EXHIBIT 10.2

COLLATERAL AGREEMENT

made by

ADVANCED MICRO DEVICES, INC.

and

AMD INTERNATIONAL SALES AND SERVICE, LTD.

in favor of

WELLS FARGO BANK, N.A.,

as Collateral Agent

Dated as of October 24, 2006

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TABLE OF CONTENTS

 

SECTION 1.

  

DEFINED TERMS

   2

1.1.

  

Definitions

   2

1.2.

  

Other Definitional Provisions

   6

SECTION 2.

  

[INTENTIONALLY OMITTED]

   6

SECTION 3.

  

GRANT OF SECURITY INTEREST

   6

SECTION 4.

  

REPRESENTATIONS AND WARRANTIES

   7

4.1.

  

Representations in Credit Agreement

   7

4.2.

  

Title; No Other Liens

   7

4.3.

  

Perfected First Priority Liens

   8

4.4.

  

Jurisdiction of Organization; Chief Executive Office

   8

4.5.

  

[Intentionally Omitted]

   9

4.6.

  

[Intentionally Omitted]

   9

4.7.

  

Pledged Equity Interests and the Spansion Collateral Account

   9

4.8.

  

Accounts Receivable

   9

SECTION 5.

  

COVENANTS

   10

5.1.

  

Covenants in Credit Agreement

   10

5.2.

  

Delivery and Control of Instruments, Certificated Securities, Chattel Paper,
Pledged Equity Interests and the Spansion Collateral Account

   10

5.3.

  

Maintenance of Insurance

   11

5.4.

  

Payment of Obligations

   11

5.5.

  

Maintenance of Perfected Security Interest; Further Documentation

   12

5.6.

  

Changes in Locations, Name, etc

   12

5.7.

  

Notices

   12

5.8.

  

Pledged Equity Interests

   13

5.9.

  

Accounts Receivable

   13

SECTION 6.

  

REMEDIAL PROVISIONS

   14

6.1.

  

Certain Matters Relating to Accounts Receivable

   14

6.2.

  

Communications with Obligors; Grantors Remain Liable

   14

6.3.

  

Pledged Equity Interests

   15

6.4.

  

Proceeds to be Turned Over to Collateral Agent

   15

6.5.

  

Application of Proceeds

   16

6.6.

  

Code and Other Remedies

   16

6.7.

  

Registration Rights

   16

6.8.

  

Deficiency

   17

SECTION 7.

  

THE COLLATERAL AGENT

   17

7.1.

  

Collateral Agent’s Appointment as Attorney-in-Fact, etc

   17

7.2.

  

Duty of Collateral Agent

   19

7.3.

  

Financing Statements

   19

7.4.

  

Authority, Immunities and Indemnities of Collateral Agent

   19

SECTION 8.

  

MISCELLANEOUS

   19

8.1.

  

Amendments in Writing

   19

8.2.

  

Notices

   19

8.3.

  

No Waiver by Course of Conduct; Cumulative Remedies

   20

8.4.

  

Enforcement Expenses; Indemnification

   20

8.5.

  

Successors and Assigns

   20

8.6.

  

Set-Off

   20

8.7.

  

Counterparts

   21

8.8.

  

Severability

   21

8.9.

  

Section Headings

   21

 

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8.10.

  

Integration

   21

8.11.

  

GOVERNING LAW

   21

8.12.

  

Submission To Jurisdiction; Waivers

   21

8.13.

  

Acknowledgements

   22

8.14.

  

Additional Grantors; Supplements to Schedules

   22

8.15.

  

Releases

   22

8.16.

  

WAIVER OF JURY TRIAL

   23

8.17.

  

Secured Parties

   23

8.18.

  

Collateral Trust Agreement; Secured Instrument

   23

 

SCHEDULES

Schedule 1

  

Notice Addresses

Schedule 2

  

Investment Property

Schedule 3

  

Jurisdictions of Organization and Chief Executive Offices

Schedule 4

  

Filings and Other Actions Required for Perfection

 

ANNEXES

 

Annex I

 

Form of Assumption Agreement

Annex II

 

Form of Acknowledgement and Consent

Annex III

 

Form of Pledge Supplement

 

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COLLATERAL AGREEMENT, dated as of October 24, 2006, made by each of the
signatories hereto (together with any other entity that may become a party
hereto as provided herein, the “Grantors”), in favor of Wells Fargo Bank, N.A.,
as Collateral Agent for the Secured Parties (as defined herein) under the
Collateral Trust Agreement referred to below (in such capacity and together with
its successors and assigns from time to time acting as Collateral Agent under
the Collateral Trust Agreement, the “Collateral Agent”).

RECITALS

A. Pursuant to the Credit Agreement, dated as of the date hereof (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Advanced Micro Devices, Inc., a Delaware corporation (the “Borrower”), the
various financial institutions and other Persons from time to time parties
thereto (each a “Lender”), Morgan Stanley Senior Funding, Inc., as
administrative agent (in such capacity, the “Administrative Agent”), Morgan
Stanley Senior Funding, Inc., as sole lead arranger and sole bookrunner (in such
capacity, the “Lead Arranger”), and Morgan Stanley Senior Funding, Inc., as
syndication agent (in such capacity, the “Syndication Agent”) the Lenders have
severally agreed to make extensions of credit to the Borrower upon the terms and
subject to the conditions set forth therein;

B. Pursuant to an Indenture, dated as of October 29, 2004 (the “Senior Notes
Indenture”), between the Borrower and Wells Fargo Bank, N.A., as trustee, the
Borrower issued and sold its 7.75% Senior Notes due 2012 (the “2012 Notes”).

C. The Borrower, the other Grantors, and the Collateral Agent have entered into
a Collateral Trust Agreement, dated as of the date hereof (the “Collateral Trust
Agreement”).

D. Upon effectiveness of the Acquisition, the Borrower will be a member of an
affiliated group of companies that includes each other Grantor;

E. The proceeds of the extensions of credit under the Credit Agreement and the
proceeds under the Specified Hedge Agreements will be used in part to enable the
Borrower to make valuable transfers to one or more of the other Grantors in
connection with the operation of their respective businesses;

F. The Borrower and the other Grantors are engaged in related businesses, and
each Grantor will derive substantial direct and indirect benefit from the making
of the extensions of credit under the Credit Agreement and the providing of
financial accommodation under the Specified Hedge Agreements; and

G. It is a condition precedent to the obligation of the Lenders to make their
respective extensions of credit to the Borrower under the Credit Agreement and
of the Qualified Counterparties to provide financial accommodation under the
Specified Hedge Agreements that the Grantors shall have executed and delivered
this Agreement to the Collateral Agent for the benefit of the Secured Parties.

NOW, THEREFORE, in consideration of the premises and to induce the Agents and
the Lenders to enter into the Credit Agreement and to induce the Lenders to make
their respective extensions of credit to the Borrower thereunder and to induce
the Qualified Counterparties to enter into the Specified Hedge Agreements and
provide financial accommodation, each Grantor hereby agrees with the Collateral
Agent, for the benefit of the Secured Parties, as follows:

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SECTION 1. DEFINED TERMS

1.1. Definitions.

(a) Unless otherwise defined herein, terms defined in the Credit Agreement and
used herein shall have the meanings given to them in the Credit Agreement, and
the following terms are used herein as defined in the New York UCC (and if
defined in more than one Article of the New York UCC, shall have the meaning
given in Article 8 or 9 thereof): Accounts, Certificated Security, Chattel
Paper, Deposit Account, Electronic Chattel Paper, Instruments, Letter-of-Credit
Rights, Payment Intangibles, Records, Supporting Obligations, Tangible Chattel
Paper and Uncertificated Security.

(b) The following terms shall have the following meanings:

“2012 Notes:” as defined in the second recital.

“2012 Notes Obligations”: all obligations under the 2012 Notes and the Senior
Notes Indenture.

“Accounts Receivable”: all (i) Accounts, (ii) Chattel Paper, (iii) to the extent
arising from goods or other property sold, leased, licensed, assigned or
otherwise disposed of, or services rendered or to be rendered (A) Payment
Intangibles and (B) Instruments, and (iv) to the extent not otherwise covered
above, all other rights to payment, whether or not earned by performance, for
goods or other property sold, leased, licensed, assigned or otherwise disposed
of, or services rendered or to be rendered, regardless of how classified under
the New York UCC together with all of Grantors’ rights, if any, in any goods or
other property giving rise to such right to payment and all Collateral Support
and Supporting Obligations related thereto and all Receivables Records.

“Agreement”: this Collateral Agreement, as the same may be amended, amended and
restated, supplemented or otherwise modified from time to time.

“Borrower”: as defined in the preamble.

“Borrower Credit Agreement Obligations”: the unpaid principal of and interest on
the Loans and all other obligations and liabilities of the Borrower to any
Agent, Lender or Indemnitee, whether direct or indirect, absolute or contingent,
due or to become due or now existing or hereafter incurred, which may arise
under, out of, or in connection with, the Credit Agreement, this Agreement or
the other Loan Documents or any other document made, delivered or given in
connection therewith or pursuant thereto, in each case whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, attorney’s fees and legal expenses) or
otherwise (including interest accruing at the then applicable rate provided in
the Credit Agreement after the maturity of the Loans and interest accruing at
the then applicable rate provided in the Credit Agreement after the commencement
of any bankruptcy case or insolvency, reorganization, liquidation or like
proceeding relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding and all expense
reimbursement and indemnity obligations arising or incurred as provided in the
Loan Documents after the commencement of any such case or proceeding, whether or
not a claim for such obligations is allowed in such case or proceeding).

“Borrower Obligations”: the collective reference to (i) the Borrower Credit
Agreement Obligations, (ii) the Borrower Hedge Agreement Obligations and
(iii) all other obligations and liabilities of the Borrower, whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Agreement (including, without limitation, all fees and disbursements of counsel
to the Secured Parties that are required to be paid by the Borrower pursuant to
the terms of the Credit Agreement or this Agreement.

 

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“Borrower Hedge Agreement Obligations”: the collective reference to all
obligations and liabilities of the Borrower (including, without limitation,
interest accruing at the then applicable rate provided in any Specified Hedge
Agreement after the filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization, liquidation or like proceeding, relating to the
Borrower, whether or not a claim for post-petition interest is allowed in such
proceeding) to any Qualified Counterparty, whether direct or indirect, absolute
or contingent, due or to become due or now existing or hereafter incurred, which
may arise under, out of, or in connection with, any Specified Hedge Agreement or
any other Loan Document entered into with any Secured Party or any other
document made, delivered or given in connection therewith or pursuant thereto,
in each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Qualified Counterparty
that are required to be paid by the Borrower pursuant to the terms of any
Specified Hedge Agreement or any other Loan Document); provided, that any
release of Collateral effected in the manner permitted by the Credit Agreement
shall not require the consent of holders of obligations under the Specified
Hedge Agreements.

“Collateral”: as defined in Section 3.

“Collateral Account”: any collateral account established by the Collateral Agent
as provided in Section 6.1 or 6.4.

“Collateral Support”: all property (real or personal) assigned, hypothecated or
otherwise securing any Collateral and including any security agreement or other
agreement granting a lien or security interest in such real or personal
property.

“Collateral Trust Agreement”: as defined in the third recital.

“Control Party”: as defined in the Collateral Trust Agreement.

“Event of Default”: an “Event of Default” under any Secured Instrument.

“Foreign Subsidiary Voting Stock”: the voting Capital Stock of any Foreign
Subsidiary.

“Intercompany Note”: any promissory note evidencing loans or other monetary
obligations owing to any Grantor by any Group Member.

“Investment Property”: the collective reference to (i) all Pledged Equity
Interests and (ii) all Pledged Notes.

“Issuers”: the collective reference to each issuer of any Investment Property
purported to be pledged hereunder.

“New York UCC”: the Uniform Commercial Code as from time to time in effect in
the State of New York.

“Obligations”: the Borrower Obligations and the 2012 Notes Obligations.

“Organizational Documents”: as to any Person, its certificate or articles of
incorporation and by-laws if a corporation, or its certificate of formation and
its partnership agreement if a partnership, its limited liability company
agreement if a limited liability company, or other organizational or governing
documents of such person.

 

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“Pledge Supplement: a Pledge Supplement, substantially in the form of Annex III.

“Pledged Alternative Equity Interests”: (a) all participation or other interests
in any equity or profits of any Pledged Company at any time issued or granted to
or owned, held or acquired by any Grantor and (b) all participation or other
interests in any equity or profits of any business entity that was created or
acquired after the Closing Date at any time issued or granted to or owned, held
or acquired by any Grantor, and including in each case the certificates, if any,
representing such interests and any interest of such Grantor in the entities on
the books of the Issuer of such interests or on the books and records of any
securities intermediary pertaining to such interests, and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such interests and
any other warrant, right or option to acquire any of the foregoing; provided,
however, that Pledged Alternative Equity Interests shall not include any Pledged
Notes, Pledged Stock, Pledged Partnership Interests, and Pledged LLC Interests;
provided further that in no event shall more than 65% of the total voting power
of the outstanding Foreign Subsidiary Voting Stock of any Foreign Subsidiary be
subject to the security interests granted hereby.

“Pledged Company”: each of AMD US Finance, Inc., AMD Saxony Holding GmbH, AMD
Saxony LLC, AMD International Sales & Service, Ltd., Advanced Micro Devices
(Singapore) Pte Ltd and Advanced Micro Devices Sdn.Bhd.

“Pledged Equity Interests”: all Pledged Stock, Pledged LLC Interests, Pledged
Partnership Interests and Pledged Alternative Equity Interests.

“Pledged LLC Interests”: (a) all interests owned, directly or indirectly, by any
Grantor in any Pledged Company that is a limited liability company (including
those listed on Schedule 2) at any time issued or granted to or owned, held or
acquired by any Grantor and (b) all interests owned, directly or indirectly, by
any Grantor in any limited liability company that was created or acquired after
the Closing Date at any time issued or granted to or owned, held or acquired by
any Grantor, including in each case the certificates, if any, representing such
limited liability company interests and any interest of any Grantor on the books
and records of such limited liability company or on the books and records of any
securities intermediary pertaining to such interest and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such limited
liability company interests and any other warrant, right or option to acquire
any of the foregoing; provided that in no event shall more than 65% of the total
voting power of the outstanding Foreign Subsidiary Voting Stock of any Foreign
Subsidiary be subject to the security interests granted hereby.

“Pledged Notes”: all indebtedness for borrowed money owed to any Grantor by a
Group Member including, without limitation, all Intercompany Notes at any time
issued to or owned, held or acquired by any Grantor (including those listed on
Schedule 2).

“Pledged Partnership Interests”: (a) all interests owned, directly or
indirectly, by any Grantor in any Pledged Company that is a general partnership,
limited partnership, limited liability partnership or other partnership
(including those listed on Schedule 2) at any time issued or granted to or
owned, held or acquired by any Grantor and (b) all interests owned, directly or
indirectly, by any Grantor in any general partnership, limited partnership,
limited liability partnership or other partnership that was created or acquired
after the Closing Date at any time issued or granted to or owned, held or
acquired by

 

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any Grantor, including, in each case, the certificates, if any, representing
such partnership interests and any interest of such Grantor on the books and
records of such partnership or on the books and records of any securities
intermediary pertaining to such interest and all dividends, distributions, cash,
warrants, rights, options, instruments, securities and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such partnership interests and any
other warrant, right or option to acquire any of the foregoing: provided that in
no event shall more than 65% of the total voting power of the outstanding
Foreign Subsidiary Voting Stock of any Foreign Subsidiary be subject to the
security interests granted hereby.

“Pledged Stock”: (a) all shares, stock certificates, options, interests or
rights of any nature whatsoever in respect of the Capital Stock of any Pledged
Company (including those listed on Schedule 2) at any time issued or granted to
or owned, held or acquired by any Grantor and (b) all shares, stock
certificates, options, interests or rights of any nature whatsoever in respect
of the Capital Stock of any Person created or acquired after the Closing Date at
any time issued or granted to or owned, held or acquired by any Grantor,
including, in each case, the certificates, if any, representing such shares and
any interest of such Grantor in the entries on the books of the Issuer of such
shares or on the books and records of any securities intermediary pertaining to
such shares, and all dividends, distributions, cash, warrants, rights, options,
instruments, securities and other property or proceeds from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of such shares and any other warrant, right or option to acquire any
of the foregoing; provided that in no event shall more than 65% of the total
voting power of the outstanding Foreign Subsidiary Voting Stock of any Foreign
Subsidiary be subject to the security interests granted hereby.

“Proceeds”: all “proceeds” as such term is defined in Section 9-102(a)(64) of
the New York UCC, including, in any event, all dividends, returns of capital and
other distributions and income from Investment Property and all collections
thereon and payments with respect thereto.

“Receivables Records”: (i) all original copies of all documents, instruments or
other writings or electronic records or other Records evidencing the Accounts
Receivable, (ii) all books, correspondence, credit or other files, Records,
ledger sheets or cards, invoices, and other papers relating to Accounts
Receivable, including, without limitation, all tapes, cards, computer tapes,
computer discs, computer runs, record keeping systems and other papers and
documents relating to the Accounts Receivable, whether in the possession or
under the control of Grantor or any computer bureau or agent from time to time
acting for Grantor or otherwise, (iii) all evidences of the filing of financing
statements and the registration of other instruments in connection therewith,
and amendments, supplements or other modifications thereto, notices to other
creditors or agents thereof, and certificates, acknowledgments, or other
writings, including, without limitation, lien search reports, from filing or
other registration officers, (iv) all credit information, reports and memoranda
relating thereto and (v) all other written or non-written forms of information
related in any way to the foregoing or any Accounts Receivable.

“Secured Instrument”: as defined in the Collateral Trust Agreement.

“Secured Parties”: as defined in the Collateral Trust Agreement.

“Securities Act”: the Securities Act of 1933, as amended.

“Senior Notes Indenture” is defined in the second recital.

“Subordination Agreement”: Subordination Agreement, dated April 20, 2004, among
the Borrower, AMD Fab 36 Holding Gmbh, AMD Fab 36 Admin Gmbh, Leipziger Messe
Gmbh, Fab 36 Beteiligungs Gmbh, AMD Fab 36 LLC, LB Beteiligungsgesellschaft MBH,
AMD Fab 36 Limited

 

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Liability Company & Co. KG, ABN AMRO Bank N.V., Commerzbank Aktiengesellschaft,
Deutsche Bank Luxembourg S.A., Dresdner Kleinwort Wasserstein, KFW, Landesank
Hessen-Thuringen Girozentrale, Landesbank Sachsen Girozentrale, Dresdner Bank
Luxembourg S.A., as Facility Agent, Dresdner Bank AG In Berlin, as Security
Agent, and the Financial Institutions party thereto.

“UETA”: the Uniform Electronic Transaction Act, as in effect in the applicable
jurisdiction.

1.2. Other Definitional Provisions.

(a) As used herein and in any certificate or other document made or delivered
pursuant hereto, (i) accounting terms relating to any Group Member not defined
in Section 1.1 and accounting terms partly defined in Section 1.1, to the extent
not defined, shall have the respective meanings given to them under GAAP,
(ii) the words “include”, “includes” and “including” shall be deemed to be
followed by the phrase “without limitation”, (iii) the word “incur” shall be
construed to mean incur, create, issue, assume, become liable in respect of or
suffer to exist (and the words “incurred” and “incurrence” shall have
correlative meanings), and (iv) the words “asset” and “property” shall be
construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties of every type and nature, and
(v) references to agreements or other Contractual Obligations shall, unless
otherwise specified, be deemed to refer to such agreements or Contractual
Obligations as amended, supplemented, restated or otherwise modified from time
to time (subject to any applicable restrictions hereunder).

(b) The words “hereof,” “herein”, “hereto” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and Section and Schedule
references are to this Agreement unless otherwise specified.

(c) The meanings given to terms defined herein shall be equally applicable to
both the singular and plural forms of such terms.

(d) Where the context requires, terms relating to the Collateral or any part
thereof, when used in relation to a Grantor, shall refer to such Grantor’s
Collateral or the relevant part thereof.

(e) The expressions “payment in full,” “paid in full” and any other similar
terms or phrases when used herein with respect to any Obligation shall mean
(A) the payment in full of such Obligation in cash in immediately available
funds and (B) with respect to obligations under the Specified Hedge Agreements
with any Qualified Counterparty, such obligations are secured by a collateral
arrangement reasonably satisfactory to the Qualified Counterparty in its sole
discretion.

SECTION 2. [INTENTIONALLY OMITTED].

SECTION 3. GRANT OF SECURITY INTEREST

Each Grantor hereby grants to the Collateral Agent, for the benefit of the
Secured Parties, a security interest in all of the following property now owned
or at any time hereafter acquired by such Grantor or in which such Grantor now
has or at any time in the future may acquire any right, title or interest
(collectively, the “Collateral”), as collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of all Obligations:

(a) all Accounts Receivable;

 

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(b) all proceeds and products from the direct or indirect sale of the Capital
Stock of Spansion;

(c) the Spansion Collateral Account, if and when the same is created pursuant to
Section 6.11 of the Credit Agreement;

(d) all Investment Property;

(e) all Supporting Obligations and products of any and all of the foregoing and
all security interests or other liens on personal or real property securing or
in any respect relating to any of the foregoing;

(f) all books and records (regardless of medium) pertaining to any of the
foregoing; and

(g) all Proceeds of any of the foregoing;

provided that the security interest granted hereunder shall not cover and the
term “Collateral” shall not include any of the following: (A) Capital Stock of
Fab 36, (B) as of the date hereof, Capital Stock of 1252986 Alberta ULC or any
Subsidiary of the Borrower that is not a Material Subsidiary owned by a Grantor,
and after the date hereof with respect to after-acquired or after-created
Subsidiaries, Capital Stock of any Subsidiary that is not a Material Subsidiary,
(C) Capital Stock which is specifically excluded from the definitions of Pledged
Alternative Equity Interests, Pledged LLC Interests, Pledged Partnership
Interests and Pledged Stock by virtue of the proviso to such definitions,
(D) any Intercompany Note or other obligation (x) that is not issued by either a
Subsidiary that is an Issuer as of the date hereof or after the date hereof that
is not a Material Subsidiary or (y) that is issued by Fab 36 that by its terms
or by the terms of the Subordination Agreement does not permit the grant of a
security interest in such Intercompany Note or other obligations; provided that
no prohibition on the grant of a security interest shall be effective if it were
bargained for by any Grantor with the intent of avoiding compliance with this
Agreement, and (E) any Intercompany Note evidencing a loan or other extension of
credit made by a Grantor to any Foreign Subsidiary to the extent that a pledge
or Lien to the Collateral Agent with respect to such Intercompany Note would
create an increased tax liability for any Grantor; provided that no Intercompany
Note shall be excluded from the security interest granted hereunder if it was
entered into with the intent of avoiding compliance with this Agreement;
provided, further, that the security interest granted hereby shall attach at all
times to all proceeds of such property if such proceeds are otherwise Collateral
hereunder.

SECTION 4. REPRESENTATIONS AND WARRANTIES

Each Grantor hereby represents and warrants to each Secured Party that:

4.1. Representations in Credit Agreement. In the case of each Grantor (other
than the Borrower), the representations and warranties set forth in Section 4 of
the Credit Agreement as they relate to such Grantor or to the Loan Documents to
which such Grantor is a party, each of which is hereby incorporated herein by
reference, are true and correct, and each Secured Party shall be entitled to
rely on each of them as if they were fully set forth herein; provided that each
reference in each such representation and warranty to the Borrower’s knowledge
shall, for the purposes of this Section 4.1, be deemed to be a reference to such
Grantor’s knowledge.

4.2. Title; No Other Liens. Except for the security interest granted to the
Collateral Agent for the benefit of the Secured Parties pursuant to this
Agreement and the other Liens permitted to

 

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exist on such Grantor’s Collateral by the Credit Agreement, such Grantor owns
each item of Collateral granted by it free and clear of any and all Liens or
claims of others. No financing statement or other public notice with respect to
all or any part of the Collateral is on file or of record in any public office,
except such as have been filed in favor of the Collateral Agent, for the benefit
of the Secured Parties, pursuant to this Agreement or in respect of Liens that
are permitted by the Credit Agreement or any other Loan Document or for which
termination statements will be delivered on the Closing Date.

4.3. Perfected First Priority Liens.

(a) Upon completion of the filings and other actions specified on Schedule 4
(which, in the case of all filings and other documents referred to on said
Schedule, have been delivered to the Collateral Agent in completed and, where
required, duly executed form) and the obtaining and maintenance of “control”
(within the meaning of Section 8-106, 9-104 and 9-107 of the New York UCC) by
the Collateral Agent of the Spansion Collateral Account and any Letter-of-Credit
Rights which are part of the Supporting Obligations, the security interests
granted in Section 3 will constitute valid perfected security interests in all
of the Collateral in favor of the Collateral Agent, for the benefit of the
Secured Parties, as collateral security for the Obligations, enforceable in
accordance with the terms hereof against all creditors of such Grantor and any
Persons purporting to purchase any such Collateral from such Grantor and is and
will be prior to all other Liens on such Collateral except for Liens permitted
by the Credit Agreement which have priority over the Liens on such Collateral by
operation of law. Without limiting the foregoing and except as otherwise
permitted or provided in Section 5 hereof, each Grantor has taken all actions
necessary to establish the Collateral Agent’s “control” (within the meanings of
Sections 8-106 and 9-106 of the New York UCC) over any portion of the Investment
Property constituting Certificated Securities or Uncertificated Securities (each
as defined in the New York UCC).

(b) Each Grantor consents to the grant by each other Grantor of the security
interests granted hereby and the transfer of any Capital Stock or Investment
Property to the Collateral Agent or its designee following an Event of Default
and to the substitution of the Collateral Agent or its designee or the purchaser
upon any foreclosure sale as the holder and beneficial owner of the interest
represented thereby.

4.4. Jurisdiction of Organization; Chief Executive Office. On the date hereof,
such Grantor’s exact legal name, jurisdiction of organization, organizational
identification number from the jurisdiction of organization (if any), and the
location of such Grantor’s chief executive office or sole place of business or
principal residence, as the case may be, are specified on Schedule 3. On the
date hereof, such Grantor is organized solely under the law of the jurisdiction
so specified and has not filed any certificates of domestication, transfer or
continuance in any other jurisdiction. Except as otherwise indicated on Schedule
3, the jurisdiction of such Grantor’s organization or formation is required to
maintain a public record showing the Grantor to have been organized or formed.
On the date hereof, except as specified on Schedule 3, such Grantor has not
changed its name, jurisdiction of organization, chief executive office or sole
place of business or its corporate or organizational form in any way (e.g. by
merger, consolidation, change in corporate form or otherwise) within the past
five years and has not within the last five years become bound (whether as a
result of merger or otherwise) as grantor under a security agreement entered
into by another person, which (x) has not heretofore been terminated or (y) is
in respect of a Lien that is not permitted by the Credit Agreement. Such Grantor
has furnished to the Collateral Agent its Organizational Documents as in effect
as of a date which is recent to the date hereof and long form good standing
certificate as of a date which is recent to the date hereof.

 

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4.5. [Intentionally Omitted].

4.6. [Intentionally Omitted]. Investment Property and the Spansion Collateral
Account. (a) Schedule 2 hereto (as such schedule may be amended or supplemented
from time to time) sets forth under the headings “Pledged Stock,” “Pledged LLC
Interests” and “Pledged Partnership Interests,” all of the Pledged Stock,
Pledged LLC Interests and Pledged Partnership Interests, respectively, owned by
any Grantor and pledged hereunder and such Pledged Equity Interests constitute
the percentage of issued and outstanding shares of stock, percentage of
membership interests, percentage of partnership interests or percentage of
beneficial interest of the respective issuers thereof indicated on such
schedule. Schedule 2 hereto (as such schedule may be amended or supplemented
from time to time) sets forth under the heading “Pledged Notes” all of the
Pledged Notes owned by any Grantor and pledged hereunder. When created, the
Spansion Collateral Account will be a Deposit Account and the Borrower will be
the sole customer of the Spansion Collateral Account and it will not consent to
any person other than the Collateral Agent having “control” (within the meanings
of Section 9-104 of the New York UCC) over, or any other interest in, the
Spansion Collateral Account, or any property credited thereto.

(b) The shares of Pledged Equity Interests pledged by such Grantor hereunder
constitute all of the issued and outstanding shares of all classes of Capital
Stock in each Pledged Company owned by such Grantor or, in the case of Voting
Stock of any Excluded Foreign Subsidiary, if less, 65% of the total voting power
of the outstanding Voting Stock of each relevant Pledged Company.

(c) All the shares of the Pledged Equity Interests pledged hereunder have been
duly and validly issued and are fully paid and nonassessable.

(d) The Pledged LLC Interests and Pledged Partnership Interests pledged
hereunder (i) are not traded on securities exchanges or in securities markets,
(ii) are not “investment company securities” (as defined in Section 8-103(b) of
the New York UCC and (iii) do not provide, in the related operating or
partnership agreement, as applicable, or on the certificates, if any,
representing such Pledged LLC Interests or Pledged Partnership Interests, as
applicable, or otherwise that they are securities governed by the Uniform
Commercial Code of any jurisdiction.

(e) Such Grantor is the record and beneficial owner of, and has good and
marketable title to, the Investment Property pledged by it hereunder, free of
any and all Liens or options in favor of, or claims of, any other person, except
Liens permitted to exist on the Collateral by the Credit Agreement, and there
are no outstanding warrants, options or other rights to purchase, or
shareholder, voting trust or similar agreements outstanding with respect to, or
property that is convertible into, or that requires the issuance or sale of, any
Pledged Equity Interests pledged hereunder.

4.8. Accounts Receivable.

(a) No amount payable to such Grantor under or in connection with any Accounts
Receivable in excess of $1,000,000 is evidenced by any Instrument or Chattel
Paper which has not been delivered to the Collateral Agent or constitutes
Electronic Chattel Paper that has not been subjected to the control (within the
meaning of Section 9-105 of the New York UCC) of the Collateral Agent.

 

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SECTION 5. COVENANTS

Each Grantor covenants and agrees with the Secured Parties that, from and after
the date of this Agreement until the Collateral is released pursuant to
Section 8.15(a):

5.1. Covenants in Credit Agreement. Such Grantor shall take, or refrain from
taking, as the case may be, each action that is necessary to be taken or not
taken, so that no breach of the covenants in the Credit Agreement pertaining to
actions to be taken, or not taken, by such Grantor will result.

5.2. Delivery and Control of Instruments, Certificated Securities, Chattel
Paper, Investment Property, Letter-of-Credit Rights that are Supporting
Obligations and the Spansion Collateral Account.

(a) Upon the occurrence and during the continuation of a Default or Event of
Default, if any of the Collateral of such Grantor is or shall become evidenced
or represented by any Instrument or Tangible Chattel Paper, such Grantor shall
immediately deliver such Instrument or Tangible Chattel Paper to the Collateral
Agent, duly indorsed in a manner reasonably satisfactory to the Collateral
Agent, to be held as Collateral pursuant to this Agreement and all of such
property owned by any Grantor as of the Closing Date shall be delivered on the
Closing Date.

(b) Upon the occurrence and during the continuation of a Default or Event of
Default, if any of the Collateral of such Grantor is or shall become “Electronic
Chattel Paper”, such Grantor shall ensure that (i) a single authoritative copy
exists which is unique, identifiable, unalterable (except as provided in clauses
(iii), (iv) and (v) of this paragraph), (ii) such authoritative copy identifies
the Collateral Agent as the assignee and is communicated to and maintained by
the Collateral Agent or its designee, (iii) copies or revisions that add or
change the assignee of the authoritative copy can only be made with the
participation of the Collateral Agent, (iv) each copy of the authoritative copy
and any copy of a copy is readily identifiable as a copy and not the
authoritative copy and (v) any revision of the authoritative copy is readily
identifiable as an authorized or unauthorized revision.

(c) If any of the Collateral of such Grantor is or shall become evidenced or
represented by an Uncertificated Security, such Grantor shall cause the issuer
thereof either (i) to register the Collateral Agent as the registered owner of
such Uncertificated Security, upon original issue or registration of transfer or
(ii) to promptly agree in writing with such Grantor and the Collateral Agent
that such Issuer will comply with instructions with respect to such
Uncertificated Security originated by the Collateral Agent without further
consent of such Grantor, such agreement to be in form and substance reasonably
satisfactory to the Collateral Agent.

(d) If the Administrative Agent has requested the Borrower to establish the
Spansion Collateral Account pursuant to Section 6.11 of the Credit Agreement,
the Borrower shall promptly upon such request of the Administrative Agent (but
in any event within three Business Days of such request or such later date to
which the Administrative Agent may consent in writing) (i) execute and deliver
to the Collateral Agent a Pledge Supplement and (ii) cause the depositary
institution maintaining such account to enter into an agreement satisfactory to
the Collateral Agent pursuant to which the depositary institution shall agree to
comply with the Collateral Agent’s instructions without further consent by the
Borrower and shall establish that the Collateral Agent shall have “control”
(within the meaning of Section 9-104 of the New York UCC) over the Spansion
Collateral Account.

(e) If any of the Collateral of such Grantor is or shall become evidenced or
represented by any Certificated Security (other than any Capital Stock which is
specifically excluded from the definition of Pledged Stock by virtue of the
proviso to such definition and any promissory note that does not qualify as a
Pledged Note pursuant to the definition thereof), such Certificated Security
shall be promptly delivered to the Collateral Agent, duly indorsed in a manner
reasonably satisfactory to the Collateral Agent, to be held as Collateral
pursuant to this Agreement.

 

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(f) In addition to and not in lieu of the foregoing, if any issuer of any
Investment Property is organized under the law of, or has its chief executive
office in, a jurisdiction outside of the United States, each Grantor shall take
such additional actions, including causing the issuer to register the pledge on
its books and records, or take any other action as may be reasonably requested
by the Collateral Agent, under the laws of such jurisdiction to insure the
validity, perfection and priority of the security interest of the Collateral
Agent.

(g) Upon the occurrence and during the continuation of a Default or Event of
Default, if any of the Collateral of such Grantor is or shall become
“transferable records” as defined in UETA, such Grantor shall take such action
as the Collateral Agent may reasonably request to vest in the Collateral Agent
“control” under Section 16 of UETA over such transferable records. The
Collateral Agent agrees with such Grantor that the Collateral Agent will
arrange, pursuant to procedures reasonably satisfactory to the Collateral Agent
and so long as such procedures will not result in the Collateral Agent’s loss of
control, for the Grantor to make alterations to the transferable records
permitted under Section 16 of UETA for a party in control to allow without loss
of control, unless an Event of Default has occurred and is continuing or would
occur after taking into account any action by such Grantor with respect to such
transferable records.

(h) Upon the occurrence and during the continuation of a Default or Event of
Default, in the case of any Letter-of-Credit Rights that are Supporting
Obligations, each Grantor shall promptly (but in any event within 60 days of the
occurrence of such Default or Event of Default or such later date to which the
Collateral Agent may consent in writing) obtain the consent of the issuer
thereof and any nominated person thereon to the assignment of the proceeds of
the related letter of credit in accordance with Section 5-114(c) of the New York
UCC, pursuant to an agreement in form and substance reasonably satisfactory to
the Collateral Agent. No Grantor will consent to any person having “control”
(within the meaning of Section 9-107 of the New York UCC) over, or any other
interest in, any Letter-of-Credit Rights that are Supporting Obligations which
such Grantor has an interest, other than the Collateral Agent.

5.3. Maintenance of Insurance.

(a) Such Grantor will maintain insurance policies as required by the Credit
Agreement and naming the Collateral Agent on behalf of the Secured Parties as
additional insureds under liability insurance policies to the extent reasonably
requested by the Collateral Agent.

(b) All such insurance shall (i) provide that no cancellation, material
reduction in amount or material change in coverage thereof shall be effective
until at least 30 days after receipt by the Collateral Agent of written notice
thereof and (ii) name the Collateral Agent as additional insured party and/or
loss payee in respect of Net Cash Proceeds from Extraordinary Receipts related
to property insurance which exceed $30,000,000. All proceeds of property
insurance received by the Collateral Agent shall be released by the Collateral
Agent to the Borrower for the account of the Grantor entitled thereto, unless
(i) an Event of Default has occurred and is continuing or (ii) otherwise
provided in the Credit Agreement.

5.4. Payment of Obligations. Such Grantor will pay and discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all taxes and other assessments and governmental charges or levies imposed
upon such Grantor’s Collateral or in respect of income or profits therefrom, as
well as all claims of any kind (including claims for labor, materials and
supplies) against or with respect to such Grantor’s Collateral, except such
claims as are contested in good faith and as to which the failure to pay or
discharge would not reasonably be expected to result in a Material Adverse
Effect.

 

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5.5. Maintenance of Perfected Security Interest; Further Documentation.

(a) Such Grantor shall maintain the security interest created by this Agreement
in such Grantor’s Collateral as a security interest having at least the
perfection and priority described in Section 4.3 and shall defend such security
interest against the claims and demands of all Persons whomsoever, subject to
the rights of such Grantor under the Loan Documents to dispose of the
Collateral.

(b) Such Grantor will furnish to the Collateral Agent from time to time
statements and schedules further identifying and describing the assets and
property of such Grantor in reasonable detail and such other reports in
connection therewith as the Collateral Agent may reasonably request.

(c) Such Grantor shall give to the Collateral Agent and the other Secured
Parties at all times upon reasonable prior notice full and free access during
normal business hours to all of its books, correspondence and records and the
Collateral Agent and the other Secured Parties and their respective
representatives may examine, inspect or audit the same, take extracts therefrom
and make photocopies thereof, and the Grantors agree to render to the Collateral
Agent and the other Secured Parties, at such Grantor’s cost and expense, such
clerical and other assistance as may be reasonably requested with regard
thereto.

(d) At any time and from time to time, upon the written request of the
Collateral Agent, and at the sole expense of such Grantor, such Grantor will
promptly and duly execute and deliver, and have recorded, such further
instruments and documents, including, without limitation, a completed Pledge
Supplement, substantially in the form of Annex III attached hereto, and take
such further actions as the Collateral Agent may reasonably request for the
purpose of creating, perfecting, ensuring the priority of, protecting or
enforcing the Collateral Agent’s security interest in the Collateral or
otherwise conferring or preserving the full benefits of this Agreement and of
the interests, rights and powers herein granted.

5.6. Changes in Locations, Name, etc. Such Grantor will not, except upon not
less than 30 days’ prior written notice to the Collateral Agent and delivery to
the Collateral Agent of all additional financing statements and other documents
(executed where appropriate) reasonably requested by the Collateral Agent to
maintain the validity, perfection and priority of the security interests
provided for herein:

(i) change its jurisdiction of organization or the location of its chief
executive office or sole place of business or principal residence from that
referred to in Section 4.4; or

(ii) change its name, identity or corporate structure to such an extent that any
financing statement filed by the Collateral Agent in connection with this
Agreement would become misleading.

5.7. Notices. Such Grantor will advise the Collateral Agent and the Secured
Parties promptly, in reasonable detail, of:

(a) any Lien (other than security interests created hereby or Liens permitted
under the Credit Agreement) on any of the Collateral which would adversely
affect the ability of the Collateral Agent to exercise any of its remedies
hereunder; and

(b) the occurrence of any other event which would reasonably be expected to have
a material adverse effect on the aggregate value of the Collateral or on the
security interests created hereby.

 

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5.8. Investment Property.

(a) If such Grantor shall become entitled to receive or shall receive any stock
certificate (including any certificate representing a stock dividend or a
distribution in connection with any reclassification, increase or reduction of
capital or any certificate issued in connection with any reorganization), option
or rights in respect of the Capital Stock of any Issuer of Pledged Equity
Interests, whether in addition to, in substitution of, as a conversion of, or in
exchange for, any shares of the Pledged Stock, or otherwise in respect thereof,
such Grantor shall accept the same as the agent of the Secured Parties, hold the
same in trust for the Secured Parties and deliver the same forthwith to the
Collateral Agent in the exact form received, duly indorsed by such Grantor to
the Collateral Agent, if required, together with an undated stock power or
equivalents covering such certificate duly executed in blank by such Grantor and
with, if the Collateral Agent so requests, signature guaranteed, to be held by
the Collateral Agent, subject to the terms hereof, as additional collateral
security for the Obligations; provided, that in no event shall there be pledged
more than 65% of the total voting power of the outstanding Foreign Subsidiary
Voting Stock of any Foreign Subsidiary. Any sums paid upon or in respect of the
Investment Property upon the liquidation or dissolution of any Issuer shall be
paid over to the Collateral Agent (unless otherwise agreed in the Credit
Agreement) to be held by it hereunder as additional collateral security for the
Obligations, and in case any distribution of capital shall be made on or in
respect of the Investment Property or any property shall be distributed upon or
with respect to the Investment Property pursuant to the recapitalization or
reclassification of the capital of any Issuer or pursuant to the reorganization
thereof, the property so distributed shall, unless otherwise subject to a
perfected security interest in favor of the Collateral Agent, be delivered to
the Collateral Agent to be held by it hereunder as additional collateral
security for the Obligations. If any sums of money or property so paid or
distributed in respect of the Investment Property shall be received by such
Grantor, such Grantor shall, until such money or property is paid or delivered
to the Collateral Agent, hold such money or property in trust for the Secured
Parties, segregated from other funds of such Grantor, as additional collateral
security for the Obligations.

(b) In the case of each Grantor which is an Issuer, such Grantor agrees that
(i) it will be bound by the terms of this Agreement relating to the Investment
Property issued by it and will comply with such terms insofar as such terms are
applicable to it, (ii) it will notify the Collateral Agent promptly in writing
of the occurrence of any of the events described in Section 5.8(a) with respect
to the Investment Property issued by it and (iii) it will take all actions
required or reasonably requested by the Collateral Agent to enable or permit
each Grantor to comply with Sections 6.3(c) and 6.7 as to all Investment
Property issued by it.

(c) Such Grantor covenants and agrees that, without the prior express written
consent of the Collateral Agent, it will not agree to any election by any
limited liability company or partnership, as applicable, to treat the Pledged
LLC Interests or Pledged Partnership Interests, as applicable, pledged
hereunder, as securities governed by the Uniform Commercial Code of any
jurisdiction and in any event will promptly notify the Collateral Agent in
writing if the representation set forth in Section 4.7(d) becomes untrue for any
reason and, in such event, take such action as the Collateral Agent may request
in order to establish the Collateral Agent’s “control” (within the meaning of
Section 8-106 of the New York UCC) over such Pledged LLC Interests or Pledged
Partnership Interests, as applicable. Such Grantor shall not consent to any
amendment to any related operating or partnership agreement, as applicable, that
would render the representation in Section 4.7(d) to no longer be true and
correct.

5.9. Accounts Receivable.

Other than in the ordinary course of business or as permitted by the Loan
Documents, such Grantor will not (i) grant any extension of the time of payment
of any Accounts Receivable, (ii)

 

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compromise or settle any Accounts Receivable for less than the full amount
thereof, (iii) release, wholly or partially, any Person liable for the payment
of any Accounts Receivable, (iv) allow any credit or discount whatsoever on any
Accounts Receivable or (v) amend, supplement or modify any Accounts Receivable
in any manner that would materially adversely affect the value thereof.

SECTION 6. REMEDIAL PROVISIONS

6.1. Certain Matters Relating to Accounts Receivable.

(a) The Collateral Agent hereby authorizes each Grantor to collect such
Grantor’s Accounts Receivable, and the Collateral Agent may curtail or terminate
said authority at any time after the occurrence and during the continuance of an
Event of Default. If required by the Collateral Agent at any time after the
occurrence and during the continuance of an Event of Default, any payments of
Accounts Receivable, when collected by any Grantor, (i) shall be forthwith (and,
in any event, within two Business Days of receipt by such Grantor) deposited by
such Grantor in the exact form received, duly indorsed by such Grantor to the
Collateral Agent if required, in a Collateral Account maintained under the sole
dominion and control of the Collateral Agent, subject to withdrawal by the
Collateral Agent for the account of the Secured Parties only as provided in
Section 6.5, and (ii) until so turned over, shall be held by such Grantor in
trust for the Collateral Agent and the Secured Parties, segregated from other
funds of such Grantor. Each such deposit of Proceeds of Accounts Receivable
shall be accompanied by a report identifying in reasonable detail the nature and
source of the payments included in the deposit.

(b) At any time and from time to time upon the occurrence and during the
continuation of an Event of Default, at the Collateral Agent’s request, each
Grantor shall deliver to the Collateral Agent all original and other documents
evidencing, and relating to, the agreements and transactions which gave rise to
the Accounts Receivable, including all original orders, invoices and shipping
receipts.

6.2. Communications with Obligors; Grantors Remain Liable.

(a) At any time after the occurrence and during the continuance of an Event of
Default, the Collateral Agent in its own name or in the name of others may at
any time communicate with obligors under the Accounts Receivable to verify with
them to the Collateral Agent’s satisfaction the existence, amount and terms of
any Accounts Receivable.

(b) At any time after the occurrence and during the continuance of an Event of
Default, the Collateral Agent may (and each Grantor at the request of the
Collateral Agent shall) notify obligors on the Accounts Receivable that the
Accounts Receivable have been assigned to the Collateral Agent for the benefit
of the Secured Parties and that payments in respect thereof shall be made
directly to the Collateral Agent.

(c) Anything herein to the contrary notwithstanding, each Grantor shall remain
liable under each of such Grantor’s Accounts Receivable to observe and perform
all the conditions and obligations to be observed and performed by it
thereunder, all in accordance with the terms of any agreement giving rise
thereto. No Secured Party shall have any obligation or liability under any
Accounts Receivable (or any agreement giving rise thereto) by reason of or
arising out of this Agreement or the receipt by any Secured Party of any payment
relating thereto, nor shall any Secured Party be obligated in any manner to
perform any of the obligations of any Grantor under or pursuant to any Accounts
Receivable (or any agreement giving rise thereto), to make any payment, to make
any inquiry as to the nature or the sufficiency of any payment received by it or
as to the sufficiency of any performance by any party thereunder, to present or
file any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.

 

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6.3. Investment Property.

(a) Unless an Event of Default has occurred and is continuing and the Collateral
Agent has given notice to the relevant Grantor of the Collateral Agent’s intent
to exercise its rights pursuant to Section 6.3(b), each Grantor may receive all
cash dividends paid in respect of the Pledged Stock pledged hereunder and all
payments made in respect of the Pledged Notes pledged hereunder, in each case
paid in the normal course of business of the relevant Issuer and consistent with
past practice, to the extent permitted in the Credit Agreement, and may exercise
all voting and corporate or other organizational rights with respect to
Investment Property; provided, that no vote shall be cast or corporate or other
organizational right exercised or other action taken (other than in connection
with a transaction permitted by the Credit Agreement) which, in the Collateral
Agent’s reasonable judgment, would impair the Collateral or be inconsistent with
or result in any violation of any provision of any Loan Document.

(b) If an Event of Default shall occur and be continuing and the Collateral
Agent shall give notice of its intent to exercise such rights to the relevant
Grantor or Grantors, (i) the Collateral Agent shall have the right to receive
any and all cash dividends, payments or other Proceeds paid in respect of the
Investment Property and shall make application thereof to the Obligations in the
order set forth in Section 6.5, and (ii) any or all of the Investment Property
shall be registered in the name of the Collateral Agent or its nominee, and the
Collateral Agent or its nominee may thereafter exercise (A) all voting,
corporate and other rights pertaining to such Investment Property at any meeting
of shareholders of the relevant Issuer or Issuers or otherwise and (B) any and
all rights of conversion, exchange and subscription and any other rights,
privileges or options pertaining to such Investment Property as if it were the
absolute owner thereof (including the right to exchange at its discretion any
and all of the Investment Property upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate or
other organizational structure of any Issuer, or upon the exercise by any
Grantor or the Collateral Agent of any right, privilege or option pertaining to
such Investment Property, and in connection therewith, the right to deposit and
deliver any and all of the Investment Property with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Collateral Agent may determine), all without liability except
to account for property actually received by it, but the Collateral Agent shall
have no duty to any Grantor to exercise any such right, privilege or option and
shall not be responsible for any failure to do so or delay in so doing.

(c) Each Grantor hereby authorizes and instructs each Issuer of any Investment
Property pledged by such Grantor hereunder to (i) comply with any instruction
received by it from the Collateral Agent in writing that (A) states that an
Event of Default has occurred and is continuing and (B) is otherwise in
accordance with the terms of this Agreement, without any other or further
instructions from such Grantor, and each Grantor agrees that each Issuer shall
be fully protected in so complying, and (ii) after receipt by an Issuer or
obligor of any instructions pursuant to Section 6.3(c)(i) hereof, pay any
dividends or other payments with respect to the Investment Property directly to
the Collateral Agent.

6.4. Proceeds to be Turned Over to Collateral Agent. In addition to the rights
of the Secured Parties specified in Section 6.1 with respect to payments of
Accounts Receivable, if an Event of Default shall occur and be continuing and
the Collateral Agent has instructed any Grantor to do so, all Proceeds received
by such Grantor consisting of cash, checks and other near-cash items shall be
held by such Grantor in trust for the Secured Parties, segregated from other
funds of such Grantor, and shall, forthwith upon receipt by such Grantor, be
turned over to the Collateral Agent in the exact form received by such Grantor
(duly indorsed by such Grantor to the Collateral Agent, if required). All
Proceeds received by the Collateral Agent hereunder shall be held by the
Collateral Agent in a Collateral Account

 

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maintained under its sole dominion and control. All Proceeds while held by the
Collateral Agent in a Collateral Account (or by such Grantor in trust for the
Collateral Agent and the Secured Parties) shall continue to be held as
collateral security for all the Obligations and shall not constitute payment
thereof until applied as provided in Section 6.5.

6.5. Application of Proceeds. All Proceeds received by the Collateral Agent in
respect of any sale of, collection from, or other realization upon, all or any
part of the collateral shall be applied by the Collateral Agent against all or
any part of the Obligations as set forth in Section 3.4 of the Collateral Trust
Agreement.

6.6. Code and Other Remedies. If an Event of Default shall occur and be
continuing, the Collateral Agent may exercise, in addition to all other rights
and remedies granted to it in this Agreement and in any other Loan Document, all
rights and remedies of a secured party under the New York UCC or any other
applicable law or in equity. Without limiting the generality of the foregoing,
to the fullest extent permitted by applicable law, the Collateral Agent, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law referred to below) to or
upon any Grantor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, lease, assign, give option or options
to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker’s board or office of
any Agent or any Secured Party or elsewhere upon such terms and conditions as it
may deem advisable and at such prices as it may deem best, for cash or on credit
or for future delivery without assumption of any credit risk. Any Secured Party
shall have the right upon any such public sale or sales, and, to the extent
permitted by law, upon any such private sale or sales, to purchase the whole or
any part of the Collateral so sold, free of any right or equity of redemption in
any Grantor, which right or equity is hereby waived and released. Each Grantor
further agrees, at the Collateral Agent’s request, to assemble the Collateral
and make it available to the Collateral Agent at places which the Collateral
Agent shall reasonably select, whether at such Grantor’s premises or elsewhere.
The Collateral Agent shall apply the net proceeds of any action taken by it
pursuant to this Section 6.6, after deducting all reasonable costs and expenses
of every kind incurred in connection therewith or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral or
the rights of the Collateral Agent and the Secured Parties hereunder, including
reasonable attorneys’ fees and disbursements, to the payment in whole or in part
of the Obligations, in such order as set forth in Section 6.5, and only after
such application and after the payment by the Collateral Agent of any other
amount required by any provision of law, including Section 9-615(a)(3) of the
New York UCC, need the Collateral Agent account for the surplus, if any, to any
Grantor. To the extent permitted by applicable law, each Grantor waives all
claims, damages and demands it may acquire against any Secured Party arising out
of the exercise of any rights hereunder other than any such claims, damages and
demands that may arise from the gross negligence or willful misconduct of such
Secured Party. If any notice of a proposed sale or other disposition of
Collateral is required by law, such notice shall be deemed reasonable and proper
if given at least 10 days before such sale or other disposition.

6.7. Registration Rights.

(a) Each Grantor recognizes that the Collateral Agent may be unable to effect a
public sale of any or all the Pledged Stock pledged hereunder, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may

 

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result in prices and other terms less favorable than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner. The
Collateral Agent shall be under no obligation to delay a sale of any of the
Pledged Stock pledged hereunder for the period of time necessary to permit the
Issuer thereof to register such securities for public sale under the Securities
Act, or under applicable state securities laws, even if such Issuer would agree
to do so.

(b) Each Grantor agrees to use its best efforts to do or cause to be done all
such other acts as may be necessary to make such sale or sales of all or any
portion of the Pledged Stock pledged hereunder pursuant to this Section 6.7
valid and binding and in compliance with any and all other applicable
Requirements of Law.

6.8. Deficiency. Each Grantor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay its Obligations and the fees and disbursements of any attorneys employed by
the Collateral Agent or any Secured Party to collect such deficiency.

SECTION 7. THE COLLATERAL AGENT

7.1. Collateral Agent’s Appointment as Attorney-in-Fact, etc.

(a) Each Grantor hereby irrevocably constitutes and appoints the Collateral
Agent and any officer or agent thereof, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of such Grantor and in the name of such Grantor or in its
own name, for the purpose of carrying out the terms of this Agreement, to take
any and all appropriate action and to execute any and all documents and
instruments which may be reasonably necessary or desirable to accomplish the
purposes of this Agreement, and, without limiting the generality of the
foregoing, each Grantor hereby gives the Collateral Agent the power and right,
on behalf of such Grantor, without notice to or assent by such Grantor, to do
any or all of the following:

(i) in the name of such Grantor or its own name, or otherwise, take possession
of and indorse and collect any checks, drafts, notes, acceptances or other
instruments for the payment of moneys due under any Accounts Receivable of such
Grantor or with respect to any other Collateral of such Grantor and file any
claim or take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Collateral Agent for the purpose of
collecting any and all such moneys due under any Accounts Receivable of such
Grantor or with respect to any other Collateral of such Grantor whenever
payable;

(ii) pay or discharge taxes and Liens levied or placed on or threatened against
the Collateral, effect any repairs or any insurance called for by the terms of
this Agreement and pay all or any part of the premiums therefor and the costs
thereof;

(iii) execute, in connection with any sale provided for in Section 6.6 or 6.7,
any endorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral; and

(iv) (A) direct any party liable for any payment under any of the Collateral to
make payment of any and all moneys due or to become due thereunder directly to
the Collateral Agent or as the Collateral Agent shall direct; (B) ask or demand
for, collect, and receive payment of and receipt for, any and all moneys, claims
and other amounts

 

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due or to become due at any time in respect of or arising out of any Collateral
of such Grantor; (C) sign and indorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications, notices and other documents in connection with any
of the Collateral of such Grantor; (D) commence and prosecute any suits, actions
or proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any portion thereof and to enforce any other right in
respect of any Collateral of such Grantor; (E) defend any suit, action or
proceeding brought against such Grantor with respect to any Collateral;
(F) settle, compromise or adjust any such suit, action or proceeding and, in
connection therewith, give such discharges or releases as the Collateral Agent
may deem appropriate; and (G) generally, sell, transfer, pledge and make any
agreement with respect to or otherwise deal with any of the Collateral of such
Grantor as fully and completely as though the Collateral Agent were the absolute
owner thereof for all purposes, and do, at the Collateral Agent’s option and
such Grantor’s expense, at any time, or from time to time, all acts and things
which the Collateral Agent deems necessary to protect, preserve or realize upon
the Collateral of such Grantor and the Secured Parties’ security interests
therein and to effect the intent of this Agreement, all as fully and effectively
as such Grantor might do.

The Collateral Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 7.1(a) unless an Event of Default has
occurred and is continuing.

(b) If any Grantor fails to perform or comply with any of its agreements
contained herein, the Collateral Agent, at its option, but without any
obligation so to do, may perform or comply with, or cause performance or
compliance with, such agreement.

(c) The expenses of the Collateral Agent incurred in connection with actions
undertaken as provided in this Section 7.1, together with interest thereon at a
rate per annum equal to the rate per annum at which interest would then be
payable on past due Base Rate Loans under the Credit Agreement, from the date of
payment by the Collateral Agent to the date reimbursed by the relevant Grantor,
shall be payable by such Grantor to the Collateral Agent on demand.

(d) Each Grantor hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Agreement are coupled with an interest and are irrevocable as
to each Grantor until this Agreement is terminated and all security interests
created hereby with respect to the Collateral of such Grantor are released.

7.2. Duty of Collateral Agent. The Collateral Agent’s sole duty with respect to
the custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the New York UCC or otherwise, shall be to
deal with it in the same manner as the Collateral Agent deals with similar
property for its own account. Neither the Collateral Agent, any Secured Party
nor any of their respective officers, directors, employees or agents shall be
liable for failure to demand, collect or realize upon any of the Collateral or
for any delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Collateral upon the request of any Grantor or any other Person or
to take any other action whatsoever with regard to the Collateral or any part
thereof. The powers conferred on the Collateral Agent and the Secured Parties
hereunder are solely to protect the Secured Parties’ interests in the Collateral
and shall not impose any duty upon the Collateral Agent or any Secured Parties
to exercise any such powers. The Collateral Agent and the Secured Parties shall
be accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder, except, in the case of the Collateral Agent only in respect of
its own gross negligence or willful misconduct, to the extent required by
applicable law (subject to Section 10.12(e) of the Credit Agreement and other
applicable provisions of the Loan Documents).

 

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7.3. Financing Statements. Each Grantor hereby authorizes the filing of any
financing statements or continuation statements, and amendments to financing
statements, or any similar document in any jurisdictions and with any filing
offices as the Collateral Agent may determine, in its sole discretion, are
necessary or advisable to perfect or otherwise protect the security interest
granted to the Collateral Agent herein. Such financing statements may describe
the Collateral in the same manner as described herein or may contain an
indication or description of collateral that describes such property in any
other manner as the Collateral Agent may determine, in its sole discretion, is
necessary, advisable or prudent to ensure the perfection of the security
interest in the Collateral granted to the Collateral Agent herein. Each Grantor
hereby ratifies and authorizes the filing by the Collateral Agent of any
financing statement with respect to the Collateral made prior to the date
hereof.

7.4. Authority, Immunities and Indemnities of Collateral Agent. Each Grantor
acknowledges, and, by acceptance of the benefits hereof, each Secured Party
agrees, that the rights and responsibilities of the Collateral Agent under this
Agreement with respect to any action taken by the Collateral Agent or the
exercise or non-exercise by the Collateral Agent of any option, voting right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Agreement shall, as among the Secured Parties, be governed
by the Credit Agreement and that the Collateral Agent shall have, in respect
thereof, all rights, remedies, immunities and indemnities granted to it in the
Credit Agreement. By acceptance of the benefits hereof, each Secured Party that
is not a Lender agrees to be bound by the provisions of the Credit Agreement
applicable to the Collateral Agent, including Section 9 thereof, as fully as if
such Secured Party were a Lender. The Collateral Agent shall be conclusively
presumed to be acting as agent for the Secured Parties with full and valid
authority so to act or refrain from acting, and no Grantor shall be under any
obligation, or entitlement, to make any inquiry respecting such authority. Each
Grantor further acknowledges that (a) the Grantors and the Collateral Agent have
entered into the Collateral Trust Agreement and that, pursuant to Section 2.1
thereof, the Collateral Agent has agreed (solely for the benefit of the Secured
Parties) to take such actions and exercise such remedies as may be permitted
solely in accordance with the Requisite Instructions delivered thereto and
(b) that the Collateral Agent shall have no liability hereunder for taking any
such action, exercising any such remedy, or performing any such obligation in
accordance with such Requisite Instructions.

 

  SECTION 8. MISCELLANEOUS

8.1. Amendments in Writing. None of the terms or provisions of this Agreement
may be waived, amended, supplemented or otherwise modified except in accordance
with Section 10.1 of the Credit Agreement; provided that no such waiver,
amendment, supplement or modification shall require the consent of the any
Qualified Counterparty except as expressly provided in Section 10.1 of the
Credit Agreement.

8.2. Notices. All notices, requests and demands to or upon the Collateral Agent
or any Grantor hereunder shall be effected in the manner provided for in
Section 10.2 of the Credit Agreement; provided that any such notice, request or
demand to or upon any Grantor shall be addressed to such Grantor at its notice
address set forth on Schedule 1 or to such other address as such Grantor may
notify the Collateral Agent in writing; provided further that notices to the
Collateral Agent shall be addressed as follows, or to such other address as may
be hereafter notified by the Collateral Agent:

Wells Fargo Bank, N.A.

Corporate Trust Services

MAC N9303-120

Sixth Street and Marquette Avenue

Minneapolis, MN 55479

Attention: AMD Collateral Agency

Telecopy: (612) 667-9825

 

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8.3. No Waiver by Course of Conduct; Cumulative Remedies. Neither the Collateral
Agent nor any Secured Party shall by any act (except by a written instrument
pursuant to Section 8.1), delay, indulgence, omission or otherwise be deemed to
have waived any right or remedy hereunder or to have acquiesced in any Default
or Event of Default. No failure to exercise, nor any delay in exercising, on the
part of the Collateral Agent or any Secured Party, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by the Collateral Agent or any Secured Party of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which the Collateral Agent or such Secured Party would otherwise have on
any future occasion. The rights and remedies herein provided are cumulative, may
be exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.

8.4. Enforcement Expenses; Indemnification.

(a) Each Grantor agrees to pay, or reimburse the Collateral Agent and each
Secured Party for, all its costs and expenses incurred in enforcing or
preserving any rights under this Agreement and the other Loan Documents to which
such Grantor is a party, including the reasonable fees and disbursements of
counsel (including the allocated fees and expenses of in-house counsel) to the
Collateral Agent and counsel to the each Secured Party.

(b) Each Grantor agrees to pay, and to save the Collateral Agent and the Secured
Parties harmless from, any and all liabilities with respect to, or resulting
from any delay in paying, any and all stamp, excise, sales or other taxes which
may be payable or determined to be payable with respect to any of the Collateral
or in connection with any of the transactions contemplated by this Agreement.

(c) Each Grantor agrees to pay, and to save the Collateral Agent and the Secured
Parties harmless from, any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Agreement on the terms set forth in
Section 10.5 of the Credit Agreement.

(d) The agreements in this Section shall survive repayment of the Obligations
and all other amounts payable under the Secured Instruments.

8.5. Successors and Assigns. This Agreement shall be binding upon the successors
and assigns of each Grantor and shall inure to the benefit of the Collateral
Agent and the Secured Parties and their successors and assigns; provided that no
Grantor may assign, transfer or delegate any of its rights or obligations under
this Agreement without the prior written consent of the Collateral Agent and,
unless so consented to, each such assignment, transfer or delegation by any
Grantor shall be void.

8.6. Set-Off. Each Grantor hereby irrevocably authorizes each Secured Party at
any time and from time to time while an Event of Default shall have occurred and
be continuing, without notice to such Grantor or any other Grantor, any such
notice being expressly waived by each Grantor, to set-off and appropriate and
apply any and all deposits (general or special, time or demand, provisional or

 

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final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Secured Party to or for
the credit or the account of such Grantor, or any part thereof in such amounts
as such Secured Party may elect, against and on account of the obligations and
liabilities of such Grantor to such Secured Party hereunder and claims of every
nature and description of such Secured Party against such Grantor, in any
currency, whether arising hereunder, under the Credit Agreement, any other Loan
Document or otherwise, as such Secured Party may elect, whether or not any
Secured Party has made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. Each Secured Party shall
notify such Grantor promptly of any such set-off and the application made by
such Secured Party of the proceeds thereof, provided that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Secured Party under this Section are in addition to other rights
and remedies (including other rights of set-off) which such Secured Party may
have.

8.7. Counterparts. This Agreement may be executed by one or more of the parties
to this Agreement on any number of separate counterparts, and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower, the Administrative Agent and the
Collateral Agent.

8.8. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

8.9. Section Headings. The Section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.

8.10. Integration. This Agreement and the other Secured Instruments represent
the entire agreement of the Grantors and the Secured Parties with respect to the
subject matter hereof and thereof, and there are no promises, undertakings,
representations or warranties by any Secured Party relative to subject matter
hereof and thereof not expressly set forth or referred to herein or in the other
Loan Documents.

8.11. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

8.12. Submission To Jurisdiction; Waivers. Each Grantor hereby irrevocably and
unconditionally:

(a) submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
non exclusive general jurisdiction of the Courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;

 

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(b) consents that any such action or proceeding may be brought in such courts
and waives any objection that it may now or hereafter have to the venue of any
such action or proceeding in any such court or that such action or proceeding
was brought in an inconvenient court and agrees not to plead or claim the same;

(c) agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Grantor at its
address referred to in Section 8.2 or at such other address of which the
Collateral Agent shall have been notified pursuant thereto;

(d) agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and

(e) waives, to the maximum extent not prohibited by law, any right it may have
to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages.

8.13. Acknowledgements. Each Grantor hereby acknowledges that:

(a) it has been advised by counsel in the negotiation, execution and delivery of
this Agreement and the other Loan Documents to which it is a party;

(b) neither the Collateral Agent nor any Secured Party has any fiduciary
relationship with or duty to any Grantor arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Grantors, on the one hand, and the Collateral Agent and the Secured Parties,
on the other hand, in connection herewith or therewith is solely that of debtor
and creditor; and

(c) no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Collateral Agent and the Secured Parties or among the Grantors and the
Collateral Agent and the Secured Parties.

8.14. Additional Grantors; Supplements to Schedules. (a) Each Subsidiary of the
Borrower that is required to become a party to this Agreement pursuant to
Section 6.9 of the Credit Agreement shall become a Grantor for all purposes of
this Agreement upon execution and delivery by such Subsidiary of an Assumption
Agreement in the form of Annex I hereto.

(b) The Grantors shall deliver to the Collateral Agent supplements to the
Schedules to this Agreement as necessary to reflect changes thereto arising
after the date hereof. Such supplements shall become part of this Agreement as
of the date of delivery to the Collateral Agent.

8.15. Releases.

(a) At such time as the Loans and all other Borrower Obligations (other than
contingent surviving indemnity obligations in respect of which no claim or
demand has been made and Borrower Hedge Agreement Obligations) have been paid in
full, all commitments to extend credit under the Loan Documents have terminated
and the Borrower Hedge Agreement Obligations to any Qualified Counterparty shall
have either (i) been paid in full and the Specified Hedge Agreements shall have
been terminated or (ii) secured by a collateral arrangement satisfactory to the
Qualified Counterparty in its sole discretion, the Collateral shall be released
from the Liens created hereby, and this Agreement and all obligations (other
than those expressly stated to survive such termination) of the Collateral Agent
and

 

22

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each Grantor hereunder shall terminate, all without delivery of any instrument
or performance of any act by any party, and all rights to the Collateral shall
revert to the Grantors. At the request and sole expense of any Grantor following
any such termination, the Collateral Agent shall deliver to such Grantor any
Collateral held by the Collateral Agent hereunder and execute and deliver to
such Grantor such documents (in form and substance reasonably satisfactory to
the Collateral Agent) as such Grantor may reasonably request to evidence such
termination.

(b) If any of the Collateral is sold, transferred or otherwise disposed of by
any Grantor in a transaction permitted by the Credit Agreement, then the Lien
created pursuant to this Agreement in such Collateral shall be released, and the
Collateral Agent, at the request and sole expense of such Grantor, shall execute
and deliver to such Grantor all releases or other documents reasonably necessary
or desirable for the release of such Collateral (not including Proceeds thereof)
from the security interests created hereby.

(c) Upon receipt by the Collateral Agent of a written notice from the Borrower
stating that the 2012 Notes Obligations are no longer required to be secured
equally and ratably by the Liens securing the Borrower Obligations pursuant to
Section 4.11 of the Senior Notes Indenture (which notice shall include evidence
that the Liens securing the Borrower Obligations are “Permitted Liens” under the
Senior Notes Indenture), the security interest granted hereunder in favor of the
Collateral Agent shall no longer secure the 2012 Notes Obligations and the
definition of “Obligations” shall automatically be amended to no longer include
the 2012 Notes Obligations without delivery of any instrument or performance of
any act by any party. In the absence of bad faith or willful misconduct on its
part, the Collateral Agent may conclusively rely, as to the truth of the
statements and the accuracy of the mathematical calculations stated therein,
upon such written notice.

8.16. WAIVER OF JURY TRIAL. EACH GRANTOR AND, BY ACCEPTANCE OF THE BENEFITS
HEREOF, THE COLLATERAL AGENT AND EACH OTHER SECURED PARTY, HEREBY IRREVOCABLY
AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.

8.17. Secured Parties. By accepting the benefits of the Collateral, each of the
Secured Parties agrees to be bound by the terms of the Loan Documents,
including, without limitation, Section 9 of the Credit Agreement.

8.18. Collateral Trust Agreement; Secured Instrument. Notwithstanding anything
herein to the contrary, each Grantor hereby acknowledges that the lien and
security interest granted to the Collateral Agent pursuant to this Agreement and
the exercise of any right or remedy by the Collateral Agent hereunder are
subject to the provisions of the Collateral Trust Agreement. The Collateral
Agent shall exercise all powers, discretions, rights and remedies hereunder
solely in accordance with the provisions of the Collateral Trust Agreement. In
the event of any conflict or inconsistency between or among the terms of the
Collateral Trust Agreement and this Agreement, the terms of the Collateral Trust
Agreement shall govern. This Agreement is a Secured Instrument for purposes of
the Collateral Trust Agreement and shall have (unless otherwise expressly
indicated herein) been construed, administered and applied in accordance with
the terms and provisions thereof.

 

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IN WITNESS WHEREOF, each of the undersigned has caused this Collateral Agreement
to be duly executed and delivered as of the date first above written.

 

ADVANCED MICRO DEVICES, INC. By:  

/s/ Robert J. Rivet

Name:   Robert J. Rivet Title:   Executive Vice President,   Chief Financial
Officer AMD INTERNATIONAL SALES & SERVICE, LTD. By:  

/s/ Hollis M. O’Brien

Name:   Hollis M. O’Brien Title:   Secretary AMD (U.S.) HOLDINGS, INC. By:  

/s/ Hollis M. O’Brien

Name:   Hollis M. O’Brien Title:   Vice President and Secretary

[Signature Page to Collateral Agreement]

--------------------------------------------------------------------------------

AMD US FINANCE, INC. By:  

/s/ Hollis M. O’Brien

Name:   Hollis M. O’Brien Title:   Secretary

[Signature Page to Collateral Agreement]

--------------------------------------------------------------------------------

ATI RESEARCH SILICON VALLEY INC. By:  

/s/ Dave Orton

Name:   Dave Orton Title:   Director ATI RESEARCH, INC. By:  

/s/ Patrick Crowley

Name:   Patrick Crowley Title:   Director ATI TECHNOLOGIES SYSTEMS CORP. By:  

/s/ Dave Orton

Name:   Dave Orton Title:   Director

[Signature Page to Collateral Agreement]

--------------------------------------------------------------------------------

Acknowledged and Agreed to:

WELLS FARGO BANK, N.A.,

as Collateral Agent

 

By:  

/s/ Lynn M. Steiner

Name:   Lynn M. Steiner Title:   Vice President

[Signature Page to Collateral Agreement]