Document:

<PAGE>

                                                              Exhibit 10.50(f-4)
                                                                Redacted Version

                                 THIRD AMENDMENT

                                       TO

                           SPONSORS' SUPPORT AGREEMENT

*** Confidential treatment has been requested as to certain portions of this
agreement.  Such omitted confidential information has been designated by an
asterisk and has been filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended, and the Commission's rules and regulations promulgated under the
Freedom of Information Act, pursuant to a request for confidential treatment.

THIS THIRD AMENDMENT (this "Amendment"), dated 20 February 2001, is made between
                            ---------
ADVANCED MICRO DEVICES, INC., a corporation organized and existing under the
laws of the State of Delaware, United States of America, with its chief
executive office and principal place of business at One AMD Place, Sunnyvale,
California 94088, United States of America ("AMD Inc."), AMD SAXONY HOLDING
                                             --------
GMBH, Dresden, registered in the Commercial Register of the Dresden County
Court, HRB 13931 ("AMD Holding"; and, together with AMD Inc., collectively, the
                   -----------
"Sponsors"), DRESDNER BANK LUXEMBOURG S.A., as Agent (and successor to Dresdner
 --------
Bank AG in such capacity) under the Loan Agreement referred to below (in such
capacity, the "Agent") for the Banks referred to below, and DRESDNER BANK AG, as
               -----
Security Agent under such Loan Agreement (in such capacity, the "Security
                                                                 --------
Agent"), for the Secured Parties referred to below.
-----

                              W I T N E S S E T H:

WHEREAS, AMD Saxony Manufacturing GmbH, Dresden, registered in the Commercial
Register of the Dresden Country Court HRB 13186 ("AMD Saxonia"), a wholly-owned
                                                  -----------
Subsidiary of AMD Holding, which is, in turn, a wholly-owned Subsidiary of AMD
Inc., has been formed for the purpose of constructing, owning, and operating (i)
the Plant and (ii) the integrated Design Center;

WHEREAS, in order to finance the construction of the Plant and the Design
Center, and start-up costs of the operation of the Plant, inter alia, (i) AMD
Saxonia has entered into a Syndicated Loan Agreement, dated 11 March 1997, as
amended, (the "Loan Agreement") with the Agent, the Security Agent and the Banks
from time to time party thereto providing, inter alia, for a senior secured term
facility aggregating up to DM 1,500,000,000 (one billion five hundred million
Deutsche Marks), and (ii) the Sponsors, the Agent and the Security Agent have
entered into that certain Sponsors' Support Agreement dated 11 March 1997, as
amended, (the "Sponsors' Support Agreement") providing (x)
               ---------------------------

                                       1
<PAGE>

certain assurances to the Agent and Security Agent with respect to the
completion of the Project, and (y) certain undertakings to and for the benefit
of the Secured Parties;

WHEREAS, AMD Saxonia, the Agent, the Security Agent and the Banks wish, with the
consent of the Sponsors to, among other things, amend the Loan Agreement and the
Sponsors' Support Agreement;

WHEREAS, the Sponsors are willing to provide certain additional undertakings to
and for the benefit of the Secured Parties as provided in this Amendment and to
amend and supplement the Sponsors' Support Agreement on the terms and subject to
the conditions of this Amendment;

NOW, THEREFORE, the Sponsors, the Agent (for itself and on behalf of the Banks),
and the Security Agent (on behalf of the Secured Parties), agree as follows:

                                    ARTICLE I
                                   Definitions

SECTION 1.1  Definitions. Capitalized terms not otherwise defined in this
Amendment are used with the definitions assigned to them in the Sponsors'
Support Agreement.

SECTION 1.2  Construction. In this Amendment, unless the context requires
otherwise, references to Sections and Schedules are to Sections and Schedules of
the Sponsors' Support Agreement. Section headings are inserted for reference
only and shall be ignored in construing this Amendment.

                                   ARTICLE II
                                   Amendments

SECTION 2.1  Amendments. The Sponsors' Support Agreement shall be amended and
restated in the form set out in Schedule 1 to this Amendment Agreement.
                                ----------

                                  ARTICLE III
                     Revised Budget and Disclosure Schedule

SECTION 3.1  Budget and Disclosure Schedule. The parties hereto confirm that the
Project Budget attached as Schedule 2 hereto is, the "Approved Project Budget"
                           ----------
for all purposes of the Sponsors' Support Agreement until such time as there is
another Approved Project Budget in accordance with the terms of the Sponsors'
Support Agreement. The parties hereto agree that the Sponsors' Disclosure
Schedule in Schedule II to the Sponsors' Support Agreement shall be deleted and
be replaced with the Sponsors' Disclosure Schedule attached as Schedule 3
                                                               ----------
hereto.

                                   ARTICLE IV

                                       2
<PAGE>

                                 Miscellaneous

SECTION 4.1  Representations and Warranties. Each of the Sponsors hereby
represents and warrants that:

(a)  Organization; Corporate Power.  It is duly incorporated and validly
     existing under the laws of the jurisdiction of its organization, and has
     all necessary power and authority to execute and deliver this Amendment and
     to consummate the transactions contemplated by the Sponsors' Support
     Agreement, as amended hereby;

(b)  Corporate Authority; No Conflict.  The execution and delivery by it of this
     Amendment, and the performance by it of its obligations under the Sponsors'
     Support Agreement, as amended by this Amendment, have been duly authorized
     by all necessary corporate action (including any necessary shareholder
     action) on its part, and do not and will not (i) violate any provision of
     any law, rule, regulation, order, writ, judgment, injunction, decree,
     determination or award presently in effect having applicability to it, or
     of its charter or by-laws or (ii) result in a breach of, result in a
     mandatory prepayment or acceleration of indebtedness evidenced by or
     secured by, or constitute a default under, any indenture or loan or credit
     agreement, or any other agreement or instrument to which it is a party or
     by which it or its properties may be bound, or require the creation or
     imposition of any encumbrance of any nature upon or with respect to any of
     the properties now owned or hereafter acquired by it; and

(c)  Valid and Binding Obligations.  The Sponsors' Support Agreement, as amended
     by this Amendment, constitutes its legal, valid and binding obligation,
     enforceable against it in accordance with its terms subject, however, to
     applicable bankruptcy, insolvency, reorganization, moratorium or similar
     laws affecting creditors' rights generally and, as to enforceability, by
     general equitable principles.

SECTION 4.2  Repetition of Representation and Warranties. The representations
and warranties contained in Sections 12.1 and 12.2 of the Sponsors' Support
                            -------------     ----
Agreement shall be repeated on the date hereof except to the extent any such
representation and warranty expressly relates solely to an earlier date.

SECTION 4.3  Miscellaneous.

(a)  This Amendment is limited as specified and, except as expressly herein
     provided, shall not constitute a modification, amendment or waiver of any
     other provision of the Sponsors' Support Agreement or any provision of any
     other Operative Document. Except as specifically amended by this Amendment,
     the Sponsors' Support Agreement shall remain in full force and effect and
     is hereby ratified and confirmed.

(b)  This Amendment shall be an Operative Document under and for purposes of the
     Sponsors' Support Agreement.

                                       3
<PAGE>

(c)  The form and execution of this Amendment and all rights and obligations of
     the parties arising hereunder shall be governed by the laws of the Federal
     Republic of Germany.

(d)  This Amendment has been executed in the English language.

(e)  This Amendment may be executed in any number of counterparts and all of
     such counterparts taken together shall be deemed to constitute one and the
     same instrument.

                  [Remainder of page intentionally left blank]

IN WITNESS WHEREOF, each of the parties set out below has caused this Amendment
to be duly executed and delivered by its respective officer or agent thereunto
duly authorised as of the date first above written.

ADVANCED MICRO DEVICES, INC.

By /s/ Robert J. Rivet
   -------------------

Its Senior Vice President and Chief Financial Officer

AMD SAXONY HOLDING GMBH

By /s/ Thomas M. McCoy
   -------------------

Its Managing Director

DRESDNER BANK LUXEMBOURG S.A., as
Agent

/s/ Marcus Nelgen  /s/ Robert von Finckenstein
-----------------  ---------------------------

DRESDNER BANK AG, as Security Agent

/s/ Marcus Nelgen  /s/ Robert von Finckenstein
-----------------  ---------------------------

                                       4
<PAGE>

                                   Schedule 1

                Amended and restated Sponsors' Support Agreement

                                       5
<PAGE>

                           SPONSORS' SUPPORT AGREEMENT

                               Dated 11 March 1997

                   AS AMENDED ON 6 FEBRUARY 1998, 29 JUNE 1999

                                       AND

                                20 February 2001

                                     between

                          ADVANCED MICRO DEVICES, INC.,

                            AMD SAXONY HOLDING GMBH,

                                       and

                                DRESDNER BANK AG,
                               as Security Agent,

                                       and

                         DRESDNER BANK LUXEMBOURG S.A.,
                                    as Agent

                                       1
<PAGE>

                                     INDEX

ARTICLE I    Definitions and Accounting Terms..................................

ARTICLE II   Contribution of Equity Capital....................................

ARTICLE III  Sponsors' Loans...................................................

ARTICLE IV   Project Costs.....................................................

ARTICLE V    Completion Guaranty...............................................

ARTICLE VI   Subsidies Undertaking.............................................

ARTICLE VII  [left intentionally blank]........................................

ARTICLE VIII AMD Inc. Share Pledge Agreement;
             AMD Holding Security Documents

ARTICLE IX   Sponsors' Guaranty................................................

ARTICLE X    Sponsors' Subordination Agreement;
             AMD Inc. Subordination Agreement

ARTICLE XI   Obligations Unconditional.........................................

ARTICLE XII  Representations and Warranties....................................

ARTICLE XIII Covenants.........................................................

ARTICLE XIV  Costs and Expenses; Indemnities; Taxes; Etc.......................

ARTICLE XV   Miscellaneous.....................................................

ARTICLE XVI  Governing Law, Jurisdiction, and Language.........................

SCHEDULE I   -    [left intentionally blank]
SCHEDULE II  -    Sponsors' Disclosure Schedule

                                       2
<PAGE>

                          SPONSORS' SUPPORT AGREEMENT

THIS SPONSORS' SUPPORT AGREEMENT, dated 11 March 1997, as amended, is made
between ADVANCED MICRO DEVICES, INC., a corporation organized and existing under
the laws of the State of Delaware, United States of America, with its chief
executive office and principal place of business at One AMD Place, Sunnyvale,
California  94088, United States of America ("AMD Inc."), AMD SAXONY HOLDING
                                              -------
GMBH, Dresden, registered in the Commercial Register of the Dresden County
Court, HRB 13931 ("AMD Holding"; and, together with AMD Inc., collectively, the
                   -----------
"Sponsors"), and DRESDNER BANK LUXEMBOURG S.A. ("Dresdner"), as Agent under the
 --------                                        --------
Loan Agreement referred to below for the Banks referred to below (in such
capacity, the "Agent"), and DRESDNER BANK AG, as Security Agent under such Loan
               -----
Agreement (in such capacity, the "Security Agent") for the Secured Parties
                                  --------------
referred to below.

                             W I T N E S S E T H :
                             - - - - - - - - - -

WHEREAS, AMD Saxony Manufacturing GmbH, Dresden, registered in the Commercial
Register of the Dresden County Court HRB 13186 ("AMD Saxonia"), a wholly-owned
                                                 -----------
Subsidiary (such and other capitalised terms being used herein with the meanings
provided in Section 1.1) of AMD Holding, which is, in turn, a wholly-owned
            -----------
Subsidiary of  AMD Inc., has been formed for the purpose of constructing,
owning, and operating (i) the Plant and (ii) the integrated Design Center (the
construction, ownership, and operation of the Plant and the Design Center being
hereinafter called the "Project");
                        -------

WHEREAS, in order to finance the construction of the Plant and the Design
Center, and start-up costs of the operation of the Plant, (i) the Sponsors have
made, and expect to make substantial subordinated loans to, and AMD Holding has
made, and from time to time may make, substantial equity investments in, AMD
Saxonia, and (ii) AMD Saxonia has entered into a Syndicated Loan Agreement,
dated 11 March 1997, as amended (as so amended, the "Loan Agreement"), with the
                                                     --------------
banks from time to time party thereto (hereinafter collectively called the
"Banks" and individually called a "Bank"),  the Agent, Dresdner, as Paying Agent
 -----                             ----
(in such capacity, the "Paying Agent"), and Dresdner Bank AG, as Security Agent,
                        ------------
providing, inter alia, for a senior secured term facility aggregating up to DM
           ----- ----
1,500,000,000 (one billion five hundred million Deutsche Marks);

WHEREAS, the Sponsors desire that the Project be constructed and completed and
are entering into this Agreement with the Agent (for the benefit of itself and
the Banks) and the Security Agent (for the benefit of the Secured Parties), for
the purpose, among other things, of providing (i) certain assurances with
respect to the completion of the Project, and (ii) certain undertakings to and
for the benefit of the Secured Parties; and

                                       3
<PAGE>

WHEREAS, a condition precedent to the initial Advance is, inter alia, the
                                                          ----- ----
execution by the Sponsors of this Agreement and, in extending credit to AMD
Saxonia under the Loan Agreement, the Banks are relying on the undertakings of
the Sponsors contained herein;

NOW, THEREFORE, the Sponsors, the Agent (for itself and on behalf of the Banks),
and the Security Agent (on behalf of the Secured Parties), agree as follows:

                                   ARTICLE I
                        Definitions and Accounting Terms

SECTION 1.1 Definitions. Unless otherwise defined herein, the following terms
(whether or not underlined) when used in this Agreement, including its preamble
and recitals, shall, except where the context otherwise requires, have the
following meanings (such meanings to be equally applicable to the singular and
plural forms thereof):

            "Advances" means all advances that the Banks make to AMD Saxonia
             --------
pursuant to the Loan Agreement.

            "Affiliate" means, with respect to any Person, a Person which,
             ---------
directly or indirectly, controls, is controlled by, or is under common control
with, such other Person; and, for purposes of this definition, the concept of

"control", with respect to any Person, signifies the possession of the power to
 -------
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, the possession of voting
rights, by contract, or otherwise; provided, that none of the Agent, the
                                   --------
Security Agent, the Paying Agent, any of the Banks, nor any of their respective
Affiliates, shall be deemed to be Affiliates of (x) any AMD Company or (y) any
other Subsidiary of AMD Inc.

            "Agent" has the meaning assigned to that term in the introduction to
             -----
this Agreement.

            "Agreement" means this Sponsors' Support Agreement, as the same may
             ---------
be amended or modified in accordance with the terms hereof and in effect.

            "AMD Companies" means AMD Saxonia, AMD Holding, and AMD Inc.,
             -------------
collectively.

            "AMD Holding" has the meaning assigned to that term in the
             -----------
introduction to this Agreement.

            "AMD Holding Assignment (U.S.A.)" means the AMD Holding Assignment
             -------------------------------
of, inter alia, rights under the Wafer Purchase Agreements, the Sponsors' Loan
Agreement, and the Revolving Loan Facility Agreement, in the form set out in
Schedule 56 to the Loan Agreement, between AMD Holding and the Security Agent.

                                       4
<PAGE>

            "AMD Holding Assignment of Contractual Rights" means the AMD Holding
             --------------------------------------------
Assignment of Contractual Rights, in the form set out in Schedule 55 to the Loan
                                                         -----------
Agreement, between AMD Holding and the Security Agent.

            "AMD  Holding   Assignment  of  Current   Assets"  means  the  AMD
             -----------------------------------------------
Holding Security  Assignment of Current Assets,  in the form set out in
Schedule 52 to the Loan Agreement, between AMD Holding and the Security Agent.
-----------

            "AMD Holding Charge of Bank Accounts" means the AMD Holding Charge
             -----------------------------------
of Bank Accounts, in the form set out in Schedule 54 to the Loan Agreement,
                                         -----------
between AMD Holding and the Security Agent.

            "AMD Holding Global Assignment" means the AMD Holding Global
             -----------------------------
Assignment, in the form set out in Schedule 53 to the Loan Agreement, between
                                   -----------
AMD Holding and the Security Agent.

            "AMD Holding Research Agreement" means the AMD Holding Research,
             ------------------------------
Design and Development Agreement, in the form set out in Schedule 34 to the Loan
                                                         -----------
Agreement, between AMD Inc. and AMD Holding.

            "AMD Holding Security" means all collateral security created
             --------------------
pursuant to the AMD Holding Security Documents.

            "AMD Holding Security Documents" means, collectively, the AMD
             ------------------------------
Holding Assignment (U.S.A), the AMD Holding Assignment of Contractual Rights,
the AMD Holding Assignment of Current Assets, the AMD Holding Charge of Bank
Accounts, the AMD Holding Global Assignment, the AMD Holding Share Pledge
Agreement, and each other instrument or document designated by the Agent (with
the consent of each AMD Company) as an AMD Holding Security Document under and
for purposes of this Agreement.

            "AMD Holding Share Pledge Agreement" means the AMD Holding Share
             ----------------------------------
Pledge Agreement, in the form set out in Schedule 51 to the Loan Agreement,
                                         -----------
between AMD Holding and the Security Agent.

            "AMD Holding Wafer Purchase Agreement" means the AMD Holding Wafer
             ------------------------------------
Purchase Agreement, in the form of Schedule 33 to the Loan Agreement, between
                                   -----------
AMD Inc. and AMD Holding.

            "AMD Inc." has the meaning assigned to that term in the introduction
             -------                                                ------------
to this Agreement.

            "AMD Inc. Guaranty" means the AMD Inc. Guaranty in the form set out
             -----------------
in Schedule 27 to the Loan Agreement, executed by AMD Inc. in favour of AMD
   -----------
Saxonia, the Agent, and the Security Agent for the benefit of the Secured
Parties.

            "AMD Inc. 1999 Loan and Security Agreement" means the Loan and
             -----------------------------------------
Security Agreement, dated as of July 13, 1999, between, inter alia, AMD Inc.,
                                                        ----- ----
the lenders party thereto, and

                                       5
<PAGE>

Bank of America National Trust and Savings Association, as administrative agent,
as amended by the First Amendment to Loan and Security Agreement, dated as of
July 30, 1999 and by the Second Amendment to Loan and Security Agreement, dated
as of February 12, 2001.

            "AMD Inc. Primary Bank Credit Agreement" means, from time to time:
             --------------------------------------

            (i)    the AMD Inc. 1999 Loan and Security Agreement; or

            (ii)   if the agreement referred to in paragraph (i) above is
                                                   -------------
                   terminated or cancelled, then any secured or unsecured
                   revolving credit or term loan agreement between or among AMD
                   Inc., as borrower, and any bank or banks, as lender(s), for
                   borrowed monies to be used for general corporate purposes of
                   AMD Inc., with an original term of not less than 4 years and
                   an original aggregate loan commitment of at least
                   $100,000,000 (one hundred million Dollars) or the equivalent
                   thereof in any other currency, and, if there is more than one
                   such revolving credit or term loan agreement, then such
                   agreement which involves the greatest original aggregate loan
                   commitment(s) and, as between agreements having the same
                   aggregate original loan commitment(s), then the one which has
                   the most recent date; or

            (iii)  if the agreement referred to in paragraph (i) above and all
                                                   -------------
                   of the agreements, if any, which could apply under paragraph
                                                                      ---------
                   (ii) above have been terminated or cancelled, then so long as
                   ----
                   paragraph (ii) does not apply as the result of one or more
                   --------------
                   new agreements being entered into, the agreement which is the
                   last such agreement under paragraph (i) or (ii) to be so
                                             -------------    ----
                   terminated or cancelled as in effect immediately prior to
                   such termination or cancellation.

            "AMD Inc. Security" means all collateral security furnished pursuant
             -----------------
to the AMD Inc. Share Pledge Agreement.

            "AMD Inc. Senior Secured Note Indenture" means that certain
             --------------------------------------
Indenture, dated as of August 1, 1996, between AMD Inc. and United States Trust
Company of New York, as trustee, relating to the issuance by AMD Inc. of $
400,000,000 (four hundred million Dollars) of its 11% Senior Secured Notes due
2003, as amended by the First Supplemental Indenture dated as of January 13,
1999, by the Second Supplemental Indenture dated as of April 8, 1999 and by the
Third Supplemental Indenture dated as of July 28, 2000.

            "AMD Inc. Share Pledge Agreement" means the AMD Inc. Share Pledge
             -------------------------------
Agreement, in the form set out in Schedule 41 to the Loan Agreement, between AMD
                                  -----------
Inc. and the Security Agent.

            "AMD Inc. Subordination Agreement" means the AMD Inc. Subordination
            --------------------------------
Agreement, in the form set out in Schedule 42 to the Loan Agreement, between AMD
                                  -----------
Inc., AMD Holding, and the Security Agent.

                                       6
<PAGE>

            "AMD Saxonia" has the meaning assigned to that term in the first
             -----------                                               -----
recital of this Agreement.
-------

            "AMD Saxonia Assignment (U.S.A)" means the AMD Saxonia Assignment
            ------------------------------
of, inter alia, rights under the AMD Saxonia Wafer Purchase Agreement, the
    ----- ----
Sponsors'Loan Agreement, and the Revolving Loan Facility Agreement, in the
form set out in Schedule 50 to the Loan Agreement, between AMD Saxonia and the
                -----------
Security Agent.

            "AMD Saxonia Assignment of Contractual Rights" means the AMD Saxonia
             --------------------------------------------
Assignment of Contractual Rights, in the form set out in Schedule 49 to the Loan
                                                         -----------
Agreement, between AMD Saxonia and the Security Agent.

            "AMD Saxonia Assignment of Current Assets" means the AMD Saxonia
             ----------------------------------------
Security Assignment of Current Assets, in the form set out in Schedule 44 to the
                                                              -----------
Loan Agreement, between AMD Saxonia and the Security Agent.

            "AMD Saxonia Assignment of Fixed Assets" means the AMD Saxonia
             --------------------------------------
Security Assignment of Fixed Assets, in the form set out in Schedule 45 to the
                                                            -----------
Loan Agreement, between AMD Saxonia and the Security Agent.

            "AMD Saxonia Assignment of Insurances" means the AMD Saxonia
             ------------------------------------
Assignment of Insurances, in the form set out in Schedule 46 to the Loan
                                                 -----------
Agreement, between AMD Saxonia and the Security Agent.

            "AMD Saxonia Charge of Project Accounts" means the AMD Saxonia
             --------------------------------------
Charge of Project Accounts, in the form set out in Schedule 48 to the Loan
                                                   -----------
Agreement, between AMD Saxonia and the Security Agent.

            "AMD Saxonia/Dresdner Subsidy Agreement" means the AMD/Dresdner
             --------------------------------------
Subsidy Agreement, in the form set out in Schedule 25 to the Loan Agreement,
                                          -----------
between AMD Saxonia and Dresdner.

            "AMD Saxonia Disclosure Schedule" means the Disclosure Schedule
             -------------------------------
attached to the Loan Agreement as Schedule 15, as it may be amended,
                                  -----------
supplemented, or otherwise modified from time to time by AMD Saxonia with the
written consent of the Agent.

            "AMD Saxonia Global Assignment" means the AMD Saxonia Global
             -----------------------------
Assignment, in the form set out in Schedule 47 to the Loan Agreement, between
                                   -----------
AMD Saxonia and the Security Agent.

            "AMD Saxonia Hedging Contract" means the Agreement, in the form set
             -----------------------------
out in Schedule 50a to the Loan Agreement, between AMD Saxonia and AMD Inc.
       ------------

            "AMD Saxonia Land Charge" means the Grundschuld, in the form set out
             -----------------------
in Schedule 43 to the Loan Agreement, between AMD Saxonia and the Security
   -----------
Agent.

                                       7
<PAGE>

            "AMD Saxonia Research Agreement" means the AMD Saxonia Research,
             ------------------------------
Design and Development Agreement, in the form set out in Schedule 36 to the Loan
                                                         -----------
Agreement, between AMD Holding and AMD Saxonia.

            "AMD Saxonia Security" means all collateral security created
             --------------------
pursuant to the AMD Saxonia Security Documents.

            "AMD Saxonia Security Documents" means, collectively, the AMD
             ------------------------------
Saxonia Assignment (U.S.A), the AMD Saxonia Assignment of Contractual Rights,
the AMD Saxonia Assignment of Current Assets, the AMD Saxonia Assignment of
Fixed Assets, the AMD Saxonia Assignment of Insurances, the AMD Saxonia Charge
of Project Accounts, the AMD Saxonia Land Charge, the AMD Saxonia Global
Assignment, and each other instrument or document designated by the Agent (with
the consent of each AMD Company) as an AMD Saxonia Security Document under and
for purposes of this Agreement.

            "AMD Saxonia Wafer Purchase Agreement"  means the AMD Saxonia Wafer
             ------------------------------------
Purchase Agreement, in the form set out in Schedule 35 to the Loan Agreement,
                                           -----------
between AMD Holding and AMD Saxonia.

            "Approved Project Budget" means:
             -----------------------

            (i)    that certain Project Budget, in the form set out in
                   Schedule 6 to the Loan Agreement, which has been prepared by
                   AMD Saxonia and approved by each Sponsor; and

            (ii)   at any time after such Project Budget has been updated,
                   amended, supplemented, or otherwise modified, and prior to
                   Completion, any such updated, amended, supplemented, or
                   modified Project Budget having been approved by each AMD
                   Company (such approval of each Sponsor not to be unreasonably
                   withheld or delayed) and the Agent (which may, in its sole
                   discretion, consult with the Technical Advisor and the Banks'
                   Auditor) in accordance with (S)18.2 of the Loan Agreement.
                                                  ----

The Approved Project Budget referred to in paragraph (i) above and (subject to
the requirements of (S)13.1(i)(d)(y)(1)) each subsequent Approved Project Budget
                       ----------------
from time to time in effect shall itemise, separately from the other information
set forth therein, and on a Project Phase by Project Phase basis, the aggregate
Capital Expenditure then required to be made by AMD Saxonia in order to complete
each then uncompleted Project Phase of the Project and to achieve Completion.
All references herein to the Approved Project Budget shall, at any time, refer
to the Approved Project Budget as then in effect.

            "Approved Project Schedule" means:
             -------------------------

            (i)    initially, that certain Project Schedule, in the form set out
                   in Schedule 7 to the Loan Agreement, which has been prepared
                      ----------
                   by AMD Saxonia and approved

                                       8
<PAGE>

                   by each Sponsor with respect to the schedule for completing
                   each Project Phase and for achieving Completion; and

            (ii)   at any time after such Project Schedule has been updated,
                   amended, supplemented, or otherwise modified, and prior to
                   Completion, any such updated, amended, supplemented, or
                   modified Project Schedule having been approved by each AMD
                   Company (such approval of each Sponsor not to be unreasonably
                   withheld or delayed) and the Agent (which may, in its sole
                   discretion, consult with the Technical Advisor and the Banks'
                   Auditor) in accordance with (S)18.2 of the Loan Agreement.
                                                  ----

The initial Approved Project Schedule and (subject to the requirements of (S)
13.1(i)(d)(y)(2)) each subsequent Approved Project Schedule from time to time in
----------------
effect shall itemise, separately from the other information set forth therein,
and on a Project Phase by Project Phase basis, the then anticipated date for
completing each then uncompleted Project Phase and for achieving Completion.
All references herein to the Approved Project Schedule shall, at any time, refer
to the Approved Project Schedule as then in effect.

            "Auditor" means Ernst & Young Wirtschaftsprufungsgesellschaft mbH or
             -------
such other firm of auditors charged with duties relating to the Project as may
be appointed by AMD Saxonia with the consent of the Agent, such consent not to
be unreasonably delayed or withheld.

            "Available Tranche A Amount" means, on any date, the excess, if any,
             --------------------------
     of:

            (i)    the Total Tranche A Commitment Amount on such date;

over
----

            (ii)   the aggregate unpaid principal amount of all Tranche A
                   Advances outstanding on such date.

            "Banks' Auditor" means BDO Deutsche Warentreuhand AG Wirtschafts-
             ----------------
prufungsgesellschaft or such other firm of auditors charged with duties relating
to the Project as may be appointed by the Banks with the consent of AMD Saxonia,
such consent not to be unreasonably delayed or withheld.

            "Bank" and "Banks" have the respective meanings assigned to those
             ----       -----
terms in the second recital of this Agreement.
             ------ -------

            "Business Day" means any day of the year on which banks are
             ------------
generally open for business in London, Frankfurt am Main, Dresden, Luxembourg
and, to the extent th e same relates to any obligation to be performed by AMD
Inc., San Francisco.

            "Capital Expenditure" means all acquisition or manufacturing costs
             -------------------
in respect of fixed and movable assets in accordance with (S) 266 2 A II of the
Commercial Code and all acquisition costs for intangible assets in accordance
with (S) 266 2 A I of the Commercial Code, to the extent the same

                                       9
<PAGE>

have a useful operational life of more than one year (not being expenditures
chargeable to the profit and loss account).

            "Capitalised Lease Liabilities" means , with respect to any Person,
             -----------------------------
all monetary obligations of such Person under any leasing or similar arrangement
which, in accordance with GAAP, would be classified as fixed or capitalised
leases or finance leases, and, for purposes of this Agreement, the amount of
such obligations shall be the capitalised amount thereof, determined in
accordance with GAAP, and the stated maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.

            "Cash Equivalent Investment" means any security or other instrument
             --------------------------
set out in Schedule 23 to the Loan Agreement.
           -----------

            "Class A Sponsors' Loans" has the meaning assigned to that term in
             -----------------------
     Section 3.1.
     -----------

            "Class C Sponsors' Loans" has the meaning assigned to that term in
             -----------------------
     Section 3.1.
     -----------

            "Completion" means the date on which the initial satisfaction of all
             ----------
conditions set forth in the Technical Completion Certificate (Obligors) and the
Technical Completion Certificate (Technical Advisor), set out in Schedules 9 and
                                                                 -----------
10 to the Loan Agreement is confirmed to the Agent by the submission of properly
--
executed originals of such Certificates.

            "Completion Certificates" means the Scheduled Project Phase
             -----------------------
Completion Certificates and the Technical Completion Certificates.

            "Consent and Agreement" means:
             ---------------------

            (i)    in the case of the Sponsors, the Sponsors' Consent and
                   Agreement;

            (ii)   in the case of the Contractor, the Contractor's Consent and
                   Agreement;

            (iii)  in the case of an Equipment Supplier, each Equipment
                   Supplier's Consent and Agreement; and

            (iv)   in the case of a Service Supplier, each Service Supplier's
                   Consent and Agreement.

            "Contingent Liabilities" means, with respect to any Person, any
             ----------------------
agreement, undertaking, or arrangement by which such Person guarantees,
endorses, or otherwise becomes or is contingently liable upon (by direct or
indirect agreement, contingent or otherwise, to provide funds for payment to,
supply funds to, or otherwise invest in, a debtor, or otherwise to assure a
creditor against loss) the indebtedness, obligation, or other liability of any
other Person (other than by endorsements of instruments in the course of
collection), or guarantees the payment of dividends or other distributions upon
the shares of any other Person.  The amount of any Person's obligation under any
Contingent Liability shall (subject to any limitation set forth therein) be
deemed to be the

                                      10
<PAGE>

outstanding principal amount (or maximum principal amount, if larger) of the
indebtedness, obligation, or other liability guaranteed thereby.

            "Contractor" means Meissner & Wurst GmbH & Co., Rossbachstrasse 38,
             ----------
70499 Stuttgart, registered in the Commercial Register of the Stuttgart County
Court HRA 1208.

            "Contractor's Consent and Agreement" means the Contractor's Consent
             ----------------------------------
and Agreement, in the form set out in Schedule 39 to the Loan Agreement, or in
                                      -----------
such other form as is consented to by the Security Agent from the Contractor in
favour of the Security Agent.

            "Contractual Obligation" means, as to any Person, any provision of
             ----------------------
any security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust, or other instrument, document, or agreement
to which such Person is a party or by which it or any of its property is bound.

            "Contribution Date" means 30 June 1999.
             -----------------

            "Design/Build Agreement" means the Design/Build Agreement for the
             ----------------------
construction of the Plant and the Design Center, in the form set out in Schedule
                                                                        --------
39 to the Loan Agreement, between the Contractor and AMD Saxonia.
--

            "Design Center" means the research, design, and development
             -------------
facilities constructed or to be constructed by AMD Saxonia and integrated with
the Plant for the purpose of designing and developing a broad spectrum of state-
of-the-art and other digital components such as micro-processors and circuits
for the telecommunications and multi-media sectors, and improvements thereof.

            "Deutsche Mark Equivalent" means, with respect to any Class A
             ------------------------
Sponsors' Loan, the amount, expressed in Deutsche Marks, which results from the
conversion of Dollars to Deutsche Marks at a spot rate of exchange equal to the
greater of (i) DM 1.45 for $1.00 and (ii) the Agent's spot rate of exchange,
expressed in Deutsche Marks, for the sale of Dollars for Deutsche Marks
prevailing on the date two (2) Business Days prior to the date such Class A
Sponsors' Loan is or was due to be made.

            "Deutsche Marks" and the sign "DM" mean lawful money of the Federal
             --------------                --
Republic of Germany from time to time.

            "Disclosure Schedules" means the AMD Saxonia Disclosure Schedule and
             --------------------
the Sponsors' Disclosure Schedule, collectively.

            "Dollars" and the sign "$" mean the lawful money of the United
             -------                -
States of America from time to time

            "Dresdner" has the meaning assigned to that term in the introduction
             --------                                               ------------
to this Agreement.

                                      11
<PAGE>

            "Encumbrance" means, (i) when used with reference to any Person
             -----------
organized and existing under the laws of the Federal Republic of Germany, any
security interest in property or in rights to secure payment of a debt or
performance of an obligation, including, but not limited to, mortgages
(Hypotheken), land charges (Grundschulden), annuity charges (Rentenschulden),
contractual and legal pledges (vertragliche und gesetzliche Pfandrechte)
including pledges or mortgages in favour of execution creditors
(Pfandungspfandrechte und Zwangshypotheken), transfers of title by way of
security (Sicherungsubereignungen), assignments of claims or other property or
rights by way of security (Sicherungsabtretungen und sonstige Ubertragungen von
Sachen oder Rechten zur Sicherung), retention of title arrangements
(Eigentumsvorbehalt) including extended retentions of title (erweiterter und
verlangerter Eigentumsvorbehalt), and any other priority or preferential
arrangement of any kind or nature whatsoever, and (ii) when used with reference
to any other Person, any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge (including floating and fixed charges) against or interest in property to
secure payment of a debt or performance of an obligation, or other preferential
arrangement of any kind or nature whatsoever in respect of any property, but not
including the interest of a lessor under a lease which, in accordance with GAAP,
would be classified as an operating lease.

            "Equipment Suppliers" means, collectively, each Person party to a
             -------------------
contract or other agreement with AMD Saxonia in the capacity of a supplier of
fixed or tangible current assets for the Project; it being understood and agreed
that AMD Inc. or an Affiliate thereof (other than AMD Saxonia) may be an
Equipment Supplier.

            "Equipment Supplier's Consent and Agreement" means, with respect to
             ------------------------------------------
an Equipment Supplier, such Equipment Supplier's Consent and Agreement, in the
form set out in Schedule 40 to the Loan Agreement or Annex 3 to Schedule 49 or
                                                                 -----------
Annex 3 to Schedule 55 of the Loan Agreement, as the case may be, or in such
           -----------
other form as is consented to by the Security Agent, which pertains to a
Material Equipment Supply Contract or which is otherwise required pursuant to
the terms of the Loan Agreement or the Security Documents.

            "Equipment Supply Contract" means each agreement (also in the form
             -------------------------
of an order) between AMD Saxonia and suppliers (including AMD Inc. or one of its
Affiliates) relating to the acquisition by, and delivery to, AMD Saxonia of
fixed or tangible current assets for the Project but excluding Excepted Software
Agreements.

            "Equity Capital" means registered stated capital (Stammkapital).
             --------------

            "Event of Default" means an event which would entitle the Banks to
             ----------------
terminate their commitments and the loan facilities pursuant to (S) 21 of the
                                                                    --
Loan Agreement.

            "Event of Termination" means any event which would entitle a party
             --------------------
to an Operative Document to terminate such Operative Document in accordance with
the terms thereof; provided, however, that such event could reasonably be
                   --------  -------
expected to have a material adverse consequence to the entirety of the
transactions contemplated by the Operative Documents.

                                      12
<PAGE>

            "Excepted Software Agreements" means software licences and software
             ----------------------------
service agreements entered into by AMD Saxonia and which are used exclusively:

            (i)    for financial planning, business administration systems and
                   similar ancillary administrative functions which are not
                   linked or connected with (a) the production process in the
                   Plant; (b) general bookkeeping and invoicing; and (c)
                   production planning); or

            (ii)   in the Design Center.

            "Financing Documents" means, collectively, the Loan Agreement, this
             -------------------
Agreement, the Sponsors' Guaranty, the Sponsors' Subordination Agreement, the
AMD Inc. Subordination Agreement, the Sponsors' Loan Agreement, the Revolving
Loan Facility Agreement, the AMD Saxonia/Dresdner Subsidy Agreement, the
SAB/Dresdner Subsidy Agreement, the 65/35 Burgschaft, the AMD Saxonia Hedging
Contract, the Security Documents, each Consent and Agreement, and each other
instrument or document designated by the Agent (with the consent of each AMD
Company) as a Financing Document under and for purposes of this Agreement.

            "Fiscal Month" means any fiscal month of a Fiscal Year.
             ------------

            "Fiscal Quarter" means any fiscal quarter of a Fiscal Year.
             --------------

            "Fiscal Year" means any period of approximately 12 consecutive
             -----------
calendar months ending on the last Sunday in December; references to a Fiscal
Year with a number corresponding to any calendar year (e.g., the "1997 Fiscal
Year") refer to the Fiscal Year ending on the last Sunday in December occurring
during such calendar year.

            "GAAP" means, (x) in the case of AMD Saxonia or AMD Holding or its
             ----
respective financial statements, those generally accepted accounting principles
in general use by the accounting profession (Grundsatze ordnungsgemasser
Buchfuhrung und Bilanzierung) and in effect on the Loan Agreement Effective
Date in Germany (it being expressly understood and agreed that AMD Saxonia's and
AMD Holding's monthly and quarterly financial statements shall be prepared on
the basis of a Fiscal Month or a Fiscal Quarter (rather than on the basis of a
calendar month or a calendar quarter, as the case may be), but shall be
reconciled on an annual basis), and (y) in the case of AMD Inc. or its financial
statements, generally accepted accounting principles set forth from time to time
in the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.

            "Governmental Approvals" means each and every authorization,
             ----------------------
consent, approval, licence, permit, franchise, certificate, exemption or order
of or filing or registration with, any Governmental Authority or legal or
regulatory body, federal, state, local or foreign except for (i) routine or
periodic information reports which, if not filed, would not in any case or in
the aggregate, adversely affect the due authorization, execution, delivery,
validity, legality, or enforceability of any

                                      13
<PAGE>

of the Operative Documents, (ii) filings of certificates or articles of
incorporation, registrations or qualifications of a foreign corporation or
similar corporate filings, and (iii) returns and filings with respect to taxes.

            "Governmental Authority" means any nation or government, any state
             ----------------------
or other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory, or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.

            "Guarantors" means the Federal Republic of Germany and the Free
             ----------
State of Saxony in their respective capacities as guarantors pursuant to the
65/35 Burgschaft.

            "Guaranty Decision" means the decision dated 2 July 1996 set out in
             -----------------
Schedule 24 to the Loan Agreement concerning the guaranty application made by
-----------
AMD Saxonia, including the following documents:

            (i)    the specimen credit agreement F 13.09.1990 (1993 Edition)
                   Federal/State or THA

            (ii)   the General Terms and Conditions applicable to the assumption
                   of Guaranties by the Federal Republic of Germany and the
                   States of the Accession Territory (States) in the edition
                   dated F 04.01.1993 Federal/State, together with

            (iii)  Notes relating to applications for guaranties and loans of
                   the Treuhandanstalt Berlin and/or Federal and State
                   guaranties for projects in the Accession Territory in the
                   edition dated 1993 F 12.10.1990,

            (iv)   together with the Memorandum of Understanding ("Gemeinsame
                   Feststellungen") dated 19 February 1997, the Amendment
                   Decision of the Guarantors of 12 December 1997 and a letter
                   of confirmation from C&L Deutsche Revision AG dated 5 January
                   1998; and

            (v)    the letter from Deutsche Revision AG to Dresdner Kleinwort
                   Benson dated 17 November 2000.

            "Indebtedness" of any Person, means, without duplication:
             ------------

            (i)    all obligations of such Person for borrowed money and all
                   obligations of such Person evidenced by bonds, debentures,
                   notes, or similar instruments;

            (ii)   all obligations, contingent or otherwise, relative to the
                   face amount of all letters of credit, guarantees, and
                   bankers' acceptances issued for the account of such Person,
                   whether or not drawn or paid;

                                      14
<PAGE>

            (iii)  all obligations of such Person as lessee under leases which
                   have been or should be, in accordance with GAAP, recorded as
                   Capitalised Lease Liabilities;

            (iv)   all net liabilities of such Person under or in connection
                   with any interest rate, currency, commodity, or other hedging
                   contracts to which such Person is a party;

            (v)    all other items which, in accordance with GAAP, would be
                   included as liabilities on the liability side of the balance
                   sheet of such Person as of the date at which Indebtedness is
                   to be determined;

            (vi)   whether or not so included as liabilities in accordance with
                   GAAP, all obligations of such Person to pay the deferred
                   purchase price of property or services, and indebtedness
                   (including pre-paid interest thereon) secured by an
                   Encumbrance on property owned or being purchased by such
                   Person (including indebtedness arising under conditional
                   sales or other title retention agreements), whether or not
                   such indebtedness shall have been assumed by such Person or
                   is limited in recourse; and

            (vii)  all Contingent Liabilities of such Person in respect of any
                   of the foregoing.

For all purposes of this Agreement, the Indebtedness of any Person shall include
the Indebtedness of any partnership or unincorporated joint venture in which
such Person is a general partner or a joint venturer, respectively.

            "Information Memorandum" means the Information Memorandum, dated
             ----------------------
September 1996, entitled "AMD Saxony Manufacturing GmbH, Dresden: DM
1,650,000,000 Information Memorandum Limited Recourse Financing", prepared and
furnished by the AMD Companies to the Agent, for distribution to prospective
lenders under the Loan Agreement, as such Information Memorandum may at any time
be amended or modified with the consent of each AMD Company and in effect.

            "Instructing Group" means in respect of any matter, the Banks whose
             -----------------
votes are required to pass a resolution on such matter as determined in
accordance with (S)(S) 22.5 and 22.6 of the Loan Agreement.
                       ----     ----

            "License Agreement" means the License Agreement, in the form set out
             -----------------
in Schedule 38 to the Loan Agreement, between AMD Inc., AMD Holding, and AMD
   -----------
Saxonia.

            "Loan Agreement" has the meaning assigned to that term in the second
             --------------                                               ------
recital of this Agreement.
-------

            "Loan Agreement Effective Date" means the date specified by the
             -----------------------------
Agent in a notice given to the parties hereto as being the first date on or as
of which (i) the Loan Agreement has been executed and delivered by each of the
respective parties thereto, and (ii) the Agent has received each

                                      15
<PAGE>

of the documents referred to in (S)(S) 5.1.1 to 5.1.16 of the Loan Agreement, in
                                       -----    ------
each case in the form, and with the substance, specified therein.

            "Loan Agreement Termination Date" has the meaning assigned to that
             -------------------------------
term in Section 15.7.
        ------------

            "Management Plan" means the project concept attached as Schedule 14
             ---------------                                        -----------
to the Loan Agreement, as the same may from time to time be further amended or
modified by AMD Saxonia (with the consent of each Sponsor, whose consent will
not be unreasonably delayed or withheld) in accordance with the terms of this
Agreement and the Loan Agreement and in effect.

            "Management Service Agreement" means the Amended and Restated
             ----------------------------
Management Service Agreement, in the form set out in Schedule 37 to the Loan
                                                     -----------
Agreement, between AMD Inc., AMD Holding, and AMD Saxonia.

            "Material Adverse Effect" means
             -----------------------

            (i)    a material adverse change in, or a material adverse effect
                   upon, the operations, business, properties, condition
                   (financial or otherwise), or prospects of any AMD Company, or
                   of AMD Inc. and its Subsidiaries, taken as a whole;

            (ii)   with respect to the Contractor, a material adverse change in,
                   or a material adverse effect upon, the operations, business,
                   properties, condition (financial or otherwise), or prospects
                   of the Contractor and its Subsidiaries, taken as a whole;

            (iii)  with respect to an Equipment Supplier, a material adverse
                   change in, or a material adverse effect upon, the operations,
                   business, properties, condition (financial or otherwise), or
                   prospects of such Equipment Supplier and its Subsidiaries,
                   taken as a whole;

            (iv)   with respect to a Service Supplier, a material adverse change
                   in, or a material adverse effect upon, the operations,
                   business, properties, condition (financial or otherwise), or
                   prospects of such Service Supplier and its Subsidiaries,
                   taken as a whole;

            (v)    a material impairment of the ability of any AMD Company, the
                   Contractor, any Equipment Supplier, or any Service Supplier
                   to perform its obligations under any Operative Document to
                   which it is or is to be a party; or

            (vi)   a material adverse effect upon (i) the legality, validity,
                   binding effect, or enforceability against any AMD Company,
                   the Contractor, any Equipment Supplier, or any Service
                   Supplier of any Operative Document, or (ii) the perfection or
                   priority of any Security granted under any of the Security
                   Documents;

                                      16
<PAGE>

provided, however, that with respect to an event described in clause (ii),
--------  -------                                             -----------
(iii), (iv), or, with respect to the Contractor, an Equipment Supplier, or a
----- -----
Service Supplier,  clause (v) or (vi) above, such event could reasonably be
                   ----------    ----
expected to have a material adverse consequence to the entirety of the
transactions contemplated by the Operative Documents.

            "Material AMD Inc. Subsidiary" means, at any time, any Subsidiary of
             ----------------------------
AMD Inc. having at such time (either on an individual basis or on a consolidated
basis for such Subsidiary and its Subsidiaries) either:

            (i)    total (gross) revenues for the preceding four Fiscal Quarter
                   period in excess of 5% of gross revenues for AMD Inc. and its
                   Subsidiaries on a consolidated basis for such period, or

            (ii)   total assets, as of the last day of the preceding Fiscal
                   Quarter, having a net book value in excess of 5% of total
                   assets for AMD Inc. and its Subsidiaries on a consolidated
                   basis as of such date,

in each case, based on the then most recent annual or quarterly financial
statements delivered to the Agent hereunder; provided, however, that AMD Saxonia
                                             --------  -------
and AMD Holding shall, for purposes of this Agreement, each be deemed to be a
Material AMD Inc. Subsidiary.

            "Material Equipment Supply Contract" means each Equipment Supply
             ----------------------------------
     Contract:

            (i)    pursuant to which AMD Saxonia incurs obligations in aggregate
                   in excess of DM 3,750,000, or

            (ii)   which has an initial term in excess of 12 months, or which
                   has an indefinite term and, in either case, cannot be
                   terminated by AMD Saxonia on less than 12 months' notice, or

            (iii)  which is listed in Part I of Schedule 40 to the Loan
                                                -----------
                   Agreement.

            "Material Service Contract" means each Service Contract (with the
             -------------------------
exception of the AMD Saxonia Wafer Purchase Agreement, the Management Service
Agreement and employment contracts):

            (i)    pursuant to which AMD Saxonia incurs obligations in aggregate
                   in excess of DM 2,500,000 during the term of the contract, or

            (ii)   which has an initial term in excess of 12 months, or which
                   has an indefinite term and, in either case, cannot be
                   terminated by AMD Saxonia on less than 12 months' notice, or

            (iii)  which is listed in Part I of Schedule 40 to the Loan
                                                -----------
                   Agreement.

                                      17
<PAGE>

            "Minimum Liquidity Covenant" means the covenant described as
             --------------------------
(Mindestliquiditatskennzahl) in Schedule 17 to the Loan Agreement, pursuant to
                                -----------
which AMD Saxonia has undertaken to ensure at all times from 1 July 2001 until
the payment in full of all Secured Obligations, the balance standing to the
credit of the Project Accounts shall be ***

            "Minimum Liquidity Covenant Calculation Date" means, with effect
             -------------------------------------------
from 1 July 2001:

            (i)    the date as of which the Minimum Liquidity Covenant is, or is
                   required to be, calculated in any certificate of compliance
                   furnished by AMD Saxonia pursuant to (S) 16.2.1 of the Loan
                                                            ------
                   Agreement;

            (ii)   the date so referred to in a confirmation relating to the
                   financial covenants given by the Auditor pursuant to
                   (S) 16.2.2 of the Loan Agreement; and
                       ------

            (iii)  each other date on which the Agent has reasonably requested a
                   calculation of the Minimum Liquidity Covenant to be made.

            "Operative Documents" means, collectively, the Project Agreements,
             -------------------
the Financing Documents, the AMD Inc. Primary Bank Credit Agreement, the AMD
Inc. Senior Secured Note Indenture, the Management Plan, each Project Budget,
each Project Schedule, each Approved Project Budget, each Approved Project
Schedule, the Information Memorandum, the Completion Certificates, and each
other instrument or document designated by the Agent (with the consent of each
AMD Company) as an Operative Document under and for purposes of this Agreement.

            "Opinion Reservations" means limitations on the enforceability of
             --------------------
legal documents as a matter of German law or the law of the United States of
America or one of its states and as incorporated as qualifications to an
enforceability opinion in the legal opinions delivered to and accepted by the
Agent under and pursuant to (S) 5.1.11 of the Loan Agreement.
                                ------

            "Organizational Documents" means, with respect to any AMD Company,
             ------------------------
its certificate of incorporation, Memorandum and Articles of Association,
charter, by-laws, and (ex cept with respect to AMD Inc.) all shareholder
agreements, voting trusts, and similar arrangements applicable to any of its
authorised shares of capital stock.

            "Paying Agent" has the meaning assigned to that term in the second
             ------------                                               ------
recital of this Agreement.
-------

            "Perform in Accordance with the Plans and Specifications" means, for
             -------------------------------------------------------
purposes of the Technical Completion tests, and when used for the period from
and after Technical Completion, the performance by the Plant, on a substantially
continuous basis substantially as intended under normal operating conditions, of
the functions for which it was designed in accordance with the Plans and
Specifications.  In order to certify that the Plant is capable of performing
substantially as intended under normal operating conditions, the Technical
Advisor will during normal operations of the Plant

-------------------------
*** CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION.

                                      18
<PAGE>

(and without, to the extent practicable, disrupting production at the Plant),
observe the operation of the Plant and its component parts to determine if the
Plant and its component parts (except for uninstalled spares):

            (x)   are in operation and performing normally; and

            (y)   demonstrate as a whole the operation of the principal
                  component parts of the Plant at production rates consistent
                  with the design capacity of the Plant (as observed by the
                  Technical Advisor from the operating log sheets and such other
                  data as may be reasonably available and is demonstrated from
                  AMD Saxonia's operating reports, copies of which will be
                  obtained by the Technical Advisor).

The Technical Advisor will not be required to conduct specific tests on
individual pieces of the Plant or its component parts in making this
determination.  In order to certify that the Plant has met the tests, or has
demonstrated performance equivalent to the tests, set forth in the definition
"Perform in Accordance with the Plans and Specifications", the Technical Advisor
will:

            (i)    in the case of demonstrated performance equivalent to the
                   tests of the Plant (or portion thereof), obtain and rely on
                   copies of, review, and analyze, AMD Saxonia's operating data
                   comprising, but not limited to, daily log sheets, yield test
                   results, and product shipments and, based upon the foregoing,
                   will determine if the Plant (or such portion) has
                   demonstrated its required performance; and

            (ii)   in the case of a formal test run, observe the operations
                   during normal business hours to verify the operating rates
                   and time of operation and obtain and rely on copies of and
                   review and analyse AMD Saxonia's operating data (as specified
                   in clause (i) above) to independently determine if the Plant
                      ----------
                   (or portion thereof) has demonstrated its required
                   performance.

           "Permitted Encumbrances" means, (i) in the case of AMD Saxonia or AMD
            ----------------------
Holding, any Encumbrance arising by operation of law in the ordinary course of
business, Encumbrances arising in the ordinary course of business as a result of
a supplier retaining title to goods supplied pending payment for such goods, and
Encumbrances on the Security pursuant to the Security Documents, and (ii) in the
case of AMD Inc. or any Subsidiary of AMD Inc. (other than AMD Saxonia or AMD
Holding), a "Permitted Lien" under, and as defined in, the AMD Inc. 1999 Loan
and Security Agreement (or the equivalent thereof in any other AMD Inc. Primary
Bank Credit Agreement).

           "Person" means an individual or a corporation, partnership, trust,
            ------
incorporated or unincorporated association, joint venture, joint stock company,
government (or an agency or political subdivision thereof), or other juridical
entity of any kind.

           "Plans and Specifications" means the plans and specifications to be
            ------------------------
prepared by AMD Saxonia and approved by each of the Sponsors (which approval
shall not be unreasonably delayed or

                                      19
<PAGE>

withheld), the Technical Advisor, and the Agent for the fitting out of the Plant
and the Design Center, as the same may be amended by AMD Saxonia from time to
time with the consent of each Sponsor and the Agent (which consent, in the case
of each Sponsor, shall not be unreasonably delayed or withheld); provided, that
                                                                 --------
amendments to the plans and specifications which do not, individually or in the
aggregate, reduce or adversely affect the value of the Plant and the Design
Center in any material respect or the capacity and purpose of the Plant as set
out in the plans and specifications as originally approved by the Technical
Advisor and the Agent for purposes of the Operative Documents shall not require
the consent of the Agent.

            "Plant" means the advanced silicon wafer production facility
             -----
constructed or to be constructed by AMD Saxonia in or near Dresden, Germany to
manufacture integrated circuits in wafer form using high-volume semi-conductor
wafer fabrication processes.

            "Primary Secured Obligations" means, at the time any determination
             ---------------------------
thereof is to be made, all Secured Obligations then owing and, whether or not
then owing, all Secured Obligations in respect of the principal of and interest
on the Advances.

            "Project" has the meaning assigned to that term in the first recital
             -------                                               ----- -------
of this Agreement.

            "Project Accounts" means the account or accounts referred to and
             ----------------
opened pursuant in (S) 19.1 of the Loan Agreement (including any sub-accounts
                      -----
into which any such account may be divided), as such account may be renewed,
redesignated, or renumbered from time to time.

            "Project Agreements" means, collectively, the Wafer Purchase
             ------------------
Agreements, the Research Agreements, the Management Service Agreement, the
License Agreement, the Design/Build Agreement, the Equipment Supply Contracts,
the Service Contracts, the AMD Inc. Guaranty, and each other instrument or
document designated by the Agent (with the consent of each AMD Company) as a
Project Agreement under and for purposes of this Agreement.

            "Project Budget" means the budget, in the form set out in Schedule 6
             --------------                                           ----------
to the Loan Agreement, with such changes (if any) to its form as the Agent may
from time to time reasonably require, of projected Capital Expenditure for the
implementation of the Project and the Project Phases in the implementation of
the Project prior to Completion, including a detailed projected sources and uses
of funds statement, broken down for each Project Phase on a Fiscal Quarter by
Fiscal Quarter basis, as prepared by AMD Saxonia and approved by each Sponsor in
accordance with the Management Plan and the Project Schedule, such approval not
to be unreasonably withheld or delayed.

            "Project Costs" means all Capital Expenditure and other costs which
             -------------
are incurred by AMD Saxonia in connection with the Project.

            "Project Phase" means each project phase set out in the Approved
             -------------
Project Schedule contemplated for the implementation of the Project.

            "Project Schedule" means the schedule, in the form set out in
             ----------------
Schedule 7 to the Loan Agreement, with such changes (if any) to its form as the
----------
Agent may from t ime to time reasonably require, of Project Phases to be
achieved during the construction of the Project prior to Completion,

                                      20
<PAGE>

as prepared by AMD Saxonia and approved by each Sponsor, such approval not to be
unreasonably withheld or delayed.

            "Relevant AMD Inc. Individual" means any Vice President or more
             ----------------------------
senior officer of AMD Inc., some or all of whose responsibilities include the
Project.

            "Requirements of Law" means, with respect to any Person, any law
             -------------------
(statutory or common), treaty, rule, or regulation or determination of an
arbitrator or of a Governmental Authority, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject.

            "Research Agreements" means, collectively, the AMD Saxonia Research
             -------------------
Agreement and the AMD Holding Research Agreement.

            "Revolving Loans" means, the subordinated unsecured revolving loans
             ---------------
made by either Sponsor to AMD Saxonia under the terms of the Revolving Loan
Facility Agreement.

            "Revolving Loan Facility Agreement" means, the $ 500,000,000
             ---------------------------------
subordinated unsecured Revolving Loan Facility Agreement dated 20 February 2001
between AMD Inc., AMD Holding and AMD Saxonia.

            "SAB" means Sachsische Aufbaubank GmbH, a Gesellschaft mit
             ---
beschrankter Haftung organised and existing under the laws of Germany and
registered in Dresden, Germany, acting on behalf of the Free State of Saxony.

            "SAB Related Agreements" means the AMD Saxonia/Dresdner Subsidy
             ----------------------
Agreement and the SAB/Dresdner Subsidy Agreement, collectively.

            "SAB/Dresdner Subsidy Agreement" means the Agreement, in the form
             ------------------------------
set out in Schedule 26 to the Loan Agreement, between SAB and Dresdner.
           -----------

            "Same Day Funds" means, at the time of any determination, funds
             --------------
which are immediately available to AMD Saxonia.

            "Scheduled Project Phase Completion Certificates" means the
             -----------------------------------------------
Scheduled Project Phase Technical Completion Certificate (Obligors) and the
Scheduled Project Phase Technical Completion Certificate (Technical Advisor).

            "Scheduled Project Phase Technical Completion" when used with
             --------------------------------------------
reference to a Project Phase, shall be deemed to have occurred when:

            (i)    all of the conditions set forth in the form of Scheduled
                   Project Phase Technical Completion Certificate (Obligors)
                   attached to the Loan Agreement as Schedule 9 thereto have
                                                     ----------
                   been satisfied in all material respects, all of the
                   statements appearing in said form of Certificate are true and
                   correct in all material respects, in each case with respect
                   to such Project Phase, and the

                                      21
<PAGE>

                   Agent shall have received a fully executed counterpart of
                   such Certificate; and

            (ii)   the Agent shall have received a fully executed counterpart of
                   the Scheduled Project Phase Technical Completion Certificate
                   (Technical Advisor).

           "Scheduled Project Phase Technical Completion Certificate (Obligors)"
            ------------------------------------------------------------------
means a Certificate, in the form set out in Schedule 9 to the Loan Agreement
                                            ----------
(appropriately completed), executed by the AMD Companies, and delivered to the
Agent.

           "Scheduled Project Phase Technical Completion Certificate (Technical
            -------------------------------------------------------------------
Advisor)" means a Certificate, in the form set out in Schedule 10 to the Loan
--------                                              -----------
Agreement (appropriately completed), executed by the Technical Advisor, and
delivered to the Agent.

           "Secured Obligations" means all actual and contingent obligations of
            -------------------
AMD Saxonia to the Secured Parties under or arising out of the Financing
Documents and the Security Documents.

           "Secured Parties" means the Agent, the Paying Agent, the Security
            ---------------
Agent, and the Banks, collectively.

            "Security" means, collectively, the AMD Inc. Security, the AMD
             --------
Holding Security, and the AMD Saxonia Security.

           "Security Agent" has the meaning assigned to that term in the
            --------------
introduction to this Agreement.
------------

           "Security Documents" means, collectively, the AMD Saxonia Security
            ------------------
Documents, the AMD Holding Security Documents, the AMD Inc. Share Pledge
Agreement, and each other instrument or document designated by the Agent (with
the consent of each AMD Company) as a Security Document under and for purposes
of this Agreement.

           "Service Suppliers" means, collectively, each Person party to a
            -----------------
contract or other agreement with AMD Saxonia in the capacity of a supplier of
services for the Plant or the Design Center.

           "Service Supplier's Consent and Agreement" means, with respect to a
            ----------------------------------------
Service Supplier, such Service Supplier's Consent and Agreement, in the form set
out in Schedule 40 to the Loan Agreement or Annex 3 to Schedule 49 of the Loan
       -----------                                     -----------
Agreement, as the case may be, or such other form as is consented to by the
Security Agent, which pertains to a Material Service Contract or which is
otherwise required pursuant to the terms of the Loan Agreement or the Security
Documents.

           "Service Contract" means each agreement (which may be in the form of
            ----------------
an accepted order) between AMD Saxonia and a Service Supplier relating to the
acquisition by, and delivery to, AMD Saxonia of services for the Project but
excluding Excepted Software Agreements.

           "65/35 Burgschaft" means the several maximum amount shortfall
            ----------------
guaranties issued by each of the Free State of Saxony (26%) and the Federal
Republic of Germany (39%) in

                                      22
<PAGE>

accordance with the Guaranty Decision up to a maximum aggregate amount of DM
975,000,000 (nine hundred and seventy five million Deutsche Marks), together
with 65% of the shortfall of interest and costs, vested with a first right of
satisfaction in favour of the Banks over all security granted by each AMD
Company as security for the Banks' risk of recovery (but subject to a set-off of
65 % of payments (if any) made under the Sponsors' Guaranty against the
Guarantors' obligations under the aforesaid shortfall guaranties).

          "Sponsors" has the meaning assigned to that term in the introduction
           --------                                               ------------
to this Agreement.

          "Sponsors' Consent and Agreement" means the Sponsors' Consent and
           -------------------------------
Agreement, in the form set out in Schedule 31 to the Loan Agreement, between the
                                  -----------
Sponsors, the Agent, and the Security Agent.

          "Sponsors' Disclosure Schedule" means the Disclosure Schedule attached
           -----------------------------
as Schedule II, as it may be amended, supplemented, or otherwise modified from
   -----------
time to time by the Sponsors with the written consent of the Agent.

          "Sponsors' Guaranty" means the Sponsors' Guaranty, in the form set out
           ------------------
in Schedule 32 to the Loan Agreement, executed by the Sponsors in favour of the
   -----------
Agent and the Security Agent for the benefit of the Secured Parties.

          "Sponsors' Loan Agreement" means the Sponsors' Loan Agreement, in the
           ------------------------
form set out in Schedule 29 to the Loan Agreement, between the Sponsors, as
                -----------
lenders, and AMD Saxonia, as borrower.

          "Sponsors' Loans" means all loans made or to be made by AMD Inc. or
           ---------------
AMD Holding to AMD Saxonia in accordance with the terms of the Sponsors' Loan
Agreement, which loans are subordinated in accordance with the Sponsors'
Subordination Agreement.

          "Sponsors' Subordination Agreement" means the Sponsors' Subordination
           ---------------------------------
Agreement, in the form set out in Schedule 30 to the Loan Agreement, executed by
                                  -----------
the Sponsors, AMD Saxonia, and the Security Agent.

          "Sponsors' Warranty Date" means each of the following dates which
           -----------------------
occurs prior to the exercise of rights by the Security Agent under any of the
Security Documents: (i) the Loan Agreement Effective Date, (ii) each date AMD
Saxonia delivers a notice of drawing for an Advance under the Loan Agreement,
(iii) each date the AMD Companies deliver each Scheduled Project Phase Technical
Completion Certificate (Obligors), (iv) the date of Technical Completion, and
(v) each date the Sponsors deliver the certificate referred to in Section
                                                                  -------
13.1(i)(c).
----------

          "Stock Offering" means a public or private sale or other placement of
           --------------
stock of AMD Inc. in the capital markets (which, for avoidance of doubt, shall
not include (i) the issuance by AMD Inc. of stock options (and/or the issuance
by AMD Inc. of stock upon the exercise of any existing or future such stock
options) to any of its or its affiliates' directors, officers and/or employees
or (ii) purchases of AMD Inc. stock by Fujitsu Limited in connection with the
Fujitsu AMD Semiconductor Limited joint venture between AMD Inc. and Fujitsu
Limited).

                                      23
<PAGE>

            "Subsidiary" means with respect to (i) any Person organised and
             ----------
existing under the laws of the Federal Republic of Germany, a subsidiary within
the meaning of the term "abhangiges Unternehmen" in (S) 17 of the German Stock
Corporation Act (Aktiengesetz); and (ii) any other Person, a corporation or
other entity of which such Person or such Person and/or such Person's other
Subsidiaries own, directly or indirectly, more than 50% of the ordinary voting
power for the election of directors or others performing similar functions.

            "Subsidies" has the meaning assigned to that term in Section 6.1.
             ---------                                           -----------

            "Taxes" has the meaning assigned to that term in Section 14.5(a).
             -----                                           ---------------

            "Technical Advisor" means  Fraunhofer Institut fur
             -----------------
Siliziumtechnologie, Itzehoe, or such other technical advisor as may be
appointed by the Security Agent with the consent of each AMD Company, which
consent shall not be unreasonably delayed or withheld.

            "Technical Advisor's Report" means that certain report dated October
             --------------------------
16, 1996 from the Technical Advisor to the Agent prepared for purposes of this
Agreement and the other Operative Documents and the transactions contemplated
hereby and thereby.

            "Technical Completion" shall be deemed to have occurred when:
             --------------------

            (i)    all of the conditions set forth in the form of Technical
                   Completion Certificate (Obligors) attached to the Loan
                   Agreement as Schedule 9 thereto have been satisfied in all
                                ----------
                   material respects, all of the statements appearing in said
                   form of Certificate are true and correct in all material
                   respects, and the Agent shall have received a fully executed
                   counterpart of such Certificate; and

            (ii)   the Agent shall have received a fully executed counterpart of
                   the Technical Completion Certificate (Technical Advisor).

            "Technical Completion Certificates" means the Technical Completion
             ---------------------------------
Certificate (Obligors) and the Technical Completion Certificate (Technical
Advisor).

            "Technical Completion Certificate (Obligors)" means a certificate,
             -------------------------------------------
in the form set out in Schedule 9 to the Loan Agreement (appropriately completed
                       ----------
and with the legal opinion therein referred to attached), executed by the AMD
Companies, and delivered to the Agent.

            "Technical Completion Certificate (Technical Advisor)" means a
             ----------------------------------------------------
certificate, in the form set out in Schedule 10 to the Loan Agreement
                                    -----------
(appropriately completed), executed by the Technical Advisor, and delivered to
the Agent.

            "Total Tranche A Commitment Amount" means DM 1,500,000,000 (one
             ---------------------------------
billion five hundred million Deutsche Marks), as such amount shall be reduced by
any reductions to (but not utilizations of) the commitments of the Banks under
"Facility A" under the Loan Agreement.

            "Tranche A Advances" means Advances made by the Banks or any Bank
             ------------------
pursuant to "Facility A" under the Loan Agreement.

                                      24
<PAGE>

            "Total Revolving Loan Commitment Amount" means $ 500,000,000 (five
             --------------------------------------
hundred million Dollars) or the "Euro Equivalent" (under, and as defined
therein) thereof, or such reduced amount as shall have been agreed upon by each
of the Sponsors, AMD Saxonia, the Agent, and the Banks.

            "Unmatured Event of Default" means an event or circumstance which,
             --------------------------
with the giving of notice, the lapse of time, or both, would (if not cured or
otherwise remedied) constitute an Event of Default.

            "Wafer" has the meaning assigned to that term in the AMD Saxonia
             -----
Wafer Purchase Agreement.

            "Wafer Purchase Agreements" means, collectively, the AMD Saxonia
             -------------------------
Wafer Purchase Agreement and the AMD Holding Wafer Purchase Agreement.

SECTION 1.2  Accounting and Financial Determinations.  Unless otherwise
specified, all accounting terms used herein shall be interpreted, all accounting
determinations and computations hereunder shall be made, and all financial
statements required to be delivered hereunder shall be prepared in accordance
with, GAAP.  When used herein, the term "financial statements" shall include the
notes and schedules thereto, but need not include such notes or schedules when
used with reference to such statements of any Person as of any date other than
the end of a Fiscal Year of such Person.  In the determination of any periods
pursuant to any provision hereof, unless otherwise specified, the term "from"
means "from (and including)", the term "to" means "to (and excluding)", and the
term "until" means "until (and excluding)".

SECTION 1.3 Construction. In this Agreement, unless the context requires
otherwise, any reference to:

            "assets" includes any asset, property, or right and includes
             ------
uncalled capital;

            "including" or "includes" means including or includes without
             ---------      --------
limitation;

            "law" and/or "regulation" includes any constitutional provision,
             ---          ----------
treaty, convention, statute, act, law, decree, ordinance, subsidiary or
subordinate legislation, order, rule, or regulation having the force of law, and
any rule of civil or common law or equity;

            "order" includes any judgment, injunction, decree, determination, or
             -----
award of any court, arbitration, or administrative tribunal;

            "tax" includes any tax, levy, duty, charge, impost, fee, deduction,
             ---
or withholding of any nature now or hereafter imposed, levied, collected,
withheld, or assessed by any taxing or other authority and includes any
interest, penalty, or other charge payable or claimed in respect thereof, and
"taxation" shall be construed accordingly; and
 --------

                                      25
<PAGE>

            "winding-up" includes any winding-up, liquidation, dissolution, or
             ----------
comparable process in any jurisdiction.

SECTION 1.4  Miscellaneous.  In this Agreement, unless the context requires
otherwise, (i) any reference to an Operative Document shall be to such Operative
Document as the same may have been or from time to time may be amended, varied,
re-issued, replaced, novated or supplemented, in each case in accordance with
the terms thereof and hereof, and in effect; (ii) any statutory provisions shall
be construed as references to those provisions as amended, modified, re-enacted,
or replaced from time to time; (iii) words importing a gender include every
gender; (iv) references to Sections and Schedules are to Sections of and
Schedules to this Agreement; and (v) references to this Agreement include its
Schedules. Section headings are inserted for reference only and shall be ignored
in construing this Agreement. A time of day, unless otherwise specified, shall
be construed as a reference to Frankfurt am Main time.

                                  ARTICLE II
                        Contribution of Equity Capital

SECTION 2.1  Undertaking to Contribute.  AMD Holding hereby undertakes to
contribute to AMD Saxonia, and AMD Inc. hereby undertakes to cause AMD Holding
to so contribute to AMD Saxonia (and AMD Inc. shall, to the extent necessary,
contribute sufficient funds, or otherwise cause sufficient funds to be made
available, to AMD Holding as shall be necessary to enable AMD Holding to so
contribute to AMD Saxonia), Equity Capital at the times and in the amounts set
forth in Section 2.2.  For the avoidance of doubt:
         -----------

     (i)    to the extent, but only to the extent, reflected in AMD Saxonia's
            financial statements referred to in (S) 15.1.6 of the Loan
                                                    ------
            Agreement (or, if not so reflected, as certified by AMD Inc. to the
            Agent and the Security Agent as of the Loan Agreement Effective
            Date), Equity Capital contributed by the Sponsors to AMD Saxonia
            prior to the Loan Agreement Effective Date shall be taken into
            account in determining whether the Sponsors shall have complied
            with their obligations under this Article II;
                                              ----------

     (ii)   the obligations of the Sponsors contained in this Article II are in
            addition to, and not in limitation of, their respective obligations
            contained elsewhere in this Agreement and in the other Operative
            Documents;

     (iii)  the Sponsors shall not be relieved of the foregoing obligations by
            virtue of:

            (a)    any Sponsors' Loan made by either Sponsor pursuant to this
                   Agreement or the Sponsors' Loan Agreement or any Revolving
                   Loan made by either Sponsor pursuant to this Agreement or the
                   Revolving Loan Facility Agreement before or after the Loan
                   Agreement Effective Date, including without limitation, the
                   additional Sponsors' Loan in an amount of $34,000,000 made by
                   AMD Inc. to AMD Saxonia on 26 September 1997 and referred to
                   in Section 3.5 below; or
                      -----------

                                      26
<PAGE>

            (b)    any payment made by either Sponsor under the Sponsors'
                   Guaranty; and

     (iv)   the amounts set forth in Section 2.2 below are minimum aggregate
                                     -----------
            amounts of Equity Capital to be received by AMD Saxonia; nothing
            contained herein shall be deemed to preclude AMD Holding from making
            additional contributions to AMD Saxonia's stated capital or capital
            reserves in order to fulfil the obligations of the Sponsors
            contained in Article IV, V, VI, or VII, or for any other reason.
                         ----------  -  --     ---

SECTION 2.2  Time of Contribution.  The Equity Capital to be contributed to AMD
Saxonia under this Article II is due and payable to AMD Saxonia as follows:
                   ----------

     (i)    one or more instalments aggregating DM 108,750,000 (one hundred
            eight million seven hundred fifty thousand Deutsche Marks) on or
            before the date of the initial Advance under the Loan Agreement; it
            being understood and agreed that, to the extent, but only to the
            extent, reflected in AMD Saxonia's financial statements referred to
            in (S) 15.1.6 of the Loan Agreement (or, if not so reflected, as
                   ------
            certified by AMD Inc. to the Agent and the Security Agent as of the
            Loan Agreement Effective Date), all contributions to the Equity
            Capital of AMD Saxonia prior to Loan Agreement Effective Date shall
            be considered contributions to its Equity Capital for purposes of
            this Section 2.2(i); and
                 --------------

     (ii)   in addition to the Equity Capital contributed or to be contributed
            pursuant to Section 2.2(i) hereof, one or more additional
                        --------------
            instalments aggregating DM 108,750,000 (one hundred eight million
            seven hundred fifty thousand Deutsche Marks) by the earlier to occur
            of:

            (a)    the acceleration of the Advances under the Loan Agreement
                   following the occurrence of an Event of Default (it being
                   understood and agreed that if, at the time of any such
                   acceleration, the Primary Secured Obligations are less than
                   the amount otherwise required to be contributed to AMD
                   Saxonia under this Section 2.2(ii), such contribution shall
                                      ---------------
                   be made in an amount which, when added to the aggregate
                   amount of all Sponsors' Loans and/or other contributions to
                   AMD Saxonia's Equity Capital or capital reserves then
                   concurrently made, is equal to the Primary Secured
                   Obligations at such time); and

            (b)    December 31 1997;

            provided, however, that such Equity Capital shall be required to be
            --------  -------
            contributed in whole or in part at any time prior to such dates if,
            but only to the extent that, the ratio of:

                   (x)  the sum of

                        (1)  the then aggregate outstanding principal amount of
                             Sponsors' Loans,

                                      27
<PAGE>

                         plus
                         ----

                        (2)  the then aggregate amount of AMD Saxonia's Equity
                             Capital and capital reserves,

                        to
                        --

                   (y)  the then aggregate outstanding principal amount of the
                        Advances,

is less than 25:75.

SECTION 2.3  Form of Contribution.  The Equity Capital under this Article II
                                                                  ----------
shall be contributed in cash and in Same Day Funds to AMD Saxonia.

                                  ARTICLE III
                                Sponsors' Loans

SECTION 3.1  Undertaking to Make Class A and Class C Sponsors' Loans.  The
Sponsors, jointly and severally, hereby undertake that either Sponsor or both of
the Sponsors will make Sponsors' Loans to AMD Saxonia:

     (i)    in an aggregate principal amount of at least DM 290,000,000 (two
            hundred ninety million Deutsche Marks) for all such Sponsors' Loans,
            the exact amount thereof being equal to the Deutsche Mark Equivalent
            of $200,000,000 (two hundred million Dollars) for all such Sponsors'
            Loans, as contemplated by Section 3.2 (the "Class A Sponsors'
                                      -----------       -----------------
            Loans");
            -----

     (ii)   [left intentionally blank]

     (iii)  in an aggregate principal amount of $70,000,000 (seventy million
            Dollars) as contemplated by Section 3.4 (the "Class C Sponsors'
                                                          -----------------
            Loans").
            -----

For the avoidance of doubt:

     (i)    the obligations of the Sponsors under the Sponsors' Loan Agreement
            are intended to reflect, rather than to be in addition to, the
            obligations of the Sponsors pursuant hereto;

     (ii)   with the exception of the additional Sponsors' Loan in an amount of
            $34,000,000 made by AMD Inc. to AMD Saxonia on 26 September 1997 and
            referred to in Section 3.5 below, Sponsors' Loans and/or
                           -----------
            contributions (to the extent, but only to the extent, not otherwise
            taken into account in determining whether AMD Holding has complied
            with its obligations under Article II) by AMD Holding to AMD
                                       ----------
            Saxonia's capital reserves made to AMD Saxonia prior to the Loan
            Agreement Effective Date shall be taken into account, to the extent,
            but only to the extent, reflected in AMD Saxonia's financial
            statements referred to in (S) 15.1.6 of the Loan
                                          ------

                                      28
<PAGE>

            Agreement (or, if not so reflected, as certified by AMD Inc. to the
            Agent and the Security Agent as of the Loan Agreement Effective
            Date) as Class A Sponsors' Loans in determining whether the Sponsors
            shall have complied with their obligations under this Article III;
                                                                  -----------

     (iii)  although the obligations of the Sponsors contained in this Article
                                                                       -------
            III are in addition to, and not in limitation of, their respective
            ---
            obligations contained elsewhere in this Agreement and in the other
            Operative Documents, if the Agent shall have otherwise expressly
            consented thereto in writing (which consent will not be unreasonably
            withheld or delayed), the Sponsors shall be deemed to have complied
            with their obligations to make Class A Sponsors' Loans and/or Class
            C Sponsors' Loans to the extent, but only to the extent, that AMD
            Holding shall have made additional contributions to AMD Saxonia's
            Equity Capital (or other contribution to AMD Saxonia's capital
            reserves) which contributions are not otherwise required to be made
            pursuant hereto or to any other Operative Document;

     (iv)  the Sponsors shall not be relieved:

           (a)     of the foregoing obligation by virtue of any Equity Capital
                   (or other contribution to AMD Saxonia's capital reserves)
                   contributed or required to be contributed to AMD Saxonia
                   pursuant to Section 2.1 or (except as and to the extent,
                               -----------
                   provided in clause (iii) above) otherwise;
                               -----------

          (b)      of any obligation to make Class A Sponsors' Loans (or to
                   contribute additional Equity Capital or other contributions
                   to AMD Saxonia's capital reserves in lieu thereof) by virtue
                   of any payment made by either Sponsor under the Sponsors'
                   Guaranty;

          (c)      [left intentionally blank]

          (d)      of any obligation to make Class A Sponsors' Loans or Class C
                   Sponsors' Loans by the additional Sponsors' Loans in an
                   amount of $34,000,000 made by AMD Inc. to AMD Saxonia on 26
                   September 1997 and referred to in Section 3.5 below;
                                                     -----------

     (v)  each Class A Sponsors' Loan shall be denominated in Deutsche Marks and
          the Deutsche Mark Equivalent thereof shall be calculated for the
          purpose of determining whether the Sponsors have complied with their
          obligations under Section 3.2; provided, however, that any Class A
                            -----------  --------  -------
          Sponsors' Loan may, with the consent of the Agent (such consent not to
          be unreasonably delayed or withheld), be funded in Dollars but for all
          purposes of this Agreement and the Sponsors' Loan Agreement shall be
          deemed to have been funded in Deutsche Marks in an amount which is
          equal to the Deutsche Mark Equivalent thereof;

     (vi) Class C Sponsors' Loans may be made in either Dollars or in Deutsche
          Marks at AMD Inc.'s option provided that:

                                      29
<PAGE>

          (a)  for the purpose of determining whether the Sponsors have complied
               with their obligations under Section 3.4, any Class C Sponsors'
                                            -----------
               Loans made in Deutsche Marks shall be deemed converted to Dollars
               at the Agent's spot rate of exchange for the purchase of Dollars
               with Deutsche Marks prevailing on the date two (2) Business Days
               prior to the date such Class C Sponsors' Loans were made;

          (b)  if AMD Inc. and AMD Saxonia agree, any Class C Sponsors' Loans
               may be denominated in Deutsche Marks but funded in Dollars and
               the Deutsche Mark amount of such Class C Sponsors' Loans shall be
               deemed to be the DM amount which is the equivalent of the Dollar
               amount so funded determined at the Agent's spot rate of exchange
               for the purchase of Dollars with Deutsche Marks prevailing on the
               date two (2) Business Days prior to the date such Class C
               Sponsors' Loans were made.

   (vii)  the Sponsors shall be relieved of their respective obligations to
          make Class C Sponsors' Loans under Sections 3.1 and 3.4 if, but only
                                             ------------     ---
          if:

          (a)  the Sponsors shall have complied with each of their respective
               obligations under Article II and, insofar as such obligations
                                 ----------
               relate to Class A Sponsors' Loans (or additional contributions to
               Equity Capital or AMD Saxonia's capital reserves in lieu
               thereof), this Article III; and
                              -----------

          (b)  following a demand for payment by the Agent under the Sponsors'
               Guaranty, the Sponsors shall have paid all amounts payable under
               the Sponsors' Guaranty.

   (viii) the amounts set forth in this Section 3.1 are cumulative minimum
                                        -----------
          aggregate amounts for both Sponsors, collectively; nothing contained
          herein shall be deemed to preclude the Sponsors (or either of them)
          from making additional Sponsors' Loans in order to fulfil their
          respective obligations contained in Article IV, V, VI, or VII, or for
                                              ----------  -  --     ---
          any other reason.

SECTION 3.2  Time of Class A Sponsors' Loans.  The Class A Sponsors' Loans will
be made in cash and in Same Day Funds and will be made as follows:

   (i)    at least DM 145,000,000 (one hundred forty five million Deutsche
          Marks) for all such Class A Sponsors' Loans, the exact amount thereof
          being equal to the Deutsche Mark Equivalent of $100,000,000 (one
          hundred million Dollars) for all such Class A Sponsors' Loans, by the
          earlier to occur of:

          (a)  the acceleration of the Advances under the Loan Agreement
               following the occurrence of an Event of Default (it being
               understood and agreed that if, at the time of any such
               acceleration, the Primary Secured Obligations are less than the
               amount otherwise required to be lent to AMD Saxonia under this

               Section 3.2(i), the amount of such Class A Sponsors' Loans shall
               --------------
               be an

                                      30
<PAGE>

               amount which, when added to the aggregate amount of all Sponsors'
               Loans and/or other contributions to AMD Saxonia's Equity Capital
               or capital reserves then concurrently made, is equal to the
               Primary Secured Obligations at such time); and

          (b)  December 31, 1998; and

   (ii)   at least a further DM 145,000,000 (one hundred forty five million
          Deutsche Marks) for all such Class A Sponsors' Loans, the exact amount
          thereof being equal to the Deutsche Mark Equivalent of $100,000,000
          (one hundred million Dollars) for all such Class A Sponsors' Loans, by
          the earlier to occur of:

          (a)  the acceleration of the Advances under the Loan Agreement
               following the occurrence of an Event of Default (it being
               understood and agreed that if, at the time of any such
               acceleration, the Primary Secured Obligations are less than the
               amount otherwise required to be lent to AMD Saxonia under this

               Section 3.2(ii), the amount of such Class A Sponsors' Loans shall
               ---------------
               be an amount which, when added to the aggregate amount of all
               Sponsors' Loans and/or other contributions to AMD Saxonia's
               Equity Capital or capital reserves then concurrently made, is
               equal to the Primary Secured Obligations at such time); and

          (b)  December 31, 1999;

     provided, however, that such Class A Sponsors' Loans shall be required to
     --------  -------
     be made in whole or in part at any time prior to the aforesaid dates if,
     but only to the extent that, the ratio of:

               (x)  the sum of

                    (1)  the then aggregate outstanding principal amount of
                         Sponsors' Loans,

               plus
               ----

                    (2)  the then aggregate amount of AMD Saxonia's Equity
                         Capital and capital reserves,

               to
               --

               (y)  the then aggregate outstanding principal amount of the
                    Advances under the Loan Agreement,

is less than 25:75.

SECTION 3.3  [left intentionally blank]

                                      31
<PAGE>

SECTION 3.4  Time of Class C Sponsors' Loans. The Class C Sponsors' Loans will
be made in cash and in Same Day Funds and will be made in full, pursuant to
Section 4.07 of the AMD Inc. Senior Secured Note Indenture (prior to giving
------------
effect to the Third Supplemental Indenture dated as of July 28, 2000), without
utilizing any of the provisions contained in the first proviso to Section
                                                                  -------
4.07(iv) thereof, by the Contribution Date at the latest.
--------

SECTION 3.5  Additional Sponsors' Loans.  In addition to the Class A Sponsors'
Loans and the Class C Sponsors' Loans, the Sponsors (or either of them) may,
from time to time, at their option make additional Sponsors' Loans in order to
fulfil their respective obligations contained herein or otherwise to provide
additional funds to AMD Saxonia.

For the avoidance of doubt, the additional Sponsors' Loan in an amount of
$34,000,000 made by AMD Inc. to AMD Saxonia on 26 September 1997:

     (i)  is hereby expressly agreed by the parties hereto to be an additional
          Sponsors' Loan pursuant to the terms of this Section 3.5 and
                                                       -----------
          subordinated as a Junior Liability (under, and as defined in, the
          Sponsors' Subordination Agreement); and

     (ii) shall not relieve the Sponsors from any obligation to make Class A
          Sponsors' Loans or Class C Sponsors' Loans in accordance with Sections
                                                                        --------
          3.2, and 3.4 above respectively.
          ----     ---

SECTION 3.6  Terms of Sponsors' Loans.  The making of Sponsors' Loans will be
made on the terms, and shall be subject to the conditions, contained in the
Sponsors' Loan Agreement which, as provided in Section 3.1, is intended to
                                               -----------
reflect, rather than to be in addition to, the obligations of the Sponsors
contained in this Article III.
                  -----------

SECTION 3.7  Undertaking to make Revolving Loans/Terms of Revolving Loans. The
Sponsors hereby jointly and severally undertake that either Sponsor or both
Sponsors will make available to AMD Saxonia an unsecured, subordinated revolving
loan facility in an aggregate principal amount of $ 500,000,000 (five hundred
million Dollars) with a term of no earlier than 31 March, 2006 and bearing
interest at a rate not in excess of 1% (one per cent) per annum over the
Applicable Rate (as defined in the Revolving Loan Facility Agreement), on and
subject to the terms and conditions contained in the Revolving Loan Facility
Agreement, which is intended to reflect, rather than to be in addition to, the
obligations of the Sponsors contained in this Article III, to the extent
                                              -----------
applicable to Revolving Loans.

SECTION 3.8  Time of Revolving Loans. Revolving Loans will be made in cash and
in Same Day Funds:

     (i)  in such amounts as shall be required from time to time to ensure that
          as from 1 July 2001, the Minimum Liquidity Covenant is complied with
          at all times and, in any event, upon first written demand by the
          Security Agent at any time and from time to

                                      32
<PAGE>

          time immediately following a Minimum Liquidity Covenant Calculation
          Date in such amounts as may be necessary to remedy any shortfall in
          the Minimum Liquidity Covenant at any time and from time to time; and

     (ii) in such amounts as shall be required from time to time and, in any
          event, upon the first written demand of AMD Saxonia at any time and
          from time to time to finance AMD Saxonia's general corporate funding
          requirements, including working capital, cash expenses and other
          capital requirements of AMD Saxonia.

The Sponsors shall be relieved of their respective obligations to make Revolving
Loans available to AMD Saxonia if, but only if:

     (x)  the Sponsors shall have complied with each of their respective
          obligations under Article II and, insofar as such obligations relate
                            ----------
          to Class A Sponsors' Loans (or additional contributions to Equity
          Capital or AMD Saxonia's capital reserves in lieu thereof), this
          Article III; and
          -----------

     (y)  following a demand for payment by the Agent under the Sponsors'
          Guaranty, the Sponsors shall have paid all amounts payable under the
          Sponsors' Guaranty.

In addition to the Revolving Loans contemplated to be made under Section 3.7,
                                                                 -----------
the Sponsors (or either of them) may, from time to time, at their option make
additional Revolving Loans in order to fulfil their respective obligations
contained herein or otherwise to provide additional funds to AMD Saxonia, it
being expressly understood and agreed that any such Revolving Loans shall be
optional rather than compulsory, and that in no event shall the Sponsors (or
either of them) be obligated to advance Revolving Loans such that the total
amount of outstanding Revolving Loans would exceed the Total Revolving Loan
Commitment Amount.

SECTION 3.9  Subordination of Sponsors' Loans and Revolving Loans.  The
Sponsors' Loans and the Revolving Loans will be subordinated on the terms and
conditions contained in the Sponsors' Subordination Agreement.

                                      33
<PAGE>

                                   ARTICLE IV
                                 Project Costs

SECTION 4.1  Project Costs.  In addition to, and not in limitation of, their
other obligations contained in this Agreement and the other Operative Documents,
the Sponsors, jointly and severally, hereby undertake to provide AMD Saxonia
with Same Day Funds (whether, in the case of AMD Holding, by contribution to AMD
Saxonia's Equity Capital (or other contributions to AMD Saxonia's capital
reserves), or, in the case of either Sponsor, through Sponsors' Loans or
Revolving Loans) sufficient to cover all Project Costs (after taking into
account the Available Tranche A Amount). The Sponsors shall be relieved of any
further obligations under this Article IV if, but only if:

   (i)    the Sponsors shall have complied with each of their respective
          obligations under Article II and, insofar as such obligations relate
                            ----------
          to Class A Sponsors' Loans (or additional contributions to Equity
          Capital or AMD Saxonia's capital reserves in lieu thereof), Article
                                                                      -------
          III; and
          ---

   (ii)   following a demand by the Agent for payment under the Sponsors'
          Guaranty, the Sponsors shall have paid all amounts payable under the
          Sponsors' Guaranty.

SECTION 4.2  [left intentionally blank]

SECTION 4.3  Form of Contribution.  The Sponsors may comply with their
respective obligations under this Article IV by making:
                                  ----------

   (i)    in the case of either Sponsor, Revolving Loans pursuant to the terms
          and conditions of the Revolving Loan Facility Agreement; and/or

   (ii)   in the case of AMD Holding, a cash increase in the Equity Capital (or
          other contributions to AMD Saxonia's capital reserves) of AMD Saxonia;
          and/or

   (iii)  in the case of either Sponsor, further Sponsors' Loans to AMD
          Saxonia.

SECTION 4.4  No Double Recovery under Revolving Loan Facility Agreement and
Sponsors' Guaranty.  If, during the continuance of an Event of Default (unless
such Event of Default is subsequently cured or waived with the concurrence of
the Agent or the Security Agent, AMD Inc., and AMD Saxonia), and following the
exercise of rights by the Agent or the Security Agent under either the AMD
Holding Share Pledge Agreement, the AMD Inc. Share Pledge Agreement, or the AMD
Saxonia Assignment (U.S.A.), the Agent seeks to make borrowings under, or to
cause such borrowings to be made under, the Revolving Loan Facility Agreement,
the Agent's right to make such borrowings or to cause such borrowings to be
made, shall be limited mutatis mutandis to the amount set forth in Section 2.1
                                                                   -----------
of the Sponsors' Guaranty and any such borrowings (to the extent paid to AMD
Saxonia and not subsequently repaid to AMD Inc. or its successor in interest)
shall, pro tanto, reduce the amount available to be recovered from the Sponsors
under the Sponsors' Guaranty.

                                      34
<PAGE>

                                   ARTICLE V
                              Completion Guaranty

SECTION 5.1  Completion Guaranty.  The Sponsors (jointly and severally), hereby
agree to cause AMD Saxonia:

   (i)    to complete each Project Phase as soon as contemplated by the Approved
          Project Schedule (it being understood and agreed that the completion
          date for one or more Project Phases (other than the final Project
          Phase) may be deferred for up to six (6) months in the aggregate for
          all such deferrals on a cumulative basis provided that no such
          deferral may affect the final deadline for Completion);

   (ii)   to achieve Completion as soon as contemplated by the Approved Project
          Schedule and, in any event, on or before 31 December 2000; and

   (iii)  to take all such action, including, without limitation, all actions
          before Governmental Authorities, as shall be necessary or appropriate
          to enable AMD Saxonia to complete each Project Phase and to achieve
          Completion as aforesaid.

For the avoidance of doubt, the obligations of the Sponsors contained in this

Article V are in addition to, and not in limitation of, their respective
---------
obligations contained elsewhere in this Agreement and in the other Operative
Documents; provided, however, that the Sponsors shall be relieved of their
           --------  -------
respective obligations under this Article V if, but only if:
                                  ---------

   (i)    the Sponsors shall have complied with each of their respective
          obligations under Article II and, insofar as such obligations relate
                            ----------
          to Class A Sponsors' Loans (or additional contributions to Equity
          Capital or AMD Saxonia's capital reserves in lieu thereof), Article
                                                                      -------
          III and
          ---

   (ii)   following a demand for payment by the Agent under the Sponsors'
          Guaranty, the Sponsors shall have paid all amounts payable under the
          Sponsors' Guaranty.

SECTION 5.2  Notice of Scheduled Project Phase Technical Completion and
Completion.  Upon the occurrence of each of the following, the Agent shall
promptly advise the Sponsors, AMD Saxonia, and the Banks thereof:

   (i)   Scheduled Project Phase Technical Completion for each Project Phase,
         and

   (ii)  Completion.

SECTION 5.3  No Double Recovery Under Article V and Sponsors' Guaranty.  In the
event that the Sponsors default in the payment and performance of their
obligations under this Article V and, following any such default, the Agent
                       ---------
institutes litigation or other adversary proceedings designed to compel the
Sponsors to perform such obligations or to pay damages for such failure, the
right of

                                      35
<PAGE>

recovery against the Sponsors under this Article V is limited mutatis
                                         ---------            -------
mutandis to the amount set forth in Section 2.1 of the Sponsors' Guaranty and
--------                            -----------
any recovery by the Agent from the Sponsors hereunder shall, pro tanto, reduce
                                                             --- -----
the amount available to be recovered from the Sponsors under the Sponsors'
Guaranty.

For the avoidance of doubt, the obligations of the Sponsors under this Section
                                                                       -------
5.1 constitute a primary guarantee obligation (Garantievertrag) and not a surety
---
guarantee (Burgschaft).

                                   ARTICLE VI
                             Subsidies Undertaking

SECTION 6.1  Subsidies.  The Project will be supported by the following
subsidies and grants from the Free State of Saxony (hereinafter, the

"Subsidies"):
 ---------

   (i)    a dedicated purpose investment grant in an aggregate amount of DM
          476,687,000 (four hundred seventy six million six hundred eighty seven
          thousand Deutsche Marks) which, together with the investment subsidies
          in an aggregate amount of DM 23,813,000 (twenty three million eight
          hundred thirteen thousand Deutsche Marks), totals an aggregate amount
          of  DM 500,500,000 (five hundred million five hundred thousand
          Deutsche Marks); and

   (ii)   a dedicated purpose interest subsidy in an amount of DM 300,000,000
          (three hundred million Deutsche Marks),

which, in each case, will be paid to AMD Saxonia by Dresdner Bank AG in Dresden,
in its capacity as house bank.

SECTION 6.2  Payment of Shortfall.  The granting of the Subsidies is contingent
on the adherence by the Sponsors and AMD Saxonia to particular conditions,
requirements, and covenants. If, for any reason whatsoever, any AMD Company or
any Affiliate of any AMD Company breaches any such conditions, requirements, or
covenants, and, accordingly, causes the Subsidies not to be paid or, as a result
of any such breach, the Subsidies are required to be repaid (in either such case
the amount thereof being hereinafter called a "Shortfall"), then, without delay
                                               ---------
following its or their receipt of a demand therefor by the Agent, either:

   (i)    AMD Holding shall contribute Equity Capital (or other contributions to
          AMD Saxonia's capital reserves) to AMD Saxonia, and AMD Inc. shall
          cause AMD Holding to so contribute to AMD Saxonia (and AMD Inc. shall,
          to the extent necessary, contribute sufficient funds, or otherwise
          cause sufficient funds to be made available, to AMD Holding as shall
          be necessary to enable AMD Holding to so contribute to AMD Saxonia);
          and/or

   (ii)   one or both Sponsors shall make Sponsors' Loans to AMD Saxonia,

                                      36
<PAGE>

in either case in an aggregate amount (and, if the Subsidies have not yet been
provided, as and when the Subsidies, but for such breach, would have otherwise
been provided) equal to the Shortfall.

For the avoidance of doubt:

   (i)    the obligations of the Sponsors contained in this Article VI are in
                                                            ----------
          addition to, and not in limitation of, their obligations contained
          elsewhere in this Agreement and in the other Operative Documents, and
          shall survive Completion; and

   (ii)   the Sponsors shall not be relieved of the foregoing obligations by
          virtue of:

          (a)  any prior Sponsors' Loans made by the Sponsors (or either of
               them), including without limitation, the additional Sponsors'
               Loan in an amount of $34,000,000 made by AMD Inc. to AMD Saxonia
               on 26 September 1997 and referred to in Section 3.5 above and the
                                                       -----------
               Class C Sponsors' Loan in an amount of $ 70,000,000 made by AMD
               Inc. to AMD Saxonia on 30 June 1999 and referred to in Section
                                                                      -------
               3.4 above;
               ---

          (b)  any prior contributions of Equity Capital (or other contributions
               to AMD Saxonia's capital reserves) by AMD Holding;

          (c)  any prior Revolving Loans made by the Sponsors (or either of
               them); or

          (d)  any payment made by either Sponsor under the Sponsors' Guaranty;

provided, however, that the Sponsors shall have no liability as aforesaid in
--------  -------
respect of any Subsidies which fail to be provided at any time after the
foreclosure by the Security Agent upon any security provided by the Security
Documents, unless such failure is attributable to any such breach by AMD Inc. or
any of its Affiliates (other than AMD Saxonia or AMD Holding, if then Affiliates
of AMD Inc.) occurring after such foreclosure.

SECTION 6.3 Bridging of AMD Saxonia's Receipt of the Subsidies.

          (a)  It is understood and agreed that the Sponsors (jointly and
               severally) will, in the case of AMD Holding, contribute Equity
               Capital (or other contributions to AMD Saxonia's capital
               reserves), or, in the case of either Sponsor, make Sponsors'
               Loans, to AMD Saxonia, in either case as and to the extent that
               AMD Saxonia requires such funds prior to and in anticipation of
               its receipt of the Subsidies.  If any such contribution or
               Sponsors' Loan is made for such purpose prior to AMD Saxonia's
               receipt of the Subsidies (or any portion thereof) then, to the
               extent that AMD Saxonia subsequently receives the proceeds of
               such Subsidies, and provided that no Event of Default, Unmatured
               Event of Default or Event of Termination shall have occurred and
               be continuing, AMD Saxonia shall, to the extent permitted by
               applicable law, repay Sponsors' Loans to the extent of the
               aggregate amount of the proceeds of the Subsidy so received, but
               without interest.

                                      37
<PAGE>

          (b)  The Sponsors' obligations to make contributions or loans under

               Section 6.3 (a) shall terminate from the date of any foreclosure
               ---------------
               over the shares of AMD Holding or AMD Saxonia under the Security
               Documents.

                                  ARTICLE VII
                             Pari Passu Undertaking

SECTION 7.1 [left intentionally blank]

                                  ARTICLE VIII
        AMD Inc. Share Pledge Agreement; AMD Holding Security Documents

SECTION 8.1 AMD Inc. Share Pledge Agreement.  AMD Inc. has granted a first
priority security interest in the AMD Inc. Security pursuant to and on the terms
and conditions set forth in the AMD Inc. Share Pledge Agreement.

SECTION 8.2 AMD Holding Security Documents.  AMD Holding has granted a first
priority security interest in the AMD Holding Security pursuant to and on the
terms and conditions set forth in the AMD Holding Security Documents.

                                   ARTICLE IX
                               Sponsors' Guaranty

SECTION 9.1 Sponsors' Guaranty.  Without intending to derogate from the
provisions of the Sponsors' Guaranty (and, in the event of any inconsistency
with this Section 9.1, the Sponsors' Guaranty shall prevail), the Sponsors
          -----------
(jointly and severally), have agreed to guarantee, on the terms and subject to
the conditions of the Sponsors' Guaranty, the full and prompt payment when due,
whether by acceleration or otherwise, of all Secured Obligations of AMD Saxonia
to the Secured Parties under or in connection with the Financing Documents and
the Security Documents; provided, however, that as provided in the Sponsors'
                        --------  -------
Guaranty, the cumulative right of recovery against the Sponsors with respect to
the Sponsors' Guaranty is limited to an amount equal to the greater of:

     (x)  thirty five per cent. (35 %) of the aggregate amount of all Guaranteed
          Obligations (as defined in the Sponsors' Guaranty); and

     (y)  DM 217,500,000 (two hundred and seventeen million five hundred
          thousand Deutsche Marks),

plus (as and to the extent provided in the Sponsors' Guaranty) interest on such
amount, if not paid when due, and plus costs and expenses of enforcement

provided, that the maximum aggregate
--------

                                      38
<PAGE>

amount payable by the Sponsors pursuant to the Sponsors' Guaranty shall be DM
600,000,000. In furtherance of the foregoing, the Sponsors have undertaken,
pursuant to the terms of the Sponsors' Guaranty, to pay to the Agent, upon first
written demand following the occurrence of an Event of Default and acceleration
of the Advances an amount equal to the greater of:

   (i)    thirty five per cent. (35 %) of the aggregate amount of all Guaranteed
          Obligations (as defined in the Sponsors' Guaranty); and

   (ii)   DM 217,500,000 (two hundred and seventeen million five hundred
          thousand Deutsche Marks),

plus (as and to the extent provided in the Sponsors' Guaranty) interest on such
amount, if not paid when due, and plus costs and expenses of enforcement
provided, that the maximum aggregate amount payable by the Sponsors pursuant to
--------
the Sponsors' Guaranty shall be DM 600,000,000.

For the avoidance of doubt, the obligations of the Sponsors under the Sponsors'
Guaranty:

     (a)  constitute a primary guarantee obligation (Garantievertrag) and not a
          surety guarantee (Buergschaft), and are in addition to, and not in
          limitation of, the other obligations of the Sponsors hereunder and
          under the other Operative Documents; and

     (b)  are continuing obligations and shall remain in full force and effect
          until whichever is the earlier of (1) satisfaction in full of all
          Secured Obligations and (2) payment in full by either Sponsor of all
          amounts payable under the Sponsors' Guaranty.

                                   ARTICLE X
      Sponsors' Subordination Agreement; AMD Inc. Subordination Agreement

SECTION 10.1  Sponsors' Subordination Agreement.  The Sponsors hereby agree to
subordinate the payment of the Junior Liabilities (under, and as defined in, the
Sponsors' Subordination Agreement) to the payment in full of all Senior
Liabilities (under, and as defined in, the Sponsors' Subordination Agreement),
on the terms and subject to the conditions of the Sponsors' Subordination
Agreement.

SECTION 10.2  AMD Inc. Subordination Agreement.  AMD Inc. hereby agrees to
subordinate the payment of the Junior Liabilities (under, and as defined in, the
AMD Inc. Subordination Agreement) to the payment in full of all Senior
Liabilities (under, and as defined in, the AMD Inc. Subordination Agreement), on
the terms and subject to the conditions of the AMD Inc. Subordination Agreement.

                                   ARTICLE XI
                           Obligations Unconditional

                                      39
<PAGE>

SECTION 11.1  Absolute and Unconditional Nature of the Sponsors' Obligations.
The obligation of the Sponsors to perform their respective obligations under
this Agreement, and the right of AMD Saxonia or the Agent or the Security Agent,
as applicable, to receive the proceeds of each payment to be made to or for the
account of AMD Saxonia as provided herein and in each of the other Operative
Documents, shall be absolute, irrevocable, and unconditional, it being the
intention of the parties hereto that all obligations of the Sponsors under or in
connection with this Agreement shall be paid and performed in all events in the
manner and at the times herein provided, irrespective of and without prejudice
to, in particular, any rights or remedies that are available to the other
parties hereto and thereto under any agreements or any applicable laws. The
Sponsors shall be entitled to setoff, and to raise rights of retention, in
respect of their respective payment claims hereunder and under the other
Operative Documents only to the extent their respective counterclaims are
undisputed or have been the subject of a final binding arbitral or court
decision.

                                  ARTICLE XII
                         Representations and Warranties

SECTION 12.1  Representations and Warranties of AMD Inc.  AMD Inc. hereby
represents and warrants to the Agent and the Security Agent as follows:

   (i)    Organization; Corporate Power.

          AMD Inc. and each Material AMD Inc. Subsidiary:

          (a)  is a corporation duly incorporated, validly existing, and (where
               the concept has a technical meaning) in good standing under the
               laws of the jurisdiction of its incorporation;

          (b)  is duly qualified or licensed and (where the concept has a
               technical meaning) in good standing as a foreign corporation
               authorized to do business in each other jurisdiction where,
               because of the nature of its activities or properties in such
               jurisdiction, such qualification or licensing is required,

          (c)  has all requisite corporate power and authority to own, operate,
               and lease its assets and properties and to carry on the business
               in which it is engaged and in which it proposes to engage;

          (d) that is an AMD Company, has all requisite corporate power and
              authority:

              (x)   to execute, deliver, and perform its obligations under each
                    of the Operative Documents to which it is a party; and

              (y)   to assign, and grant a security interest in, the Security in
                    the manner and for the purpose contemplated by the Security
                    Documents to which it is a party; and

          (e)  is in compliance with all Requirements of Law

                                      40
<PAGE>

          except, in each case referred to in clause (b), (c), or (e), to the
                                              ----------  ---     ---
          extent that the failure to do so could not reasonably be expected to
          have a Material Adverse Effect.

   (ii)   Corporate Authority; No Conflict.

          The execution, delivery, and performance by each AMD Company of each
          Operative Document to which any such AMD Company is a party, and the
          grant by such AMD Company of a security interest in the Security in
          the manner and for the purpose contemplated by the Security Documents
          to which such AMD Company is a party, have been duly authorised by all
          necessary corporate action (including any necessary shareholder
          action) on the part of such AMD Company, and do not:

          (a)  violate any provision of any law, rule, regulation, order, writ,
               judgment, injunction, decree, determination, or award presently
               in effect binding on such AMD Company, or of the Organizational
               Documents of such AMD Company;

          (b)  result in a breach of, result in a mandatory prepayment or
               acceleration of indebtedness evidenced or secured by, or
               constitute a default under, any indenture or loan or credit
               agreement, or any other agreement or instrument, to which such
               AMD Company is a party or by which such AMD Company or its
               properties are bound; or

          (c)  result in, or require (in either case except as contemplated by
               the Operative Documents), the creation or imposition of any
               Encumbrance of any nature upon or with respect to any of the
               properties now owned or hereafter acquired by any of the AMD
               Companies (other than any right of set-off or banker's lien or
               attachment that the Agent, the Security Agent, or any Bank may
               have under the Operative Documents or applicable law), and none
               of the AMD Companies is in default under or in violation of its
               Organizational Documents, any of the Operative Documents to which
               it is a party, or any such law, rule, regulation, order, writ,
               judgment, injunction, decree, determination, award, indenture,
               agreement, or instrument, which default or violation,
               individually or in the aggregate, could reasonably be expected to
               have a Material Adverse Effect.

   (iii)  Valid and Binding Obligations.

          Each Operative Document which has been executed and delivered by an
          AMD Company constitutes the legal, valid, and binding obligation of
          such AMD Company, enforceable against such AMD Company in accordance
          with its respective terms, subject, however, to the Opinion
          Reservations.

   (iv)   Sponsor Security Documents.

                                      41
<PAGE>

          (a)  The provisions of each of the Security Documents which has been
               executed and delivered by a Sponsor are effective to create in
               favor of the Security Agent for the benefit of the Secured
               Parties, a legal, valid, and enforceable first priority
               Encumbrance on all rights, title, and interest of such Sponsor in
               the Security described therein, subject only to Permitted
               Encumbrances; and all necessary filings and recordings have been
               made in the requisite offices in all of the jurisdictions
               necessary or appropriate to perfect or continue perfected with
               such priority such Encumbrance on such Security.

          (b)  Each Security Document which has been executed and delivered by a
               Sponsor is effective to grant to the Security Agent a legal,
               valid, and enforceable security interest on all rights, title,
               and interest of the relevant Sponsor in the Security described
               therein.  When each such Security Document is duly recorded or
               filed in the applicable recording or filing office(s), if any,
               and the recording or filing fees and taxes, if any, in respect
               thereof are paid and compliance is otherwise had with the formal
               requirements of applicable law applicable to the recording and
               filing of security documentation generally, such Security is
               subject to a legal, valid, enforceable, and perfected first
               priority Encumbrance.

   (v)   Financial Information; No Material Adverse Change.

          (a)  The audited consolidated balance sheet of AMD Inc. and its
               Subsidiaries dated December 31, 1995, the unaudited consolidated
               balance sheet of AMD Inc. and its Subsidiaries for the Fiscal
               Quarter ending on or about December 30, 1996, and in each case
               the related consolidated statements of income or operations,
               shareholders' equity and cash flows for the fiscal period ended
               on such dates:

               (x)  were prepared in accordance with GAAP consistently applied
                    throughout the period covered thereby, except as otherwise
                    expressly noted therein, subject to ordinary, good faith
                    year-end audit adjustments, in the case of quarterly
                    financial statements;

               (y)  are complete and accurate in all material respects and
                    fairly present the consolidated financial condition of AMD
                    Inc. and its Subsidiaries as of the dates thereof and
                    results of operations and cash flows for the periods covered
                    thereby; and

               (z)  except as specifically disclosed in the Disclosure
                    Schedules, show all material indebtedness and other
                    liabilities, direct or contingent, of AMD Inc. and its
                    consolidated Subsidiaries as of the date thereof, including
                    liabilities for taxes, material commitments, and Contingent
                    Liabilities.

                                      42
<PAGE>

          (b)  Since December 31, 1995, there has been no Material Adverse
               Effect, except as may be specifically disclosed in the
               Disclosure Schedules.

          (c)  From July 13, 1999 to and including the effective date of the
               Third Amendment to this, there has been no "Enhanced Covenant
               Period" (under, and as defined in the AMD Inc. 1999 Loan and
               Security Agreement) in effect.

   (vi)   Litigation.

          Except as specifically disclosed in the Disclosure Schedules, there
          are no actions, suits, proceedings, claims, or disputes pending, or to
          the best knowledge of AMD Inc., threatened or contemplated, at law, in
          equity, in arbitration or before any Governmental Authority, against
          any AMD Company or any other Subsidiary of AMD Inc. or any of their
          respective properties which:

          (a)  purport to affect or pertain to this Agreement or any other
               Operative Document, or the entirety of the transactions
               contemplated hereby or thereby; or

          (b)  if determined adversely to such AMD Company or such other
               Subsidiary, would reasonably be expected to have a Material
               Adverse Effect.

          No injunction, writ, temporary restraining order, or any order of any
          nature has been issued by any court or other Governmental Authority
          purporting to enjoin or restrain the execution, delivery, or
          performance of this Agreement or any other Operative Document, or
          directing that the transactions provided for herein or therein not be
          consummated as herein or therein provided.

   (vii)  No Default or Termination.

          No Event of Default or Unmatured Event of Default, and, to the best of
          AMD Inc.'s knowledge, no Event of Termination, exists. None of the AMD
          Companies nor any other Subsidiary of AMD Inc. is in default under or
          with respect to any Contractual Obligation in any respect which,
          individually or together with all such defaults, could reasonably be
          expected to have a Material Adverse Effect.

   (viii) No Burdensome Restrictions.

          None of the AMD Companies nor any other Subsidiary of AMD Inc. is a
          party to or bound by any Contractual Obligation other than the
          Operative Documents, or subject to any restriction in any
          Organizational Document, or any Requirement of Law, which could
          reasonably be expected to have a Material Adverse Effect.

   (ix)   Title to Properties; Encumbrances.

          Each AMD Company and each other Material AMD Inc. Subsidiary has good
          record and marketable title in fee simple to, or valid leasehold
          interests in (or the equivalent

                                      43
<PAGE>

          for the relevant jurisdiction), all real property necessary or used in
          the ordinary conduct of their respective businesses, except for such
          defects in title as could not, individually or in the aggregate,
          reasonably be expected to have a Material Adverse Effect. The property
          of each AMD Company and each other Material AMD Inc. Subsidiary is
          subject to no Encumbrances, other than Permitted Encumbrances.

   (x)    Subsidiaries; Material AMD Inc. Subsidiaries.

          (a)  As of the Loan Agreement Effective Date, AMD Inc. has no
               Subsidiaries other than those specifically disclosed in the
               Disclosure Schedules and has no equity investments in any other
               Person other than those specifically disclosed in the Disclosure
               Schedules;

          (b)  As of the Loan Agreement Effective Date, there are no Material
               AMD Inc. Subsidiaries other than those specifically disclosed in
               the Disclosure Schedules;

          (c)  AMD Inc. is the direct legal and beneficial owner of 100% of the
               issued and outstanding shares of capital stock of AMD Holding,
               all of which shares have been validly issued;

          (d)  AMD Holding is the direct legal and beneficial owner of 100% of
               the issued and outstanding shares of capital stock of AMD
               Saxonia, all of which shares have been validly issued;

          (e)  AMD Holding has no Subsidiaries other than AMD Saxonia, and has
               no equity investments in any other Person; and

          (f)  AMD Saxonia has no Subsidiaries and has no equity investments in
               any other Person.

   (xi)   Insurance.

          Except as specifically disclosed in the Disclosure Schedules,
          properties of each Sponsor and each "Restricted Subsidiary" (under,
          and as defined in, the AMD Inc. 1999 Loan and Security Agreement) are
          insured with financially sound and reputable insurance companies not
          Affiliates of AMD Inc., in such amounts, with such deductibles and
          covering such risks as are customarily carried by companies engaged in
          similar businesses and owning similar properties in localities where
          such Sponsor or such "Restricted Subsidiary" (as so defined) operates.

   (xii)  Copyrights, Patents, Trademarks and Licenses, Etc.

          Each AMD Company and each other Material AMD Inc. Subsidiary owns or
          is licensed or otherwise has the right to use all of the patents,
          trademarks, service marks, trade names, copyrights, contractual
          franchises, authorizations, and other rights that are reasonably
          necessary for the operation of its respective businesses,

                                      44
<PAGE>

          without conflict with the rights of any other Person, except for such
          conflicts which would not, individually or in the aggregate,
          reasonably be expected to have a Material Adverse Effect. Except as
          specifically disclosed in the Disclosure Schedules, to the best
          knowledge of AMD Inc.:

          (a)  no slogan or other advertising device, product, process, method,
               substance, part, or other material now employed, or now
               contemplated to be employed, by any AMD Company or any other
               Subsidiary of AMD Inc. infringes upon any rights held by any
               other Person;

          (b)  no claim or litigation regarding any of the foregoing is pending
               or, to the best knowledge of AMD Inc., threatened; and

          (c)  no patent, invention, device, application, principle, or any
               statute, law, rule, regulation, standard, or code is pending or,
               to the best knowledge of AMD Inc., proposed,

          which, in any case described in (a), (b), or (c) above, could
                                           -    -       -
          reasonably be expected to have a Material Adverse Effect.

   (xiii) Taxes.

          Each Sponsor and each "Restricted Subsidiary" (under, and as defined
          in, the AMD Inc. 1999 Loan and Security Agreement) have filed all
          material US Federal, German, and other tax returns and reports
          required to be filed, and have paid all material US Federal, German,
          and other taxes, assessments, fees, and other governmental charges
          levied or imposed upon them or their properties, income, or assets
          otherwise due and payable, except those which are being contested in
          good faith by appropriate proceedings and for which adequate reserves
          have been provided in accordance with GAAP.  There is no proposed tax
          assessment against either Sponsor or any "Restricted Subsidiary" (as
          so defined) that would, if made, have a Material Adverse Effect.

   (xiv)  Governmental Approvals with Respect to the Operative Documents.

          As of the date this representation and warranty is made or reaffirmed,
          as the case may be, all Governmental Approvals (including, without
          limitation, from the European Union, the Federal Republic of Germany,
          and the Free State of Saxony) necessary for the due authorization,
          execution, delivery, and performance by each of the AMD Companies of,
          the legality or validity of the obligations of each of the AMD
          Companies under, or the enforceability against each of the AMD
          Companies of, each of the Operative Documents to which it is a party
          and the due and timely payment by each of the AMD Companies of amounts
          owing under each of the Operative Documents have been listed on

          Schedule 20 to the Loan Agreement and, except as otherwise noted
          -----------
          therein, all of such Governmental Approvals have been duly

                                      45
<PAGE>

          obtained or effected, and are in full force and effect, on the Loan
          Agreement Effective Date.

   (xv)   Governmental Approvals with Respect to the Plant and the Design
          Center.

          As at the date this representation and warranty is made or reaffirmed,
          as the case may be, all Governmental Approvals necessary for the
          construction, ownership, use, and operation by AMD Saxonia of the
          Plant and the Design Center or which are required in order that the
          Plant and the Design Center may be operated for their intended
          purposes and Perform in Accordance with the Plans and Specifications,
          have been listed on Schedule 20 to the Loan Agreement, and all of such
                              -----------
          Governmental Approvals (except those listed in Part B of Schedule 20
                                                         ------    -----------
          to the Loan Agreement) have been duly obtained or effected, are
          sufficient for all purposes thereof, and are in full force and effect
          on such date (and, in the case of Government Approvals that have
          expired, each AMD Company has timely applied for renewal thereof and
          such Governmental Approvals have been administratively extended under
          applicable law); and AMD Inc. reasonably believes, after due inquiry,
          that the Governmental Approvals set forth in Schedule 20 to the Loan
                                                       -----------
          Agreement, together with all Governmental Approvals, if any, that may
          be required in connection with the transactions contemplated by the
          Operative Documents subsequent to the date on which this
          representation and warranty is made or reaffirmed, as the case may be,
          will be obtained at such time or times as may be necessary to avoid
          material delay in, or material restrictions on the use or operation
          of, the Plant and the Design Center.

   (xvi)  Interruption of Business.

          Neither the business nor the properties of an AMD Company are
          presently affected by any fire, explosion, accident, strike, lockout,
          or other dispute, drought, storm, hail, earthquake, embargo, Act of
          God, or of the public enemy, or other casualty (whether or not covered
          by insurance) which impairs, or, if such event or condition were to
          continue for more than thirty (30) additional days would be likely to
          impair, such AMD Company's ability to perform its obligations under
          the Operative Documents.

   (xvii) Prior Activities, etc.

          Prior to the Loan Agreement Effective Date, neither AMD Holding nor
          AMD Saxonia has engaged in any business, conducted any operations or
          activities, nor incurred any obligations or liabilities (contingent or
          otherwise), other than (a) as described in the Disclosure Schedules,
          and (b) its obligations, if any, under the Operative Documents, and
          activities reasonably incidental thereto.

   (xviii)Status of AMD Holding and AMD Saxonia, etc.

          (a)  AMD Holding is an "Unrestricted Subsidiary" under, and for
               purposes of, the AMD Inc. Senior Secured Note Indenture and is
               not a "Restricted Subsidiary" under, and for the purposes of, the
               AMD Inc. 1999 Loan and Security Agreement; and

                                      46
<PAGE>

          (b)  AMD Saxonia is an "Unrestricted Subsidiary" under, and for
               purposes of, the AMD Inc. Senior Secured Note Indenture and is
               not a "Restricted Subsidiary" under, and for the purposes of, the
               AMD Inc. 1999 Loan and Security Agreement;

   (xix)  Accuracy of Information.

          As of the date this representation and warranty is made or reaffirmed,
          as the case may be, all factual information then or theretofore
          furnished by or on behalf of any AMD Company to the Agent or any Bank
          or the Technical Advisor for purposes of or in connection with any
          Operative Document or any transaction contemplated thereby (including
          the Information Memorandum, true and complete copies of which were
          furnished to the Agent in connection with the execution and delivery
          of this Agreement) is true and accurate (taken as a whole) in all
          material respects on the date as of which such information is dated or
          certified, and on such date such information (taken as a whole) was
          not incomplete by omitting to state any material fact necessary to
          make such information not misleading.  Insofar as any such information
          includes assumptions, estimates, or projections, such assumptions,
          estimates, or projections have been made in good faith, with due care,
          and with a diligent application of engineering, construction, and
          accounting expertise reasonably available within AMD Inc. and its
          Subsidiaries (it being understood that although any projections and
          forecasts furnished by an AMD Company represent such AMD Company's
          best estimates and assumptions as to future performance, which such
          AMD Company believes to be fair and reasonable as of the time made in
          the light of current and reasonably foreseeable business conditions,
          such projections and forecasts as to future events are not to be
          viewed as facts and that actual results during the period or periods
          covered thereby may differ from the projected or forecasted results).
          Without limiting the generality of the foregoing, as of the Loan
          Agreement Effective Date, no new information has become available
          which was not provided to the Technical Advisor prior to the Loan
          Agreement Effective Date and which, had it been so provided, could
          reasonably be expected to have caused the Technical Advisor to express
          an unfavourable opinion with respect to the Project in the Technical
          Advisor's Report.

   (xx)   Warranties of AMD Saxonia and AMD Holding.

          Each of the representations and warranties made by AMD Saxonia or AMD
          Holding in any Operative Document to which it is a party (other than
          the representation and warranty of AMD Holding contained in Section
                                                                      -------
          12.2(ix) and the representation and warranty of  AMD Saxonia contained
          --------
          in (S) 15.1.10 of the Loan Agreement) is true and accurate in all
                 -------
          material respects on each Sponsors' Warranty Date, except to the
          extent that any such representation or warranty expressly relates
          solely to an earlier date, and except, in the case of any
          representation or warranty made on a Sponsors' Warranty Date described
          in clause (vi) of the definition thereof, as otherwise provided in the
             -----------
          certificate referred to therein.

                                      47
<PAGE>

SECTION 12.2  Representations and Warranties of the Sponsors.  The Sponsors,
jointly and severally, hereby represent and warrant to the Agent and the
Security Agent as follows (save in respect of Section 12.2 (ix) which is
                                              -----------------
warranted by AMD Holding only):

   (i)    Organization; Corporate Power.

          Each of AMD Holding and AMD Saxonia:

          (a)  is a Gesellschaft mit beschrankter Haftung duly organised and
               existing under the laws of the Federal Republic of Germany and
               registered in Dresden, Germany;

          (b)  is duly qualified or licensed as a foreign corporation authorized
               to do business in each other jurisdiction where, because of the
               nature of its activities or properties in such jurisdiction, such
               qualification or licensing is required,

          (c)  has all requisite corporate power and authority to own, operate,
               and lease its assets and properties and to carry on the business
               in which it is engaged and in which it proposes to engage;

          (d)  has all requisite corporate power and authority

              (x)   to execute, deliver, and perform its obligations under each
                    of the Operative Documents to which it is a party; and

              (y)   to assign, and grant a security interest in, the Security in
                    the manner and for the purpose contemplated by the Security
                    Documents to which it is or is to be a party; and

          (e)  is in compliance with all Requirements of Law,

          except, in each case referred to in clause (b), (c), or (e), to the
                                              ----------  ---      -
          extent that the failure to do so could not reasonably be expected to
          have a Material Adverse Effect.

   (ii)   Corporate Authority; No Conflict.

          The execution, delivery, and performance by each of AMD Holding and
          AMD Saxonia of each Operative Document to which either such AMD
          Company is a party, and the grant by each such AMD Company of a
          security interest in the Security in the manner and for the purpose
          contemplated by the Security Documents to which such AMD Company is a
          party, have been duly authorised by all necessary corporate action
          (including any necessary shareholder action) on the part of such AMD
          Company, and do not:

          (a)  violate any provision of any law, rule, regulation, order, writ,
               judgment, injunction, decree, determination, or award presently
               in effect binding on

                                      48
<PAGE>

               such AMD Company, or of the Organizational Documents of such AMD
               Company;

          (b)  result in a breach of, result in a mandatory prepayment or
               acceleration of indebtedness evidenced or secured by, or
               constitute a default under, any indenture or loan or credit
               agreement, or any other agreement or instrument, to which such
               AMD Company is a party or by which such AMD Company or its
               properties are bound; or

          (c)  result in, or require (in each case except as contemplated by the
               Operative Documents), the creation or imposition of any
               Encumbrance of any nature upon or with respect to any of the
               properties now owned or hereafter acquired by either of such AMD
               Companies (other than any right of set-off or banker's lien or
               attachment that the Agent, the Security Agent, or any Bank may
               have under the Operative Documents or applicable law), and
               neither of such AMD Companies is in default under or in violation
               of its Organizational Documents, any of the Operative Documents
               to which it is a party, or any such law, rule, regulation, order,
               writ, judgment, injunction, decree, determination, award,
               indenture, agreement, or instrument, which default or violation,
               individually or in the aggregate, could reasonably be expected to
               have a Material Adverse Effect.

   (iii)  Valid and Binding Obligations.

          Each Operative Document (which has been executed and delivered by
          either AMD Holding or AMD Saxonia) constitutes the legal, valid, and
          binding obligation of such AMD Company, enforceable against such AMD
          Company in accordance with its respective terms, subject, however, to
          the Opinion Reservations.

   (iv)   AMD Holding Security Documents.

          (a)  The provisions of each of the AMD Holding Security Documents
               which has been executed and delivered by AMD Holding are
               effective to create in favor of the Security Agent for the
               benefit of the Secured Parties, a legal, valid, and enforceable
               first priority Encumbrance in all rights, title, and interest of
               AMD Holding in the AMD Holding Security described therein,
               subject only to Permitted Encumbrances; and all necessary filings
               and recordings have been made in the requisite offices in all
               jurisdictions necessary or appropriate to perfect or continue
               perfected with such priority such Encumbrance on such Security.

          (b)  Each AMD Holding Security Document which has been executed and
               delivered by AMD Holding is effective to grant to the Security
               Agent a legal, valid, and enforceable security interest in all
               rights, title, and interest of AMD Holding in the AMD Holding
               Security described therein.  When each such Security Document is
               duly recorded or filed in the applicable recording or

                                      49
<PAGE>

               filing office(s), if any, and the recording or filing fees and
               taxes, if any, in respect thereof are paid and compliance is
               otherwise had with the formal requirements of applicable law
               applicable to the recording and filing of security documentation
               generally, such AMD Holding Security is subject to a legal,
               valid, enforceable, and perfected first priority Encumbrance.

     (v)  Financial Information; No Material Adverse Change.

          (a)  The audited consolidated balance sheet of AMD Holding and its
               Subsidiaries as at 31 December 1996, and the audited balance
               sheet of AMD Saxonia as at 31 December 1996, and in each case the
               related consolidated statements of income or operations,
               shareholders' equity and cash flows for the period from
               incorporation to such date:

               (x)  were prepared in accordance with GAAP consistently applied
                    throughout the period covered thereby, except as otherwise
                    expressly noted therein, subject to ordinary, good faith
                    year-end audit adjustments;

               (y)  are complete and accurate in all material respects and
                    fairly present the consolidated financial condition of AMD
                    Holding and AMD Saxonia, or the financial condition of AMD
                    Saxonia, as the case may be, as of the date thereof and
                    their results of operations and cash flows for the period
                    covered thereby; and

               (z)  except as specifically disclosed in the Disclosure
                    Schedules, show all material indebtedness and other
                    liabilities, direct or contingent, of AMD Holding and AMD
                    Saxonia as of the date thereof, including liabilities for
                    taxes, material commitments, and Contingent Liabilities.

          (b)  Since the respective dates of incorporation of AMD Holding and
               AMD Saxonia, there has been no Material Adverse Effect with
               respect to AMD Holding or AMD Saxonia, except as may be
               specifically disclosed in the  Disclosure Schedules.

     (vi) Litigation.

          Except as specifically disclosed in the Disclosure Schedules, there
          are no actions, suits, proceedings, claims, or disputes pending, or to
          the best knowledge of the Sponsors, threatened or contemplated, at
          law, in equity, in arbitration or before any Governmental Authority,
          against AMD Holding or AMD Saxonia or any of their respective
          properties which:

          (a)  purport to affect or pertain to this Agreement or any other
               Operative Document, or the entirety of the transactions
               contemplated hereby or thereby; or

                                      50
<PAGE>

          (b)  if determined adversely to such AMD Company would reasonably be
               expected to have a Material Adverse Effect.

          No injunction, writ, temporary restraining order, or any order of any
          nature has been issued by any court or other Governmental Authority
          purporting to enjoin or restrain the execution, delivery, or
          performance of this Agreement or any other Operative Document, or
          directing that the transactions provided for herein or therein not be
          consummated as herein or therein provided.

   (vii)  No Default or Termination.

          No Event of Default or Unmatured Event of Default, and, to the best of
          the Sponsors' knowledge, no Event of Termination, exists.  Neither AMD
          Holding nor AMD Saxonia is in default under or with respect to any
          Contractual Obligation in any respect which, individually or together
          with all such defaults, could reasonably be expected to have a
          Material Adverse Effect.

   (viii) No Burdensome Restrictions.

          Neither AMD Holding nor AMD Saxonia is a party to or bound by any
          Contractual Obligation (other than the Operative Documents), or
          subject to any restriction in any Organizational Document, or any
          Requirement of Law, which could reasonably be expected to have a
          Material Adverse Effect.

   (ix)   Solvency.

          AMD Holding is not insolvent as a matter of German law.

   (x)    Title to Properties; Encumbrances.

          AMD Saxonia has good record and marketable title in fee simple to, or
          valid leasehold interests in (or the equivalent for the relevant
          jurisdiction), all real property necessary or used in the ordinary
          conduct of its business, except for such defects in title as could
          not, individually or in the aggregate, reasonably be expected to have
          a Material Adverse Effect.  AMD Holding has no real property or
          leasehold interests.  The property of each of AMD Holding and AMD
          Saxonia is subject to no Encumbrances, other than Permitted
          Encumbrances.

   (xi)   Subsidiaries; Material AMD Inc. Subsidiaries.

          (a)  AMD Holding is the direct legal and beneficial owner of 100% of
               the issued and outstanding shares of capital stock of AMD
               Saxonia, all of which shares have been validly issued;

          (b)  AMD Holding has no Subsidiaries other than AMD Saxonia, and has
               no equity investments in any other Person; and

                                      51
<PAGE>

          (c)  AMD Saxonia has no Subsidiaries and has no equity investments in
               any other Person.

   (xii)  Insurance.

          Except as specifically disclosed in the Disclosure Schedules,
          properties of AMD Holding are insured with financially sound and
          reputable insurance companies not Affiliates of AMD Inc., in such
          amounts, with such deductibles and covering such risks as are
          customarily carried by companies engaged in similar businesses and
          owning similar properties in localities where AMD Holding operates.

   (xiii) Copyrights, Patents, Trademarks and Licenses, Etc.

          Each of AMD Holding and AMD Saxonia owns or is licensed or otherwise
          has the right to use all of the patents, trademarks, service marks,
          trade names, copyrights, contractual franchises, authorizations, and
          other rights that are reasonably necessary for the operation of their
          respective businesses, without conflict with the rights of any other
          Person, except for such conflicts, if any, which would not,
          individually or in the aggregate, reasonably be expected to have a
          Material Adverse Effect. Except as specifically disclosed in the
          Disclosure Schedules, to the best knowledge of the Sponsors:

          (a)  no slogan or other advertising device, product, process, method,
               substance, part, or other material now employed, or now
               contemplated to be employed, by AMD Holding or AMD Saxonia
               infringes upon any rights held by any other Person;

          (b)  no claim or litigation regarding any of the foregoing is pending
               or, to the best knowledge of the Sponsors, threatened; and

          (c)  no patent, invention, device, application, principle, or any
               statute, law, rule, regulation, standard, or code is pending or,
               to the best knowledge of the Sponsors, proposed

          which, in any case described in (a), (b), or (c) above, could
                                           -    -       -
          reasonably be expected to have a Material Adverse Effect.

   (xiv)  Taxes.

          AMD Holding has filed all material German and other tax returns and
          reports required to be filed, and has paid all material German and
          other taxes, assessments, fees, and other governmental charges levied
          or imposed upon it or its properties, income, or assets otherwise due
          and payable, except those which are being contested in good faith by
          appropriate proceedings and for which adequate reserves have been
          provided in accordance with GAAP.  There is no proposed tax assessment
          against AMD Holding that would, if made, have a Material Adverse
          Effect.

                                      52
<PAGE>

   (xv)   Governmental Approvals with Respect to the Operative Documents.

          As of the date on which this representation and warranty is made or
          reaffirmed, as the case may be, all Governmental Approvals (including,
          without limitation, from the European Union, the Federal Republic of
          Germany, and the Free State of Saxony) necessary for the due
          authorization, execution, delivery, and performance by each of AMD
          Holding and AMD Saxonia of, the legality or validity of the
          obligations of each of such AMD Companies under, or the enforceability
          against each of such AMD Companies of, each of the Operative Documents
          to which it is a party and the due and timely payment by each of such
          AMD Companies of amounts owing under each of the Operative Documents
          have been listed on Schedule 20 to the Loan Agreement and, except as
                              -----------
          otherwise noted therein, all of such Governmental Approvals have been
          duly obtained or effected, and are in full force and effect, on the
          Loan Agreement Effective Date.

   (xvi)  Governmental Approvals with Respect to the Plant and the Design
          Center.

          As of the date on which this representation and warranty is made or
          reaffirmed, as the case may be, all Governmental Approvals necessary
          for the construction, ownership, use, and operation by AMD Saxonia of
          the Plant and the Design Center or which are required in order that
          the Plant and the Design Center may be operated for their intended
          purposes and Perform in Accordance with the Plans and Specifications,
          have been listed on Schedule 20 to the Loan Agreement, and all of such
                              -----------
          Governmental Approvals (except those listed in Part B of Schedule 20
                                                         ------    -----------
          to the Loan Agreement) have been duly obtained or effected, are
          sufficient for all purposes thereof, and are in full force and effect
          on such date (and, in the case of Government Approvals that have
          expired, each of AMD Holding and AMD Saxonia has timely applied for
          renewal thereof and such Governmental Approvals have been
          administratively extended under applicable law); and the Sponsors
          reasonably believe, after due inquiry, that the Governmental Approvals
          set forth in Schedule 20 to the Loan Agreement, together with all
                       -----------
          Governmental Approvals, if any, that may be required in connection
          with the transactions contemplated by the Operative Documents
          subsequent to the date on which this representation and warranty is
          made or reaffirmed, as the case may be, will be obtained at such time
          or times as may be necessary to avoid material delay in, or material
          restrictions on the use or operation of, the Plant and the Design
          Center.

   (xvii) Interruption of Business.

          Neither the business nor the properties of AMD Holding or AMD Saxonia
          are presently affected by any fire, explosion, accident, strike,
          lockout, or other dispute, drought, storm, hail, earthquake, embargo,
          Act of God, or of the public enemy, or other casualty (whether or not
          covered by insurance) which impairs, or, if such event or condition
          were to continue for more than thirty (30) additional days would be
          likely to impair, such AMD Company's ability to perform its
          obligations under the Operative Documents.

                                      53
<PAGE>

  (xviii) Prior Activities, etc.

          Prior to the Loan Agreement Effective Date, neither AMD Holding nor
          AMD Saxonia has engaged in any business, conducted any operations or
          activities, nor incurred any obligations or liabilities (contingent or
          otherwise), other than (i) as described in the Disclosure Schedules,
          and (ii) its obligations, if any, under the Operative Documents, and
          activities reasonably incidental thereto.

  (xix)   Status of AMD Holding and AMD Saxonia, etc.

          (a)  AMD Holding is an "Unrestricted Subsidiary" under, and for
               purposes of, the AMD Inc. Senior Secured Note Indenture and is
               not a "Restricted Subsidiary" under, and for purposes of, the AMD
               Inc. 1999 Loan and Security Agreement; and

          (b)  AMD Saxonia is an "Unrestricted Subsidiary" under, and for
               purposes of, the AMD Inc. Senior Secured Note Indenture and is
               not a "Restricted Subsidiary" under, and for purposes of, the AMD
               Inc. 1999 Loan and Security Agreement.

  (xx)    Accuracy of Information.

          As of the date this representation and warranty is made or reaffirmed,
          as the case may be, all factual information then or theretofore
          furnished by or on behalf of AMD Holding or AMD Saxonia to the Agent
          or any Bank or the Technical Advisor for purposes of or in connection
          with any Operative Document or any transaction contemplated thereby
          (including the Information Memorandum, true and complete copies of
          which were furnished to the Agent in connection with the execution and
          delivery of this Agreement) is true and accurate (taken as a whole) in
          all material respects on the date as of which such information is
          dated or certified, and on such date such information (taken as a
          whole) was not incomplete by omitting to state any material fact
          necessary to make such information not misleading.  Insofar as any
          such information includes assumptions, estimates, or projections, such
          assumptions, estimates, or projections have been or will be made in
          good faith, with due care, and with a diligent application of
          engineering, construction, and accounting expertise reasonably
          available within AMD Inc. and its Subsidiaries (it being understood
          that although any projections and forecasts furnished by an AMD
          Company represent such AMD Company's best estimates and assumptions as
          to future performance, which such AMD Company believes to be fair and
          reasonable as of the time made in the light of current and reasonably
          foreseeable business conditions, such projections and forecasts as to
          future events are not to be viewed as facts and that actual results
          during the period or periods covered thereby may differ from the
          projected or forecasted results).  Without limiting the generality of
          the foregoing, as of the Loan Agreement Effective Date, no new
          information has become available which was not provided to the
          Technical Advisor prior to the Loan Agreement Effective Date and
          which, had it been so provided, could reasonably be expected to have
          caused the

                                      54
<PAGE>

          Technical Advisor to express an unfavourable opinion with respect to
          the Project in the Technical Advisor's Report.

   (xxi)  Warranties made by AMD Saxonia.

          Each of the representations and warranties made by AMD Saxonia in any
          Operative Document to which it is a party (other than the
          representation and warranty contained in (S) 15.1.10 of the Loan
                                                       -------
          Agreement) is true and accurate in all material respects on each
          Sponsors' Warranty Date, except to the extent that any such
          representation or warranty expressly relates solely to an earlier
          date, and except, in the case of any representation or warranty made
          on a Sponsors' Warranty Date described in clause (vi) of the
                                                    -----------
          definition thereof, as otherwise provided in the certificate referred
          to therein.

SECTION 12.3  Repetition of Representations and Warranties.  The representations
and warranties contained in Sections 12.1 and 12.2 shall be repeated on each
                            -------------     ----
Sponsors' Warranty Date, except to the extent that any such representation and
warranty expressly relates solely to an earlier date, and except, in the case of
the Sponsors' Warranty Date described in clause (vi) of the definition thereof,
                                         -----------
as otherwise set forth in the certificate referred to therein.

                                  ARTICLE XIII
                                   Covenants

SECTION 13.1  Affirmative Covenants of AMD, Inc.   AMD Inc. agrees, so long as
any Primary Secured Obligations shall remain outstanding or any Bank shall have
any commitment under or arising out of the Loan Agreement, that it will, and
will cause each other AMD Company to, unless in either case the Security Agent
shall have enforced any of the Security or the Agent (acting on the instructions
of an Instructing Group) shall have otherwise consented in writing:

     (i)  furnish to the Agent (with copies for each of the Banks):

          (a)  as soon as possible and in any event within ten (10) Business
               Days after a Relevant AMD Inc. Individual shall have obtained
               actual knowledge of the occurrence of an Event of Default, an
               Unmatured Event of Default or an Event of Termination, the
               statement of an authorised officer of AMD Inc. setting forth the
               details thereof which has occurred and the action (if any) which
               AMD Inc. or any other AMD Company proposes to take with respect
               thereto;

          (b)  as soon as available, and in any event within forty-five (45)
               days after the end of each of the first three Fiscal Quarters of
               each Fiscal Year of AMD Inc., (x) consolidated financial
               statements consisting of a consolidated balance sheet of AMD Inc.
               as at the end of such Fiscal Quarter and a consolidated statement
               of income and statement of shareholders' equity and cashflows of

                                      55
<PAGE>

               AMD Inc. for such Fiscal Quarter and for the Fiscal Year through
               such Fiscal Quarter, setting forth in comparative form the
               corresponding figures for the corresponding periods of the
               preceding Fiscal Year, all in reasonable detail and certified
               (subject to ordinary good faith year end audit adjustments) by an
               authorised financial officer of AMD Inc. as being complete and
               accurate in all material respects, and as fairly presenting in
               accordance with GAAP, consistently applied, the financial
               position and results of operations of AMD Inc. and its
               Subsidiaries, and (y) consolidating financial statements
               consisting of a consolidating balance sheet of AMD Inc. as at the
               end of such Fiscal Quarter and a consolidating statement of
               income and statement of shareholders' equity and cashflows of AMD
               Inc. for such Fiscal Quarter and for the Fiscal Year through such
               Fiscal Quarter, setting forth in comparative form the
               corresponding figures for the corresponding periods of the
               preceding Fiscal Year, all in reasonable detail and certified
               (subject to ordinary good faith year end audit adjustments) by an
               authorised financial officer of AMD Inc. as being complete and
               accurate in all material respects, and as having been developed
               and used in connection with the financial statements referred to
               in clause (x) above;
                  ----------

          (c)  as soon as available, and in any event within ninety (90) days
               after the end of each Fiscal Year of AMD Inc., (x) financial
               statements consisting of a consolidated balance sheet of AMD Inc.
               as at the end of such Fiscal Year and a consolidated statement of
               income and statement of shareholders' equity and cashflows of AMD
               Inc. for such Fiscal Year, setting forth in comparative form the
               corresponding figures for the preceding Fiscal Year, all in
               reasonable detail and certified by independent certified public
               accountants of recognised national standing as fairly presenting
               in accordance with GAAP, consistently applied, the financial
               position and results of operations of AMD Inc. and its
               Subsidiaries, and (y) a certificate from each Sponsor confirming,
               as of the date of such certificate, that, except as otherwise
               therein set forth, each of the representations and warranties
               made by each AMD Company in any Operative Document to which it is
               a party is true and accurate in all material respects on the date
               of such certificate, except to the extent that any such
               representation or warranty expressly relates solely to an earlier
               date;

          (d)  (x) in connection with the completion of any Scheduled Project
               Phase, (1) a Scheduled Project Phase Technical Completion
               Certificate (AMD Companies), and (2) a Scheduled Project Phase
               Technical Completion Certificate (Technical Advisor), and (y) as
               soon as available, and in any event within ten (10) days after
               the completion of any Scheduled Project Phase, (1) a Project
               Budget and (2) a Project Schedule relating to the Project,
               setting forth in reasonable detail a description of all of the
               Capital Expenditures which have been made during each Scheduled
               Project Phase (other than the final Project Phase) with respect
               to the Project to the date thereof and those which are
               anticipated to be made during each Project Phase prior to
               Completion; provided, however, that if, at any time prior to
                           --------  -------
               Completion, any

                                      56
<PAGE>

               AMD Company or the Agent (acting on the instructions of an
               Instructing Group), determines that it is appropriate to amend,
               supplement, or otherwise modify the Approved Project Budget, or
               the Approved Project Schedule, the parties hereto hereby agree to
               discuss in good faith any such proposed amendment, supplement, or
               modification; provided, further, that (a) neither the Agent nor
                             -----------------
               the Banks shall be obligated in any matter, as a result of any
               such discussions or otherwise, to agree to any amendments,
               supplements, or other modifications to the Approved Project
               Budget or Approved Project Schedule which would reduce or relax
               the then required financial performance of AMD Saxonia with
               respect to the Project, and (b) each of the Agent and the Banks
               reserve(s) all rights hereunder in the event that such
               discussions fail to produce an amendment or other supplement to,
               or modification of, the Approved Project Budget or the Approved
               Project Schedule. In the event (but only in such event) that AMD
               Saxonia (with the consent of each Sponsor) and the Agent agree to
               amend, supplement, or otherwise modify any Approved Project
               Budget or any Approved Project Schedule, as the case may be, then
               such amended, supplemented, or otherwise modified Approved
               Project Budget or Approved Project Schedule, as the case may be,
               shall thereafter be the "Approved Project Budget" or the
                                        -----------------------
               "Approved Project Schedule" for all purposes hereof until further
                -------------------------
               changed, if at all, pursuant to this Section 13.1(i)(d);
                                                    ------------------

          (e)  promptly following AMD Inc.'s or such other AMD Company's receipt
               or transmission thereof, and unless otherwise concurrently
               delivered by another AMD Company to the Agent under an Operative
               Document, a copy of each notice, report, schedule, certificate,
               financial statement, or other document furnished pursuant to any
               of the Operative Documents if such notice, report, schedule,
               certificate, financial statement, or other document could
               reasonably be considered material to the Agent or any Bank in
               connection with the Operative Documents and the entirety of the
               transactions contemplated thereby;

          (f)  promptly following the occurrence of (x) any change in the
               identification of the applicable AMD Inc. Primary Bank Credit
               Agreement pursuant to the definition thereof contained in Section
                                                                         -------
               1.1, or (y) any consent or waiver or amendment or modification
               ---
               with respect to the incorporated covenants, related definitions,
               or ancillary provisions of the AMD Inc. Primary Bank Credit
               Agreement or of the AMD Inc. Senior Secured Note Indenture,
               notice of such change and the basis therefor or of such consent
               or waiver or amendment or modification and the basis therefor;
               and

          (g)  such other information with respect to the business affairs,
               financial condition, and/or operations of AMD Inc. and its
               Subsidiaries (including AMD Saxonia) and Affiliates as the Agent
               or any Bank (acting through the Agent) may from time to time
               reasonably request for purposes of the transactions contemplated
               by the Operative Documents.

                                      57
<PAGE>

   (ii)   pay and perform all of its obligations under each of the Operative
          Documents to which it is a party in the manner and at the time
          contemplated therein.

   (iii)  cause AMD Holding at all times to be a wholly owned Subsidiary of
          AMD Inc. and cause AMD Saxonia at all times to be a wholly owned
          Subsidiary of AMD Holding.

   (iv)   promptly following a request by the Agent or any Bank (acting through
          the Agent) to do so, permit the Agent, the Technical Advisor, the
          Auditor, or any of their respective representatives to have reasonable
          access during normal business hours to the Plant or the Design Center
          and to such books and records of AMD Saxonia as may be necessary or
          reasonably desirable (in the good faith discretion of the Agent or any
          Bank) to verify compliance by each AMD Company with its obligations
          under the Operative Documents to which it is a party; provided, that
                                                                --------
          such access shall be exercised in a manner which does not disrupt the
          operations of the Plant or the Design Center, in any material respect.

   (v)    prior to Completion, cause AMD Saxonia to use Sponsors' Loans, equity
          contributions under Article II, Advances and Revolving Loans solely to
                              ----------
          pay Project Costs incurred to complete the Project in accordance with
          the Plans and Specifications.

SECTION 13.2  Negative Covenants of AMD Inc.   AMD Inc. agrees, so long as any
Primary Secured Obligation shall remain outstanding or any Bank shall have any
commitment under or arising out of the Loan Agreement, that it will not, and not
permit any other AMD Company to, unless in either case the Security Agent shall
have enforced any of the Security or the Agent (acting on the instructions of an
Instructing Group) shall have otherwise consented in writing:

   (i)    terminate, amend or modify, or agree to the termination, amendment or
          modification, of any Operative Document, other than (w) the AMD Inc.
          Primary Bank Credit Agreement or the AMD Inc. Senior Secured Note
          Indenture (each of which may be amended, modified, or terminated in
          accordance with Section 13.3), (x) the Equipment Supply Contracts that
                          ------------
          are not Material Equipment Supply Contracts, (y) the Service Contracts
          that are not Material Service Contracts, or (z) in the case of the
          Project Budget, the Approved Project Budget, the Project Schedule, the
          Approved Project Schedule, and the Management Plan, as expressly
          provided hereunder; provided, that AMD Inc. may terminate the AMD
                              --------
          Holding Wafer Purchase Agreement or the AMD Holding Research Agreement
          only in accordance with the express termination provisions thereof;

          provided, further, that AMD Holding may terminate the AMD Saxonia
          --------  -------
          Wafer Purchase Agreement or the AMD Saxonia Research Agreement only in
          accordance with the express termination provisions thereof; and

          provided, further, that the AMD Saxonia Hedging Contract may be
          --------  -------
          terminated only in accordance with the express termination provisions
          thereof. The foregoing notwithstanding, AMD Saxonia may amend or
          modify, or agree to the amendment or modification of, the Design/Build
          Agreement, any Material Equipment Supply Contract, any Material
          Service Contract, or the Plans and

                                      58
<PAGE>

          Specifications to the extent such amendment or modification does not,
          individually or in the aggregate, decrease or adversely affect (x) the
          value or use of the Plant and the Design Center (or of the rights of
          the Banks with respect thereto) in any material respect, or (y) the
          capacity of the Plant to perform, on a substantially continuous basis,
          the functions for which it was specifically designed in accordance
          with the plans and specifications as originally approved by the
          Technical Advisor and the Agent for purposes of the Operative
          Documents; provided, that prior to Completion no such amendment or
                     --------
          modification will, individually or in the aggregate, be inconsistent
          with the Approved Project Budget or the Approved Project Schedule.

   (ii)   create, incur, or suffer to exist any Encumbrance with respect to its
          rights under or in respect of the Sponsors' Loan Agreement or the
          Revolving Loan Facility Agreement.

   (iii)  permit AMD Holding or AMD Saxonia to amend their respective
          Organizational Documents.

   (iv)   permit to subsist or enter into any other agreements which (by their
          terms) conflict with, or prohibit AMD Inc., from complying with its
          obligations as set out in this Agreement or any other Operative
          Document.

SECTION 13.3  Incorporated Covenants of AMD, Inc.   AMD Inc. agrees, so long as
any Primary Secured Obligation shall remain outstanding or any Bank shall have
any commitment under or arising out of the Loan Agreement, that it will, unless
the Security Agent shall have enforced any of the Security or the Agent (acting
on the instructions of an Instructing Group) shall have otherwise consented in
writing, duly keep, perform, and observe, for the benefit of the Agent, the
Security Agent, and the Secured Parties, each and every affirmative, negative,
and informational covenant contained in each of (x) the AMD Inc. Senior Secured
Note Indenture, and (y) the AMD Inc. Primary Bank Credit Agreement (to the
extent that such covenants are applicable to AMD Inc. thereunder), all of which
covenants, together with related definitions and ancillary provisions, are
hereby incorporated herein by reference as if such terms were set forth herein
in full; provided, however, that:
         --------  -------

   (i)    with respect to the AMD Inc. Primary Bank Credit Agreement referred to
          in clause (i) of the definition thereof:
             ----------

          (a)  any references to the "Agent" shall be deemed to be references to
               the Agent (except where such term is used in Article 6, Sections
                                                            ---------- --------
               7.1, 7.2 (a), 9.5 (b) and (c) (second sentence), 9.11, 9.14, 9.15
               ---- -------- -------     ---                    ----- ----- ----
               and 9.22 (a) thereof);
                   --------

          (b)  any references to the "Lenders" shall be deemed to be references
               to the Banks (except where such term is used in Article 6,
                                                               ----------
               Sections 7.1, 7.2 (a), 9.5 (b) and (c) (second sentence), 9.15
               ------------- -------- -------     ---                    ----
               and 9.22 (a) thereof);
                   --------

          (c)  any references to the "Majority Lenders" shall be deemed to be
               references to an Instructing Group (except where such term is
               used in Article 6, or Section 9.5 (b) and 9.22 (a) thereof);
                       ----------   ----------------     --------

                                      59
<PAGE>

          (d)  any references to the "Agreement" shall be deemed to be
               references to this Agreement (except where such term is used in

               Article 6 and Sections 7.2 (b), 7.2 (d), 7.2 (e), 9.8, 9.13, 9.15
               ---------     ----------------- -------- -------- ---- ----- ----
               and 9.22 (a) thereof);
                   --------

          (e)  any references to the "Loan Documents" shall be deemed to be
               references to the Operative Documents (except where such term is
               used in Article 6 and Section 7.2 (e) and 9.22 (a) thereof);
                       ----------    ---------------     --------

          (f)  any references to an "Event of Default" shall be deemed to be
               references to an Event of Default (except where such term is used
               in Article 6 and Sections 7.2 (d), 7.2 (e), 9.5 (c) and 9.8 (vi)
                  ---------     ----------------- -------- -------     --------
               (A) thereof);
               ---

          (g)  any references to a "Default" shall be deemed to be references to
               an Unmatured Event of Default (except where such term is used in

               Article 6 and Sections 7.2 (d) and 7.2 (e) thereof);
               ----------    ----------------    --------

          (h)  any references to a "Material Adverse Effect" shall be deemed to
               be references to a Material Adverse Effect; and

          (i)  any references to "so long as any of the Obligations remain
               outstanding or this Agreement is in effect" shall be deemed to be
               references to "So long as any Bank shall have any commitment to
               make Advances under the Loan Agreement or any of the Primary
               Secured Obligations shall remain unpaid or unsatisfied";

   (ii)   with respect to the AMD Inc. Senior Secured Note Indenture:

          (a)  [left intentionally blank];

          (b)  the references to "this Indenture" and "the Trustee" contained in

               Section 4.06 thereof shall be deemed to be references to "this
               ------------
               Agreement" and "the Security Agent and the Agent", respectively;

          (c)  [left intentionally blank]

          (d)  the reference to "the Holders of the Notes" contained in Section
                                                                        -------
               4.15 thereof shall be deemed to be a reference to "the Agent and
               ----
               the Banks";

          (e)  the reference to "the Notes, this Indenture and the Collateral
               Documents pursuant to a supplemental indenture or other documents
               or instruments in form reasonably satisfactory to the Trustee"
               contained in clause (ii) of Section 5.01 thereof shall be deemed
                            -----------    ------------
               to be a reference to "each of the Operative Documents to which
               AMD Inc. is a party pursuant to one or more documents or
               instruments in form reasonably satisfactory to the Agent"; and

          (f)  the references to "this Indenture" contained in Section 5.02
                                                               ------------
               thereof shall be deemed to be references to "this Agreement"; and
               the reference to "the

                                      60
<PAGE>

               obligation to pay the principal of, premium, if any, and
               interest, if any, on the Notes" contained in Section 5.02 thereof
                                                            ------------
               shall be deemed to be a reference to "its obligations under each
               of the Operative Documents to which it is a party"; and

   (iii)  with respect to the AMD Inc. Primary Bank Credit Agreement referred
          to in clause (ii) of the definition thereof, such modifications to the
                -----------
          provisions incorporated in this Agreement as shall be appropriate to
          make them applicable to this Agreement and consistent with the Project
          shall be deemed to be made; and

The provisions and definitions of the applicable AMD Inc. Primary Bank Credit
Agreement, and the AMD Inc. Senior Secured Note Indenture, as incorporated by
reference in this Agreement, shall continue to be binding on AMD Inc. after
giving effect to any consent or waiver with respect to such provisions or to any
amendment or modification or (in the case of the AMD Inc. Senior Secured Note
Indenture only) termination thereof, in each case given or made in accordance
with the terms of and by the parties to the applicable AMD Inc. Primary Bank
Credit Agreement or the AMD Inc. Senior Secured Note Indenture.

SECTION 13.4  Affirmative Covenants of the Sponsors.  The Sponsors, jointly and
severally, agree, so long as any Primary Secured Obligations shall remain
outstanding or any Bank shall have any commitment under or arising out of the
Loan Agreement, that AMD Holding will (and, at all times prior to the exercise
of rights by the Security Agent under any of the Security Documents, AMD Inc.
will cause AMD Holding to), unless the Agent (acting on the instructions of an
Instructing Group) shall have otherwise consented in writing:

   (i)    duly and punctually pay and perform all of its obligations under each
          of the Operative Documents to which it is a party in the manner and at
          the time contemplated therein.

   (ii)   pay or discharge (a) all taxes, assessments, and governmental charges
          or levies imposed upon it or upon its income or profits or any
          property belonging to it prior to the date on which penalties attach
          thereto, and (b) all lawful claims prior to the time they become an
          Encumbrance upon any property of AMD Holding, and other than taxes,
          assessments, charges, levies, or claims included in clauses (a) and
                                                              -----------
          (b) above which are not, individually or collectively, substantial in
          ---
          aggregate amount; provided, that (after providing notice thereof to
                            --------
          the Agent) AMD Holding shall not be required to pay or discharge any
          such tax, assessment, charge, levy, or claim while the same is being
          contested by it in good faith and by appropriate proceedings and
          adequate book reserves have been established with respect thereto, and
          so long as the lien or charge resulting from the nonpayment or non-
          discharge of such tax, assessment, charge, levy, or claim shall not,
          individually or in the aggregate, have a Material Adverse Effect.

                                      61
<PAGE>

   (iii)  cause AMD Saxonia to preserve and maintain its corporate existence,
          rights, privileges, and franchises in the jurisdiction of its
          incorporation, and cause AMD Saxonia to not have operations in any
          other jurisdiction.

   (iv)   comply in all material respects with all laws, rules, regulations, and
          governmental orders (Federal, state, local, and foreign) having
          applicability to it or to the business or businesses at any time
          conducted by AMD Holding except to the extent that any such
          noncompliance, individually or in the aggregate, could not reasonably
          be expected to have a Material Adverse Effect.

   (v)    promptly following AMD Holding's receipt or transmission thereof,
          unless otherwise concurrently delivered by another AMD Company to the
          Agent under an Operative Document, furnish to the Agent a copy of each
          notice, report, schedule, certificate, financial statement, or other
          document furnished pursuant to any of the Operative Documents if such
          notice, report, schedule, certificate, financial statement, or other
          document could reasonably be considered material to the Agent or any
          Bank in connection with the Operative Documents or the entirety of the
          transactions contemplated thereby.

   (vi)   promptly following a request from the Security Agent to do so and at
          AMD Holding's own expense, take all such lawful action as the Security
          Agent may reasonably request to enforce or secure the performance by
          each other AMD Company under any Operative Document to which AMD
          Holding is a party of such AMD Company's respective obligations under
          and in connection with the applicable Operative Document in accordance
          with the respective terms thereof, and exercise any right of
          termination or remedy available to AMD Holding thereunder or in
          connection therewith to the extent and in the manner reasonably
          directed by the Security Agent, including, without limitation, the
          institution of legal or administrative actions or proceedings to
          compel or enforce performance by each other AMD Company of its
          respective obligations thereunder, or to recover any payment due AMD
          Holding thereunder.

   (vii)  keep, or cause to be kept, adequate records and books of account, in
          which complete entries are to be made reflecting its business and
          financial transactions, such entries to be made in accordance with
          GAAP consistently applied in the case of financial transactions or as
          otherwise required by applicable rules and regulations of any
          governmental agency or regulatory authority (federal, state, local or
          foreign) having jurisdiction over AMD Holding, or the transactions
          contemplated by this Agreement or the other Operative Documents to
          which it is or will be a party.

   (viii) maintain, obtain or effect all Governmental Approvals which may at
          any time or from time to time be necessary for the due authorization,
          execution, delivery, performance, legality, validity, or
          enforceability of each of the Operative Documents to which it is or
          will be a party.

                                      62
<PAGE>

   (ix)   prior to Completion, cause AMD Saxonia to use Sponsors' Loans, equity
          contributions under Article II, Advances and Revolving Loans solely to
          pay Project Costs to complete the Project in accordance with the Plans
          and Specifications.

SECTION 13.5  Negative Covenants of the Sponsors.  The Sponsors, jointly and
severally, agree, so long as any Primary Secured Obligation shall remain
outstanding or any Bank shall have any commitment under or arising out of the
Loan Agreement, that AMD Holding will not (and AMD Inc. will not, at any time
prior to the exercise of rights by the Security Agent under any of the Security
Documents, permit AMD Holding to), unless the Agent (acting on the instructions
of an Instructing Group) shall have otherwise consented in writing:

   (i)    terminate, amend or modify, or agree to the termination, amendment or
          modification, of any Operative Document, other than (w) the AMD Inc.
          Primary Bank Credit Agreement or the AMD Inc. Senior Secured Note
          Indenture (each of which may be amended, modified or terminated in
          accordance with Section 13.3), (x) the Equipment Supply Contracts that
                          ------------
          are not Material Equipment Supply Contracts, (y) the Service Contracts
          that are not Material Service Contracts, or (z) in the case of the
          Project Budget, the Approved Project Budget, the Project Schedule, the
          Approved Project Schedule, and the Management Plan, as expressly
          provided hereunder; provided, that AMD Inc. may terminate the AMD
                              --------
          Holding Wafer Purchase Agreement or the AMD Holding Research Agreement
          only in accordance with the express termination provisions thereof;

          provided, further, that AMD Holding may terminate the AMD Saxonia
          --------  -------
          Wafer Purchase Agreement or the AMD Saxonia Research Agreement only in
          accordance with the express termination provisions thereof; and

          provided, further, that the AMD Saxonia Hedging Contract may be
          --------  -------
          terminated only in accordance with the express termination provisions
          thereof. The foregoing notwithstanding, AMD Saxonia may amend or
          modify, or agree to the amendment or modification of, the Design/Build
          Agreement, any Material Equipment Supply Contract, any Material
          Service Contract, or the Plans and Specifications to the extent such
          amendment or modification does not, individually or in the aggregate,
          decrease or adversely affect (x) the value or use of the Plant and the
          Design Center (or of the rights of the Banks with respect thereto) in
          any material respect, or (y) the capacity of the Plant to perform, on
          a substantially continuous basis, the functions for which it was
          specifically designed in accordance with the plans and specifications
          as originally approved by the Technical Advisor and the Agent for
          purposes of the Operative Documents; provided, that, prior to
                                               --------
          Completion, no such amendment or modification will, individually or in
          the aggregate, be inconsistent with the Approved Project Budget or the
          Approved Project Schedule.

   (ii)   engage in any activities other than those contemplated by the
          Operative Documents to which it is a party or the transactions
          contemplated thereby and activities reasonably incidental thereto.

   (iii)  create, incur, assume, or suffer to exist any Encumbrance in, upon,
          or with respect to any of its properties or assets, whether now owned
          or hereafter acquired, or assign or

                                      63
<PAGE>

          otherwise convey any right to receive income to secure any obligation,
          except (1) as contemplated by the AMD Holding Security Documents, and
          (2) for Permitted Encumbrances.

   (iv)   create, incur, assume, or suffer to exist any Indebtedness, whether
          current or funded, except current accounts and other amounts payable
          in the ordinary course of business, and except to the extent
          contemplated by the Operative Documents.

   (v)    create, incur, assume, or suffer to exist any obligations as lessee
          for the rental or hire of real or personal property of any kind
          whatsoever.

   (vi)   assume, guarantee, or endorse, or otherwise become directly or
          contingently liable in respect of, any obligation of any Person,
          except pursuant to the Operative Documents to which it is a party.

   (vii)  merge with or into or consolidate with any Person, or, acquire,
          lease, or purchase, all or substantially all of the assets or stock of
          any class of, or any partnership or joint venture interest in, any
          Person, or create or acquire any Subsidiary, except for the
          acquisition of AMD Saxonia.

   (viii) sell, lease, assign, transfer, or otherwise dispose of any of its
          assets, including its accounts receivable, except as contemplated by
          the Operative Documents; or issue or sell any shares of any class of
          its capital stock to any Person except to AMD Inc.

   (ix)   make any loan or advance or extend any credit to any Person other than
          AMD Saxonia or as contemplated by the AMD Holding Wafer Purchase
          Agreement, or purchase or otherwise acquire the capital stock or
          obligation of, or any investment in, any Person other than AMD
          Saxonia, in each case other than Cash Equivalent Investments which
          have been pledged to the Security Agent pursuant to the AMD Holding
          Security Documents.

   (x)    apply for or become liable with respect to any letter of credit or
          acceptance financing; or enter into or become liable with respect to
          any interest or currency swap, hedge, exchange, or other similar
          obligation.

   (xi)   purchase any shares of any Person, other than AMD Saxonia, or redeem
          any of its shares, declare or pay any dividend thereon or make any
          distribution to its shareholders, except for any such redemption or
          distribution made as a result of the transactions contemplated by
          Section 6.3.
          -----------

   (xii)  except as provided in the Management Service Agreement, pay any
          salary, compensation, or bonus of any character to any officer,
          director, or employee of AMD Holding or any Affiliate thereof or
          provide any such Person with any medical, surgical, dental, hospital,
          disability, unemployment, retirement, pension, vacation, or insurance
          benefit of any kind or adopt, establish, or maintain any plan, fund,
          or program to provide any such benefit.

                                      64
<PAGE>

   (xiii) enter into any transaction with AMD Inc. or an Affiliate thereof
          (other than AMD Saxonia) on a basis materially less favourable to AMD
          Holding than would be the case if such transaction had been effected
          with a Person other than AMD Inc. or an Affiliate thereof.

   (xiv)  open or maintain a bank account with any Person, except for demand
          or other  deposit accounts at the Agent and at Security Agent.

   (xv)   amend or modify the Organizational Documents of AMD Saxonia.

   (xvi)  issue any power of attorney or other contract or agreement giving
          any Person power or control over the day-to-day operations of AMD
          Holding's business, except as contemplated by the Operative Documents.

   (xvii) commence, or join with any other creditor in commencing, any
          bankruptcy, reorganization, or insolvency proceeding with respect to
          AMD Saxonia or AMD Inc.

   (xviii)enter into any agreement other than as contemplated by the
          Operative Documents to which it is or will be a party or under any
          instrument or document delivered or to be delivered by it hereunder or
          thereunder, or in connection herewith or therewith.

   (xix)  make any significant change in accounting treatment or reporting
          practices, except as required by GAAP, or change its Fiscal Year.

   (xx)   create, incur, assume, or suffer to exist any Encumbrance with respect
          to its rights under or in respect of the Sponsors' Loan Agreement or
          the Revolving Loan Facility Agreement, except as set forth in the
          Security Documents.

SECTION 13.6  Recourse to AMD Inc. for Breach of Covenant.  It is expressly
understood and agreed by the parties hereto that the obligations of AMD Saxonia
under the Loan Agreement are intended to be limited recourse obligations from
the perspective of AMD Inc. and that the covenants of the Sponsors contained in
this Article XIII are not intended to represent a guaranty of AMD Saxonia's
     ------------
obligations under the Loan Agreement.  Accordingly, (i) neither AMD Inc. nor its
assets (other than its interests in AMD Holding) shall be exposed to liability
(whether in damages or otherwise) for breach of any covenant contained in this
Article XIII to the extent that such damages would otherwise result in AMD Inc.
------------
incurring greater financial exposure than the aggregate amount otherwise agreed
to be payable by AMD Inc. pursuant to this Agreement and the other Operative
Documents, and (ii) AMD Holding shall have no right of contribution against AMD
Inc. arising from any payment made by AMD Holding under this Agreement or the
Sponsors' Guaranty to the extent that AMD Inc. provides funds for the purpose of
such payment by contributions to AMD Holding's stated capital or capital
reserves and/or by loans to AMD Holding; provided, however, that the provisions
                                         --------  -------
of this Section 13.6 shall not be construed to absolve AMD Inc. for its
        ------------
liability, whether in damages or otherwise, for actions or omissions
constituting fraud or misrepresentation or breach of warranty; and provided,
                                                                   --------
further that the provisions of this Section 13.6 shall not preclude the Security
-------                             ------------
Agent from seeking temporary relief (if otherwise available) for any prospective
breach by AMD Inc. of its covenants contained in this Article XIII.
                                                      ------------

                                      65
<PAGE>

                                  ARTICLE XIV
                  Costs and Expenses; Indemnities; Taxes; Etc.

SECTION 14.1  Costs and Expenses.  The Sponsors, jointly and severally, agree to
pay (to the extent not previously paid by AMD Saxonia promptly following a
demand by the Agent therefor, it being understood and agreed that the Agent will
demand such payment for the costs and expenses of the preparation of this
Agreement) all costs and expenses (including reasonable legal fees and expenses)
of the Agent, the Security Agent, and the Paying Agent in connection with the
negotiation, preparation, execution, and delivery of this Agreement, any
amendments or modifications of (or supplements to) this Agreement, and any and
all other documents furnished pursuant  hereto or in connection herewith, as
well as all costs and expenses (including, without limitation, reasonable
attorneys' fees and expenses) if any, in connection with the enforcement of this
Agreement or any other agreement furnished by them prior to the enforcement by
the Security Agent of any of the Security pursuant hereto or in connection
herewith.

SECTION 14.2  General Indemnity.  The Sponsors, jointly and severally, hereby
agree to indemnify, exonerate, and hold the Agent, the Security Agent, and the
Paying Agent, and each of the officers, directors, employees of the Agent, the
Security Agent, and the Paying Agent (herein collectively called the
"Indemnitees") free and harmless from and against any and all actions, claims,
 -----------
losses, liabilities, damages, and expenses, including, without limitation,
reasonable legal fees and expenses (herein collectively called the "Indemnified
                                                                    -----------
Liabilities"), which may be incurred by or asserted against the Indemnitees or
-----------
any Indemnitee as a result of, or arising out of, or relating to, or in
connection with:

   (i)    the failure by either Sponsor to comply with its respective
          obligations under this Agreement, the Sponsors' Guaranty, the
          Sponsors' Loan Agreement and the Revolving Loan Facility Agreement
          (subject, in the case of Indemnified Liabilities arising from Article
                                                                        -------
          XIII, to the provisions of Section 13.6);
          ----                       ------------

   (ii)   the inaccuracy by either Sponsor of any of its representations and
          warranties contained in any of the Operative Documents to which it is
          a party as and when made or reaffirmed as the case may be (provided
          that AMD Inc. shall have no liability under this Section 14.2 in
                                                           ------------
          respect of any inaccuracy by AMD Holding of the representation and
          warranty contained in Section 12.2 (ix)); and
                                -----------------

   (iii)  any investigation, litigation, or proceeding related to this
          Agreement or the consummation of the transactions contemplated hereby,
          whether or not any such Indemnitee is a party thereto, and, to the
          extent that the foregoing undertaking may be unenforceable for any
          reason, the Sponsors, jointly and severally, hereby agree to make the
          maximum contribution to the payment and satisfaction of each of the
          Indemnified Liabilities which is permissible under applicable law.

SECTION 14.3  Undertaking to Contribute.  AMD Inc. hereby undertakes that in the
event:

                                      66
<PAGE>

     (i)  a liability is imposed on AMD Saxonia and/or AMD Holding as a result
          of the German tax authorities recharacterising interest on the
          Sponsors' Loans as dividends; or

     (ii) a liability is imposed on AMD Saxonia and/or AMD Holding as a result
          of the German tax authorities ruling that AMD Saxonia and/or AMD
          Holding is not sufficiently profitable (the "Liabilities"),
                                                       -----------

and in either case (x) provided all remedies and/or appeals under the provisions
of the German and U.S.A. (Income and Capital) Tax Treaty, to the extent
applicable, have been exhausted and (y) only to the extent that AMD Saxonia is
not able to repay the Advances in the amounts and at the times scheduled, that
it will contribute Equity Capital (or other contributions to AMD Saxonia's
capital reserves) to AMD Holding (and AMD Inc. shall to the extent necessary and
depending on where the Liability arises, contribute sufficient funds or
otherwise cause sufficient funds to be made available, to AMD Holding as shall
be necessary to enable AMD Holding to so contribute to AMD Saxonia and AMD Inc.
shall cause AMD Holding to do the same) in an amount not exceeding the
Liabilities that, when added to amounts then available to AMD Saxonia, is
sufficient to pay the Primary Secured Obligations.

SECTION 14.4  SAB Related Agreements Indemnity.  The Sponsors, jointly and
severally, hereby agree to indemnify, exonerate, and hold the Agent, and each of
the officers, directors, employees of the Agent (herein collectively called the
"SAB Indemnitees") free and harmless from and against any and all actions,
 ---------------
claims, losses, liabilities, damages, and expenses, including, without
limitation, reasonable legal fees and expenses (herein collectively called the
"Indemnified SAB Liabilities"), which may be incurred by or asserted against the
----------------------------
SAB Indemnitees or any SAB Indemnitee as a result of, or arising out of, or
relating to, or in connection with, the SAB Related Agreements (other than any
such Indemnified SAB Liabilities finally determined by a court of competent
jurisdiction to have resulted from the gross negligence or wilful misconduct of
an SAB Indemnitee), and, to the extent that the foregoing undertaking may be
unenforceable for any reason, the Sponsors, jointly and severally, hereby agree
to make the maximum contribution to the payment and satisfaction of each of the
Indemnified SAB Liabilities which is permissible under applicable law.

SECTION 14.5  Payments Free and Clear of Taxes, etc.  Each of the Sponsors
hereby agrees that:

     (a)  All payments by such Sponsor hereunder shall be made to the Person
          entitled thereto in Same Day Funds, free and clear of and without
          deduction for any present or future income, excise, stamp, or
          franchise taxes and other taxes, fees, duties, withholdings, or other
          charges of any nature whatsoever imposed by any taxing authority on
          such payments, but excluding taxes imposed on or measured by such
          Person's net income or receipts or the net income or receipts of any
          branch thereof (such non-excluded items being called "Taxes").  In the
                                                                -----
          event that any withholding or deduction from any payment to be made by
          either of the Sponsors hereunder is required in respect of any

                                      67
<PAGE>

          Taxes pursuant to any applicable law, rule, or regulation, then such
          Sponsor will, subject to Section 14.5(d),
                                   ---------------

          (i)    pay directly to the relevant authority the full amount required
                 to be so withheld or deducted;

          (ii)   promptly forward to such Person (with a copy to the Security
                 Agent) an official receipt or other documentation satisfactory
                 to the Security Agent evidencing such payment to such
                 authority; and

          (iii)  pay to such Person such additional amount or amounts as is
                 necessary to ensure that the net amount actually received by
                 such Person will equal the full amount such Person would have
                 received had no such withholding or deduction been required.

          Moreover, if any Taxes are directly asserted against any Person
          entitled to receive a payment under this Agreement with respect to any
          payment received by such Person hereunder, such Person may pay such
          Taxes and the Sponsors will promptly pay such additional amounts
          (including any penalties, interest, or expenses, but only (in the case
          of penalties or interest) to the extent not resulting from a negligent
          or wilful failure to pay any or all of such Taxes by such Person, as
          the case may be) as is necessary in order that the net amount received
          by such Person after the payment of such Taxes (including any Taxes on
          such additional amount) shall equal the amount such Person would have
          received had no such Taxes been asserted.

     (b)  The additional amount or amounts that either Sponsor shall be required
          to pay pursuant to clause (iii) of Section 14.5(a) shall be reduced,
                             ------------    ---------------
          to the extent permitted by applicable law, by the amount of the
          offsetting tax benefits, if any, as determined by the relevant Person
          in the exercise of its sole discretion, which such Person actually
          receives and utilises as a result of such Sponsor's payment under
          clause (i) of Section 14.5(a) to the relevant authority (it being
          ----------    ---------------
          expressly understood and agreed that such Person shall be required to
          use commercially reasonable efforts to claim or utilise any such
          benefit which may be available to it unless it believes in good faith
          that to do so would be inconsistent with its internal tax and other
          policies or if, in its good faith judgment, it would be disadvantaged
          in any respect with respect to its tax position or planning).

     (c)  Subject to the relevant Person complying with Section 14.5(d) below,
                                                        ---------------
          if either of the Sponsors fails to pay any Taxes when due to the
          appropriate taxing authority or fails to remit to the applicable
          recipient hereunder the required receipts or other required
          documentary evidence, such Sponsor shall indemnify such Person for any
          incremental Taxes, interest, or penalties that may become payable by
          such Person as a result of any such failure.

     (d)  Each Person entitled to receive a payment hereunder that is entitled
          to claim an exemption (either on its own account or for the account of
          the relevant Sponsor) in

                                      68
<PAGE>

          respect of all or a portion of any Taxes which are otherwise required
          to be paid or deducted or withheld pursuant to this Section 14.5 in
                                                              ------------
          respect of any payments made by a Sponsor hereunder shall, within a
          reasonable time after receiving a written request from such Sponsor,
          provide such Sponsor with such certificates as may be appropriate in
          order to obtain the benefits of such exemption.

     (e)  Without prejudice to the survival of any other agreement of the
          Sponsors hereunder, the agreements and obligations of the Sponsors
          contained in this Section 14.5 shall survive the payment in full of
                            ------------
          the principal of and interest on the loans and other financial
          accommodations made to AMD Saxonia under the Loan Agreement.

SECTION 14.6  Judgment.  The Sponsors hereby agree that:

     (a)  If, for the purposes of obtaining a judgment in any court, it is
          necessary to convert a sum due hereunder in Deutsche Marks into
          another currency, the rate of exchange used shall be that at which in
          accordance with normal banking procedures the Security Agent could
          purchase Deutsche Marks with such other currency on the Business Day
          preceding that on which final judgment is given.

     (b)  The obligation of each of the Sponsors in respect of any sum due from
          it to the Security Agent, the Agent, the Paying Agent, or any Bank
          hereunder shall, notwithstanding any judgment in a currency other than
          Deutsche Marks be discharged only to the extent that on the Business
          Day following receipt by the Security Agent, the Agent, the Paying
          Agent, or such Bank, as the case may be, of any sum adjudged to be so
          due in such other currency, the Security Agent, the Agent, the Paying
          Agent, or such Bank, as the case may be, may, in accordance with
          normal banking procedures, purchase Deutsche Marks with such other
          currency; in the event that the Deutsche Marks so purchased are less
          than the sum originally due to the Security Agent, the Agent, the
          Paying Agent, or any Bank, in Deutsche Marks, such Sponsor, as a
          separate obligation and notwithstanding any such judgment, hereby
          indemnifies and holds harmless the Security Agent, the Agent, the
          Paying Agent, and each Bank against such loss, and if the Deutsche
          Marks so purchased exceed the sum originally due to the Security
          Agent, the Agent, or such Bank in Deutsche Marks, the Security Agent,
          the Agent, the Paying Agent, or such Bank, as the case may be, shall
          remit to the relevant Sponsor such excess.

SECTION 14.7  License Agreement. With respect to the License Agreement,

     (a)  AMD Inc. hereby waives, and agrees to cause each of its Subsidiaries
          other than AMD Saxonia to waive, any and all rights, claims and/or
          causes of action such Person now has or in the future may have against
          AMD Saxonia, its successors and assigns, the Agent, the Security
          Agent, the Paying Agent, any Bank, any receiver appointed to operate
          the Plant, or a third party purchaser of the capital stock, or of all
          or substantially all of the assets, of AMD Saxonia (herein
          collectively referred to as the "Beneficiaries" and individually as a
                                           -------------
          "Beneficiary"), based on: (i) its use, in any manner whatsoever, of
           -----------
          any Non-Proprietary Know-how or of Information Residuals

                                      69
<PAGE>

          (as such terms are defined in the License Agreement); (ii) its use,
          within the scope of the license granted in Section 3(a) of the License
                                                     ------------
          Agreement, of the Developed Intellectual Property (as defined in the
          License Agreement), or (iii) its use, in any manner whatsoever, of
          Post Research Agreement AMD Saxonia Developed Improvements or Post
          Research Agreement AMD Saxonia Developed Intellectual Property (as
          such terms are defined in the License Agreement). The preceding
          sentence notwithstanding, AMD Inc. does not waive any rights, claims
          or causes of action based on the infringement and/or misappropriation
          of any patents, copyrights, mask works, trademarks and trade secrets,
          whether registered or not, which are owned by AMD Inc. or by an
          Affiliate of AMD Inc. other than AMD Saxonia and not licensed to AMD
          Saxonia under the License Agreement; provided, however, that the use
          of Information Residuals (as so defined) shall not be deemed to
          constitute an infringement and/or misappropriation of any intellectual
          property rights of AMD Inc. or any of its Subsidiaries (other than AMD
          Saxonia).

     (b)  each Sponsor hereby acknowledges and agrees that, following the
          termination of the AMD Saxonia Wafer Purchase Agreement, the operation
          of the Plant by AMD Saxonia, its successors and assigns, or by a
          Beneficiary shall not, absent a separate infringement or other
          unlawful violation, under the License Agreement or otherwise, of a
          proprietary, substantial, and identifiable right of AMD Inc., or any
          of its Subsidiaries other than AMD Saxonia, constitute: (i) a breach
          of the terms of the License Agreement or of any of the Service
          Agreements (as defined in the License Agreement), or (ii) an
          infringement upon any intellectual property right of AMD Inc. or its
          Subsidiaries other than AMD Saxonia; and

     (c)  except where such failure was due to a breach by AMD Saxonia of its
          covenants to cooperate with AMD Inc., if AMD Inc. fails to complete
          the document removal process set forth in Section 9 of the License
                                                    ---------
          Agreement within the period required therein following the termination
          of the AMD Saxonia Research Agreement, AMD Inc. and its Subsidiaries
          other than AMD Saxonia shall be deemed to have waived any and all
          rights, claims and/or causes of action they have or in the future may
          have against AMD Saxonia, its successors and assigns, or against a
          Beneficiary based on the disclosure or use, for any purpose, by such
          Person of any documentation left in the Plant on the grounds that such
          documentation or the information contained therein is proprietary to
          AMD Inc. or its Affiliates or Subsidiaries other than (in either case)
          AMD Saxonia.

                                   ARTICLE XV
                                 Miscellaneous

SECTION 15.1  No Waiver; Modifications in Writing.  No failure or delay on the
part of the Agent or the Security Agent in exercising any right, power, or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power, or remedy preclude any other or
further exercise thereof or the exercise of any other right, power, or remedy.
The

                                      70
<PAGE>

remedies provided for herein are cumulative and are not exclusive of any
remedies that may be available to the Agent or the Security Agent at law or
otherwise.  No amendment, modification, supplement, termination, or waiver of or
to any provision of this Agreement, or consent to any departure by either
Sponsor therefrom, shall be effective unless the same shall be in writing and
signed by or on behalf of the Agent and the Security Agent.  Any waiver of any
provision of this Agreement, and any consent to any departure by either Sponsor
from the terms of any provision of this Agreement, shall be effective only in
the specific instance and for the specific purpose for which given.  No notice
to or demand on either Sponsor in any case shall entitle such Sponsor to any
other or further notice or demand in similar or other circumstances.

SECTION 15.2  Severability of Provisions.  In case any provision of this
Agreement is invalid or unenforceable, the validity or enforceability of the
remaining provisions hereof shall remain unaffected.  The parties hereto shall
have an obligation to replace any invalid or unenforceable provision by a valid
and enforceable provision which approximates best the economic purpose of the
invalid provision.

SECTION 15.3  Termination.  This Agreement and the obligations of the parties
hereunder shall terminate on the day that AMD Saxonia has paid in full all of
the Primary Secured Obligations, and the Banks shall have no other or further
commitments under the Loan Agreement; provided, that such obligations shall
                                      --------
automatically revive and be reinstated if and to the extent that AMD Saxonia
shall subsequently have obligations to any Secured Party under or in connection
with any of the Operative Documents.

SECTION 15.4  Assignment.  This Agreement shall be binding upon and shall inure
to the benefit of each party hereto and their respective successors and assigns;
provided that neither AMD Inc. nor AMD Holding shall have the right to transfer
--------
or assign its rights under this Agreement without the prior written consent of
the Agent and the Security Agent.

SECTION 15.5  Notice.  All notices, demands, instructions, and other
communications required or permitted to be given to or made upon any party
hereto shall be in writing and shall be personally delivered or sent by
registered or certified mail, postage pre-paid, return receipt requested, or by
pre-paid telex, TWX, or telegram, or by pre-paid courier service, or by
telecopier, and shall be deemed to be given for purposes of this Agreement on
the day that such writing is delivered or sent to the intended recipient thereof
in accordance with the provisions of this Section 15.5. Unless otherwise
                                          -------------
specified in a notice sent or delivered in accordance with the foregoing
provisions of this Section 15.5, notices, demands, instructions, and other
                   ------------
communications in writing shall be given to or made upon the respective parties
hereto at their respective addresses (or to their respective telex, TWX or
telecopier numbers) indicated below.

     To the Security Agent:

     Dresdner Bank AG, as Security Agent
     Ostra Allee 9

                                      71
<PAGE>

     01067 Dresden
     Attention: Betreuung Unternehmenskunden
     Facsimile No.: (49) 351 489-1300

     To the Agent:

     Dresdner Bank Luxembourg S.A., as Agent
     26, rue du Marche-aux-Herbes
     L-2097 Luxembourg
     Attention: Direktion
     Facsimile No.: (352) 4760-824

     To AMD Inc.:

     Advanced Micro Devices, Inc.
     One AMD Place
     Sunnyvale, California  94088
     Attention: General Counsel
     Facsimile No.: (1) (408) 749-3945

     To AMD Holding:

     AMD Saxony Holding GmbH
     Wilschdorfer Landstrasse 101
     01109 Dresden
     Attention: Geschaftsfuhrer
     Facsimile No.: 49 351 277 91300

SECTION 15.6  Relationship to Other Agreements.  The rights of the Agent and the
Security Agent pursuant to this Agreement are in addition to any other rights or
remedies which the Agent and the Security Agent may have under statutory law or
other agreements between one or more of the Agent, the Security Agent, the
Banks, and AMD Inc. or AMD Holding.

SECTION 15.7  Effectiveness of Agreement; Survival; Expiry of Obligation.  This
Agreement shall not be effective for any purpose whatsoever prior to the
execution and delivery of the Loan Agreement by each of AMD Saxonia and the
Agent.  Subject to Section 15.3 hereof, the obligations of the Sponsors under
                   ------------
this Agreement shall terminate, except as otherwise provided herein, upon the
payment in full of all of the Primary Secured Obligations to the Secured Parties
under or in connection with the Financing Documents and the Security Documents,
and the expiration or termination of all of their respective commitments
thereunder (the "Loan Agreement Termination Date"); provided, however, that the
                 -------------------------------    --------  -------
obligations of the Sponsors contained in Article XIV hereof shall survive any
                                         -----------
termination of this Agreement.  Except as provided in Section 2.4 of the
                                                      -----------
Sponsors' Guaranty, the obligations of the Sponsors

                                      72
<PAGE>

under the Sponsors' Guaranty shall expire on the Loan Agreement Termination
Date.

SECTION 15.8  EMU.  European Economic and Monetary Union anticipate the
introduction of a single currency and the substitution of the national
currencies of Member States participating in Monetary Union. On the date on
which the Deutsche Mark is replaced by the single currency, conversion into such
currency shall take effect. The denomination of the original currency shall be
retained for so long as this is legally permissible. Conversions shall be based
on the officially fixed rate of conversion. Neither the introduction of the
single currency nor the substitution of the national currencies of the Member
States participating in European Monetary Union nor the fixing of the official
rate of conversion nor any economic consequences that arise from any of the
aforementioned events or in connection with European Monetary Union shall give
rise to any right to terminate prematurely, contest, cancel, rescind, modify, or
renegotiate this Agreement or any of its provisions or to raise any other
objections and/or exceptions or to assert any claims for compensation. This
Agreement shall continue in full force and effect in accordance with its terms.

                                  ARTICLE XVI
                   Governing Law, Jurisdiction, and Language

SECTION 16.1  Governing Law.  The form and execution of this Agreement and all
rights and obligations of the parties arising hereunder shall be governed by the
Laws of the Federal Republic of Germany.

SECTION 16.2  Jurisdiction.  Each of AMD Inc. and AMD Holding hereby submits to
the exclusive jurisdiction of the courts in Frankfurt am Main for any dispute
arising out of or in connection with this Agreement.  AMD Inc. states that
Advanced Micro Devices GmbH, whose address is Rosenheimerstrasse 143b, 81671
Munich, Germany, Attention: Legal Department, Tel: +49 89 450 530, Fax: +49 89
406 490, Telex: 841523883, is its accredited agent for service of process and
hereby undertakes to maintain an agent for service in Germany.  The foregoing
submission to jurisdiction shall not (and shall not be construed so as to) limit
the rights of the Agent or the Security Agent to take suits, actions, or
proceedings against a Sponsor to enforce any judgment rendered by the courts in
Frankfurt am Main in any other court or entity of competent jurisdiction where
such Sponsor has assets, nor shall the taking of suits, actions, or proceedings
to enforce any such judgment in one or more jurisdictions preclude the taking of
enforcement proceedings in any other jurisdiction, whether concurrently or not.

SECTION 16.3  Use of English Language.  This Agreement has been executed in the
English language.  All certificates, reports, notices, and other documents and
communications given or delivered pursuant to this Agreement shall be in the
English language and, if reasonably requested by the Agent, shall be accompanied
by a certified German translation thereof.  In the event of any inconsistency,
the English language version of any such document shall control.

                                      73
<PAGE>

IN WITNESS WHEREOF, each of the parties set out below has caused this Agreement
to be duly executed and delivered by its respective officer or agent thereunto
duly authorised as of the date first above written.

                     ADVANCED MICRO DEVICES, INC.

                     By     ___________________________________________

                     Its    ___________________________________________

                     AMD SAXONY HOLDING GMBH

                            __________________________________________

                     DRESDNER BANK AG, as Agent and Security Agent

                            __________________________________________

                                      74
<PAGE>

                                   SCHEDULE I
                                       to
                          Sponsors' Support Agreement

                           [left intentionally blank]

                                      75<PAGE>

                                                              Exhibit 10.50(j-1]

                                                                Redacted Version

                 FIRST AMENDMENT TO AMD HOLDING WAFER PURCHASE
                                   AGREEMENT

***Confidential treatment has been requested as to certain portions of this
agreement. Such omitted confidential information has been designated by an
asterisk and has been filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as
amended, and the Commission's rules and regulations promulgated under the
Freedom of Information Act, pursuant to a request for confidential treatment.

          This First Amendment to AMD Holding Wafer Purchase Agreement (this
"First Amendment"), dated as of February 20, 2001 is between:

(1)  Advanced Micro Devices, Inc., a corporation organized and existing under
     the laws of the State of Delaware, United States of America, with its
     principal place of business at One AMD Place, Sunnyvale, California 94088,
     United States of America ("AMD Inc."); and

(2)  AMD Saxony Holding GmbH, a Gesellschaft mit beschrankter Haftung organized
     and existing under the laws of Germany and registered in Dresden, Germany
     ("AMD Holding").

                                    RECITALS

          WHEREAS, AMD Saxony Manufacturing GmbH, a Gesellschaft mit
beschrankter Haftung organized and existing under the laws of Germany and
registered in Dresden, Germany ("AMD Saxonia"), is a wholly-owned Subsidiary
(such and other capitalized terms having the meaning assigned thereto in the AMD
Saxonia Wafer Purchase Agreement (as defined below)) of AMD Holding, which in
turn is a wholly-owned Subsidiary of AMD Inc.;

          WHEREAS, AMD Inc., AMD Holding and AMD Saxonia are involved in a
project pursuant to which AMD Saxonia is constructing, and owns and operates
inter alia the Plant located in Dresden, Germany, to manufacture Wafers using
high-volume semiconductor wafer fabrication processes;

          WHEREAS, AMD Inc. and AMD Holding are party to the AMD Holding Wafer
Purchase Agreement dated as of March 11, 1997 (the "AMD Holding Wafer Purchase
Agreement"), pursuant to which, among other things, AMD Inc. has agreed to
purchase from AMD Holding, and AMD Holding has agreed to supply on an exclusive
basis to AMD Inc., all Wafers as are ordered from time to time by AMD Inc. from
AMD
<PAGE>

Holding, in each case on the terms and conditions of the AMD Holding Wafer
Purchase Agreement;

          WHEREAS, AMD Holding and AMD Saxonia are party to that certain AMD
Saxonia Wafer Purchase Agreement dated as of March 11, 1997, as amended by the
First Amendment to AMD Saxonia Wafer Purchase Agreement dated as of February 8,
1998 (as so amended, the "AMD Saxonia Wafer Purchase Agreement") pursuant to
which AMD Holding has the exclusive right to purchase Wafers from AMD Saxonia in
order to enable AMD Holding to fulfill its obligations under the AMD Holding
Wafer Purchase Agreement, and AMD Saxonia has agreed on such exclusive basis, to
manufacture and sell Wafers to AMD Holding;

          WHEREAS, concurrently herewith, the parties are amending the AMD
Saxonia Wafer Purchase Agreement to revise certain pricing and cost
reimbursement obligations and to make certain other amendments, all on the terms
and conditions more particularly set forth in this First Amendment; and

          WHEREAS, the parties desire to make certain conforming amendments to
the AMD Holding Wafer Purchase Agreement, on the terms and conditions more
particularly set forth in this First Amendment.

          NOW, THEREFORE, in consideration of the mutual agreements contained
herein, intending to be legally bound hereby, the parties hereto agree as
follows:

                                   ARTICLE I

                                  Amendments

      Section 1.1  The AMD Holding Wafer Purchase Agreement shall be amended and
restated in the form set out in Schedule A to this First Amendment.

                                  ARTICLE II
                         Representations and Warranties

      Section 2.1 Each of AMD Inc. and AMD Holding, severally and for itself
      alone, hereby represents and warrants to the other as follows:

      (a)  Organization; Corporate Power. It is duly incorporated and validly
           existing under the laws of the jurisdiction of its organization, and
           has all necessary power and authority to execute and deliver this
           First Amendment and to consummate the transactions contemplated by
           the AMD Holding Wafer Purchase Agreement as amended by this First
           Amendment;

                                       2
<PAGE>

      (b)  Corporate Authority; No Conflict. The execution and delivery by it of
           this First Amendment, and the performance by it of its obligations
           under the AMD Holding Wafer Purchase Agreement as amended by this
           First Amendment have been duly authorized by all necessary corporate
           action (including any necessary shareholder action) on its part, and
           do not and will not (i) violate any provision of any law, rule,
           regulation, order, writ, judgment, injunction, decree, determination
           or award presently in effect having applicability to it, or of its
           charter or by-laws or (ii) result in a breach of, result in a
           mandatory prepayment or acceleration of indebtedness evidenced by or
           secured by, or constitute a default under, any indenture or loan or
           credit agreement, or any other agreement or instrument to which it is
           a party or by which it or its properties may be bound, or require the
           creation or imposition of any encumbrance of any nature upon or with
           respect to any of the properties now owned or hereafter acquired by
           it; and

      (c)  Valid and Binding Obligations. The AMD Holding Wafer Purchase
           Agreement, as amended by this First Amendment, constitutes its legal,
           valid and binding obligation, enforceable against it in accordance
           with its terms subject, however, to applicable bankruptcy,
           insolvency, reorganization, moratorium or similar laws affecting
           creditors' rights generally and, as to enforceability, by general
           equitable principles.

                                  ARTICLE III
                                 Miscellaneous

      Section 3.1  Miscellaneous.
                   -------------
      (a)  This First Amendment is limited as specified and, except as
           specifically set forth herein, shall not constitute a modification,
           amendment or waiver of any other provision of the AMD Holding Wafer
           Purchase Agreement or any provision of any other Operative Document.
           Except as specifically amended by this First Amendment, the AMD
           Holding Wafer Purchase Agreement shall remain in full force and
           effect and is hereby ratified and confirmed.

      (b)  This First Amendment shall be an Operative Document under and for
           purposes of the Sponsors' Support Agreement.

      (c)  This First Amendment shall be governed by, and shall be construed in
           accordance with, the internal laws of the State of California,
           without regard to its conflicts of laws principles.

      (d)  This First Amendment is in the English language, which language shall
           be controlling in all respects.

                                       3
<PAGE>

      (e)  This First Amendment may be executed in one or more counterparts and
           by different parties hereto in separate counterparts, each of which
           when so executed and delivered shall be deemed an original but all
           such counterparts together shall constitute but one and the same
           instrument; signature pages may be detached from multiple
           counterparts and attached to a single counterpart so that all
           signature pages are physically attached to the same document.

                                       4
<PAGE>

IN WITNESS OF THE FOREGOING, AMD Inc. and AMD Holding have caused this First
Amendment to be executed by their authorized representatives as of the date
first written above.

                                           ADVANCED MICRO DEVICES, INC.

                                           By: /s/ Robert J. Rivet
                                              ------------------------
                                           Its:  Senior Vice President and Chief
                                                 Financial Officer

                                           AMD SAXONY HOLDING GMBH

                                           By: /s/ Thomas M. McCoy
                                              ------------------------
                                           Its:   Managing Director

                                      S-1
<PAGE>

                                  Schedule A
                                  ----------

                              Amended and Restated
                     AMD Holding Wafer Purchase Agreement.

                                 Schedule A-1

<PAGE>

                                  Schedule A

                      AMD HOLDING WAFER PURCHASE AGREEMENT
                       as amended by the First Amendment
                    to AMD Holding Wafer Purchase Agreement
                         dated as of February 20, 2001

                                    between

                          ADVANCED MICRO DEVICES, INC.

                                      and

                            AMD SAXONY HOLDING GMBH
<PAGE>

               AMD HOLDING WAFER PURCHASE AGREEMENT (as amended)

          This AMD Holding Wafer Purchase Agreement (as amended, supplemented or
otherwise modified from time to time, this "Agreement") dated as of March 11,
1997 is between:

     (1)  Advanced Micro Devices, Inc., a corporation organized and existing
          under the laws of the State of Delaware, United States of America,
           with its principal place of business at One AMD Place, Sunnyvale,
          California 94088, United States of America ("AMD Inc."); and

     (2)  AMD Saxony Holding GmbH, a Gesellschaft mit beschrunkter Haftung
          organized and existing under the laws of Germany and registered in
          Dresden, Germany ("AMD Holding").

                                    RECITALS

          WHEREAS, AMD Saxony Manufacturing GmbH, a Gesellschaft mit
beschrunkter Haftung organized and existing under the laws of Germany and
registered in Dresden, Germany ("AMD Saxonia"), is a wholly-owned Subsidiary
(such and other capitalized terms not otherwise defined herein having the
meaning assigned thereto in Section 1.01) of AMD Holding, which in turn is a
wholly-owned Subsidiary of AMD Inc.;

          WHEREAS, AMD Inc., AMD Holding and AMD Saxonia are currently involved
in the initial planning stages of a project pursuant to which AMD Saxonia will
construct, own and operate inter alia the Plant to be located in or near
Dresden, Germany to manufacture Wafers using high-volume semiconductor wafer
fabrication processes;

          WHEREAS, concurrently herewith, AMD Holding and AMD Saxonia are
entering into the AMD Saxonia Wafer Purchase Agreement (as amended, supplemented
or otherwise modified from time to time, the "AMD Saxonia Wafer Purchase
Agreement") pursuant to which AMD Holding is obtaining the exclusive right to
purchase Wafers from AMD Saxonia, and AMD Saxonia is agreeing, on such exclusive
basis, to manufacture and sell Wafers to AMD Holding, in each case on the terms
and conditions of the AMD Saxonia Wafer Purchase Agreement;

          WHEREAS, on the terms and conditions of this Agreement, including the
payment terms of Article III, AMD Inc. wishes the exclusive right to purchase
such Wafers from AMD Holding as are purchased by AMD Holding from AMD Saxonia
pursuant to the AMD Saxonia Wafer Purchase Agreement, and AMD Holding is
willing, on such exclusive basis, to sell such Wafers to AMD Inc.;

          WHEREAS, concurrently herewith (i) AMD Inc. and AMD Holding are
entering into the AMD Holding Research Agreement, (ii) AMD Inc., AMD Holding and
AMD Saxonia
<PAGE>

are entering into the License Agreement and the amendment and restatement of the
Management Service Agreement and (iii) AMD Holding and AMD Saxonia are entering
into the AMD Saxonia Research Agreement.

          NOW, THEREFORE, in consideration of the mutual agreements contained
herein, intending to be legally bound hereby, the parties hereto agree as
follows:

                                   ARTICLE I

                                 Interpretation
                                 --------------

      Section 1.01.  Definitions. Capitalized terms used and not otherwise
                     -----------
defined herein shall have the respective meanings assigned to them in the AMD
Saxonia Wafer Purchase Agreement.

      Section 1.02.  Construction of Certain Terms.
                     -----------------------------

      (a)  Unless otherwise specifically provided, (i) references to the
singular shall include the plural and vice versa, and references by way of
masculine pronoun or adjective shall include references by way of the feminine;
(ii) references to Articles, Sections and Subsections shall be to Articles,
Sections and Subsections of this Agreement; (iii) accounting terms are to be
construed in accordance with German GAAP; (iv) save where expressly stated to
the contrary, all references to money, costs and payments in this Agreement are
to money, costs and payments in DM; and (v) references to days in this Agreement
shall be to calendar days.

      (b)  The index to and headings in this Agreement are inserted for
convenience only and are to be ignored in construing this Agreement

                                  ARTICLE II

                               Supply of Products
                               ------------------

      Section 2.01.  Sale of Products by AMD Holding to AMD Inca
                     -------------------------------------------

      (a)  AMD Holding hereby agrees to sell to AMD Inc., and AMD Inc. hereby
agrees to purchase from AMD Holding, in accordance with the terms of this
Agreement, 100% of such Products as are manufactured by AMD Saxonia and sold to
AMD Holding in accordance with the AMD Saxonia Wafer Purchase Agreement. AMD
Holding further agrees that, during the term of this Agreement, unless AMD Inc.
and, prior to the Loan Agreement Termination Date, the Agent, otherwise consent
thereto,

           (i)  it shall not under any circumstances, directly or indirectly,
      (a) market, distribute or sell any Products or any other goods or services
      to any Person other than AMD Inc. or one or more of AMD Inc.'s
      Subsidiaries and

                                       2
<PAGE>

      Affiliates, (b) order Products from AMD Saxonia under the AMD Saxonia
      Wafer Purchase Agreement unless ordered by AMD Inc. hereunder, (c) amend,
      supplement or otherwise modify the AMD Saxonia Wafer Purchase Agreement,
      or (d) engage in any activities other than (e) the investment in equity of
      AMD Saxonia, (f) the making of loans and provision of other financial
      support to AMD Saxonia, (g) the purchase and sale of Products as
      contemplated hereby, (h) the provision of research, design and development
      services as contemplated by the AMD Holding Research Agreement and (i)
      activities reasonably incidental to any of the foregoing; and

           (ii) it shall cause AMD Saxonia to comply with AMD Saxonia's
      obligations under the AMD Saxonia Wafer Purchase Agreement except to the
      extent inconsistent with the terms of the Sponsors' Subordination
      Agreement (as defined in the Loan Agreement).

      (b)  On the terms and subject to the conditions of this Agreement, AMD
Inc. hereby agrees to purchase from AMD Holding and pay for the Products
Onshipped (as defined below) to it pursuant to the terms of this Agreement. For
purposes of this Agreement, "Onshipped" means Products delivered by or on behalf
of AMD Holding F.O.B. Dresden, Germany pursuant to Section 3.04. For purposes of
this definition, all Products Shipped by AMD Saxonia to AMD Holding under the
AMD Saxonia Wafer Purchase Agreement shall be deemed to be delivered by AMD
Holding under this Agreement.

      (c)  AMD Inc. hereby agrees to provide, on behalf of AMD Holding, such
technical assistance and to make such disclosures to AMD Saxonia at such times
and to the extent required to be provided or made by AMD Holding, or required to
be arranged by AMD Holding to be provided or made, pursuant to Section 2.01(c)
of the AMD Saxonia Wafer Purchase Agreement.

      (d)  Section 2.01(d) of the AMD Saxonia Wafer Purchase Agreement
contemplates delivery to AMD Holding of pre-production samples of Products under
the circumstances contemplated thereby. AMD Holding shall submit such samples to
AMD Inc. for approval under this Agreement within one Business Day of its
receipt of such samples from AMD Saxonia pursuant to such Section 2.01(d). AMD
Inc. shall communicate its approval or disapproval of any such samples no later
than 10 days after such samples are submitted to AMD Holding by AMD Saxonia for
such approval (and shall be deemed to have approved such samples under this
Section 2.01(d) if it has not communicated any such disapproval within such 10
day period). Approval shall not be unreasonably withheld by AMD Inc. and, once
given, shall constitute irrevocable confirmation that the Products manufactured
in conformity with the samples (or differing only within normal silicon computer
chip industry limits) will comply with the Specifications and will meet the
requirements of quality specified in Section 2.03, except in respect of defects
in such samples or future production which are not capable of being revealed on
reasonable inspection by AMD Inc.

      (e)  AMD Holding with AMD Inc.'s approval shall nominate one or more
senior managers of AMD Inc. to act as its representative for liaising with AMD
Saxonia,

                                       3
<PAGE>

pursuant to Section 2.01(e) of the AMD Saxonia Wafer Purchase Agreement, in
connection with the manufacture and development of Products by AMD Saxonia.

      Section 2.02.  Importation of Products. AMD Inc. shall be responsible, at
                     -----------------------
its own cost and expense, for obtaining any and all consents, authorizations,
permits or approvals in connection with the import of Products hereunder into
any territory outside Germany.

      Section 2.03.  Quality of the Products; Inspection and Rejection;
                     --------------------------------------------------
Replacement Product. Without prejudice to AMD Inc.'s obligation to make payment
-------------------
for Products Onshipped pursuant to Section 3.05:

      (a)  AMD Holding shall use, and shall cause AMD Saxonia to use, all
reasonable efforts to ensure that each Product Onshipped meets the
Specifications for that Product. In order to assist AMD Holding in such efforts
and for the purpose of assuring to AMD Inc. the quality of the Products required
under this Agreement, AMD Holding shall permit the duly authorized
representatives of AMD Inc., at any time during normal working hours and on
reasonable notice, to inspect any premises of AMD Holding, and shall use all
reasonable efforts to permit such representatives, at such time and on such
notice, to inspect any premises of any third party where any of the Products, or
any labeling or packaging for them, are stored by or for AMD Holding. In
addition, AMD Holding shall cause AMD Saxonia to permit the duly authorized
representatives of AMD Inc., at any time during normal working hours and on
reasonable notice, to inspect any premises of AMD Saxonia, and shall cause AMD
Saxonia to use all reasonable efforts to permit such representatives, at such
time and on such notice, to inspect any premises of any third party where any of
the Products, or any labeling or packaging for them, are manufactured or stored
by or for AMD Saxonia.

      (b)  AMD Inc. shall promptly notify AMD Holding and AMD Saxonia in writing
should the quality of the Products Onshipped vary materially from the typical
quality of the four previous shipments or, in the case of the first four
shipments, from that quality of the previous shipments. In such event, AMD
Holding shall use, and shall cause AMD Saxonia to use, its reasonable commercial
efforts to restore the quality of the Products delivered hereunder to again meet
such typical quality as soon as possible.

                                  ARTICLE III

                       Payments and Delivery of Products
                       ---------------------------------

      Section 3.01.  Purchase Price of Products.
                     --------------------------

      (a)  AMD Inc. shall pay to AMD Holding the relevant Selling Price Per
Wafer for each Product Onshipped by AMD Holding and, to the extent paid by AMD
Saxonia and/or AMD Holding, the costs and expenses for freight and insurances
(including such costs and expenses in respect of delivery from AMD Saxonia to
AMD Holding). In addition, and without duplication, AMD Inc. agrees to make
payments from time to time to AMD Holding in amounts equal to (and on the same
basis as) all other amounts (but without duplication of amounts

                                       4
<PAGE>

compensated to AND Holding under Section 6.02 or any other provision hereof) due
from AMD Holding to AMD Saxonia under the AMD Saxonia Wafer Purchase Agreement,
including without limitation the following:

           (i)    payment of the Selling Price Per Wafer when and to the extent
      required to be paid by AMD Holding under Section 3.03 of the AMD Saxonia
      Wafer Purchase Agreement;

           (ii)   payment of Excess Start-Up Costs when and to the extent
      required to be paid by AMD Holding under Section 3.04 of the AMD Saxonia
      Wafer Purchase Agreement;

           (iii)  payment of the Advance Payment Adjustment Amount when and to
      the extent required to be paid by AMD Holding under Section 3.05 of the
      AMD Saxonia Wafer Purchase Agreement;

           (iv)   Intentionally Deleted

           (v)    Intentionally Deleted

      (b)  AMD Inc. may offset against amounts it owes or will owe to AMD
Holding under this Agreement the same amount as is required to be credited from
time to time by AMD Saxonia to AMD Holding under the AMD Saxonia Wafer Purchase
Agreement.

      (c)  Without limiting Sections 2.01(a) and (b), AMD Holding agrees that it
will neither Onship any Product to AMD Inc. for an amount in excess of the
purchase price paid by AMD Holding to AMD Saxonia (or credited to AMD Holding by
AMD Saxonia) for such Product, nor bill AMD Inc. for research and development
services in an amount in excess of the amount paid by AMD Holding to AMD Saxonia
(or credited to AMD Holding by AMD Saxonia) for such research and development
services.

      Section 3.02.  Intentionally Deleted

      Section 3.03.  Intentionally Deleted

      Section 3.04.  Shipping Terms.  AMD Holding shall deliver the Products
                     --------------
purchased hereunder F.O.B. Dresden, Germany. AMD Inc. will arrange and be
responsible for and pay all freight, trucking, insurance and other charges
incurred in connection with the shipment of the Products from Dresden, Germany,
to such place or places of delivery as specified by AMD Inc.

      Section 3.05.  Payments; Set Off.
                     -----------------

      (a)  AMD Inc. shall pay to AMD Holding the relevant Selling Price Per
Wafer for each Product Onshipped by AMD Holding and, to the extent paid by AMD
Holding and/or AMD Saxonia, the costs and expenses for freight and insurances,
unconditionally before the date on which AMD Holding is required to pay to AMD
Saxonia the corresponding Selling Price Per

                                       5
<PAGE>

Wafer for the relevant Product Shipped by AMD Saxonia pursuant to Section 3.10
of the AMD Saxonia Wafer Purchase Agreement (provided AMD Holding or AMD Saxonia
gives AMD Inc. reasonable advance notice of such date) but in no event later
than 30 days after receipt of invoices denominated in DM from AMD Holding in
accordance with this Section 3.05. AMD Holding shall be entitled to issue
invoices to AMD Inc. as soon as the relevant Products are Onshipped as provided
in Section 3.04 above.

      (b)  Payment for all other amounts due hereunder from either party
(including any adjustment amount as set forth in Section 3.01 hereof) shall be
unconditionally due on or before the date specified in the AMD Saxonia Wafer
Purchase Agreement for the corresponding such amount. AMD Holding agrees that it
shall, as soon as practicable and in any event prior to the relevant due date
for any such payment, deliver to AMD Inc. any certification, invoice or notice
from AMD Saxonia to AMD Holding which, pursuant to the terms of the AMD Saxonia
Wafer Purchase Agreement, is to be delivered by AMD Saxonia to AMD Holding prior
to the relevant due date for payment of any amount under the AMD Saxonia Wafer
Purchase Agreement.

      (c)  All amounts under this Agreement not paid when due from AMD Inc.
shall bear interest at the rate of 7.0% per annum from the date due until paid,
calculated on the basis of actual days and months elapsed. Such interest shall
be due and payable at the end of each calendar month. In no event shall the
interest charged exceed the maximum amount permitted under law.

      (d)  The obligations of AMD Inc. under this Agreement are intended by the
parties to be absolute and unconditional under any and all circumstances except
to the extent expressly stated in this Agreement, and are intended to be
independent of the rights and obligations of-AMD Holding and AMD Inc. or any of
their Affiliates or of any third party under this Agreement or any other
agreement or arrangement in each case except as expressly stated in this
Agreement.

      (e)  The parties hereto hereby expressly acknowledge, agree, and
understand that the payment by AMD Inc. of all amounts payable by it hereunder
as required by this Agreement shall in no way be prevented, delayed, or
otherwise affected as a result of any dispute between the parties (or between
any of the parties and their Affiliates) or by any breach of this Agreement or
any other agreement entered into in connection herewith and/or any adverse
change in the financial or economic condition of AMD Holding or any Affiliate
thereof, including without limitation AMD Holding's or any such Affiliate's
liquidation or bankruptcy, or any kind of insolvency proceeding in respect
thereof.

      (f)  Except as otherwise expressly provided herein and in that certain
Management Service Agreement entered into concurrently herewith (a copy of which
is attached as Exhibit III to the AMD Saxonia Wafer Purchase Agreement), no
obligations of AMD Inc. under this Agreement shall be subject to any
counterclaim, set-off, deduction, withholding, or defense based upon (and
without prejudice to) any claim that AMD Inc. may have against AMD Holding, any
of its Affiliates, or any other Person, or released, discharged, or in any way
affected for any reason or through any circumstances whatsoever (other than as
required by any

                                       6
<PAGE>

mandatory non-waivable requirements of law) including, without limitation, (i)
any breach of any representation or warranty on the part of AMD Holding under or
in connection with this Agreement or any other agreement entered into in
connection herewith or any failure of AMD Holding to perform any of its
agreements, covenants, or other obligations hereunder or thereunder, or (ii) any
other circumstance which might constitute a legal or equitable discharge or
defense of AMD Inc.; provided that, as between AMD Inc. and AMD Holding (and (a)
notwithstanding any other provision hereof, and (b) without prejudice to any
rights of subrogation that may arise), payment or performance by AMD Inc. or any
other Person of any obligation of AMD Holding under the AMD Saxonia Wafer
Purchase Agreement (including without limitation pursuant to the AMD Inc.
Guaranty (as defined in the Sponsors' Support Agreement)) shall constitute
payment or performance (as applicable) of the corresponding such obligation of
AMD Inc. hereunder.

      (g)  Any amounts that are due from AMD Holding to AMD Inc. hereunder shall
be payable only in the form of credit against amounts owed or to be owed by AMD
Inc. to AMD Holding under this Agreement, except to the extent expressly
provided in Section 4.02. Any amount that is due from AMD Inc. to AMD Holding
hereunder may be set-off against any payment then due (whether as a credit or
otherwise) hereunder or under the Management Service Agreement from AMD Holding
to AMD Inc.

      Section 3.06.  Method of Payment. Payments under this Agreement from AMD
                     -----------------
Inc. to AMD Holding, if made other than by set-off permitted by Section 3.05,
shall be made by wire transfer deposited into *** or such other account
specified by AMD Holding with the prior written consent of the Agent (a copy of
which consent shall be delivered by AMD Holding to AMD Inc.) with not less than
15 days written notice to AMD Inc., and all such payments shall be made in DM or
the Dollar equivalent thereof, or a combination of DM and Dollar equivalents, in
each case at the option of AMD Saxonia. As used herein, Dollar equivalents shall
be calculated in the amount, expressed in Dollars, resulting from the conversion
of DM to Dollars at the Agent's spot rate of exchange as in effect on the date
of the relevant invoice.

      Section 3.07.  Product Warranty.  Subject to Section 3.08, AMD Holding
                     ----------------
represents and warrants that all Products sold to AMD Inc. pursuant to this
Agreement shall conform in all material respects to the Specifications for such
Products and, if expressly agreed by AMD Holding in writing in advance, to any
specific changes thereto.

      Section 3.08.  Disclaimer. THE WARRANTY CONTAINED IN SECTION 3.07 IS THE
                     ----------
SOLE AND EXCLUSIVE WARRANTY AS TO THE PRODUCTS AND IS EXPRESSLY IN LIEU OF ANY
EXPRESS OR IMPLIED WARRANTIES, IN FACT OR IN LAW, INCLUDING, WITHOUT LIMITATION,
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY SIMILAR
WARRANTIES IMPLIED BY APPLICABLE LAW. REPAIR OR REPLACEMENT OF DEFECTIVE
PRODUCTS SHALL BE AMD INC.'S EXCLUSIVE REMEDY WITH RESPECT TO

-----------------------
***CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

                                       7
<PAGE>

DEFECTIVE PRODUCTS. AMD HOLDING ASSUMES NO LIABILITY IN TORT OR STRICT
LIABILITY, NOR SHALL AMD HOLDING BE LIABLE TO AMD INC. OR ANY SUBSIDIARY OR
AFFILIATE THEREOF FOR LOSS OF USE OF PRODUCTS OR ANY OTHER INCIDENTAL, SPECIAL
OR CONSEQUENTIAL DAMAGES INCURRED BY AMD INC. OR ANY SUBSIDIARY OR AFFILIATE
THEREOF. IN NO EVENT SHALL THE LIABILITY OF AMD HOLDING ARISING IN CONNECTION
WITH ANY PRODUCTS SOLD HEREUNDER EXCEED THE ACTUAL AMOUNT PAID BY AMD INC. TO
AMD HOLDING FOR PRODUCTS INVOLVED IN SUCH CLAIM.

      Section 3.09.  Limitation of Liability.  In furtherance of the parties'
                     -----------------------
selection of California law to govern this Agreement, the parties hereby
expressly exclude rescission (Wandlung) and price reduction (Minderung) as
remedies for defective Products and agree that in no event shall German Civil
Code Paragraph 462 be applicable.  To the extent permissible under applicable
law, AMD Holding assumes no liability in tort or strict liability, nor shall AMD
Holding be liable to AMD Inc. or any AMD Inc. Affiliate for loss of use of
Products or any other incidental, special, indirect or consequential damages or
lost profits incurred by AMD Inc. or an AMD Inc. Affiliate.  Without prejudice
to Section 3.08, in no event shall the liability of AMD Holding arising in
connection with any Products sold hereunder exceed the actual amount paid by AMD
Inc. to AMD Holding for Products involved in such claim.

      Section 3.10.  Annual Fee; Reimbursement of Certain Administrative Costs
                     ---------------------------------------------------------
of AMD Holding.
--------------

      (a)  AMD Inc. agrees to pay AMD Holding an annual fee, no later than 30
days after the end of the relevant Fiscal Year, of (i) DM 250,000 for the Fiscal
Year ending December 1997, and (ii) DM 500,000 for each Fiscal Year thereafter
during the term of this Agreement (which fee shall be pro-rated for any part of
a Fiscal Year other than the Fiscal Year ending December 1997), as compensation
to AMD Holding for undertaking any obligations under the Operative Documents (as
defined in the Sponsors' Support Agreement) that benefit AMD Inc.

      (b)  AMD Inc. agrees to compensate AMD Holding for any administrative
costs, including without limitation bookkeeping, legal and accounting costs and
amounts payable by AMD Holding to AMD Saxonia pursuant to Section 3.07 of the
AMD Saxonia Wafer Purchase Agreement, incurred by AMD Holding in connection with
this Agreement, the AMD Saxonia Wafer Purchase Agreement and the Research
Agreements, plus a surcharge on such costs of 7.5%. All amounts payable by
            ----
AMD Inc. under this Section 3.10(b) shall be payable in arrears no later than 30
days after the end of each Fiscal Year.

                                  ARTICLE IV

                              Technical Assistance
                              --------------------

      Section 4.01.  Provision to AMD Saxonia of Know-how, Advice, Technical
                     -------------------------------------------------------
Assistance, Expert Support and Training and Access to Comparable Plants.  AMD
-----------------------------------------------------------------------
Inc.

                                       8
<PAGE>

hereby agrees to (i) provide, on behalf of AMD Holding, AMD Saxonia with such
technical assistance, advice, expert support, Intellectual Property, Technical
Documentation, copies, technical discussions, lectures, guidance and technical
and other training, (ii) make such disclosures and notifications to AMD Saxonia,
(iii) permit AMD Saxonia to make such copies and (iv) permit AMD Saxonia to send
employees of AMD Saxonia to visit AMD Inc.'s Wafer Fabrication Plants, in each
case to the extent and in the manner required to be, provided, made or
permitted, or required to be arranged to be provided, made or permitted, by AMD
Holding and/or AMD Inc. under Article IV of the AMD Saxonia Wafer Purchase
Agreement. To the extent any such requirement is contingent on AMD Saxonia
making a request to AMD Holding, AMD Holding shall inform AMD Inc. of each such
request (including all relevant details) as soon as practicable after such
request is made by AMD Saxonia to AMD Holding.

      Section 4.02.  Charge for Technical Assistance.
                     -------------------------------

      (a)  As compensation in full for the performance of the services
contemplated under this Article IV, AMD Holding shall reimburse AMD Inc. for (i)
all reasonable out-of-pocket expenses incurred by AMD Inc. in connection with
providing such services, plus (ii) the reasonable salaries and other
remuneration of the relevant personnel involved, in each case to the extent not
reimbursed by AMD Saxonia directly to AMD Inc. In this regard, AMD Inc. shall
issue quarterly invoices to AMD Holding itemizing in detail the basis for each
invoiced amount. Prior to the Effective Date, all such invoiced amounts shall,
notwithstanding Section 3.05, be paid by AMD Holding within thirty-five (35)
days of its receipt of the respective invoice. Payments shall be made in DM by
wire transfer. From and after the Effective Date, payments shall be made only in
the form of credits against amounts owed or to be owed by AMD Inc. to AMD
Holding under this Agreement.

      (b)  The parties agree that any invoiced amounts to be paid or credited by
AMD Holding under this Section 4.02 shall not duplicate amounts charged for
services provided by AMD Inc. to AMD Saxonia pursuant to the Management Service
Agreement.

      (c)  The foregoing notwithstanding, (i) in no event shall the aggregate
amounts to be paid to AMD Inc. under this Section 4.02 and under the Management
Service Agreement prior to the Effective Date exceed DM 135,000,000 (One Hundred
Thirty-Five Million Deutsche Marks), and (ii) the parties agree that any
Intellectual Property provided in any form to AMD Saxonia or to AMD Holding for
the benefit of AMD Saxonia for its use hereunder is provided at no charge.

                                   ARTICLE V

                       Accounting Reports; Other Reports;
                       ----------------------------------
               Right of Inspection by or on Behalf of AMD Holding
               --------------------------------------------------

      Section 5.01.  Annual Accounting Reports.
                     -------------------------

                                       9
<PAGE>

      (a)  AMD Inc. and its duly authorized representatives and, if the Loan
Agreement Termination Date has not yet taken place, the Agent shall at all
reasonable times have access to the books and accounts kept by AMD Holding and
annually upon the closing of the Fiscal Year all such books and accounts shall
be audited by Ernst & Young GmbH or such other firm of independent and
internationally known public accountants as may be selected by AMD Holding with
the approval of AMD Inc. and, if the Loan Agreement Termination Date has not yet
taken place, the Agent (the consent of the Agent not to be unreasonably
withheld). A copy of each such report of audit, together with a reconciliation
of AMD Holding's fiscal year figures to the statutory financial statements of
AMD Holding, shall be sent promptly to AMD Inc. and, prior to the Loan Agreement
Termination Date, the Agent. AMD Inc. and its duly authorized representatives
shall also have the right to examine and inspect at any reasonable time all
properties and operations of AMD Holding to which this Agreement relates.

      (b)  AMD Holding shall (i) cause AMD Saxonia to give AMD Inc. at all
reasonable times access to the books and accounts kept by AMD Saxonia and (ii)
cause all such books and accounts to be audited annually upon the closing of the
Fiscal Year by Ernst & Young GmbH or such other firm of independent and
internationally known public accountants as may be selected by AMD Saxonia with
the approval of AMD Inc. and, if the Loan Agreement Termination Date has not yet
taken place, the Agent (the consent of the Agent not to be unreasonably
withheld). A copy of each such report of audit, together with a reconciliation
of AMD Saxonia's fiscal year figures to the statutory financial statements of
AMD Saxonia, shall be sent promptly to AMD Inc. and, prior to the Loan Agreement
Termination Date, the Agent by or on behalf of AMD Holding. AMD Holding shall
cause AMD Saxonia to permit AMD Inc. and its duly authorized representatives to
examine and inspect at any reasonable time all properties and operations of AMD
Saxonia to which the AMD Saxonia Wafer Purchase Agreement relates.

      Section 5.02.  Intentionally Deleted

      Section 5.03.  Accountants' Certification; Officer's Certificate. AMD
                     -------------------------------------------------
Holding shall, as soon as practicable after its receipt of the same, deliver to
AMD Inc. a copy of each certificate delivered by or on behalf of AMD Saxonia to
AMD Holding pursuant to Section 5.03 of the AMD Saxonia Wafer Purchase
Agreement.

      Section 5.04.  Intentionally Deleted

                                  ARTICLE VI

                           Effectiveness; Termination
                           --------------------------

      Section 6.01.  Effectiveness; Termination.
                     --------------------------

      (a)  This Agreement shall become effective on the date hereof and (unless
otherwise extended as hereinafter provided) shall terminate on the date (the
"Initial Termination Date") which is the earlier of (i) the Loan Agreement
Termination Date and (ii) the Termination Date (as defined below). At the option
of AMD Holding, exercised by giving notice to AMD

                                      10
<PAGE>

Inc. at least six months prior to the Loan Agreement Termination Date, and
provided that no Termination Event has occurred and is continuing- and the AMD
Saxonia Wafer Purchase Agreement is extended for the same period, this Agreement
may be extended for one additional three year term. At the option of AMD Inc.,
exercised by giving, notice to AMD Holding, at least six months prior to the
Loan Agreement Termination Date, and provided that no Termination Event has
occurred and is continuing and the AMD Saxonia Wafer Purchase Agreement is
extended for the same period (and AMD Holding shall use its best efforts to
effect such extension under the terms of the AMD Saxonia Wafer Purchase
Agreement following its receipt of such notice), the initial term of this
Agreement may be extended for one additional three year term (to the extent not
previously extended by AMD Holding pursuant to the preceding sentence).

      (b)  Each of the events described in this Section 6.01(b), whether or not
such events directly or indirectly affect AMD Inc. or AMD Holding, shall
constitute a Termination Event. If such a Termination Event has occurred and is
continuing, AMD Holding (or, if prior to the Loan Agreement Termination Date,
the Security Agent on behalf of AMD Holding pursuant to and in accordance with
the Security Documents (as defined in the Sponsors' Support Agreement)) may, by
notice to AMD Inc. and, if prior to the Loan Agreement Termination Date, the
Agent, terminate this Agreement in case of any of the Termination Events
described in clauses (viii) through (xii) below. In addition, this Agreement
shall automatically terminate (without any requirement for any action by any
party hereto) immediately upon the occurrence of the Termination Event described
in clauses (i) through (vii) below. Any such automatic termination shall be
effective on the date of the relevant Termination Event, and any termination
upon the giving of notice pursuant to this Section 6.02 shall be effective on
the date any such notice is given (the date of any such automatic or other
termination being the "Termination Date"). The Termination Events are as
follows:

           (i)    the expropriation or condemnation of the Plant or any
      substantial part of the assets or business of AMD Saxonia or AMD Holding
      by any Governmental Authority, or the involuntary suspension, or
      curtailment below seventy-five percent of capacity, by AMD Saxonia of the
      operation of the Plant for six months or more as a result of any change in
      or introduction of any Law, or any change in the interpretation or
      application thereof, in each case occurring after the date hereof;

           (ii)   AMD Inc. or AMD Holding being required by any Governmental
      Authority to divest itself of all or a substantial portion of its direct
      or indirect interest in AMD Saxonia, or AMD Saxonia being required by any
      Governmental Authority to divest itself or all or a substantial portion of
      the Plant;

           (iii)  the destruction of the Plant or a substantial portion thereof
      and a decision by AMD Saxonia not to rebuild the same after having
      received insurance proceeds in respect of such destruction in an amount at
      least equal to the depreciated book value of such Plant or substantial
      portion thereof;

                                      11
<PAGE>

           (iv)   obligations of AMD Saxonia being accelerated following lapse
      of any applicable grace periods as a result of the occurrence of an event
      described in Section 21 of the Loan Agreement that would permit the Banks
      to terminate the Facilities under, and as defined in, such agreement,
      and/or the Agent, the Security Agent or any of the Banks exercising
      remedies pursuant to any of the Security Documents (as defined in the Loan
      Agreement);

           (v)    the involuntary (including without limitation as a result of
      enforcement of any rights of security granted in shares of AMD Holding
      and/or AMD Saxonia or performance of any undertakings to transfer such
      shares made to secure obligations of AMD Holding and/or AMD Saxonia)
      transfer of a controlling interest in AMD Holding and/or AMD Saxonia from
      AMD Inc. and its Subsidiaries to one or more third parties;

           (vi)   the involuntary dissolution or winding up of the business of
      AMD Holding and/or AMD Saxonia;

           (vii) the AMD Saxonia Wafer Purchase Agreement terminating in
      accordance with its terms;

           (viii) failure by AMD Inc. to make any payment required from it
      hereunder or under the AMD Holding Research Agreement or Sponsors' Support
      Agreement within 45 days of the date due therefor, or default by AMD Inc.
      in the performance of or compliance with any other term contained in this
      Agreement or any such other agreement and such default shall not have been
      remedied or waived within 30 days after receipt of notice from AMD Holding
      or, if the Loan Agreement Termination Date has not yet taken place, the
      Agent of such default;

           (ix)   any of AMD Inc.'s representations or warranties made in this
      Agreement or the AMD Holding Research Agreement or in any statement or
      certificate at any time given by AMD Inc. in writing pursuant to any
      thereof being false in any material respect on the date as of which made;

           (x)    a court having jurisdiction in the premises entering a decree
      or order for relief in respect of AMD Inc. in an involuntary case under
      any applicable bankruptcy, insolvency or other similar law now or
      hereafter in effect, which decree or order is not stayed; or any other
      similar relief being granted under any applicable federal or state law;

           (xi)   a decree or order of a court having jurisdiction in the
      premises for the appointment of a receiver, liquidator, sequestrator,
      trustee, custodian or other officer having similar powers over AMD Inc. or
      over all or a substantial part of its property, having been entered; or
      the involuntary appointment of an interim receiver, trustee or other
      custodian of AMD Inc. for all or a substantial part of its property; or
      the issuance of a warrant of attachment, execution or similar process
      against any substantial part of the property of AMD Inc.; and the
      continuance of

                                      12
<PAGE>

      any such events in this clause (xi) for 90 days unless stayed, dismissed,
      bonded or discharged; or

           (xii)  AMD Inc. having an order for relief entered with respect to it
      or commence a voluntary case under any applicable bankruptcy, insolvency
      or other similar law now or hereafter in effect, or consenting to the
      entry of an order for relief in an involuntary case, or to the conversion
      of an involuntary case to a voluntary case, under any such law, or
      consenting to the appointment of or taking possession by a receiver,
      trustee or other custodian for all or a substantial part of its property;
      the making by AMD Inc. of any assignment for the benefit of creditors; or
      the inability or failure by AMD Inc. or the admission by AMD Inc. in
      writing of its inability to pay its debts as such debts become due; or the
      Board of Directors of AMD Inc. (or any committee thereof) adopting any
      resolution or otherwise authorizing action to approve any of the
      foregoing.

      Section 6.02.  Rights Upon Termination.
                     -----------------------

      (a)  Promptly, but in no event later than 20 days following the
Termination Date,

           (i)    the Selling Price Per Wafer for the Month ending on the
      Termination Date shall be calculated in accordance with Section 3.03 of
      the AMD Saxonia Wafer Purchase Agreement;

           (ii)   in the event that the Termination Date occurs before all of
      the Excess Start-up Costs or the Start-up Cost Savings, whichever the case
      may be, has been paid in accordance with Section 3.04 of the AMD Saxonia
      Wafer Purchase Agreement, the amount of any unpaid Excess Start-up Costs
      or Start-up Costs Savings shall be calculated in accordance with Section
      3.04 of that Agreement;

           (iii)  if no Products were Shipped in the Month ending on the
      Termination Date, the final Advance Payment Adjustment Amount for that
      Month shall be calculated in accordance with Section 3.05 of the AMD
      Saxonia Wafer Purchase Agreement;

           (iv)   Intentionally Deleted

           (v)    Intentionally Deleted

           (vi)   amounts payable by AMD Holding under Section 3.07 of the AMD
      Saxonia Wafer Purchase Agreement shall be calculated in accordance with
      the terms thereof; and the amounts payable by AMD Inc. under Section 3.10
      shall be calculated in accordance with the terms thereof;

                                      13
<PAGE>

and, for purposes of each such calculation under the AMD Saxonia Wafer Purchase
Agreement and of clause (b) of this Section 6.02 only, the Termination Date
under the AMD Saxonia Wafer Purchase Agreement shall be deemed to be the
Termination Date hereunder.

      (b)  AMD Inc. shall purchase from AMD Holding all inventory and
work-in-process of AMD Saxonia as of the Termination Date that AMD Holding is
required to purchase from AMD Saxonia pursuant to Section 6.02(b) of the AMD
Saxonia Wafer Purchase Agreement. The terms and conditions of such sale shall be
as set forth in Section 6.02(b) of the AMD Saxonia Wafer Purchase Agreement. The
purchase price to be paid by AMD Inc. therefore shall be equal to the purchase
price paid or to be paid by AMD Holding therefor under such Section 6.02(b) and
shall be paid before the date on which AMD Holding is required to pay for such
inventory and work-in-process under the AMD Saxonia Wafer Purchase Agreement.

      (c)  Upon termination of this Agreement for any reason, any amounts due
from AMD Inc. to AMD Holding hereunder (including for this purpose the amounts
calculated under 6.02(a) and/or 6.02(b)) shall be aggregated, and any amounts
due (whether in the form of an obligation to pay or credit) from AMD Holding to
AMD Inc. hereunder (including for this purpose the amounts calculated under
6.02(a) and/or 6.02(b)) and under the Management Service Agreement shall be
aggregated. If the aggregate amount payable by AMD Inc. exceeds the aggregate
amount payable and/or to be credited by AMD Holding, then each party's
obligation to make payment of any such amount will be automatically satisfied
and discharged and replaced by an obligation upon AMD Inc. to pay to AMD Holding
the excess of the larger aggregate amount over the smaller aggregate amount. If
the aggregate amount payable by AMD Holding exceeds the aggregate amount payable
by AMD Inc., then each party's obligation to make payment of any such amount
will be automatically discharged and the amount of such excess shall be
additional compensation to be retained by AMD Holding for the early termination
of this Agreement, and AMD Holding shall have no obligation to pay such amount
to AMD Inc.

      Section 6.03.  Survival. The provisions of Sections 3.07, 3.08, 3.09,
                     --------
6.02, 7.09, 7.10, 7.11 and 7.13 shall survive any termination of this Agreement.

                                  ARTICLE VII

                                 Miscellaneous
                                 -------------

      Section 7.01.  Representations and Warranties Generally. Each of AMD Inc.
                     ----------------------------------------
and AMD Holding hereby represents and warrants to the other as follows:

      (a)  Organization; Corporate Power. It is duly incorporated and validly
existing under the laws of the jurisdiction of its organization, and has all
necessary power and authority to (i) own its assets and to carry on the business
in which it is engaged; and (ii) execute, deliver and perform its obligations
under this Agreement;

                                      14
<PAGE>

      (b)  Corporate Authority; No Conflict. The execution, delivery and
performance by it of this Agreement have been duly authorized by all necessary
corporate action (including any necessary shareholder action) on its part, and
do not and will not (i) violate any provision of any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award presently in
effect having applicability to it, or of its charter or by-laws or (ii) result
in a breach of, result in a mandatory prepayment or acceleration of indebtedness
evidenced by or secured by, or constitute a default under, any indenture or loan
or credit agreement, or any other agreement or instrument to which it is a party
or by which it or its properties may be bound, or require the creation or
imposition of any encumbrance of any nature upon or with respect to any of the
properties now owned or hereafter acquired by it, and it is not in default under
or in violation of its charter or by-laws or any law, rule, regulation, order,
writ, judgment, injunction, decree, determination, award, indenture or
instrument, which default or violation, individually or in the aggregate, would
reasonably be expected to have a material adverse effect on its financial
condition, business, operations, or prospects;

      (c)  Valid and Binding Obligations. This Agreement constitutes its legal,
valid and binding obligation, enforceable against it in accordance with its
terms subject, however, to applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and, as to
enforceability, by general equitable principles; and

      (d)  No Litigation. No litigation, arbitration proceedings or governmental
proceedings are pending or to its knowledge, threatened, which pertain to this
Agreement or any of the transactions contemplated thereby.

AMD Inc. acknowledges that it has no right to terminate this Agreement or offset
payments hereunder because of any breach by AMD Holding of the representations
and warranties contained herein.

      Section 7.02.  Force Majeure.
                     -------------

      (a)  A party to this Agreement shall not be liable for the consequences of
any failure to perform, or default in performing, any of its obligations, other
than its payment obligations, under this Agreement if that party can show that
such failure is caused by Force Majeure.

      (b)  Where there has been any such failure, the said failure shall not be
considered non-compliance with any term or condition of this Agreement, and all
the obligations (other than payment obligations) and times which because of such
failure could not be fulfilled shall be deemed to have been suspended while the
failure continues. In addition, the party for whom such obligations and/or times
have been suspended shall be entitled to take reasonable steps during the
pendency of the relevant Force Majeure to limit its losses resulting from such
Force Majeure, and following the termination of such Force Majeure such
obligations and/or times shall continue to be suspended for such further
reasonable period as is necessary for such party to restore its capacity to
perform such obligations and/or meet such times.

                                      15
<PAGE>

      Section 7.03.  Relationship of Parties. AMD Holding and AMD Inc. shall at
                     -----------------------
all times be independent contractors with respect to each other. Nothing in this
Agreement shall constitute either party hereto as the partner, joint venturer,
employee or agent of the other such party or of AMD Saxonia, and neither AMD
Holding nor AMD Inc. shall act or omit to act in such a way as to suggest the
contrary to any Person.

      Section 7.04.  Assignment. This Agreement shall be binding upon and enure
                     ----------
to the benefit of each party hereto and their respective successors and assigns;
vied, however, that neither party hereto shall have the right to transfer or
assign its interest in this Agreement without the prior written consent of the
other party hereto, and, if prior to the Loan Agreement Termination Date, of the
Agent; provided further that AMD Holding may assign this Agreement to the Agent
       -------- -------
as security for obligations of AMD Saxonia under the Loan Agreement and the
Agent may assign this Agreement to any direct transferee of the Plant in the
proper exercise of the Agent's enforcement rights in respect of such security.

      Section 7.05.  Waivers.  No delay or omission in exercise of any right or
                     -------
remedy of either party or any default by the other, and no custom or practice of
the.  parties at variance with the terms of this Agreement, shall impair any
right or remedy otherwise available nor shall it be construed as a waiver of any
right or remedy.  Any waiver by either party of any default must be in writing
and shall not be a waiver of any other default concerning the same or any other
provision.  AMD Holding shall have no right to waive any of its rights or
remedies under this Agreement prior to the Loan Agreement Termination Date
without the prior written consent of the Agent.

      Section 7.06.  Rights Cumulative. The rights, remedies and powers of each
                     -----------------
of the parties contained in this Agreement are cumulative and not exclusive of
any rights, remedies or powers provided to the parties by Law. No single or
partial exercise by any of the parties hereto of any right, remedy or power
under this Agreement shall preclude any other or further exercise thereof or the
exercise of any other right, power or remedy.

      Section 7.07.  Notices.  All notices and other communications required or
                     -------
permitted to be given to or made upon either party hereto shall be in writing
and shall be personally delivered or sent by registered or certified mail,
postage pre-paid, return receipt requested, or by pre-paid telex, TWX or
telegram, or by pre-paid courier service, or by telecopier, to the respective
parties hereto at their respective addresses (or to their respective telex, TWX
or telecopier numbers) indicated below, or such other addresses or numbers
specified in a notice sent or delivered in accordance with the provisions of
this Section 7.07.  Any such notice or communication shall be deemed to be given
for purposes of this Agreement on the day that such writing or communication is
delivered or, in the case only of a telex, TWX or telegram, sent to the intended
recipient thereof, or in the case only of telecopier, sent to the intended
recipient thereof with confirmation of receipt, all in accordance with the
provision of this Section 7.07.

If to AMD Inc.:

                                      16
<PAGE>

             Advanced Micro Devices, Inc.
             One AMD Place
             P.O.  Box 3453
             Sunnyvale, California 94088
             Attention: General Counsel
             Facsimile: +1 408 774 7399

If to AMD Holding:

             AMD Saxony Holding GmbH
             Wilschdorfer Landstrasse 101
             01109 Dresden
             Attention: Geschaftsfuhrer
             Facsimile: +49 351 277 91300

with a copy to:

             Dresdner Bank AG
             Ostra Allee 9
             01067 Dresden
             Attention: Betreuung Unternehmenskunden
             Facsimile: + 49 351 489 1300

           Section 7.08  No Effect on Other Agreements. No provision of this
                         -----------------------------
Agreement shall be construed so as to negate, modify or affect in any way the
provisions of any other agreement between AMD Inc. and AMD Holding except as
specifically provided in any such other agreement.

           Section 7.09. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
                         -------------
SHALL BE CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA, WITHOUT REGARD TO ITS CONFLICTS OF LAWS PRINCIPLES. THE PARTIES
EXPRESSLY EXCLUDE APPLICATION OF THE UNITED NATIONS CONVENTION ON CONTRACTS FOR
THE SALE OF GOODS OF APRIL 11, 1980.

           Section 7.10. Dispute Resolution.  Subject to Section 7.10(j) below,
                         ------------------
arbitration under this Section 7.10 shall be the exclusive means for a party to
seek resolution of any dispute arising out of, relating to or connected with
this Agreement, except that either party may bring an action before a competent
court for the issuance of provisional or protective measures.

           (a)  The parties hereto agree to submit any dispute, controversy or
claim ("Dispute") arising out of, relating to or in any way connected with this
Agreement to final and binding arbitration in Santa Clara County, California,
under the Commercial Arbitration Rules and Supplementary Procedures for
International Commercial Arbitration of the American Arbitration Association
("AAA") then in force except as modified in accordance with the provisions of
this Section 7.10.

                                      17
<PAGE>

           (b)  The arbitral tribunal shall be composed of three arbitrators,
one appointed by each party, and the two arbitrators so appointed shall, within
15 days appoint a third arbitrator who shall be chosen from a country other than
those of which the parties are nationals, who shall be fluent in English, and
who shall act as Chairman of the tribunal.

           (c)  In arriving at decisions, the arbitrators shall apply the terms
and conditions of this Agreement in accordance with the laws of California.

           (d)  The award shall be deemed a U.S. award for purposes of the
Convention the Recognition and Enforcement of Foreign Arbitral Awards of 1958
(the "New York Convention"). The English language shall be used in the
arbitral proceedings and all exhibits and other evidence in a language other
than English shall be accompanied by English translations when submitted into
evidence before the arbitral tribunal.

           (e)  The arbitrators are empowered to render the following awards in
accordance with any provision of this Agreement or any related agreement: (i)
enjoining a party from performing any act prohibited, or compelling a party to
perform any act required, by the terms of this Agreement or any related
agreement and any order entered pursuant to this Agreement and (ii) ordering
such other legal or equitable relief, including any provisional legal or
equitable relief, or specifying such procedures as the arbitrator deems
appropriate, to resolve any Dispute submitted for arbitration. The parties shall
be entitled to discover all documents and other information reasonably necessary
for a full understanding of any legitimate issue raised in the arbitration. They
may use all methods of discovery customary under U.S. federal law, including but
not limited to depositions, requests for admission, and requests for production
of documents. The time periods for compliance shall be set by the arbitrators,
who may also set limits on the scope of such discovery. The arbitrators shall
not be empowered to award consequential or punitive damages.

           (f)  Either party may file an application in any proper court
described in Section 7.11 for a provisional remedy in connection with an
arbitrable controversy hereunder, but only upon the ground that the award to
which the applicant may be entitled may be rendered ineffectual without
provisional relief.

           (g)  The arbitrators shall issue to both parties a written
explanation in English of the reasons for the award and a full statement of the
facts as found and the rules of law applied in reaching the decision.

           (h)  Any monetary award shall be made and shall be payable in DM free
of any tax or any deduction.

           (i)  The award of the arbitral tribunal will be the sole and
exclusive remedy between the parties regarding any and all claims and
counterclaims with respect to the subject matter of the arbitrated dispute. An
award rendered in connection with an arbitration pursuant to this Section 7.10
shall be final and binding upon the parties, and any judgment upon which an
award may be entered and enforced in any court of competent jurisdiction.

                                      18
<PAGE>

           (j)  Notwithstanding the foregoing, the parties agree that any
disputes hereunder relating solely to accounting matters shall be resolved by an
auditor, appointed as provided below, acting as an expert (and not as an
arbitrator), and that the resolution by such independent auditor of any such
matter shall be conclusive between the parties absent manifest error. Such
auditor shall be appointed by mutual agreement of the parties' respective
auditors, and, if prior to the Loan Agreement Termination Date, of the Agent and
shall be an independent and internationally known certified public accounting
firm with no affiliation with either the parties,. the Agent or any of their
respective auditors.

      Section 7.11.  Consent to Jurisdiction and Forum; AMD Holding Appointment
                     ----------------------------------------------------------
of Agent for Service of Process.
-------------------------------

      (a)  Subject to Section 7.10, all judicial proceedings brought against
either party hereto with respect to this Agreement may be brought in Santa Clara
County, California, and by execution arid delivery of this Agreement, each such
party accepts for itself and in connection with its properties, generally and
unconditionally, the nonexclusive jurisdiction of such courts. In addition, each
such party hereby irrevocably and unconditionally waives, to the fullest extent
permitted by law, any objection which it may now or hereafter have to the laying
of venue of any such proceedings, and hereby further irrevocably and
unconditionally waives and agrees to the fullest extent permitted by law not to
plead or claim that any such proceeding brought in any such court has been
brought in an inconvenient forum.

      (b)  AMD Holding hereby irrevocably appoints CT Corporation Services as
its agent to receive on behalf of AMD Holding and its property service of copies
of the summons and complaint and any other process which may be served in any
proceeding in any state or federal court of competent jurisdiction in the State
of California.

      Section 7.12.  Judgment Currency.  The parties hereto agree that, without
                     -----------------
prejudice to Sections 7.10 and 7.11 above:

      (a)  if, for purposes of obtaining hereunder an arbitral award or judgment
of any court, it is necessary to convert a sum due hereunder in DM into another
currency, the rate of exchange used shall be that at which in accordance with
normal banking procedures the prevailing party could purchase DM with such other
currency on the Business Day preceding that on which the final award or judgment
(as applicable) is given; and

      (b)  the obligation of each of the parties hereto in respect of any sum
due hereunder from it (the "Payor") to the other party (the "Recipient") shall,
notwithstanding any judgment in a currency other than DM, be discharged only to
the extent that on the Business Day following receipt by the Recipient of any
sum adjudged to be so due in such other currency, the Recipient may, in
accordance with normal banking procedures, purchase DM with such other currency;
in the event that the DM so purchased is less than the sum originally due to the
Recipient, the Payor, as a separate obligation and notwithstanding any such
judgment or award, hereby agrees to indemnify and hold harmless the Recipient
against such loss, and if the DM so purchased exceeds the sum originally due to
the Recipient, the Recipient shall remit to the Payor the excess.

                                      19
<PAGE>

      Section 7.13.  Language.  This Agreement is in the English language, which
                     --------
language shall be controlling in all respects.

      Section 7.14.  Entire Agreement.  This Agreement, the AMD Saxonia Wafer
                     ----------------
Purchase Agreement, the AMD Holding Research Agreement, the AMD Saxonia Research
Agreement, the Management Service Agreement and the License Agreement embody the
entire agreement and understanding between the parties with respect to the
subject matter hereof.  Neither party has relied upon any representation or
warranty of the other party in entering into this Agreement except as expressly
set forth herein.  AMD Inc. further acknowledges and agrees that its obligations
hereunder shall remain in full force and effect notwithstanding the breach by
AMD Holding of any representation or warranty contained herein.

      Section 7.15.  Counterparts. This Agreement may be executed in one or more
                     ------------
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple counterparts and attached to a
single counterpart so that all signature pages are physically attached to the
same document.

      Section 7.16.  Amendments. No modifications or amendments to this
                     ----------
Agreement shall be binding unless in writing and executed by each of the parties
hereto. In addition, no modification or amendment to this Agreement may be made
without the prior written consent of, if prior to the Loan Agreement Termination
Date, the Agent.

      Section 7.17.  EMU. The European Economic and Monetary Union anticipates
                     ---
the introduction of a single currency and the substitution of the national
currencies of Member States participating in the Monetary Union. On the date on
which the DM is replaced by the single currency, conversion into such currency
shall take effect. The denomination of the original currency shall be retained
for so long as this is legally permissible. Conversions shall be based on the
officially fixed rate of conversion. Neither the introduction of the single
currency nor the substitution of the national currencies of the Member States
participating in European Monetary Union nor the fixing of the official rate of
conversion nor any economic consequences that arise from any of the
aforementioned events or in connection with European Monetary Union shall give
rise to any right to terminate prematurely, contest, cancel, rescind, modify, or
renegotiate this Agreement or any of its provisions or to raise any other
objections and/or exceptions or to assert any claims for compensation. This
Agreement shall continue in full force and effect in accordance with its terms.

                  [Remainder of page intentionally left blank]

                                      20
<PAGE>

          IN WITNESS OF THE FOREGOING, AMD Inc. and AMD Holding have caused this
Agreement to be executed by their authorized representatives as of the date
first written above.

                                                   ADVANCED MICRO DEVICES, INC.

                                                   By:________________________
                                                   Its:_______________________

                                                   AMD SAXONY HOLDING GMBH

                                                   By:________________________
                                                   Its: Managing Director

                                      21

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