SECURITY AGREEMENT, DATED AUGUST 1, 1996

Exhibit 4.6
SECURITY AGREEMENT
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This SECURITY AGREEMENT ("Agreement"), dated as of August 1, 1996, between
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ADVANCED MICRO DEVICES, INC., a Delaware corporation (the "Company"), and IBJ
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SCHRODER BANK & TRUST COMPANY, as collateral agent ("Collateral Agent") under
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the Intercreditor Agreement, as defined below.

A. The Company, Bank of America National Trust and Savings Association,
as agent ("Bank Agent") and certain financial institutions ("Banks") have
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entered into the Credit Agreement, dated as of July 19, 1996, covering loans
in the aggregate principal amount of $400,000,000 ("Bank Loans") evidenced by
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promissory notes if so desired by the Banks (the "Notes, as defined in the
Credit Agreement, and as used herein, the "Bank Notes") issued to the Banks (as
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amended or otherwise modified from time to time, the "Credit Agreement"). It is
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a condition precedent to the effectiveness of the Credit Agreement that the
Company shall have executed and delivered this Agreement.

B. United States Trust Company of New York, as trustee ("Indenture
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Trustee"), and the Company have entered into the Indenture, dated as of August
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1, 1996 relating to the Company's Senior Secured Notes due 2003 ("Senior Secured
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Notes") issued in the aggregate principal amount of $400,000,000 (as amended or
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otherwise modified from time to time, the "Indenture"). It is a condition
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precedent to purchase of the Senior Secured Notes that the Company shall have
executed and delivered this Agreement.

C. The Collateral Agent, Indenture Trustee and Bank Agent have entered
into the Intercreditor and Collateral Agency Agreement, dated as of August 1,
1996 (as amended or otherwise modified from time to time, the "Intercreditor
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Agreement").
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NOW, THEREFORE, in consideration of the premises, the Company hereby agrees
as follows:

SECTION 1. Defined Terms and Related Matters.
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(a) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole
and not to any particular provision of this Agreement.

(b) Unless otherwise defined herein, the terms defined in Article 9 of
the Uniform Commercial Code as enacted in the State of New York (the "Code") are
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used herein as therein defined.

(c) Definitions. The following terms have the respective meanings given:
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"Authorized Representative" means the president, chief executive officer,
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chief financial officer or any other executive officer authorized by the board
of directors to bind the Company, and who has knowledge of the matters with
respect to which such term is used.

"Credit Documents" has the meaning given in the Deed of Trust.
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"Deed of Trust" means the Deed of Trust, Assignment, Security Agreement and
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Financing Statement, dated as of the date hereof, from the Company to the
Collateral Agent for the benefit of the Banks and the holders of the Senior
Secured Notes, as described in the Intercreditor Agreement.

"Event of Default" has the meaning given in the Deed of Trust.
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"Governmental Authorities" means any national, state or local government
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(whether domestic or foreign), any political subdivision thereof or any other
governmental or quasi-governmental, judicial, public or statutory
instrumentality, authority, body, agency, bureau or entity.

"Government Securities" means any securities the transfer or pledge of
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which is governed by 31 C.F.R. (S) 306.118.

"Indemnity Agreement" means the Payment, Reimbursement and Indemnity
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Agreement, dated as of August 1, 1996, between the Company and the Collateral
Agent, as amended or modified from time to time.

"Liens" means any security interest, mortgage, deed of trust, pledge,
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hypothecation, assignment, charge or deposit arrangement, encumbrance, lien
(statutory or other) or preferential arrangement of any kind or nature
whatsoever in respect of any property (including those created by, arising under
or evidenced by any conditional sale or other title retention agreement, the
interest of a lessor under a capital lease, any financing lease having
substantially the same economic effect as any of the foregoing, or the filing of
any financing statement naming the owner of the asset to which such lien relates
as debtor, under the Uniform Commercial Code or any comparable law) and any
contingent or other agreement to provide any of the foregoing, but not including
the interest of a lessor under an operating lease.

"Permit" means any action, approval, consent, waiver, exemption, variance,
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franchise, order, permit, authorization, right or license of or from a
Governmental Authority.

"Proceeds Account" means the account by such name established pursuant to
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Section 2(a).

"Permitted Investments" means: "Cash Equivalents", as defined in the
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Indenture.

SECTION 2. Proceeds Account.
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(a) Establishment of Account. The Collateral Agent hereby establishes at
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its office located at One State Street, New York, New York (or such other office
of the Collateral Agent in the State of New York as the Collateral Agent shall
from time to time designate in writing to Bank Agent, Indenture Trustee and the
Company) a special segregated and irrevocable cash collateral account designated
the "Proceeds Account of IBJ Schroder Bank & Trust Company, as first priority
lienholder" (the "Proceeds Account"). All moneys, investments and securities at
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any time on deposit in the Proceeds Account shall be held in the custody of the
Collateral Agent for the purposes and on the terms set forth in this Agreement.
The full title of the Proceeds Account shall appear on all external written
communications from

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the Collateral Agent (other than routine regulatory reports) with respect to
the Proceeds Account.

(b) Deposits Into Proceeds Account. There shall be deposited into the
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Proceeds Account all proceeds of Collateral Asset Sales (as defined in the
Indenture), all proceeds of insurance and all condemnation proceeds required
pursuant to Section 4.10 of the Indenture to be retained in the Proceeds Account
pending repair or replacement, or application to an Excess Proceeds Offer (as
defined in the Indenture) and the mandatory prepayment of Bank Loans. The
Company shall instruct its casualty insurer to deposit such proceeds as provided
herein, and shall provide all necessary endorsements to such effect.

(c) Control of Collateral Agent. The Proceeds Account, all money, cash,
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cash equivalents, instruments, investments and other securities at any time on
deposit in the Proceeds Account, all investment income thereon, and all proceeds
of any of the foregoing, shall at all times be subject to the sole control and
dominion of the Collateral Agent and shall be held in the custody of the
Collateral Agent for the purposes of, and on the terms set forth in, this
Agreement. Access to the monies on deposit in the Proceeds Account shall be
limited to the Collateral Agent, and the ability of any person other than the
Collateral Agent to access funds in the Proceeds Account, whether through the
writing of checks on such account, by wire transfer or otherwise, shall be
blocked. If there exists an instrument which represents the rights in the
Proceeds Account, such as a passbook, the Collateral Agent shall at all times
maintain exclusive possession of such instrument. The Company shall not have
any rights or powers with respect to any amounts in the Proceeds Account or any
part thereof; provided that the foregoing shall not be construed to limit the
obligation of the Collateral Agent to apply amounts in the Proceeds Account in
accordance with Section 2(e) hereof and the other provisions of this Agreement.

(d) Investment. Any cash held by the Collateral Agent in the Proceeds
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Account shall be invested by the Collateral Agent from time to time as directed
in writing by the Company in Permitted Investments; provided that at all times
that an Event of Default has occurred and is continuing, such investments shall
be made by the Collateral Agent at the direction of the Directing Creditors (as
defined in the Intercreditor Agreement), in Permitted Investments. Any income
or gain realized as a result of any such investment shall be held in the
Proceeds Account and reinvested as provided herein. Any income tax payable on
account of any such income or gain shall be payable by the Company. The
Collateral Agent shall have no liability for any loss resulting from any
diminution in value of any investment. Any investment may be liquidated and
sold by the Collateral Agent at the direction of the Person directing such
investment, as set forth in the first sentence of this Section 2(d), and the
proceeds of such sale shall be reinvested in Permitted Investments or, during an
Event of Default, applied as provided in Section 13.

(e) Disbursements. The Collateral Agent shall disburse funds in the
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Proceeds Account solely in accordance with the instructions delivered to it in
accordance with the terms and conditions of the Intercreditor Agreement. In the
event the Company wishes the Collateral Agent to disburse funds from the
Proceeds Account to the Company and to which the Company is entitled under the
Indenture, the Company shall comply with the applicable provisions of the
Indenture; provided that funds in the Proceeds Account are subject to the
security interest created by this Agreement, to the exercise of remedies set
forth in this

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Agreement, the Indenture, the Credit Agreement and the Intercreditor Agreement,
and to the collateral-sharing provisions of the Intercreditor Agreement.

(f) Perfection of Security Interest in Money and Securities Included in
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the Collateral.
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(i) All money delivered to the Collateral Agent for deposit in
the Proceeds Account shall, prior to such deposit, be delivered to and held by
the Collateral Agent pursuant hereto.

(ii) All certificated securities included in the Collateral shall
either be: (A) (1) delivered to and held by the Collateral Agent and (2)
registered in the name of the Collateral Agent or, if requested by the
Collateral Agent, registered to bearer or in the name of the Collateral Agent's
nominee, or (B) with the consent of the Collateral Agent, delivered to and held
by a clearing corporation or by a custodian or a nominee of either which is
subject to the control of such clearing corporation with which the Collateral
Agent (or its nominee) maintains an account (each of the foregoing, an "Approved
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Depository"), in bearer form, indorsed in blank or registered in the name of
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such Approved Depository, and in each of the foregoing cases in this clause (B),
by appropriate book entry credited to an account in the name of the Collateral
Agent (or its nominee) and subtracted from the account of the Company maintained
with such clearing corporation.

(iii) All instruments, other than certificated securities, included
in the Collateral shall be delivered to and held by the Collateral Agent
pursuant hereto and shall be duly indorsed in blank or to the order of the
Collateral Agent, its nominee or bearer, as the Collateral Agent may request.

(iv) All Government Securities included in the Collateral shall be
registered in the name of the Collateral Agent on the records of the Federal
Reserve Bank of New York. All other uncertificated securities, if any, included
in the Collateral shall be registered in the name of the Collateral Agent, its
nominee or an Approved Depository on the books of the issuer of such
uncertificated securities and, in the case of uncertificated securities
registered in the name of an Approved Depository, by appropriate book entry
credited to an account in the name of the Collateral Agent (or its nominee) and
subtracted from the account of the Company maintained with such Approved
Depository, if a clearing corporation, or with the clearing corporation which
controls such Approved Depository.

(v) The Company shall take such actions as may be necessary to
cause the security interest of the Collateral Agent in the Proceeds Account and
any Permitted Investments contained therein to be and remain a first priority
perfected security interest. To the extent as a result of a change of law after
the date hereof, the procedures set forth in Sections 2(f)(ii)-(iv) above are no
longer effective to cause the Collateral Agent's security interest in the
property described in such sections to be perfected, the Company shall be
excused from such requirements, provided it complies with the requirements of
the first sentence of this Section 2(f)(v).

(vi) The terms "money", "certificated securities", "clearing
corporation", "custodian", "nominee", "account", "bearer form", "instrument" and
"uncertificated securities",

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as used in this Section 2(f), shall have the meaning given in the New York
Uniform Commercial Code.

SECTION 3. Grant of Security Interest.
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(a) Collateral. The Company hereby assigns and pledges to the
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Collateral Agent and hereby grants to the Collateral Agent a security interest
in and an assignment of all of the Company's right, title and interest in and
to the following property, subject to the exclusions contained in Section 3(b)
(the "Collateral"), whether now owned or hereafter acquired or created, and any
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rights, remedies or claims with respect to any thereof and any proceeds of any
thereof:

(i) All equipment, including without limitation machinery, tools,
machine tools, furniture, furnishings and fixtures of every nature, located on
or used in connection with, that certain real property more particularly
described in Exhibit A-1 and Exhibit A-2 attached hereto and incorporated herein
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for all purposes (the "Fab 25 Site") and the improvements located thereon
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(including without limitation the "Fab 25" integrated circuit manufacturing
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facility and related support facilities (collectively, the "Fab 25
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Facilities")), all accessions, additions and improvements thereto and
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substitutions therefor and all parts and equipment which may be attached to or
which are necessary for the operation and use of such personal property, whether
or not the same shall be deemed to be affixed to real property (any and all of
the foregoing being the "Equipment").
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(ii) (A) Purchase orders for Equipment, including all rights
thereunder, whether or not such Equipment has yet been delivered; (B) warranty
claims for construction of the Fab 25 Facilities or any Equipment therein;
(C) the as-built plans and specifications for the Fab 25 Facilities;
(D) governmental licenses and permits for the construction and operation of the
Fab 25 Facilities (but not those for Proprietary Property and Rights, as defined
below); (E) operating manuals supplied by sellers of, and maintenance agreements
for, the Equipment, building heating and air conditioning equipment, and
electrical, plumbing, and mechanical systems for the Fab 25 Facilities; and
(F) any other general intangibles used specifically in the construction,
ownership or operation of the Fab 25 Facilities, excluding from the property
described in this clause (F) general intangibles associated with the Equipment
or manufacturing process, other than licenses and other intellectual property
licensed with the Equipment and made available by equipment vendors generally to
purchasers of such equipment (any and all of the foregoing being the "General
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Intangibles").
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(iii) (A) contracts and agreements for the sale of the Equipment
(without hereby implying consent to the sale of any Equipment); (B) those
contracts and agreements listed on Schedule 1 hereof; and (C) ordinary vendor
and service contracts relating to the operation of the Fab 25 Facilities,
including scavenger, landscaping, extermination and cleaning, but not raw
materials (the "Contracts").
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(iv) The Proceeds Account, and all money, cash, cash equivalents,
instruments, investments and other securities at any time on deposit or required
hereby to be deposited in the Proceeds Account.

(v) All casualty insurance policies maintained or required to be
maintained under the Indenture and the Credit Agreement with respect to the
foregoing

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Collateral, and all condemnation or eminent domain proceeds deriving
from the Fab 25 Facilities.

(b) Excluded Property. The Collateral does not include:
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(i) Any agreements, contracts, or intangible personal property
assignment of which is prohibited by applicable law or by contract.

(ii) Any (A) property or rights commonly referred to as
"intellectual property" or "proprietary rights" or "confidential information",
in each case owned by the Company (including without limitation confidential
information, patents, copyrights, trade secrets, trademarks, symbols, mask
works, know-how, or any general intangibles constituting any part of the
Company's proprietary technology), or any media or part thereof (including
without limitation documents, recordings, computer tapes, disks or diskettes,
and magnetic or other storage media) which include the foregoing items in this
Section 3(b)(ii) (provided that any practicably severable part of any medium
which does not contain any of the items in this Section 3(b)(ii) shall not be
excluded from the Collateral); and (B) any of the foregoing intellectual
property, proprietary rights or confidential information licensed or obtained by
the Company from another party with an agreement or expectation of
confidentiality or not generally available to the semiconductor industry. All
such excluded property shall be referred to herein collectively as the
"Proprietary Property and Rights"; provided that the Proprietary Property and
Rights shall not include (I) licenses and other intellectual property licensed
with the Equipment and made available by equipment vendors generally to
purchasers of such equipment and (II) the plans and specifications for the
buildings included in the Fab 25 Facilities.

(iii) Any agreement or contract to provide Proprietary Property and
Rights to the Company. The grant of a security interest in the Contracts shall
also not require the Company or any other party to divulge, supply or reveal any
Proprietary Property and Rights, and shall not allow any other party to divulge,
supply or reveal any Proprietary Property and Rights owned by the Company.

SECTION 4. Security for Obligations. The security interest in the
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Collateral granted pursuant to Section 3 secures the prompt and complete payment
and performance of all present and future obligations of the Company to (a) the
Agent (as defined in the Credit Agreement) and the Banks under the Credit
Agreement and the Bank Notes, if any, and (b) the holders of the Senior Secured
Notes under the Indenture, as each such agreement may be modified, amended,
extended or renewed from time to time, or replaced in accordance with the
Intercreditor Agreement; and further secures payment of all obligations of the
Company to the Collateral Agent, the Indenture Trustee, the Bank Agent, the
Banks and the holders of the Senior Secured Notes under the Deed of Trust, this
Agreement, the Indemnity Agreement and all other documents and instruments
securing or otherwise related to the Credit Agreement and the Senior Secured
Notes (all such obligations, whether for principal, interest, fees, expenses or
otherwise, being hereinafter collectively referred to as the "Obligations").
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SECTION 5. Company Remains Liable. Anything herein to the contrary
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notwithstanding, (a) the Company shall remain liable under the contracts and
agreements included in the Collateral to the extent set forth therein to perform
all of its duties and obligations thereunder to the same extent as if this
Agreement had not been executed; (b) the

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exercise by the Collateral Agent of any of the rights hereunder shall not
release the Company from any of its duties or obligations under the contracts
and agreements included in the Collateral; and (c) neither the Collateral Agent,
Bank Agent, Indenture Trustee, nor any Bank shall have any obligation or
liability under the contracts and agreements included in the Collateral by
reason of this Agreement, unless and to the extent that any such Person succeeds
to the Company's interests under such contract or agreement pursuant to the
exercise of such Person's rights or remedies after default, nor shall the
Collateral Agent, Bank Agent, Indenture Trustee, nor any Bank be obligated to
perform any of the obligations or duties of the Company thereunder, unless and
to the extent that any such Person succeeds to the Company's interests under
such contract or agreement pursuant to the exercise of such Person's rights or
remedies after default, nor shall any such Person be obligated to take any
action to collect or enforce any claim for payment assigned hereunder.

SECTION 6. Representations and Warranties. The Company hereby represents
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and warrants as follows:

(a) The chief executive office of the Company is located at its address
shown on Schedule 2; the Company also has a place of business at the Fab 25
Site.

(b) The Company's Federal Taxpayer ID Number is 94-1692300.

(c) All Contracts are located at the Company's offices set forth on
Schedule 2. There are no contracts of the Company included in the Collateral
other than those set forth on Schedule 1, which are (i) on terms materially more
favorable to the Company than would be obtainable by a third-party owner of Fab
25, except as a function of volume purchase arrangements involving purchases for
other Company facilities, or (ii) of a nature such that if such contracts were
terminated Fab 25 could not be operated without either (A) entering into a
contract which is not available to the semiconductor industry within sixty days
or (B) paying an above-market price for property.

(d) There are no utilities, easements or real or personal property
(including warehouse or office space) necessary to own and operate Fab 25 as
contemplated by the Company, other than those contained in the Reciprocal
Easement Agreement, dated as of August 1, 1996, between the Company and AMD
Texas Properties, LLC, and those in which the Company has granted the Collateral
Agent a lien pursuant to the Deed of Trust and this Agreement or which are
generally available on a ministerial basis from public utilities and which are
available at the Fab 25 Site, or, in the case of warehouse space, from the
commercial property leasing market.

(e) All of the Equipment is located at the Fab 25 Site and at places
specified in Schedule 2, and will remain at those locations except as disposed
of or replaced in compliance with the Indenture and the Credit Agreement.
Replacement Equipment shall be located at the Fab 25 Site and at places
specified in Schedule 2 unless and until it is itself replaced in compliance
with the Indenture and the Credit Agreement.

(f) The Company owns the Collateral (without regard to the limitation in
Section 3(a) that the Collateral includes only "the Company's right, title and
interest" in the property described therein), free and clear of any Liens,
except for the Liens permitted by the Deed of Trust or both the Indenture and
the Credit Agreement. Except with respect to Liens

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permitted by the Indenture and the Credit Agreement, no effective financing
statement or other instrument similar in effect covering all or any part of
the Collateral is or will be on file in any recording office, except as may be
filed in favor of the Collateral Agent; provided that it is acknowledged that
(i) certain gas manufacturing and storage equipment on the Fab 25 Site is owned
by Air Products and Chemicals, Inc. and (ii) the Company does not own a
certain amount of equipment leased to the Company and used on the Fab 25 Site,
not in excess in value of the Capital Lease Obligations (as defined in the
Indenture) limitation set forth in Sections 4.09(ii) and 4.09(iv) of the
Indenture.

(g) Other than the filings and other actions necessary to perfect the
security interests created by this Agreement, no authorization, approval or
other action by, and no notice to or filing with, any Governmental Authority is
required (i) for the due execution, delivery and performance of this Agreement
by the Company, and the other documents and instruments executed in connection
herewith; (ii) for the grant by the Company of the security interests granted
hereby; (iii) for the perfection of the security interests granted hereby; or
(iv) for the exercise by the Collateral Agent of its rights and remedies
hereunder.

(h) The Company has obtained the consent of all Persons necessary for the
grant of the security interest contained herein and consummation of the
transactions contemplated hereby.

(i) The execution, delivery and performance by the Company of this
Agreement and the consummation of the transactions contemplated hereby
(including the creation of the Liens granted hereunder) will not (i) violate the
Company's certificate of incorporation or bylaws, (ii) violate any order,
judgment or decree of any Governmental Authorities binding on the Company or any
property or assets of the Company (iii) violate or conflict with any law, rule,
regulation, or Permit applicable to the Company or any of its properties, (iv)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any agreement, indenture, mortgage, deed of trust,
equipment lease, instrument or other document to which the Company is a party or
pursuant to which any of its properties or assets are bound, or (v) result in or
require the creation or imposition of any Lien upon any material properties or
assets of the Company (other than the creation of the Liens granted hereunder).

(j) This Agreement is, and all other documents and instruments executed
in connection herewith, when delivered will be, legal, valid and binding
obligations of the Company enforceable against the Company in accordance with
their respective terms, except as enforceability may be (i) limited by
bankruptcy, insolvency, reorganization, arrangement, moratorium, or other
similar laws relating to or affecting the rights and remedies of creditors, and
(ii) subject to the general effect of general principles of equity.

(k) Upon the filing of financing statements covering the Collateral, the
Collateral Agent will have a valid first priority security interest in the
Collateral (subject only to Permitted Liens), securing the payment of the
Obligations; the Collateral is not subject to any Liens other than the Liens of
this Agreement and of the Deed of Trust.

SECTION 7. Covenants. The Company hereby covenants as follows:
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(a) The Company shall keep the Equipment at the Fab 25 Site, subject to
removal of Equipment for disposition or replacement in conformity with the
Indenture and Credit Agreement.

(b) The Company shall cause the Equipment to be maintained and
preserved in good condition, repair and working order, ordinary wear and tear
excepted, and in accordance with any manufacturer's manual, and shall forthwith,
or in the case of any loss or damage to any of the Equipment as quickly as
practicable after the occurrence thereof, and make or cause to be made all
repairs, replacements and other improvements in connection therewith which are
necessary or desirable to such end. Equipment may be disposed of or replaced as
provided in the Indenture.

(c) The Company shall, at its own expense, do, make, procure, execute,
deliver, file and record all acts, things, writings and assurances as the
Collateral Agent may at any time require to protect, assure or enforce its
interests, rights and remedies created by, provided in or emanating from this
Agreement. The Company shall furnish, promptly upon written request, such
information as the Collateral Agent may request relating to the Collateral.

(d) The Company shall cause to continue to be true at all times during
the term of this Agreement the representations and warranties contained in
Sections 6(d), 6(f) and 6(h), including exercising reasonable efforts to
ensure that the grant of the security interest in this Agreement with respect
to after-acquired intangible personal property is not prohibited by any
contract of the Company.

(e) The Company shall not change its name, identity or corporate
structure in any manner which might make any financing or continuation
statement filed hereunder seriously misleading within the meaning of
Section 9-402 of the Uniform Commercial Code in effect in any applicable
jurisdiction (or any other then applicable provision of the Uniform Commercial
Code or any other provision of law in effect in any applicable jurisdiction)
unless the Company shall have given the Collateral Agent at least thirty days'
prior written notice thereof and shall have taken all action (or made
arrangements to take such action substantially simultaneously with such change
if it is impossible to take such action in advance) necessary, or reasonably
requested by the Collateral Agent, to amend such financing statement or
continuation statement so that it is not seriously misleading.

(f) Except as permitted by the Credit Agreement and the Indenture, the
Company shall not sell, assign or otherwise dispose of any of the Collateral, or
create or suffer to exist any Lien upon or with respect to any of the
Collateral. In the event that Collateral is sold or otherwise disposed of in
compliance with the terms of Credit Agreement and the Indenture, the Collateral
Agent shall promptly release the Lien of this Agreement with respect to such
Collateral.

SECTION 8. Further Assurances.
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(a) The Company agrees to execute one or more financing statements to
perfect the security interests granted hereby and authorizes the Collateral
Agent to file such financing statements in such offices as are appropriate under
applicable law.

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(b) The Company authorizes the Collateral Agent to deliver notices and
file financing statements (including without limitation, Form UCC-1 or
Form UCC-3, as the case may be) and such other security documents to be
executed by the Company in such offices and locations as are necessary in the
opinion of the Collateral Agent to perfect the security interests granted
herein. The Company further agrees that from time to time and at the expense of
the Company, the Company will promptly execute and deliver all further
instruments and documents, and take all further action that may be reasonably
necessary or desirable, or that the Collateral Agent may request, in order to
perfect and protect any security interests renewed and extended or granted or
purported to be granted hereby (including in the Permitted Investments) or to
enable the Collateral Agent to exercise and enforce the Collateral Agent's
rights and remedies hereunder with respect to any of the Collateral.

(c) The Company authorizes the Collateral Agent to file a carbon,
photographic or other reproduction of this Agreement as a financing statement or
to file one or more financing or continuation statements, and amendments
thereto, relative to all or any part of the Collateral without the signature of
the Company where permitted by law.

(d) The Company will furnish to the Collateral Agent from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Collateral Agent may
reasonably request, all in reasonable detail.

SECTION 9. Right of Inspection. The Collateral Agent, Bank Agent and
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Indenture Trustee shall on reasonable advance notice have access during normal
business hours to records of the Company pertaining to the Collateral, and the
Collateral Agent, Bank Agent and Indenture Trustee or their respective
representatives may examine the same, take extracts therefrom and make
photocopies thereof, and the Company agrees to render to the Collateral Agent,
Bank Agent or Indenture Trustee, as the case may be, at the Company's cost and
expense, such clerical assistance as may be reasonably requested with regard
thereto. The Collateral Agent, Bank Agent and Indenture Trustee and their
respective representatives shall have the right, upon reasonable advance notice
to the Company and during normal business hours, to enter into and upon any
premises where any of the Collateral is located for the purposes of inspecting
the same, observing its use or otherwise protecting its interests therein;
provided, however, that as to Collateral located in the cleanroom at the Fab 25
Facilities at the Fab 25 Site, such entry shall occur at such time and under
such conditions as set forth in the Deed of Trust dated as of August 1, 1996 by
the Company for the benefit of the Collateral Agent.

SECTION 10. Collateral Agent Appointed Attorney-in-Fact. The Company
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hereby irrevocably appoints the Collateral Agent the Company's attorney-in-fact,
effective upon and during the continuance of an Event of Default, with full
authority in the place and stead of the Company and in the name of the Company,
the Collateral Agent or otherwise, from time to time in the Collateral Agent's
discretion, to take any action and to execute any instrument which the
Collateral Agent may deem necessary or advisable to accomplish the purposes of
this Agreement, including, without limitation:

(a) to ask, demand, collect, sue for, recover, compound, receive and give
acquittance and receipts for amounts due and to become due under or in respect
of any of the Collateral,

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(b) to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with clause (a) above, and

(c) to file any claims or take any action or institute any proceedings
which the Collateral Agent may deem necessary or desirable for the collection
of any of the Collateral or otherwise to enforce the rights of the Collateral
Agent, including, without limitation, the collection of royalties or other
compensation due under any license or agreement, with respect to any of the
Collateral.

SECTION 11. Collateral Agent May Perform. If the Company fails to perform
----------------------------
any agreement contained herein, the Collateral Agent may itself perform, or
cause performance of, such agreement, and the reasonable expenses of the
Collateral Agent incurred in connection therewith shall be payable by the
Company as set forth in Section 14.

SECTION 12. Collateral Agent's Duties. The powers conferred on the
-------------------------
Collateral Agent, Bank Agent and Indenture Trustee hereunder are solely to
protect their interest in the Collateral and shall not impose any duty upon the
Collateral Agent, Bank Agent or Indenture Trustee to exercise any such powers.
Except for the safe custody of any Collateral in its possession and the
accounting for amounts actually received by it hereunder, the Collateral Agent
shall have no duty as to any Collateral or as to the taking of any necessary
steps to preserve rights against prior parties or any other rights pertaining to
any Collateral.

SECTION 13. Remedies. If any Event of Default shall have occurred and be
--------
continuing:

(a) The Collateral Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party on default under the Code
(whether or not the Code applies to the affected Collateral) and in addition
thereto and cumulative thereof, the following rights: the right to sell, lease
or otherwise dispose of the Collateral and the right to take possession of the
Collateral, and for that purpose, the Collateral Agent may enter upon any
premises on which the Collateral may be situated and remove the same therefrom
and/or may render the Collateral inoperable; the Collateral Agent may require
the Company to, and the Company hereby agrees that it will, at its expense and
upon the request of the Collateral Agent, forthwith assemble all or part of the
Collateral and all documents relating to the Collateral as directed by the
Collateral Agent and make the Collateral available to the Collateral Agent at
the Fab 25 Site; without notice except as specified below, sell the Collateral
in one or more parcels at public or private sale, at any of the Collateral
Agent's offices or elsewhere, for cash, on credit or for future delivery, and
upon such other terms as the Collateral Agent may deem commercially reasonable.
The Company agrees that, to the extent notice of sale shall be required by law,
at least ten days' notice to the Company of the time and place of any public
sale or the time after which any private sale is to be made shall constitute
reasonable notification. The Collateral Agent shall not be obligated to make
any sale of Collateral regardless of notice of sale having been given. The
Collateral Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.

11

(b) All cash proceeds received by the Collateral Agent in respect of any
sale of, collection from, or other realization upon all or any part of the
Collateral may, in the discretion of the Collateral Agent, be held by the
Collateral Agent as collateral for, and/or then or at any time thereafter
applied in whole or in part by the Collateral Agent against, the Obligations in
any order that the Collateral Agent may select, subject, as among the holders of
the Senior Secured Notes and the Banks, to the terms of the Intercreditor
Agreement. Any surplus of such cash or cash proceeds and interest accrued
thereon, if any, held by the Collateral Agent and remaining after payment in
full of all of the Obligations shall be paid over to the Company or to
whomsoever may be lawfully entitled to receive such surplus; provided that the
Collateral Agent shall have no obligation to the Company to invest or otherwise
pay interest on any amounts held by it pursuant to this Section 13.

(c) All rights and remedies of the Collateral Agent, Bank Agent and
Indenture Trustee expressed herein are in addition to all other rights and
remedies possessed by the Collateral Agent, Bank Agent and Indenture Trustee in
the Credit Agreement, the Bank Notes, the Indenture, the Senior Secured Notes
the other Credit Documents and any other agreement or instrument relating to the
Obligations.

SECTION 14. Indemnity, Expenses and Interest.
--------------------------------

(a) To the fullest extent permitted by applicable law, the Company
agrees to indemnify the Collateral Agent and its directors, officers, partners,
employees, and agents (collectively the "Indemnified Parties," each an
"Indemnified Party") from and against any and all claims, losses and liabilities
growing out of or resulting from this Agreement (including, without limitation,
enforcement of this Agreement), except claims, losses or liabilities resulting
from the gross negligence or willful misconduct of the Indemnified Party, IT
BEING THE INTENTION OF THE COMPANY TO INDEMNIFY EACH INDEMNIFIED PARTY FOR THE
CONSEQUENCES OF HIS, HER OR ITS OWN NEGLIGENCE.

(b) The Company agrees upon demand to pay to the Indemnified Parties or
any one or more appropriate Indemnified Party the amount of any and all
reasonable expenses, including the reasonable fees and out-of-pocket expenses of
counsel and of any experts and agents, which the Indemnified Parties or any one
or more Indemnified Party may incur in connection with (i) the custody,
preservation, use or operation of, or the sale of, collection from, or other
realization upon, any of the Collateral; (ii) the exercise or enforcement of any
of the rights of the Indemnified Parties hereunder; or (iii) the failure by the
Company to perform or observe any of the provisions hereof.

(c) The Company agrees to pay interest on any expenses or other sums
due to the Collateral Agent, the Indemnified Parties and/or any Indemnified
Party hereunder that are not paid when due at a rate per annum equal to the rate
described in Section 2.09(c) of the Credit Agreement (whether the Credit
Agreement shall still be in effect) in effect on the date such amount becomes
due (but never in excess of the maximum nonusurious amount permitted by
applicable law).

SECTION 15. Amendments, Etc. No amendment or waiver of any provision of
----------------
this Agreement nor consent to any departure by the Company herefrom, shall be
effective unless the same is in writing and signed by the Collateral Agent, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which

12

given. Any amendment to any term of the Intercreditor Agreement which is
referenced or incorporated by this Agreement and which affects the rights or
obligations of the Company hereunder shall not be binding upon the Company
unless consented to in a writing signed by the Company.

SECTION 16. Addresses for Notices. All notices, requests, consents,
---------------------
demands and other communications required or which any party desires to give
hereunder shall be in writing and shall be deemed sufficiently given or
furnished if delivered in accordance with the notice delivery provisions of the
Deed of Trust. This Section 16 shall not be construed in any way to affect or
impair any waiver of notice or demand provided in any Credit Document or to
require giving of notice or demand to or upon any person in any situation or for
any reason.

SECTION 17. Limitation of Powers of Collateral Agent. The Company
----------------------------------------
acknowledges that the powers and discretion granted to or held by the Collateral
Agent under this Agreement are subject to the terms of the Intercreditor
Agreement, and that the ability of the Collateral Agent to take particular
actions under this Agreement may require the consent of one or more of the Bank
Agent, the Indenture Trustee, or other representatives of one or more Credit
Classes, as defined in the Intercreditor Agreement. The Collateral Agent shall
have no liability to the Company under this Agreement for taking or failing to
take any action, to the extent such action or failure to take action is
consistent with the terms of the Intercreditor Agreement.

SECTION 18. Security Interest Absolute. All rights of the Collateral
--------------------------
Agent, Bank Agent and Indenture Trustee, and all obligations of the Company
hereunder and the security interests hereunder, shall, to the extent permitted
by applicable law, be absolute and unconditional, irrespective of:

(a) any lack of validity or enforceability of the Credit Agreement, the
Bank Notes or any of the other Credit Documents or any other agreement or
security document relating thereto or executed in connection with or pursuant
to any Credit Document;

(b) any lack of validity or enforceability of the Indenture, the Senior
Secured Notes or any of the other Credit Documents or any other agreement or
security document relating thereto or executed in connection with or pursuant to
any Credit Document;

(c) any change in the time, manner or place of payment of, or in any
other term of, all or any of the obligations or any other amendment or waiver of
or any consent to any departure from the Credit Agreement, the Bank Notes or any
of the other Credit Documents or any other agreement or security document
relating thereto or executed in connection with or pursuant to any Credit
Document;

(d) any change in the time, manner or place of payment of, or in any
other term of, all or any of the obligations or any other amendment or waiver
of or any consent to any departure from the Indenture, the Senior Secured Notes
or any of the other Credit Documents or any other agreement or security document
relating thereto or executed in connection with or pursuant to any Credit
Document;

13

(e) any exchange, release or non-perfection of any other collateral, or
any release or amendment or waiver of or consent to departure from any
guaranty, for all or any of the Obligations; or

(f) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, the Company, or any other Person that is a
party to any Credit Document in respect of the Obligations.

SECTION 19. Continuing Security Interest. This Agreement creates a
----------------------------
continuing security interest in the Collateral and shall (a) remain in full
force and effect until the termination of the obligation of the Banks to make
loans under the Credit Agreement and the payment in full or defeasance of the
Obligations; (b) be binding upon the Company, its successors and assigns; and
(c) inure to the benefit of and be enforceable by the Collateral Agent and its
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (c), the Collateral Agent may assign or otherwise transfer any
of its rights and obligations under this Agreement to any other Person, and to
the extent of such assignment or transfer such Person shall thereupon become
vested with all the benefits, and bound to any obligations, in respect thereof
granted herein or otherwise to, or imposed upon, the Collateral Agent. Upon
payment in full or defeasance of the Obligations, and termination of the Banks'
obligation to make loans under the Credit Agreement, the Company shall be
entitled to the return, upon its request and at its expense, of such of the
Collateral as shall not have been sold or otherwise applied pursuant to the
terms hereof.

SECTION 20. Waiver of Marshalling. All rights of marshalling of assets of
---------------------
the Company, including any such right with respect to the Collateral, are hereby
waived by the Company.

SECTION 21. Limitation by Law. All rights, remedies and powers provided in
-----------------
this Agreement may be exercised only to the extent that the exercise thereof
does not violate any applicable provision of law, and all the provisions of this
Agreement are intended to be subject to all applicable mandatory provisions of
law which may be controlling and to be limited to the extent necessary so that
they will not render this Agreement invalid, unenforceable, in whole or in part,
or not entitled to be recorded, registered or filed under the provisions of any
applicable law.

SECTION 22. Severability. The invalidity of any one or more covenants,
------------
phrases, clauses, sentences or paragraphs of this Agreement shall not affect the
remaining portions of this Agreement, or any part thereof, and in case of any
such invalidity, this Agreement shall be construed as if such invalid covenants,
phrases, clauses, sentences or paragraphs had not been inserted.

SECTION 23. Captions. The captions in this Agreement have been inserted
--------
for convenience only and shall be given no substantive meaning or significance
whatever in construing the terms and provisions of this Agreement.

SECTION 24. No Waiver; Cumulative Remedies. No failure on the part of the
------------------------------
Collateral Agent to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other

14

or further exercise thereof or the exercise of any other right. The remedies
herein provided are cumulative and not exclusive of any remedies provided by
law.

SECTION 25. Execution in Counterparts. This Agreement may be executed in
-------------------------
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.

SECTION 26. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO CONFLICTS OF LAWS (OTHER THAN SECTION 5-1401 OF THE NEW YORK
GENERAL OBLIGATIONS LAW).

15

IN WITNESS WHEREOF, the Company has caused this Security Agreement to be
duly executed by its officer thereunto duly authorized as of the date first
above written.

ADVANCED MICRO DEVICES, INC.,
a Delaware corporation


By: /s/ Marvin D. Burkett
---------------------------------
Name: Marvin D. Burkett
Title: Senior Vice President, Chief
Financial and Administrative
Officer and Treasurer

IBJ SCHRODER BANK & TRUST COMPANY,
as Collateral Agent


By: /s/ Thomas J. Bogert
---------------------------------
Name: Thomas J. Bogert
Title: Vice President

16

EXHIBIT A-1
to Security Agreement

Fab 25 Site Property Description
--------------------------------

The site upon which is located the Debtor's "Fab 25" integrated circuit
manufacturing facility, and related support facilities, 5204 East Ben White
Blvd., Austin, Texas (or such other address as shall be designated to such
property), as more particularly described below:

TRACT 1: Lot One (1), SUNRIDGE PARK, SECTION TWO, a subdivision in Travis
- ------- County, Texas, according to the map or plat thereof, recorded in
Volume 77, Pages 118-119 of the Plat Records of Travis County, Texas.

TRACT 2: Lots Three (3), Four (4), Five (5) and Six (6), Block "A", and Lots
- ------- One (1) and Four (4), Block "B", all in UNIVERSITY BUSINESS PARK,
a subdivision in Travis County, Texas, according to the map or plat
thereof, recorded in Volume 85, Pages 52C, 52D and 53A of the Plat
Records of Travis County, Texas.

TRACT 3: Lot One (1), Block One (1), AMD ADDITION, a subdivision in Travis
- ------- County, Texas, according to the map or plat thereof, recorded in
Volume 92, Pages 92-93 of the Plat Records of Travis County, Texas.

SAVE, LESS AND EXCEPT THEREFROM

A 34.481 acre tract of land out of Lot One (1) SUNRIDGE PARK SECTION 2, a
subdivision in Travis County, Texas according to the map or plat thereof,
recorded in Volume 77, Pages 118-119 of the Plat Records of Travis County,
Texas, more particularly described as follows on the following Exhibit A-2.
-----------

A-1-1

EXHIBIT A-2
to Security Agreement

The following described real property and the improvements located thereon
are expressly excluded and excepted from the Fab 25 Site, and none of the
following real property or improvements located thereon shall constitute a part
of the Fab 25 Facilities:

FOR A 34.481-ACRE TRACT OF LAND SITUATED IN THE CITY OF
AUSTIN, TRAVIS COUNTY, TEXAS, SAID 34.481-ACRE TRACT
BEING A PORTION OF LOT 1 OF "SUNRIDGE PARK, SECTION TWO",
A SUBDIVISION ACCORDING TO THE PLAT THEREOF RECORDED IN
BOOK 77, PAGES 118-119 OF THE PLAT RECORDS OF TRAVIS
COUNTY, TEXAS, SAID 34.481-ACRE TRACT BEING MORE
PARTICULARLY DESCRIBED BY METES AND BOUNDS AS FOLLOWS:

BEGINNING on a 3/4-inch-diameter iron pipe found in the northerly
right-of-way line of Ben White Boulevard (right-of-way varies), being the
southeasterly corner of Lot A of "Briarton Subdivision", a subdivision of record
in Book 72, Page 40 of said Plat Records, being also the southwesterly corner of
said Lot 1 of "Sunridge Park, Section Two" and POINT OF BEGINNING hereof;

THENCE departing the northerly right-of-way line of Ben White
Boulevard, in part with the easterly boundary line of said "Briarton
Subdivision", in part with the easterly boundary line of a tract of land
conveyed to Azur Property Investment U.S.A., Inc. by deed recorded in Volume
8936, Page 289 of the Real Property Records of Travis County, Texas, same being
the westerly boundary line of said Lot 1 of "Sunridge Park, Section Two",
N31(Degrees)01'17"E for a distance of 788.86 feet to a 1-inch-diameter iron pipe
found on an angle point hereof;

THENCE continuing with the easterly boundary line of said Azur
Property Investment U.S.A., Inc. tract, same being the westerly boundary line of
said Lot 1, N59(Degrees)34'01"W for a distance of 506.23 feet to a 1/2-inch-
diameter iron rod in concrete found, being a southeasterly corner of "Sunridge
Park, Section One" a subdivision according to the plat thereof recorded in Book
85, Pages 107B, 107C and 107D, of said Plat Records, being an angle point
hereof;

THENCE with the easterly boundary line of said "Sunridge Park,
Section One", continuing with the westerly boundary line of said Lot 1 of
"Sunridge Park, Section Two", N31(Degrees)03'00"E (Bearing Basis) for a distance
of 1303.59 feet to a 1-inch-diameter iron pipe in concrete found, being on an
angle point in said easterly boundary line, same being the most northerly corner
of said Lot 1, for the most northerly corner of the herein-described tract;


A-2-1

THENCE in part with the easterly boundary line of said "Sunridge
Park, Section One", the southerly boundary line of Lot 6 of "University Business
Park", a subdivision according to the plat thereof recorded in Book 85, Pages
52C, 52D and 53A of said Plat Records and the northerly boundary line of said
Lot 1 of "Sunridge Park, Section Two", S58(Degrees)57'53"E, at a distance of
456.12 feet pass an iron rod found, being on an easterly corner of said
"Sunridge Park, Section One", same being a southwesterly corner of said Lot 6 of
"University Business Park", continuing for a total distance of 732.26 feet to a
cotton gin spindle set in asphalt on an angle point hereof;

THENCE departing the southerly boundary line of said Lot 6 of
"University Business Park", through the interior of said Lot 1 of "Sunridge
Park, Section Two", the following fourteen (14) courses and distances:

1) S28(Degrees)25'15"W, for a distance of 67.41 feet to a cotton gin
spindle set in asphalt on an angle point hereof;

2) S59(Degrees)50'45"E, for a distance of 172.50 feet to a PK nail set
in concrete on an angle point hereof;

3) S18(Degrees)39'30"E, for a distance of 333.73 feet to a PK nail set
in concrete on an angle point hereof;

4) S71(Degrees)27'23"W, for a distance of 374.42 feet to a PK nail set
in concrete on an angle point hereof;

5) N52(Degrees)04'12"W, for a distance of 55.03 feet to a PK nail set
in concrete on an angle point hereof;

6) S70(Degrees)25'04"W, for a distance of 201.88 feet to a PK nail set
in asphalt on an angle point hereof;

7) S18(Degrees)47'06"E, for a distance of 207.97 feet to a PK nail set
in concrete on an angle point hereof;

8) S71(Degrees)22'55"W, for a distance of 88.20 feet to a cotton gin
spindle set in asphalt on an angle point hereof;

9) S18(Degrees)59'15"E, for a distance of 68.88 feet to punch hole set
in a concrete gutter on an angle point hereof;

A-2-2

10) S70(Degrees)47'24"W, for a distance of 243.96 feet to a 1/2-inch-
diameter iron rod with Baker-Aicklen cap set on an angle point
hereof;

11) S18(Degrees)31'43"E, for a distance of 456.56 feet to a cotton gin
spindle set in asphalt on an angle point hereof;

12) N81(Degrees)16'37"W, for a distance of 88.07 feet to a cotton gin
spindle set in asphalt on the point of curvature of a non-
tangent curve to the left, from which the radius point of said curve
bears S04(Degrees)43'15"W, a distance of 325.45 feet;

13) with the arc of said non-tangent curve to the left, having a radius
of 325.45 feet, and interior angle of 22(Degrees)54'28", an arc
length of 130.12 feet and a chord which bears S83(Degrees)16'01"W for
a distance of 129.26 feet to a cotton gin spindle set in asphalt on
an angle point hereof;

14) S09(Degrees)28'45"W, for a distance of 368.38 feet to a 1/2-inch-
diameter iron rod with a Baker-Aicklen cap set on a point in the
aforementioned northerly right-of-way line of Ben White Boulevard,
being also the southerly boundary line of said Lot 1, from which a
1/2-inch-diameter iron rod with Baker-Aiklen cap set on a point being
the southeasterly corner of said Lot 1 of "Sunridge Park, Section
Two", bears S78(Degrees)29'31"E a distance of 267.25 feet;

THENCE with said northerly right-of-way line, same being the
southerly boundary line of said Lot 1 of "Sunridge Park, Section Two", the
following two (2) courses and distances:

1) N78(Degrees)29'31"W, for a distance of 264.94 feet to a concrete
highway right-of-way marker found on an angle point hereof;

2) N78(Degrees)30'31"W, for a distance of 295.85 feet to the POINT OF
BEGINNING and containing 34.481 acres of land.

A-2-3

Schedule 1
to Security Agreement


Specified Contracts
-------------------


1. Product Supply and Operating Agreement, dated as of June 1, 1995, between
the Company and Air Products and Chemicals, Inc. ("APCI") (relating to
----
supply of argon, hydrogen, helium and nitrogen (hauled in liquid) to the
Company's microchip fabrication facilities known as "Fab 10," "Fab 14,"
"Fab 15" and "Fab 25").

2. Product Supply Agreement, dated as of July 1, 1994, between the Company and
APCI (relating to supply of nitrogen and oxygen to Fab 10, Fab 14, Fab 15
and Fab 25).

3. Air Rights Lease Agreement, dated as of July 1, 1994, between the Company
and APCI.

Schedule 2
to Security Agreement


Locations
---------


The Company's chief executive office:

Advanced Micro Devices, Inc.
One AMD Place
Sunnyvale, CA 94086

Other California locations:

Advanced Micro Devices, Inc.
1160 Kern
Sunnyvale, CA 94086

Advanced Micro Devices, Inc.
915 DeGuigne Drive
Sunnyvale, CA 94086

Advanced Micro Devices, Inc.
3625 Peterson Way
Santa Clara, CA 95051

Location of Fab 25 Site:

Advanced Micro Devices, Inc.
5204 East Ben White Boulevard
Austin, TX 78741

Other Texas locations:

Advanced Micro Devices, Inc.
5501 East Oltorf
Austin, TX 78741

Advanced Micro Devices, Inc.
5240 East Ben White Boulevard
Austin, TX 78741