Collateral Trust Agreement

EXHIBIT 10.3

COLLATERAL TRUST AGREEMENT

COLLATERAL TRUST AGREEMENT, dated as of October 24, 2006, by and among ADVANCED MICRO DEVICES, INC., a Delaware corporation (the " Borrower" ), the Subsidiaries of the Borrower listed on the signature pages hereof (together with the Borrower and each other Subsidiary of the Borrower which becomes a party hereto pursuant to Section 6.11, the " Obligors" ), and WELLS FARGO BANK, N.A., a national banking association, as collateral agent (the " Collateral Agent" ). W I T N E S S E T H : WHEREAS, in order to induce the Lenders to enter into the Credit Agreement, dated as of the date hereof (as amended, supplemented, amended and restated or otherwise modified from time to time, the " Credit Agreement" ), among the Borrower, the several banks and other financial institutions or entities from time to time parties thereto (the " Lenders" ), Morgan Stanley Senior Funding, Inc., as syndication agent, Wells Fargo Bank, N.A., as collateral agent, and Morgan Stanley Senior Funding, Inc., as administrative agent for the Lenders, the Obligors granted Collateral Agent for the benefit of the Secured Parties a Lien on the Collateral to secure the Credit Agreement Obligations;

WHEREAS, pursuant to an Indenture, dated as of October 29, 2004 (as amended, supplemented, amended and restated or otherwise modified from time to time, the " 2012 Notes Indenture" ), between the Borrower and Wells Fargo Bank, N.A., as trustee (in such capacity, together with any successor in such capacity, the " Indenture Trustee" ), the Borrower issued and sold its 7.75% Senior Notes due 2012 (the " 2012 Notes" );

WHEREAS, subject to certain exceptions, the 2012 Notes Indenture requires that effective provision be made so that the 2012 Notes be secured equally and ratably with the Credit Agreement Obligations so secured for so long as the Credit Agreement Obligations are so secured; and

WHEREAS, the Collateral Agent has been appointed by the Lenders and the Indenture Trustee to act as collateral agent with respect to the Collateral and the Secured Instruments and is entering into this Agreement to, among other things, define the rights, duties, authority and responsibilities of the Collateral Agent and the relationships among the Secured Parties regarding their interests in the Collateral;

NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereto agree as follows:

DECLARATION OF TRUST:

NOW, THEREFORE, in order to secure the payment of the Secured Obligations and in consideration of the promises and the mutual agreements set forth herein, the Collateral Agent does hereby declare that it holds and will hold as trustee in trust under this Agreement all of its

right, title and interest in, to and under the Security Documents and the collateral granted to the Collateral Agent thereunder whether now existing or hereafter arising (and each Obligor does hereby consent thereto).

TO HAVE AND TO HOLD the Security Documents and the entire Collateral (the right, title and interest of the Collateral Agent in the Security Documents and the Collateral being hereinafter referred to as the " Trust Estate" ) unto the Collateral Agent and its successors in trust under this Agreement and its assigns and assigns forever.

IN TRUST NEVERTHELESS, under and subject to the conditions herein set forth and for the benefit of the Secured Parties, and for the enforcement of the payment of all Secured Obligations, and as security for the performance of and compliance with the covenants and conditions of this Agreement, each of the Secured Instruments and each of the Security Documents.

PROVIDED , HOWEVER , that these presents are upon the condition that if the conditions set forth in Section 6.10 shall be satisfied, then this Agreement, and the estates and rights hereby assigned, shall cease, determine and be void; otherwise they shall remain and be in full force and effect. IT IS HEREBY FURTHER COVENANTED AND DECLARED, that the Trust Estate is to be held and applied by the Collateral Agent, subject to the further covenants, conditions and trusts hereinafter set forth.

SECTION 1.

DEFINITIONS

(a) The capitalized terms used herein which are defined in, or by reference in, Schedule I hereto shall have the meanings specified therein.

(b) 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, and section, clause, schedule and exhibit references are to this Agreement unless otherwise specified.

(c) The term " including" is not limiting and means " including without limitation." SECTION 2.

ACTIONS BY THE COLLATERAL AGENT

2.1. General Authority of the Collateral Agent over the Collateral . Each Obligor hereby irrevocably constitutes and appoints the Collateral Agent, with full power of substitution, as its true and lawful attorney-in-fact with full power and authority in the name of such Obligor or in its own name, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to carry out the terms of this Agreement and the Security Documents and accomplish the purposes hereof and thereof and, without limiting the generality of the foregoing, each Obligor hereby acknowledges that the Collateral Agent shall have all powers and remedies set forth in the Security Documents; provided that the


2

Collateral Agent and the Secured Parties agree, solely for their own mutual benefit (and not for the benefit of any Obligor), that the Collateral Agent shall exercise all of its powers, rights and remedies with respect to the Obligors and the Collateral under the Secured Instruments solely in accordance with Requisite Instructions. 2.2. Right to Initiate Judicial Proceedings . Without limiting any provision contained in Section 2.1 , the Collateral Agent, subject to the provisions of clause (b) of Section 2.4 , (i) shall have the right and power to institute and maintain such suits and proceedings as it may deem appropriate to protect and enforce the rights vested in it by this Agreement and each Security Document and (ii) may proceed by suit or suits at law or in equity to enforce such rights and to foreclose upon the Collateral and to sell all or, from time to time, any of the Collateral under the judgment or decree of a court of competent jurisdiction, in the case of each of clauses (i) and (ii) , solely in accordance with Requisite Instructions delivered to the Collateral Agent. 2.3. Exercise of Powers; Requisite Instructions . (a) All of the powers, rights and remedies of the Collateral Agent set forth in this Agreement may be exercised by the Collateral Agent in respect of any Security Document as though set forth in full therein, and all of the powers, rights and remedies of the Collateral Agent and the Administrative Agent as set forth in any Security Document may be exercised from time to time as set forth herein and therein; provided that the Collateral Agent shall exercise all such powers, rights and remedies solely in accordance with Requisite Instructions delivered to the Collateral Agent, and shall not exercise any such powers, rights or remedies unless it shall have received Requisite Instructions requiring such exercise.

(b) The Control Party shall have the right, by delivery of Requisite Instructions to the Collateral Agent, to direct the time, method and place of conducting any proceeding for any right or remedy available to the Collateral Agent, or of exercising any trust or power conferred on the Collateral Agent, or for the appointment of a receiver, or to direct the taking or the refraining from taking of any action authorized by this Agreement or any Security Document; provided that (i) such Requisite Instructions shall not conflict with any provision of law or of this Agreement, any Security Document, the Credit Agreement or the 2012 Notes Indenture (including, without limitation Section 4.11 of the 2012 Notes Indenture) or the 2012 Notes and (b) the Collateral Agent shall be adequately secured and indemnified as provided in clause (d) of Section 5.4 . 2.4. Remedies Not Exclusive . (a) No remedy conferred upon or reserved to the Collateral Agent herein or in the Security Documents is intended to be exclusive of any other remedy or remedies, but every such remedy shall be cumulative and shall be in addition to every other remedy conferred herein or in any Security Document or now or hereafter existing at law or in equity or by statute; provided that the Collateral Agent shall exercise any and all remedies solely in accordance with Requisite Instructions delivered to the Collateral Agent.

(b) No delay or omission by the Collateral Agent to exercise any right, remedy or power hereunder or under any Security Document shall impair any such right, remedy or power or shall be construed to be a waiver thereof, and every right, power and remedy given by this Agreement or any Security Document to the Collateral Agent may be exercised from time to time and as often as may be deemed expedient by the Collateral Agent; provided that the Collateral Agent shall exercise all such powers, rights and remedies solely in accordance with Requisite Instructions delivered to the Collateral Agent.


3

(c) If the Collateral Agent shall have proceeded to enforce any right, remedy or power under this Agreement or any Security Document and the proceeding for the enforcement thereof shall have been discontinued or abandoned for any reason or shall have been determined adversely to the Collateral Agent, then the Obligors, the Collateral Agent and the Secured Parties shall, subject to any determination in such proceeding, severally and respectively be restored to their former positions and rights hereunder or thereunder with respect to the Trust Estate and in all other respects, and thereafter all rights, remedies and powers of the Collateral Agent shall continue as though no such proceeding had been taken.

(d) All rights of action and of asserting claims upon or under this Agreement and the Security Documents may be enforced by the Collateral Agent without the possession of any Secured Instrument or instrument evidencing any Secured Obligation or the production thereof at any trial or other proceeding relative thereto, and any suit or proceeding instituted by the Collateral Agent shall be, subject to clause (d) of Section 5.3 and clause (b)(ii) of Section 5.9 , brought in its name as Collateral Agent and any recovery of judgment shall be held as part of the Trust Estate.

2.6. Limitation by Law . All rights, remedies and powers provided herein may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law, and all the provisions hereof 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.

2.6. Rights of Secured Parties under Secured Instruments . Notwithstanding any other provision of this Agreement or any Security Document, the right of each Secured Party to receive payment of the Secured Obligations held by such Secured Party when due (whether at the stated maturity thereof, by acceleration or otherwise) as expressed in the related Secured Instrument or other instrument evidencing or agreement governing a Secured Obligation or to institute suit for the enforcement of such payment on or after such due date, and the obligation of the Obligors to pay such Secured Obligation when due, shall not be impaired or affected without the consent of such Secured Party given in the manner prescribed by the Secured Instrument pursuant to which such Secured Obligation is outstanding.

SECTION 3.

COLLATERAL ACCOUNT; DISTRIBUTIONS

3.1. The Collateral Account . On the date hereof there shall be established and, at all times thereafter until the trusts created by this Agreement shall have terminated, there shall be maintained with the Collateral Agent at the office of the Collateral Agent' s corporate trust division an account which shall be entitled the " Advanced Micro Devices Collateral Account" (the " Collateral Account" ). All moneys which are required by this Agreement or any Security Document to be delivered to the Collateral Agent or which are received by the Collateral Agent or any agent or nominee of the Collateral Agent in respect of the Collateral, whether in


4

connection with the exercise of the remedies provided in this Agreement or any Security Document or otherwise, shall be deposited in the Collateral Account and held by the Collateral Agent as part of the Trust Estate and applied in accordance with the terms of this Agreement (including Section 3.4 ). Notwithstanding the foregoing, all moneys received by the Collateral Agent when no Event of Default exists shall promptly be paid over to the Obligors in accordance with their respective interests.

3.2. Control of Collateral Account . All right, title and interest in and to the Collateral Account shall vest in the Collateral Agent, and funds on deposit in the Collateral Account shall constitute part of the Trust Estate. The Collateral Account shall be subject to the exclusive dominion and control of the Collateral Agent.

3.3. Investment of Funds Deposited in Collateral Account . The Collateral Agent shall, in accordance with Requisite Instructions delivered to the Collateral Agent, invest and reinvest moneys on deposit in the Collateral Account at any time in Cash Equivalents. All such investments and the interest and income received thereon and the net proceeds realized on the sale or redemption thereof shall be held in the Collateral Account as part of the Trust Estate. The Collateral Agent shall not be responsible for any diminution in funds resulting from such investments. In the absence of any Requisite Instructions, the Collateral Agent shall have no obligation to invest or reinvest moneys.

3.4. Application of Moneys . (a) The Collateral Agent shall have the right (pursuant to Section 4.6 ) at any time to apply moneys held by it in the Collateral Account to the payment of due and unpaid Collateral Agent Fees. Notwithstanding anything to the contrary contained herein, the Collateral Agent shall, pursuant to Requisite Instructions, transfer money held by it in the Collateral Account to any depository bank of any Obligor in accordance with any control agreement entered into with such depository bank pursuant to the Collateral Agreement, solely to reimburse such depository bank for checks, ACH transfers and other items which are recalled, dishonored, reversed or returned to such depository bank in respect of any deposit account subject to any such control agreement.

(b) All remaining moneys held by the Collateral Agent in the Collateral Account or received by the Collateral Agent while an Event of Default exists shall, to the extent available for distribution (it being understood that the Collateral Agent may liquidate investments prior to maturity in order to make a distribution pursuant to this Section 3.4 ), be promptly distributed (subject to the provisions of Section 3.5 ) by the Collateral Agent in the following order of priority: First : to the Collateral Agent for any unpaid Collateral Agent Fees and then to any Secured Party which has theretofore advanced or paid any Collateral Agent Fees constituting administrative expenses allowable under Section 503(b) of the Bankruptcy Code, an amount equal to the amount thereof so advanced or paid by such Secured Party and for which such Secured Party has not been previously reimbursed;

Second : to any Secured Party which has theretofore advanced or paid any Collateral Agent Fees other than such administrative expenses, an amount equal to the amount thereof so advanced or paid by such Secured Party and for which such Secured Party has not been previously reimbursed;

5

Third : to the Secured Parties in an amount equal to (i) in the case of holders of the Credit Agreement Obligations (other than with respect to Specified Hedge Agreements) and the 2012 Notes and the 2012 Indenture, the unpaid principal of, unpaid interest on and other unpaid charges, if any, in respect of such Secured Obligations then outstanding whether or not then due and payable, and (ii) in the case of holders of Credit Agreement Obligations with respect to Specified Hedge Agreements, the amount of credit exposure of such holders under such Specified Hedge Agreements; and, in any case, if such moneys shall be insufficient to pay such amounts in full, then ratably (without priority of any one over any other) to the Secured Parties in proportion to such amounts; provided that, for purposes hereof, the " credit exposure" at any time of any Secured Party with respect to a Specified Hedge Agreement to which such Secured Party is a party shall be determined (a) in accordance with any applicable schedule between the applicable Obligor and such Secured Party, if any, or (b) otherwise at such time in accordance with the customary methods of calculating credit exposure under similar arrangements by the counterparty to such arrangements, so long as such Specified Hedge Agreement has been terminated by the applicable counterparty;

Fourth : to the Secured Parties, amounts equal to all other sums which constitute Secured Obligations, including the reasonable costs and expenses of the Secured Parties and their representatives which are due and payable under the relevant Secured Instruments and which constitute Secured Obligations as of the date of distribution, and, if such moneys shall be insufficient to pay such sums in full, then ratably to the Secured Parties in proportion to such sums; and Fifth : any surplus then remaining shall be paid to the Obligors or their successors or assigns or to whomsoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct.

(c) The term " unpaid" as used in clause (b) of this Section 3.4 refers:

(i) in the absence of a bankruptcy proceeding with respect to the applicable Obligor, to all the outstanding Secured Obligations, and

(ii) during the pendency of a bankruptcy proceeding with respect to the applicable Obligor, to all amounts allowed by the bankruptcy court in respect of Secured Obligations as a basis for distribution (including estimated amounts, if any, allowed in respect of contingent claims), to the extent that prior distributions (whether actually distributed or set aside pursuant to Section 3.5 ) have not been made in respect thereof.

(d) The Collateral Agent shall make all payments and distributions under this Section 3.4 : (i) on account of Credit Agreement Obligations, to the Administrative Agent for re-distribution among the holders of the Credit Agreement Obligations in accordance with the provisions of the Credit Agreement, (ii) on account of the 2012 Notes (subject to Section 3.5 ), to


6

the Indenture Trustee for re-distribution among the holders of the 2012 Notes in accordance with the provisions of the 2012 Notes Indenture and (iii) to the Obligors pursuant to sub-clause sixth of clause (b) of Section 3.4 , as directed in writing by the Borrower. 3.5. Application of Moneys Distributable to Indenture Trustee . If at any time any moneys collected or received by the Collateral Agent pursuant to this Agreement are distributable pursuant to Section 3.4 to the Indenture Trustee, and if the Indenture Trustee shall notify the Collateral Agent in writing that no provision is made under the 2012 Notes Indenture for the application by such Indenture Trustee of such moneys (whether because the Secured Obligations issued under the 2012 Notes Indenture have not become due and payable or otherwise) and that the 2012 Notes Indenture does not effectively provide for the receipt and the holding by the Indenture Trustee of such moneys pending the application thereof, then the Collateral Agent, after receipt of such notification, shall, at the direction of the Indenture Trustee, invest and reinvest such amounts in Cash Equivalents maturing within 90 days after they are acquired by the Collateral Agent and shall hold all such amounts so distributable and all such investments and the net proceeds thereof in trust solely for the Indenture Trustee (in its capacity as trustee) and for no other purpose until such time as the Indenture Trustee shall request in writing the delivery thereof by the Collateral Agent for application pursuant to the 2012 Notes Indenture. The Collateral Agent shall not be responsible for any diminution in funds resulting from investments made at the direction of the Indenture Trustee or from holding such monies uninvested.

3.6. Collateral Agent' s Calculations . In making the determinations and allocations required by Section 3.4 , the Collateral Agent may conclusively rely upon information supplied by the Administrative Agent as to the amounts payable with respect to Credit Agreement Obligations and upon information supplied by the Indenture Trustee as to the amounts payable with respect to the 2012 Notes, and the Collateral Agent shall have no liability to any of the Secured Parties for actions taken in reliance on such information. If, in the sole discretion of the Collateral Agent, the distribution of any amount received by the Collateral Agent in such capacity hereunder or under the Security Documents might involve the Collateral Agent in liability, or might be prohibited hereby, or might be contrary to any law, rule or regulation, the Collateral Agent may refrain from making distribution until the Collateral Agent' s right to make such distribution has been adjudicated by a court of competent jurisdiction. All distributions made by the Collateral Agent pursuant to Section 3.4 shall be (subject to any decree of any court of competent jurisdiction) final (absent manifest error), and the Collateral Agent shall have no duty to inquire as to the application by the Administrative Agent or the Indenture Trustee of any amounts distributed to them by the Collateral Agent hereunder.

3.7. Pro Rata Sharing . If, through the operation of any bankruptcy, reorganization, insolvency or other laws or otherwise, the Collateral Agent' s security interest hereunder and under the Security Documents is enforced with respect to some, but not all, of the Secured Obligations then outstanding, the Collateral Agent shall nonetheless apply the Proceeds of the Collateral for the benefit of the holders of all Secured Obligations in the proportions and subject to the priorities specified in Section 3.4 . To the extent that the Collateral Agent distributes Proceeds collected with respect to Secured Obligations held by one holder to or on behalf of Secured Obligations held by a second holder, the first holder shall be deemed to have purchased a participation in the Secured Obligations held by the second holder, or shall be subrogated to the rights of the second holder to receive any subsequent payments and distributions made with respect to the portion thereof paid or to be paid by the application of such Proceeds.


7

SECTION 4.

AGREEMENTS WITH COLLATERAL AGENT

4.1. Information as to Secured Parties, Administrative Agent and Indenture Trustee . The Borrower shall deliver to the Collateral Agent from time to time after an Event of Default has occurred and is continuing under the Credit Agreement or the 2012 Notes Indenture, upon request of the Collateral Agent, a list setting forth as of a date not more than 30 days prior to the date of such delivery, (i) the aggregate unpaid principal amount of Credit Agreement Obligations outstanding and the name and address of the Administrative Agent, and (ii) the aggregate unpaid principal amount of 2012 Notes outstanding under the Indenture and the name and address of the Indenture Trustee thereunder. In addition, the Borrower will promptly notify the Collateral Agent of each change in the identity of the Administrative Agent or the Indenture Trustee. On or prior to the date hereof, the Administrative Agent will deliver to the Collateral Agent the names of its officers that are authorized to give directions hereunder on behalf of the Administrative Agent. The Borrower will request that the Administrative Agent notify the Collateral Agent of any change in such officers prior to the date of any such change. If the Collateral Agent does not receive the names of such officers, the Collateral Agent may rely on any person purporting to be authorized to give directions hereunder on behalf of the Administrative Agent. If the Collateral Agent is not informed of changes in the officers of the Administrative Agent, the Collateral Agent may rely on the information previously provided to the Collateral Agent.

4.2. Compensation and Expenses . The Borrower agrees to pay to the Collateral Agent, from time to time within 30 days following receipt of an invoice therefor all of the fees (as set forth in the separate correspondence between the Borrower and the Collateral Agent), costs and expenses of the Collateral Agent (including the fees and disbursements of its counsel, advisors and agents which, in the case of the immediately succeeding clause (A) only, shall be reasonable) (A) arising in connection with the preparation, execution, delivery, modification, and termination of this Agreement and each Security Document or the enforcement of any of the provisions hereof or thereo ...