Document:

exv10w27

 

Exhibit 10.27

                                        May 15, 2006

Mark R. Kent

1135 Palomar Drive

Redwood City, CA 94062

     Re: Separation Benefits and Release Agreement

Dear Mark:

     This letter (this “Agreement”) confirms the agreement between you (“you” or the “Employee”)
and Transmeta Corporation (the “Company” or “Transmeta”) concerning the terms of your separation,
including your compensation for your undertaking of certain responsibilities and your release of
claims, as follows:

     1. Separation Date: You and the Company agree that your regular employment with the
Company terminated as of and effective May 15, 2006 (the “Separation Date”). You hereby resign as
the Company’s chief financial officer and any other offices, if any, that you hold in the Company
or any of its subsidiaries. The Company agrees to provide you with certain consideration in
exchange for your release of claims and other covenants as set out herein.

     2. Payment of Final Wages: You acknowledge that Transmeta has provided you with a
final paycheck for all wages, salary, bonuses, accrued vacation and any similar payments due you
from Transmeta as of the Separation Date.

     3. Additional Performance Payment: In addition to your final pay check, Transmeta
will pay you an additional cash performance payment of $50,000. Transmeta will make this payment
in one lump sum payment within 90 days after the Separation Date; provided that you have signed and
returned this Agreement, and have returned to Transmeta all Transmeta property and Proprietary
Information in accordance with Section 7.

     4. Additional Health Benefits: Pursuant to the provisions of COBRA, the Company will
continue to pay for your present election of group health benefits for you and your dependents
until you find employment providing comparable health benefits, or through and including August 15,
2006, whichever occurs first. Following such period you will be entitled to continue
your group coverage under COBRA, but you must do so at your own expense.

     5. Acknowledgment of Consideration: You acknowledge that the various payments
described above in paragraphs 2, 3, and 4 will fully satisfy Transmeta’s obligations for salary and
benefits owed to you by reason of your employment with Transmeta, and also constitute valuable
consideration for your undertaking of responsibilities and release of claims under this Agreement.

Transmeta Corporation 6 3990 Freedom Circle 6 Santa Clara, California 95054 6 Ph: 408.919.3000 6 Fax: 408.919.6540

 

 

Mark R. Kent

May 15, 2006

Page 2

     6. Consulting Agreement. The Company agrees to engage you, and you agree to serve the
Company, as a consultant following the Separation Date under the terms and conditions of the
Consulting Agreement attached as Exhibit A to this Agreement (the “Consulting Agreement”). The
Consulting Agreement will be effective as of the Separation Date.

     7. Transmeta Property and Proprietary Information: You acknowledge that you are bound
by and will comply with your Agreement Regarding Proprietary Information & Inventions with
Transmeta, attached hereto as Exhibit B (the “Confidentiality Agreement”). You confirm that you
have not taken from Transmeta, or have otherwise returned to Transmeta, all documents, data,
equipment and things that constitute Transmeta property or Proprietary Information (as defined in
the Confidentiality Agreement) except for such Proprietary Information as you may reasonably need
to perform your obligations under the Consulting Agreement, including all notebook computer
document and data files. Transmeta expressly reserves all legal rights relating to its Proprietary
Information or other property. It is anticipated that you will have continued use of your
Transmeta notebook computer and continued access to the Transmeta email system in order for you to
provide services under the Consulting Agreement, and that you will return the notebook computer and
any Transmeta Proprietary Information to the Company on or promptly after the end of the term of
the Consulting Agreement, unless otherwise agreed by you and the Company.

     8. Release of Claims: The payments and promises set forth in this Agreement are in
full satisfaction of all accrued salary, vacation pay, bonus pay, termination benefits, stock
options or other compensation to which you may be entitled by virtue of your employment with
Transmeta, including your separation from Transmeta, except for compensation to be paid to you
under the Consulting Agreement. You hereby release and waive any other claims you may have against
Transmeta and its agents, officers, employees, directors, subsidiaries, affiliates, successors and
assigns (collectively “Releasees”), whether known or not known, including, without limitation,
claims under any employment laws, including, but not limited to, claims of unlawful discharge,
breach of contract, fraud, physical injury, emotional distress, claims under Title VII of the 1964
Civil Rights Act, as amended, the California Fair Employment and Housing Act and any other laws
and/or regulations relating to employment or employment discrimination, including, without
limitation, claims based on age or under the Age Discrimination in Employment Act as amended by the
Older Workers Benefit Protection Act. Notwithstanding anything to the contrary in this Agreement,
the release and waiver in this Section 8 does not extend to releasing the Company from any
responsibilities, or liability the Company may incur, through a breach of this Agreement, the
Consulting Agreement or the Indemnity Agreement (as defined below in Section 9), and you retain all
rights and claims with respect to any such breach.

     You represent and warrant that you have not sold, assigned, transferred, or otherwise disposed
of any claim relating to any matter covered by this section, and agree to indemnify and hold
harmless the Releasees from any claim which may be based upon or which may arise out of or in
connection with any such sale, assignment, transfer, or disposal.

Transmeta Corporation 6 3990 Freedom Circle 6 Santa Clara, California 95054 6 Ph: 408.919.3000 6 Fax: 408.919.6540

 

 

Mark R. Kent

May 15, 2006

Page 3

     By signing below, you expressly waive any benefits of Section 1542 of the Civil Code of the
State of California, which provides as follows:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE
MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

     9. Indemnity: Notwithstanding the foregoing, the release and waiver in Section 9
shall not extend to or waive any rights to or claims for indemnification or contribution, including
associated expenses and attorneys fees and the advancement of either of the foregoing, that you
currently have or may in the future have under any of the following: the Articles of Incorporation
or By-Laws of Transmeta, any applicable insurance policy, or that certain Indemnity Agreement
between you and the Company dated as of September 7, 2004 (the “Indemnity Agreement”).

     10. Cooperation. As a former financial manager of Transmeta, you agree to assist
Transmeta, upon reasonable request and subject to reasonable accommodation of your personal and
business schedule, in connection with any pending or future dispute, litigation, arbitration or
similar proceeding or investigation (“Dispute”) or any regulatory request involving Transmeta or
any of its officers or directors, provided that such Dispute or regulatory request relates to a
matter of which you had knowledge or for which you were responsible prior to May 15, 2006, and that
such request for assistance is neither unduly burdensome nor unreasonable. Transmeta shall
promptly reimburse you for, or promptly advance to you, all costs and expenses that you reasonably
incur in connection with rendering assistance to Transmeta or any of its officers or directors in
connection with any such Dispute or regulatory request, including without limitation reasonable
fees of separate counsel for you upon reasonable determination that the matter is of such nature
that you should have separate representation.

     11. No Admission of Liability: This Agreement is not and shall not be construed or
contended by you to be an admission or evidence of any wrongdoing or liability on the part of
Transmeta or any of the Releasees. This Agreement shall be afforded the maximum protection
allowable under California Evidence Code Section 1152 and any other state or Federal provisions of
similar effect.

     12. Nondisparagement: You agree that you will not disparage Transmeta or its
products, technologies, agents, directors, officers, or employees.

     13. Entire Agreement: This Agreement constitutes the entire agreement between you and
Releasees with respect to the subject matter hereof and supersedes all prior negotiations and
agreements, whether written or oral, relating to such subject matter other than (a) the
Consulting Agreement, (b) the Confidentiality Agreement, (c) the Indemnity Agreement and (d) your
stock option agreements dated September 7, 2004 and May 9, 2005, all of which agreements (a)-(d)
continue to operate in accordance with their respective terms. It is expressly agreed that this
Agreement may not be altered, amended, modified, or otherwise changed in any respect except

Transmeta Corporation 6 3990 Freedom Circle 6 Santa Clara, California 95054 6 Ph: 408.919.3000 6 Fax: 408.919.6540

 

 

Mark R. Kent

May 15, 2006

Page 4

by
another written agreement that specifically refers to this Agreement, executed by authorized
representatives of each of the parties to this Agreement.

     14. Review of Agreement: You affirm that that you have been advised by Transmeta to
consult with an attorney of your choice concerning the terms and conditions set forth herein; that
you have been given at least twenty-one (21) days within which to consider the release and waiver
in Section 8 of this Agreement and its consequences; that you have seven (7) days after the date of
your signature on this Agreement to revoke and cancel this Agreement by written notice to
Transmeta; and that this Agreement shall not become effective or enforceable until the eighth day
following its execution.

     This offer of separation compensation in exchange for a release of claims will expire at 5:00
p.m. (PDT) on Monday, June 5, 2006.

     If you agree to abide by the terms outlined in this letter, please sign the attached copy and
return it to me.

	 	 	 	 	 	 	 
	 	 	            Very truly yours,
	 	 
	 
	 	 	 	 	 	 
	 	 	TRANSMETA CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ John O’Hara Horsley	 	 
	 

	 	 	 	 

John O’Hara Horsley
	 	 
	 

	 	 	 	Executive Vice President,	 	 
	 

	 	 	 	General Counsel & Secretary	 	 
	 
	 	 	 	 	 	 
	READ, UNDERSTOOD AND AGREED
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	Date: 5/19/06

	 	 	 	/s/ Mark R. Kent	 	 
	 

	 	 	 	 

Mark R. Kent
	 	 

Attachment A: Consulting Agreement

Attachment B: Agreement Regarding Proprietary Information & Inventions

Transmeta Corporation 6 3990 Freedom Circle 6 Santa Clara, California 95054 6 Ph: 408.919.3000 6 Fax: 408.919.6540

 

 

CONSULTING AGREEMENT

     This Consulting Agreement (“Agreement”) is entered into as of May 15, 2006, by and between
Mark R. Kent (“Kent” or the “Consultant”) and Transmeta Corporation, a Delaware corporation
(“Transmeta” or the “Company”) (each a “Party” and, collectively, the “Parties”).

RECITALS

     WHEREAS, Kent served as the Company’s Chief Financial Officer from September 7, 2004 to May
15, 2006; and

     WHEREAS, the Company now desires to engage the services of Kent as a financial consultant for
a transitional period, and Kent is willing to render, and to hold himself available to render,
consulting services to the Company during such a transitional period upon the terms and conditions
set forth herein.

AGREEMENT

     NOW, THEREFORE, in consideration of the mutual promises set forth herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties
agree as follows:

     1. Services. For the term of this Agreement, Kent shall serve as a consultant to the
Company, and shall be available to perform, and shall perform, for the Company financial consulting
services as reasonably requested, and solely as directed, by the Company’s President and Chief
Executive Officer. Kent shall personally perform any and all of the consulting services provided
for in this Agreement.

     2. Term and Termination. The term of this Agreement shall be for three months and shall
terminate as of August 15, 2006, unless extended by mutual written agreement of the Parties (the
“Termination Date”).

     3. Compensation. In consideration for Kent’s performance of financial consulting services
described in paragraph 1, the Company shall pay Kent at the rate of $22,083.33 per month for the
term of this Agreement, beginning with the pay period commencing on or about May 15, 2006. In
addition, the Company stock options previously granted to Kent on September 7, 2004 and May 9, 2005
will continue to vest in accordance with their terms through and until the Termination Date of this
Agreement, and shall be otherwise subject to the provisions of the original option grant
agreements, including provisions requiring exercise of vested stock options within three months
after the Termination Date. The Company acknowledges that the compensation for financial
consulting services provided for in this Paragraph 2 shall be in addition to the $50,000 payment to
which Kent is entitled pursuant to that certain Separation and Release Agreement between the
Parties dated May 15, 2006 and entered into concurrently herewith (the “Separation Agreement”).

Page 1 of 2

 

     4. Expenses. The Company shall reimburse Consultant for reasonable expenses incurred in his
performance of financial consulting services pursuant to this Agreement in accordance with the
Company’s policies. Consultant shall submit to the Company records of such expenses.

     5. Equipment and Support. Consultant shall have the continued use of a Company-owned
notebook computer and continued access to the Company’s email system during the term of this
Agreement. Consultant will return the notebook computer and any other equipment and information
belonging to the Company promptly after the termination of this Agreement, unless otherwise agreed.

     6. Relationship of the Parties. Kent’s consulting relationship to the Company will be that
of an independent contractor. Nothing in this Agreement is intended or shall be construed to
constitute Kent as, and Kent acknowledges that he is not, an employee of the Company. Kent
acknowledges that his performance of financial consulting services pursuant to this Agreement will
not entitle him to receive any vacation accrual or payments, or to participate in any of the
Company’s employee benefits plans, arrangements, or distributions relating to any bonus, stock
option, insurance or similar benefits provided for the Company’s employees, except for the
compensation specifically described in paragraph 2 of this Agreement and the separation benefits
specifically described in the Separation Agreement.

     7. Governing Law. This Agreement shall be construed in accordance with the laws of the State
of California, without giving effect to the principles of conflict of laws.

	 	 	 
	CONSULTANT

	 	TRANSMETA CORPORATION
	 
	 	 
	/s/ Mark R. Kent

	 	/s/ Arthur L. Swift
	 

	 	 
	Mark R. Kent

	 	By Arthur L. Swift,
	 

	 	President and Chief Executive Officer
	 
	 	 
	Date: 5/19/06

	 	Date: 5/19/06

Page 2 of 2exv10w28

 

Exhibit 10.28

AGREEMENT FOR THE PURCHASE AND SALE OF PRODUCTS

     This Agreement for the Purchase and Sale of Products (“Agreement”) is made as of the 5th
day of June, 2006 (“Effective Date”), and is entered into by and between Advanced Micro Devices,
Inc., a Delaware corporation, having an office located at One AMD Place, Sunnyvale, CA 94088,
(hereinafter referred to as “AMD”) and Transmeta Corp., a Delaware corporation with offices at 3990
Freedom Circle, Santa Clara, CA 95054 (hereinafter referred to as “Transmeta”). AMD and Transmeta
may be referred to in this Agreement as the “Party” or “Parties.”

     Whereas, AMD has a worldwide sales and marketing infrastructure that may sell Transmeta
products in volume and AMD and Transmeta generally desire to jointly leverage the AMD sales and
marketing infrastructure.

     Whereas, AMD and Transmeta specifically desire to have AMD distribute the Transmeta Efficeon
SF23J product in conjunction with CMS Software (as defined below) (collectively the “Contract
Product”) branded as an AMD Efficeon product.

          Now, therefore, the Parties agree as follows:

     1. EXCLUSIVE APPOINTMENT AND LICENSES.

     1.1 Transmeta hereby appoints AMD, during the term of this Agreement, as the independent,
exclusive worldwide reseller of the Contract Product with the exclusive right to market, promote
and sell the Contract Product. AMD may sell the Contract Product through AMD’s own sales force,
through affiliates, agents and independent distributors.

     1.2 AMD acknowledges that Transmeta licenses and does not sell any of its software or
firmware. Accordingly, subject to AMD’s compliance with the terms and conditions of this Agreement
and Transmeta obtaining appropriate consent from Microsoft, Transmeta hereby grants AMD the right
and license to distribute the FlexGo-enabled Transmeta Code Morphing Software (“CMS Software”), in
executable code, only to purchasers of the Contract Product and only for use with the Contract
Product. AMD will distribute the CMS Software to such purchasers pursuant to Transmeta’s
then-current standard license agreement, attached hereto as Exhibit 4, as provided by Transmeta to
AMD in writing from time to time. Nothing in this Agreement transfers any right, title or interest
in the CMS Software to AMD or to any of AMD’s customers. AMD will not: (i) copy, modify,
disassemble, decompile, or reverse engineer the CMS Software or (ii) use, distribute or otherwise
dispose of the CMS Software, except as expressly permitted under this Agreement. Transmeta
reserves all rights and licenses in and to the CMS Software not expressly granted in this
Agreement. Transmeta shall provide AMD with updates and new versions if and when Transmeta makes
such updates and new versions available. Within [* * *], the Parties shall mutually agree upon
additional support and maintenance obligations for the CMS Software including Transmeta providing
solutions,

 

			
	* * * 	 	Confidential treatment has been requested for portions of this exhibit. The copy filed
herewith omits the information subject to the confidential request. Omissions are designated as [* * *]. A complete version of this exhibit has been filed separately with the Securities and
Exchange Commission.

Page 1

 

changes, and corrections as required to (i) correct reported problems/errors with the CMS
Software and (ii) support deployment of the Contract Product.

     1.3 Transmeta grants to AMD a non-exclusive, non-transferable, worldwide license during the
term of this Agreement and during the period in which AMD is selling Contract Product in inventory
following termination of this Agreement to use the trademark “Efficeon” (the “Efficeon Mark”) only
in combination with the trademark “AMD” (the resulting combination mark, “AMD Efficeon”, is
referred to herein as the “AMD Efficeon Mark”) and only in connection with AMD’s marketing,
promotion, distribution and sale of the Contract Product. The actual use, quality and style of the
AMD Efficeon Mark and the manner in which the AMD Efficeon Mark may appear or be used shall be
subject to Transmeta’s trademark guidelines as provided to AMD, except as expressly provided in
this Section 1.3. Except as otherwise expressly agreed to in writing by Transmeta, AMD has no
other right to use the Efficeon Mark. AMD acknowledges and agrees that Transmeta owns the Efficeon
Mark and that any and all goodwill and other proprietary rights that are created by or that result
from AMD’s use of the Efficeon Mark hereunder inure solely to the benefit of Transmeta. AMD will
not take, to AMD’s knowledge, any action in derogation of Transmeta’s rights in the Efficeon Mark,
including, without limitation, applying to register any trademark, trade name or other designation
that includes the Efficeon Mark or is confusingly similar to the Efficeon Mark. AMD will cause to
be abandoned any applications filed by any of its affiliates, agents or distributors for any
trademark or other designation that includes the Efficeon Mark in breach of this Section.

     1.4 During the term of this Agreement, AMD will not represent, promote or distribute any
products that are directly competitive with the Contract Product. For purposes hereof, a product
shall be deemed directly competitive if it includes (i) secured processing capability consistent
with Microsoft’s FlexGo requirements; (ii) provides substantially similar performance; and (iii)
dissipates substantially similar power. For purposes of this Agreement, “FlexGo” shall mean
Microsoft’s proprietary security technology to enable end users to use or download certain products
and services and/or to access certain software or hardware functionality solely for limited periods
of time or for specific tasks, to support a variety of business models including customer offerings
that are provided on a pre-paid, subscription or other basis.

     1.5 Each Party will: (i) avoid deceptive or unethical practices that are or might be
detrimental to the other Party or the Contract Product; (ii) not make any representations,
warranties or guarantees on behalf of the other Party; and (iii) not make any representations,
warranties or guarantees with respect to the Contract Product other than those contained in the
Transmeta’s standard marketing materials for the Contract Product or other material regarding the
Contract Product Transmeta has made publicly available.

     2. SPECIFICATIONS

     2.1 The specifications for the Contract Product are as set forth in Exhibit 1 attached hereto
(the “Specifications”). Transmeta will immediately notify AMD in writing of any changes to such
Specifications and/or changes to form, fit or function that would affect the Contract Products
supplied by Transmeta to AMD hereunder. Any changes to such specifications, form, fit or function
shall be subject to AMD’s prior written approval, which consent shall not be unreasonably withheld.

 

			
	* * * 	 	Confidential treatment has been requested for portions of this exhibit. The copy filed
herewith omits the information subject to the confidential request. Omissions are designated as [* * *]. A complete version of this exhibit has been filed separately with the Securities and
Exchange Commission.

Page 2

 

     2.2 Transmeta agrees that it shall not use AMD’s logo except to mark Contract Products to be
delivered to AMD under this Agreement in accordance with Exhibit 1. If AMD’s logo has been marked
on Contract Products which are subsequently rejected by AMD, Transmeta will accept the return of
such rejects and destroy such rejects. The actual use, quality and style of the AMD logo and the
manner in which the AMD logo may appear or be used shall be subject to AMD’s trademark guidelines
provided to Transmeta or located on AMD’s website. Except as otherwise expressly agreed to in
writing by AMD, Transmeta has no other right to use the AMD logo. Transmeta acknowledges and
agrees that AMD owns the AMD logo and that any and all goodwill and other proprietary rights that
are created by or that result from Transmeta’s use of the AMD logo hereunder inure solely to the
benefit of AMD. Transmeta will not take, to Transmeta’s knowledge, any action in derogation of
AMD’s rights in the AMD logo, including, without limitation, applying to register any trademark,
trade name or other designation that is confusingly similar to the AMD logo.

     3. PRICING

     3.1 Pricing for the Contract Product shall be as provided in this Section 3.1:

     3.1.1 The first [* * *] purchased by AMD from Transmeta shall be at a price of [* * *].

     3.1.2 For all additional purchases, AMD shall purchase such Contract Product units from
Transmeta at a Contract Product Cost determined [* * *]. The “Contract Product Cost” shall be set
as [* * *]. The Contract Product Cost shall be used by AMD as the purchase price for Contract
Products on all orders placed by AMD until a new Contract Product Cost is set by the parties upon
the dates set forth above. [* * *]. Transmeta’s actual Contract Product cost shall be set as [* *
*]. [* * *]. Within [* * *], AMD shall provide to Transmeta a royalty report along with a payment
for the royalty owed. AMD shall provide to Transmeta, on [* * *], a sales report covering [* * *]
in a mutually agreed upon form. The actual royalty to Transmeta will never be less than [* * *].
After the sale of the first [* * *], in the event the total profit margin is less than [* * *] the
parties shall negotiate in good faith to set up [* * *].

     3.1.3 During the term of this Agreement and for a period of [* * *] thereafter, Transmeta will
maintain complete and accurate books and records regarding the costs and expenses associated with
manufacturing the Contract Product units governed by section 3.1.2. AMD will have the right, upon
[* * *] prior written notice to Transmeta to have Transmeta’s books and records audited by an
independent representative reasonably acceptable to both Parties during normal business hours to
verify the prices charged by Transmeta for the Contract Product during the period being audited.
Such audits will be limited to [* * *] period and all of Transmeta’s books and records (and any
other information disclosed by Transmeta in connection with such audit) will be deemed to be
Confidential Information of Transmeta, subject to the terms and conditions of Section 6 hereof.
If, upon performing such audit, it is determined that
Transmeta overcharged AMD for the Contract Products, then Transmeta will promptly remit to AMD
the full amount of such overpayment. In addition, if the amount of such overcharge exceeds

 [* * *]
for the period audited, then Transmeta will also reimburse AMD for all reasonable out-of-pocket
expenses and costs of conducting such audit.

     3.1.4 During the term of this Agreement and for a period of [* * *] thereafter, AMD will
maintain complete and accurate books and records regarding the volume sold and

 

			
	* * * 	 	Confidential treatment has been requested for portions of this exhibit. The copy filed
herewith omits the information subject to the confidential request. Omissions are designated as [* * *]. A complete version of this exhibit has been filed separately with the Securities and
Exchange Commission.

Page 3

 

corresponding prices
charged by AMD for the Contracts Product units sold by AMD and its affiliates, agents and
distributors governed by section 3.1.2. Transmeta will have the right, upon [* * *] prior written
notice to AMD, to have such books and records audited by an independent representative reasonably
acceptable to both Parties during normal business hours to verify the royalties paid by AMD to
Transmeta during the period being audited. Such audits will be limited to [* * *] period and all
of AMD’s books and records (and any other information disclosed by AMD in connection with such
audit) will be deemed to be Confidential Information of AMD, subject to the terms and conditions of
Section 5 hereof. If, upon performing such audit, it is determined that AMD underpaid the
royalties payable to Transmeta, then AMD will promptly remit to Transmeta the full amount of such
underpayment. In addition, if the amount of such underpayment exceeds [* * *] for the period
audited, then AMD will also reimburse Transmeta for all reasonable out-of-pocket expenses and costs
of conducting such audit.

     3.1.5 In the event that Transmeta reduces manufacturing costs for any product using the same
die as the Contract Product, Transmeta hereby agrees to provide such manufacturing cost reductions
to AMD on terms that share and reflect such manufacturing cost reductions. In the event Transmeta
offers to a third party a substantially similar product as the Contract Product in terms of
frequency, power, and performance, Transmeta shall offer AMD the Contract Product at the same or
lower price as the similar product.

     3.2 All payment for Contract Products herein shall be [* * *] and made to Transmeta in US
dollars. No early payment discounts are authorized. Each delivery of Contract Product will be
considered a separate and independent transaction for which payment is required to be made.
Amounts unpaid when due hereunder will bear interest at [* * *].

     3.3 Prices, anticipated to be revised by the parties [* * *], will be quoted by Transmeta and
paid by AMD in United States dollars. Prices will be established relative to scheduled delivery
date. Payment will be made by wire transfer to the following account:

          [* * *]

or as otherwise noticed in writing by Transmeta. Prices quoted by Transmeta do not include
freight, insurance, taxes (including, without limitation, sales, use, value-added, excise,
withholding, gross basis and gross receipts taxes, but excluding taxes on net income), import and
export duties, and other governmental charges all of which are to be paid by AMD.

     3.4 During the initial roll out of the Contract Product, a sales commission plan will be
developed for AMD sales staff for achieving initial penetration of the Contract Product and follow
on sales (“Sales Commission Plan”). For commission purposes, the Contract Product will be treated
[* * *]. The Sales Commission Plan will include [* * *]. The Sales Commission Plan shall be
attached to this Agreement.

     3.5 The prices set forth in Section 3.1 for the Contract Products (the “Contract Products
Prices”) are net of any and all royalties, license fees or other amounts that would otherwise be
payable by Transmeta to AMD with respect to the use or exploitation of any AMD

 

			
	* * * 	 	Confidential treatment has been requested for portions of this exhibit. The copy filed
herewith omits the information subject to the confidential request. Omissions are designated as [* * *]. A complete version of this exhibit has been filed separately with the Securities and
Exchange Commission.

Page 4

 

intellectual
property rights or technology (e.g., AMD’s HyperTransport technology) arising out of the
manufacture and sale of the Contract Products by Transmeta to AMD or the use of the Contract
Products sold hereunder in conjunction with CMS Software.

     4. STRATEGIC FORECAST

          For the purposes of estimating quantities, AMD will provide, on a quarterly basis to
Transmeta, a non-binding [* * *] forecast of AMD’s anticipated purchases of the Contract Product.
Except as provided in Section 5.1, AMD shall have no obligation to purchase with respect to the
quantities set forth in the [* * *] forecast, such quantities being projected quantities only and
subject to change.

     5. ORDER PLACEMENT

     5.1.1 During the term of this Agreement, AMD will deliver a forecast [* * *]. [* * *].

     5.1.2.1 [* * *].

     5.1.2.2 [* * *].

     5.1.2.3 [* * *].

     5.1.2.4 [* * *].

     5.1.3.1 [* * *].

     5.1.3.2 [* * *].

     5.1.3.3 [* * *].

     5.1.3.4 [* * *].

     5.1.4    [* * *].

     5.2 A purchase order from AMD will include (a) the identification of a specific Contract
Product; (b) a specified quantity of that Contract Product; (c) the mutually agreed upon price; and
(d) a reference to Transmeta’s price quote identification number. End customer Ship To information
will be provided to meet the current weeks non-cancellable order quantity. Except for an order for
samples or for an end-of-life order for a particular Contract Product, the specified quantity must
be a multiple of the “economic order quantity” as noticed from time to time by Transmeta. Only
purchase orders or any other contracts of sale that Transmeta accepts at locations noticed from
time to time by Transmeta by an authorized employee, and confirmed
in writing, including by email, to AMD, will bind Transmeta. Transmeta will respond to
purchase orders within [* * *].

     5.3 AMD or its contractors will consider shipments that are received [* * *]to be on time to
the schedule. In the event of delays of more than [* * *]from the original date confirmed by
Transmeta, AMD shall have the option of unilaterally canceling, without penalty, the late
shipment(s) (or the undelivered portion of partial shipments), provided that AMD gives Transmeta
written notice of AMD’s intent to cancel the order and Transmeta is given a reasonable opportunity
to cure any such delay [* * *] of such notice. This right of cancellation is AMD’s sole and
exclusive remedy for delayed shipments.

 

			
	* * * 	 	Confidential treatment has been requested for portions of this exhibit. The copy filed
herewith omits the information subject to the confidential request. Omissions are designated as [* * *]. A complete version of this exhibit has been filed separately with the Securities and
Exchange Commission.

Page 5

 

     5.4 Pricing, delivery and respective obligations of AMD and Transmeta, including with respect
to bearing of particular costs and transfer of risk of loss, are based on EXW, pursuant to
Incoterms 2000 edition, Transmeta’s manufacturing or warehouse facility from which the Contract
Product is first delivered to a carrier for shipment to AMD. If specific shipping instructions
have not been supplied in writing by AMD, Transmeta will hold shipment for [* * *] and, if no
shipping instructions have been received by that time and Transmeta has been unable to reasonably
secure such information from AMD, Transmeta will exercise its discretion as to choice of carrier.

     5.5 All scheduled delivery dates are estimates and are based on shipment from Transmeta’s
manufacturing or warehouse facility. Deliveries may be made in installments.

     5.6 Transmeta understands and agrees that AMD must ship Contract Products to customers of AMD
and Transmeta shall use commercially reasonable efforts to follow the terms and conditions of AMD’s
Order Acknowledgement attached hereto as Exhibit 2, which may be amended from time to time.

     6. CONFIDENTIALITY

     6.1 During the term of this Agreement, either Party may disclose to the other Party
information specified as confidential. Confidential Information is any information disclosed by an
originating Party to a receiving Party in oral, written, graphic, machine recognizable, and/or
sample form, being clearly designated, labeled or marked as confidential or its equivalent.
Confidential information which is disclosed orally shall be identified as confidential before or at
the time of disclosure, and confirmed as being confidential in writing by the originating Party
within thirty (30) days after such first disclosure by submitting a letter marked as confidential
and containing substantially similar information to that disclosed orally to the receiving Party.
Confidential Information also includes any information that due to its nature or the circumstances
of its disclosure, a person exercising reasonable business judgment would understand to be
confidential. The Parties acknowledge and agree that the specific terms and conditions of this
Agreement (but not the existence of this Agreement) is the Confidential Information of both
Parties. When accepting confidential information, the receiving Party agrees to take those
precautions which it routinely takes for its own information of like importance, but at least take
reasonable precautions, to ensure that confidential information shall not be disclosed to
unauthorized third parties. Each Party shall use the other Party’s Confidential Information only
as necessary for the performance of this Agreement. Contractors of either Party may be granted
access to Confidential Information only if such contractors are subject to written
confidentiality provisions at least as restrictive as that set forth herein. However, nothing
shall be considered as Confidential Information if such information: (i) is now available or
becomes available to the public without breach of this Agreement; (ii) is released in writing by
the Party providing the information, without obligation of confidentiality; (iii) is lawfully
obtained from a third party without a duty of confidentiality; (iv) is disclosed to a third party
by the disclosing Party without a duty of confidentiality; (v) is lawfully known to the receiving
Party prior to such disclosure without obligation of confidentiality; or (vi) is at any time
developed by the receiving Party independently of any such disclosure(s) from the originating
Party.

 

			
	* * * 	 	Confidential treatment has been requested for portions of this exhibit. The copy filed
herewith omits the information subject to the confidential request. Omissions are designated as [* * *]. A complete version of this exhibit has been filed separately with the Securities and
Exchange Commission.

Page 6

 

     6.2 The obligations and restrictions set forth in this Section 5 shall last for the five (5)
years from the date of first disclosure of the Confidential Information regardless of termination
or expiration of this Agreement, except that the obligations and restrictions set forth in this
Section 5 as to the CMS Software will remain in force and effect perpetually.

     6.3 Each Party may use Residuals for any purpose including, without limitation, use in
development, manufacture, promotion, sale and maintenance of its products and services, provided
that this right to Residuals does not represent a license under any patents, copyrights, mask work
rights or similar intellectual property rights of the disclosing Party. The term “Residuals” means
any information that is inadvertently retained in the unaided memories of the receiving Party’s
employees or contractors who have rightful access to the disclosing Party’s Confidential
Information pursuant to the terms of this Agreement. An employee’s memory is unaided if the
employee has not intentionally memorized the Confidential Information for the purpose of retaining
and subsequently using or disclosing it.

     6.4 Notwithstanding the foregoing provisions of this Section 5, each party may disclose the
terms and conditions of this Agreement: (i) pursuant to the order or requirement of a court,
administrative agency, or other governmental body, provided that the disclosing party gives
reasonable written notice to the other party to contest such order or requirement; (ii) on a
confidential basis to its professional legal or financial advisors; (iii) as required under
applicable securities regulations; and (iv) subject to reasonable and customary confidentiality
restrictions, to present or future providers of venture capital and/or potential private investors
in or acquirers of such party.

     7. ENGINEERING/SALES SUPPORT

     7.1 Transmeta will use commercially reasonable efforts to provide AMD with sales literature
and other selling collateral, and the rights to reproduce and distribute such material.

     7.2 The information, the adequacy of the information, and the proper use of the information
supplied by Transmeta to AMD pursuant to this Section 7 shall be discussed by the Parties at a
quarterly experts meeting set up by the Parties.

     7.3 Transmeta agrees to provide reasonable assistance and informal training to AMD personnel
if AMD has been unable to use the documents and information provided under this Section 7 to proper
effect.

     7.4 Transmeta hereby agrees to use commercially reasonable efforts to process returns, field
failures, and the like with the same level of competence and timeframe described in Exhibit 3.
Transmeta further agrees to use commercially reasonable efforts to meet the same quality and
reliability requirements as AMD provides to AMD’s customers.

     7.5 Transmeta and AMD agree to openly communicate to each other any information derived from
undertaking the activities contemplated under this Section 7 via the quarterly meetings set forth
in Section 7.2 so that Contract Products and the processes used in conjunction therewith may be
continually improved to the mutual benefit of both AMD and Transmeta. Expert meetings will be held
quarterly to exchange engineering data and assist AMD in selling and supporting the Contract
Products.

 

			
	* * * 	 	Confidential treatment has been requested for portions of this exhibit. The copy filed
herewith omits the information subject to the confidential request. Omissions are designated as [* * *]. A complete version of this exhibit has been filed separately with the Securities and
Exchange Commission.

Page 7

 

     7.6 AMD shall use commercially reasonable efforts to provide first level technical support and
Transmeta shall use commercially reasonable efforts provide second and all other levels support for
Contract Product provided hereunder. Transmeta shall use commercially reasonable efforts to
provide training to AMD in order for AMD to provide the first level technical support.

     7.7 Within [* * *] of the Effective Date, the party’s shall mutual agree upon a sales training
plan to ensure that AMD has the capability to train AMD sales staff on the Contract Products
(“Sales Training Plan”). The Sales Training Plan shall be made a part of this Agreement.

     8. WARRANTIES

     8.1 Transmeta warrants that all Contract Products, as delivered by Transmeta to AMD pursuant
to this Agreement, will be clear of any liens and encumbrance, will be free from any defects in
material and workmanship, and will conform in all material respects to the Specifications for a
period of twelve (12) months from the date of receipt of the Contract Product by AMD or AMD’s
designated recipient.

     8.2 Transmeta covenants that it will use all commercially reasonable efforts to amend any
existing representative and distribution agreements to avoid any conflicts with this Agreement.

     8.3 THE WARRANTY OF THIS SECTION 8 IS THE EXCLUSIVE WARRANTY FOR THE CONTRACT PRODUCTS, AND
ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, WRITTEN OR ORAL, ARE HEREBY DISCLAIMED AND EXCLUDED.
TRANSMETA SPECIFICALLY DISCLAIMS THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.

     8.4 AMD shall advise Transmeta, in writing, within the warranty period specified in Section
8.1, of any claimed defects in the Contract Product or of any claimed failure of the Contract
Product to conform to the warranty set forth therein. If Contract Products are not as warranted,
as AMD’s sole and exclusive remedy and Transmeta’s sole and exclusive liability, Transmeta shall,
at its option: (a) repair the defect(s) in the Contract Products; (b) replace the defective
Contract Products with fully functional Contract Products; or (c) only if (a) and (b) are not
feasible, accept a return of the defective Contract Products and promptly refund to AMD all amounts
paid for the defective Contract Products. The return of any Contract Products under warranty to
Transmeta will be solely in accordance with Transmeta’s written Return Material Authorization (RMA)
procedure as noticed by Transmeta from time to time. On such returned items, Transmeta will
reimburse AMD for freight back to Transmeta. Transmeta will pay return freight to AMD if such item
is found not to be in compliance with Specifications; otherwise AMD will reimburse Transmeta for
such freight charges, including insurance.

     9. LIMITATION OF LIABILITY

     9.1 EXCEPT FOR THIRD PARTY DAMAGES AWARDED PURSUANT TO INDEMNIFICATION OBLIGATIONS, AND EXCEPT
FOR A BREACH BY EITHER PARTY OF SECTION 6, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR SPECIAL,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES UNDER ANY CIRCUMSTANCES.

 

			
	* * * 	 	Confidential treatment has been requested for portions of this exhibit. The copy filed
herewith omits the information subject to the confidential request. Omissions are designated as [* * *]. A complete version of this exhibit has been filed separately with the Securities and
Exchange Commission.

Page 8

 

     9.2 EXCEPT FOR THIRD PARTY DAMAGES AWARDED PURSUANT TO INDEMNIFICATION OBLIGATIONS, AND EXCEPT
FOR A BREACH BY AMD OF SECTION 6, IN NO EVENT SHALL AMD BE LIABLE UNDER ANY THEORY OF LIABILITY,
WHETHER IN AN EQUITABLE, LEGAL, OR COMMON LAW ACTION ARISING HEREUNDER FOR CONTRACT, STRICT
LIABILITY, INDEMNITY, TORT (INCLUDING NEGLIGENCE), OR OTHERWISE, FOR DAMAGES WHICH, IN THE
AGGREGATE, EXCEED [* * *].

     9.3 EXCEPT FOR THIRD PARTY DAMAGES AWARDED PURSUANT TO INDEMNIFICATION OBLIGATIONS, AND EXCEPT
FOR A BREACH BY TRANSMETA OF SECTION 6, IN NO EVENT SHALL TRANSMETA BE LIABLE UNDER ANY THEORY OF
LIABILITY, WHETHER IN AN EQUITABLE, LEGAL, OR COMMON LAW ACTION ARISING HEREUNDER FOR CONTRACT,
STRICT LIABILITY, INDEMNITY, TORT (INCLUDING NEGLIGENCE), OR OTHERWISE, FOR DAMAGES WHICH, IN THE
AGGREGATE, EXCEED [* * *].

     9.4 Each Party acknowledges and agrees that the both Parties have entered into this Agreement
in reliance on the above limitations of liability, and that the same constitute a basis of the
bargain between the parties. The Parties have agreed that the limitations specified above will
survive any termination of this Agreement and will apply even if any limited remedy specified in
this Agreement is found to have failed of its essential purpose.

     10. MANUFACTURING PROCESS CHANGES

          Transmeta will provide at least [* * *] written notice of any modification to manufacturing
process for the Contract Product, unless such modification results from safety issues, law or
regulation, liability concerns, or actual or potential infringement issues, in which case Transmeta
will provide notice immediately. Transmeta shall use commercially reasonable efforts to provide
appropriate reliability data associated with such a change.

     11. INTELLECTUAL PROPERTY INDEMNIFICATION

     11.1 Transmeta agrees to defend, at its sole expense, any lawsuits against AMD based on a
claim that any Contract Product infringes any patent, mask works, trade dress, trademark, or
copyright, or misappropriates any trade secrets, and to pay any costs and damages finally awarded
in any such lawsuit against AMD, provided that AMD: (a) notifies Transmeta in writing within thirty
(30) days of becoming aware of such suit; (b) provides Transmeta with reasonable and available
information and assistance for the defense of such lawsuit; (c) grants Transmeta the sole right to
defend and settle such claims in accordance with this Section.

     11.2 If the use or sale of any Contract Products is enjoined as a result of such suit,
Transmeta, at its option and at no expense to AMD, shall obtain for AMD: (i) the right to continue
to use and sell the Contract Product(s); (ii) substitute equivalent and non-infringing product(s)
acceptable to AMD and extend this indemnity thereto; or (iii) failing all reasonable attempts at
(i) and (ii), shall accept the return of any Contract Products and reimburse AMD for the full price
thereof.

     11.3 THE FOREGOING PROVISIONS OF THIS SECTION 11 SET FORTH TRANSMETA’S SOLE AND EXCLUSIVE
LIABILITY AND AMD’S SOLE AND

 

			
	* * * 	 	Confidential treatment has been requested for portions of this exhibit. The copy filed
herewith omits the information subject to the confidential request. Omissions are designated as [* * *]. A complete version of this exhibit has been filed separately with the Securities and
Exchange Commission.

Page 9

 

EXCLUSIVE REMEDY FOR ANY CLAIMS OF INFRINGEMENT OR MISAPPROPRIATION OF
INTELLECTUAL PROPERTY RIGHTS OF ANY KIND.

     11.4 AMD agrees to defend, at its sole expense, any lawsuits against Transmeta based on a
claim arising from AMD’s breach of its obligations under Section 1.5 or any misrepresentation made
by AMD with respect to Transmeta or the Contract Product, and to pay any costs and damages finally
awarded in any such lawsuit against Transmeta, provided that Transmeta (a) notifies AMD in writing
within thirty (30) days of becoming aware of such suit; (b) provides AMD with reasonable and
available information and assistance for the defense of such lawsuit; (c) grants AMD the sole right
to defend and settle such claims in accordance with this Section.

     12. MARKETING AND DERIVATIVE PRODUCTS

     12.1 Transmeta will provide AMD with advance information on new, modified, improved, enhanced
or derivative products and advance notice of public announcements regarding successor products to
the Contract Product. Transmeta further agrees to discuss in good faith AMD’s ability to ship such
products as Contract Products by adding such products to the definition of Contract Products via a
signed Addendum hereto.

     12.2 The parties shall use commercially reasonable efforts to jointly develop the following:
(i) a set of frequently asked questions (to be posted on a website) that attempts to answer simple
issues from the sales force, customers, distributors and other representatives; (ii) marketing
presentations; (iii) material to reside on both the AMD and Transmeta websites as links to an
official announcement regarding the relationship; and (iv) appropriate communication materials,
including web casts, for AMD organizations related to an official announcement regarding the
relationship.

     13. NOTIFICATION

     13.1 All notices to be served hereunder shall be in writing and sent to the address stated
below:

To Transmeta:

Transmeta Corporation

Attn: General Counsel

3990 Freedom Circle

Santa Clara, CA 95054

With an additional copy to:

Fenwick & West LLP

Attn: Mark Leahy

801 California St.

Mountain View, CA 94041

 

			
	* * * 	 	Confidential treatment has been requested for portions of this exhibit. The copy filed
herewith omits the information subject to the confidential request. Omissions are designated as [* * *]. A complete version of this exhibit has been filed separately with the Securities and
Exchange Commission.

Page 10

 

To AMD:

Advanced Micro Devices, Inc.

Attn: General Counsel

5204 East Ben White Boulevard, MS 562

Austin, TX 78741

     13.2 If either Party changes its address or name, a written notice thereof shall be
immediately served on the other Party. All notices shall be deemed to have been served upon
receipt by the addressee.

     14. TERM, TERMINATION & END OF LIFE

     14.1 This Agreement shall remain in effect for thirty-six (36) months after it has been
executed, and is automatically renewable from year to year for incremental renewal terms of one (1)
year thereafter unless otherwise terminated in writing by either Party, with or without cause, upon
two (2) months prior notice before the end of the initial term or of any renewal term.

     14.2 If either Party has defaulted in any material provision of this Agreement and failed to
remedy such default within thirty (30) days after a written notice of breach from the other Party,
such other Party may terminate this Agreement upon providing written notice of termination.

     14.3 Either party shall be able to terminate this Agreement upon ninety (90) days written
notice to the other party, provided (i) all purchase orders shall survive termination; and (ii)
Transmeta shall continue to provide support as described herein through the end of the Delivery
Period.

     14.4 In the event that Transmeta determines to discontinue the Contract Product, Transmeta
will provide AMD at least nine (9) months notice, unless such discontinuance results from safety
issues, law or regulation, liability concerns, or actual or potential infringement issues. In such
event, AMD may, prior to the end of the nine (9) month period, place, and Transmeta will accept, a
non-cancelable, binding, non-reschedulable purchase order complying with the terms of this
Agreement for the Contract Product proposed to be discontinued so long as requested delivery dates
are consistent with required order lead times and delivery is to be no later than nine (9) months
after the end of such notice period (“Delivery Period”).

     14.5 In the event Transmeta files a petition for bankruptcy or insolvency, has an involuntary
petition filed against it not subsequently dismissed within a reasonable time, commences an action
providing for relief under bankruptcy laws, files for the appointment of a
receiver, or is adjudicated a bankrupt concern, subject to reasonable terms and conditions,
including protection of Transmeta intellectual property, AMD may purchase Contract Product from a
previously authorized Transmeta manufacturer or manufacture the Contract Product using its own
resources.

     14.6 Upon termination or expiration of this Agreement, all payments due the other Party at or
before the time of termination or expiration of this Agreement shall be paid in due course to the
demanding Party, all the terms and conditions of Sections 6, 9, 11, 13 and 16 shall survive
expiration or termination of this Agreement.

 

			
	* * * 	 	Confidential treatment has been requested for portions of this exhibit. The copy filed
herewith omits the information subject to the confidential request. Omissions are designated as [* * *]. A complete version of this exhibit has been filed separately with the Securities and
Exchange Commission.

Page 11

 

     15. FINANCIAL NEGOTIATION

     15.1 Promptly following the Effective Date, AMD and Transmeta will negotiate in good faith the
terms and conditions of a written agreement by which AMD purchases from Transmeta equity, or debt
convertible into equity, of Transmeta. If the parties agree upon such terms and conditions, they
shall enter into such mutually agreed upon written agreement and perform their obligations
thereunder.

     16. MISCELLANEOUS

     16.1 This Agreement supersedes all prior discussions and writings and constitutes the entire
and only Agreement between the Parties hereto relating to the subject matter hereof, and it may not
be changed, altered, or amended except in writing signed by duly authorized representatives of the
Parties.

     16.2 In the event of any conflict between the terms of this Agreement and those contained in
any related purchase orders, acknowledgments, Exhibits hereto, or acceptances, the terms of this
numbered Sections in the body of this Agreement shall control.

     16.3 The failure of either Party to enforce, at any time, or for any period of time, any
provision of this Agreement, to exercise any election or option provided herein, or to require, at
any time, performance of any provision hereof, shall not be construed to be a waiver of such
provisions, nor in any way affect the validity of this Agreement or any part hereof, or the right
of any Party thereafter to enforce any such provision.

     16.4 This Agreement will be governed by and construed in accordance with the laws of the State
of California, as if entered into and performed entirely in California between California
residents. The Parties agree that the UN Convention for the International Sale of Goods shall not
apply. If any provision herein is held to be invalid, illegal, or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not be affected or impaired thereby.

     16.5 Neither Party shall be liable in any manner for failure or delay upon fulfillment of all
or part of this Agreement, directly or indirectly due to acts of God, governmental orders or
restrictions, war, threat of war, warlike conditions, fire, hostilities, sanctions, mobilization,
blockage, embargo, detention, revolution, riot, looting, strike, lockout, labor disturbances, or
accident.

     16.6 Neither Party shall assign or otherwise dispose of this Agreement, or of any rights,
duties, or obligations arising under this Agreement, without first obtaining the prior written
approval of the other Party.

     16.7 The Parties shall comply with all applicable U.S. export laws and shall not export,
re-export, resell, ship or divert any Contract Products or controlled technical information or
software furnished by the other Party to any country for which the U.S. requires an export license
or other governmental approval without first obtaining such license or approval.

     16.8 All captions and descriptive headings used in this Agreement are for convenience of
reference only and are not to be used in interpreting the obligations of the Parties under this
Agreement.

 

			
	* * * 	 	Confidential treatment has been requested for portions of this exhibit. The copy filed
herewith omits the information subject to the confidential request. Omissions are designated as [* * *]. A complete version of this exhibit has been filed separately with the Securities and
Exchange Commission.

Page 12

 

     16.9 Representatives and personnel of each Party, during the time they are present on the
premises of the other Party, shall be subject to all rules and regulations prevailing on such
premises. Each Party shall be responsible for the payment of all compensation and expenses, unless
otherwise specified in this Agreement, of its respective representatives and personnel. None of
the representatives or personnel of either Party shall be considered for any reason to be an
employee of the other Party.

     16.10 Nothing contained herein, or done in pursuance of this Agreement, shall constitute the
Parties as entering upon a joint venture or shall constitute either Party hereto the agent for the
other Party for any purpose or in any sense whatsoever.

     16.11 AMD and Transmeta will attempt to settle any claim or controversy arising under this
Agreement through consultation and negotiation in good faith and a spirit of mutual cooperation.
The Parties agree that any disputes which arise out of or are based upon this Agreement shall be
subject to mediation before any legal or administrative process may be initiated by either Party,
except disputes relating to intellectual property which by their nature require immediate or
extraordinary relief. There shall be a forty-five (45) day time limit on this mediation process,
beginning from the initial request for mediation, after which legal remedies may be initiated by
either Party if no resolution has been adopted in writing to both Parties satisfaction. The
Parties agree to cooperate in good faith in the selection of a mediator (if the Parties decide a
formal mediator is needed), and to share equally the costs of the mediator’s services. Each Party
shall bear their own expenses associated with the mediation process. The use of any alternative
dispute resolution procedure will not be construed under the doctrines of laches, waiver or
estoppel to affect adversely the rights of either Party. And nothing in this paragraph will
prevent either Party from resorting to judicial proceedings if: (a) good faith efforts to resolve
the dispute under these procedures have been unsuccessful; or (b) interim relief from a court is
necessary to prevent serious and irreparable injury to one Party or to others.

     16.12 The Agreement was negotiated in the spirit of mutual cooperation whereby no clause
should be necessarily construed against any one Party based upon the finding that that Party
provided all or most of the contractual language contained within that clause.

     IN WITNESS WHEREOF, the Parties have caused their respective duly authorized representatives
to sign this Agreement on the respective dates specified below.

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	ADVANCED MICRO DEVICES, INC.	 	 	 	TRANSMETA CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	  /s/ William T. Edwards
	 	 	 	By:
	 	  /s/ Arthur L. Swift	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Name:

	 	  William T. Edwards
	 	 	 	Name:
	 	  Arthur L. Swift	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Title:

	 	  SVP & Chief Innovation Officer
	 	 	 	Title:
	 	  President and CEO	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date:

	 	  June 5, 2006
	 	 	 	Date:
	 	  June 5, 2006	 	 
	 

	 	 
	 	 	 	 	 	 	 	 

 

			
	* * * 	 	Confidential treatment has been requested for portions of this exhibit. The copy filed
herewith omits the information subject to the confidential request. Omissions are designated as [* * *]. A complete version of this exhibit has been filed separately with the Securities and
Exchange Commission.

Page 13

 

EXHIBIT 1 – Specifications

Transmeta SF23J Data Book

Transmeta SF23J Errata

Transmeta CMS [* * *] Release Notes

Transmeta CMS [* * *] Errata

 

			
	* * * 	 	Confidential treatment has been requested for portions of this exhibit. The copy filed
herewith omits the information subject to the confidential request. Omissions are designated as [* * *]. A complete version of this exhibit has been filed separately with the Securities and
Exchange Commission.

Page 14

 

EXHIBIT 2 – Order Acknowledgement Terms and Conditions

 

			
	* * * 	 	Confidential treatment has been requested for portions of this exhibit. The copy filed
herewith omits the information subject to the confidential request. Omissions are designated as [* * *]. A complete version of this exhibit has been filed separately with the Securities and
Exchange Commission.

Page 15

 

EXHIBIT 3 — Customer Corrective Action Request (CCAR) Turn-Around-Times.

	 	 	 
	Event	 	Timeframe
	[* * *]
	 	[* * *]
	[* * *]
	 	[* * *]
	[* * *]
	 	[* * *]
	[* * *]
	 	[* * *]
	[* * *]
	 	[* * *]
	[* * *]
	 	[* * *]
	[* * *]
	 	[* * *]

 

			
	* * * 	 	Confidential treatment has been requested for portions of this exhibit. The copy filed
herewith omits the information subject to the confidential request. Omissions are designated as [* * *]. A complete version of this exhibit has been filed separately with the Securities and
Exchange Commission.

Page 16

 

EXHIBIT 4 – Code Morphing Software License Agreement

 

			
	* * * 	 	Confidential treatment has been requested for portions of this exhibit. The copy filed
herewith omits the information subject to the confidential request. Omissions are designated as [* * *]. A complete version of this exhibit has been filed separately with the Securities and
Exchange Commission.

Page 17

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