Document:

exv10w37

 

Exhibit 10.37

CONFIDENTIAL

Settlement, Release and License Agreement Between

Transmeta Corporation And Intel Corporation

     This Settlement, Release and License Agreement (“Agreement”) is entered into as of
December 31, 2007 (“Effective Date”) by and between Transmeta Corporation, a Delaware
corporation having an office at 2540 Mission College Blvd., Santa Clara, CA 95054,
(“Transmeta”) and Intel Corporation, a Delaware corporation having an office at 2200
Mission College Blvd., Santa Clara, California 95052, U.S.A. (“Intel”) (each of Transmeta
and Intel being a “Party” and together the “Parties”).

WHEREAS, there is pending litigation in the United States District Court for the District of
Delaware in Civil Action No. 06-633-GMS in which the Parties have asserted various claims and
defenses against each other;

WHEREAS, in the pending litigation, each Party alleges, among other things, that certain of the
other Party’s past and current microprocessor products infringe certain of its patents, and
Transmeta further alleges that certain of Intel’s microprocessors in development infringe certain
Transmeta patents;

WHEREAS, each Party denies that it infringes any of the patents asserted by the other Party and
contends that the patents asserted by the other Party are either invalid or unenforceable;

WHEREAS, the Parties deny any liability arising from the pending litigation, but wish to resolve
all claims, known and unknown, between them;

WHEREAS, the Parties entered into a Binding Term Sheet dated October 20, 2007, as amended on
December 18, 2007 (the “Binding Term Sheet”), pursuant to which the Parties agreed to,
among other things, settle the pending litigation and attempt to negotiate a definitive agreement
by December 31, 2007 or have the Binding Term Sheet become the final agreement between the Parties
effective December 31, 2007;

NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and in consideration of the mutual covenants and payments set forth herein, the
parties hereto agree as follows:

1. Definitions

	1.1.	 	“Affiliate” means any entity that directly or indirectly controls or is under common
control with the subject Party. Solely for the purposes of this definition of “Affiliate” set
forth in this Section 1.1, “control” means direct or indirect ownership or control of
(i) more than fifty percent (50%) of the outstanding shares or securities entitled to vote for
the election of directors or similar managing authority of the subject entity; (ii) more
than fifty percent (50%) of the ownership interest representing the right to make the
decisions for the subject entity; or (iii) any other ability to elect more than half of the
board of

 

 

	 	 	directors or similar managing authority of the subject entity, whether by contract
or otherwise.
	 
	1.2.	 	“Assert/Assertion” means to bring an action of any nature before any legal, judicial,
arbitration, administrative, executive or other type of body or tribunal that has or claims to
have authority to adjudicate such action in whole or in part. Examples of such body or
tribunal include, without limitation, United States State and Federal Courts, the United
States International Trade Commission and any foreign counterparts of any of the foregoing;
provided, however, that this definition shall specifically exclude patent interference
proceedings, if any, before the United States Patent and Trademark Office or any foreign
counterpart patent office or agency.
	 
	1.3.	 	“Capture Period” shall mean any time on or prior to the tenth (10th)
anniversary of the Effective Date.
	 
	1.4.	 	“Claims” shall mean actions, causes of action, claims or demands of any type,
liabilities, losses, damages, duties, obligations, attorneys’ fees, court costs, or any other
form of claim or compensation.
	 
	1.5.	 	“Change of Control” shall mean any transaction or series of related transactions with
respect to any Party or Granting Subsidiary in which, either:

	 	(1)i.1.	 	a Person or group of related Persons, any one of which is not a Covered
Party and is not a Granting Subsidiary, who do not Control (as defined below)
such Party prior to such transaction or series of transactions, subsequently
obtain(s) Control of a Party by any means, whether by operation of law,
acquisition of securities, merger, contract, acquisition of assets, or
otherwise; or
	 
	 	(1)i.2.	 	a Person or group of related Persons, any one of which is not a Covered
Party and is not a Granting Subsidiary, who do not Control such Granting
Subsidiary prior to such transaction or series of transactions, subsequently
obtain(s) Control of a Granting Subsidiary by any means, whether by operation
of law, acquisition of securities, merger, contract, acquisition of assets, or
otherwise in a transaction or series of transactions that result(s) in the
Granting Subsidiary no longer meeting all the requisite conditions of being a
Subsidiary.

	 	 	As used in this Section 1.5, a Person (or group of related Persons) exercises
“Control” over a Party or Granting Subsidiary when such Person or group owns or
controls (either directly or indirectly) any of the following: (a) if the Party or Granting
Subsidiary issues voting stock or other voting securities, more than fifty percent (50%) of
the outstanding stock or securities entitled to vote for the election of directors or
similar managing authority; or (b) if such Party or Granting Subsidiary does not issue
voting stock or other voting securities, more than fifty percent (50%) of the ownership interest that represents
the right to make decisions for such Party or Granting Subsidiary; or (c) any other ability
to elect more than fifty percent (50%) of the board of directors or similar managing

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	 	 	authority of the subject Party or Granting Subsidiary, whether by contract or otherwise;
provided, however, that with respect to an Intel Granting Subsidiary that is a Minority
Subsidiary, the applicable percentage in (a) through (c) above shall be sixty percent (60%)
percent instead of fifty percent (50%).
	 
	1.6.	 	“Controlled Subsidiary” shall mean any Subsidiary in which a Party owns or controls
(either directly or indirectly) any of the following:

	 	(a)	 	if such entity has voting shares or stock or other voting securities, more than
fifty percent (50%) of the outstanding shares or stock or securities entitled to vote
for the election of directors or similar managing authority; or
	 
	 	(b)	 	if such entity does not have voting shares or stock or other voting securities,
more than fifty percent (50%) of the ownership interest that represents the right to
make decisions for such entity; or
	 
	 	(c)	 	any other ability to elect more than fifty percent (50%) of the board of
directors or similar managing authority of the subject entity, whether by contract or
otherwise.
	 
	 	For clarity, “Intel Controlled Subsidiary” shall mean a Subsidiary of Intel that is
a Controlled Subsidiary, and “Transmeta Controlled Subsidiary” shall mean a
Subsidiary of Transmeta that is a Controlled Subsidiary. For additional clarity, any event
causing a Person that was once a Controlled Subsidiary to no longer meet the requisite
conditions of being a Controlled Subsidiary as set forth in this Section 1.6, whether by
Change of Control or otherwise, shall render such Person to be no longer a Controlled
Subsidiary.

	1.7.	 	“Covered Party” shall mean either Party and (but not necessarily together with) all
of its Covered Subsidiaries.
	 
	1.8.	 	“Covered Subsidiary” shall mean any Granting Subsidiary in which a Party owns or
controls an interest sufficient to receive at least forty percent (40%) of the profits and/or
losses of such Granting Subsidiary, provided that such Granting Subsidiary shall be deemed to
be also a Covered Subsidiary only so long as:

	 	(a)	 	the Party owning or controlling such interest has not contractually or
otherwise surrendered, limited, or in any other way forfeited any part of its share of
the profits or losses distributed by the Granting Subsidiary;
	 
	 	(b)	 	the Party owning or controlling the shares, securities, or other interest
required under Sections 1.19(a), 1.19(b) or 1.19(c) for such Granting Subsidiary to be
a Subsidiary has not contractually or otherwise surrendered, limited, or in any other
way constrained its authority to elect the managing authority or make decisions for the
entity; and
	 
	 	(c)	 	all requisite conditions of being a Covered Subsidiary are met.

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     For clarity, any event causing a Person that was once a Covered Subsidiary to no longer meet
the requisite conditions of being a Covered Subsidiary as set forth in this Section 1.8, whether by
Change of Control or otherwise, shall render such Person to be no longer a Covered Subsidiary.

	1.9.	 	“Former Subsidiary” shall mean a Person that, after meeting all the requirements of
being a Covered Subsidiary set forth in Section 1.8 (including without limitation agreeing to
be bound by the terms of this Agreement), ceased to meet all the requirements of being a
Subsidiary set forth in Section 1.19.
	 
	1.10.	 	“Granting Subsidiary” shall mean:

	 	(a)	 	any Controlled Subsidiary with respect to which a Party has taken all steps
necessary to bind that Controlled Subsidiary to the obligations, covenants, licenses
and other terms of this Agreement, as such steps are further set forth in Subsection
3.4(a)(1), for so long as such Controlled Subsidiary remains so bound and continues to
meet the requisite conditions for being a Controlled Subsidiary (subject to the terms
of, among other provisions of this Agreement, Section 3.4(g)); and
	 
	 	(b)	 	any Minority Subsidiary who has elected and taken all steps necessary to be
bound by the obligations, covenants, licenses and other terms of this Agreement, as
such steps are further set forth in Subsection 3.4(b), for so long as such Minority
Subsidiary meets the requisite conditions for being a Minority Subsidiary (subject to
the terms of, among other provisions of this Agreement, Section 3.4(g)).

     For clarity, “Intel Granting Subsidiary” shall mean a Controlled Subsidiary or
Minority Subsidiary of Intel that is a Granting Subsidiary and “Transmeta Granting
Subsidiary” shall mean a Controlled Subsidiary or Minority Subsidiary of Transmeta that is a
Granting Subsidiary. For additional clarity, the term “Granting Subsidiary” shall include all
Intel Covered Subsidiaries and Transmeta Covered Subsidiaries, but the terms “Intel Covered
Subsidiary” and “Transmeta Covered Subsidiary” shall include only those Granting Subsidiaries that
meet the requisite conditions for qualifying as Covered Subsidiaries under the definition set forth
in Section 1.8.

	1.11.	 	“Information System Product” shall mean any active or passive circuit element,
apparatus, appliance, circuit assembly, computer, device, equipment, firmware, housing,
Integrated Circuit, instrumentality, material, method, process, service, software, substrate
or other means for calculating, classifying, combining, computing, detecting, displaying,
handling, hosting, imaging, inputting, manifesting, measuring, modifying, networking,
originating, photographing, playing, printing, processing, providing, receiving, recording,
reproducing, retrieving, scanning, serving, storing, switching, transmitting or utilizing any
data or any other information for any purpose, including without limitation any component or
subsystem thereof and any supplies therefor.
	 
	1.12.	 	“Initial Payment” shall mean have the meaning set forth in Section 4.1 hereof.

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	1.13.	 	“Integrated Circuit” shall mean an integrated unit comprising one or more active
and/or passive circuit elements associated on one or more substrates, such unit forming, or
contributing to the formation of, a circuit for performing electrical functions (including, if
provided therewith, housing and/or supporting means).
	 
	1.14.	 	“Intel Licensed Product” shall mean any product that constitutes: (a) an
Information System Product that Intel or an Intel Covered Subsidiary makes, has made, sells or
offers to sell, (b) software that Intel or an Intel Covered Subsidiary makes, has made, sells
or offers to sell or (c) any combination thereof.
	 
	1.15.	 	“Minority Subsidiary” shall mean a Subsidiary that is not a Controlled Subsidiary.
	 
	1.16.	 	“Patents” shall mean Patent Rights that are owned or controlled at any time on or
after the Effective Date by the applicable Party or any of its Granting Subsidiaries or to
which such entities have the right to grant licenses, that have a first effective filing date
or priority date during the Capture Period and to the extent that the applicable Party or any
of its Granting Subsidiaries has the right to grant licenses within and of the scope set forth
in this Agreement and without the requirement to pay consideration to any third Person (other
than employees of the applicable Party or any of its Subsidiaries) for the grant of a license
under this Agreement. For clarity, “Intel(’s) Patents” shall mean the Patents of
Intel and its Granting Subsidiaries and “Transmeta(‘s) Patents” shall mean the Patents
of Transmeta and its Granting Subsidiaries.
	 
	1.17.	 	“Patent Rights” shall mean all classes or types of patents (including without
limitation originals, divisions, continuations, continuations-in-part, extensions or
reissues), and applications for these classes or types of patents throughout the world.
	 
	1.18.	 	“Person” shall mean any natural person, and any corporation, partnership, limited
liability company or other legal entity recognized in any jurisdiction in the world.
	 
	1.19.	 	“Subsidiary” shall mean any corporation, partnership, limited liability company or
other entity recognized in any jurisdiction in the world, now or hereafter, in which a Party
owns or controls (either directly or indirectly) any of the following:

	 	(a)	 	if such entity has voting shares or stock or other voting securities, at least
forty percent (40%) of the outstanding shares or stock or securities entitled to vote
for the election of directors or similar managing authority; or
	 
	 	(b)	 	if such entity does not have voting shares or stock or other voting securities,
at least forty percent (40%) of the ownership interest that represents the right to
make decisions for such entity; or
	 
	 	(c)	 	any other ability to elect at least forty percent (40%) of the board of
directors or similar managing authority of the subject entity, whether by contract or
otherwise.

	 	 	An entity shall be deemed to be a Subsidiary under this Agreement only so long as the Party
owning or controlling the shares, stock, securities or other ownership interest

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	 	 	required under Sections 1.19(a), 1.19(b) or 1.19(c) above has not contractually or otherwise
surrendered, limited or in any other way constrained its authority to elect the managing
authority or make decisions for the entity, and only so long as all the requisite conditions
of being a Subsidiary are met. For clarity, any event causing a Person that was once a
Subsidiary to no longer meet the requisite conditions of being a Subsidiary as set forth in
this Section 1.19, whether by Change of Control or otherwise, shall render such Person to be
no longer a Subsidiary.
	 
	1.20.	 	“Transmeta Power Management Technology” shall mean Transmeta’s power management and
leakage control technologies as embodied in Transmeta’s LongRun and LongRun2 technologies.
For clarity, Transmeta Power Management Technology shall not include, as a non-limiting
example, any microprocessor architecture technology.

2. Mutual Releases

	2.1.	 	Transmeta Release.

	 	(a)	 	Transmeta (for itself and on behalf of all persons acting for it, including
directors, officers and employees, to the fullest extent Transmeta has such authority),
each of its Granting Subsidiaries and Affiliates, and their predecessors, successors
and assigns hereby release, acquit and forever discharge Intel and its Covered
Subsidiaries that are Covered Subsidiaries as of the Effective Date from any and all
Claims, known or unknown, suspected or unsuspected, that they have, have had or may
have relating to or arising from any acts, omissions or statements made on or before
the later of the Effective Date or, with respect to any Transmeta Granting Subsidiary,
the date of becoming a Transmeta Granting Subsidiary.
	 
	 	(b)	 	Transmeta (for itself and on behalf of all persons acting for it, including
directors, officers and employees, to the fullest extent Transmeta has such authority)
and each of its Granting Subsidiaries and Affiliates, and their predecessors,
successors and assigns hereby release, acquit and forever discharge all the direct and
indirect distributors, customers and contract manufacturers of Intel and of its Covered
Subsidiaries that are Covered Subsidiaries as of the Effective Date, from any and all
claims for patent infringement that they have, have had or may have based on any acts
or omissions occurring on or before the later of the Effective Date or, with respect to
any Transmeta Granting Subsidiary, the date of becoming a Transmeta Granting
Subsidiary, which, had they been performed after the later of the Effective Date or the
date of becoming a Transmeta Granting Subsidiary, would have been licensed under this
Agreement.

	2.2.	 	Intel Release.

	 	(a)	 	Intel (for itself and on behalf of all persons acting for it, including
directors, officers and employees, to the fullest extent Intel has such authority) and
each of its Granting Subsidiaries and Affiliates, and their predecessors, successors
and

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	 	 	 	assigns hereby release, acquit and forever discharge Transmeta and its Covered
Subsidiaries that are Covered Subsidiaries as of the Effective Date from any and all
Claims, known or unknown, suspected or unsuspected, that they may have, have had or may
have relating to or arising from any acts, omissions or statements made on or before
the later of the Effective Date or, with respect to any Intel Granting Subsidiary, the
date of becoming an Intel Granting Subsidiary.
	 
	 	(b)	 	Intel (for itself and on behalf of all persons acting for it, including
directors, officers and employees, to the fullest extent Intel has such authority) and
each of its Granting Subsidiaries and Affiliates, and their predecessors, successors
and assigns hereby release, acquit and forever discharge all the direct and indirect
distributors, customers and contract manufacturers of Transmeta and of its Covered
Subsidiaries that are Covered Subsidiaries as of the Effective Date, from any and all
claims for patent infringement based on the manufacture, use, sale, offer for sale or
importation of any Transmeta products on or before the Effective Date.

	2.3.	 	Known and Unknown Claims. For clarity, and without limiting or changing the
provisions of Sections 7.8 and 7.9 of this Agreement, the Parties hereby irrevocably waive any
reliance upon Section 1542 of the California Civil Code, or any similar legal provision, which
may be adjudicated for any reason to apply notwithstanding or as a result of Sections 7.8 and
7.9. Section 1542 of the California Civil Code states:

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

	 	 	As between themselves, and as between their Granting Subsidiaries on one side and their
Covered Subsidiaries on the other, the Parties intend the provisions of Sections 2.1 and 2.2
to be a full release of all claims and liability, both known and unknown, arising out of any
and all acts prior to the later of the Effective Date or the date of becoming a Granting
Subsidiary of a Party (in the case of a Granting Subsidiary that becomes a Granting
Subsidiary after the Effective Date). Further, as between Transmeta and each of its
Granting Subsidiaries, on one side, and the direct and indirect distributors and customers
of Intel and its Covered Subsidiaries on the other, the Parties intend the provisions of
Section 2.1(b) to be a full release of all claims and liability, both known and unknown,
arising out of any and all acts prior to the later of the Effective Date or the date of
becoming a Transmeta Granting Subsidiary, which, had such acts been performed after the
later of the Effective Date or the date of becoming a Transmeta Granting Subsidiary, would
have been licensed under this Agreement. These full releases of known and unknown claims
apply in any jurisdiction where an action or claim inconsistent with the
release might be filed, notwithstanding the existence in any such jurisdiction of a statute
or other legal provision similar to Section 1542 of the California Civil Code.

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	2.4.	 	Ownership and Indemnification of Released Claims: Each of Intel and Transmeta hereby
warrants, represents and agrees that it is the sole and lawful owner of all rights, title, and
interests in and to every claim and every matter which it purports to release in this Section
2, and that it has not heretofore assigned or transferred, or purported or attempted to assign
or transfer to any Person any claims or other matters herein released. Transmeta shall
indemnify, defend and hold harmless any Person released hereunder from any and all future
claims arising out of or relating to such assignment or transfer by Transmeta of any claims or
other matters released herein. Intel shall indemnify, defend and hold harmless any Person
released hereunder from any and all future claims arising out of or relating to such
assignment or transfer by Intel of any claims or other matters released herein.
	 
	2.5.	 	Dismissal of Litigation. Within ten (10) days of the date of Transmeta’s receipt of
the Initial Payment, the Parties shall file stipulations to dismiss all pending lawsuits
between them with prejudice, each Party to bear its own attorneys’ fees and costs.
	 
	2.6.	 	Stipulation on Re-Examinations. Intel agrees that it will not voluntarily
participate in any of the eleven reexamination proceedings declared by the United States
Patent & Trademark Office in connection with the patents asserted by Transmeta in the
litigation. Notwithstanding anything to the contrary contained in this Agreement, nothing in
this Agreement shall prevent or limit Intel from complying with any order of a court or other
governmental authority.

3. Grant Of Rights

	3.1.	 	Intel Covenant Not to Sue. Subject to the terms and conditions of this Agreement and
so long as Transmeta, its Affiliates and its Granting Subsidiaries have not Asserted any
Transmeta Patent against Intel or any Intel Covered Subsidiary, Intel and its Granting
Subsidiaries hereby agree that they shall not Assert any Intel Patent against Transmeta or its
Covered Subsidiaries for:

	 	(a)	 	the making or using of the subject matter claimed by such Intel Patent solely
for the internal research purposes of Transmeta and its Covered Subsidiaries, so long
as such research is conducted by Transmeta employees or contractors who are (i) engaged
by and subject to duties of confidentiality to Transmeta and (ii) working at facilities
regularly operated by Transmeta; and
	 
	 	(b)	 	the inducement or contributory infringement of such Intel Patent arising solely
from Transmeta’s licensing of the Transmeta Power Management Technology (and related
technology transfer and technical support services to the extent they are reasonably
necessary to facilitate such licensing) but only as to the Transmeta Power Management
Technology existing as of October 20, 2007.

For clarity, the above covenants (i) do not apply to, among other things, any marketing,
distribution, sale, offering to sell, importation, manufacturing, purchasing or other disposition
of any product or service, except as expressly set out in Section 3.1(b) above, and (ii) do not grant

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any license, immunity or protection, expressly or by implication, estoppel or otherwise, to
any customer, licensee, distributor, importer or partner of Transmeta or its Subsidiaries for any
act, including but not limited to the making, having made (including by Transmeta) offering to
sell, selling using or otherwise disposing of any process, machine, manufacture or composition of
matter. No right or covenant granted by Intel under this Section 3.1 is transferable, whether by
assignment, Change of Control or operation of law, without Intel’s prior written consent, which
consent may be withheld at Intel’s sole discretion.

	3.2.	 	Transmeta Licenses to Intel. Subject to the terms and conditions of this Agreement,
Transmeta and its Granting Subsidiaries hereby grant to:

	 	(a)	 	Intel and its Covered Subsidiaries a non-exclusive, non-transferable, worldwide
license, without the right to sublicense, under Transmeta’s Patents to:

	 	(1)	 	make, use, sell (directly and/or indirectly), offer to sell,
import and otherwise dispose of all Intel Licensed Products, alone and in
combination with other Intel Licensed Products and/or other products; and
	 
	 	(2)	 	make, have made, use and/or import any equipment and practice
any method or process for the manufacture, use, import and/or sale of Intel
Licensed Products; and
	 
	 	(3)	 	have made products by another manufacturer for supply to Intel
or to any Intel Covered Subsidiary for use, import, sale, offer for sale or
disposition by Intel or any Intel Covered Subsidiary pursuant to the license
granted above in Section 3.2(a)(1); and

	 	(b)	 	direct and indirect customers of Intel and its Covered Subsidiaries a
non-exclusive, non-transferable, worldwide license, without the right to sublicense,
under Transmeta’s Patents to use, sell, offer to sell, import and otherwise dispose of
all Intel Licensed Products, alone and in combination with other Intel Licensed
Products and/or other products; provided however, that any combination of one or more
Intel Licensed Products with one or more other products shall be licensed under a
patent claim of a Transmeta Patent reading on that combination if and only if the
combination would not infringe the claim of the Transmeta Patent but for the inclusion
of at least one Intel Licensed Product.

	 	 	The Parties agree and acknowledge that customers of Intel and its Covered Subsidiaries are
intended to be third-party beneficiaries under the terms of this Section 3.2.
	 
	3.3.	 	Software. Transmeta understands and acknowledges that Intel Licensed Products may
consist of software, and that software is often distributed to end users by providing a single
master copy of such software to a distributor, replicator, VAR, OEM or other agent and
authorizing such agent to reproduce such software in substantially identical
form and distribute it as a product of the providing Party.
Accordingly, Transmeta agrees that the licenses granted to
Intel in this Section 3 are intended to apply to the
reproduction and subsequent distribution, as a product of
Intel or of any of Intel’s

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	 	 	Covered Subsidiaries, of such software Intel Licensed Products by any such authorized agent.

	3.4.	 	Covenants, Licenses and Subsidiaries.

	 	(a)	 	Intention for Controlled Subsidiaries to be Bound.

	 	(1)	 	Each Party (as used in this Section 3.4(a), the “First
Party”) represents, warrants and covenants to the other Party (as used in
this Section 3.4(a), the “Second Party”) that the First Party shall
take all necessary actions, corporate, contractual or otherwise, required to
ensure that:

	 	i.	 	each and every of its Controlled Subsidiaries
which meet the conditions requisite for being a Controlled Subsidiary
as of the Effective Date shall meet the requisite conditions to become
a Granting Subsidiary (including without limitation agreeing to be
bound by the releases, licenses and other terms of this Agreement) no
later than ninety (90) days from the Effective Date; and
	 
	 	ii.	 	each and every Person which subsequently
becomes one of the First Party’s Controlled Subsidiaries shall become a
Granting Subsidiary no later than sixty (60) days from the date such
Person first meets all the conditions requisite for being a Controlled
Subsidiary.

	 	(2)	 	The Parties agree that breach by a First Party of any covenant,
representation or warranty set forth in Subsections 3.4(a)(1)i and 3.4(a)(1)ii
above shall not be a material breach. Additionally, in the event of any such
breach, the Second Party’s remedy shall be strictly limited to the rights, as
its sole and exclusive remedies for any such breach:

	 	i.	 	to seek and secure equitable relief ordering
such First Party to take all necessary actions, corporate, contractual
or otherwise, required to ensure that each and every First Party
Controlled Subsidiary becomes a Granting Subsidiary; and
	 
	 	ii.	 	solely in the event a Person that is, as of the
Effective Date, or at any time after the Effective Date becomes, a
First Party Controlled Subsidiary and thus should have been bound to
the terms of this Agreement pursuant to the terms of Subsection
3.4(a)(1), but was in fact not so bound, makes an allegation at any
time during the term of this Agreement of infringement of Patent
Rights, including without limitation by initiation of litigation or of
any administrative claim, against the Second Party, any Second Party Covered Subsidiary or their successors-in-interest, regardless of
whether that Person is at the time of such initiation still a
Controlled Subsidiary, the Second Party shall have the right to

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	 	 	 	recover from the First Party all damages reasonably foreseeable and
proximately caused by the First Party’s breach of any covenant,
representation or warranty set forth in Subsections 3.4(a)(1)i and
3.4(a)(1)ii.

	 	(3)	 	Each Party agrees to take all steps that are reasonable and in
good faith under the circumstances to ensure that all Patents directed to
inventions that are made by its employees and former employees, as well as the
employees and former employees of its Subsidiaries, and/or all Patents directed
to inventions that are made by its contractors during performance of work paid
for by the Party or any of its Subsidiaries, in each case, either alone or in
conjunction with the employees and/or contractors of one or more of its
Subsidiaries or third Persons (to the extent legally possible), are subject to
the licenses or covenant not to sue under this Agreement. Each Party further
agrees to take all steps that are reasonable and in good faith under the
circumstances to ensure that all Patents directed to inventions that are made
in substantial part using funding provided directly or indirectly by that Party
and/or its Subsidiaries are covered by the licenses or covenant not to sue
under this Agreement.

	 	(b)	 	Election of Intel Minority Subsidiary to be Bound. Each Intel Minority
Subsidiary may elect to become a Granting Subsidiary by agreeing in writing to be bound
by the releases, licenses and all other terms of this Agreement. Each Intel Minority
Subsidiary which becomes an Intel Granting Subsidiary will become an Intel Covered
Subsidiary only if and for only as long as all requisite conditions of being an Intel
Covered Subsidiary are met.
	 
	 	(c)	 	Broad Scope. In the event that neither a Party nor any of its
Granting Subsidiaries has the right to grant a license or covenant not to sue under any
particular Patent Rights of the scope set forth in this Agreement, then the license or
covenant not to sue granted herein under such Patent Rights shall be of the broadest
scope the Party or any of its Granting Subsidiaries has the right to grant.
	 
	 	(d)	 	Consent to Third-Party License Grant. If a third Person has the right
to grant a covenant not to sue and/or license under Patent Rights within the scope of
those granted under Section 3 of this Agreement, but such right is subject to the
consent of the other Party or any of its Granting Subsidiaries (collectively,
“Consenting Party”), the Consenting Party shall provide said third Person with
any consent required to enable said third Person to so covenant not to sue and/or
license on whatever terms such third Person may deem appropriate. In the event said
Covered Party is required to pay any royalties or other consideration to such third
Person for such grant of Patent Rights and the Consenting Party receives all or any
portion of any such royalties or other consideration, the Consenting Party
shall tender to such Covered Party an amount equal to the value of any royalties or
other consideration received by the Consenting Party as a result of said third
Person so covenanting not to sue and/or licensing such Covered Party, but such

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	 	 	 	amount shall in no case be more than the amount such Covered Party actually paid to
said third Person for such grant of Patent Rights.
	 
	 	(e)	 	No Sham Subsidiaries. The Parties represent, warrant and covenant that
they shall not participate in the creation or acquisition of any Subsidiary where a
primary purpose of such creation or acquisition is to extend the benefits of this
Agreement to a third Person. The Parties agree that any such attempt shall not extend
any rights under this Agreement to such third Person or Subsidiary, including without
limitation any benefit as a Covered Subsidiary.
	 
	 	(f)	 	Restricted Patent Rights. If any Transmeta or any Transmeta Granting
Party owns or has the right to enforce or control the enforcement of any Patent Rights,
but does not have the right to license such Patent Rights to Intel under the terms of
this Agreement (such Patent Rights referred to in this Section 3.4(f) as
“Restricted Patent Rights”) then, if and to the extent such Restricted Patent
Rights would have been licensed to Intel under this Agreement if Transmeta or the
Transmeta Granting Subsidiary had the right to license such Restricted Patent Rights:

	 	(1)	 	Transmeta and the Transmeta Granting Subsidiary hereby grants
to Intel, and promises for itself and its permitted successors and assigns of
such Restricted Patent Rights to abide by its grant of, an immunity from suit
for infringement of such Restricted Patent Rights of a scope identical to the
rights that would have been granted under this Agreement if Transmeta or the
Transmeta Granting Subsidiary had the right to license such Restricted Patent
Rights;
	 
	 	(2)	 	Transmeta and the Transmeta Granting Subsidiary shall not give
its assent if that assent is required to allow a third Person to Assert the
Restricted Patent Rights against Intel products or activities; provided that in
any event Transmeta and the Transmeta Granting Subsidiary shall be free to
fulfill its preexisting contractual obligations to provide assistance and
support as may be required under any pre-existing contractual agreement; and
	 
	 	(3)	 	Transmeta and the Transmeta Granting Subsidiary promise to
offset or repay over to Intel any monetary awards for damages and/or royalties
to be paid or paid by Intel and owing to or ultimately delivered to Transmeta
or the Transmeta Granting Subsidiary as a result of litigation or received in
compromise of any claim by the holder of the Restricted Patent Rights against
Intel Licensed Products to the extent attributable to such Restricted Patent
Rights.

	 	(g)	 	Cessation of Subsidiary Status. Notwithstanding anything to the
contrary contained in this Agreement, the extension of rights under Sections 3.1 and
3.2 hereof to a Covered Subsidiary shall apply only during the time period when such
Covered Subsidiary meets all requisite conditions of being a Covered Subsidiary.

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	 	 	 	However, if a Granting Subsidiary of a Party holds any Patents that are licensed to or
the subject of a covenant not to sue for the benefit of the other Party and its Covered
Subsidiaries under the terms of this Agreement and that Granting Subsidiary ceases to
meet all requisite conditions of being a Granting Subsidiary for any reason, the
licenses or covenants not to sue granted by such Granting Subsidiary to the other Party
and its Covered Subsidiaries under the terms of this Agreement shall continue for the
life of the Patents subject to such licenses, and the terms of Sections 7.14 and 7.15
shall continue to apply to such Patents, even after such entity ceases to meet all the
requirements of being a Granting Subsidiary.
	 
	 	(h)	 	Rights Requiring Payment to Third Parties. Notwithstanding anything to
the contrary contained in this Agreement, in the event that a Party or any of its
Granting Subsidiaries (the “Grantor”) obtains any Patent Rights that would be included
within the Patents licensed or covenants not to sue under this Agreement but for the
fact that granting such a license or covenant would require such Grantor to make
payments to a third Person who is not its Subsidiary, such Patent Rights shall be
included within the Patents, if the other Party or one or more of its Covered
Subsidiaries agrees in a separate written agreement to be bound by, and protect such
Grantor against, those payment obligations.
	 
	 	(i)	 	Rights to Former Subsidiaries. Notwithstanding anything to the
contrary in this Agreement, including without limitation the provisions of Section
3.4(g), Transmeta grants to each Intel Covered Subsidiary that becomes a Former
Subsidiary a patent license sufficiently broad to encompass the existing and
anticipated business operations of the Former Subsidiary as of the time the Former
Subsidiary ceases to meet all requirements of being a Subsidiary, as set forth in the
definition of that term in Section 1.19, provided that:

	 	(1)	 	within six (6) months of the date the Former Subsidiary ceases
to meet all requirements set forth in the definition of Subsidiary, Intel
notifies Transmeta in writing of its intention to exercise its rights under
this Section 3.4(i); and
	 
	 	(2)	 	the Former Subsidiary does not first initiate a lawsuit or
other proceeding alleging patent infringement against Transmeta or any of its
Granting Subsidiaries for the activities that are subject to the covenant
granted in Section 3.1 of this Agreement.

	3.5.	 	No Other Rights. No rights are granted under this Agreement, by implication,
estoppel, statute or otherwise, except as expressly set forth herein. Without limiting the
previous sentence, except as expressly provided in Section 3, nothing in the licenses or
immunities granted under this Agreement or otherwise contained in this Agreement shall
expressly or by implication, estoppel or otherwise give either Party or any of its Granting Subsidiaries
any right to license (or sublicense) the other Party’s Patents to others. Nor does anything
in this Agreement grant any license to any Transmeta Covered Party.

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4. Business Terms

	4.1.	 	Consideration and Payment. In consideration of the Parties’ obligations under this
Agreement, including without limitation the releases, covenants and licenses set forth in
Sections 2 and 3, Intel shall make (i) a one-time non-refundable cash payment of One Hundred
and Fifty Million U.S. Dollars (US$150,000,000) to Transmeta (“Initial Payment”)
within thirty (30) days of the Effective Date, and (ii) non-refundable annual payments of
Twenty Million U.S. Dollars (US$20,000,000) to Transmeta payable on January 31st of
every year beginning in 2009 and continuing through 2013. For purposes of clarification, the
total amount paid by Intel to Transmeta under this Section 4.1 shall not exceed Two Hundred
and Fifty Million U.S. Dollars (US$250,000,000). Intel shall pay the sums due by wire
transfer for the account of Transmeta to such account as Transmeta may indicate from time to
time by written notice to Intel in accordance with this Agreement no less than thirty (30)
days before any payment is due to Transmeta.
	 
	4.2.	 	Taxes. The payments specified in Section 4.1 above shall be the total amount paid by
Intel, without any additional amounts due or paid as a result of any present and future taxes
(including without limitation any income taxes, sales taxes, use taxes, stamp taxes, value
added taxes, property taxes and all other taxes, duties or imposts) that may be imposed by any
taxing authority on or in relation to this Agreement. Payment of any and all such taxes shall
be the sole responsibility of Transmeta. In the event Intel in its reasonable judgment
believes that it is prohibited by law from making the payment specified in Section 4.1 unless
Intel deducts or withholds taxes therefrom and remits such taxes to any taxing jurisdiction,
Intel shall notify Transmeta of such belief in writing and confer with Transmeta in good faith
regarding the basis for such belief. If after conferring with Transmeta, Intel continues to
believe that it is prohibited by law from making the payment specified in Section 4.1 unless
Intel deducts or withholds taxes therefrom and remits such taxes to any taxing jurisdiction,
then Intel may duly withhold and remit such taxes and shall pay to Transmeta the remaining net
amount after the taxes have been withheld. If under any applicable income tax treaty the
amount of taxes withheld can be reduced, Intel will do so provided that Transmeta provides all
documents necessary to avail itself of this reduction in withholding tax. Intel shall not
reimburse Transmeta for the amount of such taxes withheld. Upon Transmeta’s request, Intel
will promptly furnish Transmeta with a copy of an official tax receipt or other appropriate
evidence of any taxes imposed on payments made under this Agreement.
	 
	4.3.	 	Technology License Agreement. Concurrent with the execution of this Agreement, the
Parties will enter into a Technology License Agreement substantially in the form attached as
Exhibit A hereto pursuant to which Transmeta will license to Intel and its Covered
Subsidiaries Transmeta’s LongRun, LongRun2 and related technologies.

5. Term, Termination And Suspension

	5.1.	 	Term. This Agreement and the rights and licenses granted under this Agreement shall
become effective on the Effective Date, and shall continue in effect until the expiration of

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	 	 	the last to expire of the Patents, unless earlier terminated by the Parties pursuant to
Section 5.2.
	 
	5.2.	 	Termination and Suspension. This Agreement may only be terminated upon the mutual
written agreement of all of the Parties. However, the Parties shall have the limited right to
temporarily suspend performance of certain obligations in the following circumstances:

	 	(a)	 	Limited Right To Suspend Performance By Intel. In the event that
Intel, an Intel Covered Subsidiary, and/or a direct or indirect customer of Intel is
sued for infringement of one or more Transmeta Patents that Intel contends is(are)
licensed under this Agreement, or Intel receives from a direct or indirect customer of
Intel a written tender of indemnification based upon a written charge of infringement
of one or more Transmeta Patents that Intel contends is(are) licensed under this
Agreement, then Intel shall have the right to suspend making the payments required by
Section 4.1 until (i) such suit is dismissed, (ii) such charge is withdrawn in writing,
or (iii) the issue of whether or not the alleged infringement is licensed under this
Agreement has been adjudicated or otherwise resolved. Transmeta agrees that Intel’s
good faith suspension of performance under this Section 5.2(a) shall not constitute a
breach of this Agreement.
	 
	 	(b)	 	Limited Right To Suspend Performance By Transmeta. In the event that
Intel fails to make any payment required by Section 4.1 and Intel has not invoked its
rights under Section 5.2(a), Transmeta shall have the right to suspend the licenses
granted under Section 3.2 until all payments, including accrued interest, have been
made to Transmeta, at which time the licenses to Intel under this Agreement shall
immediately resume effective as of the date of the initial suspension. Intel agrees
that Transmeta’s good faith suspension of performance under this Section 5.2(b) shall
not constitute a breach of this Agreement. For purposes of clarity, Transmeta shall
not have the right to suspend performance under this Section 5.2(b) based solely on
Intel’s invocation of its rights under Section 5.2(a).

	5.3.	 	Survival. The provisions of Sections 1, 2, 3, 4.1, 5.3, 6 and 7 will survive any
termination or expiration of this Agreement as a whole.

6. Warranties and Disclaimer

	6.1.	 	Transmeta represents and warrants that:

	 	(a)	 	Transmeta has not assigned or granted any exclusive licenses to any third
Person for any Transmeta Patent Rights prior to the Effective Date; and
	 
	 	(b)	 	Transmeta has taken, and will continue to take, steps that are reasonable and
in good faith under the circumstances to ensure that all Patent Rights having a first
effective filing date or priority date during the Capture Period and directed to
inventions made by the employees and former employees of Transmeta and its

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	 	 	 	Granting Subsidiaries during and within the scope of their employment at Transmeta have been
assigned to Transmeta and are included as Transmeta Patents under this Agreement; and
	 
	 	(c)	 	Transmeta has the right and authority to grant the licenses granted under
Section 3.2 of this Agreement.

	6.2.	 	Nothing contained in this Agreement shall be construed as:

	 	(a)	 	a warranty or representation by any Party or any Granting Subsidiary as to the
validity, enforceability or scope of any class or type of Patent Right; or
	 
	 	(b)	 	an agreement by or obligation of any Party or any Granting Subsidiary to bring
or prosecute actions or suits against any third Person for infringement or conferring
any right to bring or prosecute actions or suits against any third Person for
infringement; or
	 
	 	(c)	 	an agreement by or obligation of any Party or any Granting Subsidiary to defend
any action or suit brought by a third Person that challenges the validity of any of its
patents; or
	 
	 	(d)	 	conferring any right to any Person to use in advertising, publicity, or
otherwise, any trademark, trade name or names, or any contraction, abbreviation or
simulation thereof, of any Party or any Granting Subsidiary; or
	 
	 	(e)	 	conferring by implication, estoppel or otherwise, to any Person, any license or
other right under any Patent Rights, copyright, maskwork, trade secret, trademark or
other intellectual property right, except the licenses, covenants and rights expressly
granted under this Agreement; or
	 
	 	(f)	 	a requirement that either any Party or any Granting Subsidiary file or maintain
any patent; or
	 
	 	(g)	 	an obligation of any Party or any Granting Subsidiary to file any patent
application, or to secure any patent or Patent Rights, or to maintain any patent in
force.

	6.3.	 	NO IMPLIED WARRANTIES. EACH PARTY AND EACH GRANTING SUBSIDIARY HEREBY DISCLAIMS ANY
AND ALL IMPLIED WARRANTIES WITH RESPECT TO ITS PATENTS, INCLUDING WITHOUT LIMITATION ANY
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
	 
	6.4.	 	Covenants. Transmeta covenants that, in the event that it is made aware of any
patent or patent application directed to inventions made by its or its Granting Subsidiaries’
employees or former employees during and within the scope of their employment at Transmeta
that has not been assigned to Transmeta, Transmeta shall cooperate with Intel

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	 	 	in good faith and use efforts that are commercially reasonable under the circumstances to cause the
applicable employee(s) or former employee(s) to assign the applicable patent or patent
application to Transmeta.
	 
	6.5.	 	Indemnification. Transmeta shall indemnify and hold harmless Intel, its Covered
Subsidiaries and each of their officers, directors and employees from and against any and all
claims, liabilities, losses, costs and expenses (including reasonable attorneys’ fees) of any
kind finally levied against or incurred by Intel, its Covered Subsidiaries, and their
officers, directors and employees, arising out of or in connection with any breach of any of
the representations or warranties set forth in Section 6.1 of this Agreement. Intel shall
have sole control of the defense and settlement of all claims, actions or proceedings and all
negotiations relating thereto.

7. Miscellaneous Provisions

	7.1.	 	Authority. Each Party and each Granting Subsidiary represents and warrants that it
has the right to grant the licenses and releases it grants under this Agreement.

	7.2.	 	No Assignment or Assumption.

	 	(a)	 	General. This Agreement is personal to the Parties and their Granting
Subsidiaries. Neither this Agreement nor any right or obligation hereunder shall be
assignable or assumable, whether in connection with a Change of Control, bankruptcy or
otherwise, either voluntarily, by operation of law or otherwise, without the prior
written consent of the other Party, which consent may be withheld at the sole
discretion of such other Party; provided, however, that Transmeta may, in its sole
discretion, and without consent by Intel, sell, assign, transfer or pledge the rights
to receive payments under Section 4.1 of this Agreement. Notwithstanding the
foregoing, Transmeta may assign this Agreement in connection with a sale or transfer of
all or substantially all of its assets (including in connection with a Change of
Control or by operation of law); provided that (i) Transmeta gives Intel not less than
twenty (20) days’ prior written notice and (ii) the assignee agrees in writing to be
bound by all the terms and conditions of this Agreement. The Parties agree that, upon
any assignment or transfer of this Agreement by Transmeta, whether by assignement,
Change of Control or operation of law, the covenants granted by Intel in Section 3.1
herein shall automatically and immediately terminate without any further action or notice
by Intel unless Intel has granted prior written consent specifically directed to the
assignment of the covenants pursuant to Section 3.1.
	 
	 	(b)	 	Assignment or Assumption in Bankruptcy. Without limiting any other
provision of this Agreement, with respect to any proposed or purported assumption or
assignment of any right or duty under this Agreement by a Party or any Covered
Subsidiary during or in connection with any bankruptcy proceeding related to that Party
or Covered Subsidiary, the Parties agree and stipulate as follows:

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	 	(1)	 	This Agreement is an executory agreement under 11 U.S.C. § 365
(Title 11 of the United States Code being henceforth referred to in this
Section 7.2(b) as the “Bankruptcy Code”);
	 
	 	(2)	 	This Agreement is personal to the Parties and their Granting
Subsidiaries. As a licensor of, or grantor of covenants related to,
intellectual property (as that term is defined in Section 101 of the Bankruptcy
Code) under this Agreement, in entering this Agreement and granting the rights
it grants under this Agreement, each Party and each Granting Subsidiary has, in
its efforts to protect its own valuable intellectual property, relied on the
particular skills and business qualities of the recipients of such rights.
Such skills and business qualities include, without limitation, the expected
future innovation of the other Party and its Covered Subsidiaries to be
licensed to each Party and Covered Subsidiary under this Agreement, and the
particular market segments addressed by the other Party and its Covered
Subsidiaries in their businesses. Therefore, the Parties and the Granting
Subsidiaries agree that in the event of either Party’s entry into bankruptcy
proceedings of any kind (including without limitation the entry into bankruptcy
proceedings of any kind by any Covered Subsidiary), this Agreement is of the
type described in Section 365(c)(1) of the Bankruptcy Code because U.S. patent
law prohibits the assignment of a patent license without the consent of the
licensor, and thus, notwithstanding the provisions of Section 365(f) of the
Bankruptcy Code or any similar provision, this Agreement may not be assumed or
assigned in bankruptcy by a Party or any of its Covered Subsidiaries without
the consent of the other Party to this Agreement.
	 
	 	(3)	 	The Parties agree that in the event that Transmeta and/or its
Granting Subsidiary files or has filed against it a petition for relief under
the Bankruptcy Code and this Agreement were rejected in such case, Intel may,
in accordance with Section 365(n)(1)(B) of the Bankruptcy Code, elect to retain
its license rights with respect to the Transmeta Patents under Section 3 of
this Agreement, in which event Intel shall remain liable to the extent provided
in Section 365(n)(1)(B) for the payments set forth in Section 4.1 and such
payments shall be deemed royalties for the ongoing licenses set forth in
Section 3.2 herein.

	 	(c)	 	Any purported assignment, assumption or transfer in violation of this Section
7.2 shall be null and void. Subject to the provisions of this Section 7.2, this
Agreement shall be binding upon and inure to the benefit of the Parties, the Granting
Subsidiaries and their permitted successors and assigns.

	7.3.	 	Notice. All notices required or permitted to be given under the terms of this
Agreement shall be in writing (regardless of whether the provision requiring such notice
expressly calls for such notice to be in writing) and shall be delivered by hand, or if
dispatched by

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	 	 	prepaid air courier or by registered or certified airmail, postage prepaid,
addressed as follows:

	 	 	 
	If to Transmeta or any of its
Granting Subsidiaries:

	 	If to Intel or any of its Granting
Subsidiaries:
	 
	 	 
	President

	 	General Counsel
	Transmeta Corporation

	 	Intel Corporation
	2540 Mission College Blvd.

	 	2200 Mission College Blvd.
	Santa Clara, CA 95054

	 	Santa Clara, CA 95052
	United States of America

	 	United States of America
	 
	 	 
	With copies to:

	 	With a copy to:
	General Counsel

	 	Director of Licensing
	Transmeta Corporation

	 	Intel Corporation
	2540 Mission College Blvd.

	 	2200 Mission College Blvd.
	Santa Clara, CA 95054

	 	Santa Clara, CA 95052
	United States of America

	 	United States of America
	 
	 	 
	Mark A. Leahy, Esq.
	 	 
	Fenwick & West LLP
	 	 
	801 California Street
	 	 
	Mountain View, CA 94041
	 	 
	United States of America
	 	 

	 	 	Such notices shall be deemed to have been served when received by the addressee or, if
delivery is not accomplished by reason of some fault of the addressee, when tendered for
delivery. Either Party may give written notice of a change of address and, after notice of
such change has been received, any notice or request shall thereafter be given to such Party
as above provided at such changed address.
	 
	7.4.	 	No Rule of Strict Construction. Regardless of which Party may have drafted this
Agreement or any part thereof, no rule of strict construction shall be applied against either
Party or any of its Granting Subsidiaries. If any provision of this Agreement is determined
by a court to be unenforceable, the Parties shall deem the provision to be modified to the
extent necessary to allow it to be enforced to the extent permitted by law, or if it cannot be so modified, the provision will be severed and deleted from this
Agreement, and the remainder of the Agreement will continue in effect.
	 
	7.5.	 	Taxes. Subject to the provisions of Section 4.2, each Party and each Granting
Subsidiary shall be responsible for the payment of its own tax liability arising from this
transaction.
	 
	7.6.	 	Entire Agreement. This Agreement embodies the entire understanding of the Parties
and their Granting Subsidiaries with respect to the subject matter hereof, and merges all
prior oral or written communications between them, including without limitation, the Binding

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	 	 	Term Sheet. Neither of the Parties or their Granting Subsidiaries shall be bound by any
conditions, definitions, warranties, understandings, or representations with respect to the
subject matter hereof other than as expressly provided herein. No oral explanation or oral
information by either Party or any Granting Subsidiary shall alter the meaning or
interpretation of this Agreement.
	 
	7.7.	 	Modification; Waiver. No modification or amendment to this Agreement, nor any waiver
of any rights under this Agreement, shall be effective unless assented to in writing by the
Party who would be charged, or whose Granting Subsidiary would be charged, and the waiver of
any breach or default will not constitute a waiver of any other right under, or any subsequent
breach or default of, this Agreement.
	 
	7.8.	 	Governing Law. All matters arising out of or related to this Agreement, including
without limitation all matters connected with its performance, shall be construed,
interpreted, applied and governed in all respects in accordance with the laws of the United
States of America and the State of Delaware, without reference to conflict of laws principles.
	 
	7.9.	 	Jurisdiction. All disputes and litigation arising out of or related to this
Agreement, including without limitation matters connected with its performance and litigation
between Covered Parties regarding the Patents licensed hereunder, shall be subject to the
exclusive jurisdiction of the courts of the State of Delaware or of the Federal courts sitting
therein. Each Party and each Granting Subsidiary hereby irrevocably submits to the personal
jurisdiction of such courts and irrevocably waives all objections to such venue.
	 
	7.10.	 	Dispute Resolution. Any dispute arising out of or related to this Agreement shall
be resolved as follows: First, within forty five (45) days from one Party’s written request
to the other, senior executives of both Parties shall meet to attempt to resolve such dispute.
If the senior executives cannot resolve the dispute, either Party may then make a written
demand for formal dispute resolution by tendering to the other Party notice of the dispute and
its intent to invoke the terms of this Section 7.10. The Parties agree to meet within ninety
(90) days of such a demand with an impartial mediator selected by mutual agreement to consider
dispute resolution alternatives other than litigation. In the event the Parties cannot agree
on a mediator, they shall each select one nominator, who shall not at that time be employed by
either Party, and the two nominators shall agree on and appoint the mediator. If the Parties
have not resolved the dispute or agreed on an alternative method of dispute resolution within
thirty (30) days after the one-day
mediation, either Party may begin litigation proceedings; provided, however, nothing in this
provision shall prevent either Party from seeking preliminary injunctive relief. The
prevailing party in any legal action brought by one Party against the other and arising out
of this Agreement shall be entitled, in addition to any other rights and remedies that such
prevailing party may have, to reimbursement for all losses and expenses incurred by such
prevailing party and its customers, including without limitation, court costs and reasonable
attorneys’ fees. In addition, Intel shall further have the right to offset and

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	 	 	deduct any monies awarded
under this Section 7.10 from any payments required to be made by Intel under Section 4.1.

	7.11.	 	Confidentiality of Terms. Each Party and each Granting Subsidiary thereof shall
keep the terms of this Agreement (including without limitation the payment terms) confidential
and shall not now or hereafter divulge these terms to any third Person except:

	 	(a)	 	with the prior written consent of the other Party; or
	 
	 	(b)	 	to any governmental body having jurisdiction and authority to compel such
disclosure, provided that before such disclosure the Party or Granting Subsidiary
required to make such disclosure shall seek confidential treatment of any disclosed
portion of this Agreement and shall reasonably cooperate with the other Party in
seeking and securing such confidential treatment; and provided that, in the event that
Transmeta or any of its Granting Subsidiaries is requested or is legally required or
becomes legally compelled by any governmental authority or regulatory body (including
without limitation the Securities and Exchange Commission) or by statute or regulation
or by oral questions, interrogatories, requests for information or documents, subpoena,
criminal or civil investigative demand or similar process, including without limitation
in connection with any public or private offering of the capital stock of Transmeta or
any of its Granting Subsidiaries to disclose any terms of this Agreement, Transmeta and
its impacted Granting Subsidiary shall provide Intel with prompt written notice of that
fact before such disclosure and will use their best efforts to fully cooperate with
Intel to seek a protective order, confidential treatment or other appropriate remedy
with respect to the disclosure. In the event of any such disclosure, Transmeta or such
compelled Transmeta Granting Subsidiary shall disclose only that portion of the
confidential information that Transmeta is legally required to disclose and shall
exercise its best efforts to obtain reliable assurance that confidential treatment will
be accorded such information to the extent requested by Intel and to the maximum extent
possible under law. Transmeta and each Granting Subsidiary agrees that it shall
provide Intel with drafts of the disclosing materials in which Transmeta or such
Granting Subsidiary desires to disclose confidential information under this Section
7.11(b) at least five (5) business days prior to the proposed disclosure in order to
afford Intel a reasonable opportunity to review and comment upon the
proposed disclosure, and that it shall make any changes to such materials as
requested by Intel to the extent permitted by law; or
	 
	 	(c)	 	subject to Sections 7.11(d) and 7.11(e) below, as otherwise may be required by
law or legal process, including without limitation to legal and financial advisors in
their capacity of advising a Covered Party with respect to such matters, provided such
advisors are obligated not to further disclose to any other Person any portion these
terms; or
	 
	 	(d)	 	during the course of litigation, so long as the disclosure of such terms and
conditions are restricted in the same manner as is the confidential information of the
other litigating parties and so long as (a) the restrictions are embodied in a

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	 	 	 	court-entered protective order and (b) the disclosing Party or Granting Subsidiary
informs the other Party in writing at least ten (10) days in advance of the disclosure;
or

	 	(e)	 	in confidence to legal counsel, accountants, banks and financing sources and
their advisors having a reasonable need to know, solely in connection with complying
with information requests associated with contemplated and executed financial
transactions, subject to customary written obligations of non-disclosure, non-use and
safe-keeping; or
	 
	 	(f)	 	Intel and its Covered Subsidiaries may state to any potential customer and any
customer who has purchased an Intel Licensed Product that they believe such Intel
Licensed Product is licensed under Transmeta’s Patents; or
	 
	 	(g)	 	Transmeta and its Covered Subsidiaries, if any, may, under a written agreement
containing reasonable and customary non-disclosure terms, disclose to any potential
customer and any customer who has licensed Transmeta’s Power Management Technology the
exact text of Sections 3.1(a) and 3.1(b); or
	 
	 	(h)	 	Intel may disclose to its Minority Subsidiaries (and their shareholders) the
terms of this Agreement to inform or facilitate the Minority Subsidiaries’ decision on
whether to elect to be bound by this Agreement pursuant to Section 3.4(b) hereof; or
	 
	 	(i)	 	Either Party may file this Agreement in the United States Patent and Trademark
Office in accordance with 35 USC §135(c) and 37 CFR §41.205, in which case the Party
shall file the Agreement in a sealed envelope and request pursuant to 37 CFR §41.205(c)
that the document be kept separate from the file of any application or interference,
and made available only to government agencies on written request, or to any Person
upon petition accompanied by the fee set forth in 37 CFR §41.20(a) and upon a showing
of good cause.

	 	 	Additionally, each Party may use similar terms and conditions in other agreements.

	7.12.	 	Publicity. Subject to the provisions of Section 7.11, the Parties agree they will
make no public statements or announcements relating to this Agreement. Notwithstanding the
foregoing, both Parties shall have the right under a confidentiality agreement to inform third
parties under a confidentiality agreement of the rights, obligations and benefits granted to
them and their Covered Subsidiaries under this Agreement.

	7.13.	 	Force Majeure. The Parties and their Granting Subsidiaries shall be excused from
any failure to perform any obligation under this Agreement to the extent such failure is
caused by war, acts of public enemies, strikes or other labor disturbances, fires, floods,
acts of God, or any causes of like or different kind beyond the control of the Party or
Granting Subsidiary excused from performing under this Section 7.13; provided, however, for
clarity, that the refusal of a Party’s (or any Covered Subsidiary or Granting Subsidiary) to
allow its Subsidiary to perform the Subsidiary’s obligations under this

-22-

 

	 	 	 	Agreement shall not be
deemed to be beyond the control of such Subsidiary or the person so refusing, and shall be
deemed a breach of this Agreement by both such Person and such Subsidiary.

	7.14.	 	Assignment of Patents. The Parties and their Granting Subsidiaries agree that the
rights, licenses and covenants granted under this Agreement shall run with the assignment of
any Patents. Furthermore, neither Transmeta nor any of its Granting Subsidiaries shall assign
or grant any right under any of its Patents unless such assignment or grant is made subject to
the rights and licenses granted under this Agreement. Any purported assignment or grant of
right in violation of this Section 7.14 shall be null and void.

	7.15.	 	 Patent Inquiries. Each Party (and, in the case of any Person that was but is no
longer a Granting Subsidiary, any such Person) shall, upon a request from the other Party
sufficiently identifying any patent or patent application, inform the other Party as to the
extent to which said patent or patent application is subject to the licenses and other rights
granted under this Agreement. If such licenses or other rights under said patent or patent
application are restricted in scope, copies of all pertinent provisions of any contract or
other arrangement creating such restrictions shall, upon request, be furnished to the Party
making such request, unless such disclosure is prevented by such contract, and in such event,
a statement of the nature of such restriction shall be provided.

	7.16.	 	Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the same agreement.
Any counterpart or other signature delivered in electronic form or by facsimile by a Party
shall be deemed for all purposes as being a good and valid execution and delivery of this
Agreement by that Party.

[The remainder of this page is left blank intentionally.]

-23-

 

IN WITNESS WHEREOF, the Parties to have caused this Agreement to be duly executed on the date below
written.

	 	 	 	 	 	 	 	 	 	 	 
	INTEL CORPORATION	 	 	 	TRANSMETA CORPORATION	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ SUZAN A. MILLER
 

	 	 	 	By:
	 	/s/ LESTER M. CRUDELE
 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	     Suzan A. Miller	 	 	 	     Lester M. Crudele	 	 
	 	 	 	 	 	 	 
	Printed Name	 	 	 	Printed Name	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	     Vice President & Deputy General Counsel	 	 	 	     President & Chief Executive Officer	 	 
	 	 	 	 	 	 	 
	Title	 	 	 	Title	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	     December 31, 2007	 	 	 	     December 31, 2007	 	 
	 	 	 	 	 	 	 
	Date	 	 	 	Date	 	 

-24-

 

Exhibit A

Form of Technology License Agreement

-25-exv10w38

 

EXHIBIT 10.38

CONFIDENTIAL TREATMENT REQUESTED

LongRun And LongRun2 Technology License Agreement

          This LongRun and LongRun2 Technology License Agreement (“Agreement”) is made and entered into
as of December 31, 2007 (“Effective Date”), by and between Transmeta Corporation, a Delaware
corporation having an office at 2540 Mission College Blvd., Santa Clara, CA 95054 (“Transmeta”),
and Intel Corporation (“Intel”), a Delaware corporation having an office at 2200 Mission College
Blvd., Santa Clara, CA 95052 (each of Transmeta and Intel being a “Party” and together the
“Parties”).

RECITALS

          A. Transmeta and Intel entered into a Settlement, Release and License Agreement (“Settlement
Agreement”) on December 31, 2007 to settle certain litigation matters.

          B. Transmeta has developed certain microprocessor power management and related technologies,
including Transmeta Technology (as defined below) that Transmeta licenses to others.

          C. Transmeta wishes to grant to Intel, and Intel wishes to obtain from Transmeta, licenses for
Intel to use and exploit the Transmeta Technology in connection with certain products in accordance
with the terms and conditions set forth in this Agreement.

          D. Transmeta also wishes to provide to Intel, and Intel wishes to obtain from Transmeta,
certain technology transfer and technical support services related to the Transmeta Technology in
accordance with the terms of this Agreement.

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

1. DEFINITIONS

     1.1 “Exploit” means to make, import, use, sell, or offer for sale, reproduce, distribute,
create works derivative of, including to research, develop, modify, enhance, improve, have used,
export, transport, promote, market or have sold or otherwise dispose of.

     1.2 “Foundry Service” means the service of manufacturing Integrated Circuits on behalf of
third parties where the manufacturer provides the third parties with

 

			
	***	 	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.

 

 

process information (such as design rules) and/or cell libraries, library tools, standard
cells, function block, macros (such as, by way of example, but not limitation, a digital or analog
block or cell library) to be incorporated into the Integrated Circuits.

     1.3 “Have Made” means for Intel (or a sublicensed Intel Subsidiary (as defined below)) to
contract with a third party or parties to perform designing or manufacturing functions for and on
behalf of Intel (or the sublicensed Intel Subsidiary).

     1.4 “Integrated Circuit” means an integrated unit comprising one or more active and/or passive
circuit elements associated on one or more substrates, such unit forming, or contributing to the
formation of, a circuit for performing electrical functions (including, if provided therewith,
housing and/or supporting means).

     1.5 “Intel Improvements” means any improvements, modifications, enhancements or extensions to,
and derivative works of the Transmeta Technology, in whole or in part, developed by or for Intel or
an Intel Subsidiary by any employee, contractor, consultant or agent of Intel or a Subsidiary who
has had access to Transmeta Technology pursuant to this Agreement.

     1.6 “Intel Licensed Product” has the same meaning set forth in the Settlement Agreement.

     1.7 “Intellectual Property Rights” means Patent rights, mask work rights, copyrights, rights
in trade secrets and know-how, and any other intellectual property rights recognized in any country
or jurisdiction in the world, exclusive of rights in and to trademarks, trade names, logos, service
marks, other designations of source and design patents and design patent applications.

     1.8 “Licensed Products” means any active or passive circuit element, apparatus, appliance,
circuit assembly, computer, device, equipment, firmware, housing, Integrated Circuit,
instrumentality, material, method, process, service, software, substrate or other means for
calculating, classifying, combining, computing, detecting, displaying, handling, hosting, imaging,
inputting, manifesting, measuring, modifying, networking, originating, photographing, playing,
printing, processing, providing, receiving, recording, reproducing, retrieving, scanning, serving,
storing, switching, transmitting or utilizing any data or any other information for any purpose,
including without limitation any component or subsystem thereof and any supplies therefor.

     1.9 “Patent(s)” means all classes or types of patents (including without limitation originals,
divisions, continuations, continuations-in-part, extensions or reissues), and applications for
these classes or types of patents throughout the world that are owned or controlled by Transmeta or
any of its Subsidiaries at any time during the term of this Agreement or to which such entities
have the right to grant licenses.

2

 

     1.10 “Subsidiary” means any corporation, partnership, limited liability company or other
entity recognized in any jurisdiction in the world, now or hereafter, in which a Party owns or
controls (either directly or indirectly) any of the following:

          (a) if such entity has voting shares or stock or other voting securities, at least forty
percent (40%) of the outstanding shares or stock or securities entitled to vote for the election
of directors or similar managing authority; or

          (b) if such entity does not have voting shares or stock or other voting securities, at least
forty percent (40%) of the ownership interest that represents the right to make decisions for such
entity; or

          (c) any other ability to elect at least forth percent (40%) of the board of directors or
similar managing authority of the subject entity, whether by contract or otherwise.

          An entity shall be deemed to be a Subsidiary under this Agreement only so long as the Party
owning or controlling the shares, stock, securities or other ownership interest required under
Sections 1.10(a), 1.10(b) or 1.10 (c) above has not contractually or otherwise surrendered, limited
or in any other way constrained its authority to elect the managing authority or make decisions for
the entity, and only so long as all the requisite conditions of being a Subsidiary are met.
Subsidiary(ies) of Intel will be referred to as “Intel Subsidiary(ies)” and those of Transmeta will
be referred to as “Transmeta Subsidiary(ies).”

     1.11 “Transmeta Technology” means Transmeta’s LongRun and LongRun2 power management and
related technologies described in Exhibit A attached hereto, and including any
improvements, modifications, enhancements or extensions thereto, or derivative works thereof, in
whole or in part, developed by or for Transmeta or Transmeta Subsidiaries.

     1.12 “Transmeta Technology Deliverables” means those items of Transmeta Technology specified
in Exhibit A attached hereto, that Transmeta will deliver to Intel in accordance with the
terms of this Agreement.

     1.13 “Transmeta Documents” means the documents included in the Transmeta Technology
Deliverables specified in Exhibit A attached hereto, that Transmeta will deliver to Intel
pursuant to the terms of this Agreement.

2. LICENSES, LICENSE ROYALTIES AND NON-ASSERTION RIGHTS

     2.1 License Grant.

          (a) Transmeta hereby grants to Intel a worldwide, nonexclusive, nontransferable (except as
specified in Section 10.1), non-sublicensable (except as

3

 

specified in Section 2.2) and fully-paid-up license under all of Transmeta’s Intellectual
Property Rights in and to Transmeta Technology to:

               (i) Exploit (and Have Made) Intel Improvements as incorporated into Intel Licensed Products;

               (ii) Exploit (and Have Made) Licensed Products; and

               (iii) use, reproduce, distribute and create works derivative of the Transmeta Documents,
provided that Intel will comply with the confidentiality obligations hereunder to the extent
Transmeta Confidential Information (as defined below) is included.

          (b) Transmeta hereby grants to Intel a worldwide, nonexclusive, nontransferable (except as
specified in Section 10.1), non-sublicensable (except as specified in Section 2.2) and
fully-paid-up license to disclose software interfaces in the Transmeta’s Technology for the
purpose of facilitating Intel’s exercise of the rights and the licenses granted in Section 2.1(a)
above.

          (c) It is acknowledged and agreed by the Parties that the rights and licenses granted under
this Section expressly include the right and license for Intel to utilize any Transmeta Technology
to provide Foundry Services to any third-party customers of Intel in order for such third-party
customers to design and develop Licensed Products for manufacture by Intel or its Subsidiaries for
such third-party customers, and to use, offer for sale, sell, or import such Licensed Products;
provided however, that such Foundry Services shall be provided by Intel (or its Subsidiaries) and
not by third-party manufacturers acting on behalf of Intel (or its Subsidiaries).

     2.2 Intel Subsidiaries. Intel has the right to sublicense any (or all) of the license
rights granted in Section 2.1 to any Intel Subsidiary. Intel, however, will ensure the compliance
by each and every such Intel Subsidiary with the terms and conditions of this Agreement.
Notwithstanding the foregoing sentence, failure by Intel to ensure such compliance by its
Subsidiary(ies) shall not, by itself, be grounds for Transmeta to terminate this Agreement.

     2.3 License Restrictions.

          (a) Restrictions on Have Made Rights. Intel acknowledges that any exercise of its
“Have Made” rights under Section 2.1(a)(i) and 2.1(a)(ii) is expressly contingent upon Intel
entering into a written agreement with its contract designer(s) or manufacturer(s) for the design
or manufacture of Licensed Products (a “Contract Manufacturing Agreement"). Each Contract
Manufacturing Agreement that Intel enters into shall contain provisions that protect Transmeta’s
Intellectual Property Rights in and to the Transmeta Technology, Transmeta Technology Deliverables
and Transmeta Confidential Information to at least the same extent Intel protects its own
Intellectual Property Rights.

4

 

          (b) Limited Rights. Intel’s rights in the Transmeta Technology, Transmeta Technology
Deliverables and Transmeta Confidential Information will be limited to those expressly granted in
this Agreement. Transmeta reserves all rights in and to the Transmeta Technology, Transmeta
Technology Deliverables and Transmeta Confidential Information not expressly granted to Intel
hereunder.

          (c) Specific Restrictions. Without limiting any restrictions or other limitations
specified in Section 2.3(a) above, Intel further acknowledges that in no event shall Intel or a
sublicensed Intel Subsidiary authorize or permit an Intel contract designer or manufacturer to
Exploit or Have Made a Licensed Product for or on behalf of any party other than Intel or a
sublicensed Intel Subsidiary, as applicable.

3. TECHNOLOGY TRANSFER SERVICES

     3.1 Transmeta Obligations: Transmeta will deliver to Intel the Transmeta Technology
Deliverables as set forth in Exhibit A within two (2) months of the Effective Date.

     3.2 Technology Transfer Training Services. During and within the one-year period
following the Effective Date (the “Technology Transfer Services Period”), Transmeta will provide to
Intel the technology training as set forth in Exhibit A in accordance with the terms
specified therein (Technology Transfer Training” ).

     3.3 Technical Support Services. If requested by Intel, and subject to the Parties’
mutual agreement regarding resource requirements and applicable service fees, Transmeta will make
available to Intel during the Technology Transfer Services Period the technical support services
specified in Exhibit B or as otherwise agreed between the Parties (“Technical Support
Services”). Intel will have no obligation to request or engage Transmeta to provide any Technical
Support Services pursuant to this Section 3.3 or otherwise. Unless otherwise agreed in writing
between the Parties, Transmeta will have no obligation to provide additional Technical Support
Services or training of any kind after the expiration of the Technology Transfer Services Period.

     3.4 Provision of Transmeta Technology “AS IS”. The Transmeta Technology, Transmeta
Technology Deliverables, Technology Transfer Training and Technical Support Services are provided
“AS IS.”

4. TERM AND TERMINATION

     4.1 Term. This Agreement will begin on the Effective Date and will remain in force
perpetually unless and until terminated in accordance with Section 4.2.

     4.2 Termination. Either Party may terminate this Agreement if the other Party commits
a material breach of this Agreement and fails to cure such breach within ninety (90) days following
receipt of written notice from the non-breaching Party specifying the breach.

5

 

     4.3 Effect of Termination. Upon the termination of this Agreement by either Party
pursuant to Section 4.2: (i) all licenses and rights granted to Intel hereunder will (x) survive as
to Licensed Products in existence or in development as of the effective date of termination
(“Continuing Products”); (y) terminate as to any Licensed Products not in existence or in
development as of the effective date of termination; (ii) Intel shall return to Transmeta or
destroy all Transmeta Confidential Information and all Transmeta Technology Deliverables in its
possession or control, provided that Intel (and sublicensed Intel Subsidiaries) may retain a
reasonable number of copies thereof necessary for the provision of maintenance services to its then
existing customers to which Intel and/or Intel Subsidiaries had already sold the Licensed Products
and the exercise of the licenses granted in Section 2.1 as to the Continuing Products; and (iii)
Transmeta shall return to Intel or destroy all of Intel Confidential Information that Transmeta may
have obtained through the course of this Agreement.

     4.4 Survival. The rights and obligations of the Parties under Sections 1, 2 (only as
to Continuing Products), 3.4, 4.3, 4.4, 5, 6, 7, 8, 9 and 10 of this Agreement also will survive
the termination of this Agreement for any reason.

     4.5 Confirmation of Intel’s License Rights. The Parties acknowledge that the
Transmeta Technology is “intellectual property” as defined in Section 101(35A) of the U.S.
Bankruptcy Code (the “Code”), that this Agreement is governed by Section 365(n) of the Code, and
that Intel will have the right to exercise all rights provided by Section 365(n) of the Code with
respect to the Transmeta Technology. Without limiting the foregoing, the Parties agree that in the
event that any bankruptcy proceeding is filed by or against Transmeta, and the bankruptcy trustee
or debtor-in-possession rejects this Agreement, Intel will have the right to exercise all rights
provided by Section 365(n) of the Code, including the right to retain its license rights to the
Transmeta Technology under this Agreement and any agreement ancillary to this Agreement, subject to
Intel’s ongoing compliance with this Agreement.

5. CONFIDENTIALITY

     5.1 Confidential Information. “Confidential Information” means any business or
technical information of a Party that is identified and/or marked by the disclosing Party as
Confidential Information at the time of disclosure. Examples of Confidential Information may
include, but is not limited to, any information relating to business processes, operations, product
plans, designs, costs, product prices and names, finances, marketing plans, business opportunities,
personnel, research, development or know-how; and the terms and conditions of this Agreement. In
addition, for the purpose of this Agreement: (i) the Transmeta Technology and Transmeta Technology
Deliverables and information disclosed by Transmeta in connection with providing Technology
Transfer Training pursuant to Section 3.2 and Technical Support Services pursuant to Section 3.3
shall be deemed Transmeta’s Confidential Information unless and until such information falls into
any of the exceptions as provided in Section 5.3 below; and (ii) any Intel Improvements that Intel
provides to Transmeta pursuant to this Agreement shall be deemed Intel Confidential Information
unless and until such

6

 

information falls into any of the exceptions as provided in Section 5.3 below. For the
avoidance of doubt, it is acknowledged and agreed by the Parties that Intel has no obligation to
disclose Intel Improvements to Transmeta under this Agreement.

     5.2 Use and Disclosure Restrictions. For a period of five (5) years from the
Effective Date, neither Party (“Receiving Party”) will use the other Party’s (“Disclosing Party”)
Confidential Information except for the purposes of exercising its rights and fulfilling its
obligations hereunder, and will not disclose such Confidential Information to any third party
except to its employees and consultants as is reasonably required in connection with the exercise
of its rights and the fulfillment of its obligations under this Agreement (and, in case of any
consultants, only subject to binding use and disclosure restrictions at least as protective as
those protecting the Receiving Party’s own Confidential Information). In addition, Intel may
disclose Transmeta’s Confidential Information to any (i) Intel Subsidiary to which Intel grants a
sublicense pursuant to Section 2.2 hereof, (ii) to any third-party designer or manufacturer of
Intel or such a sublicensed Intel Subsidiary for the purpose of exercising its rights under
Sections 2.1(a)(i) and 2.1(a)(ii); and (iii) to any third-party customer of Intel or such a
sublicensed Intel Subsidiary for the purpose of exercising its rights under Section 2.1; provided,
that prior to any such disclosure, each such third party customer must execute a written
non-disclosure agreement with Intel that contains use and disclosure restrictions at least as
protective as those protecting Intel’s own Confidential Information. Each Party will use all
reasonable efforts to protect and to maintain the confidentiality of all of the other Party’s
Confidential Information in its possession or control by using the efforts that such Party
ordinarily uses with respect to its own Confidential Information of similar nature and importance,
but in no event less than reasonable efforts. The foregoing obligations will not restrict either
Party from disclosing the terms of this Agreement: (i) pursuant to the order or requirement of a
court administrative agency, or other governmental body, provided that the Party required to make
such a disclosure gives reasonable notice to the other Party, to the extent reasonably practicable,
so that the other Party may contest such an order or requirement or seek confidential treatment;
(ii) on a confidential basis to its legal or professional advisors; (iii) as required under
applicable securities regulations; and (iv) subject to execution of reasonable and customary
written confidentiality agreements consistent with the restrictions set forth herein, to present or
future providers of capital and/or potential acquirers of such Party or its assets associated with
the subject matter of this Agreement.

     5.3 Exclusions. The obligations set forth in Section 5.2 will not apply to any
information that: (i) is or becomes generally known to the public through no fault or breach of
this Agreement by the receiving Party; (ii) the receiving Party can document was rightfully known
to the receiving Party at the time of disclosure without an obligation of confidentiality owned to
the disclosing party; (iii) the receiving Party can document was independently developed by the
receiving Party without use of the disclosing Party’s Confidential Information; or (iv) the
receiving Party rightfully obtains from a third Party without restriction on use or disclosure.

7

 

6. OWNERSHIP

     6.1 Intellectual Property Ownership. It is acknowledged and agreed by the Parties
that nothing in this Agreement shall affect either Party’s ownership of any Intellectual Property
Rights which exist as of the Effective Date or will be generated independent of this Agreement
thereafter.

     6.2 Proprietary Notices. Each Party will not delete or in any manner alter the
patent, copyright, trademark, and other proprietary rights notices of the other Party (and its
suppliers, if any) appearing on the documents (including but not limited to the Transmeta
Technology and/or Transmeta Technology Deliverables, Intel Improvements), as provided or otherwise
made available by the other Party hereunder. Each Party shall reproduce such notices on all copies
it makes of the documents, as permitted hereunder.

7. REPRESENTATIONS AND WARRANTIES

     7.1 Warranty of Authority. Each Party represents and warrants to the other Party that
it has the necessary corporate power, right and authority to enter into this Agreement, to carry
out its obligations under this Agreement, and to grant the rights herein granted.

     7.2 Warranty Disclaimer of Transmeta. EXCEPT AS EXPRESSLY SET FORTH IN SECTION 7.1,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, TRANSMETA SPECIFICALLY AND EXPRESSLY DISCLAIMS
ANY AND ALL WARRANTIES AND CONDITIONS WITH RESPECT TO THE TRANSMETA TECHNOLOGY, TRANSMETA
TECHNOLOGY DELIVERABLES, TECHNOLOGY TRANSFER TRAINING AND TECHNICAL SUPPORT SERVICES, EXPRESS OR
IMPLIED, STATUTORY OR OTHERWISE, INCLUDING ANY IMPLIED WARRANTIES OR CONDITIONS OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, QUALITY, OR NON-INFRINGEMENT, EVEN IF TRANSMETA HAS BEEN MADE
AWARE OF ANY PARTICULAR INTEL REQUIREMENTS.

     7.3 Warranty Disclaimer of Intel. EXCEPT AS EXPRESSLY SET FORTH IN SECTION 7.1, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, INTEL SPECIFICALLY AND EXPRESSLY DISCLAIMS ANY AND
ALL WARRANTIES AND CONDITIONS REGARDING INTEL IMPROVEMENTS, EXPRESS OR IMPLIED, STATUTORY OR
OTHERWISE, INCLUDING ANY IMPLIED WARRANTIES OR CONDITIONS OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, QUALITY, OR NON-INFRINGEMENT, EVEN IF INTEL HAS BEEN MADE AWARE OF ANY
PARTICULAR TRANSMETA REQUIREMENTS.

8

 

8. INFRINGEMENT INDEMNITY

     8.1 Transmeta Obligations. Subject to Sections 8.2 and 8.4, Transmeta will, at its
expense: (i) defend any third-party action or proceeding brought against Intel (or an Intel
Subsidiary) to the extent it is based upon a claim that the Transmeta Technology and/or Transmeta
Technology Deliverables, as provided by Transmeta to Intel under this Agreement, infringes or
misappropriates any Intellectual Property Right of any third party; and (ii) settle such claim and
pay any costs, damages and reasonable attorneys’ fees attributable to such claim incurred by Intel
and/or Intel Subsidiaries in relation to this claim or that are payable in a settlement approved in
advance and in writing by Transmeta, provided, however, that Transmeta shall not enter into any
settlement that would impose any obligations or liability upon Intel without Intel’s prior written
consent.

     8.2 Conditions to Defense Obligations. Transmeta will have no obligations to Intel
under this Section 8 unless Intel: (i) provides Transmeta with written notice of the claim within
thirty (30) days of receiving notice of the claim and (ii) provides Transmeta with all reasonably
required information and assistance, at Transmeta’s expense, to defend or settle the claim. Intel
reserves the right to retain counsel, at Intel’s expense, to participate in the defense and
settlement of any such claim.

     8.3 Injunctions. If Intel’s use of the Transmeta Technology and/or Transmeta
Technology Deliverables is, or in Transmeta’s opinion is likely to be, enjoined due to a claim of
the type specified in Section 8.1 above, then Transmeta will, at its sole option and expense: (i)
procure for Intel the right to continue using the Transmeta Technology and/or Transmeta Technology
Deliverables under the terms of this Agreement; and/or (ii) replace or modify the Transmeta
Technology and/or Transmeta Technology Deliverables to make it non-infringing but substantially
equivalent in function; or (iii) if options (i) and (ii) above cannot be accomplished despite
Transmeta’s commercially reasonable efforts, then Transmeta and Intel will work together to
determine a mutually agreed-upon alternative solution.

     8.4 Exclusions. Notwithstanding the terms of Section 8.1, Transmeta will have no
liability for any infringement or misappropriation claim of any kind to the extent it results from:
(i) modifications to the Transmeta Technology or Transmeta Technology Deliverables not made by
Transmeta or a party authorized in writing by Transmeta, if a claim would not have occurred but for
such modifications; (ii) the combination, operation or use of the Transmeta Technology or Transmeta
Technology Deliverables with any data, software, products or devices not provided by Transmeta or
in connection with processes not provided by Transmeta, if a claim would not have occurred but for
such combination, operation or use; (iii) Intel’s failure to use updated or modified versions of
the Transmeta Technology or Transmeta Technology Deliverables provided by Transmeta if a claim
would not have occurred but for such failure to use an updated or modified version; (iv) use of the
Transmeta Technology or Transmeta Technology Deliverables by or on behalf of Intel or any Intel
Subsidiary other than in accordance with this Agreement; or (v) use of the Transmeta Technology or
Transmeta Technology Deliverables in any manner that would cause Transmeta to continue to incur
liability to a

9

 

third party with respect to an infringement or misappropriation claim after notice from
Transmeta to cease use thereof.

     8.5 Sole Remedy of Intel. AS BETWEEN TRANSMETA AND INTEL, THE PROVISIONS OF THIS
SECTION 8 SET FORTH TRANSMETA’S SOLE AND EXCLUSIVE OBLIGATIONS, AND INTEL’S SOLE AND EXCLUSIVE
REMEDIES, WITH RESPECT TO ANY THIRD-PARTY INTELLECTUAL PROPERTY RIGHTS INFRINGEMENT OR
MISAPPROPRIATION CLAIMS OF ANY KIND RELATED TO THE TRANSMETA TECHNOLOGY, TRANSMETA TECHNOLOGY
DELIVERABLES, LICENSED PRODUCTS, AND ANY TECHNOLOGY TRANSFER TRAINING AND TECHNICAL SUPPORT
SERVICES PROVIDED BY OR FOR TRANSMETA UNDER THIS AGREEMENT.

9. LIMITATION OF LIABILITY

     9.1 Exclusion of Damages. NEITHER PARTY WILL BE LIABLE FOR ANY INCIDENTAL, SPECIAL,
PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES (INCLUDING LOSS OF USE, DATA, BUSINESS, PROFITS, OR
GOODWILL) IN CONNECTION WITH, ARISING OUT OF, OR RELATING TO THIS AGREEMENT OR THE USE OF THE
TRANSMETA TECHNOLOGY, TRANSMETA TECHNOLOGY DELIVERABLES OR FROM TECHNOLOGY TRANSFER TRAINING OR
TECHNICAL SUPPORT SERVICES PERFORMED BY TRANSMETA UNDER THIS AGREEMENT, OR INTEL IMPROVEMENTS,
WHETHER SUCH LIABILITY ARISES FROM ANY CLAIM BASED UPON CONTRACT, WARRANTY, TORT (INCLUDING
NEGLIGENCE), PRODUCT LIABILITY OR OTHERWISE, AND WHETHER OR NOT A PARTY HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH DAMAGE. The limitation set forth in the previous sentence will not apply to or
restrict in any manner: (a) either Party’s liability arising from a breach of Section 5; (b) either
Party’s liability arising out of any infringement, misappropriation or violation of the other
Party’s Intellectual Property Rights; or (c) Intel’s liability arising from a breach of Section
2.3.

     9.2 Total Liability. IN NO EVENT WILL EACH OF TRANSMETA’S TOTAL LIABILITY TO INTEL
AND INTEL’S TOTAL LIABILITY TO TRANSMETA IN CONNECTION WITH, ARISING OUT OF, OR RELATING TO THIS
AGREEMENT, FROM ALL CAUSES OF ACTION AND THEORIES OF LIABILITY, EXCEED [* * *]. The limitation set
forth in the previous sentence will not apply to or restrict in any manner: (a) either Party’s
liability arising from a breach of Section 5; (b) either Party’s liability arising out of any
infringement, misappropriation or violation of the other Party’s Intellectual Property Rights; or
(c) Intel’s liability arising from any breach of Section 2.3.

     9.3 Acknowledgment. Intel acknowledges that Transmeta has entered into this Agreement
in reliance on the above limitations of liability, and that the same constitute a material basis of
the bargain between the Parties. The Parties have agreed that the limitations specified above will
survive any expiration or termination of this

10

 

Agreement and will apply even if any limited remedy specified in this Agreement is found to
have failed of its essential purpose.

10. GENERAL PROVISIONS

     10.1 Assignment. Neither Party may assign or transfer this Agreement and/or any
rights and/or obligations hereunder, in whole or in part, whether by operation of law or otherwise,
without the other Party’s express prior written consent, which consent will not be unreasonably
delayed or withheld; provided that any such assignee or transferee shall agree in writing to be
bound by the terms and conditions of this Agreement. Any attempt to assign or transfer this
Agreement without such consent, will be null and void and without effect. Notwithstanding the
foregoing, either Party may assign or transfer this Agreement, without the other Party’s consent,
to a third party that succeeds to all or substantially all of its assets or related business
(whether by sale, merger, operation of law or otherwise), and Transmeta may so assign this
Agreement to an assignee or transferee of, or successor in interest to, Transmeta’s rights to
license the Intellectual Property Rights in and to the Transmeta Technology; provided that any such
assignee, transferee or successor agrees in writing to be bound by the terms and conditions of this
Agreement. Subject to the foregoing, the rights and obligations of the Parties will be binding
upon and inure to the benefit of the Parties’ permitted successors and lawful transferees and
assigns.

     10.2 Independent Contractors. In performing their respective duties under this
Agreement, each of the Parties will be operating as an independent contractor. Nothing contained
herein will in any way constitute any association, partnership, or joint venture between the
Parties hereto. Neither Party will have the power to bind the other Party or incur obligations on
the other Party’s behalf without the other Party’s prior written consent.

     10.3 Equitable Relief. Each Party acknowledges and agrees that any breach of this
Agreement with respect to the other Party’s Confidential Information may cause such other Party to
incur irreparable harm and significant injury that would be difficult to ascertain and would not be
compensable by damages alone. Accordingly, each Party acknowledges and agrees that, in addition to
any and all remedies that the non-breaching Party may have at law or otherwise with respect to such
a breach, the non-breaching Party will have the right to obtain specific performance, injunction or
other appropriate equitable relief.

     10.4 Notice. All notices required or permitted under this Agreement will be in
writing and delivered by confirmed facsimile transmission, by courier or overnight delivery
services, or by certified mail, and in each instance will be deemed given upon receipt. All
communications will be sent to the addresses set forth below or to such other address as may be
specified by either Party to the other in accordance with this Section. Either Party may change
its address for notices under this Agreement by giving written notice to the other Party by the
means specified in this Section.

11

 

	 	 	 
	If to Transmeta:	 	If to Intel:
	 
	President
	 	General Counsel
	Transmeta Corporation

	 	Intel Corporation
	2540 Mission College Blvd.

	 	2200 Mission College Blvd.
	Santa Clara, CA 95054

	 	Santa Clara, CA 95052
	 
	With copies to:
	 	With a copy to:
	General Counsel

	 	Director of Licensing
	Transmeta Corporation

	 	Intel Corporation
	2540 Mission College Blvd.

	 	2200 Mission College Blvd.
	Santa Clara, CA 95054

	 	Santa Clara, CA 95052
	 
	 	 
	Mark A. Leahy, Esq.
	 	 
	Fenwick & West LLP
	 	 
	801 California Street
	 	 
	Mountain View, CA 94041
	 	 

     10.5 Compliance with Law; Export Controls. Each Party will comply with all laws and
regulations applicable to such Party’s performance of this Agreement. Without limiting the
generality of the foregoing, each Party will comply fully with all relevant export laws and
regulations of the United States and all other countries having competent jurisdiction (“Export
Laws”) to ensure that neither the Transmeta Technology, Transmeta Technology Deliverables nor any
direct product thereof or technical data related thereto is: (i) exported or re-exported directly
or indirectly in violation of Export Laws; or (ii) used for any purposes prohibited by the Export
Laws, including, but not limited to nuclear, chemical, or biological weapons proliferation.

     10.6 Waiver. No failure by either Party to exercise or enforce any of its rights
under this Agreement will act as a waiver of such rights, and no waiver of a breach in a particular
situation will be held to be a waiver of any other or subsequent breach.

     10.7 Severability. If any provision of this Agreement is found invalid or
unenforceable, that provision will be enforced to the maximum extent possible, and the other
provisions of this Agreement will remain in force.

     10.8 Non-Exclusive Remedy. Except as otherwise set forth in this Agreement, the
exercise by either Party of any of its remedies under this Agreement will be without prejudice to
its other remedies under this Agreement or otherwise.

     10.9 Force Majeure. Neither Party will be liable to the other Party for any delay or
failure in its performance of this Agreement to the extent that such delay or failure is due to
causes beyond its reasonable control, including, but not limited to, acts of God, fires,
earthquake, explosions, labor disputes, war, terrorism, riots, inability to obtain

12

 

energy or supplies, provided, that the non-performing Party promptly furnishes notice to the
other Party and resumes performance as soon as practicable.

     10.10 Governing Law. This Agreement will be governed by and construed in accordance
with the laws of the State of Delaware. The parties expressly disclaim the application of the U.N.
Convention on Contracts for the International Sale of Goods.

     10.11 Entire Agreement. This Agreement, including its exhibits, constitutes the
complete and exclusive understanding and agreement between the Parties relating to the subject
matter hereof and supersedes all contemporaneous and prior understandings, agreements and
communications (both written and oral) relating to its subject matter; provided, however, that the
Settlement Agreement shall continue in full force and effect without regard to the existence or
validity of this Agreement. No modifications, alterations or amendments will be effective unless
in writing signed by duly authorized representatives of both Parties.

     10.12 Publicity. Except as required by applicable law, neither Party will
individually make or issue any press release or public statement related to this Agreement or any
of the rights or obligations undertaken by either Party hereunder unless agreed otherwise in
writing by both Parties prior to the issuance of any such press release or public statement.

     10.13 Counterparts. This Agreement may be executed in multiple counterparts, each of
which will be deemed an original but all of which together will constitute one and the same
instrument.

          IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their
duly-authorized representatives as of the Effective Date.

	 	 	 	 	 	 	 	 	 	 	 
	TRANSMETA CORPORATION:	 	 	 	INTEL CORPORATION:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ LESTER M. CRUDELE
 

	 	 
	 	By:
	 	/s/ SUZAN A. MILLER
 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Name:

	 	Lester M. Crudele
	 	 	 	Name:
	 	Suzan A. Miller	 	 
	Title:

	 	President & Chief Executive Officer
	 	 	 	Title:
	 	Vice President & Deputy General Counsel	 	 
	Date:

	 	December 31, 2007
	 	 	 	Date:
	 	December 31, 2007	 	 

13

 

EXHIBIT A

Transmeta Technology, Transmeta Technology Deliverables and

Training Services

The following documents and intellectual property will be delivered substantially in the form
described below, although the exact titles and contents may change. The specific titles and
bulleted descriptions are meant to be indicative of the content of each document.

1. Transmeta LongRun Power Management Overview

           [* * *]

2. Transmeta LongRun Code Morphing Software Examples

     •     Examples and documentation of [* * *].

3. Transmeta LongRun Product Engineering Documentation

          [* * *]

4. Transmeta LongRun Circuit Design Guide

          [* * *]

5. Transmeta LongRun2 Power Management Overview

          [* * *]

6. Transmeta LongRun2 DNW Design Guide

          [* * *]

7. Transmeta LongRun2 Circuit Design Guide

          [* * *]

8. Transmeta LongRun2 [* * *] methodology

          [* * *]

14

 

9. Transmeta LongRun2 Transistor Optimization Guidelines

          [* * *]

10. Transmeta [* * *] Design Guide

          [* * *]

11. Transmeta’s Presentation Materials

     Instructional text, PowerPoint slides and other presentation materials used in connection with
the training classes.

12. Transmeta Technology Training

	 	 	Transmeta will hold training classes for Intel as soon as can be mutually agreed between the
parties, but in no case later than June 30, 2008. Training classes will cover topics 3 and 5-9
listed above. Training classes will take no more than 10 full time equivalent business days.

15

 

EXHIBIT B

Transmeta Technical Support Services

	 	1.	 	Consulting on [* * *]
	 
	 	2.	 	Consulting on [* * *]
	 
	 	3.	 	Consulting on [* * *]

16

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