Transmeta Corp. Contracts
Sample Business Contracts
Authorized Exclusive Distributor Agreement - Transmeta Corp. and Siltrontech Electronics Corp.
AUTHORIZED EXCLUSIVE DISTRIBUTOR AGREEMENT
This Agreement is made and entered into as of Sept. 12, 2000 ("Effective
Date") between Transmeta Corporation, a California corporation with its
principal place of business at 3940 Freedom Circle, Santa Clara, CA 95054
("Transmeta"), and Siltrontech Electronics Corporation, a corporation
maintaining its principal place of business at 11 F No. 20 Alley 1, Lane 768,
Sec 4. PA TE RD, Taipei, Taiwan R.O.C. ("Distributor").
RECITALS
A. Transmeta develops, manufactures and distributes certain computer
hardware products, including the products listed in Exhibit A ("Transmeta
Products"). This Agreement pertains only to "Transmeta Products" as listed in
Exhibit A and not to any other products developed, manufactured or distributed
by Transmeta.
B. Transmeta and Distributor desire that Distributor be authorized to act
as an independent distributor of Transmeta Products under the terms and
conditions set forth below.
NOW, THEREFORE, Transmeta and Distributor agree as follows:
1. Appointment as Authorized Transmeta Distributor.
(a) Exclusive Appointment. Subject to the terms of this Agreement,
Transmeta appoints Distributor, and Distributor accepts such appointment, as the
independent, exclusive distributor of Transmeta Products in and limited to the
territory set forth in Exhibit B (the "Territory"). As long as Distributor
satisfies all of its obligations under this Agreement, and unless Distributor's
exclusive status is terminated pursuant to Section 2(c)(iii) of this Agreement,
Transmeta will not appoint another distributor of Transmeta Products located in
the Territory.
(b) Exclusivity Limitations. Notwithstanding Distributor's
exclusive appointment, Transmeta reserves the right at any time to offer,
license and sell any Transmeta Products, directly or indirectly, with no
obligation to pay compensation to Distributor (i) to original equipment
manufacturers, wherever located, who may in turn distribute Transmeta Products
in the Territory, and (ii) to the customers identified in Exhibit C.
(c) Transmeta's Reserved Rights. Transmeta reserves the rights
from time to time, in its sole discretion and without liability to Distributor,
to:
(i) change, add to, or delete from the list of Transmeta
Products;
(ii) change or terminate the level or type of service or
support that Transmeta makes available; and
(iii) add to or delete from the Territory by written notice
to Distributor at least thirty (30) days prior to the effective date of the
change.
(d) Nature of Distribution. Subject to the terms of this
Agreement, to the extent that any Transmeta Product contains or consists of
software, Distributor's appointment only grants to Distributor a non-exclusive,
non-transferable license to distribute such Transmeta Product in the Territory,
and does not transfer any right, title or interest to any such software to
Distributor or Distributor's customers. Distributor may not distribute any
Transmeta Products containing or consisting of software to any third party
unless such third party is subject to an end
<PAGE>
user software license agreement with Transmeta that Transmeta will provide to
Distributor. Transmeta will sell Transmeta Products to Distributor only to the
extent such Transmeta Products consist of non-software items on the terms
specified herein. Use of the terms "sell," "license," "purchase," "license fees"
and "price" will be interpreted in accordance with this Section.
2. Obligations of Distributor.
(a) Promotion Efforts. Distributor will use its best efforts to
(i) vigorously promote the distribution of Transmeta Products in the Territory
in accordance with the terms and policies of Transmeta as announced from time to
time; and (ii) satisfy those reasonable criteria and policies with respect to
Distributor's obligations under this Agreement communicated in writing to
Distributor by Transmeta from time to time.
(b) Adaptation For Local Market. Distributor will be responsible
for translating, at its expense, all Transmeta manuals, packaging, advertising,
and promotional materials used in connection with Transmeta Products into the
language(s) of the Territory if so instructed by Transmeta in writing.
Distributor will consult with Transmeta as to what changes need to be made to
written materials pursuant to this Section 2(b), and will obtain Transmeta's
prior written consent to each such change to written materials. Distributor
hereby assigns to Transmeta all of Distributor's right, title and interest in
all such translated and modified materials, including but not limited to all
related copyrights and moral rights.
(c) Minimum Commitments. Distributor agrees to order and pay for,
during each of the periods set forth in Exhibit D, at least the minimum
quantities of each Transmeta Product indicated in Exhibit D for such periods.
Transmeta, at its sole discretion, shall have the right to amend Exhibit D upon
thirty (30) days prior written notice to Distributor. If Distributor fails to
order and pay for such minimum quantities during any period, it will provide
Transmeta within thirty (30) days of the end of such period with a written
report explaining Distributor's failure to meet its minimum quantity, and
Transmeta will determine in its sole discretion which of the following steps is
appropriate: (i) mutual agreement as to revision of future minimum quantities;
or (ii) an undertaking by Distributor to effect steps necessary to ensure that
it will meet its minimum quantities for the ensuing periods.
(d) Advertising Obligations. Distributor will aggressively
advertise Transmeta Products in the Territory in accordance with this Agreement,
provided that Distributor will not use advertisements that have not been
approved in writing by Transmeta before such use. Transmeta will set aside
advertising funds equal to up to one half percent (0.5%) of Distributor's annual
purchases. Using such funds, Transmeta shall reimburse Distributor up to the
amount in such funds for any expenses actually incurred by Distributor in
connection with advertising of the Transmeta Products, provided that such
advertising has been approved in advance by Transmeta.
(e) Inventory. Distributor will maintain at least one warehouse
facility in the Territory, and will maintain an inventory of Transmeta Products
and warehousing facilities sufficient to serve adequately the needs of its
customers on a timely basis. As a minimum, such inventory shall include not less
than the quantity of Transmeta Products necessary to meet Distributor's
reasonably anticipated demands for a thirty (30) day period. Transmeta will
authorize an inventory stock rotation twice (2 times) per year, April 1st and
September 1st, the maximum amount to be authorized will be 5% of the previous
six (6) months purchases at cost in US$ from Transmeta by Distributor. A new
stocking order of equal dollar amount must accompany the stock rotation request
from the Distributor.
-2-
<PAGE>
(f) Distributor Personnel. Distributor will train and maintain a
sufficient number of capable technical and sales personnel having the knowledge
and training necessary to: (i) inform customers properly concerning the features
and capabilities of Transmeta Products and, if necessary, competitive products;
(ii) service and support Transmeta Products in accordance with Distributor's
obligations under this Agreement; and (iii) otherwise carry out the obligations
and responsibilities of Distributor under this Agreement.
(g) Technical Expertise. Distributor and its staff will be
conversant with the technical language conventional to Transmeta Products and
similar computer products in general, and will develop sufficient knowledge of
the industry, of Transmeta Products and of products competitive with Transmeta
Products (including specifications, features and benefits) so as to be able to
explain in detail to its customers the differences between Transmeta Products
and competitive products.
(h) Training. Distributor will send at least one of its technical
and/or sales personnel for training on Transmeta Products and services. The
training will be provided free of charge at the Transmeta offices shown on page
one of this Agreement, the amount of training time will be reasonable and
appropriate in Transmeta's judgment, all such training will be in English, and
Distributor will bear all travel and living expenses for such personnel sent to
Transmeta for training.
(i) Service and Support. Distributor will provide prompt pre-and
post-sales or license service and support for all Transmeta Products located in
the Territory. Distributor will provide necessary and useful assistance and
consultation on the use of Transmeta Products; timely respond to customers'
general questions concerning use of Transmeta Products; and assist customers in
the diagnosis and correction of problems encountered in using Transmeta
Products.
(j) Meetings and Trade Show Attendance. Distributor will at its
expense: (i) attend, and aggressively promote Transmeta Products in, such trade
shows, conventions and exhibits as Transmeta reasonably requests; (ii) attend
any sales meetings held by Transmeta to which Transmeta invites Distributor with
reasonable notice; and (iii) notify Transmeta of Distributor's sales meetings
and provide Transmeta personnel adequate opportunity to provide sales and
promotion information regarding Transmeta Products in such meetings.
(k) Distributor Financial Condition. Distributor will maintain and
employ in connection with Distributor's business under this Agreement such
working capital and net worth as may be required in Transmeta's reasonable
opinion to enable Distributor to carry out and perform all of Distributor's
obligations and responsibilities under this Agreement. From time to time, on
reasonable notice by Transmeta, Distributor will furnish such financial reports
and other financial data as Transmeta may reasonably request as necessary to
determine Distributor's financial condition.
(l) Transmeta Packaging. Except as provided in section 2(b),
Distributor will distribute Transmeta Products with all packaging, warranties,
disclaimers and license agreements intact as shipped from Transmeta, and will
instruct its customers as to the terms of such documents applicable to Transmeta
Products.
(m) No Competing Products. Distributor will not represent or
distribute during the term of this Agreement any products which, in Transmeta's
opinion, compete, directly or indirectly, with Transmeta Products. Exhibit E
contains a list of products which, as of the Effective Date, compete with
Transmeta Products. Upon thirty (30) days prior written notice to Distributor,
Transmeta may, at its sole discretion, update or modify the list specified by
Exhibit E at any time during the term of this Agreement.
-3-
<PAGE>
(n) Distributor Covenants. Distributor will: (i) conduct business
in a manner that reflects favorably at all times on Transmeta Products and the
good name, good will and reputation of Transmeta;(ii) avoid deceptive,
misleading or unethical practices that are or might be detrimental to Transmeta,
Transmeta Products or the public; (iii) make no false or misleading
representations with regard to Transmeta or Transmeta Products; (iv) not publish
or employ, or cooperate in the publication or employment of, any misleading or
deceptive advertising material with regard to Transmeta or Transmeta Products;
(v) make no representations, warranties or guarantees to customers or to the
trade with respect to the specifications, features or capabilities of Transmeta
Products that are inconsistent with the literature distributed by Transmeta; and
(vi) not enter into any contract or engage in any practice detrimental to the
interests of Transmeta in Transmeta Products. Distributor agrees that: (1) it
will not disassemble, decompile, or reverse engineer any Transmeta Products, (2)
it will not copy or otherwise reproduce any Transmeta Products, in whole or in
part, and (3) it will not modify the Transmeta Products in any manner.
(o) Compliance with Law. Distributor will comply with all
applicable international, national, state, regional and local laws and
regulations in performing its duties hereunder and in any of its dealings with
respect to Transmeta Products.
(p) Compliance with U.S. Export Laws. Distributor acknowledges
that all Transmeta Products including documentation and other technical data are
subject to export controls imposed by the U.S. Export Administration Act of
1979, as amended (the "Act"), and the regulations promulgated thereunder.
Distributor will not export or reexport (directly or indirectly) any Transmeta
Products or documentation or other technical data therefor without complying
with the Act and the regulations thereunder.
(q) Governmental Approval. If any approval with respect to this
Agreement, or the notification or registration thereof, will be required at any
time during the term of this Agreement, with respect to giving legal effect to
this Agreement in the Territory, or with respect to compliance with exchange
regulations or other requirements so as to assure the right of remittance abroad
of U.S. dollars pursuant to Section 5(e) hereof or otherwise, Distributor will
immediately take whatever steps may be necessary in this respect, and any
charges incurred in connection therewith will be for the account of Distributor.
Distributor will keep Transmeta currently informed of its efforts in this
connection. Transmeta will be under no obligation to ship Transmeta Products to
Distributor hereunder until Distributor has provided Transmeta with satisfactory
evidence that such approval, notification or registration is not required or
that it has been obtained.
(r) Market Conditions. Distributor will advise Transmeta promptly
concerning any market information that comes to Distributor's attention
respecting Transmeta, Transmeta Products, Transmeta's market position or the
continued competitiveness of Transmeta Products in the marketplace. Distributor
will confer with Transmeta from time to time at the request of Transmeta on
matters relating to market conditions, sales forecasting and product planning
relating to Transmeta Products.
(s) Costs and Expenses. Except as expressly provided herein or
agreed to in writing by Transmeta and Distributor, Distributor will pay all
costs and expenses incurred in the performance of Distributor's obligations
under this Agreement.
3. Inspections, Records and Reporting.
-4-
<PAGE>
(a) Reports. Within ten (10) days of the end of each calendar
month, Distributor will provide to Transmeta a written report showing, for the
time periods Transmeta reasonably requests, (i) Distributor's point of sale
report showing shipments of Transmeta Products by customer name, address, zip
code, Transmeta part number, number of units sold, and revenue value, (ii)
Distributor's customer backlog report, and (iii) Distributor's current inventory
levels of Transmeta Products, in the aggregate and by Transmeta Product.
(b) Notification. Distributor will: (i) notify Transmeta in
writing of any claim or proceeding involving Transmeta Products within ten (10)
days after Distributor learns of such claim or proceeding; (ii) report promptly
to Transmeta all claimed or suspected product defects; and (iii) notify
Transmeta in writing not more than thirty (30) days after any change in the
management of Distributor or any transfer of more than twenty-five percent (25%)
of Distributor's voting control or a transfer of substantially all its assets.
(c) Records. Distributor will maintain, for at least two years
after termination of this Agreement, its records, contracts and accounts
relating to distribution of Transmeta Products, and will permit examination
thereof by authorized representatives of Transmeta at all reasonable times.
4. Order Procedure.
(a) Transmeta Acceptance. All orders for Transmeta Products by
Distributor shall be subject to acceptance in writing by Transmeta at its
principal place of business and shall not be binding until the earlier of such
acceptance or shipment, and, in the case of acceptance by shipment, only as to
the portion of the order actually shipped.
(b) Controlling Terms. The terms and conditions of this Agreement
and of the applicable Transmeta invoice or confirmation will apply to each order
accepted or shipped by Transmeta hereunder. The provisions of Distributor's form
of purchase order or other business forms will not apply to any order
notwithstanding Transmeta's acknowledgment or acceptance of such order.
(c) Cancellation. Transmeta reserves the right to cancel any
orders placed by Distributor and accepted by Transmeta as set forth above, or to
refuse or delay shipment thereof, if Distributor (i) fails to make any payment
as provided in this Agreement or under the terms of payment set forth in any
invoice or otherwise agreed to by Transmeta and Distributor, (ii) fails to meet
reasonable credit or financial requirements established by Transmeta, including
any limitations on allowable credit, or (iii) otherwise fails to comply with the
terms and conditions of this Agreement. Transmeta also reserves the right to
discontinue the manufacture or distribution of any or all Transmeta Products at
any time (with at least 30 days written notice to Distributor and to offer to
Distributor an End of Life Buy a.k.a. EOL on such terms and conditions as
Transmeta, in its sole discretion, shall specify in an End of Life Buy Letter),
and to cancel any orders outside of the 30-day notice period for such
discontinued Transmeta Products without liability of any kind to Distributor or
to any other person. No such cancellation, refusal or delay will be deemed a
termination (unless Transmeta so advises Distributor) or breach of this
Agreement by Transmeta.
5. Prices, License Fees and Payment.
(a) Prices and License Fees. During the term of this Agreement,
Transmeta shall inform Distributor as to current prices and license fees to
Distributor for Transmeta Products. Transmeta may change its prices and license
fees to Distributor from time to time upon at least thirty (30) days prior
written notice.
-5-
<PAGE>
(b) Price and License Fees Increase. In the event Transmeta
increases the price or license fees to Distributor for any Transmeta Product,
the increase shall apply to: any order received by Transmeta after the effective
date of the increase; and any order or portion thereof to be shipped after the
effective date of the increase regardless of the date the order was received;
provided, however, that any order or portion thereof transmitted by Distributor
prior to Transmeta's announcement of the increase and affected thereby, may be
cancelled without penalty by Distributor by written notice to Transmeta within
ten (10) days of such announcement.
(c) Price and License Fee Decrease. In the event that Transmeta
decreases the price or license fee to Distributor for any Transmeta Product, the
decrease shall apply to all units of such product in Distributor's inventory
that are still new as of the effective date of the decrease, and that had been
shipped to Distributor no more than ninety (90) days prior to such effective
date. For each unit of product as to which this section applies, Distributor
will receive a credit against the price or license fee of a subsequent unit
purchased from Transmeta within ninety (90) days of the effective date of the
price or license fee decrease.
(d) Taxes, Tariffs, Fees. Transmeta's prices and license fees do
not include any national, state or local sales, use, value added or other taxes,
customs duties, or similar tariffs and fees which Transmeta may be required to
pay or collect upon the delivery of Transmeta Products or upon collection of the
prices and license fees or otherwise. Should any tax or levy be made,
Distributor agrees to pay such tax or levy and indemnify Transmeta for any claim
for such tax or levy demanded. Distributor represents and warrants to Transmeta
that all Transmeta Products acquired hereunder are for redistribution in the
ordinary course of Distributor's business, and Distributor agrees to provide
Transmeta with appropriate resale certificate numbers and other documentation
satisfactory to the applicable taxing authorities to substantiate any claim of
exemption from any such taxes or fees. Distributor will pay any withholding
taxes required by applicable law. Distributor will supply Transmeta with
evidence of such payment of withholding tax, in a form acceptable to Transmeta
to meet the requirements for claiming foreign tax credits on Transmeta's federal
income tax return.
(e) Payment Terms. All payments shall be made in United States
dollars, free of any currency control or other restrictions to Transmeta at the
address designated by Transmeta. Unless otherwise agreed by Transmeta in
writing, at the time of submission of any order for Transmeta Products
hereunder, Distributor will either:
(i) Cash Payment. Pay by certified check or wire transfer
to a bank account designated by Transmeta the amount of the aggregate prices and
license fees of the Transmeta Products ordered (plus any applicable taxes,
shipping and other charges); or
(ii) Letter of Credit Payment. Cause to be issued by a bank
acceptable to Transmeta, and confirmed by a bank designated by Transmeta, one or
more irrevocable letters of credit to be equal to the aggregate prices and
license fees of the Transmeta Products ordered (plus any applicable taxes,
shipping and other charges) and to provide for payment at sight upon
presentation of Transmeta's invoices and receipted shipping documents evidencing
delivery of the invoiced Transmeta Products to the carrier or freight forwarder.
(f) Credit Terms. At Transmeta's option, shipments may be made on
Transmeta's credit terms in effect at the time an order is accepted. Transmeta
reserves the right, upon written notice to Distributor, to declare all sums
immediately due and payable in the event of a breach by Distributor of any of
its obligations to Transmeta, including the failure of
-6-
<PAGE>
Distributor to comply with credit terms. Furthermore, Transmeta reserves the
right at all times either generally or with respect to any specific order by
Distributor to vary, change or limit the amount or duration of credit to be
allowed to Distributor. Distributor agrees to pay for Transmeta Products as
invoiced.
(g) Interest. Interest shall accrue on any delinquent amounts owed
by Distributor for Transmeta Products at the lesser of eighteen percent (18%)
per annum or the maximum rate permitted by applicable usury law.
(h) No Setoff. Distributor will not setoff or offset against
Transmeta's invoices amounts that Distributor claims are due to it. Distributor
will bring any claims or causes of action it may have in a separate action and
waives any right it may have to offset, setoff or withhold payment for Transmeta
Products delivered by Transmeta. Distributor will notify Transmeta in writing of
any claims or causes of action it may have. Transmeta will respond to an such
written documentation within thirty (30) days.
6. Shipment, Risk of Loss and Delivery.
(a) Shipment. All Transmeta Products will be shipped by Transmeta
Ex-Works Factory (as defined in I.C.C. document 350), Transmeta's point of
shipment. Shipments will be made to Distributor's identified warehouse
facilities or freight forwarder, subject to approval in writing by Transmeta in
advance of shipment. Transmeta will specify its point of shipment, which may
change from time to time. Unless specified in Distributor's order, Transmeta
will select the mode of shipment and the carrier. Distributor will arrange, be
responsible for and pay all packing, shipping, freight and insurance charges
from Transmeta's point of shipment to Distributor.
(b) Title and Risk of Loss. Title (except to the extent Transmeta
Products contain or consist of software) and all risk of loss of or damage to
Transmeta Products will pass to Distributor upon delivery by Transmeta to the
carrier, freight forwarder or Distributor, whichever first occurs.
(c) Partial Delivery. Unless Distributor clearly advises Transmeta
to the contrary in writing, Transmeta may make partial shipments on account of
Distributor's orders, to be separately invoiced and paid for when due. Delay in
delivery of any installment shall not relieve Distributor of its obligation to
accept the remaining deliveries.
(d) Delivery Schedule; Delays. Transmeta will use reasonable
efforts to meet Distributor's requested delivery schedules for Transmeta
Products, but Transmeta reserves the right to refuse, cancel or delay shipment
to Distributor when Distributor's credit is impaired, when Distributor is
delinquent in payments or fails to meet other credit or financial requirements
established by Transmeta, or when Distributor has failed to perform its
obligations under this Agreement. Should orders for Transmeta Products exceed
Transmeta's available inventory, Transmeta will allocate its available inventory
and make deliveries on a basis Transmeta deems equitable, in its sole
discretion, and without liability to Distributor on account of the method of
allocation chosen or its implementation. In any event, Transmeta will not be
liable for any damages, direct, consequential, special or otherwise, to
Distributor or to any other person for failure to deliver or for any delay or
error in delivery of Transmeta Products for any reason whatsoever.
7. Distributor Determines Its Own Prices and License Fees.
-7-
<PAGE>
Although Transmeta may publish suggested wholesale or retail
prices, these are suggestions only and Distributor will be entirely free to
determine the actual prices and license fees at which Transmeta Products will be
sold or licensed to its customers.
8. Trademarks, Trade Names, Logos, Designations and Copyrights.
(a) Use During Agreement. During the term of this Agreement and
subject to the terms and conditions specified herein, Transmeta grants to
Distributor a nonexclusive, nontransferable, limited license to use, in the
Territory, Transmeta's trademarks, trade names, logos and designations as set
forth on Exhibit F only as necessary for Distributor to fulfill its obligations
hereunder. Distributor's use of such trademarks, trade names, logos and
designations will be in accordance with Transmeta's policies in effect from time
to time, including but not limited to trademark usage and cooperative
advertising policies. Transmeta's current trademark use policy is attached in
Exhibit F. Changes to this trademark use policy, that Transmeta in its sole
discretion will specify, shall be effective upon thirty (30) days' written
notice to Distributor. Distributor agrees not to attach any additional
trademarks, trade names, logos or designations to any Transmeta Product.
Distributor further agrees not to use any Transmeta trademark, trade name, logo
or designation in connection with any non-Transmeta Product. Transmeta reserves
the right to review planned uses of its trademarks, trade names, logos and
designations to confirm that they are within the guidelines, prior to usage of
such trademarks by Distributor.
(b) Copyright and Trademark Notices. Distributor will include on
each Transmeta Product that it distributes, and on all containers and storage
media therefor, all trademark, copyright and other notices of proprietary rights
included by Transmeta on such Transmeta Product. Distributor agrees not to
alter, erase, deface or overprint any such notice on anything provided by
Transmeta. Distributor also will include the appropriate trademark notices when
referring to any Transmeta Product in advertising and promotional materials.
(c) Distributor Does Not Acquire Proprietary Rights. Distributor
has paid no consideration for the use of Transmeta's trademarks, trade names,
logos, designations or copyrights, and nothing contained in this Agreement will
give Distributor any right, title or interest in any of them. Distributor
acknowledges that Transmeta owns and retains all trademarks, trade names, logos,
designations, copyrights and other proprietary rights in or associated with
Transmeta Products, and agrees that it will not at any time during or after this
Agreement assert or claim any interest in or do anything that may adversely
affect the validity of any trademark, trade name, logo, designation or copyright
belonging to or licensed to Transmeta (including, without limitation any act or
assistance to any act, which may infringe or lead to the infringement of any of
Transmeta's proprietary rights).
(d) No Continuing Rights. Upon expiration or termination of this
Agreement, Distributor will immediately cease all display, advertising and use
of all Transmeta trademarks, trade names, logos and designations and will not
thereafter use, advertise or display any trademark, trade name, logo or
designation which is, or any part of which is, similar to or confusing with any
trademark, trade name, logo or designation associated with any Transmeta
Product.
(e) Obligation to Protect. Distributor agrees to use reasonable
efforts to protect Transmeta's proprietary rights and to cooperate at
Distributor's expense in Transmeta's efforts to protect its proprietary rights.
Distributor agrees to promptly notify Transmeta of any known or suspected breach
of Transmeta's proprietary rights that comes to Distributor's attention.
9. Assignment.
-8-
<PAGE>
Transmeta has entered into this Agreement with Distributor because
of Distributor's commitments in this Agreement, and further because of
Transmeta's confidence in Distributor, which confidence is personal in nature.
This Agreement will not be assignable by either party, and Distributor may not
delegate its duties hereunder without the prior written consent of Transmeta;
provided, however, that Transmeta may (i) assign this Agreement to a subsidiary
or entity controlling, controlled by or under common control with Transmeta, or
(ii) as part of a corporate restructuring, reorganization, divestiture, merger,
acquisition or sale or other transfer of all or substantially all of the assets
of Transmeta, assign the rights and delegate the obligations of this Agreement
without the consent of Distributor. The provisions hereof shall be binding upon
and inure to the benefit of the parties, their successors and permitted assigns.
Any attempt to assign this Agreement in derogation of this Section 9 will be
null and void.
10. Duration and Termination of Agreement.
(a) Term. This Agreement will begin on the Effective Date and will
continue until December 31, 2002 unless terminated earlier in accordance with
the provisions hereof. Nothing shall be interpreted as requiring either party to
renew or extend this Agreement.
(b) Transmeta Termination For Cause. Transmeta may terminate this
Agreement at any time prior to the expiration of its stated term in the event
that:
(i) Distributor defaults in any payment due to Transmeta
and such default continues unremedied for a period of ten (10) days following
written notice of such default;
(ii) Distributor fails to perform any other obligation,
warranty, duty or responsibility or is in default with respect to any term or
condition undertaken by Distributor under this Agreement and such failure or
default continues unremedied for a period of twenty (20) days following written
notice of such failure or default;
(iii) Distributor is merged, acquired, consolidated, sells
all or substantially all of its assets, or implements or suffers any substantial
change in management or control; or
(iv) Any bill or regulation granting Distributor
extracontractual compensation upon termination or expiration of this Agreement
is introduced into or passed by the legislature or other governing body of the
Territory.
(c) Termination At Will. Distributor or Transmeta may terminate
this Agreement at will, at any time during the term of this Agreement, with or
without cause, by written notice given to the other party not less than sixty
(60) days prior to the effective date of such termination.
(d) Automatic Termination. This Agreement terminates
automatically, with no further act or action of either party, if: (1) a receiver
or trustee is appointed for Distributor or its property or Distributor is
adjudged bankrupt, (2) Distributor makes an assignment for the benefit of its
creditors, (3) Distributor becomes the subject of a voluntary petition in
bankruptcy or any voluntary proceeding relating to insolvency, receivership,
liquidation, or composition for the benefit of creditors, (4) Distributor
becomes the subject of an involuntary petition in bankruptcy or any involuntary
proceeding relating to insolvency, receivership, liquidation, or composition for
the benefit of creditors, if such petition or proceeding is not dismissed within
sixty (60) days of filing, or (5) Distributor is liquidated or dissolved.
-9-
<PAGE>
(e) Orders After Termination Notice. In the event that any notice
of termination of this Agreement is given, Transmeta will be entitled to reject
all or part of any orders received from Distributor after notice but prior to
the effective date of termination if availability of Transmeta Products is
insufficient at that time to meet the needs of Transmeta and its customers
fully. Notwithstanding any credit terms made available to Distributor prior to
such notice, any Transmeta Products shipped thereafter shall be paid for by
certified or cashier's check prior to shipment.
(f) Effect of Termination or Expiration. Upon termination or
expiration of this Agreement:
(i) Transmeta, at its option and sole discretion, may
reacquire any or all Transmeta Products then in Distributor's possession at
prices and refunded license fees not greater than the prices and license fees
paid by Distributor for such Products (or, if the Products are not in unopened
factory sealed boxes, eighty percent (80%) of current published price on
Standard Distributor Price List. Upon receipt of any Transmeta Products so
reacquired from Distributor, Transmeta shall issue an appropriate credit to
Distributor's account.
(ii) The due dates of all outstanding invoices to
Distributor for Transmeta Products automatically will be accelerated so they
become due and payable on the effective date of termination, even if longer
terms had been provided previously. All orders or portions thereof remaining
unshipped as of the effective date of termination shall automatically be
cancelled.
(iii) For a period of two (2) years after the date of
termination or expiration, Distributor shall make available to Transmeta for
inspection and copying all books and records of Distributor that pertain to
Distributor's performance of and compliance with its obligations, warranties and
representations under this Agreement.
(iv) Distributor shall cease using any Transmeta trademark,
trade name, trade dress, service mark, service name, logo or designation.
(g) No Damages For Termination or Expiration. NEITHER TRANSMETA
NOR DISTRIBUTOR SHALL BE LIABLE TO THE OTHER FOR DAMAGES OF ANY KIND, INCLUDING
INCIDENTAL OR CONSEQUENTIAL DAMAGES, ON ACCOUNT OF THE TERMINATION OR EXPIRATION
OF THIS AGREEMENT IN ACCORDANCE WITH THIS SECTION 10. DISTRIBUTOR WAIVES ANY
RIGHT IT MAY HAVE TO RECEIVE ANY COMPENSATION OR REPARATIONS ON TERMINATION OR
EXPIRATION OF THIS AGREEMENT UNDER THE LAW OF THE TERRITORY OR OTHERWISE, OTHER
THAN AS EXPRESSLY PROVIDED IN THIS AGREEMENT. Neither Transmeta nor Distributor
will be liable to the other on account of termination or expiration of this
Agreement for reimbursement or damages for the loss of goodwill, prospective
profits or anticipated income, or on account of any expenditures, investments,
leases or commitments made by either Transmeta or Distributor or for any other
reason whatsoever based upon or growing out of such termination or expiration.
Distributor acknowledges that (i) Distributor has no expectation and has
received no assurances that any investment by Distributor in the promotion of
Transmeta Products will be recovered or recouped or that Distributor will obtain
any anticipated amount of profits by virtue of this Agreement, and (ii)
Distributor will not have or acquire by virtue of this Agreement or otherwise
any vested, proprietary or other right in the promotion of Transmeta Products or
in "goodwill" created by its efforts hereunder. THE PARTIES ACKNOWLEDGE THAT
THIS SECTION HAS BEEN INCLUDED AS A MATERIAL INDUCEMENT FOR TRANSMETA TO ENTER
INTO THIS AGREEMENT AND THAT TRANSMETA WOULD
-10-
<PAGE>
NOT HAVE ENTERED INTO THIS AGREEMENT BUT FOR THE LIMITATIONS OF LIABILITY AS SET
FORTH HEREIN.
(h) Survival. Transmeta's rights and Distributor's obligations to
pay Transmeta all amounts due hereunder, as well as Distributor's obligations
under Sections 3(b), 3(c), 5(d), 5(e), 5(f), 5(g), 5(h), 5(i), 8, 12, 13, 14,
15, 16(c), 16(d), 16(g), 16(h), 16(i) and 16(j) shall survive termination or
expiration of this Agreement.
11. Relationship of the Parties.
Distributor's relationship with Transmeta during the term of this
Agreement will be that of an independent contractor. Nothing in this Agreement
will be construed as creating or implying a partnership, joint venture,
employment, franchise, agency, or any other form of legal association (other
than as expressly set forth herein) between the parties. Distributor will not
have, and will not represent that it has, any power, right or authority to bind
Transmeta, or to assume or create any obligation or responsibility, express or
implied, on behalf of Transmeta or in Transmeta's name, except as herein
expressly provided.
12. Indemnification.
(a) Indemnification of Distributor. Transmeta will, at its
expense, defend Distributor against and, subject to the limitations set forth
herein, pay all costs and damages made in settlement or awarded against
Distributor resulting from any claim based on an allegation that a Transmeta
Product as supplied by Transmeta hereunder infringes a U.S. patent or copyright
of a third party, provided that Distributor (i) gives Transmeta prompt written
notice of any such claim, (ii) allows Transmeta to direct the defense and
settlement of the claims, and (iii) provides Transmeta with the information and
assistance necessary for the defense and settlement of the claim. If a final
injunction is obtained in an action based on any such claim against
Distributor's use of a Transmeta Product by reason of such infringement, or if
in Transmeta's opinion such an injunction is likely to be obtained, Transmeta
may, at its sole option, either (i) obtain for Distributor the right to continue
using the Transmeta Product, (ii) replace or modify the Transmeta Product so
that it becomes noninfringing, or (iii) if neither (i) nor (ii) can be
reasonably effected by Transmeta, credit to Distributor the prices and license
fees paid for the Transmeta Product during the twelve (12) months prior to the
credit, provided that such Transmeta Products are returned to Transmeta in an
undamaged condition.
(b) No Combination Claims. Notwithstanding subpart (a) of this
Section 12, Transmeta shall not be liable to Distributor for any claim arising
from or based upon the combination, operation or use of any Transmeta Product
with equipment, data, programming or materials not supplied by Transmeta, or
arising from any alteration or modification of Transmeta Products.
(c) Limitation. THE PROVISIONS OF THIS SECTION SET FORTH THE
ENTIRE LIABILITY OF TRANSMETA AND THE SOLE REMEDIES OF DISTRIBUTOR WITH RESPECT
TO INFRINGEMENT AND ALLEGATIONS OF INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS
OR OTHER PROPRIETARY RIGHTS OF ANY KIND IN CONNECTION WITH THE INSTALLATION,
OPERATION, DESIGN, DISTRIBUTION OR USE OF TRANSMETA PRODUCTS.
(d) Indemnification of Transmeta. Distributor agrees to indemnify
Transmeta (including paying all reasonable attorneys' fees and costs of
litigation) against and hold Transmeta harmless from, any and all claims by any
other party resulting from Distributor's acts
-11-
<PAGE>
(other than the mere marketing of Transmeta Products), omissions or
misrepresentations, regardless of the form of action.
13. Limited Warranty; Disclaimer of Warranties.
(a) Limited Warranty. TRANSMETA MAKES NO WARRANTIES OR
REPRESENTATIONS AS TO PERFORMANCE OF TRANSMETA PRODUCTS OR AS TO SERVICE TO
DISTRIBUTOR OR TO ANY OTHER PERSON, EXCEPT AS SET FORTH IN TRANSMETA'S LIMITED
WARRANTY ACCOMPANYING DELIVERY OF TRANSMETA PRODUCTS. TRANSMETA RESERVES THE
RIGHT TO CHANGE THE WARRANTY AND SERVICE POLICY SET FORTH IN SUCH LIMITED
WARRANTY, OR OTHERWISE, AT ANY TIME, WITHOUT FURTHER NOTICE AND WITHOUT
LIABILITY TO DISTRIBUTOR OR TO ANY OTHER PERSON.
(b) Disclaimer of Warranties. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, ALL IMPLIED WARRANTIES, INCLUDING BUT NOT LIMITED TO IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND
NONINFRINGEMENT, ARE HEREBY DISCLAIMED BY TRANSMETA.
(c) Distributor Warranty. Distributor will make no warranty,
guarantee or representation, whether written or oral, on Transmeta's behalf.
14. Limited Liability.
(a) REGARDLESS WHETHER ANY REMEDY SET FORTH HEREIN OR IN
TRANSMETA'S LIMITED WARRANTY ACCOMPANYING DELIVERY OF TRANSMETA PRODUCTS FAILS
OF ITS ESSENTIAL PURPOSE OR OTHERWISE, TRANSMETA WILL NOT BE LIABLE FOR ANY LOST
PROFITS OR FOR ANY DIRECT, INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR
OTHER SPECIAL DAMAGES SUFFERED BY DISTRIBUTOR, ITS CUSTOMERS OR OTHERS ARISING
OUT OF OR RELATED TO THIS AGREEMENT OR TRANSMETA PRODUCTS, FOR ALL CAUSES OF
ACTION OF ANY KIND (INCLUDING TORT, CONTRACT, NEGLIGENCE, STRICT LIABILITY AND
BREACH OF WARRANTY) EVEN IF TRANSMETA HAS BEEN ADVISED OF THE POSSIBILITY OF
SUCH DAMAGES.
(b) EXCEPT FOR LIABILITY FOR PERSONAL INJURY OR PROPERTY DAMAGE
ARISING FROM TRANSMETA'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, IN NO EVENT
WILL TRANSMETA'S TOTAL CUMULATIVE LIABILITY IN CONNECTION WITH THIS AGREEMENT OR
TRANSMETA PRODUCTS, FROM ALL CAUSES OF ACTION OF ANY KIND, INCLUDING TORT,
CONTRACT, NEGLIGENCE, STRICT LIABILITY AND BREACH OF WARRANTY, EXCEED THE
AGGREGATE NET AMOUNT PAID BY DISTRIBUTOR HEREUNDER DURING THE SIX (6) MONTHS
PRIOR TO THE DATE SUCH CAUSE OF ACTION AROSE.
(c) Distributor agrees that the limitations of liability and
disclaimers of warranty set forth in this Agreement will apply regardless of
whether Transmeta has tendered delivery of Transmeta Products or Distributor has
accepted any Transmeta Product. Distributor acknowledges that Transmeta has set
its prices and license fees and entered into this Agreement in reliance on the
disclaimers of liability, the disclaimers of warranty and the limitations of
liability set forth in this Agreement and that the same form an essential basis
of the bargain between the parties.
15. Proprietary Information.
-12-
<PAGE>
(a) Obligation. Distributor acknowledges that in the course of
performing its obligations under this Agreement, it may obtain information
relating to Transmeta and Transmeta Products which is of a confidential and
proprietary nature to Transmeta ("Proprietary Information"). Such Proprietary
Information includes without limitation trade secrets, know-how, formulas,
compositions of matter, inventions, techniques, processes, programs, diagrams,
schematics, customer and financial information and sales and marketing plans.
Distributor will (a) use such Proprietary Information only in connection with
fulfilling its obligations under this Agreement, (b) during the term of this
Agreement and for a period of seven (7) years thereafter, hold such Proprietary
Information in strict confidence and exercise due care with respect to its
handling and protection of such Proprietary Information, consistent with its own
policies concerning protection of its own proprietary and/or trade secret
information and (c) disclose, divulge or publish the same only to such of its
employees or representatives as are Qualified Personnel (as defined below) and
to no other person or entity, whether for its own benefit or for the benefit of
any other person or entity. Distributor further agrees to return all copies of
all Proprietary Information in its possession, control or custody immediately
upon termination or expiration of this Agreement. As used herein, the term
"Qualified Personnel" means such employees and representatives of Distributor
who (i) have a need to know or have access to Transmeta's Proprietary
Information in order for such employees or representatives to carry out the
purposes of this Agreement and (ii) have executed nondisclosure agreements
binding them not to use or disclose such Proprietary Information except as
permitted herein.
(b) Exceptions. The obligations contained in Section 15(a) will
not apply to Proprietary Information which (a) is or becomes public knowledge
without the fault or action of Distributor, (b) is received by Distributor from
a source other than Transmeta, which source received the information without
violation of any confidentiality restriction, (c) is independently developed by
Distributor without violation of any confidentiality restriction or (d) is or
becomes available to Distributor on an unrestricted basis from Transmeta.
16. General.
(a) Waiver. The waiver by either party of any default by the other
shall not waive subsequent defaults of the same or different kind.
(b) Notices. All notices and demands hereunder will be in writing
and will be served by personal service, mail or confirmed facsimile transmission
at the address of the receiving party set forth in this Agreement (or at such
different address as may be designated by such party by written notice to the
other party). All notices or demands by mail shall be by certified or registered
airmail, return receipt requested, and shall be deemed complete upon receipt.
(c) Attorneys' Fees. In the event any litigation is brought by
either party in connection with this Agreement, the prevailing party in such
litigation shall be entitled to recover from the other party all the costs,
attorneys' fees and other expenses incurred by such prevailing party in the
litigation.
(d) Execution of Agreement, Controlling Law, Jurisdiction and
Severability. This Agreement will become effective only after it has been signed
by Distributor and has been accepted by Transmeta at its principal place of
business, and its effective date shall be the date on which it is signed by
Transmeta. It shall be governed by and construed in accordance with the laws of
the State of California, excluding the Convention on Contracts for the
International Sale of Goods and that body of law known as conflicts of laws. Any
suit hereunder will be brought in the federal or state courts in the Northern
District of California and Distributor hereby submits to the personal
jurisdiction thereof. The English-language version of this Agreement controls
when
-13-
<PAGE>
interpreting this Agreement. Distributor consents to the enforcement of any
judgment rendered in the United States in any action between Distributor and
Transmeta. Any and all defenses concerning the validity and enforceability of
the judgment shall be deemed waived unless first raised in a court of competent
jurisdiction in the United States.
(e) Severability. In the event that any of the provisions of this
Agreement shall be held by a court or other tribunal of competent jurisdiction
to be unenforceable, such provision will be enforced to the maximum extent
permissible and the remaining portions of this Agreement shall remain in full
force and effect.
(f) Force Majeure. Transmeta shall not be responsible for any
failure to perform due to unforeseen circumstances or to causes beyond
Transmeta's reasonable control, including but not limited to acts of God, war,
riot, embargoes, acts of civil or military authorities, fire, floods, accidents,
strikes, failure to obtain export licenses or shortages of transportation,
facilities, fuel, energy, labor or materials. In the event of any such delay,
Transmeta may defer the delivery date of orders for Transmeta Products for a
period equal to the time of such delay.
(g) Equitable Relief. Distributor acknowledges that any breach of
its obligations under this Agreement with respect to the proprietary rights or
confidential information of Transmeta will cause Transmeta irreparable injury
for which there are inadequate remedies at law, and therefore Transmeta will be
entitled to equitable relief in addition to all other remedies provided by this
Agreement or available at law.
(h) Entire Agreement. This Agreement constitutes the complete and
exclusive agreement between the parties pertaining to the subject matter hereof,
and supersedes in their entirety any and all written or oral agreements
previously existing between the parties with respect to such subject matter.
Distributor acknowledges that it is not entering into this Agreement on the
basis of any representations not expressly contained herein. Any modifications
of this Agreement must be in writing and signed by both parties hereto. Any such
modification shall be binding upon Transmeta only if and when signed by one of
its duly authorized officers.
(i) Release of Claims. Any and all claims against Transmeta
arising under prior agreements, whether oral or in writing, between Transmeta
and Distributor are waived and released-by Distributor by acceptance of this
Agreement.
(j) Choice of Language. The original of this Agreement has been
written in English. Distributor waives any right it may have under the law of
Distributor's Territory to have this Agreement written in the language of
Distributor's Territory.
(k) Due Execution. The party executing this Agreement represents
and warrants that he or she has been duly authorized under Distributor's charter
documents and applicable law to execute this Agreement on behalf of Distributor.
(l) 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 instrument.
(m) Captions. The captions to sections of this Agreement have been
inserted for identification and reference purposes only and shall not be used to
construe or interpret this Agreement.
-14-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective on the date specified below.
TRANSMETA CORPORATION
Signature: /s/ Merle McClendon
-----------------------------------
Printed Name: Merle McClendon
--------------------------------
Title: CFO
---------------------------------------
Date: 9/12/00
----------------------------------------
DISTRIBUTOR
Signature: /s/ Tony Chou
-----------------------------------
Printed Name: Tony Chou
--------------------------------
Title: General Manager
---------------------------------------
Date: Sep. 17 `00
----------------------------------------
-15-
<PAGE>
EXHIBIT A
TRANSMETA PRODUCTS
Any products that appear on the Worldwide Distributor Price List.
Transmeta Distributor
Signature: /s/ Merle McClendon Signature: /s/ Tony Chou
--------------------------- -------------------------
-16-
<PAGE>
EXHIBIT B
TERRITORY
Taiwan, Hong Kong, China
Transmeta Distributor
Signature: /s/ Merle McClendon Signature: /s/ Tony Chou
--------------------------- -------------------------
-17-
<PAGE>
EXHIBIT C
TRANSMETA ACCOUNTS
All Tier 1 Notebook Manufacturers.
Tier 1 Notebook Manufacturers include but are not limited to the following:
Compaq
Acer
Hewlett Packard
IBM
Sony
Fujitsu
Gateway
Dell
NEC
Hitachi
Quanta
Transmeta Distributor
Signature: /s/ Merle McClendon Signature: /s/ Tony Chou
--------------------------- -------------------------
-18-
<PAGE>
EXHIBIT D
MINIMUM QUOTAS
Year 2000
Quotas will be equal to Transmeta Distributor Forecast
Transmeta Distributor
Signature: /s/ Merle McClendon Signature: /s/ Tony Chou
--------------------------- -------------------------
-19-
<PAGE>
EXHIBIT E
COMPETING PRODUCTS
Any microprocessor, microcontroller, processor, control unit or other central
processing unit that is designed, manufactured or distributed by or on behalf of
Intel Corporation, National Semiconductor Corporation or Advanced Micro Devices
Inc. or any of their subsidiaries or affiliates.
Transmeta Distributor
Signature: /s/ Merle McClendon Signature: /s/ Tony Chou
--------------------------- -------------------------
-20-