Under the terms, Transmeta (Santa Clara, Calif.) has agreed to sell, through a combination of asset purchase and licensing agreements, its Crusoe microprocessor technology to Culturecom.

Culturecom will also license Transmeta's 130-nm Efficeon processor technology. The company will make and sell Efficeon-based products in China.

As part of this transaction, Culturecom will also enter into an engineering services agreement with Transmeta to facilitate the transfer of the technology. Previously, Culturecom licensed Transmeta's Midori Linux for the development of embedded applications. In conjunction with that license, Transmeta owns a minority equity stake in Chinese 2 Linux Holdings Ltd., an affiliate of Culturecom.

In consideration, Culturecom will make up-front cash payments totaling $15 million to be escrowed pending the close of the transaction. In addition to the up-front payments, Culturecom will also pay royalties to Transmeta on sales by Culturecom of Crusoe and Efficeon products. The transaction is scheduled to close in the fourth quarter of 2005.

This transaction is subject to the completion of a number of conditions, including the receipt of a technology export license from the U.S. Department of Commerce.

On March 31, Transmeta laid off 67 employees in a restructuring plan aimed to focus more heavily on IP and phase out its less profitable processors. The company also named Arthur Swift its new president and chief executive.

By: DocMemory
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