Transmeta (Semiconductor) (TMTA)

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TRANSMETA ANNOUNCES PROCESSOR TECHNOLOGY LICENSE
AND SALE AGREEMENT FOR THE CHINESE MARKET

SANTA CLARA, CA (May 31, 2005)

Pursuant to these agreements, Transmeta has agreed to sell, through a combination of asset purchase and licensing agreements, its Crusoe product line to Culturecom. As part of this agreement, Culturecom will also license Transmeta's 130-nanometer Efficeon technology to make and sell Efficeon-based products in China. 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.