Authorized Exclusive Distributor Agreement

EXHIBIT 10.15


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


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.


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(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.


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(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.


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(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 ...