EXHIBIT 10.17 TECHNOLOGY TRANSFER SERVICES AND TECHNOLOGY LICENSE AGREEMENT

1.   

DEFINITIONS

1.1  

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

1.2  

“ Intellectual Property Rights ” means patent rights (including patent applications and disclosures), 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.

1.3  

“ LongRun2 Products ” means CMOS integrated circuit semiconductor devices that are based on, manufactured utilizing, embody, implement, incorporate or practice the Transmeta Technology, in whole or in part.

1.4  

“ NECEL Improvements ” means any improvements, modifications, enhancements, extensions to, or derivative works based upon the Transmeta Technology, in whole or in part, developed by or for NECEL or an NECEL Subsidiary.

1.5  

“ Subsidiary ” means any entity that a party controls. For purpose of this definition, “controls” means having: (i) ownership of more than fifty percent (50%) of the equity securities entitled to vote for the election of directors (or, in the case of an entity that is not a corporation, for the election of the corresponding managing authority); or (ii) the right to vote for or appoint a majority of the board of directors or other governing body of such entity. Any entity will be deemed to be a “Subsidiary” only so long as such control exists. Subsidiary(ies) of NECEL will be referred to as “NECEL Subsidiary(ies)” and those of Transmeta will be referred to as “Transmeta Subsidiary(ies)”.

1.6  

“Patent” means any patent or patent application, worldwide, owned or controlled by a party at any time during the term of this Agreement, except for design patents and design patent applications.

1.7  

“ Transmeta Technology” means certain proprietary power management and related technologies, including technologies referenced as “LongRun2”, which are a collection of technical approaches which can be used to improve the characteristics of CMOS chips with respect to total chip power, active power, leakage power, performance, die size, yield and/or production costs and are a superset of, and therefore include, technologies referenced as “LongRun”, all as described in Exhibit A attached hereto, and including any improvements, modifications, enhancements, extensions thereto or derivative works based

thereon, in whole or in part, developed by or for Transmeta or Transmeta Subsidiaries, that Transmeta provides to NECEL pursuant to the terms of this Agreement.

1.8  

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

1.9  

“ Transmeta Documents ” means the documents included in the Transmeta Technology Deliverables specified in Exhibit B , attached hereto, that Transmeta will deliver to NECEL in accordance with the terms of this Agreement.

2.   

LICENSES, LICENSE ROYALTIES AND NON-ASSERTION RIGHTS

2.1  

License Grant . Subject to NECEL’s compliance with all of the terms and conditions of this Agreement (including, without limitation, timely payment of all applicable fees, royalties and any other amounts payable hereunder), Transmeta hereby grants to NECEL a worldwide, nonexclusive, nontransferable (except as specified in Section 12.1), non-sublicensable (except as specified in Section 2.2) and royalty-bearing license under all of Transmeta’s Intellectual Property Rights in and to Transmeta Technology to:

(a)  

use (and have used), reproduce (and have reproduced), modify (and have modified), extend (and have extended), improve (and have improved) and create derivative works (and have created derivative works) based upon the Transmeta Technology solely for the purpose of designing and developing LongRun2 Products for * * * CMOS semiconductor technology generations (and any intermediate (i.e. internode) generations thereof) (“ Licensed LongRun2 Products ”);

(b)  

manufacture (and Have Manufactured), use (and have used), offer for sale, sell and import Licensed LongRun2 Products; and

(c)  

use (and have used), reproduce (and have reproduced), modify (and have modified), translate (and have translated), summarize (and have summarized), and distribute (and have distributed) the Transmeta Documents, provided that NECEL will comply with the confidentiality obligations hereunder to the extent Transmeta Confidential Information (as defined below) is included.

2.2  

NECEL Subsidiaries . NECEL has the right to sublicense any (or all) of the license rights granted in Section 2.1 to any NECEL Subsidiary. NECEL,

however, hereby guarantees the compliance by each and every such NECEL Subsidiary with the terms and conditions of this Agreement, and NECEL and such NECEL Subsidiaries shall be jointly and severally liable for any breach thereof by any such NECEL Subsidiary.

2.3  

License Restrictions.

(a)  

Restrictions on Have Manufactured Rights . NECEL acknowledges that any exercise of its “Have Manufactured” rights under Section 2.1 is expressly contingent upon NECEL’s entering into a written agreement with its contract manufacturer(s) containing provisions that protect Transmeta’s Intellectual Property Rights in and to the Transmeta Technology, Transmeta Technology Deliverables and Transmeta’s Confidential Information to at least the same extent as the terms and conditions of this Agreement; and which grants Transmeta full rights, as a third party beneficiary, to enforce all restrictions in such written agreements on the use and disclosure of the Transmeta Intellectual Property Rights, Transmeta Technology, Transmeta Technology Deliverables and Transmeta’s Confidential Information. At Transmeta’s reasonable request, NECEL will furnish Transmeta with a copy of the applicable portion (which relates to the protection of Transmeta’s Intellectual Property Rights and Confidential Information) of each such written agreement. The foregoing shall not apply to those contract manufacturers (i) which only perform the assembly or testing processes and/or (ii) to which NECEL will not disclose any Transmeta Technology, Transmeta Technology Deliverables and Transmeta’s Confidential Information.

(b)  

Specific Restrictions . Without limiting any restrictions or other limitations specified in Section 2.3(a) above, NECEL further acknowledges that, in no event, will an NECEL contract manufacturer be permitted to manufacture, use, offer to sale, sell, import or otherwise distribute any LongRun2 Product for or on behalf of any party other than NECEL or an NECEL Subsidiary, as applicable.

(c)  

Limited Rights . NECEL’s rights in the Transmeta Technology, Transmeta Technology Deliverables and Transmeta’s 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’s Confidential Information not expressly granted to NECEL

hereunder. For the avoidance of doubt, NECEL acknowledges and agrees that it may not use (or have used), reproduce (or have reproduced), modify (or have modified), extend, improve, create derivative works based upon the Transmeta Technology, Transmeta Technology Deliverables, or Transmeta Confidential Information, or manufacture (or Have Manufactured), offer for sale, sell or import the Licensed LongRun2 Product, except as expressly authorized in this Agreement.

2.4  

Royalties . For each Licensed LongRun2 Product sold or Otherwise Disposed of (as defined in Exhibit E) by or for NECEL or NECEL Subsidiaries, NECEL will pay Transmeta the non-refundable royalties calculated in accordance with the applicable royalty schedule set forth in Exhibit E . Royalties shall accrue upon the shipment of each Licensed LongRun2 Product. Within * * * after (i) the end of each calendar quarter during the term of this Agreement in which the royalty accrues and (ii) the termination of this Agreement, NECEL shall submit to Transmeta the payment of royalties due as shown in the Royalty Report (as defined below). No royalty shall accrue for any Licensed LongRun2 Products shipped as a replacement for any defective Licensed LongRun2 Products or shipped by NECEL and/or NECEL Subsidiaries for sample shipments without any charge to their customers. Royalties already paid for any Licensed LongRun2 Products shipped but returned will be credited against future royalties to be paid by NECEL to Transmeta.

2.5  

Most Favored Pricing . If, subsequent to the Effective Date of this Agreement, Transmeta enters into a similar license agreement for the Transmeta Technology with an unrelated third party similarly situated to NECEL, and such agreement provides for royalty terms more favorable than the corresponding terms specified in this Agreement, then, at NECEL’s option, this Agreement will be amended to incorporate such more favorable terms, which terms shall come into effect as of the effective date of such more favorable third party agreement, and if necessary, the parties shall make the appropriate royalty adjustments, which will be applicable to all Licensed LongRun2 Products shipping after the date of such amendment.

2.6  

Non-Assertion of Patent Rights in NECEL Improvements. NECEL, on behalf of itself and all NECEL Subsidiaries, hereby covenants not to sue for infringement of or otherwise assert rights in any of its Patents in or to NECEL Improvements against:

(a)  

Transmeta and Transmeta Subsidiaries;

(b)  

distributors and customers (including but not limited to end-user customers) of Transmeta and Transmeta Subsidiaries (hereinafter collectively “ Protected Parties ”); on the grounds that such Protected Parties are using, selling, offering for sale, importing, exporting, or otherwise distributing LongRun2 Products manufactured by, for, on behalf of or at the request of Transmeta or Transmeta Subsidiaries; and

(c)  

contract semiconductor device manufacturers of Transmeta and Transmeta Subsidiaries (“ Fabs ”), on the grounds that such Fabs are manufacturing LongRun2 Products for, on behalf of or at the request of Transmeta or Transmeta Subsidiaries.

For the avoidance of doubt, in no event shall this obligation be construed to restrict NECEL’s right to assert rights in any of its Patents in or to NECEL Improvements against such Protected Parties concerning such Protected Parties’ use, sale, offering of sale, import, export or distribution of any product other than the LongRun2 Products, nor shall this obligation be construed to restrict NECEL’s right to assert rights in any of its Patents in or to NECEL Improvements against any Fab concerning its manufacture of any product other than LongRun2 Products or such Fab’s manufacture of LongRun2 Products not for, on behalf or at the request of Transmeta or Transmeta Subsidiaries.

2.7  

Release. Notwithstanding Section 2.6 above, if Protected Parties or Fabs first sue or make a written allegation against NECEL and/or NECEL Subsidiaries for patent infringement which relates to NECEL Improvements, then NECEL’s or NECEL Subsidiaries’ covenants not to sue set forth in Section 2.6 above shall not apply to such party which sues or makes a written allegation.

2.8  

Additional Patent Licensing. At Transmeta’s request, at any time during the term of this Agreement, NECEL will negotiate in good faith the granting of a license under any NECEL Patent related to Transmeta’s LongRun2 Products. The terms of such license, including any applicable royalty, will be on a reasonable and non-discriminatory basis, and if agreed upon, will be documented in a separate agreement.

3.   

TECHNOLOGY TRANSFER SERVICES AND FEES THEREFOR

3.1  

Transmeta Obligations: Subject to NECEL’s payment of the technology transfer services fee in accordance with Section 3.5 below, Transmeta will provide NECEL with the following services for technology transfer:

(a)  

Transmeta Technology Deliverables and Training . During the * * * period following the Effective Date (the “ Technology Transfer Services Period ”), Transmeta will deliver to NECEL: (i) the Transmeta Technology Deliverables as set forth in Exhibit B as soon as reasonably practical after such deliverables become available, but in no event later than * * *; and (ii) certain technology training as set forth in Exhibit B in accordance with the terms specified therein (“ Technology Transfer Training” ”). Unless otherwise agreed in writing between the parties, Transmeta will have no obligation to provide additional deliverables or training of any kind after the expiration of the Technology Transfer Services Period

(b)  

Technical Support Services . During the Technology Transfer Services Period, Transmeta will provide to NECEL certain technical support services, as specified in Exhibit C (“ Technical Support Services ”) .

(c)  

Maintenance Services. During the Technology Transfer Services Period, Transmeta will provide or make available to NECEL the maintenance services as specified in Exhibit C (“ Maintenance Services ”).

3.2  

Additional Maintenance Services . Upon the expiration of the Technology Transfer Services Period, NECEL may, at its option, request Transmeta to continue providing Maintenance Services, at a reasonable separate fee. The terms and conditions for such additional Maintenance Services shall be discussed in good faith and, if agreed upon, will be documented in a separate agreement. Notwithstanding anything else set forth herein, unless otherwise agreed in writing between the parties, Transmeta’s obligation to provide Technology Transfer Training and/or Technical Support Services shall not extend beyond the expiration of the Technology Transfer Services Period, even in the event that NECEL has not by that time fully utilized all Technical Support Services described in Exhibit C , has not succeeded in “bringing up” a LongRun2 Product production process, or has not successfully manufactured a LongRun2 Product.

3.3  

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

3.4  

Acknowledgement of Confidential Information. NECEL acknowledges that the Transmeta Technology, Transmeta Technology Deliverables, Technology

Transfer Training, Technical Support Services and Maintenance Services contain and will disclose to NECEL certain highly valuable trade secrets of Transmeta.

3.5  

Technology Transfer Services Fee . In consideration of Transmeta’s delivery of the Transmeta Technology Deliverables and Technology Transfer Training pursuant to Section 3.1(a) during the Technology Transfer Services Period, NECEL will pay Transmeta a one-time technology transfer fee of * * * in accordance with the payment schedule set forth in Exhibit D . The technology transfer fee payable by NECEL hereunder is non-refundable, non-recoupable, and is not creditable against the royalties which may become payable by NECEL under Section 2.4. This payment is in no way dependent upon NECEL successfully manufacturing a LongRun2 Product or “bringing up” a LongRun2 Product production process.

3.6  

Technical Support Services and Maintenance Services Fee . In consideration of Transmeta’s providing Technical Support Services pursuant to Section 3.1(b) and Maintenance Services pursuant to Section 3.1(c) during the Technology Transfer Services Period, NECEL will pay Transmeta a fee of * * * in accordance with the payment schedule set forth in Exhibit D . The fee for Technical Support Services and Maintenance Services payable by NECEL hereunder is non-refundable, non-recoupable, and is not creditable against the royalties which may become payable by NECEL under Section 2.4. This payment is in no way dependent upon NECEL successfully manufacturing a LongRun2 Product or “bringing up” a LongRun2 Product production process.

3.7  

Reservation of Rights . Nothing in this Section 3 will be deemed to limit NECEL’s right to seek damages in connection with a termination of this Agreement by NECEL pursuant to Section 6.2.

4.   

PAYMENT, INTEREST AND TAXES

4.1  

Payment Method. All payments shall be made in U.S. dollars at the telegraphic transfer selling (TTS) exchange rate of the bank of NECEL’s choice by wire transfer to the bank account to be separately designated in writing by Transmeta.

4.2  

Interest and Other Payment Terms . Any payments made after the applicable due date will incur interest at the rate of * * *. All amounts specified in this Agreement will be paid in U.S. dollars and will not be subject to setoff against any amounts of claims that Transmeta owes to NECEL under this Agreement or under any other agreement.

4.3  

Taxes . NECEL will pay any and all national, state, prefecture, city, local and other excise, sales, use, value-added and other taxes and duties imposed by any

and all applicable laws and regulations in respect of the payments made under this Agreement or otherwise arising out of this Agreement, other than taxes based upon Transmeta’s net income. If it is required under applicable law, NECEL may pay, on Transmeta’s behalf, any withholding taxes that are required to be paid under applicable law. In this event, NECEL will furnish Transmeta with written documentation of such payments, including but not limited to receipts, of any and all such taxes paid by NECEL.

5.   

RECORDS AND AUDIT REQUIREMENTS

5.1  

Records . For at least * * * after the completion of each calendar quarter, NECEL will maintain complete and accurate books, records and accounts as are reasonably necessary to verify the royalty payments made by NECEL hereunder.

5.2  

Reports . Within * * * after (i) the end of each calendar quarter during the term of this Agreement; and (ii) the termination of this Agreement, NECEL will furnish to Transmeta a written report specifying the royalties owed for the relevant period (“ Royalty Report ”). If no royalties are due, that fact will be shown on such Royalty Report. The content, form and format of such Royalty Reports will be as mutually agreed to by the parties, but will include, at a minimum, the quantity and average sales price of each royalty-bearing Licensed LongRun2 Product type upon which a royalty fee is due and whether royalty schedule (a) or (b) of Exhibit E was used to determine the royalty payment due.

5.3  

Audit . During the term of this Agreement and for a period of * * * thereafter, upon at least * * * prior written notice to NECEL, Transmeta will have the right, at its own cost and expense, to authorize a certified public accounting firm, with NECEL’s prior consent which will not be unreasonably withheld or delayed, to audit NECEL’s books, records, and accounts, and other relevant information for the purpose of verifying the accuracy of the amount of royalties reported by NECEL in Royalty Reports pursuant to Section 5.2, provided that such audit shall be conducted during the normal business hours of NECEL and no more frequently than once a year. If the accounting firm concludes that additional amounts were owed during the audited period, NECEL will pay such additional amounts plus interest calculated in accordance with Section 4.2, within * * * of the date Transmeta delivers the accounting firm’s written report to NECEL. Transmeta will pay the fees and expenses charged by the accounting firm; provided however , if the audit discloses that the royalties payable by NECEL for the audited period are * * * of the amounts actually paid for such period, then NECEL will pay the reasonab