Transmeta Corp., the developer of low-power Crusoe and Efficeon processors, announced termination of its agreement with Hong Kong-based technology company under which the latter would be able to manufacture and sell Crusoe and Efficeon processors. The termination of the agreement is a result of U.S. authorities’ denials to export the technologies.

“After several meetings with U.S. government officials, Transmeta and Culturecom mutually concluded that the necessary technology export control approvals could not be obtained for these two agreements within the timeframe necessary to satisfy Culturecom’s commercial requirements,” said Arthur L. Swift, president and chief executive of Transmeta.

Culture.com Technology Limited (Culturecom) and Transmeta mutually agreed to to terminate two related asset purchase and license agreements announced in May, 2005. Under the terms of the agreements, Transmeta would have sold its Crusoe product line to Culturecom and would have licensed Transmeta’s 130nm Efficeon technology to Culturecom to make and sell Efficeon-based products in China.

“Our Crusoe and 130nm Efficeon processors are still considered very advanced, controlled technology from an export control perspective, even though they have reached the end of their competitive life-cycle for Transmeta’s ongoing business,” Mr. Swift said.

The two companies mutually and amicably elected to terminate those agreements at this time based upon their mutual concern that they could not satisfy all of the approval conditions necessary to close the agreements in a timely fashion.

The termination of the two agreements is not expected to have any adverse impact on Transmeta’s financial outlook. Transmeta has not included any potential benefit from any prospective transaction with Culturecom in its financial guidance or projections to date, in part because of the uncertainties associated with closing conditions such as technology export license approval for advanced microprocessor technologies.