Document:

exv10w10

 

EXHIBIT 10.10

CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION. THE LOCATIONS OF THE OMITTED MATERIALS ARE INDICATED BY THE FOLLOWING NOTATION:
[***].

JOINT TECHNOLOGY DEVELOPMENT AGREEMENT

AMONG POLAR SEMICONDUCTOR, INC.,

SANKEN ELECTRIC COMPANY, LTD.

AND ALLEGRO MICROSYSTEMS, INC.

This joint technology development agreement (this “Agreement”) is an amendment and restatement,
effective as of September 13, 2007, of the Agreement originally effective as of February 15, 2006
by and among Polar Semiconductor, Inc., a Delaware corporation (“PSI”), Sanken Electric Company,
Ltd. of Japan (“Sanken”) and Allegro MicroSystems, Inc., a Delaware corporation (“Allegro”).

WHEREAS, PSI desires to assist Sanken and Allegro in the joint development of new technology
(initially so-called “SG5 technology”), which would be used in the manufacture of products at PSI
for Sanken and Allegro; and

WHEREAS, Sanken and Allegro wish to join in such joint development with PSI and each other; and

WHEREAS, the Agreement effective as of February 15, 2006 has been the subject of three addenda, and
the parties wish to incorporate such addenda and additional amendments effective September 13, 2007
into a single restated Agreement.

NOW, THEREFORE, in consideration of the rights and responsibilities set forth herein, these three
parties agree as follows:

	 	1.	 	Sanken and Allegro will jointly own the SG5 technology subject to the terms and
conditions herein and will each pay the following amounts to PSI, according to the
following schedule, for its assistance in developing the SG5 technology:

	 	 	 
	 	 	Monthly Amount
	Date	 	to be Paid by Each Party
	April 1, 2006

	 	[***]
	May 1, 2006
	 	 
	June 1, 2006

	 	[***]
	July 1, 2006

	 	[***]
	August 1, 2006

	 	[***]
	September 1,2006

	 	[***]
	October 1, 2006

	 	[***]
	November 1, 2006

	 	[***]
	December 1, 2006

	 	[***]
	January 1, 2007

	 	[***]
	February 1, 2007

	 	[***]
	March 1, 2007

	 	[***]
	April 1, 2007

	 	[***]
	May 1, 2007

	 	[***]
	June 1, 2007

	 	[***]
	July 1, 2007

	 	[***]
	August 1, 2007

	 	[***]
	September 1, 2007

	 	[***]
	October 1, 2007

	 	[***]
	November 1, 2007

	 	[***]
	December 1, 2007

	 	[***]

 

 

	 	 	 
	 	 	Monthly Amount
	Date	 	to be Paid by Each Party
	January 1, 2008

	 	[***]
	February 1, 2008

	 	[***]
	March 1, 2008

	 	[***]
	 

	 	 
	Total:

	 	[***]
	 

	 	 

	 	 	 	The parties acknowledge that these amounts are considered research and development expenses
necessary to develop the SG5 technology and that PSI will incur costs associated with this
development beyond the amounts paid by Sanken and Allegro.
	 
	 	 	 	The parties will sign addenda containing payment for additional development services
provided by PSI for SG5 and derivative technology beyond 3/08.
	 
	 	2.	 	Any costs in the development of SG5 not covered by the above referenced payments from
Sanken and Allegro will be incurred by PSI. PSI’s return on capital invested will come
from purchases of products for Sanken and Allegro manufactured by PSI using the SG5
technology.
	 
	 	3.	 	PSI will retain ownership to any intellectual property it owns before the commencement
of any new technology development project with Allegro and Sanken. In addition to other
amounts that Sanken and Allegro will pay to PSI pursuant to this Agreement, Sanken and
Allegro will each pay to PSI [***] in compensation for a nonexclusive license for a portion
of the so-called Polar 35 technology, which will be one of the technologies upon which the
SG5 technology will be based. The duration of this license will be for as long as Allegro
and/or Sanken use (either directly or by transfer permitted herein) the SG5 technology or
any derivative thereof.
	 
	 	4.	 	Sanken and Allegro on the one-hand and PSI on the other-hand will agree on reasonable
prices for the product to be manufactured by PSI using the SG5 technology, which pricing
should incorporate the benefits of yield improvements and cost reductions. Sanken and
Allegro will each provide good faith quarterly and long-range forecasts of products to be
purchased from PSI, and PSI will reserve, and/or install, such capacity for Sanken and
Allegro.
	 
	 	5.	 	PSI will jointly own with Sanken and Allegro the unit processes and process modules for
the SG5 technology. Further, as a result of this SG5 technology development, or jointly
developed derivatives thereof, or as part of a separate project with Sanken and/or Allegro,
PSI may develop, but will not own intellectual property (such as [***]) for certain
technology (e.g. [***]). Such intellectual property developed but not owned by PSI may be
ported by PSI across technology platforms in a modular way. Therefore, PSI may use all of
such intellectual property as part of its manufacturing for others, [***]. Sanken and
Allegro shall have the right to access the details of unit processes, process modules and
intellectual property referenced in this paragraph. Pursuant to paragraph 6 below, Sanken
and Allegro will be restricted from disclosing (except pursuant to the terms of a separate
NDA) or selling these items a.) to another Sanken or Allegro subcontractor for manufacture
even if only for Sanken or Allegro and b.) to another partner of Sanken or Allegro in
connection with the development of future generations of technology.
	 
	 	6.	 	Sanken’s and Allegro’s right to transfer the SG5 technology developed with PSI will be
limited to the following specific situations:

	 	a.	 	Sanken’s and Allegro’s reasonably projected requirements exceed PSI’s
capacity plans and/or allocations to Sanken and Allegro.
	 
	 	b.	 	Material quality or delivery nonperformance with respect to products
using the SG5 technology. (Some reasonable early warning triggers of material
nonperformance will be developed.)
	 
	 	c.	 	An option by Sanken, and/or Allegro, to move to a second source for
security of supply, provided that a negotiated volume of substantial production is,
and would continue to be, purchased from PSI.

 

 

	 	d.	 	Transfer to a new owner of Sanken or Allegro.

	 	 	 	Except d.) above, any such transfer from PSI of the SG5 technology may only be done,
pursuant to a strict non-disclosure agreement with respect to the SG5 technology.
	 
	 	7.	 	Under no circumstances may Sanken or Allegro disclose the SG5 technology to anyone
else, except to specific Sanken and Allegro customers in commercial situations for
marketing and qualification purposes. Neither Sanken nor Allegro will apply for any patent
in any country in connection with the new SG5 technology or derivatives thereof without
obtaining the permission of, and only jointly with, the other party. PSI may not disclose
the SG5 technology to any third party, except as necessary in connection with the limited
rights to use certain elements of the technology, as contained in paragraph #5 above.
	 
	 	8.	 	Certain simple improvements after the SG5 technology has been qualified should be
considered as part of continuous improvement activities, without charge to Sanken or
Allegro. Examples of such simple improvements are:

	 	a.)	 	[***].
	 
	 	b.)	 	[***].

	 	9.	 	It remains an open issue as to what, if any, costs associated with the transfer and
qualification of SG5 and/or derivative technologies from one wafer size to another or to a
new manufacturing site would be allocated to Sanken and Allegro.
	 
	 	10.	 	Although the parties hereto will refer to the technology being jointly developed
hereunder as “SG5”, Sanken may refer to it as “BCD5” in discussions with its customers,
potential customers and others and Allegro may refer to it as “ABCD5” in discussions with
its customers, potential customers and others.
	 
	 	11.	 	This Agreement applies only to technology developed jointly among PSI, Sanken and
Allegro. Technology developed with PSI, pursuant to request of only Sanken or only
Allegro, is outside the scope of this Agreement.
	 
	 	12.	 	Sanken and Allegro have agreed that the relative future value of this technology to
each company is equal.
	 
	 	13.	 	This Agreement completely replaces any other Agreements among the parties regarding the
development of SG5 technology.
	 
	 	14.	 	Miscellaneous Provisions.

	 	14.1	 	Entire Agreement. This Agreement, and the attached Exhibits,
constitutes the entire understanding between the parties with respect to the
development of SG5, superseding the Agreement executed as of February 15, 2006; an
Addendum dated August 16, 2006; an Addendum Number 2 executed in 2006; and a Third
Addendum executed in 2007.
	 
	 	14.2	 	Amendments. No amendment or modification of this Agreement shall he
effective unless set forth in writing arid signed by a duly authorized representative
of each patty.
	 
	 	14.3	 	Assignment. Neither party shall assign any or all of its rights and
obligations under this Agreement without the prior written consent of the other party.
	 
	 	14.4	 	Waiver. Any failure by a party to exercise or enforce any right under
this Agreement

 

 

	 	 	 	shall not be deemed a waiver of such party’s right thereafter to enforce each and
every term and condition of this Agreement.
	 
	 	14.5	 	Force Majeure. The obligations of a party under this Agreement will be
suspended during the period and to the extent that such party is prevented or hindered
from complying therewith by any cause beyond its reasonable control including (insofar
as such cause is beyond such party’s control but without prejudice to the generality of
the foregoing expression); strikes, lockouts, labor disputes, act of God, war, riot,
civil commotion, malicious damage, compliance with any law or governmental order, rule,
regulation or direction, accident, breakdown of plant or machinery, fire, flood or
storm. In the event of either party being so hindered or prevented such party will
give notice of suspension as soon as reasonably possible to the other party stating the
date and extent of such suspension and the cause thereof and the omission to give such
notice will forfeit the rights of such party to claim such suspension. Any party whose
obligations have been suspended as aforesaid will not be deemed to be in default of its
contractual obligations nor will any penalties or damages be payable. Any such party
will resume the performance of such obligations as soon as reasonably possible after
the removal of the cause and will so notify the other parties. In the event that such
cause continues for more than three (3) months either party may terminate this
Agreement on fourteen (14) days written notice.
	 
	 	14.6	 	Language. This Agreement was drafted and executed in the English language.
	 
	 	14.7	 	Severability. The invalidity or unenforceability of any portion of
this Agreement shall not affect the validity or enforceability of the remainder of this
Agreement.
	 
	 	14.8	 	Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Minnesota.
	 
	 	14.9	 	Dispute Resolution. The parties shall make best efforts to try to
resolve any and all claims, controversies or difficulties between the parties
(“Claims”) by mutual discussions in good faith. Should the parties be unable to reach
resolution themselves, Claims shall be finally settled by arbitration held in
Minneapolis, Minnesota, pursuant to the Commercial Arbitration Rules of the American
Arbitration Association.

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first written
above.

	 	 	 	 	 
	POLAR SEMICONDUCTOR, INC.

 	 	 
	By:  	/s/ Yoshihiro Suzuki
 	 	 
	 	Yoshihiro Suzuki, CEO 	 	 

Date: 9/13/07

	 	 	 	 	 
	SANKEN ELECTRIC COMPANY, LTD.

 	 	 
	By:  	/s/ Kiyoshi Imaizumi
 	 	 
	 	Kiyoshi Imaizumi, Executive Vice President 	 	 

Date: 12/20/07

	 	 	 	 	 
	ALLEGRO MICROSYSTEMS, INC.

 	 	 
	By:  	/s/ Dennis Fitzgerald
 	 	 
	 	Dennis Fitzgerald, CEO 	 	 

Date: 9/13/07<PAGE>

                                                                   EXHIBIT 10.11

CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. THE LOCATIONS OF THE OMITTED MATERIALS ARE INDICATED BY THE
FOLLOWING NOTATION: [***].

                        TECHNOLOGY DEVELOPMENT AGREEMENT

                                                                         11/6/01

                                     BETWEEN
                     POLARFAB AND ALLEGRO MICROSYSTEMS, INC.

     WHEREAS, the two parties have entered into a so called Foundry Agreement on
May 25th, 2001; and

     WHEREAS, the parties desire to enter into a Technology Development
Agreement; and

     WHEREAS, the parties desire to first agree to be bound by the principal
terms of a Technology Development Agreement, and subsequently agree to a more
detailed Technology Development Agreement;

     NOW THEREFORE, the parties hereby agree to be bound by the following
principal terms of a Technology Development Agreement. It is expected that the
more detailed Technology Development Agreement will be agreed to within two
weeks of the signing of this principal terms agreement.

     PolarFab will help Allegro develop Allegro's new technology described
below, and using that new technology PolarFab will manufacture wafers for
Allegro.

     The new technology to be developed will be so called ABCD4. The term ABCD4
will include derivative technologies (including, but not limited to, DABIC6 and
[***] Volt ABCD4). ABCD4 is essentially a shrink of Allegro's ABCD3 technology
and is targeted at a minimum feature size of [***] microns.

1.   EXPECTED WAFER VOLUME PER WEEK OF ABCD4

     During the production phase (i.e., after qualification):

     Year 1: Up to Approximately [***] Wafers Per Week
     Year 2: Up to Approximately [***] Wafers Per Week
     Year 3: Up to Approximately [***] Wafers Per Week

     Allegro will provide PolarFab with a 12-month rolling forecast of
requirements. PolarFab will guarantee manufacturing capacity to Allegro based on
Allegro's Expected Wafer Volume Per Week as stated above, [***]. However,
PolarFab will not be obligated to increase its production for Allegro by more
than [***] wafers per week in a time period shorter than [***], and
PolarFab will not be

<PAGE>

                                       -2-

obligated to increase its production for Allegro by [***] wafers per week in a
time period of less than [***], and PolarFab will have a time period of
no less than [***] to increase its production for Allegro by more than
[***] wafers per week to [***] wafers per week.

     Allegro's minimum volume commitment is an average of [***] wafers per week,
calculated in calendar quarters, in year 2 and in year 3. In the event that
Allegro does not purchase [***] wafers in any calendar quarter in years 2 and 3,
Allegro will pay to PolarFab [***]% of the sale price of each wafer not
purchased below [***]. However, payments for wafers not purchased will not
exceed $[***] in any calendar year.

2.   POLARFAB'S AFFIRMATIVE OBLIGATION AND CAPACITY ALLOCATION

     PolarFab recognizes that by this Agreement PolarFab will become a critical
supplier to Allegro, and therefore PolarFab agrees that it will allocate
sufficient technical human resources and capacity and give Allegro's needs
sufficient priority in order to meet PolarFab's commitment to Allegro hereunder.
Allegro also recognizes the critical nature of this Agreement and agrees to
allocate sufficient technical human resources so that it will not impede
successful completion of the objectives of this Agreement.

     Allegro's 12 month rolling forecast of requirements will include wafer
outs, updated every eight weeks. Allegro will forecast total wafer volume
(ABC3/ABCD3/ABCD4), and Allegro can use the capacity allocation under this
Technology Development Agreement and the Foundry Agreement interchangeably, e.g.
if Allegro's ABCD4 volume needs increase beyond forecasted levels in the 12
month rolling forecast, PolarFab is obligated to meet those higher volume needs
in the event that Allegro provides a corresponding reduction for its need for
ABCD3 products.

3.   PRICING/RESTRICTIONS ON USE

     Pricing for all foundry wafers being processed by PolarFab under this
Technology Development Agreement will be as defined in the Foundry Agreement and
will be in effect for [***]. Price breaks will be calculated by combining all
wafer types (ABC3/ABCD3/ABCD4) being shipped in any given week.

     In the event that any lower price is charged by PolarFab to any third party
for wafers using ABCD3 technology, Allegro for the next two years will receive
that lower price provided to such third party for wafers using ABCD3 and ABCD4
technology and all orders for ABCD3 and/or ABCD4 products for Allegro not yet
delivered will be reduced to that lower price.

     PolarFab's right to use Allegro's ABCD3 technology will be subject to the
following limitations:

     A. Except as provided in paragraphs 3B and 3C, PolarFab may use any portion
     of Allegro's ABCD3 technology in the manufacturing of any product for any
     customer upon (but not before) the occurrence of the following two events:
     i.) the expiration of [***] after PolarFab has shipped [***] qualified
     ABCD3 wafers to Allegro, and ii.) ABCD4 technology is qualified at
     PolarFab. Since PolarFab's total back-end process is not part of Allegro's
     ABCD3 technology, PolarFab is free to use its own back-end process any
     time.

<PAGE>

                                       -3-

     B. At no time will PolarFab, irrespective of the technology used, sell
     products into Hall Effect applications.

     C. After the selling restrictions set forth in paragraph 3A are no longer
     applicable, PolarFab is prohibited from selling, directly or indirectly,
     any products using any part of Allegro's technology to the competitors of
     Allegro as set forth on "Exhibit A" attached.

     D. In the event PolarFab is purchased by one of the Allegro's competitors,
     as set forth on "Exhibit A" attached, these selling restrictions will
     continue to apply regarding inter-company transactions between PolarFab and
     that purchaser.

     E. The selling restrictions contained in the immediately preceding three
     paragraphs will remain in effect for [***] after the termination of this
     Agreement.

     F. All selling restrictions on PolarFab contained in this paragraph 3 will
     continue irrespective of whether any Allegro technology transferred
     hereunder is modified, including but not limited to modifications to wafer
     size or geometry.

     G. The parties agree that Allegro will have access to injunctive relief in
     the event that any of these selling restrictions are breached.

     The royalty to be paid by PolarFab to Allegro for each wafer sold to third
parties using Allegro's ABCD3 technology is [***]% of PolarFab's selling price
to its customers, to be paid monthly.

4.   DELIVERABLES

     In order to help PolarFab market the ABCD3 process, Allegro will deliver
the following to PolarFab:

     a.)  [***].

     b.)  [***].

     c.)  [***].

     d.)  [***].

     e.)  [***].

5.   EXCLUSIVITY

     PolarFab will use ABCD4 only to manufacture wafers for Allegro, and not for
anyone else. Any purchaser of a portion or all of PolarFab will have the same
restriction on the use of ABCD4. In addition, PolarFab is restricted from
disclosing, selling or transferring ABCD3 or ABCD4 technology to any third
party.

<PAGE>

                                       -4-

6.   LIST OF COMPONENTS INCLUDED IN TECHNOLOGY

     Set forth on "Exhibit B" attached.

7.   CONTRIBUTION OF EACH PARTY TO TECHNOLOGY DEVELOPMENT

     As part of the development, PolarFab will supply to Allegro complete
documentation of each ABCD4 unit process step as implemented at PolarFab and
will provide engineering assistance to Allegro as reasonably required to put the
technology into Allegro's fabrication facility. The technologies (ABCD4 and its
derivatives) will be specified, and the process architecture and components
defined, by Allegro and fabricated and qualified initially at PolarFab and all
this information will be provided to Allegro as implemented by PolarFab. Once
qualified, PolarFab will act as a foundry for these technologies using its own
internal fabrication facility and Allegro reserves the right to transfer these
technologies to its own internal fabrication facility and reserves the right to
transfer these technologies to a third party facility, provided that such
alternate third party can only use these technologies to manufacture for
Allegro. ABCD4 and its derivatives, including process architecture, component
architecture, simulation and characterization files are not to be used by
PolarFab except in manufacturing for Allegro.

     [***]

8.   GOOD FAITH MILESTONE CHART FOR ABCD4 AND ITS DERIVATIVES

     Set forth on "Exhibit C" attached is a Good Faith Milestone Chart for the
development of ABCD4 and its derivatives.

     The initial three months of this schedule are primarily driven by items
that require Allegro to produce work product for PolarFab to review. Allegro
will be requesting PolarFab's involvement in periodic reviews over that
timeframe to insure that the technology definition and evolution is consistent
with PolarFab's expectations in terms of manufacturing capability. It is agreed
by both parties that activities associated with ABCD3 qualifications take
priority if resource conflicts arise.

9.   DEVELOPMENT LOT PRICING (Includes NRE)

     Based on a 10 Piece Wafer Lot (Starts):

     First [***] Lots: $[***] Per Lot

     Next [***] Lots:  $[***] Per Lot

     Over [***] Lots:  $[***] Per Lot

<PAGE>

                                       -5-

     In addition to lot pricing, Allegro will be responsible for short loop
costs at $[***] per layer.

10.  POLARFAB'S VIABILITY

     PolarFab and Allegro will agree to have some reasonable sort of last time
buy wording.

     Allegro would be able to speak and negotiate with PolarFab's equipment
lessor (if equipment is leased) or PolarFab's bank (if equipment is on loan).
Allegro would attempt to negotiate a deal that in the event PolarFab went into
bankruptcy, Allegro would have an option to purchase the equipment at a
prenegotiated price. PolarFab should consider this as a positive option. In the
event PolarFab were to go bankrupt, rather than the equipment leasing company
taking the equipment to auction, Allegro would have the option to buy the
equipment and, if appropriate, leave it in PolarFab's facility for production
for Allegro. The equipment lessor may consider this attractive, in that Allegro
might in effect guarantee the equipment lease. PolarFab supports Allegro having
such arrangements with the equipment lessor and/or bank, and PolarFab will urge
the equipment lessors/banks to enter into such arrangements with Allegro.

     In the event that Allegro is not successful negotiating this option with
the equipment lessors or banks, PolarFab agrees to have wording in the contract
that PolarFab will not give anyone else the right to purchase the equipment
(including rights by Agere to purchase beyond Agere's current rights).

POLARFAB                                ALLEGRO MICROSYSTEMS, INC.

By: /s/ Dennis Gaetano                  By: /s/ Edward Lenard
    ---------------------------------       ------------------------------------
Title: VP Sales & Marketing,            Title: Purchasing Manager
       PolarFab                                ---------------------------------
       ------------------------------
Date: 11/9/01                           Date: 11/8/01
      -------------------------------         ----------------------------------

<PAGE>

                                    EXHIBIT A

                                      [***]

<PAGE>

                                    EXHIBIT B

                     List of Components Included in Technology

                                      [***]
<PAGE>

                                      [***]

<PAGE>

                                      [***]

<PAGE>

                                      [***]
<PAGE>

                                                                        10/10/01

                                    EXHIBIT C

                                      [***]

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