EXHIBIT 10.9
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION. THE LOCATIONS OF THE OMITTED MATERIALS ARE INDICATED BY THE
FOLLOWING NOTATION: [***]
WAFER FOUNDRY AGREEMENT
By and Between
POLAR SEMICONDUCTOR, INC.
and
ALLEGRO MICROSYSTEMS, INC.
DATED AUGUST 1, 2007
ALLEGRO MICROSYSTEMS, INC. PROPRIETARY INFORMATION
WAFER FOUNDRY AGREEMENT
This Wafer Foundry Agreement ("Agreement") is made and entered into this 1st day
of August, 2007, (the "Effective Date") by and between Allegro MicroSystems
Inc., a corporation duly organized and existing under the laws of the State of
Delaware, ("Allegro"), and Polar Semiconductor, Inc., a corporation duly
organized and existing under the laws of the State of Delaware ("PSI"). PSI and
Allegro are sometimes referred to herein individually as a "Party" and
collectively as the "Parties".
Witnesseth:
WHEREAS, Allegro wishes to purchase certain semiconductor wafers; and
WHEREAS, PSI wishes to manufacture and sell such semiconductor wafers to
Allegro; and
WHEREAS, the Parties wish to set forth their respective rights and obligations
with respect to the purchase and sale of such semiconductor wafers; and
WHEREAS, Allegro desires PSI to use certain technology and intellectual property
rights owned or otherwise controlled by Allegro for the purpose of manufacturing
semiconductor wafers in accordance with this Agreement, and in furtherance
thereof, Allegro desires to grant to PSI a non-exclusive license to use such
technology and intellectual property rights for such purpose in accordance with
this Agreement.
NOW, THEREFORE, in consideration of the mutual promises made herein, the Parties
hereto agree as follows:
Definitions:
As used in this Agreement, the following terms will have the following
respective meanings:
A) "Wafers" means the semiconductor Wafers for Device Types, fabricated by PSI
using the process technologies listed in Appendix A. Wafers will include
Engineering Wafers, Risk Wafers, Production Wafers, and Process
Qualification Wafers, as defined below.
B) "Device Type" will mean any of the various Allegro integrated circuit
devices specified by Allegro.
C) "Process Qualification Wafers" or "PQW" means Wafers manufactured for the
purposes of qualifying a new or changed Wafer manufacturing process, in
accordance with Section 2.1 of this Agreement.
D) "Engineering Wafers" will mean any Wafers manufactured with unverified
masks or requiring process splits for product characterization based on
qualified processes, as described in Section 2.2 of this Agreement.
E) "Risk Wafers" will mean non-engineering, non-Process Qualification Wafers
fabricated by PSI at Allegro's request, as referenced in Appendix C, and
prior to Mass Production Wafer Approval, as referenced in Appendix B.
ALLEGRO MICROSYSTEMS, INC. PROPRIETARY INFORMATION
F) "Production Wafers" will mean those Wafers manufactured at PSI after
successful Mass Production Wafer Approval, as referenced in Appendix B.
G) "Allegro Wafer Manufacturing Technology" means, from time to time during
the term of this Agreement, those certain processes and related technical
information, whether or not patentable, then owned or controlled by
Allegro, necessary for manufacturing Wafers, and listed in Appendix N
attached hereto, as such Appendix may from time to time, during the term of
this Agreement, be amended by Allegro in its sole and absolute discretion
in order for PSI to fulfill its obligations hereunder. In no event shall
Allegro Wafer Manufacturing Technology be deemed to include any process or
technical information previously known by PSI prior to its receipt from
Allegro, received from another party, becomes part of the public domain, or
is independently developed by PSI.
H) "Allegro WMT Documentation" means, from time to time during the term of
this Agreement, all documents and other manifestations, in any form
whatsoever (including, without limitation, Allegro WMT Production Records,
operating procedures, masks, reticles, and the like) that describe,
memorialize or otherwise make manifest the processes or other inventions
comprising the Allegro Wafer Manufacturing Technology and the use thereof
by PSI.
I) "Allegro WMT Production Records" means all production records, data,
analyses, and the like generated by PSI in the course of manufacturing
Wafers.
J) "Allegro Intellectual Property Rights" means, from time to time during the
term of this Agreement, all right, title and interest in, to and under the
Allegro Wafer Manufacturing Technology then owned or otherwise controlled
by Allegro.
K) "PSI Bloomington Wafer Fab Facility" means that certain facility owned by
PSI and located at 0000 Xxxx Xxx Xxxxxxxx Xxxx, Xxxxxxxxxxx, Xxxxxxxxx.
L) "PSI Wafer Manufacturing Technology" means, from time to time during the
term of this Agreement, those certain processes and related technical
information, whether or not patentable, then owned or controlled by PSI,
used by PSI in manufacturing Wafers, and listed in Appendix N, attached
hereto, as such Appendix shall from time to time during the term of this
Agreement be amended in order to reflect the manufacturing processes or
other inventions then being used by PSI to fulfill its obligations under
this Agreement. It is further understood and agreed to by the Parties that
technical information, documentation and intellectual property rights
related to PSI's [***] process shall not be included within PSI Wafer
Manufacturing Technology or PSI Intellectual Property Rights.
M) "PSI WMT Documentation" means, from time to time during the term of this
Agreement, all documents and other manifestations, in any form whatsoever
(including, without limitation, operating procedures, masks, reticles, and
the like) that describe, memorialize or otherwise make manifest the
processes or other inventions comprising the PSI Wafer Manufacturing
Technology and the use thereof by PSI.
N) "PSI Intellectual Property Rights" means, from time to time during the term
of this Agreement, all right, title and interest in, to and under the PSI
Wafer Manufacturing
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Patents and the PSI Wafer Manufacturing Technology then owned or otherwise
controlled by PSI. It is further understood and agreed to by the Parties
that technical information, documentation and intellectual property rights
related to PSI's [***] process shall not be included within PSI Wafer
Manufacturing Technology or PSI Intellectual Property Rights.
Section 1. Scope and Grant of License:
1.1 Subject to the terms of this Agreement, PSI will fabricate certain Wafers
ordered by Allegro, and PSI will deliver and sell such Wafers to Allegro.
1.2 This Agreement does not constitute a purchase order or release for such
services. PSI will not undertake any expenses or other acts on Allegro's
behalf before receiving and agreeing to an actual purchase order or other
written authorization from Allegro.
1.3 Subject to the terms and conditions set forth in this Agreement, Allegro
grants to PSI, and PSI accepts, a non-exclusive, royalty-free license under
the Allegro Intellectual Property Rights, limited in accordance with the
terms and conditions of this Agreement, to use the manufacturing processes
and other inventions comprising the Allegro Wafer Manufacturing Technology
and the Allegro WMT Documentation in order to make the Wafers in compliance
with PSI's obligations under this Agreement or such other uses as the
Parties may agree to in writing. Such license shall be limited to the
manufacture of Wafers by PSI in the PSI Bloomington Wafer Fab Facility (or
such other facility operated or subcontracted by PSI and to which Allegro
consents in its sole and absolute discretion), shall not be sublicensed or
otherwise transferred by PSI to any third party, and shall be subject to
revocation, in whole or in part, by Allegro at any time in Allegro's sole
and absolute discretion, and in the event of such revocation, PSI shall
cease any further use of such portion or all, as specified by Allegro, of
such manufacturing processes, other inventions and Allegro Wafer
Manufacturing Technology.
1.3.1 The license granted by Allegro to PSI, under Section #.1 of this
Agreement, shall terminate upon the expiration or termination of this
Agreement.
1.3.2 Upon the termination of the license granted by Allegro to PSI, in
this Section 1 of this Agreement, PSI shall promptly return to Allegro
any and all Allegro WMT Documentation and, if requested in writing by
Allegro, PSI shall certify that all Allegro WMT has been returned to
Allegro
1.3.3 Allegro shall have the right, upon reasonable notice to PSI, during
the term of this Agreement, during reasonable times to inspect and
copy the Allegro WMT Documentation. Documentation and information
received by Allegro from PSI in this manner shall be used solely by
Allegro to manufacture Wafers during a force majeure condition or if a
default event has occurred, unless otherwise agreed to in writing by
PSI and Allegro.
1.3.4 PSI agrees at all times during the term of this Agreement to maintain
the Allegro WMT Production Records in a manner at least as rigorous as
it maintains its own information of a similar nature and consistent
with PSI's implementation of the requirements, as set forth in the TS
16949 specifications.
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1.3.5 PSI agrees at all times during the term of this Agreement to maintain
the PSI WMT Documentation in a manner at least as rigorous as those it
maintains its own information of a similar nature and consistent with
PSI's implementation of the requirements, as set forth in the TS 16949
specifications.
Section 2. Wafer Fabrication:
PSI will fabricate all Wafers at its Bloomington, Minnesota facility, using the
process technologies listed in Appendix A, as specified by Allegro.
2.1 PSI will provide Allegro with PQW or qualification reports to establish
wafer fabrication processes with the following conditions:
2.1.1 Wafer lot sizes will be as specified in Appendix E;
2.1.2 Split Wafer lots for PQW will be mutually agreed upon by Allegro and
PSI;
2.1.3 All instructions for such PQW will be documented in Allegro purchase
orders;
2.1.4 PQW processed to standard conditions will meet optical and electrical
specification(s) as referenced in Appendix A;
2.1.5 PQW not processed to standard conditions will meet optical and
electrical specification(s) as referenced in Appendix A;
2.1.6 Allegro acknowledges that the sale of all PQW not processed to
standard conditions, but processed correctly within practical limits
according to the mutually agreed upon process flow, will be made AS IS
and with all faults and without warranties, either express or implied,
except as provided in Section 2.1.5;
2.1.7 Future Wafer processes, including modifications to current Wafer
processes, that are developed by PSI may be added to this Agreement by
mutual consent. Subject to Allegro's prior written consent, PSI may
terminate the use of a Wafer process at the PSI Fab (provided that
such changes are not initiated at Allegro's request) (i) PSI will
provide all PQWs to Allegro free of charge, and (ii) PSI will
reimburse Allegro for the purchase of masks for qualification of each
process with a change requiring mask changes. At least [***] prior to
the date of the discontinuance of any process, with respect to any
Wafers, PSI will provide Allegro with written notice of its intent to
terminate such Wafer process and will cooperate with Allegro on a
transition plan that allows Allegro to meet all of Allegro's
contractual obligations with Allegro's customers that provides
Allegro's customer with a maximum supply of [***] of inventory.
2.1.8 PSI may subcontract various wafer processes at an outside
subcontractor subject to Allegro's prior written consent.
2.1.9 PSI will not transfer Allegro product from one fabrication facility
to another regardless of the process or technology being qualified at
another fab without Allegro's written approval.
2.2 PSI will accept Allegro's purchase orders for Engineering Wafers for Device
Types, based on qualified processes with the following conditions:
2.2.1 Wafer lot sizes will be as specified in Appendix E;
2.2.2 Split Wafer lots for Engineering Wafers will be mutually agreed upon
by Allegro and PSI;
2.2.3 Special instructions for Engineering Wafers will be documented in
Allegro purchase orders;
2.2.4 Engineering Wafers processed to PSI's standard process specifications
will meet optical and electrical specification(s), as referenced in
Appendix A
2.2.5 Engineering Wafers not processed to standard conditions will meet
optical and electrical specification(s), as referenced in Appendix A;
and
2.2.6 Allegro acknowledges that the purchase of all Engineering Wafers that
meet agreed upon Process Control Module Specifications, according to
the mutually agreed
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upon process flow, will be made AS IS and with all faults and without
warranties, either express or implied, except as provided in Section
2.2.5.
2.3 PSI will accept Allegro's purchase orders for Risk Wafers with the
following conditions:
2.3.1 Wafer lot sizes will be as specified in Appendix E;
2.3.2 Purchase orders for Risk Wafers must be accompanied by a Risk Wafer
Production Authorization, as referenced in Appendix C;
2.3.3 Risk Wafers will meet optical and electrical specification(s), as
referenced in Appendix A;
2.3.4 Allegro acknowledges that the purchase of such Risk Wafers will meet
acceptance criteria, as set forth in Appendix A.
2.4 PSI will accept purchase orders for Production Wafers with the following
conditions:
2.4.1 Wafer lot sizes will be as specified in Appendix E; and
2.4.2 Both Parties have determined that the Device Type has been
successfully approved for Mass Production Wafers, as set forth in
Appendix B.
2.5 Upon acceptance, PSI will fabricate Production Wafers ordered by Allegro
with specifications listed in Appendix A. These specifications may be
changed only upon mutual agreement in writing by both Parties. PSI will
comply with all the requirements set forth in "Allegro's Quality Plan", as
set forth in Appendix G.
2.6 PSI will make available PSI's wafer evaluation and electrical data, as set
forth in Appendix A, to Allegro through electronic means for each lot of
Wafers delivered to Allegro prior to the shipment of the Wafers. PSI will
also supply relevant reliability, optical and process control information,
as set forth in Appendix F and Appendix G by request.
2.7 PSI will follow Allegro's change procedures (as set forth in Appendix F and
Appendix G) with respect to processes utilized to manufacture Allegro.
2.8 For any lots not meeting the relevant criteria, as specified above, PSI
will provide a Non-Conforming Material Permission ("NMP") sheet
electronically to the Director of Manufacturing Engineering, as set forth
in Appendix G, along with all applicable data, for Allegro's review. If the
material is determined by Allegro to be acceptable, Allegro will complete
the NMP and PSI will deliver the acceptable Wafers to Allegro.
Section 3. Forecast, Purchase Orders, Deliveries, Delivery Performance,
Expedited Delivery:
3.1 Allegro will provide, by the 15th of each calendar month, a six (6) month,
rolling non-binding forecast, for months subsequent to the current month,
of the total Production Wafers required, by process technology, as set
forth in Appendix A. The forecast will also include Wafer quantity
estimates for Engineering Wafer requirements. The forecast will be used for
planning purposes only and does not represent a commitment by Allegro to
make any purchases. The only commitment to purchase will arise from
purchase orders or purchase requirements.
3.2 Allegro will issue purchase orders for each of the following: (1)
Engineering Wafers, (2) Risk Wafers, (3) Production Wafers and (4) Process
Qualification Wafers.
3.3 Allegro's purchase requirements, with requested delivery dates, will be
submitted weekly via a purchase order, and/or a purchase order release, and
will result in a binding purchase obligation by Allegro to PSI, subject to
cancellation charges, as set for in Section 3.5. PSI will acknowledge and
provide a scheduled ship date in writing for each purchase requirement
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within [***]. Cycle-time requirements will be as defined in Appendix H.
Any changes to Appendix H will require mutual agreement in writing. PSI
will commence Production Wafer starts within [***] business days following
the acknowledgment to the extent accepted. PSI will commence Engineering
Wafer starts within [***] business days following the acknowledgment to the
extent accepted.
3.4 PSI will provide Allegro with real-time on-line access to Allegro WIP and
delivery information. PSI will promptly notify Allegro of any delivery
deviations beyond the tolerance specified in 3.9 and 3.10.
3.5 Purchase orders for Wafers are cancelable. Purchase Order cancellations for
Wafers will incur charges (Wafer Termination Charges) for Work in Progress
(WIP), according to the following schedule:
Process Technologies
(Excluding [***]) [***]
-------------------- -----
Before Wafer Scribe [***]% of Wafer Price [***]% of Wafer Price
Prior to Device Mask [***]% of Wafer Price [***]% of Wafer Price
Subsequent to Device Mask and Prior
to Resistor Mask [***]% of Wafer Price [***]% of Wafer Price
Subsequent to Resistor Mask and Prior
to Contact Mask [***]% of Wafer Price [***]% of Wafer Price
Subsequent to Contact Mask [***]% of Wafer Price [***]% of Wafer Price
All Wafer lots on hold, in excess of [***], will be reviewed by Allegro and
PSI. This review will result in a formal determination of whether the lots
should be terminated, finished or remain on hold. After[***] of a Wafer lot
being placed on hold, and provided that PSI notifies Allegro's Director of
Planning in writing within [***] business days, Wafers can be terminated by
PSI and termination charges, as set forth in this Section 3.5, are applied.
3.6 Within [***] working days of receipt of Allegro's forecast, referred to in
Section 3.1, PSI will provide a [***] rolling non-binding capacity view,
covering [***] subsequent to the current month, of the total capacity
available, by process technology, as set forth in Appendix A.
3.7 PSI guarantees certain reserve capacity, as set forth in Appendix D of this
Agreement.
3.8 PSI will accept all orders for quantities up to the applicable reserve (as
set forth in Appendix D), with requested factory-exit dates consistent with
Section 3.3. In the event that Allegro would like to request Wafers that
exceed the applicable reserve, Allegro and PSI agree to negotiate in good
faith a possible adjustment to the applicable reserve to accommodate
Allegro's request for Wafers. Any adjustment will be subject to PSI's
existing available capacity and other customer commitments.
3.9 Delivery Performance. Delivery performance goal is [***]% of the total
quantity of specific product ordered for a specified time period, as set
forth in Allegro's purchase order and/or release (+5 days early,- 0 day
late to the specified delivery date). Failure to meet [***]% on time
delivery for [***] consecutive weeks will require PSI to submit a
corrective action plan and provide up to [***] to Allegro at no charge
until the delivery performance improves and meets [***]% on time delivery
for [***] consecutive weeks.
3.10 Expedited Delivery. PSI agrees to provide expedited delivery of 6" and 8"
Wafer lots at the prices listed in Appendix J, as follows:
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6" Hot Lots * - Up to [***] at any given time.
6" Nuclear Lots **- Up to [***] at any given time.
* 6" Hot Lots are defined as lots with a fab process technology lead time not
to exceed a cycle time of [***] day ([***] hours) per mask level for the
PSI interval (maximum of [***] Wafers per lot).
** 6" Nuclear Lots are defined as lots with a fab process technology lead-time
not to exceed a cycle time of [***] day ([***] hours) per mask level for
the PSI interval (maximum of [***] Wafers per lot).
8" Hot Lots * - Up to [***] at any given time.
8" Nuclear Lots **- Up to [***] at any given time.
* 8" Hot Lots are defined as lots with a fab process technology lead time not
to exceed a cycle time of [***] days ([***] hours) per mask level for the
PSI interval (maximum of [***] Wafers per lot).
** 8" Nuclear Lots are defined as lots with a fab process technology lead-time
not to exceed a cycle time of [***] days ([***] hours) per mask level for
the PSI interval (maximum of [***] Wafers per lot)
Section 4. Facility Visits, Audits, and Operational Reviews:
4.1 Facility visits and audits (by customers and/or Allegro) are permitted, for
any reason or purpose, on a reasonable basis and any such visits and audits
will be conducted, upon Allegro providing reasonable notice to PSI, during
PSI's regular business hours and without undue disruption of PSI's
business. Allegro, at its discretion, will have the right to schedule
operational reviews with PSI on a quarterly basis.
Section 5. Procedure for Wafer Return and Credit:
5.1 Allegro will notify PSI in writing by completing the PSI RMA Request Form,
as set forth in Appendix I, of its reasons for rejection of Production
Wafers and provide product information and engineering data within [***]
following Allegro's receipt of such Production Wafers. Such data will
include, as applicable:
5.1.1 Optical and electrical data from Production Wafers; and/or
5.1.2 Yield data for Production Wafers failing to meet the probe yield
target per device, as set forth in Appendix I.
Product information will include product name, lot number, quantity,
purchase order number, and date of receipt at Allegro.
If any Production Wafers pass the acceptance criteria, specified in
Sections 5.1.1 and 5.1.2, but are rejected by Allegro, or Allegro's
customer, at a subsequent date still within the warranty period, as
specified in Section 8, due to the fact that the failure is process
related, Allegro will promptly notify in writing and provide a failure
analysis report explaining why Allegro believes that the failure is process
related.
5.2 Allegro will notify PSI in writing by completing the PSI RMA Request Form,
as set forth in Appendix I, of its reasons for rejection of Risk and
Engineering Wafers and provide product information and engineering data
within [***] following Allegro's receipt of such Risk and Engineering
Wafers. Such data will include, as applicable:
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5.2.1 Optical and electrical data product information will include product
name, lot number, quantity, purchase order number, and date of receipt
at Allegro.
5.3 The Parties will agree on whether the reasons for rejection are valid. PSI
will respond in writing within [***] following receipt of data and product,
specified in Sections 5.1 and 5.2. If no written response is provided
within [***] of receipt of all data and product required to make a
determination, Allegro and PSI will consider the rejection as valid. If
valid, PSI will issue a Return Material Authorization ("RMA") Number. For
Production Wafers failing to meet the probe yield target per device, as set
forth in Appendix I, failures for which no design defect is identifiable,
Allegro and PSI agree that the failure is valid and an RMA Number will be
issued.
5.4 PSI, at Allegro's option, will [***], or [***], provided that the reasons
for rejection are confirmed to be valid by PSI, or deemed to be confirmed,
as described above in Section 5.3. If Wafers are replaced, PSI will pay all
applicable shipping charge.
Section 6. Wafer/ Mask Price, Payment, and Invoices:
6.1 The prices of Production Wafers, Risk Wafers, Engineering Wafers and Masks
will be set forth in Appendix J and will be established and fixed for [***]
periods. All prices are on a F.O.B. Bloomington, Minnesota basis for the
term of this Agreement, except for replacement Wafers for which PSI will
pay all applicable shipping charges. All prices stated in this Agreement
are in U.S. Dollars. All prices stated in this Agreement are exclusive of
all applicable state and local sales, use, and other similar taxes. Unless
Allegro advises PSI in writing, reasonably acceptable to PSI that an
exemption applies, Allegro will pay all applicable state and local sales,
use and other similar taxes. Taxes payable by Allegro will be billed as
separate items.
6.2 On a go-forwards basis, Allegro and PSI agree to establish the new fixed
[***] wafer and mask pricing no later than [***] prior to start of the new
fiscal half year period (April and October) and [***].
6.3 PSI will issue an invoice with each shipment, and the date on this invoice
will be no earlier than the shipment date, with the shipment date
referenced on the invoice. The invoice will include the purchase order
number, purchase order line number, purchase order line description,
purchase order quantity, purchase order unit of measure, and purchase order
unit price.
6.4 All payments due PSI under this Agreement will be delivered to PSI at the
address shown on its invoice, net [***], and Allegro reserves the right to
any credit setoff. Notwithstanding the foregoing, Allegro will not be
obligated to pay invoices for Wafers for which an RMA number has been
issued or for which an RMA request is pending.
6.5 Allegro will bear all taxes, duties, levies and similar charges (and any
related interest and penalties), however designated, in connection with the
existence of this Agreement, or the transactions contemplated thereby,
other than income taxes imposed upon PSI by any governmental authority in
any jurisdiction.
Section 7. Title and Risk of Loss:
7.1 Title and risk of loss and damage to all Wafers purchased by Allegro will
vest in Allegro when the Wafers are placed by PSI in the possession of a
carrier at the F.O.B. point of
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origin, freight collect, with freight charges being billed directly by the
carrier to Allegro. PSI will pack and ship Wafers, as set forth in Appendix
K.
Section 8. Warranty:
8.1 Warranties. PSI hereby warrants to Allegro that Production Wafers and Risk
Wafers sold by PSI will be free from defects in material and workmanship
for a period of [***] from the date of delivery by PSI to Allegro, and that
Production Wafers will conform to specifications, and Wafer and electrical
specifications, as set forth in Appendix A and Appendix I.
8.2 Remedies. If any Risk or Production Wafers fail to conform to the
applicable foregoing warranty during the relevant warranty period and PSI
is notified promptly, in writing, following the discovery of such failure,
PSI will, at Allegro's sole option, [***], or provide to Allegro [***]. The
foregoing notice from Allegro will include a description of the basis for
Allegro's warranty claim, lot number, and original date received by
Allegro. To the extent practicable (for example, provided that the Wafers
have not been shipped to a customer), Allegro will return such defective
Risk or Production Wafers to PSI, and, if such defective Wafers have
already been packaged, PSI will [***] for such Wafers. PSI will return any
Risk and Production Wafers replaced under this warranty to Allegro,
transportation prepaid. The foregoing warranty constitutes PSI's exclusive
liability, and the exclusive remedy of Allegro, for any breach of any
warranty or other nonconformity of the Risk and/or Production Wafers,
except as set forth in Appendix M.
8.3 LIMITATIONS. THIS WARRANTY IS EXCLUSIVE AND IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS, IMPLIED OR STATUTORY, INCLUDING BUT NOT LIMITED TO THE
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, WHICH
ARE HEREBY EXPRESSLY DISCLAIMED.
Section 9. Intellectual Property:
9.1 PSI will defend or settle, at its own option and expense, any and all suits
against Allegro alleging: (a) infringement of any patent, trademark,
copyright or other proprietary right, arising from adherence to process
information, drawings, design, or other specifications, which Allegro is
instructed by PSI to follow, and (b) infringement relating to the
manufacture, use or sales of any of the circuits, either as individual
units or in combination with another item not furnished by Allegro,
provided that PSI (a) has had timely written notice of all allegations of
such infringement and suits, and full opportunity and authority to assume
the sole defense of and to settle such suit, and (b) have been furnished,
upon PSI's request, all information and assistance available to Allegro for
such defense.
9.2 Allegro will defend or settle, at its own option and expense, any and all
suits against PSI alleging: (a) infringement of any patent, trademark,
copyright or other proprietary right, arising from adherence to process
information, drawings, design, or other specifications which PSI is
instructed by Allegro to follow, and (b) infringement relating to the
manufacture, use or sales of any of the circuits, either as individual
units or in combination with another item not furnished by PSI, provided
that Allegro (a) has had timely written notice of all allegations of such
infringement and suits, and full opportunity and authority to assume the
sole defense of and to settle such suit, and (b) have been furnished, upon
Allegro's request, all information and assistance available to PSI for such
defense.
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9.3 The foregoing Sections 9.1 and 9.2 state the entire liability of the
Parties for any patent, trademark, copyright, or other proprietary right
infringement.
Section 10. Identification:
10.1 PSI will not, without Allegro's prior written consent, engage in
advertising, promotion or publicity related to this Agreement, or make
public use of any Identification (as hereinafter defined) in any
circumstances related to this Agreement. As used in this Agreement, the
term "Identification" means any copy or semblance of any trade name,
trademark, service xxxx, insignia, symbol, logo, or any other product,
service or organization designation, or any specification or drawing of
Allegro or its respective affiliates, or evidence of inspection by or for
any of them.
10.2 PSI will remove or destroy any Identification prior to any use or
disposition of any Wafers rejected or not purchased by Allegro, and, will
indemnify, defend (at Allegro's request) and save harmless Allegro and its
respective affiliates and each of their officers, directors and employees
from and against any losses, damages, claims, demands, suits, liabilities,
fines, penalties and expenses (including reasonable attorneys' fees)
arising out of the PSI's failure to so remove or obliterate Identification.
Section 11. Protection of Proprietary Information:
11.1 The Non-Disclosure Agreement between PSI and Allegro having an effective
date of October 25, 2005, is hereby incorporated in its entirety into this
Agreement.
Section 12. Term, Termination of Agreement and Bankruptcy:
12.1 Term; The term of this Agreement will commence on the date first written
above and continue through March 31, 2012, unless terminated earlier,
pursuant to Sections 12.2, 12.3, or 12.4.
12.2 Immediate Termination Events. Either Party may terminate or suspend this
Agreement immediately and without liability upon written notice to the
other Party, if any one of the following events occurs:
(a) The other Party files a voluntary petition in bankruptcy or otherwise
seeks protection under any law for the protection of debtors;
(b) A proceeding is instituted against the other Party under any provision
of any bankruptcy law, which is not dismissed within ninety (90) days;
(c) The other Party is adjudged bankrupt;
(d) A court assumes jurisdiction of all or a substantial portion of the
assets of the other Party under a reorganization law;
(e) A trustee or receiver is appointed by a court for all or a substantial
portion of the assets of the other Party;
(f) The other Party becomes insolvent or ceases or suspends all or
substantially all of its business; or
(g) The other Party makes an assignment of the majority of its assets for
the benefit of creditors.
12.3 Termination for Breach. In case either Party breaches or defaults in the
effective performance of any of the terms, conditions, covenants, or
agreements contained in this Agreement, then the Parties will first attempt
in good faith to resolve such breach. [***] after delivery of written
notice to the breaching Party that a breach, described in this Section 12.3
has occurred, the non-breaching Party may terminate this Agreement without
liability for such termination; provided, that if the breaching Party has
begun substantial corrective action to remedy the breach, the non-breaching
Party may only terminate this
10
Agreement without liability for such termination [***] after delivery of
its written notice to the breaching Party, if such breach remains uncured
as of such date; provided, however, that if allowing [***] for the
breaching Party to cure the breach would cause irreparable harm to the
business prospects of the non-breaching Party, notwithstanding any dispute
resolution provisions herein to the contrary, temporary or preliminary
injunctive relief in a court of competent jurisdiction will be appropriate
to prevent either an initial or continuing breach in addition to any other
relief to which the non-breaching Party may be entitled.
12.4 In case that PSI terminates this Agreement, pursuant to Section 12.3,
Allegro will be liable for any and all Wafer finished goods and
Work-in-Process held by PSI at the time of termination, and resulting from
an order issued by Allegro hereunder. In case that Allegro terminates this
Agreement, pursuant to Section 12.3, Allegro may cancel any or all orders
without any liability to PSI.
12.5 Notwithstanding any provision of this Agreement, subject to its compliance
with the following, PSI will have the right to terminate this Agreement in
the event it ceases operations at its Bloomington, Minnesota facility:
12.5.1 PSI will give Allegro at least twenty-four (24) months prior written
notice prior to the date PSI ceases operations at its Bloomington,
Minnesota foundry.
12.5.2 In addition to its rights to purchase Wafers under this Agreement,
Allegro will have the option during such twenty-four (24) month
period, described in 12.5.1, to place, and PSI will fulfill regardless
of any Wafer production capacity commitment, as set forth in Appendix
D, a "life-time" purchase order for Wafers, provided that such "life
time" purchase order is issued by Allegro at least [***] prior to the
closing of the facility, with deliveries not to extend beyond [***]
from planned closure.
12.5.3 PSI will bear all costs (including all Allegro's costs) associated
with the product and process qualification of, and the reticle
transfer to, a new fabrication line (including within the Bloomington
facility) for the manufacture of the Wafers where the transfer is a
PSI initiated requirement.
12.6 In the event that PSI becomes the subject of voluntary, or involuntary,
petition in bankruptcy, or any proceeding related to insolvency or
composition for the benefit of creditors, and such proceeding is not
dismissed within [***], PSI agrees to grant Allegro the right to access the
PSI Wafer Manufacturing Technology and a non-exclusive, worldwide,
royalty-free license, with the right to grant sublicenses, to use the
manufacturing processes comprising the PSI Wafer Manufacturing Technology
in order to make, or have made, Wafers that PSI would have otherwise been
obligated to manufacture and supply to Allegro in compliance with this
Agreement, but for such bankruptcy, insolvency or composition for the
benefit of creditors. Such license shall terminate upon the earlier of (i)
such time that PSI emerges from any such bankruptcy or insolvency
proceeding and (ii) such time that this Agreement would have otherwise
terminated in accordance with its terms; upon any such termination, Allegro
shall cease any further use of such manufacturing processes, other
inventions and the PSI Wafer Manufacturing Technology. Such right of access
to the PSI Wafer Manufacturing Technology and license shall be effected
through PSI's prompt provision to Allegro of complete and full disclosure
to Allegro of all PSI Wafer Manufacturing Technology used to manufacture
and supply Wafers to Allegro, including, without limitation, the PSI WMT
Documentation, and any
11
and all Allegro WMT Documentation then in the possession of PSI. Such full
and complete disclosure of PSI's Wafer Manufacturing Technology and
delivery of the Allegro WMT Documentation will be provided to Allegro
without delay. In the event PSI emerges from any such bankruptcy, or
insolvency proceeding, the PSI Wafer Manufacturing Technology (including,
without limitation, the PSI WMT Documentation) will be returned to PSI, and
PSI will resume manufacture and supply of Wafers to Allegro, in accordance
with the terms and conditions of this Agreement.
12.7 Survival of Obligations. The following Sections will survive any
expiration, termination or cancellation of this Agreement, and the Parties
will continue to be bound by the terms and conditions thereof: 8, 9, 10,
11, 12.4, 12.6, 14, 16, 19, 20, 22, and 27.
Section 13. Force Majeure:
13.1 Neither Party will be held responsible for any delay or failure in
performance of any part of this Agreement, to the extent such delay or
failure, is caused by fire, flood, explosion, war, embargo, government
requirement, civil or military authority, act of God, act or omission of
carriers, or other similar causes beyond its control and without the fault
or negligence of the delayed or nonperforming Party or its subcontractors
("force majeure conditions"). Notwithstanding the foregoing, PSI's
liability for loss or damage to Allegro's material in PSI's possession or
control will not be modified by this clause. If any force majeure condition
occurs, the Party delayed or unable to perform will give immediate notice
to the other Party, stating the nature of the force majeure condition and
any action being taken to avoid or minimize its effect. The Party affected
by the other's delay or inability to perform may elect to: (1) suspend this
Agreement or an order for the duration of the force majeure condition and
(i) at its option buy, sell, obtain or furnish elsewhere material or
services to be bought, sold, obtained or furnished under this Agreement or
an order (unless such sale or furnishing is prohibited under this
Agreement) and deduct from any commitment the quantity bought, sold,
obtained or furnished or for which commitments have been made elsewhere and
(ii) once the force majeure condition ceases, resume performance under this
Agreement or order with an option to the affected Party to extend the
period of this Agreement or an order up to the length of time the force
majeure condition endured and/or (2) when the delay or nonperformance
continues for a period of at least [***], terminate, at no charge, this
Agreement or an order, or the part of it relating to material not already
shipped, or services not already performed. Unless written notice is given
within [***] after the affected Party is notified of the force majeure
condition, (1) will be deemed selected.
In the event that force majeure conditions prevent PSI from manufacturing
and supplying Wafers to Allegro, in accordance with this Agreement, for a
period of [***], Allegro shall have the option to require PSI to promptly
deliver to Allegro copies of all PSI WMT Documentation and Allegro WMT
Documentation then in PSI's possession and to grant to Allegro a license to
use the PSI Wafer Manufacturing Technology to the extent necessary and
sufficient for Allegro to make or have made, use or have used, sell or have
sold, import or have imported, and otherwise commercialize Wafers for a
period of time equal to the duration of the Force Majeure event preventing
PSI's performance.
Section 14. Limitation of Liability:
14.1 In no event will either Party be liable, whether in contract, in tort
(including negligence), under any warranty or otherwise for any special,
punitive, indirect, incidental or consequential loss or damage or loss of
profits or revenues.
12
Section 15. Emergency Backup Plan:
15.1 Within [***] of the execution of this Agreement, PSI will furnish to
Allegro, a written plan of action (an "Emergency Backup Plan") that covers
PSI's plans on how it will continue to perform its obligations under this
Agreement in case of an unforeseen catastrophe, including a force majeure
condition, or any other condition in which PSI will be unable to produce
and ship Wafers for [***]. The Emergency Backup Plan will identify PSI's
secondary manufacturing location(s), if any, and include the estimated time
for the implementation of such Emergency Backup Plan and production of
Wafers.
Section 16. Notices:
16.1 All notices, demands, or consents required or permitted hereunder will be
in writing and will be delivered, delivered by e-mail, or sent by
facsimile, or mailed to the respective Parties at the addresses set forth
below, or at such other address as will have been given to the other Party,
in writing for the purposes of this clause.
Such notices and other communications will be deemed effective upon the
earliest to occur of:
(a) Actual delivery (e-mail, facsimile, hard copy),
(b) Five (5) days after mailing, addressed and postage prepaid, return
receipt requested,
To Allegro: Allegro MicroSystems, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Vice President of Operations
Phone: 000-000-0000
With a copy to: Allegro MicroSystems, Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: General Counsel
Phone: 000-000-0000
To PSI: Polar Semiconductor, Inc.
0000 Xxxx Xxx Xxxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Attn: Chief Operating Officer
Phone: 000-000-0000
Section 17. Waiver and Amendment:
17.1 Failure by either Party, at any time, to require performance by the other
Party, or to claim a breach of any provision of this Agreement, will not be
construed as a waiver of any right accruing under this Agreement, nor will
it affect any subsequent breach or the effectiveness of this Agreement, or
any part hereof, or prejudice either Party with respect to any subsequent
action. A waiver of any right accruing to either Party, pursuant to this
Agreement, will not be effective unless given in writing.
Section 18. Assignment:
18.1 Neither Party will assign, transfer, or otherwise dispose of this Agreement
in whole or in part, without the prior consent of the other Party in
writing, and such consent will not be
13
unreasonably withheld, provided, however, that this Agreement may be
assigned by either Party to any successor entity, whether by merger,
consolidation, or acquisition of all or substantially all of the assets of
such Party related to the performance of this Agreement. Upon the
completion of such assignment, the assigning Party will promptly provide a
written notice to the other Party to this Agreement.
Section 19. Governing Law:
19.1 This Agreement shall be governed by and construed in accordance with the
laws of the State of Massachusetts.
Section 20. Compliance with Laws; Environmental Compliance:
20.1 PSI, and all persons furnished by PSI, will comply at their own expense
with all applicable federal, state and local laws, ordinances, regulations
and codes, including those relating to the use of chlorofluorocarbons, and
including the identification and procurement of required permits,
certificates, licenses, insurance, approvals and inspections in performance
under this Agreement.
20.2 PSI agrees to meet the requirements associated with Environmental
Compliance, as set forth in Appendix L, hereby attached and made part of
this Agreement.
Section 21. Severability:
21.1 In the event that any provision of this Agreement is found to be unlawful
or otherwise unenforceable, such provision will be severed, and the entire
Agreement will not fail on account thereof, the balance continuing in full
force and effect, and the Parties will endeavor to replace the severed
provision with a similar provision that is not unlawful or otherwise
unenforceable.
Section 22. Exports:
22.1 The Parties agree and stipulate that no Wafers, technical information, or
other information furnished under this Agreement or any direct product
thereof, will be exported or re-exported, directly or indirectly, to any
destination restricted or prohibited by export regulations of the United
States, without the authorization from the competent governmental
authorities. This restriction applies to all parent, subsidiaries and
affiliates of the Parties. Any successor provisions to the export
regulations apply to all future export and re-export transactions and the
requirements of this Section will survive indefinitely, including any
termination of this Agreement. Should a Party to this Agreement be held to
have breached any applicable export regulations, such Party will indemnify
and hold harmless the other Party from any costs or damages actually
incurred by the non-breaching Party, to the extent that such non-breaching
Party is held not accountable for such breach by competent governmental
authorities.
Section 23. Headings:
23.1 The headings of the various sections of this Agreement have been inserted
for convenience of reference only and will not be deemed to be a part of,
or affect the interpretation of, any provision of this Agreement.
Section 24. Counterparts:
14
24.1 This Agreement may be executed in any number of counterparts, and each such
counterpart hereof will be deemed to be an original instrument, but all
such counterparts together will constitute but one Agreement.
Section 25. Communication and Representatives:
25.1 Throughout the term hereof, each Party agrees to designate in writing one
of its employees to represent it in connection with day-to-day operations
under this Agreement.
Section 26. Rights of Non-Submitting Party to Comment (Public Disclosure):
26.1 The Parties to this Agreement shall consult with each other as to the form,
substance and timing of any press release or other public disclosure
related to this Agreement, or the transactions contemplated hereby, and no
such press release or other public disclosure shall be made without the
consent of the other Party hereto, which consent shall not be unreasonably
withheld or delayed. Each Party shall determine in its sole discretion
whether such Party is required to file or otherwise submit this Agreement
with, or to, any governmental authorities, including, without limitation,
the U.S. Securities and Exchange Commission. If a Party (as the Submitting
Party) determines that this Agreement is required to be so filed or
submitted, then such Submitting Party shall with respect to such proposed
filing or submission: (i) provide a copy of such filing or submission to
the other Party (as the Non-Submitting Party) reasonably prior to its
filing or submission, (ii) identify to the extent that the Submitting Party
intends to request confidential treatment for any portion or portions of
this Agreement, (iii) provide a reasonable amount of time for the
Non-Submitting Party's review of the filing or submission and such
confidentiality request and any redactions comprising such intended request
and (iv) give good faith consideration to the Non-Submitting Party's
comments and requests for any additional or different redactions.
Section 27 Integration:
27.1 This Agreement, and each Appendix, and each Exhibit attached, sets forth
the entire Agreement and understanding between the Parties, as to the
subject matter hereof, and merges all prior discussions between them, and
none of the Parties will be bound by any conditions, definitions,
warranties, modifications, understandings or representations with respect
to such subject matter other than as expressly provided herein, or as duly
set forth on or subsequent to the effective date hereof in writing and
signed by a proper and duly authorized representative of the Party to be
bound thereby. This Agreement supersedes and replaces in its entirety the
Agreement between Allegro MicroSystems, Inc. and PolarFab (presently PSI)
dated January 29, 2001. This Agreement may be modified or amended as set
forth in writing and signed by a duly authorized representative of each
Party.
Section 28. Relationship Between Parties:
28.1 Neither Party to this Agreement will have the power to bind the other by
any guarantee or representation that it may give, or to incur any debts or
liabilities in the name of or on behalf of the other Party. The Parties
acknowledge and agree that nothing contained in this Agreement will be
deemed or construed to constitute or create between the Parties hereto a
partnership, association, joint venture or other agency.
Section 29. No Implied Licenses:
29.1 No licenses are granted hereunder by implication, estoppel or otherwise.
Each Party may make reasonable references by name to any other Party in its
advertising material relative to Wafers, provided that the advance written
consent of an authorized representative of the other Party has been
obtained.
15
Section 30. No Third-Party Beneficiaries:
30.1 No person not a Party to this Agreement will have any rights under this
Agreement as a third-party beneficiary, or otherwise, other than persons
entitled to indemnification as expressly set forth herein.
Section 31. Dispute Resolution:
31.1 In the event of any dispute, claim, question, or disagreement arising from,
or relating to this Agreement, the Parties hereto shall use their best
efforts to settle the dispute, claim, question, or disagreement. To this
effect, they shall consult and negotiate with each other in good faith and,
recognizing their mutual interests, attempt to reach a just and equitable
solution satisfactory to both Parties. If they do not reach such solution
within a period of [***], then, upon notice by either Party to the other,
all such disputes, claims, questions, or differences shall be finally
settled by arbitration administered by the American Arbitration Association
in accordance with the provisions of its Commercial Arbitration Rules. The
Party that initiates arbitration proceedings shall do so within the state,
or city, of the other Party and that other Party's substantive laws shall
apply and shall be the site of all arbitration proceedings. Judgment on the
award rendered by the Arbitrator(s) may be entered in any court having
jurisdiction thereof.
16
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement, as of the
Effective Date first above written.
Allegro MicroSystems, Inc.
By: /S/ Xxxxxx Xxxxxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxxxxx
------------------------------------
Title: President & Chief Executive Officer
-----------------------------------
Polar Semiconductor, Inc.
By: /S/ Xxxxxxxxx Xxxxxx
--------------------------------------
Name: Xxxxxxxxx Xxxxxx
------------------------------------
Title: President & Chief Executive Officer
-----------------------------------
17
APPENDIX A
APPLICABLE SPECIFICATIONS AND WAFER EVAL ACCEPTANCE CRITERIA
[***]
18
[***]
00
XXXXXXXX X
MASS PRODUCTION WAFER APPROVAL REQUIREMENTS AND PROCEDURES
[***]
20
APPENDIX C
RISK WAFER AUTHORIZATION
[***]
21
APPENDIX D
RESERVE WAFER OUTS PER QUARTER - SHIPPED
(in terms of wafer outs - shipped per fiscal quarter)
[***]
22
APPENDIX D
[***]
23
APPENDIX E
WAFER LOT SIZES
[***]
24
APPENDIX F
RELIABILITY AND PROCESS CONTROL INFORMATION
[***]
25
APPENDIX G
ALLEGRO MICROSYSTEMS' QUALITY PLAN
[***]
26
APPENDIX G
[***]
00
XXXXXXXX X
[***]
00
XXXXXXXX X
[***]
29
APPENDIX H
PSI CYCLE TIME BY WAFER TECHNOLOGY
[***]
30
APPENDIX I
PROBE SCRAP LIMITS AND MINIMUM DIE YIELD BASELINE
[***]
31
APPENDIX I
[***]
32
APPENDIX I
[***]
33
APPENDIX I
[***]
34
APPENDIX J
Wafer Pricing & Mask Pricing
[***]
35
APPENDIX J
Wafer Pricing & Mask Pricing (continued)
[***]
36
APPENDIX J
[***]
37
APPENDIX J
[***]
38
APPENDIX K
SHIPPING CRITERIA
All Wafers to be delivered to Allegro under this Agreement will be packed,
marked, and shipped by PSI, [***], as outlined in the Quality Manual, and care
for transportation of Wafers of a similar type. All Wafers will be accompanied
by the following information, as appropriate: (i) purchase order number, (ii)
Device Type, (iii) Allegro lot number, (iv) lot quantity and (v) any process
information, to be mutually agreed upon in writing by both Parties. Items (i),
(ii), (iii), and (iv) will be clearly marked on the outside of each Wafer
cassette, shipping carton and reflected on the Packing Slip by PSI. Shipments
are [***].
39
APPENDIX L
ENVIRONMENTAL COMPLIANCE
[***]
40
APPENDIX M
[***]
41
APPENDIX N
ALLEGRO WAFER MANUFACTURING TECHNOLOGY AND PSI WAFER
MANUFACTURING TECHNOLOGY
[***]
42
