Technology Development Agreement, Dated November 6, 2001

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


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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 ...