THE AUDIT, MICRON AND THE JOINT VENTURE COMPANY SHALL WORK IN
GOOD FAITH TO AGREE TO AN AUDIT CLOSURE PLAN, WHICH WILL BE DOCUMENTED IN THE
AUDIT REPORT ISSUED BY THE JOINT VENTURE COMPANY.
IF THE JOINT VENTURE COMPANY
REQUESTS ANY CHANGES OR ADDITIONS TO MICRON'S EXISTING PROCESS AND CONTROL
MECHANISMS, THE PARTIES SHALL WORK TOGETHER IN GOOD FAITH TO RESOLVE ANY SUCH
REQUESTS.
5.4
AUDIT OF PRICING AND ADDITIONAL EQUIPMENT.
THE JOINT VENTURE
COMPANY RESERVES THE RIGHT TO HAVE MICRON'S BOOKS AND RECORDS RELATED TO THE
PRICING OF PROBED WAFERS AND THE PURCHASE OF ADDITIONAL EQUIPMENT HEREUNDER
INSPECTED AND AUDITED NOT MORE THAN [***] DURING ANY FISCAL YEAR TO ENSURE
COMPLIANCE WITH SCHEDULES 2.6 AND 4.6 OF THIS AGREEMENT IN REGARDS TO PRICING OF
THE PROBED WAFERS.
SUCH AUDIT WILL BE PERFORMED BY AN INDEPENDENT THIRD PARTY
AUDITOR ACCEPTABLE TO BOTH PARTIES AT THE JOINT VENTURE COMPANY'S EXPENSE.
IF
THE PARTIES CANNOT AGREE, THE JOINT VENTURE COMPANY MAY SELECT ONE OF THE MAJOR
INTERNATIONALLY RECOGNIZED AUDIT FIRMS, WHICH IS NOT THE AUDITOR FOR EITHER OF
THE JOINT VENTURE COMPANY'S CUSTOMERS.
THE JOINT VENTURE COMPANY SHALL PROVIDE
[***] ([***]) DAYS ADVANCE WRITTEN NOTICE TO MICRON OF ITS DESIRE TO INITIATE AN
AUDIT AND THE AUDIT SHALL BE SCHEDULED SO THAT IT DOES NOT ADVERSELY IMPACT OR
INTERRUPT MICRON'S BUSINESS OPERATIONS. IF THE AUDIT REVEALS ANY MATERIAL
DISCREPANCIES, MICRON OR THE JOINT VENTURE COMPANY SHALL REIMBURSE THE OTHER, AS
APPLICABLE, FOR ANY MATERIAL DISCREPANCIES WITHIN [***] ([***]) DAYS AFTER
COMPLETION OF THE AUDIT.
THE RESULTS OF SUCH AUDIT SHALL BE KEPT CONFIDENTIAL
BY THE AUDITOR AND ONLY THE DISCREPANCIES SHALL BE REPORTED TO THE PARTIES AND
8
its customers, and be limited to the (i) discrepancies identified by the audit,
(ii) results of the physical inspection of the Additional Equipment;
and,
(iii) subject to any limitations imposed by law, results regarding purchase and
utilization of such Additional Equipment.
Notwithstanding the foregoing, any
auditor reports shall not disclose any Micron pricing or terms of purchase for
any purchases of materials or equipment hereunder to the Joint Venture Company's
customers other than Micron, absent written agreement from the customers'
respective legal counsel.
If any audit reveals a material discrepancy, the
Joint Venture Company may increase the frequency of such audits to quarterly for
the subsequent [***] ([***]) month period.
ARTICLE 6
REPRESENTATIONS; WARRANTIES; HAZARDOUS MATERIALS; DISCLAIMER
6.1
PRODUCT WARRANTY.
MICRON WARRANTS THAT THE PROBED WAFERS SUPPLIED
HEREUNDER:
(A)
CONFORM IN ALL MATERIAL ASPECTS TO THE AGREED SPECIFICATION;
(B)
ARE FREE FROM DEFECTS IN MATERIALS OR WORKMANSHIP; AND
(C)
FREE OF LIENS AND ENCUMBRANCES, NOT INCLUDING ANY EXPRESS OR
IMPLIED WARRANTY OF NON-INFRINGEMENT AND MICRON HAS THE NECESSARY RIGHT, TITLE,
AND INTEREST TO PROVIDE THE PROBED WAFERS TO THE JOINT VENTURE COMPANY.
Each of the warranties Sections 6.1 (a), (b) and (c) shall survive any delivery,
inspection, acceptance, payment, or resale of the Probed Wafers.
6.2
WARRANTY CLAIMS.
[***].
6.3
INSPECTIONS.
THE JOINT VENTURE COMPANY MAY, UPON REASONABLE
ADVANCE WRITTEN NOTICE, REQUEST SAMPLES