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<SEC-DOCUMENT>0000724910-09-000004.txt : 20090506
<SEC-HEADER>0000724910-09-000004.hdr.sgml : 20090506
<ACCEPTANCE-DATETIME>20090506161133
ACCESSION NUMBER:		0000724910-09-000004
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20090501
ITEM INFORMATION:		Entry into a Material Definitive Agreement
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20090506
DATE AS OF CHANGE:		20090506

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NVE CORP /NEW/
		CENTRAL INDEX KEY:			0000724910
		STANDARD INDUSTRIAL CLASSIFICATION:	SEMICONDUCTORS & RELATED DEVICES [3674]
		IRS NUMBER:				411424202
		STATE OF INCORPORATION:			MN
		FISCAL YEAR END:			0331

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-12196
		FILM NUMBER:		09801644

	BUSINESS ADDRESS:	
		STREET 1:		11409 VALLEY VIEW ROAD
		CITY:			EDEN PRAIRIE
		STATE:			MN
		ZIP:			55344
		BUSINESS PHONE:		9528299217

	MAIL ADDRESS:	
		STREET 1:		11409 VALLEY VIEW ROAD
		CITY:			EDEN PRAIRIE
		STATE:			MN
		ZIP:			55344

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PREMIS CORP
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>phonak8k.htm
<DESCRIPTION>CURRENT REPORT ON FORM 8-K
<TEXT>
<p align="center"><font face="Times New Roman, Times, serif" size="5"><b>UNITED STATES<br>
  SECURITIES AND EXCHANGE COMMISSION</b></font><b><font face="Times New Roman, Times, serif" size="2"><br>
  Washington, D.C.&nbsp;&nbsp;20549</font></b></p>
<p align="center"><b><font face="Times New Roman, Times, serif" size="2"> <font size="5">FORM
  8-K</font></font></b></p>
<p align="center"><b><font face="Times New Roman, Times, serif" size="3">CURRENT REPORT<br>
  </font></b><font face="Times New Roman, Times, serif" size="3"><b>Pursuant to
  Section 13 OR 15(d) of The Securities Exchange Act of 1934</b></font></p>
<p><font face="Times New Roman, Times, serif" size="2"><br>
  Date of Report (Date of earliest event reported)&nbsp;&nbsp;<b><u>May 1, 2009</u></b><br>
  </font></p>
<div align="center"><b><font size="6" face="Arial, Helvetica, sans-serif"><img src="nve-logo.gif" width="276" height="55"><br>
  NVE Corporation</font></b><font face="Times New Roman, Times, serif" size="2"><br>
  (Exact name of registrant as specified in its charter)</font></div>
<font face="Times New Roman, Times, serif" size="2">
<div align="center">
  <p>&nbsp;</p>
</div>
</font>
<div align="center"></div>
<table border="0" cellspacing="0" cellpadding="0" width="100%">
  <tr>
    <td width="33%">
      <p align="center"><font face="Times New Roman, Times, serif"><b><font size="2" ><u>Minnesota</u></font></b></font></p>
    </td>
    <td width="33%">
      <div align="center"><font face="Times New Roman, Times, serif" size="2"><b><u>000-12196</u>
        </b> </font></div>
    </td>
    <td>
      <p align="center"><b><font size="2" face="Times New Roman"><u>41-1424202</u></font></b></p>
    </td>
  </tr>
  <tr>
    <td>
      <p align="center"><font size="2" face="Times New Roman, Times, serif">(State
        or other jurisdiction of incorporation)</font></p>
    </td>
    <td>
      <div align="center"><font face="Times New Roman, Times, serif" size="2">(Commission File Number) </font></div>
    </td>
    <td>
      <div align="center"><font size="2" face="Times New Roman, Times, serif">(IRS Employer Identification No.)</font></div>
    </td>
  </tr>
</table>
<br>
<br>
<table border="0" cellspacing="0" cellpadding="0" width="100%">
  <tr>
    <td rowspan="2" width="25%"></td>
    <td width="50%">
      <p align="center"><font size="2"><b><u>11409 Valley View Road, Eden Prairie,
        Minnesota</u></b></font></p>
    </td>
    <td>
      <p align="center"><font size="2"><b><font face="Times New Roman" ><u>55344</u></font></b></font></p>
    </td>
  </tr>
  <tr>
    <td width="50%">
      <p align="center"><font size="2" face="Times New Roman, Times, serif">(Address
        of principal executive offices)</font></p>
    </td>
    <td>
      <p align="center"><font size="2">(Zip Code)</font></p>
    </td>
  </tr>
</table>
<br>
<font size="2" face="Times New Roman, Times, serif"> Registrant&#146;s telephone
number, including area code <b><u>(952) 829-9217</u></b><br>
</font>
<p align="center"><font face="Times New Roman, Times, serif" size="2"><u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u><br>
  </font><font face="Times New Roman, Times, serif" size="2">(Former name or former
  address, if changed since last report.)</font></p>
<p><font face="Times New Roman, Times, serif" size="2">Check the appropriate box
  below if the Form 8-K filing is intended to simultaneously satisfy the filing
  obligation of the registrant under any of the following provisions (see General
  Instruction A.2. below):<br>
  <br>
  [&nbsp;&nbsp;] Written communications pursuant to Rule 425 under the Securities
  Act (17 CFR 230.425)<br>
  <br>
  [&nbsp;&nbsp;] Soliciting material pursuant to Rule 14a-12 under the Exchange
  Act (17 CFR 240.14a-12)<br>
  <br>
  [&nbsp;&nbsp;] Pre-commencement communications pursuant to Rule 14d-2(b) under
  the Exchange Act (17 CFR 240.14d-2(b))<br>
  <br>
  [&nbsp;&nbsp;] Pre-commencement communications pursuant to Rule 13e-4(c) under
  the Exchange Act (17 CFR 240.13e-4(c))<br><br>
</font>
<hr><br clear="all" style="page-break-before:always;">
<font face="Times New Roman, Times, serif" size="2"><b>Item 1.01 Entry into a Material Definitive Agreement</b><br>
<br>
<b><i>General information</i></b><i><br>
</i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Phonak AG has and continues to develop, manufacture, and sell hearing systems using our spintronic medical sensors.<br>
<br>
<b><i>Description of the Terms and Conditions of the Agreement</i></b><i><br>
</i>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;On May 1, 2009 we executed a Supply Agreement by and between us and Phonak.
The agreement has a term of three years.
The agreement establishes purchase forecasts, inventory requirements, ordering conditions, delivery time, performance indicators, requirements for handling corrective actions,  terms relating to liability and indemnification, terms relating to intellectual property rights, terms relating to supplier indemnification, confidentiality obligations, and certain other terms and conditions.<br>
<br>
<br>
<br>
<br>
</font>
<p align="center"><font face="Times New Roman, Times, serif" size="2">2</font></p>
<hr><br clear="all" style="page-break-before:always;">
<font face="Times New Roman, Times, serif" size="2"><b>Item 9.01 Financial Statements and Exhibits</b><br>
&nbsp;<br>
</font>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
<tr>
<td width="8%">
<div align="center"><font face="Times New Roman, Times, serif" size="2"><b><u>Exhibit #</u></b></font></div>
</td>
<td> </td>
<td width="88%">
<div align="center"><font face="Times New Roman, Times, serif" size="2"><b><u>Description</u></b></font></div>
</td>
</tr>
<tr>
<td colspan="3"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font>
    </td>
</tr>
<tr>
<td>
<div align="center"><font face="Times New Roman, Times, serif" size="2">10</font></div>
</td>
<td></td>
<td>
<div align="center"><font face="Times New Roman, Times, serif" size="2">
Supply Agreement by and between NVE Corporation and Phonak AG.</font></div>
</td>
</tr>
</table>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif" size="2">3</font></p>
<hr><br clear="all" style="page-break-before:always;">
<font face="Times New Roman, Times, serif" size="2"><div align="center"><b>SIGNATURE</b><br>
&nbsp;<br>
</div>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
<br>
<br></font>
<table border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="25%" valign="top"><font face="Times New Roman, Times, serif" size="2">Date&nbsp;&nbsp;<b><u>May 6, 2009</u></b></font></td>
<td valign="top">
<b><u><font size="2" face="Times New Roman, Times, serif">NVE CORPORATION<br>
</font></u></b><font size="2" face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Registrant)<br>
<br>
<u>/s/ DANIEL A. BAKER</u><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Daniel A. Baker<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;President and<br>
Chief Executive Officer</font></td>
</tr>
</table>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
<p align="center"><font face="Times New Roman, Times, serif" size="2">4</font></p>
<hr>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>phonak09.htm
<DESCRIPTION>SUPPLY AGREEMENT BY AND BETWEEN NVE CORPORATION AND PHONAK AG
<TEXT>
<div style="width: 100%;"><font style="font-size: 10pt; font-family: Arial;">Phonak AG Supply Agreement<br>
Final Version 1.1 / Feb 19 2009<br></font>
</div>
<div align="right">
<hr style="color: black;" noshade size="1">
</div>
<p align="center"><font size="4" face="Arial, Helvetica, sans-serif"><b><br>
<br>
</b>SUPPLY<br>
<br>
AGREEMENT</font><font style="font-size: 10pt; font-family: Arial;"><font size="3"><br>
</font><br>
<br>
<br>
<br>
by and between<br>
<br>
<br>
<br>
<b>NVE Corporation</b><br>
11409 Valley View Road<br>
Eden Prairie, MN&nbsp;&nbsp;55344&nbsp;&nbsp;&nbsp;USA<br>
<br>
<br>
(hereafter referred to as &#147;<b>Supplier</b>&#148;)<br>
<br>
<br>
<br>
and<br>
<br>
<br>
<br>
<b>Phonak AG</b><br>
Laubisr&uuml;tistrasse 28<br>
CH-8712 St&auml;fa<br>
Switzerland<br>
and affiliates<br>
<br>
(hereafter referred to as &#147;<b>Phonak</b>&#148;)<br>
<br>
<br>
(Supplier or Phonak hereafter &#147;<b>Party</b>&#148; or &#147;<b>Parties</b>&#148; as the case may be)<br>
<br>
<br>
<br>
<br>
</font>
<div id="PN" style="page-break-after: always;">
<div style="width: 100%; text-align: right;"></div>
<hr>
</div>
<div style="width: 100%;"><font style="font-size: 10pt; font-family: Arial;">Phonak AG / Supply Agreement<br>
Final Version 1.1 / Feb 19 2009</font></div>
<div align="right">
<font face="Times New Roman, Times, serif" size="2">Page 2 of 19</font><br>
<hr style="color: black;" noshade size="1">
</div>
<br>
<b><font style="font-size: 10pt; font-family: Arial;">
CONTENT</font><br>
</b>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="24" height="30"><b>1</b></td>
<td width="1"><b>
PREAMBLE</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>3</b></td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="24" height="30"><b>2</b></td>
<td width="1"><b>
PRODUCT&nbsp;SPECIFICATION</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>3</b></td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="24" height="30"><b>3</b></td>
<td width="1"><b>FORECAST</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>4</b></td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="24" height="30"><b>4</b></td>
<td width="1"><b>STOCKS</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>4</b></td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="24" height="30"><b>5</b></td>
<td width="1"><b>ORDERS&nbsp;AND&nbsp;ORDER&nbsp;CONFIRMATIONS</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>4</b></td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="24" height="30"><b>6</b></td>
<td width="1"><b>
DELIVERY</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>4</b></td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="24" height="30"><b>7</b></td>
<td width="1"><b>
AVAILABILITY&nbsp;OF&nbsp;PRODUCT</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>5</b></td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="24" height="30"><b>8</b></td>
<td width="1"><b>KEY&nbsp;PERFORMANCE&nbsp;INDICATOR&nbsp;(KPI)</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>5</b></td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="24" height="30"><b>9</b></td>
<td width="1"><b>INVOICES&nbsp;AND&nbsp;PAYMENT&nbsp;CONDITIONS</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>6</b></td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="24" height="30"><b>10</b></td>
<td width="1"><b>AQUALITY&nbsp;ASSURANCE</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>7</b></td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="24" height="30"><b>11</b></td>
<td width="1"><b>APPLICABLE&nbsp;STANDARDS</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>7</b></td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="24" height="30"><b>12</b></td>
<td width="1"><b>CORRECTIVE&nbsp;ACTIONS</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>7</b></td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="24" height="30"><b>13</b></td>
<td width="1"><b>LIABILITY&nbsp;AND&nbsp;INDEMNIFICATION</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>7</b></td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="24" height="30"><b>14</b></td>
<td width="1"><b>INTELLECTUAL&nbsp;PROPERTY&nbsp;RIGHTS:</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>8</b></td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="24" height="30"><b>15</b></td>
<td width="1"><b>SUPPLIER&nbsp;INDEMNIFICATION</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>9</b></td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="24" height="30"><b>16</b></td>
<td width="1"><b>CONFIDENTIALITY</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>9</b></td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="24" height="30"><b>17</b></td>
<td width="1"><b>TERMINATION</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>9</b></td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="24" height="30"><b>18</b></td>
<td width="1"><b>MISCELLANEOUS</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>10</b></td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="24" height="30"><b>19</b></td>
<td width="1"><b>APPLICABLE&nbsp;LAW&nbsp;AND&nbsp;JURISDICTION</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>11</b></td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="1" height="30"><b>APPENDIX&nbsp;A:&nbsp;PHONAK&nbsp;GROUP&nbsp;SUPPLIER&nbsp;PRINCIPLES&nbsp;(&lt;&lt;&nbsp;PGSP&nbsp;&gt;&gt;)</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>12</b></td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="1" height="30"><b>APPENDIX&nbsp;B:&nbsp;PRODUCT&nbsp;list</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>15</b></td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="1" height="30"><b>APPENDIX&nbsp;C:&nbsp;CORRECTIVE&nbsp;ACTION&nbsp;REPORT&nbsp;FORM</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>16</b></td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="1" height="30"><b>APPENDIX&nbsp;D:&nbsp;KPI&nbsp;VALUATION</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>18</b></td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="1" height="30"><b>INCOMING&nbsp;INSPECTION</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>18</b></td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="1" height="30"><b>ON&nbsp;TIME&nbsp;DELIVERY</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>18</b></td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="1" height="30"><b>RETURN&nbsp;FROM&nbsp;FIELD</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>18</b></td>
</tr>


</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="1" height="30"><b>APPENDIX&nbsp;E:&nbsp;PERCEIVED&nbsp;SERVICE&nbsp;PERFORMANCE&nbsp;QUESTIONNAIRE</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>19</b></td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;"><br>
<br>
</font><div id="PN" style="page-break-after: always;">
<div style="width: 100%; text-align: right;"><font style="font-size: 10pt; font-family: Arial;">2</font></div>
<hr>
</div>
<div style="width: 100%;"><font style="font-size: 10pt; font-family: Arial;">Phonak AG / Supply Agreement<br>
Final Version 1.1 / Feb 19 2009</font></div>
<div align="right">
<font face="Times New Roman, Times, serif" size="2">Page 3 of 19</font><br>
<hr style="color: black;" noshade size="1">
</div>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="24"><b><br>
<br>
1<br>
&nbsp;<br>
&nbsp;<br>
</b></td>
<td><b>
PREAMBLE<br>
&nbsp;<br>
&nbsp;
</b></td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">&nbsp;</td>
<td width="40">1.1.</td>
<td>Supplier designs and manufactures magnetic sensor ICs for use in
commercial, medical, industrial, and automotive applications.<br>
<br>
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">&nbsp;</td>
<td width="40">1.2.</td>
<td>Phonak has and continues to develop, manufacture and sell hearing
systems using Supplier&#146;s spintronic medical sensors.<br>
<br>
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">&nbsp;</td>
<td width="40">1.3.</td>
<td>Supplier and Phonak wish to enter in a supply agreement (the Agreement)
for the supply of the products listed in Appendix B (the Product(s)), by
Supplier.<br>
<br>
</td>
</tr>

</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="top">
<td width="40">&nbsp;</td>
<td width="40">1.4.</td>
<td>It is the intention of the Parties to define in this Agreement the processes
linked to the ordering, delivery, payment of the Product, as well as, in the
case it is needed, corrective actions handling, and to describe the
precautions that will be taken to ensure quality and availability of the
Product.<br>
<br>
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="top">
<td width="40">&nbsp;</td>
<td width="40">1.5</td>
<td>Phonak shall mean Phonak AG and/or the parent company of Phonak AG,
Sonova Holding AG, and any legal entity of which at least 50% of the
voting shares or similar voting rights now or hereafter are owned or
controlled, directly or indirectly by Sonova Holding AG, or in which Sonova
Holding AG otherwise has the ability to direct the management.
<br>
<br>
<br>
<br>
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="24"><b>2<br>
&nbsp;<br>
&nbsp;<br>
</b></td>
<td><b>PRODUCT&nbsp;SPECIFICATION<br>
&nbsp;<br>
&nbsp;
</b></td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="top">
<td width="40">2.1.</td>
<td>Phonak and Supplier will agree on a specification (Specification) defining
completely the product to be delivered. This specification includes namely but not
limited to:
<br>&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="top">
<td width="80">&nbsp;</td>
<td width="40">2.1.1.</td>
<td>Technical parameters that the product has to meet<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="top">
<td width="80">&nbsp;</td>
<td width="40">2.1.2.</td>
<td>Reliability tests the Product has to pass<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="top">
<td width="80">&nbsp;</td>
<td width="40">2.1.3.</td>
<td>Packaging and labeling of the Product if required<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="top">
<td width="80">&nbsp;</td>
<td width="40">2.1.4.</td>
<td>Quality and inspection documents required for each lot<br>
&nbsp;
</td>
</tr>
</table>

<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="top">
<td width="40">2.2.</td>
<td>No change in the Specification and/or in the manufacturing process of the Product
that could influence form fit and function of the Product shall be executed without
prior approval of Phonak.<br>
<br>
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="top">
<td width="40">2.3.</td>
<td><u>Traceability:</u> The production lots shall be identified on the reels containing the
product in order to allow traceability of the final inspection records and of process
parameters for failure analysis purposes. Individual parts are not traceable.
Traceability shall be guaranteed for 6 years after delivery of the Product.<br>
&nbsp;<br>
&nbsp;<br>
&nbsp;
</td>
</tr>
</table>
<div id="PN" style="page-break-after: always;">
<div style="width: 100%; text-align: right;"><font style="font-size: 10pt; font-family: Arial;">3</font></div>
<hr>
</div>
<div style="width: 100%;"><font style="font-size: 10pt; font-family: Arial;">Phonak AG / Supply Agreement<br>
Final Version 1.1 / Feb 19 2009</font></div>
<div align="right">
<font face="Times New Roman, Times, serif" size="2">Page 4 of 19</font><br></div>
<hr style="color: black;" noshade size="1">
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="24"><b>3<br>
&nbsp;<br>
&nbsp;<br>
</b></td>
<td><b>
FORECAST<br>
&nbsp;<br>
&nbsp;
</b></td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">3.1.</td>
<td>Phonak will provide Supplier with monthly rolling forecasts. Rolling forecasts will extend over 12 months, first month being firm and next 11 months being nonbinding forecasts.<br>
&nbsp;<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="24"><b>4<br>
&nbsp;<br>
&nbsp;<br>
</b></td>
<td><b>STOCKS<br>
&nbsp;<br>
&nbsp;
</b></td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">4.1.</td>
<td><u>Rolling Stocks</u> Supplier commits have in house the equivalent of 1 month of deliveries as finished goods.<br>
<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">4.2.</td>
<td><u>Storage conditions</u>: Storage conditions shall be:<br>
&nbsp;&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="80">&nbsp;</td>
<td><b>[Prior to use reels of the parts will remain in their protective anti-static bags, at normal room temperature (22C +/- 5C) and humidity conditions]</b><br>
&nbsp;
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">4.3.</td>
<td><u>Shelf life:</u> Under the storage conditions described in section 4.2, Supplier guarantees that the product will not be affected by any significant change in aspect or performance for 18 months.<br>
&nbsp;<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="24"><b>5<br>
&nbsp;<br>
&nbsp;<br>
</b></td>
<td><b>ORDERS AND ORDER CONFIRMATIONS<br>
&nbsp;<br>
&nbsp;
</b></td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">5.1.</td>
<td>Phonak will issue the purchase orders by mail, FAX or by a mutually agreed electronic data interchange (EDI) system. Phonak will not accept invoices for orders that have been given in any other form. Supplier shall confirm the orders within 5 calendar days by signed and dated return FAX of the original order or by Supplier specific documents or by mutually agreed EDI system. Phonak is only bound to this order if the order confirmation shows no difference with respect to the content of the original order of Phonak.<br>
&nbsp;<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">5.2.</td>
<td>Order confirmation is a commitment of Supplier and shall not be modified without prior agreement of Phonak.<br>
&nbsp;<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="24"><b>6&nbsp;<br>
&nbsp;<br>
&nbsp;
</b></td>
<td><b>DELIVERY<br>
&nbsp;<br>
&nbsp;
</b></td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">6.1.</td>
<td><u>Delivery time:</u> Delivery time is 8 &#150; 10 weeks from receipt of the order. Delivery time for quantity significantly higher than the forecast have to be discussed at the time of the order.<br>
<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">6.2.</td>
<td><u>Terms of delivery:</u> Terms of delivery are FOB NVE&#146;s Dock, To all Sonova affiliates as mentioned in 1.5<br>
&nbsp;
<br>
&nbsp;<br>
&nbsp;
<br>
&nbsp;</td>
</tr>
</table>
<div id="PN" style="page-break-after: always;">
<div style="width: 100%; text-align: right;"><font style="font-size: 10pt; font-family: Arial;">4</font></div>
<hr>
</div>
<div style="width: 100%;"><font style="font-size: 10pt; font-family: Arial;">Phonak AG / Supply Agreement<br>
Final Version 1.1 / Feb 19 2009</font></div>
<div align="right">
<font face="Times New Roman, Times, serif" size="2">Page 5 of 19</font><br>
<hr style="color: black;" noshade size="1">
<div align="left">
&nbsp;<br>
&nbsp;
<br>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="top">
<td width="40">6.3.</td>
<td>Late delivery<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="top">
<td width="80">&nbsp;</td>
<td width="40">6.3.1.</td>
<td>If, because of exceptional circumstances, a delivery schedule is in
doubt Supplier shall inform Phonak as soon as <u>NVE is aware of the
problem</u>. Supplier shall make every effort to ensure timely deliveries
to Phonak before there is a risk of production stop at Phonak.
Additionally Supplier shall start an &#147;Express LOT&#148; in production and
set Phonak products on 1st priority level at test as well as in the
whole supply chain to reach a dramatically shortened lead time.<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="top">
<td width="80">&nbsp;</td>
<td width="40">6.3.2.</td>
<td>Phonak is, in case of late delivery having stopped production, entitled to
challenge from supplier best efforts to solve the delivery problem and Supplier
agrees to act immediately and provide an action plan to Phonak within one
week. The action plan has to define how and when NVE will meet the
schedule.<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="top">
<td width="40">6.4.</td>
<td><u>Packaging, Labeling</u>: Supplier bears the full responsibility for proper packaging of
the Products.<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="top">
<td width="40">6.5.</td>
<td>Packing slip<br>
<br>
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="80">&nbsp;</td>
<td valign="top">Every lot must bear a numbered delivery note that gives information on the
contents (description of Products) including:<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="80">&nbsp;</td>
<td width="40" valign="top">6.5.1.</td>
<td valign="top">The corresponding Phonak order number<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="80">&nbsp;</td>
<td width="40" valign="top">6.5.2.</td>
<td valign="top">The Phonak part number of the units delivered<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="80">&nbsp;</td>
<td width="40" valign="top">6.5.3.</td>
<td valign="top">The lot number with the corresponding quantity<br>
&nbsp;
<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="bottom">
<td width="24">
<b>7</b><br>
&nbsp;
<br>
&nbsp;
</td>
<td><b>AVAILABILITY OF PRODUCT<br>
&nbsp;<br>
&nbsp;
</b></td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">7.1.</td>
<td>Supplier commits to make any effort to have Product fulfilling the specifications
available in time and quantities planned according to section 2.<br>
<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">7.2.</td>
<td>In case Supplier plans to discontinue the supply of the Product, Supplier will give
Phonak a 1 year notice, before giving Phonak the opportunity to place a last call
order.<br>
<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">7.3.</td>
<td>Supplier shall ensure that enough materials will be available to cover the Phonak
Forecast considering the over all yield and the regulations of safety stock.
Moreover the supplier shall ensure and maintain a proper Supply chain
considering second source strategy.<br>
<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="bottom">
<td width="24" height="36" valign="top"><b>8</b></td>
<td><b>KEY PERFORMANCE INDICATOR (KPI)<br>
</b><br>
Phonak will measure the performance of the Supplier through KPI on a quarterly
basis, as defined below:<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">8.1.</td>
<td><b><u>On Time Delivery (OTD)</u></b>: The actual date of delivery will be compared to the confirmed date of delivery and a valuation will be attributed (see appendix C).<br>
&nbsp;<br>
&nbsp;
<br>
&nbsp;</td>
</tr>
</table>
</div>
</div>
<div id="PN" style="page-break-after: always;">
<div style="width: 100%; text-align: right;"><font style="font-size: 10pt; font-family: Arial;">5</font></div>
<hr>
</div>
<div style="width: 100%;"><font style="font-size: 10pt; font-family: Arial;">Phonak AG / Supply Agreement<br>
Final Version 1.1 / Feb 19 2009</font></div>
<div align="right">
<font face="Times New Roman, Times, serif" size="2">Page 6 of 19</font><br>
<hr style="color: black;" noshade size="1">
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">8.2.</td>
<td><b><u>Return Rate from Field (RRF)</u></b>: A valuation based on a target value will be given
for the return rate of Hearing Instruments from the field in 90 days (see appendix
C). Phonak will segregate the return of sensors believed to have caused returns
from the field from other sensors to enable Supplier to validate the failure of the
sensor.<br>
<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">8.3.</td>
<td><b><u>Perceived Service Performance (PSP)</u></b>: A questionnaire will be completed by
the 3 Phonak locations to give a general evaluation of the service level of the
Supplier (See Questionnaire in appendix D).<br>
<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">8.4.</td>
<td>The valuation of each of these KPI will be made quarterly, in percent.<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr>
<td width="80">&nbsp;</td>
<td valign="top">The minimum Performance Level required is:<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr>
<td width="120">&nbsp;</td>
<td valign="top">Average of all KPI, for each Phonak Affiliates: <u>></u> 95%
<br>
No KPI below 90%<br>
&nbsp;<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">8.5.</td>
<td>Phonak will provide these results upon request supported by copies of applicable
reports showing the basis of the measurements including sufficient information
from the PSP questionnaires to allow Supplier to have the opportunity to
implement corrective actions.<br>
<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">8.6.</td>
<td>In case the performance level is not reached, Phonak is entitled to reduce the
share of Product purchased from Supplier while keeping the agreed upon prices
and conditions of supply.<br>
<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="bottom">
<td width="24" valign="top"><b>9</b></td>
<td>
<b>INVOICES AND PAYMENT CONDITIONS</b><br>
&nbsp;<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">9.1.</td>
<td>Invoices will be issued not earlier than the date of shipment and will be sent to
the following address:<br>
<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr>
<td width="120"></td>
<td valign="top">Phonak AG<br>
Laubisr&uuml;tistrasse 28<br>
CH-8712 St&auml;fa<br>
&nbsp;
<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">9.2.</td>
<td>Invoices will include:<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr>
<td width="80">&nbsp;</td>
<td width="40" valign="top">9.2.1.</td>
<td valign="top">The corresponding Phonak order number<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr>
<td width="80">&nbsp;</td>
<td width="40" valign="top">9.2.2.</td>
<td valign="top">The Phonak part number of the units delivered (one line per part
number)<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr>
<td width="80">&nbsp;</td>
<td width="40" valign="top">9.2.3.</td>
<td valign="top">The lot number with the corresponding quantity<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">9.3.</td>
<td>Payment conditions will be net 30 days after date of the invoice.<br>
&nbsp;<br>
&nbsp;<br>
&nbsp;</td>
</tr>
</table>
</div>
<div id="PN" style="page-break-after: always;">
<div style="width: 100%; text-align: right;"><font style="font-size: 10pt; font-family: Arial;">6</font></div>
<hr>
</div>
<div style="width: 100%;"><font style="font-size: 10pt; font-family: Arial;">Phonak AG / Supply Agreement<br>
Final Version 1.1 / Feb 19 2009</font></div>
<div align="right">
<font face="Times New Roman, Times, serif" size="2">Page 7 of 19</font><br>
<hr style="color: black;" noshade size="1">
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="24" height="36"></td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="bottom">
<td width="24" height="36" valign="top"><b>10</b></td>
<td><b>AQUALITY ASSURANCE</b><br>
&nbsp;<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">10.1.</td>
<td>Supplier ensures to maintain its quality system according ISO 9000 to ensure all
products to be delivered fully meet the data sheet<br>
&nbsp;<br>
&nbsp;&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">10.2.</td>
<td><u>Policy regarding incoming goods:</u> Phonak expects supplier to deliver Products
meeting Specifications. An incoming inspection is therefore not required and
Phonak will only do sample checks on incoming goods.<br>
&nbsp;<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">10.3.</td>
<td><u>Phonak&#146;s incoming inspection (if any, on a sample basis):</u> Phonak incoming
inspection procedure and acceptance criteria will be the object of a written
agreement between Supplier and Phonak.<br>
&nbsp;<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">10.4.</td>
<td><u>Warranty:</u> Supplier warrants that the product will continue performing according to specification 18 months after the end product has been delivered to Phonak<br>
&nbsp;<br>
&nbsp;<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="bottom">
<td width="24" height="36" valign="top"><b>11</b></td>
<td><b>APPLICABLE STANDARDS</b><br>
&nbsp;<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">11.1.</td>
<td>The product shall be implemented in a device complying with class 2A of the 93/42/EEC Medical directive.<br>
&nbsp;<br>
&nbsp;<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="bottom">
<td width="24" height="36" valign="top"><b>12</b></td>
<td><b>CORRECTIVE ACTIONS</b><br>
&nbsp;<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">12.1.</td>
<td>Quality complaints
<br>
<br>
If Phonak detects defective product at any production stage Phonak will provide a
written test report to Supplier. Supplier shall immediately acknowledge receipt
take short-term corrective action independent of the cause and of the
responsibility for the problem. Supplier shall analyze the problem and provide a
written report including long term corrective action within 14 days and keep
Phonak informed of the progress in the mean time.<br>
&nbsp;<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">12.2.</td>
<td>Corrective action procedure:<br><br>
Supplier shall document corrective actions using the 8D corrective action report of
APPENDIX C:, or equivalent.<br>
&nbsp;<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="bottom">
<td width="24" height="36" valign="top"><b>13</b></td>
<td><b>LIABILITY AND INDEMNIFICATION</b><br>
&nbsp;<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">13.1.</td>
<td>Subsequent to the mutual consent confirming that the Product are meeting the
Specifications and upon commencing with the supply of the Product to Phonak,
Phonak is, in case of defects in the Product, entitled to the following:&nbsp;<br>
&nbsp;<br>
&nbsp;
</td>
</tr>
</table>
</div>
<div id="PN" style="page-break-after: always;">
<div style="width: 100%; text-align: right;"><font style="font-size: 10pt; font-family: Arial;">7</font></div>
<hr>
</div>
<div style="width: 100%;"><font style="font-size: 10pt; font-family: Arial;">Phonak AG / Supply Agreement<br>
Final Version 1.1 / Feb 19 2009</font></div>
<div align="right">
<font face="Times New Roman, Times, serif" size="2">Page 8 of 19</font><br>
<hr style="color: black;" noshade size="1">
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr>
<td width="80">&nbsp;</td>
<td width="40" valign="top">13.1.1.&nbsp;&nbsp;</td>
<td valign="top">If the Product suffers from defects which are so substantial, or deviate
from the Specifications to such an extent, that they are unusable or that
the acceptance of Phonak cannot reasonably be expected by Supplier,
and such defects are known or are the direct result of intent, gross
negligence or fraud committed by Supplier, then Phonak is entitled to
refuse acceptance and Supplier has to replace the Products within
briefest possible time without cost for Phonak.<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr>
<td width="80">&nbsp;</td>
<td width="40" valign="top">13.1.2.&nbsp;&nbsp;</td>
<td valign="top">If the defects or the deviations from the Specifications caused by
Supplier are less substantial, then Phonak acting reasonably request the
improvement and/or replacement of the Product without cost for
Phonak.<br>
&nbsp;
<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="bottom">
<td width="24" height="36" valign="top"><b>14</b></td>
<td><b>INTELLECTUAL&nbsp;PROPERTY&nbsp;RIGHTS:</b><br>
&nbsp;<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">14.1.</td>
<td>Supplier hereby grants to Phonak an irrevocable, non-exclusive, royalty-free
license to use Supplier&#146;s Product in Phonak&#146;s applications. Royalty fees for the use
of any intellectual property contained in the product are included in the selling
price of the Product.<br>
&nbsp;<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">14.2.</td>
<td>Except under the conditions described in 14.3, Supplier, at its own expense, shall
indemnify and hold harmless Phonak and defend any action brought against
Phonak with respect to any claim, demand or cause of action to the extent that it
is based upon a claim that the Product infringes or violates any patent, copyright,
trade secrets, or other intellectual property rights of any third party. Supplier shall
control such defense; however, Phonak may participate in the defense at its own
expense. Phonak shall provide Supplier with written notice of any claim which it
believes falls within the scope of this Section 14 within 15 days. Supplier shall not
be liable for any monies paid by Phonak in damages, settlement or otherwise
relating to any claim under this Section 14. without Supplier&#146;s express written
consent.<br>
&nbsp;<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">14.3.</td>
<td> In the event the Product or any portion thereof is held to constitute an
infringement and its use enjoined by a final non-appealable decree, Supplier, at its
sole option, shall (a) procure the right to continue using the Product; (b) replace
or modify the Product to render it non-infringing without material change in form,
fit and function; or (c) replace the Product with equally suitable non-infringing
product.<br>
&nbsp;<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">14.4.</td>
<td>Supplier shall not be liable and shall have no obligation to defend under this
Section 14. to the extent any claim, demand or cause of action is based upon: (a)
use of the Product in combination with any other product or device, (b)
modification of the Product or (c) Phonak&#146;s application of the Product.
<br>
&nbsp;<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">14.5.</td>
<td>Supplier shall indemnify and hold Phonak, its employees, and agents
harmless from and against any and all liabilities, claims, demands, actions, suits,
losses, damages, costs and expenses (including reasonable attorney&#146;s fees) to the
extent resulting from Supplier&#146; breach of obligations and warranties under this
Section 14.<br>
&nbsp;<br>
&nbsp;
</td>
</tr>
</table><div id="PN" style="page-break-after: always;">
<div style="width: 100%; text-align: right;"><font style="font-size: 10pt; font-family: Arial;">8</font></div>
<hr>
</div>
<div style="width: 100%;">
<div align="left"><font style="font-size: 10pt; font-family: Arial;">Phonak AG / Supply Agreement<br>
Final Version 1.1 / Feb 19 2009</font></div>
</div>
<div align="right"><font face="Times New Roman, Times, serif" size="2">Page 9 of 19</font><br>
</div>
<hr style="color: black;" noshade size="1">

<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="bottom">
<td width="24" height="36" valign="top"><b>15</b></td>
<td><b>SUPPLIER INDEMNIFICATION</b><br>
&nbsp;<br>
&nbsp;</td>
</tr>
</table>
<div align="left"><font style="font-size: 10pt; font-family: Arial;">Phonak will indemnify, defend, and hold harmless Supplier and its officers, directors,
employees, agents, and contractors from and against any and all losses, claims,
damages, liabilities, and expenses (including reasonable attorneys fees) arising out of or
based upon Phonak&#146;s application of Product. Supplier shall give Phonak written notice of
any such claim within 15 days and shall cooperate in the defense of such claim at
Phonak&#146;s expense. Furthermore, Supplier agrees that Phonak shall have sole control over
the defense or settlement of any such claim, action or proceeding, including, but not
limited to, the right to select defense counsel, and that neither it nor its officers,
directors, employees, agents, or contractors shall enter into any agreement with respect
to such claim, action or proceeding for which indemnification is or may be sought without
receipt of Phonak&#146;s prior written approval.<br>
&nbsp;<br>
&nbsp;<br></font>
</div>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="bottom">
<td width="24" height="36" valign="top"><b>16</b></td>
<td><b>CONFIDENTIALITY</b><br>
&nbsp;<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">16.1.</td>
<td>As a U.S. publicly-traded company, NVE may be required to file this supply
agreement as a public document with the U.S. Securities and Exchange
Commission. In this case, Supplier agrees to file a Confidential Treatment Request
with the Securities and Exchange Commission to request that details relating to
the volume of products purchased by Phonak and the price of the Products be
redacted from the public filing. Exclusive of this requirement, each Party will keep
confidential and will not disclose to any third party the details of the collaboration
under this Agreement nor any information obtained from another Party which is
designated as confidential. No Party will use any information obtained from
another Party which is designated as confidential except for the purposes of
fulfilling its obligations under this Agreement. The Parties will advise their
employees and Affiliates of the confidential nature of the collaboration under this
Agreement and will ensure that such employees and Affiliates comply with the
obligations of confidentiality in this Section.
<br>
&nbsp;<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">16.2.</td>
<td> Information and Marketing to the Public: Any information to the public, such as
namely advertisement or marketing, or any reference to Phonak in oral or written
presentations or technical documentation and the like, or any other activities
conducted towards the public making a reference to Phonak, shall only take place
upon prior consultation and mutual consent between the Parties.<br>
&nbsp;<br>
&nbsp;<br>
&nbsp;</td>
</tr>
</table>
<div align="right">
<div align="left"><font style="font-size: 10pt; font-family: Arial;">
</font></div>
</div>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="bottom">
<td width="24" height="36" valign="top"><b>17</b></td>
<td><b>TERMINATION</b><br>
&nbsp;<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">17.1.</td>
<td> This Agreement shall remain in force for a period of three (3) years from the last date of signature, or 180 days after the last purchase of Product by Phonak, whichever is sooner, renewable with the mutual (written) consent of both Parties.<br>
&nbsp;<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">17.2.</td>
<td> This Agreement may be terminated earlier than stipulated here above under the following conditions:<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr>
<td width="80">&nbsp;</td>
<td width="40" valign="top">17.2.1.</td>
<td valign="top">&nbsp;&nbsp;Either Party may terminate this Agreement at any time and with immediate effect by a notice in writing to the other Party if the other Party is in material breach in the performance of one or more of its<br>
&nbsp;
<br>
&nbsp;
</td>
</tr>
</table>
<div id="PN" style="page-break-after: always;">
<div style="width: 100%; text-align: right;"><font style="font-size: 10pt; font-family: Arial;">9</font></div>
<hr>
</div><div style="width: 100%;">
<div align="left"><font style="font-size: 10pt; font-family: Arial;">Phonak AG / Supply Agreement<br>
Final Version 1.1 / Feb 19 2009</font></div>
</div>
<div align="right">
<font face="Times New Roman, Times, serif" size="2">Page 10 of 19</font><br>
<hr style="color: black;" noshade size="1">
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="120" valign="top">&nbsp;</td>
<td>obligations hereunder, provided that the Agreement shall not be so
terminated if the Party in default has cured the default within thirty
(30) days after the notice has been given. Either Party may
terminate this Agreement at any time and with immediate effect by
a notice in writing to the other Party if the other Party shall go into
liquidation, winding up proceedings be commenced in relation to it,
have a receiver, administrator, administrative receiver or manager
of its assets appointed, or any other similar appointment is made
under the laws of any jurisdiction, or upon that other Party ceasing
to do business for thirty (30) consecutive days.<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr>
<td width="80">&nbsp;</td>
<td width="40" valign="top">17.2.2.</td>
<td valign="top">&nbsp;&nbsp;If a Party shall come under the control of any third party or parties
other than an Affiliate and/or in the case of an initial public offering
(IPO) and if such change of control or IPO could affect and conflict
with the other Party&#146;s business interests, then the other Party may,
within ninety (90) days of receiving notice of the change of control or
IPO, terminate this Agreement by giving thirty (30) days&#146; notice in
writing.<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">17.3.</td>
<td>Termination of this Agreement shall not release either Party from fulfilling any
obligations which it may have incurred prior to any such termination or from the
obligation of confidentiality as specified in and referred to throughout this
Agreement.<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">17.4.</td>
<td>The following Sections shall continue in full force and effect after expiry or
termination of this Agreement for any reason: Sections 2, 10.4, 13, 14, 15, 16,
17, 18 and 19.<br>
&nbsp;<br>
&nbsp;
<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="bottom">
<td width="24" height="36" valign="top"><b>18</b></td>
<td><b>MISCELLANEOUS</b><br>
&nbsp;<br>
&nbsp;</td>
</tr>
</table>
</div>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">18.1.</td>
<td>This Agreement embodies the entire understanding of the Parties as it relates to
the subject matter of this Agreement, and this Agreement supercedes any prior
agreement or understandings between the Parties with regard to such subject
matter.<br>
&nbsp;
<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">18.2.</td>
<td> No amendment or modification of this Agreement shall be valid or binding upon
the Parties unless signed by their respective duly authorized officers.<br>
&nbsp;
<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">18.3.</td>
<td>This Agreement cannot be assigned by any Party (except to an Affiliate) without
the written consent of the other Parties, such consent not to be unreasonably
withheld. Should such an assignment be made by one Party without the written
consent of the other Parties, such assignment will be null and void.<br>
&nbsp;
<br>
&nbsp;&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">18.4.</td>
<td>
The waiver by any Party of a breach or default in any of the provisions of this
Agreement by another Party shall not be construed as a waiver by such Party of
any succeeding breach of the same or other provisions nor shall any delay or
omission on the part of any Party to exercise or avail itself of any right, power or
privilege that it has or may have hereunder operate as a waiver of any right,
power or privilege by such Party.<br>
&nbsp;
<br>
&nbsp;
<br>
&nbsp;
&nbsp;</td>
</tr>
</table>
<div id="PN" style="page-break-after: always;">
<div style="width: 100%; text-align: right;"><font style="font-size: 10pt; font-family: Arial;">10</font></div>
<hr>
</div>
<div style="width: 100%;">
<div align="left"><font style="font-size: 10pt; font-family: Arial;">Phonak AG / Supply Agreement<br>
Final Version 1.1 / Feb 19 2009</font></div>
</div>
<div align="right">
<font face="Times New Roman, Times, serif" size="2">Page 11 of 19</font><br>
<hr style="color: black;" noshade size="1">
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">18.5.</td>
<td>If any term or provision of this Agreement shall be judged to be invalid, the
validity of any other term or provision shall not be thereby affected and such
invalid term or provision shall be deemed deleted from this Agreement.<br>
&nbsp;
<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="bottom">
<td width="24" height="36" valign="top"><b>19</b></td>
<td><b>APPLICABLE LAW AND JURISDICTION</b><br>
&nbsp;<br>
&nbsp;</td>
</tr>
</table>
</div>
</div>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">19.1.</td>
<td>This Agreement is construed in accordance with and governed by Delaware law,
the UN-Convention on Contracts for the International Sale of Goods, as well as
general terms of sale of Supplier. General order terms of Phonak shall not be
applicable to this Agreement.<br>
&nbsp;
<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="top">
<td width="40">19.2.</td>
<td>Any disputes arising out of or in connection with this Agreement shall be
submitted to State of Delaware courts.<br>
&nbsp;
<br>
&nbsp;
</td>
</tr>
</table>
<br>
<br>
<br>
<br>
<br>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="50%"><b>For PHONAK AG:</b></td>
<td>
<b>For NVE:</b></td>
</tr>
<tr>
<td colspan="2">&nbsp;</td>
</tr>
<tr>
<td>
By:<u>&nbsp;/s/ PAUL SCHURTER&nbsp;&nbsp;&nbsp;</u></td>
<td>
By:<u>&nbsp;/s/ D. BAKER&nbsp;&nbsp;&nbsp;</u></td>
</tr>
<tr>
<td>Paul Schurter</td>
<td>Daniel Baker</td>
</tr>
<tr>
<td>Director, Corporate Procurement</td>
<td>President and&nbsp;CEO</td>
</tr>
<tr>
<td colspan="2">&nbsp;
</td>
</tr>
<tr>
<td>Place:&nbsp;&nbsp;St&auml;fa</td>
<td>Place:&nbsp;&nbsp;Eden Prairie, MN</td>
</tr>
<tr>
<td colspan="2">&nbsp;
</td>
</tr>
<tr>
<td>Date:&nbsp;&nbsp;30.03.09</td>
<td>Date:&nbsp;&nbsp;May 1, 2009</td>
</tr>
<tr>
<td height="48"></td>
<td rowspan="4">&nbsp;
</td>
</tr>
<tr>
<td>By:<u>&nbsp;/s/ HANS MEHL&nbsp;&nbsp;&nbsp;</u></td>
</tr>
<tr>
<td>Hans Mehl</td>
</tr>
<tr>
<td>Vice President Operations</td>
</tr>
<tr>
<td colspan="2">&nbsp;
</td>
</tr>
<tr>
<td>
Place:&nbsp;&nbsp;St&auml;fa</td>
<td>
Place:</td>
</tr>
<tr>
<td colspan="2">&nbsp;
</td>
</tr>
<tr>
<td>
Date:</td>
<td>Date:</td>
</tr>
</table>
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<div style="width: 100%;"><font style="font-size: 10pt; font-family: Arial;">Phonak AG / Supply Agreement<br>
Final Version 1.1 / Feb 19 2009</font></div>
<div align="right">
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</div>
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
&nbsp;<br>
<b>APPENDIX A: PHONAK GROUP SUPPLIER PRINCIPLES (&lt;&lt;&nbsp;PGSP&nbsp;&gt;&gt;)</b><br><br>
Released by the CEO of Phonak Holding AG on April 2007<br><br>
<b>Objective</b><br>
At Phonak Holding AG and its affiliates (&#147;Phonak&#148;), we have set high standards for the<br>
way we conduct business in areas from social and corporate responsibility to sound<br>
business ethics, including compliance with all applicable laws and regulations. Phonak<br>
Group employees are bound to the Phonak Group Code of Conduct. They behave<br>
according to accepted ethical principles when interacting with colleagues, customers,<br>
suppliers, business partners and shareholders.<br>
<br>
In turn, we expect the same commitment from our suppliers. The objective of the Phonak<br>
Group Supplier Principles (&#147;PGSP&#148;) is to define the standards of governance and practice<br>
that must be adhered to by all suppliers conducting business with Phonak.<br>
<br>
<b>Scope<br>
</b>The Phonak Group Supplier Principles apply to all suppliers with whom Phonak have a<br>
contractual relationship, including contractors, suppliers of goods and services, copackers<br>
and joint-venture partners (&#147;Suppliers&#148;). It is a prerequisite for doing business<br>
with Phonak that any Supplier complies with these PGSP.<br>
<br>
Even though Phonak acknowledges that legislation and cultural patterns vary across the<br>
world and that Suppliers consequently operate under different circumstances, these<br>
Phonak Group Supplier Principles set out the basic requirements any Supplier must<br>
comply with. In cases where the law in question is more comprehensive than these<br>
PGSP, current law applies. In cases where these PGSP are more comprehensive than the<br>
law in question, these PGSP apply.<br>
&nbsp;<br>
&nbsp;
<br>
<b>Principles<br>
<br>
The Working Environment</b><br>
The Supplier shall ensure a healthy and safe working environment where the sources of<br>
noise and air pollution are under control. Applicable laws and regulations for a good<br>
working environment, including the safety and health of the employees, must be<br>
complied with. Factory facilities must be well maintained and kept in clean condition.<br>
<br>
The Supplier shall especially:<br>
<br>
Ensure that indoor production and work areas have adequate air circulation.<br>
<br>
Constantly increase safety in production by ensuring sufficient light in the areas used for<br>
&#150; as an example &#150; moulding, printing and finishing activities.<br>
<br>
Protect the employees against noise and air pollution by mandatory use of protective<br>
equipment against damages to hearing, sight, respiratory passages etc. The protective<br>
equipment should be made available by the Supplier free of charge.<br>
<br>
</font>
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<div style="width: 100%;"><font style="font-size: 10pt; font-family: Arial;">Phonak AG / Supply Agreement<br>
Final Version 1.1 / Feb 19 2009</font></div>
<div align="right">
<font face="Times New Roman, Times, serif" size="2">Page 13 of 19</font><br>
<hr style="color: black;" noshade size="1">
</div>
<font style="font-size: 10pt; font-family: Arial;"><br>
Ensure the health of the employees by protecting the employees against the risks<br>
involved in performing their work.<br>
<br>
Give reasonable access to drinking water and toilet facilities. Sanitary conditions should<br>
be satisfactory and kept clean.<br>
<br>
Keep well-stocked first-aid kit available in each production unit for medical reasons.<br>
<br>
Make it possible to exit the facility from inside.<br>
<br>
Place well-functioning fire alarms and fire extinguishers in each production unit.<br>
<br>
Store dangerous and/or toxic substances safely in locations that are adequately<br>
ventilated and ensure that handling of these materials is safe. Waste from use of<br>
dangerous and/or toxic substances should be treated in accordance with applicable law.<br>
&nbsp;<br>
&nbsp;
<br>
<b>Basic Working Conditions</b><br>
The Supplier shall treat all his employees with respect and dignity and shall ensure all<br>
applicable laws and regulations.<br>
<br>
The Supplier shall especially:<br>
<br>
Not use child labor. The term &#147;child&#148; refers to any person employed under the age of 15,<br>
or under the age for completing compulsory education, or under the minimum age for<br>
employment in the country, whichever is greatest. The use of legitimate workplace<br>
apprenticeship programs, however, is supported by us.<br>
<br>
Not use forced labor, regardless of its form, or involuntary prison labor. Physically<br>
abusive disciplinary practices will not be tolerated.<br>
<br>
Not use illegal workers.<br>
<br>
Not tolerate harassment or discrimination on the basis of sex, race, color, religion, age,<br>
ethnic or national origin, marital/parental status or sexual orientation.<br>
<br>
Respect the legal rights of employees to join or to refrain from joining worker<br>
organizations, including trade unions.<br>
<br>
Comply with applicable law regulating hours of work. If no current law applies, Phonak<br>
stipulates max. standard working hours of 10 hours per day and 50 hours per week.<br>
Working hours must be organized in such a way that the employee can plan his own<br>
leisure time. In each 7-day cycle the employee is entitled to at least one day off.<br>
<br>
Comply with the current law concerning wages, compensation for overtime and payment<br>
procedures. The employees are entitled to at least a statutory minimum wage or the<br>
standard rate in the industry.<b><br>
&nbsp;<br>
&nbsp;
<br>
Environmental Friendly Production</b><br>
The Supplier shall operate in a manner that is protective of the environment. At a<br>
minimum, the Supplier shall follow all environmental laws and regulations. The Supplier<br>
shall gradually promote environmentally friendly production. Waste, wastewater and
<br>
<br>
</font>
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<hr>
</div>
<div style="width: 100%;"><font style="font-size: 10pt; font-family: Arial;">Phonak AG / Supply Agreement<br>
Final Version 1.1 / Feb 19 2009</font></div>
<div align="right">
<font face="Times New Roman, Times, serif" size="2">Page 14 of 19</font><br>
<hr style="color: black;" noshade size="1">

<p align="left"><font style="font-size: 10pt; font-family: Arial;">energy consumption are important elements in environmentally friendly production. The<br>
Supplier must therefore be able to handle his waste, including waste from toxic<br>
substances, in a satisfactory way. The Supplier is recommended to use the international<br>
standard ISO 14001 as a starting point and a basis for his work.<br>
<br>
<b>
<br>
Subcontractors<br>
</b>If the Supplier retains subcontractors to perform work on the goods or their component<br>
parts, the Supplier will only use subcontractors that will adhere to the requirements of<br>
these PGSP.<br>
<b><br>
<br>
Ethical Dealings</b><br>
The Supplier shall conduct his business in accordance with the highest ethical standards.<br>
Suppliers must strictly comply with all laws and regulations on bribery, corruption and<br>
prohibited business practices.<br>
<br>
<br>
<b>Communications and Record Keeping</b><br>
The Supplier must make the Phonak Group Supplier Principles and other relevant<br>
information available to employees in the local language in an accessible way.<br>
<br>
<b>The Supplier shall maintain documentation necessary to demonstrate<br>
compliance with these Phonak Group Supplier Principles and must provide<br>
Phonak with access to that documentation upon Phonaks request.</b><br>
<br>
<br><br><br>
</font>
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<div style="width: 100%;">
<div align="left"><font style="font-size: 10pt; font-family: Arial;">Phonak AG / Supply Agreement<br>
Final Version 1.1 / Feb 19 2009</font></div>
</div>
<div align="right">
<font face="Times New Roman, Times, serif" size="2">Page 15 of 19</font><br>
<hr style="color: black;" noshade size="1">
<p align="left"><b><font style="font-size: 10pt; font-family: Arial;"><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;APPENDIX B: PRODUCT list<br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Phonak part no / 009-0507&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Suppliers part no / AFL000-10E</font></b></p>
</div>
</div>
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</div><div style="width: 100%;"><font style="font-size: 10pt; font-family: Arial;">Phonak AG / Supply Agreement<br>
Final Version 1.1 / Feb 19 2009</font></div>
<div align="right"><font face="Times New Roman, Times, serif" size="2">Page 16 of 19</font><br>
</div>
<hr style="color: black;" noshade size="1">
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="1" height="36"><b>&nbsp;<br>
&nbsp;<br>
APPENDIX&nbsp;C:&nbsp;CORRECTIVE&nbsp;ACTION&nbsp;REPORT&nbsp;FORM<br>
&nbsp;<br>
&nbsp;
</b></td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" width="100%" border="1" cellspacing="00">
<tr>
<td colspan="2"><b>&nbsp;CAR Number: <br>
</b></td>
<td colspan="3"><b>&nbsp;Supplier:</b></td>
</tr>
<tr>
<td colspan="5"><b>&nbsp;Concern Title:</b></td>
</tr>
<tr>
<td colspan="3"><b>&nbsp;1. Device information:<br>
</b></td>
<td colspan="2"> &nbsp;Date:</td>
</tr>
<tr>
<td colspan="5">&nbsp;Product type:<br>
&nbsp;Lot(s):<br>
&nbsp;Quantity:<br>
&nbsp;Date(s) delivered:<br>
&nbsp;Other identification:<br>
&nbsp;
</td>
</tr>
<tr>
<td colspan="3"><b>&nbsp;2. Contact persons: </b><br>
</td>
<td colspan="2">&nbsp;Date:</td>
</tr>
<tr>
<td width="25%">&nbsp;Name<br>
</td>
<td>&nbsp;Phone</td>
<td colspan="3">&nbsp;Email address</td>
</tr>
<tr>
<td><br>
<br>
<br>
<br>
<br>
</td>
<td>&nbsp;</td>
<td colspan="3">&nbsp;</td>
</tr>
<tr>
<td colspan="3"><b>&nbsp;3. Problem description: </b><br>
</td>
<td colspan="2">&nbsp;Date:</td>
</tr>
<tr>
<td colspan="2">&nbsp;What  <br>
</td>
<td width="18%">&nbsp;Should be</td>
<td width="18%">&nbsp;Is</td>
<td width="14%">&nbsp;Percentage</td>
</tr>
<tr>
<td colspan="2"><br>
<br>
<br>
<br>
<br>
</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td colspan="3"><b>&nbsp;4. Interim containment actions: </b><br>
</td>
<td colspan="2">&nbsp;Date:</td>
</tr>
<tr>
<td colspan="2">&nbsp;What  <br>
</td>
<td>&nbsp;Who</td>
<td>&nbsp;When</td>
<td>&nbsp;% found</td>
</tr>
<tr>
<td colspan="2"><br>
<br>
<br>&nbsp;Next information on founding:<br>
<br>
</td>
<td>&nbsp;</td>
<td colspan="2">&nbsp;</td>
</tr>
<tr>
<td colspan="3"><b>&nbsp;5. Root cause definition:</b><br>
</td>
<td colspan="2">&nbsp;Date:</td>
</tr>
<tr>
<td colspan="3">&nbsp;5.1. Action to find out (if not already known)</td>
<td>&nbsp;Who</td>
<td>&nbsp;When</td>
</tr>
<tr>
<td colspan="3"><br>
<br>
<br>
</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td colspan="3">&nbsp;5.2. Result: Root cause description<br>
</td>
<td colspan="2">&nbsp;Date:</td>
</tr>
<tr>
<td colspan="5"><br>
<br>
<br>
<br>
<br>
</td>
</tr>
</table>
<br>
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<div style="width: 100%; text-align: right;"><font style="font-size: 10pt; font-family: Arial;">16</font></div>
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</div><div style="width: 100%;"><font style="font-size: 10pt; font-family: Arial;">Phonak AG / Supply Agreement<br>
Final Version 1.1 / Feb 19 2009</font></div>
<div align="right"><font face="Times New Roman, Times, serif" size="2">Page 17 of 19</font><br>
</div>
<hr style="color: black;" noshade size="1">
&nbsp;<br>
<table style="font-size: 10pt; font-family: Arial;" width="100%" border="1" cellspacing="00">
<tr>
<td colspan="3"><b>&nbsp;6. Permanent Corrective action:</b></td>
<td colspan="2"> &nbsp;Date</td>
</tr>
<tr>
<td colspan="3">&nbsp;What</td>
<td width="18%">&nbsp;Who</td>
<td width="14%">&nbsp;When</td>
</tr>
<tr>
<td colspan="3"><br>
<br>
<br>
<br>
<br>
</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td colspan="3"><b>&nbsp;7:Verification of corrective actions:</b><br>
</td>
<td colspan="2">&nbsp;Date:</td>
</tr>
<tr>
<td>&nbsp;What</td>
<td width="14%">&nbsp;Who</td>
<td width="14%">&nbsp;When</td>
<td colspan="2">&nbsp;Result</td>
</tr>
<tr>
<td colspan="3"><br>
<br>
<br>
<br>
<br>
</td>
<td colspan="2">&nbsp;</td>
</tr>
<tr>
<td colspan="3"><b>&nbsp;8. Prevention of reoccurrence:</b></td>
<td colspan="2">&nbsp;Date:</td>
</tr>
<tr>
<td colspan="3">&nbsp;What</td>
<td>&nbsp;Who</td>
<td>&nbsp;When</td>
</tr>
<tr>
<td colspan="3"><br>
<br>
<br>
<br>
<br>
</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
</table>
<br>
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<hr>
</div><div style="width: 100%;"><font style="font-size: 10pt; font-family: Arial;">Phonak AG / Supply Agreement<br>
Final Version 1.1 / Feb 19 2009</font></div>
<div align="right"><font face="Times New Roman, Times, serif" size="2">Page 18 of 19</font><br>
</div>
<hr style="color: black;" noshade size="1">
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
&nbsp;<br>
<b>APPENDIX&nbsp;D:&nbsp;KPI&nbsp;VALUATION<br>
<br>
<br>
<br>
INCOMING INSPECTION</b><br>
<br>
</font>
<table style="font-size: 10pt; font-family: Arial;" width="100%" border="0" cellspacing="00" cellpadding="0">
<tr>
<td>Na= Number of lots accepted <br>
Nc= Number of of lots accepted with concession <br>
Nr= Number of lots rejected </td>
<td width="1">Valuation:&nbsp;<br>
Valuation:<br>
Valuation:</td>
<td align="right">
<div align="right">100&nbsp;pts.<br>
50&nbsp;pts.<br>
1&nbsp;pt&nbsp;.</div>
</td>
<td width="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;"><br>
<br>
Valuation for period: IIR= (100*Na+50*Nc+Nr)/(Na+Nc+Nr)<br>
<b><br>
<br>
ON TIME DELIVERY<br>
</b><br>
<br>
<img src="delta.gif" width="9" height="10" alt="Delta"> = (Actual delivery date)-(Delivery date on order confirmation)<br>
<br>
</font>
<table style="font-size: 10pt; font-family: Arial;" width="100%" border="0" cellspacing="00" cellpadding="0">
<tr>
<td valign="top">T<sub>1</sub> = Nber of lots where <font style="font-size: 10pt; font-family: Arial;"><img src="delta.gif" width="9" height="10" alt="Delta"></font>= -3 to +2 days<br>
T<sub>2</sub> = Nber of lots where <font style="font-size: 10pt; font-family: Arial;"><img src="delta.gif" width="9" height="10" alt="Delta"></font>= -3 to -10 days or <font style="font-size: 10pt; font-family: Arial;"><img src="delta.gif" width="9" height="10" alt="Delta"></font>= +2 to +10 days<br>
T<sub>3</sub> = Nber of lots where <font style="font-size: 10pt; font-family: Arial;"><img src="delta.gif" width="9" height="10" alt="Delta"></font>= -10 to -n days or <font style="font-size: 10pt; font-family: Arial;"><img src="delta.gif" width="9" height="10" alt="Delta"></font>= +10 to +n days</td>
<td width="1" valign="top">Valuation:&nbsp;<br>
Valuation:<br>
Valuation:<br>
</td>
<td align="right" valign="top">
<div align="right">100&nbsp;pts.<br>
50&nbsp;pts.<br>
1&nbsp;pt&nbsp;.</div>
</td>
<td width="1">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
Valuation for period: OTD=(100*T<sub>1</sub>+50*T<sub>2</sub>+T<sub>3</sub>)/(T<sub>1</sub>+T<sub>2</sub>+T<sub>3</sub>)<br>
<b><br>
<br>
<br>
RETURN FROM FIELD<br>
</b><br>
Valuation for period: RFF= 1-(Total number of units returned/Total number shipped)<br>
<br>
<br>
<br>
</font>
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</div><div style="width: 100%;"><font style="font-size: 10pt; font-family: Arial;">Phonak AG / Supply Agreement<br>
Final Version 1.1 / Feb 19 2009</font></div>
<div align="right"><font face="Times New Roman, Times, serif" size="2">Page 19 of 19</font><br>
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<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td><b>&nbsp;<br>
&nbsp;<br>
APPENDIX&nbsp;E:&nbsp;PERCEIVED&nbsp;SERVICE&nbsp;PERFORMANCE&nbsp;QUESTIONNAIRE<br>
&nbsp;<br>
&nbsp;
</b></td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" width="100%" border="0" cellspacing="00" cellpadding="0">
<tr>
<td>Period : _______________<br>
&nbsp;
<br>
<b>Performance Level Scale:</b><br>
&nbsp;
</td>
<td>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Supplier Name:______________________________<br>
&nbsp;
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5________ 4________3________2________1<br>
Excellent&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Good &nbsp;&nbsp;&nbsp;Satisfactory &nbsp;&nbsp;&nbsp;Fair &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Poor
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" width="100%" cellspacing="1" cellpadding="0">
<tr>
<td><br>
&nbsp;<u>1. Purchasing and Finance</u><br>
&nbsp;
</td>
<td width="40">
<div align="center"><br>
&nbsp;&nbsp;<br>
Score</div>
</td>
<td width="40">
<div align="center"><br>
Prior<br>
Score</div>
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" width="100%" border="1" cellspacing="00" cellpadding="0">
<tr>
<td>&nbsp;1.1&nbsp;&nbsp;Supplier provides adequate confirmations and advance shipping notices.<br>
</td>
<td width="40">&nbsp;</td>
<td width="40">&nbsp;</td>
</tr>
<tr>
<td>&nbsp;1.2&nbsp;&nbsp;Degree of ease with switchboard, voicemail, routing of calls &amp; faxes.</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;1.3.&nbsp;Responses to any questions are timely and effective.<br>
</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;1.4&nbsp;&nbsp;Helpfulness and willingness to resolve problems.</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;1.5&nbsp;&nbsp;Ability to hold or reduce costs <b>or</b> add value without increasing costs.<br>
</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;1.6&nbsp;&nbsp;Ability of this supplier to react to changes in requirements within lead-time.<br>
</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;1.7&nbsp;&nbsp;Supplier invoice accuracy.</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" width="100%" cellspacing="1" cellpadding="0">
<tr>
<td><br>
&nbsp;2. <u>Incoming Receiving and Stockroom Processes Prior</u><br>
&nbsp;
</td>
<td width="40">
<div align="center">&nbsp;<br>
&nbsp;<br>
Score</div>
</td>
<td width="40">
<div align="center"><br>
Prior<br>
Score</div>
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" width="100%" border="1" cellspacing="00" cellpadding="0">
<tr>
<td>&nbsp;2.1&nbsp;&nbsp;Supplier labels all goods with Phonak part number and quantity.<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Add a bonus point for bar-coded labels.<br>
</td>
<td width="40">&nbsp;</td>
<td width="40">&nbsp;</td>
</tr>
<tr>
<td>&nbsp;2.2&nbsp;&nbsp;Supplier packaging adequacy, quality and ease of handling. Add a bonus<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;point if the supplier packaging is recyclable / re-usable in another<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;application.</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;2.3&nbsp;&nbsp;Accuracy of quantities on received goods.<br>
</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;2.4&nbsp;&nbsp;Shipping documents - accuracy of purchase order lines and release<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;numbers.</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" width="100%" cellspacing="1" cellpadding="0">
<tr>
<td><br>
&nbsp;3. <u>Engineering, Documentation &amp; Product Development Prior</u><br>
&nbsp;
</td>
<td width="40">
<div align="center">&nbsp;&nbsp;<br>
<br>
Score</div>
</td>
<td width="40">
<div align="center"><br>
Prior<br>
Score</div>
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" width="100%" border="1" cellspacing="00" cellpadding="0">
<tr>
<td>&nbsp;3.1&nbsp;&nbsp;Supplier shows evidence of investment in current technology<br>
</td>
<td width="40">&nbsp;</td>
<td width="40">&nbsp;</td>
</tr>
<tr>
<td>&nbsp;3.2&nbsp;&nbsp;Adequacy of catalogues or documentation regarding products or services</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;3.3&nbsp;&nbsp;Technical competency of supplier representatives</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;3.4&nbsp;&nbsp;Cycle time to provide samples and answers to technical requests</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;3.5&nbsp;&nbsp;Time to solve technical problems<br>
</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" width="100%" cellspacing="1" cellpadding="0">
<tr>
<td><br>
&nbsp;4. <u>Quality Audit</u><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Score 5 if there were no quality related problems during the review period)</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" width="100%" border="1" cellspacing="00" cellpadding="0">
<tr>
<td>&nbsp;4.1&nbsp;&nbsp;Supplier provides timely response to quality problems or inquiries.</td>
<td width="40">&nbsp;</td>
<td width="40">&nbsp;</td>
</tr>
<tr>
<td>&nbsp;4.2&nbsp;&nbsp;Supplier provides timely documentation for corrective action</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;4.3&nbsp;&nbsp;Supplier solutions provide adequate long term fixes for quality problems.</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;">&nbsp;</font><br>
<table style="font-size: 10pt; font-family: Arial;" border="1" cellspacing="0" cellpadding="0" align="right">
<tr>
<td>&nbsp;Totals<br>
&nbsp;
</td>
<td width="40">&nbsp;</td>
<td width="40">&nbsp;</td>
</tr>
<tr>
<td>&nbsp;<br>
&nbsp;Score = 100*Total/76&nbsp;&nbsp;&nbsp;&nbsp;<br>
&nbsp;
</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
</table>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<div style="width: 100%; text-align: right;"><font style="font-size: 10pt; font-family: Arial;">19</font></div>
<hr>
</TEXT>
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-----END PRIVACY-ENHANCED MESSAGE-----
