<SEC-DOCUMENT>0000724910-15-000040.txt : 20151116
<SEC-HEADER>0000724910-15-000040.hdr.sgml : 20151116
<ACCEPTANCE-DATETIME>20151116160547
ACCESSION NUMBER:		0000724910-15-000040
CONFORMED SUBMISSION TYPE:	8-K/A
PUBLIC DOCUMENT COUNT:		4
CONFORMED PERIOD OF REPORT:	20151113
ITEM INFORMATION:		Entry into a Material Definitive Agreement
FILED AS OF DATE:		20151116
DATE AS OF CHANGE:		20151116

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/A
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-12196
		FILM NUMBER:		151234350

	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/A
<SEQUENCE>1
<FILENAME>Phonak_Amendment-3_8K.htm
<DESCRIPTION>CURRENT REPORT AMENDMENT
<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/A</font></font></b></p>
<p align="center"><b><font face="Times New Roman, Times, serif" size="3">(Amendment
No. 3)<br>
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>November 13, 2015</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" alt="NVE Logo"><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><br>
<div align="center"><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>
(Former name or former address, if changed since last report.)</div><br><br>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>
<DIV STYLE="page-break-after: always;"><HR></DIV>
<font face="Times New Roman, Times, serif" size="2"><b>Explanatory Note</b><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This Amendment Number 3 to Form 8-K is being filed
to disclose a second amendment to a Supply Agreement by and between NVE Corporation
and Sonova AG.<br>
<br>
<br>
<b>Item 1.01 Entry into a Material Definitive Agreement</b><br>
<br>
<b><i>General Information</i></b><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sonova AG (formerly known as Phonak AG) develops,
manufactures, and sells hearing systems using our magnetic sensors under a Supply
Agreement executed May&nbsp;1, 2009 and previously amended January&nbsp;12, 2011.<br>
<br>
<b><i>Description of the Terms and Conditions of the Amendment</i></b><br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Effective November 13,
2015 we executed an amended agreement (the &#147;Second Amendment&#148;), amending
our May 1, 2009 Supply Agreement by and between the company and Phonak AG (now
known as Sonova AG). The Second Amendment extends the Supply Agreement term through
March 31, 2020, and amends pricing provisions, defines minimum purchase requirements,
and amends and adds other terms and conditions.<br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The foregoing descriptions of the Supply Agreement
and Amendments do not purport to be complete and are qualified in their entirety
by reference to the full text of the Amended Supply Agreement filed as Exhibit&nbsp;10.3
and the documents incorporated by reference as Exhibits&nbsp;10.1 and 10.2 to
this Current Report Amendment Number&nbsp;3 to Form 8-K/A and incorporated by
reference into this Item&nbsp;1.01.
<p>&nbsp;</p>
<p>&nbsp;</p>
<p>&nbsp;</p>
</font>
<DIV STYLE="page-break-after: always;">
<DIV STYLE="width: 100%; text-align: center;"><font face="Times New Roman, Times, serif" size="2">2</FONT></DIV>
<HR>
</DIV>
<font face="Times New Roman, Times, serif" size="2">
<div align="center"><b>SIGNATURE</b><br>
<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>
&nbsp; </font>
<table border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="33%" valign="top"><font face="Times New Roman, Times, serif" size="2">Date&nbsp;&nbsp;<b><u>November
16, 2015</u></b> </font> </td>
<td align="center" width="34%"><font face="Times New Roman, Times, serif" size="2"><b><u>NVE
CORPORATION<br>
</u></b>(Registrant)<br>
<br>
<u>&nbsp;/s/&nbsp;CURT&nbsp;A.&nbsp;REYNDERS</u><br>
Curt A. Reynders<br>
Chief Financial Officer</font></td>
<td width="33%"></td>
</tr>
</table>
<p>
<p>&nbsp;</p><p>&nbsp;</p><p>&nbsp;</p><p align="center"><DIV STYLE="page-break-after: always;">
<DIV STYLE="width: 100%; text-align: center;"><font face="Times New Roman, Times, serif" size="2">3</FONT></DIV>
<HR>
</DIV>
<div align="center"><font face="Times New Roman, Times, serif" size="2"><b>INDEX TO EXHIBITS</b><br>
<br>
</font> </div>
<table width="100%" border="0" cellspacing="0" cellpadding="0">
<tr>
<td width="1%">
<div align="center"><font face="Times New Roman, Times, serif" size="2"><b><u>Exhibit&nbsp;#</u></b></font></div>
</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="2"><font face="Times New Roman, Times, serif" size="2">&nbsp;</font></td>
</tr>
<tr>
<td valign="top"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;10.1</font></td>
<td align="center"><font face="Times New Roman, Times, serif" size="2">Supply
Agreement by and between the company and Phonak AG (incorporated by reference
to the Form 8-K filed May 6, 2009).<br>
&nbsp;</font></td>
</tr>
<tr>
<td valign="top"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;10.2+</font></td>
<td align="center"><font face="Times New Roman, Times, serif" size="2">Amendment
to Supply Agreement by and between the company and Phonak (incorporated by reference
to the Form 8-K/A filed January 12, 2011).<br>
&nbsp;</font></td>
</tr>
<tr>
<td valign="top"><font face="Times New Roman, Times, serif" size="2">&nbsp;&nbsp;10.3+</font></td>
<td align="center"><font face="Times New Roman, Times, serif" size="2">Second
Amendment to Supply Agreement by and between the company and Sonova AG (filed
with this Current Report on Form 8-K/A).<br>
&nbsp; </font></td>
</tr>
</table>
<font face="Times New Roman, Times, serif" size="2">&nbsp;<br>
+Confidential portions of this exhibit were deleted and filed separately with
the SEC under a request for confidential treatment pursuant to Rule 24b-2 or Rule
406.<br>
<br>
<br>
<br>
<br>
<br>
<p align="center"><br>
4
</font>
<hr>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>phonak15.htm
<DESCRIPTION>SECOND AMENDMENT TO SUPPLY AGREEMENT
<TEXT>
<p><font size="4" face="Arial, Helvetica, sans-serif"><b><br>
<br>
SUPPLY AGREEMENT</b></font>
<font style="font-size: 10pt; font-family: Arial;"><br>
<br>
<br>
<br>
<br>
between<br>
<br>
<br>
<br>
<b>NVE Corporation</b><br>
11409 Valley View Road<br>
Eden Prairie, MN&nbsp;&nbsp;55344<br>
USA<br>
<br>
<p align="right">(hereafter referred to as &#147;<b>Supplier</b>&#148;)
<p><br>
<br>
and<br>
<br>
<br>
<br>
<b>Sonova AG</b><br>
Laubisr&uuml;tistrasse 28<br>
CH-8712 St&auml;fa<br>
Switzerland<br>
and its affiliates<br>
<div align="right">(hereafter referred to as &#147;<b>Sonova</b>&#148;)
<br><br><br>(Supplier or Sonova hereafter &#147;<b>Party</b>&#148; or &#147;<b>Parties</b>&#148;
as the case may be)</div>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<font size="1">Supply Agreement Template v2.7 (21.01.2015)</font><br>
<br>
</font>
<hr><div style="page-break-after:always;"></div>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font style="font-size: 10pt; font-family: Arial;">NVE&nbsp;Corporation
/ Sonova&nbsp;AG</font></td>
<td width="40%" align="right"><font style="font-size: 10pt; font-family: Arial;">Supply
Agreement</font></td>
</tr>
</table>
<hr style="color: black;" noshade size="1">
<br>
<b><font style="font-size: 10pt; font-family: Arial;">CONTENT</font></b>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="40" height="18"><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="40" height="18">2</td>
<td width="1"><b>PRICE</b></td>
<td style="border-bottom: 1px dotted black;">&nbsp;</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="40" height="18"><b>3</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="40" height="18"><b>4</b></td>
<td width="1"><b>FORECAST&nbsp;AND&nbsp;USAGE</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="40" height="18"><b>5</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="40" height="18"><b>6</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="40" height="18"><b>7</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>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="40" height="18"><b>8</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="40" height="18"><b>9</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="40" height="18"><b>10</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="40" height="18"><b>11</b></td>
<td width="1"><b>QUALITY&nbsp;ASSURANCE&nbsp;AND&nbsp;WARRANTY</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="40" height="18"><b>12</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="40" height="18"><b>13</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>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="40" height="18"><b>14</b></td>
<td width="1"><b>INDEMNIFICATION&nbsp;AND&nbsp;INSURANCE</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="40" height="18"><b>15</b></td>
<td width="1"><b>INTELLECTUAL&nbsp;PROPERTY&nbsp;RIGHTS</b>
<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="40" height="18"><b>16</b></td>
<td width="1"><b>COMPLIANCE&nbsp;WITH&nbsp;LAWS</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="40" height="18"><b>17</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>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="40" height="18"><b>18</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>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="40" height="18"><b>19</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>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="40" height="18"><b>20</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>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="40" height="18"><b>21</b></td>
<td width="1"><b>LIST&nbsp;OF&nbsp;APPENDICES</b></td>
<td style="border-bottom: 1px dotted black;">&nbsp;</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="40" height="18"><b>22</b></td>
<td width="1"><b>SIGNATURES</b></td>
<td style="border-bottom: 1px dotted black;">&nbsp;</td>
<td width="1"><b>13</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="110" height="18"><b>APPENDIX&nbsp;A:</b></td>
<td width="1" height="18"><b>SONOVA&nbsp;GROUP&nbsp;SUPPLIER&nbsp;PRINCIPLES&nbsp;(&#147;SGSP&#148;)</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>14</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="110" height="18"><b>APPENDIX&nbsp;B:&nbsp;</b></td>
<td width="1" height="18"><b>PRODUCT&nbsp;LIST&nbsp;AND&nbsp;PRICES</b></td>
<td style="border-bottom: 1px dotted black;"><b><font style="font-size: .1pt;">&nbsp;</font></b></td>
<td width="1"><b>17</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="110" height="18"><b>APPENDIX&nbsp;C:&nbsp;</b></td>
<td width="1" height="18"><b>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>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="110" height="18"><b>APPENDIX&nbsp;D:&nbsp;</b></td>
<td width="1" height="18"><b>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>20</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="110" height="18"><b>APPENDIX&nbsp;E:&nbsp;</b></td>
<td width="1" height="18"><b>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>21</b></td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;"><br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
</font>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font face="Arial, Helvetica, sans-serif"><font size="1">Phonak Supplier
</font><font size="2">Agreement Final 20151102.docx</font></font></td>
<td align="center"><font face="Arial, Helvetica, sans-serif" size="1">Template
v2.8</font></td>
<td width="40%" align="right"><font face="Arial, Helvetica, sans-serif" size="1">Page&nbsp;<b>2&nbsp;/&nbsp;21</b></font></td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
</font>
<hr>
<div style="page-break-after:always;"></div>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font style="font-size: 10pt; font-family: Arial;">NVE&nbsp;Corporation
/ Sonova&nbsp;AG</font></td>
<td width="40%" align="right"><font style="font-size: 10pt; font-family: Arial;">Supply
Agreement</font></td>
</tr>
</table>
<hr style="color: black;" noshade size="1">
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
</font>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="40"><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">1.1</td>
<td>Supplier is a manufacturer of magnetic sensor products.<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">1.2</td>
<td>Sonova has and continues to develop, manufacture and sell hearing systems
using magnetic <br>
sensors.<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">1.3</td>
<td>Supplier and Sonova wish to enter in a supply agreement (the &#147;<b>Agreement</b>&#148;)
for the supply of <br>
the products listed in <b>Appendix B: Product List and Prices</b> (the &#147;<b>Product(s)</b>&#148;),
by Supplier.<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">1.4</td>
<td>It is the intention of the Parties to define in this Agreement the terms and
conditions for the<br>
supply of Product(s) including the processes linked to the ordering, delivery,
payment of the<br>
Product, as well as, in the case it is needed, corrective actions handling, and
to describe the<br>
precautions that will be taken to ensure quality and availability of the Product.<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">1.5</td>
<td>Where the context so requires a reference to &#147;Sonova&#148; shall include
the Affiliates as defined<br>
below. All rights available to Sonova under this Agreement shall be available
to the Affiliates as<br>
well if and to the extent these Affiliates purchase, process or distribute Products
supplied under<br>
this Agreement or are subject to a claim in relation to Products supplied under
this Agreement.<br>
&nbsp;</td>
</tr>
<tr valign="top">
<td width="40">1.6</td>
<td>&#147;<b>Affiliate</b>&#148; shall mean the parent company of Sonova, Sonova
Holding AG, and any legal entity<br>
of which at least 50% of the voting shares or similar voting rights now or hereafter
are owned or<br>
controlled, directly or indirectly by Sonova Holding AG, or in which Sonova Holding
AG<br>
otherwise has the ability to direct the management, but any such legal entity
shall be considered<br>
to be an affiliated company only for so long as such control exists (hereinafter
referred to as<br>
&#147;<b>Affiliate</b>&#148;).</td>
</tr>
</table>
<p><font style="font-size: 10pt; font-family: Arial;">NOW, THEREFORE THE PARTIES AGREE
AS FOLLOWS</font>:</p>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="40"><b>2<br>
&nbsp;<br>
</b></td>
<td><b>PRICE<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>The prices of the Products are specified in <b>Appendix B: Product List and
Prices</b> for &#147;the<br>
financial year 2015 until 2020&#148; and are applicable from &#147;August 20 2015
until 31st of March<br>
2020&#148;.<br>
&nbsp;</td>
</tr>
<tr valign="bottom">
<td width="24"><b>3<br>
&nbsp;<br>
</b></td>
<td valign="top"><b>PRODUCT&nbsp;SPECIFICATION<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">3.1</td>
<td>Sonova and Supplier will agree on specifications (the &#147;<b>Specification</b>&#148;)
defining completely the<br>
Product to be delivered. This Specification includes but is 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="50">3.1.1</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="50">3.1.2</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="50">3.1.3</td>
<td>Packaging and labeling of the Product if required; and<br>
&nbsp; </td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="top">
<td width="50">3.1.4</td>
<td>Quality and inspection documents required for each lot.<br>
&nbsp;<br>
&nbsp; </td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font face="Arial, Helvetica, sans-serif"><font size="1">Phonak Supplier
</font><font size="2">Agreement Final 20151102.docx</font></font></td>
<td align="center"><font face="Arial, Helvetica, sans-serif" size="1">Template
v2.8</font></td>
<td width="40%" align="right"><font face="Arial, Helvetica, sans-serif" size="1">Page&nbsp;<b>3&nbsp;/&nbsp;21</b></font></td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
</font>
<hr>
<div style="page-break-after:always;"></div>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font style="font-size: 10pt; font-family: Arial;">NVE&nbsp;Corporation
/ Sonova&nbsp;AG</font></td>
<td width="40%" align="right"><font style="font-size: 10pt; font-family: Arial;">Supply
Agreement</font></td>
</tr>
</table>
<hr style="color: black;" noshade size="1">
<font style="font-size: 10pt; font-family: Arial;">&nbsp;</font>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="top">
<td width="40">3.2</td>
<td>No change in the Specification and/or in the manufacturing process of the
Product that could<br>
influence the form, the fit or the function of the Product shall be executed without
prior written<br>
approval of Sonova.<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">3.3</td>
<td><u>Traceability:</u>The production lots shall be identified in order to allow
traceability of the final<br>
inspection records and of process parameters for failure analysis purposes. Traceability
shall be<br>
guaranteed for 5 years after delivery of the Product.<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="40"><b>4<br>
&nbsp;<br>
</b></td>
<td><b>FORECAST&nbsp;AND USAGE<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">4.1</td>
<td>Sonova will provide Supplier with monthly rolling forecasts. Rolling forecasts
will extend over 10<br>
month:<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="top">
<td width="50">4.1.1</td>
<td>for materials with the description &#147;Released&#148; the first month is
firm and the next 9 months are<br>
non-binding forecasts; and<br>
&nbsp; </td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="top">
<td width="50">4.1.2</td>
<td>for materials without the description &#147;Released&#148; all quantities
must be confirmed with purchase<br>
orders. The respective forecasts are not binding.<br>
&nbsp; </td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="top">
<td width="50">4.1.3</td>
<td>Sonova shall purchase ** .<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="40" valign="top"><b>5<br>
</b></td>
<td valign="top"><b>STOCKS<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">5.1</td>
<td><u>Rolling Stocks:</u> Supplier commits to have in house the equivalent of
two months of deliveries of<br>
Products as finished goods.<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">5.2</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">
<tr valign="top">
<td width="50">5.2.1</td>
<td>Room temperature storage, 25&deg;C +/- 15&deg;C and Rel. Humidity 40% +/-
20% with the products<br>
remaining in the sealed anti-static bags in which they were delivered.<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">5.3</td>
<td><u>Shelf life:</u> Under the storage conditions described in Section 5.2,
Supplier guarantees that the<br>
Product(s) will not be affected by any significant change in aspect or performance
for 24 months<br>
after delivery.<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="40"><b>6<br>
&nbsp;<br>
&nbsp;<br>
</b></td>
<td valign="top"><b>ORDERS AND ORDER CONFIRMATIONS<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">6.1</td>
<td>Sonova will issue the purchase orders by mail, FAX or by a mutually agreed
electronic data<br>
interchange (EDI) system. Sonova will not accept invoices for orders that have
been given in<br>
any other form. Supplier shall confirm the orders within 5 calendar days upon
receipt by signed<br>
and dated return FAX of the original order or by Supplier specific documents or
by mutually<br>
agreed EDI system. Sonova is not bound if the order confirmation deviates from
the order.<br>
&nbsp;<br>
&nbsp;</td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font face="Arial, Helvetica, sans-serif"><font size="1">Phonak Supplier
</font><font size="2">Agreement Final 20151102.docx</font></font></td>
<td align="center"><font face="Arial, Helvetica, sans-serif" size="1">Template
v2.8</font></td>
<td width="40%" align="right"><font face="Arial, Helvetica, sans-serif" size="1">Page&nbsp;<b>4&nbsp;/&nbsp;21</b></font></td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
</font>
<hr>
<div style="page-break-after:always;"></div>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font style="font-size: 10pt; font-family: Arial;">NVE&nbsp;Corporation
/ Sonova&nbsp;AG</font></td>
<td width="40%" align="right"><font style="font-size: 10pt; font-family: Arial;">Supply
Agreement</font></td>
</tr>
</table>
<hr style="color: black;" noshade size="1">
<font style="font-size: 10pt; font-family: Arial;">&nbsp;</font>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="40"><b>7<br>
&nbsp;</b></td>
<td><b>DELIVERY<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">7.1</td>
<td><u>Delivery time:</u> Delivery time is ** from receipt of the order. Delivery
time for<br>
quantities significantly higher than the forecasted quantities have to be discussed
at the time of<br>
the order.<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">7.2</td>
<td><u>Terms of delivery:</u> Terms of delivery are FOB Eden Prairie, MN, USA,
according to Incoterms 2010.<br>
Sonova may request Supplier to deliver the Products to any of its Affiliates.<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">7.3</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="50">7.3.1</td>
<td>If, because of exceptional circumstances, a delivery schedule is in doubt
Supplier shall inform<br>
Sonova as soon as <u>NVE is aware of the problem</u>. Supplier shall make every
effort to ensure<br>
timely deliveries to Sonova before there is a risk of production stop at Sonova.
Additionally<br>
Supplier shall start an &#147;Express LOT&#148; in production and set Sonova products
on 1st priority<br>
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="50">7.3.2</td>
<td>Sonova is, in case of late delivery having stopped production, entitled to
challenge from<br>
supplier best efforts to solve the delivery problem and Supplier agrees to act
immediately and<br>
provide an action plan to Sonova within one week. The action plan has to define
how and<br>
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">7.4</td>
<td><u>Packaging, Labeling</u>: Supplier bears the full responsibility for proper
packaging.<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">7.5</td>
<td><u>Packing Slip:</u> Every lot must bear a numbered delivery note that gives
information on the <br>
contents (description of Products) including:<br>
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="50" valign="top">7.5.1</td>
<td valign="top">The corresponding Sonova order number;<br>
&nbsp; </td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="50" valign="top">7.5.2</td>
<td valign="top">The Sonova part number of the units delivered; and<br>
&nbsp; </td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="50" valign="top">7.5.3</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">
<tr valign="bottom">
<td width="40" valign="top"><b>8</b></td>
<td valign="top"><b>AVAILABILITY OF PRODUCT<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">8.1</td>
<td>Supplier commits to make every effort to have Product fulfilling the Specifications
available in<br>
time and quantities planned according to Section 2. Products will be available
at least 5 years<br>
after signature of the Supply Agreement.<br>
&nbsp; <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">8.2</td>
<td>In case Supplier plans to discontinue the supply of the Product, Supplier
will give Sonova<br>
one (1) year written notice, before giving Sonova the opportunity to place a last
call order.<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">8.3</td>
<td>Supplier will provide Sonova with a contingency plan that will be applied
by Supplier to ensure<br>
availability of Product in case of exceptional circumstances and force majeure.<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="40" height="36" valign="top"><b>9</b></td>
<td valign="top"><b>KEY PERFORMANCE INDICATOR (KPI)</b><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">9.1</td>
<td>Sonova will measure the performance of the Supplier through KPI on a quarterly
basis, as <br>
defined below:<br>
&nbsp; </td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font face="Arial, Helvetica, sans-serif"><font size="1">Phonak Supplier
</font><font size="2">Agreement Final 20151102.docx</font></font></td>
<td align="center"><font face="Arial, Helvetica, sans-serif" size="1">Template
v2.8</font></td>
<td width="40%" align="right"><font face="Arial, Helvetica, sans-serif" size="1">Page&nbsp;<b>5&nbsp;/&nbsp;21</b></font></td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
</font>
<hr>
<div style="page-break-after:always;"></div>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font style="font-size: 10pt; font-family: Arial;">NVE&nbsp;Corporation
/ Sonova&nbsp;AG</font></td>
<td width="40%" align="right"><font style="font-size: 10pt; font-family: Arial;">Supply
Agreement</font></td>
</tr>
</table>
<hr style="color: black;" noshade size="1">
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
</font>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="top">
<td width="40">9.2</td>
<td><u>On Time Delivery (OTD)</u>: The actual date of delivery will be compared
to the confirmed date of <br>
delivery and a valuation will be attributed (see <b>Appendix D: KPI Valuation</b>)<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">9.3</td>
<td><u>Incoming Inspection Results (IIR)</u>: A valuation will be given based
on the number of lots<br>
accepted, accepted conditionally or refused at incoming inspection (see <b>Appendix
D: KPI<br>
Valuation</b>).<br>
&nbsp; </td>
</tr>
<tr valign="top">
<td width="40">9.4</td>
<td><u>Return Rate from Field (RRF)</u>: A valuation based on a target value will
be given for the return<br>
rate of Hearing Instruments from the field in 90 days (see <b>Appendix D: KPI
Valuation</b>).<br>
&nbsp; </td>
</tr>
<tr valign="top">
<td width="40">9.5</td>
<td><u>Perceived Service Performance (PSP)</u>: A questionnaire will be completed
by the 3 Sonova<br>
locations to give a general evaluation of the service level of the Supplier (see
<b>Appendix<br>
E: Perceived Service Performance Questionnaire</b>).<br>
&nbsp; </td>
</tr>
<tr valign="top">
<td width="40">9.6</td>
<td>
<p>The valuation of each of these KPI will be made quarterly, in percent. The
minimum<br>
Performance Level required is:<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="50" valign="top">9.6.1</td>
<td valign="top">Average of all KPI, for each Sonova Affiliates: <u>></u> 95%;
and <br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="50" valign="top">9.6.2</td>
<td valign="top">No KPI below 90%.&nbsp;<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">9.7</td>
<td>Sonova will provide these results upon request supported by copies of applicable
reports <br>
showing the basis of the measurements including sufficient information from the
PSP <br>
questionnaires to allow Supplier to have the opportunity to implement corrective
actions.<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">9.8</td>
<td>In case the performance level is not reached, Sonova is entitled to reduce
the share of Product<br>
purchased from Supplier while keeping the agreed upon prices and conditions of
supply or to<br>
terminate the Supply Agreement.<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="40" valign="top"><b>10</b></td>
<td><b>INVOICES AND PAYMENT CONDITIONS</b><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">10.1</td>
<td>Invoices will be issued not earlier than the date of shipment and will be
sent to the following <br>
address:<br>
&nbsp; </td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="50">&nbsp;</td>
<td valign="top">Sonova AG<br>
Laubisr&uuml;tistrasse 28<br>
CH-8712 St&auml;fa<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">10.2</td>
<td>If the order is placed by an Affiliate, unless otherwise instructed by Sonova,
Supplier shall issue<br>
the invoice to the respective Affiliate.<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">10.3</td>
<td>Invoices will include:<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="50" valign="top">10.3.1</td>
<td valign="top">The corresponding Sonova order number;<br>
&nbsp; </td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="50" valign="top">10.3.2</td>
<td valign="top">The Sonova part number of the units delivered (one line per part
number); and<br>
&nbsp; </td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="50" valign="top">10.3.3</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">
<tr valign="top">
<td width="40">10.4</td>
<td>Payment conditions will be net 30 days after reception of the invoice. Sonova
may withhold<br>
payment in case of quality problem with the goods.<br>
&nbsp;</td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font face="Arial, Helvetica, sans-serif"><font size="1">Phonak Supplier
</font><font size="2">Agreement Final 20151102.docx</font></font></td>
<td align="center"><font face="Arial, Helvetica, sans-serif" size="1">Template
v2.8</font></td>
<td width="40%" align="right"><font face="Arial, Helvetica, sans-serif" size="1">Page&nbsp;<b>6&nbsp;/&nbsp;21</b></font></td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
</font>
<hr>
<div style="page-break-after:always;"></div>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font style="font-size: 10pt; font-family: Arial;">NVE&nbsp;Corporation
/ Sonova&nbsp;AG</font></td>
<td width="40%" align="right"><font style="font-size: 10pt; font-family: Arial;">Supply
Agreement</font></td>
</tr>
</table>
<hr style="color: black;" noshade size="1">
<font style="font-size: 10pt; font-family: Arial;">&nbsp;</font>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="40" height="36" valign="top"><b>11</b></td>
<td valign="top"><b>QUALITY ASSURANCE AND WARRANTY</b><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">11.1</td>
<td><u>Supplier&#146;s control plan:</u> Supplier will provide Sonova with a control
plan that shows how Supplier<br>
ensures that the Product will meet the Specifications.<br>
&nbsp;&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="top">
<td width="40">11.2</td>
<td><u>Policy regarding incoming goods:</u> Sonova expects supplier to deliver
Products meeting<br>
Specification. An incoming inspection is therefore not required and Sonova will
only do sample<br>
checks on incoming goods.<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">11.3</td>
<td><u>Sonova&#146;s incoming inspection (if any, on a sample basis):</u> Sonova
incoming inspection <br>
procedure and acceptance criteria will be the object of a written agreement between
Supplier <br>
and Sonova.<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">11.4</td>
<td><u>Warranty:</u> Supplier warrants that the Products have been manufactured
in accordance with the<br>
applicable Specifications and all laws and regulations applicable and will be
free from defects in<br>
design, workmanship and materials for a period of 24 months from the date of shipment.<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">11.5</td>
<td><u>Remedies:</u> In case of delivery of non-conforming or defective Products,
Sonova may, at its<br>
discretion require Supplier as soon as reasonably practicable to either repair
or replace the<br>
Products, whichever Sonova shall determine, or refund to Sonova the purchase cost
of all<br>
Products which do not conform with this Agreement. Alternatively, Sonova may purchase
the<br>
products elsewhere and any extra expense thus incurred shall be paid by Supplier
to Sonova.<br>
Before exercising such right to purchase the products elsewhere Sonova shall give
Supplier a<br>
reasonable opportunity to replace the defective / non-conforming Products with
Products which<br>
correspond with the Agreement. Sonova&#146;s right to claim compensation for damages
and to<br>
terminate the Agreement remains reserved.<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="40" height="36" valign="top"><b>12</b></td>
<td valign="top"><b>APPLICABLE STANDARDS</b><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">12.1</td>
<td>EEC Medical Directive<br>
&nbsp;
</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="50" valign="top">12.1.1</td>
<td valign="top">The product shall fulfill the requirements to be implemented
in a device complying to class 2A<br>
of the 93/42/EEC Medical directive as amended from time to 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="40">12.2</td>
<td>EU RoHS<br>
&nbsp; </td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="50" valign="top">12.2.1</td>
<td valign="top">The European Restriction of Hazardous Substances Directive (2011/65/EU)
(&#147;<b>RoHS</b>&#148;) in its<br>
current form restricts the use of 6 hazardous substances in electrical and electronic
equipment<br>
sold in the EU. RoHS in its current form restricts Lead, Mercury, hexavalent Chromium,
and<br>
flame retardants PBB and PBDE, to no more than 0.1% by weight in any &#147;homogeneous<br>
material&#148; in any part, and it restricts Cadmium to 0.01%. Some classes of
electronic<br>
equipment are excluded from the scope of RoHS, and RoHS also allows exemptions
for some<br>
very specific materials.<br>
&nbsp; </td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="50" valign="top">12.2.2</td>
<td valign="top">All parts, materials and products supplied to Sonova shall comply
with the applicable form of<br>
RoHS at any time.<br>
&nbsp;</td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;">&nbsp;</font>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font face="Arial, Helvetica, sans-serif"><font size="1">Phonak Supplier
</font><font size="2">Agreement Final 20151102.docx</font></font></td>
<td align="center"><font face="Arial, Helvetica, sans-serif" size="1">Template
v2.8</font></td>
<td width="40%" align="right"><font face="Arial, Helvetica, sans-serif" size="1">Page&nbsp;<b>7&nbsp;/&nbsp;21</b></font></td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
</font>
<hr>
<div style="page-break-after:always;"></div>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font style="font-size: 10pt; font-family: Arial;">NVE&nbsp;Corporation
/ Sonova&nbsp;AG</font></td>
<td width="40%" align="right"><font style="font-size: 10pt; font-family: Arial;">Supply
Agreement</font></td>
</tr>
</table>
<hr style="color: black;" noshade size="1">
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br></font>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="top">
<td width="40">12.3</td>
<td>EU REACH<br>
&nbsp; </td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="50" valign="top">12.3.1</td>
<td valign="top">The Regulation (EC) No. 1907/2006 concerning the Registration,
Evaluation, Authorisation<br>
and Restriction of Chemicals (&#147;REACH&#148;), regulates a large number of
substances of very high<br>
concern (&#147;<b>SVHC&#146;s</b>&#148;). More substances are added to the SVHC&#146;s
candidate list approximately<br>
every 6 months.<br>
&nbsp; </td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="50" valign="top">12.3.2</td>
<td valign="top">In addition, certain SVHC&#146;s are subject to &#147;Authorization&#148;
(Annex XIV REACH), meaning that<br>
only certain narrowly-defined uses are authorized, or they are subject to &#147;Restriction&#148;
(Annex<br>
XVII REACH), meaning that they are essentially banned from use.<br>
&nbsp; </td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="50" valign="top">12.3.3</td>
<td valign="top">All parts, materials and products supplied to Sonova shall comply
with the applicable form of<br>
REACH at any time. Supplier is obliged to inform Sonova whether any SVHC constitutes<br>
greater than 0.1% of the weight of any part, materials or product supplied to
Sonova.<br>
&nbsp; </td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40" valign="top">12.4</td>
<td valign="top">Supplier is obliged to keep up to date on these directives and
regulations, to investigate and to<br>
track the contents of any parts, materials or products supplied to Sonova accordingly,
and to<br>
inform Sonova immediately in case any changes to Supplier&#146;s declaration have
occurred as a<br>
result of an update of the Medical directive, RoHS or the SVHC&#146;s candidate
list under REACH.<br>
&nbsp; </td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40" valign="top">12.5</td>
<td valign="top">Supplier is obliged to inform Sonova of any exemptions, contents
and deviations to Medical<br>
directive, RoHS and REACH which apply to parts, materials or products supplied
to Sonova in<br>
written form every half year, having as reporting months January and July.<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="40" height="36" valign="top"><b>13</b></td>
<td valign="top"><b>CORRECTIVE ACTIONS</b><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">13.1</td>
<td><u>Quality complaints:</u> If Sonova detects defective Products at any production
stage, Sonova will<br>
provide a written test report to Supplier. Supplier shall immediately acknowledge
receipt and<br>
take short term corrective action independent of the cause and of the responsibility
for the<br>
problem. Supplier shall analyze the problem and provide a written report including
long term<br>
corrective action within 14 days upon receipt of the written report from Sonova
and keep<br>
Sonova informed of the progress in the meantime.<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">13.2</td>
<td><u>Corrective action procedure:</u> Supplier shall document corrective actions
using the 8D corrective <br>
action report of <b>Appendix C: Corrective Action Report Form</b> or equivalent.<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="40" height="36" valign="top"><b>14</b></td>
<td valign="top"><b>INDEMNIFICATION AND INSURANCE</b><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">14.1</td>
<td>Supplier will protect, indemnify, defend and hold Sonova, its Affiliates,
and their respective<br>
employees, agents, officers and directors (the &#147;<b>Indemnified Parties</b>&#148;)
harmless from and<br>
against all liability, losses, damages, cost or expenses which they may at any
time suffer, incur<br>
or be required to pay based upon the supply of non-conforming or defective Products
by<br>
Supplier to Sonova or any breach by Supplier of its obligations hereunder or of
any statutory<br>
duty or from any act or omission of Supplier&#146;s employees, agents or subcontractors.<br>
&nbsp;</td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;">&nbsp;</font>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font face="Arial, Helvetica, sans-serif"><font size="1">Phonak Supplier
</font><font size="2">Agreement Final 20151102.docx</font></font></td>
<td align="center"><font face="Arial, Helvetica, sans-serif" size="1">Template
v2.8</font></td>
<td width="40%" align="right"><font face="Arial, Helvetica, sans-serif" size="1">Page&nbsp;<b>8&nbsp;/&nbsp;21</b></font></td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
</font>
<hr>
<div style="page-break-after:always;"></div>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font style="font-size: 10pt; font-family: Arial;">NVE&nbsp;Corporation
/ Sonova&nbsp;AG</font></td>
<td width="40%" align="right"><font style="font-size: 10pt; font-family: Arial;">Supply
Agreement</font></td>
</tr>
</table>
<hr style="color: black;" noshade size="1">
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br></font>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="top">
<td width="40">14.2</td>
<td>If the Supplier has entered into an agreement that constitutes an unlawful
restraint of<br>
competition affecting Products or services supplied to Sonova, it is obliged to
pay 30% of the<br>
net sales amount of this Agreement (excl. discounts and value added tax) to Sonova.
The<br>
Parties reserve the right of proof of a higher or lower damage. The payment obligation
shall also<br>
apply if this Agreement is terminated for whatever reason. Other contractual or
statutory rights<br>
of Sonova remain unaffected.<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">14.3</td>
<td>Supplier confirms that it has appropriate insurance coverage in place of at
least US$ 2,500,000<br>
and shall provide Sonova upon first request with a copy of Supplier&#146;s insurance
policy. Any<br>
limitation in the insurance policy shall not be construed as a limitation on Supplier&#146;s
liability<br>
under this Agreement.<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="40" height="36" valign="top"><b>15</b></td>
<td valign="top"><b>INTELLECTUAL&nbsp;PROPERTY&nbsp;RIGHTS</b><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">15.1</td>
<td>Supplier hereby grants to Sonova an irrevocable, exclusive, world-wide and
royalty-free license<br>
to use Supplier&#146;s Product in Sonova&#146;s applications, to incorporate the
Product, to sell it and to<br>
have it sold either through Affiliates or through third parties. Supplier warrants
that it has<br>
carefully reviewed the intellectual property situation in relation to the Products
and made all<br>
necessary investigations and that the Products do not infringe upon any third
party intellectual<br>
property rights, including but not limited to patent rights, copyrights and trademarks.<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">15.2</td>
<td>Supplier will protect, indemnify, defend and hold Sonova, its Affiliates,
and their respective<br>
employees, agents, officers and directors (&#147;<b>Indemnified Parties</b>&#148;)
harmless from and against all<br>
liability, losses, damages, cost or expenses (including attorney fees) which they
may at any time<br>
suffer, incur or be required to pay by reason of any claim, action, suit or proceeding
that may be<br>
brought for damages or injunctive relief based upon any actual or alleged violation
or<br>
infringement of any patent, trademark, copyright or other intellectual property
right by a Product<br>
sold by Supplier to Sonova.<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">15.3</td>
<td>Sonova shall provide Supplier with written notice of any claim which it believes
falls within the<br>
scope of this Section 14.2 and shall provide to Supplier reasonable information
and assistance<br>
in the defense thereof. Supplier agrees at its own expense to defend against any
such claims,<br>
actions, suits or proceedings, rightfully or wrongfully instituted with legal
counsel reasonably<br>
acceptable to Sonova; provided however that Supplier shall not settle any claim,
action, suit or<br>
proceeding which imposes upon Sonova any obligation, or in any way prejudices
the rights of<br>
Sonova, without Sonova&#146;s prior written consent. Supplier agrees to satisfy
any and all<br>
judgments which may be rendered against the Indemnified Parties with respect thereto.<br>
Notwithstanding the foregoing, Sonova shall have the option to mandate attorneys,
at the sole<br>
cost and expense of Supplier, to defend any claim, action, suit or proceeding
in the event<br>
Supplier fails to assume such defense.&nbsp;<br>
&nbsp; </td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font face="Arial, Helvetica, sans-serif"><font size="1">Phonak Supplier
</font><font size="2">Agreement Final 20151102.docx</font></font></td>
<td align="center"><font face="Arial, Helvetica, sans-serif" size="1">Template
v2.8</font></td>
<td width="40%" align="right"><font face="Arial, Helvetica, sans-serif" size="1">Page&nbsp;<b>9&nbsp;/&nbsp;21</b></font></td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
</font>
<hr>
<div style="page-break-after:always;"></div>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font style="font-size: 10pt; font-family: Arial;">NVE&nbsp;Corporation
/ Sonova&nbsp;AG</font></td>
<td width="40%" align="right"><font style="font-size: 10pt; font-family: Arial;">Supply
Agreement</font></td>
</tr>
</table>
<hr style="color: black;" noshade size="1">
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
</font>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="top">
<td width="40">15.4</td>
<td>In the event the Product or any portion thereof is subject of a claim of infringement,
Sonova<br>
shall permit Supplier to (a) procure the right to continue using the Product;
(b) replace or modify<br>
the Product to render it non-infringing without material change in the form, the
fit and the<br>
function; (c) replace the Product with equally suitable non-infringing product;
or (d) return of the<br>
Product in exchange for full credit.<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">15.5</td>
<td>Supplier shall not be liable and shall have no obligation to defend under
this Section 14.2 to the<br>
extent any claim, demand or cause of action is solely based upon the combination
by Sonova of<br>
the Product with devices or equipment not sold by Supplier. Supplier shall inform
Sonova if it is<br>
aware that the combination of the Product with other devices or equipment as intended
by<br>
Sonova may infringe upon third party intellectual property rights.<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="40" height="36" valign="top"><b>16</b></td>
<td valign="top"><b>COMPLIANCE WITH LAWS</b><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">16.1</td>
<td>Supplier shall comply with all applicable laws including but not limited to
export control and<br>
trade compliance regulations and anti-bribery laws. Supplier shall upon first
request of Sonova<br>
provide Sonova with all relevant information that Sonova reasonably requires to
ensure<br>
compliance by Sonova with worldwide export control and trade compliance regulations.<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">16.2</td>
<td>Supplier adheres to the Sonova Group Supplier Principles (see Appendix A:
Sonova GROUP<br>
Supplier Principles (&#147;SGSP&#148;)).<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="40" height="36" valign="top"><b>17</b></td>
<td valign="top"><b>CONFIDENTIALITY</b><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">17.1</td>
<td>Each Party will keep confidential and will not disclose to any third party
the details of the<br>
collaboration under this Agreement nor any information obtained from another Party
which is<br>
designated as confidential. No Party will use any information obtained from another
Party which<br>
is designated as confidential except for the purposes of fulfilling its obligations
under this<br>
Agreement. The Parties will advise their employees and Affiliates of the confidential
nature of<br>
the collaboration under this Agreement and will ensure that such employees and
Affiliates<br>
comply with the obligations of confidentiality in this Section.<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">17.2</td>
<td><u>Information and Marketing to the Public:</u> As a U.S. publicly-traded
company, NVE may be <br>
required to file this Agreement as a public document with the U.S. Securities
and Exchange <br>
Commission. In this case, Supplier agrees to file a Confidential Treatment Request
with the <br>
Securities and Exchange Commission to request that details relating to the volume
of products <br>
purchased by Sonova and the price of the Products be redacted from the public
filing. Exclusive <br>
of this requirement, any information to the public, such as namely advertisement
or marketing,<br>
or any reference to Sonova in oral or written presentations or technical documentation
and the<br>
like, or any other activities conducted towards the public making a reference
to Sonova, shall <br>
only take place upon prior consultation and mutual consent between the Parties.<br>
&nbsp;</td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font face="Arial, Helvetica, sans-serif"><font size="1">Phonak Supplier
</font><font size="2">Agreement Final 20151102.docx</font></font></td>
<td align="center"><font face="Arial, Helvetica, sans-serif" size="1">Template
v2.8</font></td>
<td width="40%" align="right"><font face="Arial, Helvetica, sans-serif" size="1">Page&nbsp;<b>10&nbsp;/&nbsp;21</b></font></td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
</font>
<hr>
<div style="page-break-after:always;"></div>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font style="font-size: 10pt; font-family: Arial;">NVE&nbsp;Corporation
/ Sonova&nbsp;AG</font></td>
<td width="40%" align="right"><font style="font-size: 10pt; font-family: Arial;">Supply
Agreement</font></td>
</tr>
</table>
<hr style="color: black;" noshade size="1">
<font style="font-size: 10pt; font-family: Arial;">&nbsp;</font>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="40" height="36" valign="top"><b>18</b></td>
<td valign="top"><b>TERMINATION</b><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">18.1</td>
<td>This Agreement shall remain in force until March 31, 2020 (the &#147;<b>Initial
Term</b>&#148;). It shall<br>
automatically terminate unless renewed for 5 years by written consent of both
Parties at least<br>
three (3) months before the expiry of the Initial Term or a renewal term.<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">18.2</td>
<td>This Agreement may be extraordinarily terminated under the following conditions:<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr >
<td width="50" valign="top">18.2.1</td>
<td valign="top">Either Party may terminate this Agreement at any time and with
immediate effect by a notice in<br>
writing to the other Party if the other Party is in material breach in the performance
of one or<br>
more of its obligations hereunder, provided that the Agreement shall not be so
terminated if<br>
the Party in default has cured the default within thirty (30) days after the notice
has been<br>
given. In case of material breach by Supplier, the Right of Own Manufacture with
Technology<br>
Access (as per Section 16) shall continue to apply.<br>
&nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="top">
<td width="50" valign="top">18.2.2</td>
<td>Either Party may terminate this Agreement at any time and with immediate effect
by a notice in<br>
writing to the other Party if the other Party files for bankruptcy, becomes insolvent,
goes into<br>
liquidation, winding up proceedings are commenced in relation to it, a receiver,
administrator,<br>
administrative receiver or manager of its assets is appointed, or any other similar
appointment<br>
is made under the laws of any jurisdiction.<br>
&nbsp; </td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="top">
<td width="50" valign="top">18.2.3</td>
<td>If a Party shall come under the control of any third party or parties other
than an Affiliate<br>
and/or in the case of an initial public offering (IPO) and if such change of control
or IPO could<br>
affect and conflict with the other Party's business interests, then the other
Party may, within<br>
ninety (90) days of receiving notice of the change of control or IPO, terminate
this Agreement<br>
by giving thirty (30) days' notice in writing. In such case, the Right of Own
Manufacture with<br>
Technology Access (as per Section 18) shall apply.<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">18.3</td>
<td>Termination of this Agreement shall not release either Party from fulfilling
any obligations which <br>
it may have incurred prior to any such termination or from the obligation of confidentiality
as <br>
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">
<tr valign="top">
<td width="40">18.4</td>
<td>The following Sections shall continue in full force and effect after expiry
or termination of this<br>
Agreement for any reason: Sections 2, 11, 14, 14.2, 15, 16, 17, 18, 19 and 20.<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="40" height="36" valign="top"><b>19</b></td>
<td valign="top"><b>MISCELLANEOUS</b><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">19.1</td>
<td>This Agreement embodies the entire understanding of the Parties as it relates
to the subject<br>
matter of this Agreement, and this Agreement supersedes any prior agreement or <br>
understanding between the Parties with regard to such subject matter.<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">19.2</td>
<td>No amendment or modification of this Agreement shall be valid or binding upon
the Parties<br>
unless signed by their respective duly authorized officers.<br>
&nbsp;</td>
</tr>
</table>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font face="Arial, Helvetica, sans-serif"><font size="1">Phonak Supplier
</font><font size="2">Agreement Final 20151102.docx</font></font></td>
<td align="center"><font face="Arial, Helvetica, sans-serif" size="1">Template
v2.8</font></td>
<td width="40%" align="right"><font face="Arial, Helvetica, sans-serif" size="1">Page&nbsp;<b>11&nbsp;/&nbsp;21</b></font></td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
</font>
<hr>
<div style="page-break-after:always;"></div>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font style="font-size: 10pt; font-family: Arial;">NVE&nbsp;Corporation
/ Sonova&nbsp;AG</font></td>
<td width="40%" align="right"><font style="font-size: 10pt; font-family: Arial;">Supply
Agreement</font></td>
</tr>
</table>
<hr style="color: black;" noshade size="1">
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br></font>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="top">
<td width="40">19.3</td>
<td>This Agreement cannot be assigned by any Party (except by Sonova to an Affiliate)
without the<br>
written consent of the other Party. Any assignment without the written consent
of the other Party<br>
shall be null and void.<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">19.4</td>
<td>The waiver by any Party of a breach or default in any of the provisions of
this Agreement by<br>
another Party shall not be construed as a waiver by such Party of any succeeding
breach of the<br>
same or other provisions nor shall any delay or omission on the part of any Party
to exercise or<br>
avail itself of any right, power or privilege that it has or may have hereunder
operate as a waiver<br>
of any right, power or privilege by such Party.<br>
&nbsp; &nbsp;</td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="top">
<td width="40">19.5</td>
<td>If any term or provision of this Agreement shall be judged to be invalid,
the validity of any other<br>
term or provision shall not be thereby affected and such invalid term or provision
shall be<br>
deemed deleted from this Agreement and shall be replaced by a valid provision
that reflects as<br>
closely as possible the invalid provision.<br>
&nbsp; &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="40" height="36" valign="top"><b>20</b></td>
<td valign="top"><b>APPLICABLE LAW AND JURISDICTION</b><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">20.1</td>
<td>This Agreement is construed in accordance with and governed by Swiss law.
The<br>
UN-Convention on Contracts for the International Sale of Goods as well as general
terms of<br>
sale of Supplier. General order terms of Sonova shall not be applicable to this
Agreement.<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">20.2</td>
<td>Any disputes arising out of or in connection with this Agreement shall be
exclusively submitted<br>
to the Commercial Court of the Canton of Z&uuml;rich.<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="40" height="36" valign="top"><b>21</b></td>
<td valign="top"><b>LIST OF APPENDICES</b><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">21.1</td>
<td>The following Appendices are attached to and form an integral and binding
part of this<br>
Agreement:<br>
&nbsp; </td>
</tr>
</table>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="50" valign="top">21.1.1</td>
<td width="12" valign="top">Appendix&nbsp;A:&nbsp;</td>
<td>Sonova GROUP Supplier Principles&nbsp;(&#147;SGSP&#148;);<br>
&nbsp; </td>
</tr>
<tr>
<td width="50" valign="top">21.1.2</td>
<td width="12" valign="top">Appendix&nbsp;B:&nbsp;</td>
<td>Product List and Prices;<br>
&nbsp;</td>
</tr>
<tr>
<td width="50" valign="top">21.1.3</td>
<td width="12" valign="top">Appendix&nbsp;C:&nbsp;</td>
<td>Corrective Action Report Form;<br>
&nbsp; </td>
</tr>
<tr>
<td width="50" height="15" valign="top">21.1.4</td>
<td width="12" height="15" valign="top">Appendix&nbsp;D:&nbsp;</td>
<td height="15">KPI Valuation; and<br>
&nbsp; </td>
</tr>
<tr>
<td width="50" valign="top">21.1.5</td>
<td width="12" valign="top">Appendix&nbsp;E:&nbsp;</td>
<td>Perceived Service Performance Questionnaire.<br>
&nbsp;</td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>&nbsp;<br>
&nbsp;<br>
</font>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font face="Arial, Helvetica, sans-serif"><font size="1">Phonak Supplier
</font><font size="2">Agreement Final 20151102.docx</font></font></td>
<td align="center"><font face="Arial, Helvetica, sans-serif" size="1">Template
v2.8</font></td>
<td width="40%" align="right"><font face="Arial, Helvetica, sans-serif" size="1">Page&nbsp;<b>12&nbsp;/&nbsp;21</b></font></td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
</font>
<hr>
<div style="page-break-after:always;"></div>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font style="font-size: 10pt; font-family: Arial;">NVE&nbsp;Corporation
/ Sonova&nbsp;AG</font></td>
<td width="40%" align="right"><font style="font-size: 10pt; font-family: Arial;">Supply
Agreement</font></td>
</tr>
</table>
<hr style="color: black;" noshade size="1">
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
&nbsp <br>
</font>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0" width="100%">
<tr valign="bottom">
<td width="40" height="36" valign="top"><b>22</b></td>
<td valign="top"><b>SIGNATURES</b><br>
&nbsp;<br>
&nbsp; </td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;"><b>IN WITNESS WHEREOF</b>,
the Parties have caused this Agreement to be executed by their<br>
respective duly authorized officers as follows:<br>
<br>
&nbsp;<br>
</font>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="0" cellpadding="0" width="100%">
<tr>
<td width="50%"><b>For SONOVA AG:</b></td>
<td><b>For NVE Corporation:</b></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;5.11.15</td>
<td>Date:&nbsp;&nbsp;13 Nov. 2015</td>
</tr>
<tr>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td>By:<u>&nbsp;/s/ PAUL SCHURTER&nbsp;&nbsp;&nbsp;</u></td>
<td>By:<u>&nbsp;/s/ DANIEL 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 height="48"></td>
<td>&nbsp; </td>
</tr>
<tr>
<td>By:<u>&nbsp;/s/ HANS MEHL&nbsp;&nbsp;&nbsp;</u></td>
<td>By:<u>&nbsp;/s/ JAY L. BROWN&nbsp;&nbsp;&nbsp;</u></td>
</tr>
<tr>
<td>Hans Mehl</td>
<td>Jay Brown</td>
</tr>
<tr>
<td>GVP Operations</td>
<td>Vice President, Sensors</td>
</tr>
</table>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font face="Arial, Helvetica, sans-serif"><font size="1">Phonak Supplier
</font><font size="2">Agreement Final 20151102.docx</font></font></td>
<td align="center"><font face="Arial, Helvetica, sans-serif" size="1">Template
v2.8</font></td>
<td width="40%" align="right"><font face="Arial, Helvetica, sans-serif" size="1">Page&nbsp;<b>13&nbsp;/&nbsp;21</b></font></td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
</font>
<hr>
<div style="page-break-after:always;"></div>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font style="font-size: 10pt; font-family: Arial;">NVE&nbsp;Corporation
/ Sonova&nbsp;AG</font></td>
<td width="40%" align="right"><font style="font-size: 10pt; font-family: Arial;">Supply
Agreement</font></td>
</tr>
</table>
<hr style="color: black;" noshade size="1">
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
&nbsp;<br>
<b>Appendix A:&nbsp;&nbsp;&nbsp;Sonova GROUP Supplier Principles (&#147;SGSP&#148;)</b>
&nbsp;<br>
Released by the CEO of Sonova Holding AG on April 2007 and revised on April 2014.<br>
&nbsp;<br>
&nbsp;<br>
<b>OBJECTIVE</b><br>
At Sonova Holding AG and its affiliates (&#147;<b>Sonova</b>&#148;), we have set
high standards for the way we<br>
conduct business in areas from social and corporate responsibility to sound business
ethics, including<br>
compliance with all applicable laws and regulations. Sonova Group employees are
bound to the<br>
Sonova Group Code of Conduct.<br>
<br>
We commit ourselves to behave according to accepted ethical principles when interacting
with<br>
colleagues, customers, suppliers, business partners and shareholders and equally
we expect the<br>
same commitment from our suppliers. We request our suppliers to comply with the
Sonova Code of<br>
Conduct as amended from time to time and as available in its current version on
www.sonova.com<br>
unless the supplier has implemented a code of conduct that is as strict as the
Sonova Code of<br>
Conduct.<br>
<br>The Sonova Group Supplier Principles (&#147;<b>SGSP</b>&#148;) supplement the
Sonova Code of Conduct and define<br>
the standards of governance and practice that must be adhered to by all suppliers
conducting<br>
business with Sonova.<br>
&nbsp;<br>&nbsp;<br>
<b>SCOPE</b><br>
The Sonova Code of Conduct to the extent as set out above and the SGSP apply to
all suppliers with<br>
whom Sonova have a contractual relationship, including contractors, suppliers
of goods and services,<br>
co-packers and joint-venture partners (&#147;<b>Suppliers</b>&#148;). It is a
prerequisite for doing business<br>
with Sonova that any Supplier complies with these SGSP.<br>
<br>
Even though Sonova acknowledges that legislation and cultural patterns vary across
the world and<br>
that Suppliers consequently operate under different circumstances, these SGSP
set out the basic<br>
requirements any Supplier must comply with. In cases where the law in question
is more<br>
comprehensive than these SGSP, current law applies. In cases where these SGSP
are more<br>
comprehensive than the law in question, these SGSP apply.<br>
&nbsp;<br>
&nbsp; <br>
<b>PRINCIPLES<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>
</font>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="24" valign="top"><b>&nbsp;&nbsp;&nbsp;</b></td>
<td width="24" valign="top"><b>&#149; &nbsp;&nbsp;</b></td>
<td>Ensure that indoor production and work areas have adequate air circulation.<br>
&nbsp; </td>
</tr>
<tr>
<td width="24" valign="top"><b></b></td>
<td width="24" valign="top"><b>&#149;</b></td>
<td>Constantly increase safety in production by ensuring sufficient light in the
areas used for &#150; as<br>
an example &#150; moulding, printing and finishing activities.<br>
&nbsp;</td>
</tr>
<tr>
<td width="24" valign="top"><b></b></td>
<td width="24" valign="top"><b>&#149;</b></td>
<td>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>
&nbsp;</td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
</font>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font face="Arial, Helvetica, sans-serif"><font size="1">Phonak Supplier
</font><font size="2">Agreement Final 20151102.docx</font></font></td>
<td align="center"><font face="Arial, Helvetica, sans-serif" size="1">Template
v2.8</font></td>
<td width="40%" align="right"><font face="Arial, Helvetica, sans-serif" size="1">Page&nbsp;<b>14&nbsp;/&nbsp;21</b></font></td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
</font>
<hr>
<div style="page-break-after:always;"></div>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font style="font-size: 10pt; font-family: Arial;">NVE&nbsp;Corporation
/ Sonova&nbsp;AG</font></td>
<td width="40%" align="right"><font style="font-size: 10pt; font-family: Arial;">Supply
Agreement</font></td>
</tr>
</table>
<hr style="color: black;" noshade size="1">
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
</font>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="24" valign="top"><b></b></td>
<td width="24" valign="top"><b>&#149;</b></td>
<td>Ensure the health of the employees by protecting the employees against the
risks involved in<br>
performing their work.<br>
&nbsp;</td>
</tr>
<tr>
<td width="24" valign="top"><b></b></td>
<td width="24" valign="top"><b>&#149;</b></td>
<td>Give reasonable access to drinking water and toilet facilities. Sanitary conditions
should be<br>
satisfactory and kept clean.<br>
&nbsp;</td>
</tr>
<tr>
<td width="24" valign="top"><b></b></td>
<td width="24" valign="top"><b>&#149;</b></td>
<td>Keep well-stocked first-aid kit available in each production unit for medical
reasons.<br>
&nbsp;</td>
</tr>
<tr>
<td width="24" valign="top"><b></b></td>
<td width="24" valign="top"><b>&#149;</b></td>
<td>Make it possible to exit the facility from inside.<br>
&nbsp;</td>
</tr>
<tr>
<td width="24" valign="top"><b></b></td>
<td width="24" valign="top"><b>&#149;</b></td>
<td>Place well-functioning fire alarms and fire extinguishers in each production
unit.<br>
&nbsp;</td>
</tr>
<tr>
<td width="24" valign="top"><b></b></td>
<td width="24" valign="top"><b>&#149;</b></td>
<td>Store dangerous and/or toxic substances safely in locations that are adequately
ventilated and<br>
ensure that handling of these materials is safe. Waste from use of dangerous and/or
toxic<br>
substances should be treated in accordance with applicable law.<br>
&nbsp;</td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;"><b>Basic Working Conditions</b><br>
The Supplier shall treat all his employees with respect and dignity and shall
ensure all applicable laws
<br>and regulations.<br>
&nbsp;<br>
The Supplier shall especially:<br>
&nbsp;<br>
</font>
<table style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="24" valign="top"><b>&nbsp;&nbsp;&nbsp;</b></td>
<td width="24" valign="top"><b>&#149; &nbsp;&nbsp;</b></td>
<td>Not use child labor. The term &#147;child&#148; refers to any person employed
under the age of 15, or<br>
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>
&nbsp; </td>
</tr>
<tr>
<td width="24" valign="top"><b>&nbsp;&nbsp;&nbsp;</b></td>
<td width="24" valign="top"><b>&#149;</b></td>
<td>Not use forced labor, regardless of its form, or involuntary prison labor.
Physically abusive<br>
disciplinary practices will not be tolerated.<br>
&nbsp; </td>
</tr>
<tr>
<td width="24" valign="top"><b></b></td>
<td width="24" valign="top"><b>&#149;</b></td>
<td>Not use illegal workers.<br>
&nbsp;</td>
</tr>
<tr>
<td width="24" valign="top"><b></b></td>
<td width="24" valign="top"><b>&#149;</b></td>
<td>Not tolerate harassment or discrimination on the basis of sex, race, color,
religion, age, ethnic<br>
or national origin, marital/parental status or sexual orientation.<br>
&nbsp;</td>
</tr>
<tr>
<td width="24" valign="top"><b></b></td>
<td width="24" valign="top"><b>&#149; &nbsp;&nbsp;</b></td>
<td>Respect the legal rights of employees to join or to refrain from joining worker
organizations,<br>
including trade unions.<br>
&nbsp;</td>
</tr>
<tr>
<td width="24" valign="top"><b></b></td>
<td width="24" valign="top"><b>&#149;</b></td>
<td>Comply with applicable law regulating hours of work. If no current law applies,
Sonova<br>
stipulates max. standard working hours of 10 hours per day and 50 hours per week.
Working<br>
hours must be organized in such a way that the employee can plan his own leisure
time. In<br>
each 7-day cycle the employee is entitled to at least one day off.<br>
&nbsp;</td>
</tr>
<tr>
<td width="24" valign="top"><b></b></td>
<td width="24" valign="top"><b>&#149;</b></td>
<td>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 standard<br>
rate in the industry.<br>
&nbsp;</td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;"><b>Environmental Friendly Production</b><br>
The Supplier shall operate in a manner that is protective of the environment.
At a minimum, the<br>
Supplier shall follow all environmental laws and regulations. The Supplier shall
gradually promote<br>
environmentally friendly production. Waste, wastewater and energy consumption
are important<br>
elements in environmentally friendly production. The Supplier must therefore be
able to handle his<br>
waste, including waste from toxic substances, in a satisfactory way. The Supplier
is recommended to<br>
use the international standard ISO 14001 as a starting point and a basis for his
work.<br>
<br>
<b>Subcontractors</b><br>
If the Supplier retains subcontractors to perform work on the goods or their
component parts, the<br>
Supplier will only use subcontractors that will adhere to the requirements of
these SGSP.<br>
&nbsp;<br>
&nbsp;<br>
</font>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font face="Arial, Helvetica, sans-serif"><font size="1">Phonak Supplier
</font><font size="2">Agreement Final 20151102.docx</font></font></td>
<td align="center"><font face="Arial, Helvetica, sans-serif" size="1">Template
v2.8</font></td>
<td width="40%" align="right"><font face="Arial, Helvetica, sans-serif" size="1">Page&nbsp;<b>15&nbsp;/&nbsp;21</b></font></td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
</font>
<hr>
<div style="page-break-after:always;"></div>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font style="font-size: 10pt; font-family: Arial;">NVE&nbsp;Corporation
/ Sonova&nbsp;AG</font></td>
<td width="40%" align="right"><font style="font-size: 10pt; font-family: Arial;">Supply
Agreement</font></td>
</tr>
</table>
<hr style="color: black;" noshade size="1">
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
&nbsp;<br>
<b>Ethical Dealings</b><br>
The Supplier shall conduct his business in accordance with the highest ethical
standards. Suppliers<br>
must strictly comply with all laws and regulations on bribery, corruption and
prohibited business<br>
practices.<br>
<br>
<b>Communications and Record Keeping</b><br>
The Supplier must make the SGSP and other relevant information available to employees
in the local<br>
language in an accessible way. The Supplier shall maintain documentation necessary
to demonstrate<br>
compliance with these SGSP and must provide Sonova with access to that documentation
upon<br>
Sonova&#146;s request.<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
</font>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font face="Arial, Helvetica, sans-serif"><font size="1">Phonak Supplier
</font><font size="2">Agreement Final 20151102.docx</font></font></td>
<td align="center"><font face="Arial, Helvetica, sans-serif" size="1">Template
v2.8</font></td>
<td width="40%" align="right"><font face="Arial, Helvetica, sans-serif" size="1">Page&nbsp;<b>16&nbsp;/&nbsp;21</b></font></td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
</font>
<hr>
<div style="page-break-after:always;"></div>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font style="font-size: 10pt; font-family: Arial;">NVE&nbsp;Corporation
/ Sonova&nbsp;AG</font></td>
<td width="40%" align="right"><font style="font-size: 10pt; font-family: Arial;">Supply
Agreement</font></td>
</tr>
</table>
<hr style="color: black;" noshade size="1">
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br><b>Appendix B:&nbsp;&nbsp;&nbsp;Product
List and Prices</b><br>
<br>
</font>
<table style="font-size: 10pt; font-family: Arial;" border="1" cellspacing="0" cellpadding="0">
<tr>
<td>&nbsp;</td>
<td width="40">&nbsp;</td>
</tr>
<tr>
<td><b>&nbsp;Phonak Part number&nbsp;</b></td>
<td width="40"><b>&nbsp;NVE&nbsp;Description&nbsp;</b></td>
</tr>
<tr align="center">
<td>**</td>
<td>**</td>
</tr>
</table>
<br>
<table style="font-size: 10pt; font-family: Arial;" border="1" cellspacing="0" cellpadding="0">
<tr>
<td><b>&nbsp;<b>Sonova</b> Business year<br>
&nbsp;April&nbsp;1st&nbsp;until&nbsp;March&nbsp;31st&nbsp;</b></td>
<td width="40" align="left"><b>&nbsp;&nbsp;Deviation</b></td>
<td width="40" align="center"><b>&nbsp;Aug.&nbsp;22nd&nbsp;2015&nbsp;til&nbsp;<br>
March&nbsp;31st&nbsp;2016</b></td>
<td width="40" align="center"><b>&nbsp;April&nbsp;1st&nbsp;2016&nbsp;til&nbsp;<br>
March&nbsp;31st&nbsp;2017</b></td>
<td width="40" align="center"><b>&nbsp;April&nbsp;1st&nbsp;2017&nbsp;til&nbsp;<br>
March&nbsp;31st&nbsp;2018</b></td>
<td width="40" align="center"><b>&nbsp;April&nbsp;1st&nbsp;2018&nbsp;til&nbsp;<br>
March&nbsp;31st&nbsp;2019</b></td>
<td width="40" align="center"><b>&nbsp;April&nbsp;1st&nbsp;2019&nbsp;til&nbsp;<br>
March&nbsp;31st&nbsp;2020</b></td>
</tr>
<tr>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td>&nbsp;Case 1 Sonova Demand</td>
<td>&nbsp;&nbsp;+10%&nbsp;/&nbsp;-15%&nbsp;</td>
<td align="center">**</td>
<td align="center">**</td>
<td align="center">**</td>
<td align="center">**</td>
<td align="center">**</td>
</tr>
<tr>
<td>&nbsp;Case 1 Price US$/Pc</td>
<td>&nbsp;</td>
<td align="center">**</td>
<td align="center">**</td>
<td align="center">**</td>
<td align="center">**</td>
<td align="center">**</td>
</tr>
</table>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br><table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font face="Arial, Helvetica, sans-serif"><font size="1">Phonak Supplier
</font><font size="2">Agreement Final 20151102.docx</font></font></td>
<td align="center"><font face="Arial, Helvetica, sans-serif" size="1">Template
v2.8</font></td>
<td width="40%" align="right"><font face="Arial, Helvetica, sans-serif" size="1">Page&nbsp;<b>17&nbsp;/&nbsp;21</b></font></td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
</font>
<hr>
<div style="page-break-after:always;"></div>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font style="font-size: 10pt; font-family: Arial;">NVE&nbsp;Corporation
/ Sonova&nbsp;AG</font></td>
<td width="40%" align="right"><font style="font-size: 10pt; font-family: Arial;">Supply
Agreement</font></td>
</tr>
</table>
<hr style="color: black;" noshade size="1">
<font style="font-size: 10pt; font-family: Arial;">&nbsp;</font>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr valign="bottom">
<td width="1" height="36">&nbsp;<br>
&nbsp;<br>
<b>Appendix C:&nbsp;&nbsp;&nbsp;Corrective Action Report Form</b><br>
&nbsp;<br>
&nbsp;
</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>
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
&nbsp;<br>&nbsp;<br>&nbsp;<br></font>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font face="Arial, Helvetica, sans-serif"><font size="1">Phonak Supplier
</font><font size="2">Agreement Final 20151102.docx</font></font></td>
<td align="center"><font face="Arial, Helvetica, sans-serif" size="1">Template
v2.8</font></td>
<td width="40%" align="right"><font face="Arial, Helvetica, sans-serif" size="1">Page&nbsp;<b>18&nbsp;/&nbsp;21</b></font></td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
</font>
<hr>
<div style="page-break-after:always;"></div>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font style="font-size: 10pt; font-family: Arial;">NVE&nbsp;Corporation
/ Sonova&nbsp;AG</font></td>
<td width="40%" align="right"><font style="font-size: 10pt; font-family: Arial;">Supply
Agreement</font></td>
</tr>
</table>
<hr style="color: black;" noshade size="1">
<font style="font-size: 10pt; font-family: Arial;">&nbsp;</font>&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>
<br>
<br>
<br>
<br>
<br>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font face="Arial, Helvetica, sans-serif"><font size="1">Phonak Supplier
</font><font size="2">Agreement Final 20151102.docx</font></font></td>
<td align="center"><font face="Arial, Helvetica, sans-serif" size="1">Template
v2.8</font></td>
<td width="40%" align="right"><font face="Arial, Helvetica, sans-serif" size="1">Page&nbsp;<b>19&nbsp;/&nbsp;21</b></font></td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
</font>
<hr>
<div style="page-break-after:always;"></div>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font style="font-size: 10pt; font-family: Arial;">NVE&nbsp;Corporation
/ Sonova&nbsp;AG</font></td>
<td width="40%" align="right"><font style="font-size: 10pt; font-family: Arial;">Supply
Agreement</font></td>
</tr>
</table>
<hr style="color: black;" noshade size="1">
<font style="font-size: 10pt; font-family: Arial;">&nbsp;</font><font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
&nbsp;<br>
<b>Appendix&nbsp;D:&nbsp;&nbsp;&nbsp;KPI&nbsp;Valuation<br>
&nbsp;<br>
&nbsp;<br>
INCOMING INSPECTION</b><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;">&nbsp;<br>
Valuation for period: IIR= (100*Na+50*Nc+Nr)/(Na+Nc+Nr)<br>
<br>
<br>
<b>ON TIME DELIVERY</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>
<br>
<br>
<b>RETURN FROM FIELD</b><br>
<br>
Valuation for period: RFF= 1-(Total number of units returned/Total number shipped)<br>
<br>
<br>
<br><br>
<br>
<br>
</font>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font face="Arial, Helvetica, sans-serif"><font size="1">Phonak Supplier
</font><font size="2">Agreement Final 20151102.docx</font></font></td>
<td align="center"><font face="Arial, Helvetica, sans-serif" size="1">Template
v2.8</font></td>
<td width="40%" align="right"><font face="Arial, Helvetica, sans-serif" size="1">Page&nbsp;<b>20&nbsp;/&nbsp;21</b></font></td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
</font>
<hr>
<div style="page-break-after:always;"></div>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font style="font-size: 10pt; font-family: Arial;">NVE&nbsp;Corporation
/ Sonova&nbsp;AG</font></td>
<td width="40%" align="right"><font style="font-size: 10pt; font-family: Arial;">Supply
Agreement</font></td>
</tr>
</table>
<hr style="color: black;" noshade size="1">
<font style="font-size: 10pt; font-family: Arial;">&nbsp;</font>
<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 Sonova 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</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><font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
<br>
</font>
<table width="100%" style="font-size: 10pt; font-family: Arial;" border="0" cellspacing="00" cellpadding="0">
<tr>
<td width="40%"><font face="Arial, Helvetica, sans-serif"><font size="1">Phonak Supplier
</font><font size="2">Agreement Final 20151102.docx</font></font></td>
<td align="center"><font face="Arial, Helvetica, sans-serif" size="1">Template
v2.8</font></td>
<td width="40%" align="right"><font face="Arial, Helvetica, sans-serif" size="1">Page&nbsp;<b>21&nbsp;/&nbsp;21</b></font></td>
</tr>
</table>
<font style="font-size: 10pt; font-family: Arial;">&nbsp;<br>
</font>
<hr>
</TEXT>
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