**EXHIBIT 10.23****CERTAIN INFORMATION (INDICATED BY ASTERISKS) IN THIS EXHIBIT HAS BEEN OMITTED AND FILEDSEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTEDWITH RESPECT TO THE OMITTED PORTION.****AMENDED AND RESTATED SUPPLY AGREEMENT**     This Agreement is made effective on December___30___, 2006 (“Effective Date”), among:     **Siemens Hearing Instruments, Inc.**, a Delaware corporation, with an address at 10Constitution Avenue, Piscataway, New Jersey, 08855 (“SHI”); and     certain subsidiaries and affiliates of **Siemens Aktiengesellschaft**, a corporation under thelaws of the Federal Republic of Germany (collectively, the “Siemens Affiliates”); and     **HearUSA, Inc.**, a Delaware corporation, with an address at 1250 Northpoint Parkway, WestPalm Beach, Florida, 33407 (“HearUSA”).     WHEREAS, HearUSA is a retail buyer of hearing aids in the United States and also serviceshearing healthcare programs sponsored by HMOs and insurance companies; and     WHEREAS, SHI is a manufacturer of hearing aids and sells such hearing aids to retailresellers, including HearUSA, for resale to consumers; and     WHEREAS, HearUSA and SHI have determined that it would be in their respective best intereststo assure a steady supply of hearing aids of various styles and capacities (the “Products”) fromSHI in order that HearUSA may efficiently and economically distribute such Products through itscurrent and future retail outlets (“Facilities”); and     WHEREAS, SHI has offered to sell and HearUSA has agreed to purchase the Products, all inaccordance with the terms and conditions contained herein.     NOW, THEREFORE, the parties hereto agree as follows:     1. Purchase and Sale. Subject to the provisions contained in this Agreement, SHI has agreedto sell and HearUSA has agreed to buy those Products listed on Exhibit A to this Agreement duringthe term of this Agreement. The Siemens Affiliates manufacture or may manufacture certain of theProducts offered hereunder, and those Products manufactured and supplied by the Siemens Affiliatesand purchased by HearUSA will be included within the definition of Products under this Agreementand included in the calculations set forth in Section 4 hereof. If any Siemens Affiliate shallsell any of the Products to HearUSA, such Siemens Affiliate shall execute and deliver acounterpart, substantially in the form of Exhibit B, to SHI and HearUSA. Upon the execution ofsuch counterpart, such Siemens Affiliate shall become a party hereto and be bound by all the termsand conditions hereof as a seller to the same extent as though such Siemens Affiliate hadoriginally executed this Agreement. The parties understand and agree that Exhibit A may be amendedfrom time to time, upon mutual agreement of SHI and HearUSA, to add or delete Products. Inaddition, it is specifically understood that HearUSA is purchasing the Products for the purpose ofresale in all of HearUSA’s Facilities, including,
 

 
AMENDED AND RESTATED SUPPLY AGREEMENT, December 2006without limitation, any new Facilities which may be or are owned, operated, affiliated with ormanaged by HearUSA.     2. Term. The term of this Agreement begins on the Effective Date and ends on 10 February2013 (“Term”).     3. Terms and Conditions of Sale. HearUSA will submit its orders for Products either on theforms provided by SHI for that purpose or via a website provided by SHI. Net payment is due nolater than seventy five (75) days after the statement date.     4. Ordering Process and Pricing.          4.1. HearUSA understands that SHI has offered special terms and pricing to HearUSA asconsideration for the purchase compliance levels committed to by HearUSA, and that SHI is willingto continue to provide Products to HearUSA in a manner consistent with the relationship enjoyed todate by SHI and HearUSA. Subject to Section 3 hereof, HearUSA agrees to purchase, in each FiscalQuarter (which, for the purposes of this calculation, shall be each of the three month periods ofthe Term ending on the last Saturday of the months of March, June, September and December), atleast ninety percent (90%) of HearUSA’s quarterly purchases of hearing aid products in the UnitedStates (each individual hearing aid product purchased by HearUSA from any vendor is hereinaftercalled a “Unit”); provided however, that:(i) if HearUSA has purchased from SHI, during any four (4)consecutive Fiscal Quarters, ninety percent (90%) or more of all Unitspurchased by HearUSA in the United States, net of returns (“MinimumPurchase Requirement”), then HearUSA shall be deemed to have complied withthe purchase requirements of this Agreement; and(ii) subject to Section 11(a) of this Agreement, HearUSA shall be indefault under this Agreement (including other events of default ormaterial breaches under this Agreement) if HearUSA fails to meet theMinimum Purchase Requirement during any four (4) consecutive FiscalQuarters (whether or not coinciding with a calendar year), *and if*HearUSAdoes not achieve the Minimum Purchase Requirement in the immediatelyfollowing Fiscal Quarter (“Purchase Requirement Cure Period”).New acquisitions completed by HearUSA after the Closing Date will be included under the MinimumPurchase Requirement starting on the six-month anniversary of the last calendar day of the month ofsuch acquisition.          4.2. For purposes of this Section 4, (A) the Fiscal Quarter in which the last day of the Termoccurs (unless such day is the last day of a Fiscal Quarter), shall mean the period commencing onthe first day of such Fiscal Quarter and ending on the last day of the Term (such period, the“Final Contract Fiscal Quarter”), (B) the “quarterly purchases” described above shall refer to suchpurchases made during the applicable Final Contract Fiscal Quarter, and (C) the 90% requirementshall be reduced to a number equal to the product of 90% multiplied by a fraction, the numerator ofwhich is the number of days in the applicable Final Contract Fiscal Quarter and the denominator ofwhich is the actual number of days in the Fiscal Quarter in which the last day of the Term occurs.
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AMENDED AND RESTATED SUPPLY AGREEMENT, December 2006          4.3. In exchange for HearUSA’s commitment to comply with the Minimum Purchase Requirement, SHIhas offered to sell the Products to HearUSA at the Net Prices set forth on Exhibit A. During theterm of this Agreement, upon written notice to HearUSA not later than sixty (60) days prior to theeffective date thereof, SHI may adjust the list prices for the Products, such adjustment to takeeffect on the date set forth on such notice. SHI may not change the list prices for the Productsmore often than **[*****]**in any calendar year of the Term. SHI’s list prices charged to HearUSAshall not increase more than **[*****]**percent (**[****]**%) above the then-current prices at the time ofsuch change and in any case will not exceed the maximum percentage of then-current price increasesmade by SHI to its other customers unless HearUSA fails to meet its Minimum Purchase Requirementsset forth in Section 4, at which time the parties shall meet to discuss the adjustments which needto be made should HearUSA continue not to meet the Minimum Purchase Requirement.          4.4. If HearUSA (or, as applicable, its assignee or other successor of HearUSA’s obligationsunder Section 16(a) of this Agreement) defaults in its obligation to meet the Minimum PurchaseRequirement, and such default is not cured during the Purchase Requirement Cure Period, then SHI,in its sole discretion, shall have the right to take any or all of the following actions hereunderfor so long as such default is continuing:(i) adjust prices or terms and conditions of sale with respect to theprovision of Products;(ii) as liquidated damages, and not as a penalty, receive promptreimbursement from HearUSA of one hundred percent (100%) of the fulldifference between the special pricing offered in connection with thisAgreement and the then-current listed single unit prices for the Productsfor each defaulting Fiscal Quarter. If, however, there has been a Changeof Control (as defined in the Credit Agreement) during or before anydefaulting Fiscal Quarter then the parties agree that SHI will incuradditional costs and expenses in due diligence and related activities, andthe liquidated damages reimbursement in such case will be one hundredtwenty percent (120%);(iii) obtain equitable relief (without the necessity of posting a bond orsimilar financial obligation) compelling HearUSA (including, as applicableunder Section 16(a) or otherwise, any of HearUSA’s affiliates, successors,and assigns) to refrain from purchasing hearing aids from any vendor otherthan SHI during the Term;(iv) obtain equitable relief (without the necessity of posting a bond orsimilar financial obligation) compelling HearUSA (including, as applicableunder Section 16(a) or otherwise, any of HearUSA’s affiliates, successors,and assigns) to purchase all its requirements for hearing aids from SHIduring the Term; or(v) terminate this Agreement in accordance with Section 11 hereof.The remedies enumerated above in subsections (i) through (v) of Section 4.4 are nonexclusive and donot preclude SHI from exercising any or all other remedies available to it at law or equity. IfHearUSA is not making best efforts to cure its default(s), then SHI may in its discretion implementSections 4.4(iii) and/or (iv), above, at any time after a defaulting Fiscal Quarter and regardlessof any Purchase Requirement Cure Period.          4.5. (a) If HearUSA meets its Minimum Purchase Requirement, or cures any failure during thePurchase Requirement Cure Period, then HearUSA may liquidate certain loans
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AMENDED AND RESTATED SUPPLY AGREEMENT, December 2006made by SHI to HearUSA pursuant to the Second Amended and Restated Credit Agreement dated asof December_30___, 2006 between SHI and HearUSA (the “Credit Agreement”).          (b) If the loans under the Credit Agreement are fully repaid by HearUSA before the MaturityDate (as defined in the Credit Agreement), then SHI shall credit to HearUSA hereunder substantiallyequivalent rebates in cash of $2,920,000 in each calendar year of the Term *provided that*HearUSAmeets the Minimum Purchase Requirement, or cures any failure during the Purchase Requirement CurePeriod, for all Fiscal Quarters of such calendar year.          4.6. (a) Within thirty (30) days after the end of each Fiscal Quarter, HearUSA shall reportto SHI the absolute number of Units in such Fiscal Quarter so that HearUSA’s compliance with theMinimum Purchase Requirement can be calculated for that Fiscal Quarter.          (b) If HearUSA:(i) has complied with the Minimum Purchase Requirement as of the end of aFiscal Quarter, or cures any failure during the Purchase Requirement CurePeriod, *and*(ii) in such Fiscal Quarter HearUSA has equaled or exceeded the cumulativeaverage of Units purchased from SHI in each comparable past Fiscal Quarterof the Term (except that for each Fiscal Quarter in 2007, HearUSA needonly equal or exceed the number of Units purchased in the comparable 2006Fiscal Quarter) ((i) and (ii) together called the “Quarterly VolumeTest”),then Siemens shall provide additional rebates of $312,500 for each such Fiscal Quarter (subject toSection 4.6(e), below).          (c) If HearUSA does not meet the Quarterly Volume Test for any Fiscal Quarter, then:(i) if HearUSA achieves at least 90% of the Quarterly Volume Test for suchFiscal Quarter, HearUSA shall be entitled to fifty percent (50%) or$156,250 of the rebate associated with such Fiscal Quarter (subject toSection 4.6(e), below); or(ii) if HearUSA does not achieve at least 90% of the Quarterly Volume Testfor such Fiscal Quarter, HearUSA shall not be entitled to any rebateassociated with such Fiscal Quarter other than rebates described inSection 4.5(b) of this Agreement.          (d) If HearUSA exceeds by twenty-five percent (25%) or more the Quarterly Volume Test for anyFiscal Quarter, then HearUSA shall be entitled to an additional rebate of $156,250 for such FiscalQuarter (subject to Section 4.6(e), below).          (e) Notwithstanding anything else in this Agreement, however:(i) the sum of all rebates provided to HearUSA under this Supply Agreementshall not exceed $4,795,000 in any calendar year of the Term; and
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AMENDED AND RESTATED SUPPLY AGREEMENT, December 2006(ii) so long as there is any balance outstanding under the CreditAgreement, SHI shall provide all rebates under this Supply Agreementsolely as a credit against HearUSA’s repayments of the Loans under theCredit Agreement; otherwise, all rebates under this Supply Agreement shallbe provided in cash.     5. Product Representations. SHI makes the following representations and warranties withrespect to the Products sold hereunder:     (a) Each Product shall be manufactured (i) in conformity with all applicable requirements ofthe Food and Drug Administration (“FDA”) and (ii) in accordance with all applicable United Statesfederal, state and local statutes, ordinances and regulations, including but not limited to theFood, Drug and Cosmetic Act (21 USC 301 *et seq*.) (the “Act”), as amended from time to time, and theregulations thereunder, including Good Manufacturing Practice Regulations, which are currently inforce or which are hereafter adopted. At the time of shipment of any Product, it will not beadulterated or misbranded within the meaning of the Act and will not be a product which wouldviolate any section of the Act if introduced into interstate commerce in the United States.     (b) SHI has good and marketable title to, and the right to sell, the Products.     (c) The manufacture and sale of the Product, and its use in accordance with all applicableapprovals theretofore obtained and SHI’s directions for use, shall not, to the knowledge of SHI,infringe any intellectual property rights of any third parties.     6. Covenants of SHI. SHI covenants and agrees as follows with respect to the Products:     (a) SHI shall conduct its manufacturing operations in a safe and prudent manner, in compliancewith all applicable laws and regulations, including, but not limited to, those dealing withoccupational safety and health, those dealing with public safety and health, those dealing withprotection of the environment, and those dealing with disposal of wastes and in compliance with theapplicable provisions of this Agreement.     (b) SHI shall use commercially reasonable efforts to have the Products listed on the “picklists” maintained by each of the Canadian provinces.     (c) SHI shall use commercially reasonable efforts to: (i) fill HearUSA’s orders for Productson time, and (ii) deliver Products that function as per specifications and that meet therequirements of the orders submitted by HearUSA, in each case consistent with past practices ofHearUSA and SHI.     (d) SHI shall use commercially reasonable efforts to remain one of the technology leaders inthe field of hearing healthcare; provided that nothing contained herein shall limit or prohibit SHIfrom conducting its business in accordance with the policies and procedures established from timeto time by SHI’s Board of Directors or with the overall policies and procedures of SiemensAktiengesellschaft.     7. Indemnification by SHI.     (a) Subject to the provisions of subsection 7(b) below, SHI agrees to indemnify, defend andhold harmless HearUSA, its affiliates and their respective employees, agents and
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AMENDED AND RESTATED SUPPLY AGREEMENT, December 2006representatives, against any and all claims, losses, damages and liabilities, includingreasonable attorneys’ fees, incurred by any of them arising out of any breach of any representationby SHI, resulting from the actual adulteration or misbranding of Product, or any defect inmaterials or workmanship.     (b) The foregoing indemnify shall not be effective to the extent any such claim, loss, damageor liability is based upon (i) any act of HearUSA or any of its affiliates, agents orrepresentatives, (ii) any act of HearUSA or any of its affiliates, agents or representatives donejointly with any party other than SHI, or (iii) any claim arising as a result of any unauthorizedalteration, modification or change to the Product by any party other than SHI.     8. Indemnification by HearUSA.     (a) Subject to the provisions of subsection 8(b) below, HearUSA agrees to indemnify, defendand hold harmless SHI, its affiliates and their respective employees, agents and representatives,against any and all claims, losses, damages and liabilities, including reasonable attorneys’ fees,incurred by any of them arising out of any act of HearUSA relative to the marketing, distributionand sale of Products.     (b) The foregoing indemnity shall not be effective nor shall it be enforceable to the extentthat any such claim, loss, damage or liability is based upon: (i) any act of SHI or any of itsaffiliates, agents or representatives, (ii) any act of SHI or any of its affiliates, agents orrepresentatives done jointly with any party other than HearUSA, or (iii) any claim arising as aresult of any unauthorized alteration, modification or change to the Product by any party otherthan HearUSA, or any defect in materials or workmanship.     9. Procedures Related to Indemnification.     (a) A party seeking indemnification under the terms of this Agreement shall be referred to asthe “indemnified party” and the person who is to provide such indemnification shall be referred toas the “indemnifying party.” The indemnified party shall notify in writing the indemnifying partywith reasonable promptness of its discovery of any matter giving rise to a claim of indemnity. Thefailure or delay in so notifying the indemnifying party shall not relieve indemnifying party of itsobligations to indemnify unless, and only to the extent that, the indemnifying party’s defense ofsuch claim is materially prejudiced as a result of such delay. The indemnified party shallprovide the indemnifying party as soon as practicable all information and documentation related tothe matter for which the indemnified party seeks indemnification. The indemnifying party shall begiven access to all books and records in the possession or under the control of the indemnifiedparty that the indemnifying party reasonably determines to be related to such claim.     (b) Promptly upon receipt of notice from the indemnified party, the indemnifying party shalltake over control of the defense of any action, claim or litigation arising out of theindemnification provisions of this Agreement. The indemnified party shall support and assist theindemnifying party in the defense, but all costs, expenses and related charges, including but notlimited to attorneys’ fees, shall be for the account of the indemnifying party, except to theextent such independent counsel is representing the indemnified party for defenses available to itbut not available to the indemnifying party. If the indemnified party wishes to retain its owncounsel to advise and assist in the defense of such claim, it may do so, but the expense ofretaining such independent counsel shall be for the account of the indemnified party and theindemnifying party shall retain complete control over the defense. If, after receipt of notice,the indemnifying party
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AMENDED AND RESTATED SUPPLY AGREEMENT, December 2006does not defend the interests of the indemnified party or does not take appropriate action todefend and hold harmless the indemnified party, then, and in that case only, the indemnified partyshall be entitled to retain counsel, defend the action, claim or litigation, and seek compensationfor all of its costs of defense from the indemnifying party. The indemnified party shall not,without the prior consent of the indemnifying party, enter into any settlement the result of whichwould materially limit or modify the rights of the indemnifying party under this Agreement.     10. Recall. If there is any recall of any Product, whether voluntary or involuntary, SHIshall replace the recalled Product without charge to HearUSA. In addition, SHI shall pay all ofHearUSA’s reasonable out of pocket expenses incurred in connection with such recall. In no eventshall SHI be liable for any loss of use, revenue or anticipated profits, loss of stored,transmitted or recorded data, or for any incidental, unforeseen, special, punitive or consequentialdamages arising out of or in connection with this Agreement, or the sale or use of the Products, orarising out of the actions taken by SHI in response to a recall or other action required by law,regulation or agency with oversight over the operations and business of SHI; provided, however,that nothing in this Section 10 shall limit SHI’s indemnification obligations under Section 7 forlosses incurred by HearUSA for which HearUSA is entitled to indemnification arising out of a claimby any third party.     11. Termination.     (a) Either party may terminate this Agreement if there is a material breach by the other whichremains uncured (or where significant steps toward effecting the cure shall not have been taken)within sixty (60) days (or longer as applicable under Section 4.1(ii) of this Agreement) afterwritten notice is given to the breaching party specifying the nature of the breach. The partiesagree that HearUSA’s failure to meet the Minimum Purchase Requirement or to make payments asrequired under this Agreement shall be material breaches, giving SHI the right (subject to thePurchase Requirement Cure Period or any other cure period), but not the obligation, to terminatethis Agreement. The remedy of termination shall be without prejudice to any other rights orremedies available to the non-breaching party under this Agreement or at law. For the avoidance ofdoubt, the parties agree that this Section 11(a) is subject to the terms of Sections 4.1(ii) and4.4 of this Agreement.     (b) Notwithstanding subsection (a) hereinabove, SHI may terminate this Agreement effectiveimmediately if any proceeding shall be instituted by or against HearUSA seeking to adjudicate it abankrupt or insolvent or seeking liquidation, winding up, reorganization, arrangement, adjustment,protection, relief or composition of it or its debts under any law relating to bankruptcy,insolvency or reorganization or relief of debtors, or seeking the entry of an order for relief orthe appointment of a custodian, receiver, trustee or other similar official for it or for anysubstantial part of its property and, in the case of any such proceedings instituted againstHearUSA (but not instituted by it) either such proceedings shall remain undismissed or unstayed fora period of sixty (60) days or any of the actions sought in such proceedings shall occur; orHearUSA shall take any corporate action to authorize any of the actions set forth above in thissubsection (b). HearUSA may terminate this Agreement if SHI voluntarily or involuntarily becomesbankrupt or is unable to fulfill its obligations hereunder.     (c) HearUSA may terminate this Agreement if:(i) the US Food and Drug Administration takes any final action the result of whichis to ban the manufacture, sale or introduction into interstate commerce of
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AMENDED AND RESTATED SUPPLY AGREEMENT, December 2006any Product or to impose significant restrictions on its use in the hearing fieldor generally; or(ii) SHI acquires a majority of equity ownership in a chain of entities sellinghearing aids through retail outlets *and which*, for the entire United States hearingaid market, has all of the following characteristics (A) through (D):(A) targets its advertising to the same end-users as HearUSA; and(B) exceeds twenty-five percent (25%) of the volume of sales and annualincome of HearUSA in the same year; and(C) has a comparable number of retail stores as HearUSA; and(D) directly competes with HearUSA in the same geographic territory.     (iii) The parties further agree that part (ii), above, does not apply in the case of SHIacquiring or operating an entity in relation to SHI’s exercise of a security interest or otherwisein settlement of a dispute, breach of contract, or lawsuit.     (d) Termination or expiration of this Agreement for any reason shall not (i) release eitherparty from any liability or obligation which has already accrued as of the effective date of suchtermination or (ii) constitute a waiver or release of, or otherwise be deemed to prejudice oradversely affect, any rights, remedies or claims, whether for damages or otherwise, which a Partymay have hereunder, at law, equity or otherwise.     12. Representations and Warranties.     (a) SHI represents and warrants that:     (i) SHI is a corporation duly organized, validly existing and in good standing underthe laws of its state of incorporation and has requisite power and authority to own, leaseand operate its properties and to carry on its business as currently conducted, and isqualified to do business in all jurisdictions where it currently conducts business.     (ii) SHI has the power and authority to enter into this Agreement and to perform itsobligations hereunder, and the execution of this Agreement has been duly authorized by allnecessary corporate or other action.     (iii) This Agreement constitutes a legal, valid and binding obligation of SHI, and isenforceable against it in accordance with its terms, except to the extent suchenforceability may be subject to (a) the laws of bankruptcy, insolvency, fraudulentconveyance or other laws relating to creditors’ rights or (b) general equitable principles.     (iv) The execution and delivery of this Agreement and the performance by SHI of itsobligations hereunder will not violate any laws or regulations applicable to SHI, conflictwith or cause a breach of any obligations to a third party, or violate, breach or conflictwith any of the terms of SHI’s Certificate of Incorporation or By-Laws.     (b) HearUSA represents and warrants that:
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AMENDED AND RESTATED SUPPLY AGREEMENT, December 2006     (i) HearUSA is a corporation duly organized, validly existing and in good standingunder the laws of its state of organization and has requisite power and authority to own,lease and operate its properties and to carry on its business as currently conducted, andis qualified or will be qualified to do business in all jurisdictions where it does or willconduct business.     (ii) HearUSA has the power and authority to enter into this Agreement, including thepower and authority to make payments in respect of purchases and other transactions arisingherefrom, and to perform its obligations hereunder. The execution of this Agreement hasbeen duly authorized by all necessary corporate, governmental or other action.     (iii) This Agreement constitutes a legal, valid and binding obligation of HearUSA, andis enforceable against it in accordance with its terms, except to the extent suchenforceability may be subject to (a) the laws of bankruptcy, insolvency, fraudulentconveyance or other laws relating to creditors’ rights or (b) general equitable principles.     (iv) To the best of HearUSA’s knowledge, HearUSA does not have any liabilities orobligations of any nature, whether absolute, accrued, contingent or otherwise, that wouldbe material to its or their financial condition or business operations that have not beendisclosed to SHI.     (v) The execution and delivery of this Agreement and the performance by HearUSA of itsobligations hereunder will not violate any laws or regulations applicable to HearUSA,conflict with or cause a breach of any obligations of HearUSA to a third party, or violate,conflict with or cause a breach of any of the terms of HearUSA’s Certificate ofIncorporation or By-Laws.     (c) Product Complaint Procedures. HearUSA agrees to provide all complaints with respect tothe Products to SHI, in writing and in the English language, in a timely manner. Submittedcomplaints shall contain sufficient detail to enable SHI to adequately investigate the reportedproblem. Complaints pertaining to injury or death shall be reported to SHI in five (5) workingdays or less from the date of HearUSA’s receipt of such complaint in order that SHI may comply withthe requisite FDA Medical Device Reporting requirements. SHI will take appropriate steps to makeall necessary filings and reports to regulatory agencies in accordance with its obligations. Whenrequested so to do, HearUSA will use its best commercial efforts to provide evaluation andinvestigation support to SHI. SHI, as service provider for the Products, is responsible foranalysis of service reports, service repair data, service trends and telephone support forpotential complaints or corrective action requirements, all as set forth in the Quality SystemsRegulation and other FDA instructions. HearUSA agrees to return parts involved in a complaint toSHI promptly, and in any event within thirty (30) days after notification by HearUSA to SHI of thecomplaint.     13. Dispute Resolution.     (a) In an effort to effectively and economically manage the resolution of any disagreementwhich might arise during the term of this Agreement with respect to the obligations of the parties,or with respect to actions to be taken or not taken under the terms of the Agreement, the partiesagree to appoint a representative (at the line manager level or its equivalent) to meet and discussthe disagreement. If such representatives, after a good faith effort, are not able to resolve thedisagreement to the mutual satisfaction of the parties, the
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AMENDED AND RESTATED SUPPLY AGREEMENT, December 2006disagreement then shall be submitted to the respective Vice Presidents of the parties fortheir attention. If the Vice Presidents are not able to negotiate a mutually acceptable resolutionof the dispute, then the parties agree to submit the disagreement to arbitration and the provisionsof clause (b) of this Section shall apply.     (b) Subject to the provisions of subsection (a) hereinabove, any disagreement, dispute,controversy or claim arising out of this Agreement, including without limitation, interpretationthereof, or any alleged breach or invalidity, which cannot be resolved through the good faithnegotiations of the parties shall be resolved through arbitration. The arbitration shall beconducted in accordance with the commercial arbitration rules of the American ArbitrationAssociation (except to the extent such rules conflict with the provisions of this Agreement, inwhich event, this Agreement shall control). The tribunal shall be composed of three arbitrators(one selected by each party and the third selected by the arbitrators selected by the parties) andshall be conducted in New York, New York (“Site”). Any arbitration proceedings shall be conductedin confidence and the award or decision of the tribunal shall be final and binding upon theparties. The award of the arbitrators shall be enforceable by any court having jurisdictionthereof.     (c) Nothing contained herein shall prohibit or limit in any way any party from seeking orobtaining preliminary or interim injunctive or other equitable relief from a court for a breach oralleged breach of any of the covenants and agreements of the other party to this Agreement.     14. Notices. When any notice is required or permitted to be given under any provision of thisAgreement, such notice shall be made in writing and signed by or on behalf of the party giving suchnotice, mailed certified mail, postage prepaid, return receipt requested, or sent by nationallyrecognized overnight courier, and addressed to the party to whom such notice is to be given at theaddresses set forth below. Notices are considered delivered on the postmarked date or the datedelivered to a courier for next workday delivery. Either party may change its address for thereceipt of any notice in the manner set forth above.   To SHI: To HearUSA: Siemens Hearing Instruments, Inc. HearUSA, Inc.10 Constitution Avenue  1250 Northpoint ParkwayPiscataway, NJ 08855 West Palm Beach, FL 33407Attention: Chief Financial Officer Attention: PresidentTelecopy No. (732) 562-6688 Telecopy No. (561) 688-8893   Copy to: Copy to:   Associate General Counsel LaDawn Naegle, Esq.Siemens Corporation Medical Solutions Bryan Cave LLP51 Valley Stream Parkway  700 13th Street, N.W., Suite 700Malvern, PA 19355 Washington, DC 20005Telecopy No. (610) 448-1710 Telecopy No. (202) 508-6200     15. New Products. The parties understand and agree that the development of new hearing aidsis both anticipated and encouraged. HearUSA wishes to be able to sell new and improved Products.As new Products become commercially available from SHI, SHI will provide notice to HearUSA of suchavailability, and such Products will be added to this Agreement as soon as they
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AMENDED AND RESTATED SUPPLY AGREEMENT, December 2006are commercially available upon the mutual agreement of the parties. SHI shall determine theprices for such new Products, such prices to be commercially reasonable and consistent with thequantity discounts provided under this Agreement. Such Products shall be subject to the sameadjustments in price as described above for the current Products. As a result of the developmentof new technology, certain of the current Products may become less valuable in the marketplace. Tothe extent practicable, SHI will continue to offer the older Products, but HearUSA agrees tochannel its marketing efforts and those of the Facilities towards the introduction and sale of thenew Products added to this Agreement. As the scope of the Products changes, certain older Productsmay be deleted from the Products offered under this Agreement, upon the mutual agreement of theparties.     16. Miscellaneous Provisions.     (a) Assignment or Other Transfer of Obligations. HearUSA expressly agrees that this Agreementmust be honored by any successor entity of HearUSA, and that it is an essential term of thisAgreement that its terms shall survive any acquisition, merger, transfer of assets, or otherrestructuring, reorganization or material transaction affecting HearUSA. Neither this Agreement,nor the rights or duties of any party thereunder, may be assigned, acquired, subcontracted, merged,or otherwise transferred without the written consent of the other party, which consent shall not beunreasonably withheld or delayed, *provided that*SHI shall be permitted to assign this Agreement toa subsidiary, parent or affiliated entity of SHI. If there is a Change of Control of HearUSA (asdefined in the Credit Agreement) then during the Term, SHI shall have the right to determinewhether or not, in its sole discretion, this Agreement should be assigned to the third party or theentity which results from the Change of Control, and, should SHI so request, HearUSA will provideto SHI and (as applicable) will arrange to have provided to SHI by the entity assuming HearUSA’sobligations under this Agreement, additional express written assurance of the abilities andwillingness of the third party or new entity to assume the obligations of HearUSA and provide theservices of HearUSA hereunder. If SHI does not consent to an assignment of this Agreement, thenHearUSA shall have the right to terminate the Agreement on sixty (60) days prior written noticewithout any further obligation or liability hereunder. SHI shall retain all rights which it has ormay have up to the effective date of such termination. This Agreement shall be binding on SHI andHearUSA and their respective successor and permitted assigns.     (b) No Waiver. No waiver of a breach of any provision of this Agreement shall constitute awaiver of any other breach of such provision, nor shall any such waiver be construed as acontinuing waiver.     (c) Governing Law. This Agreement is governed by and construed in accordance with the laws ofthe State of New York, without giving effect to such State’s conflict of laws provisions (otherthan Sections 5-1401 and 5-1402 of the New York General Obligations Law).     (d) Force Majeure. No party shall be liable for failure to perform or delay in performing itsobligations under this Agreement, and shall not be deemed to be in breach of its obligationshereunder, if and to the extent and for so long as such failure or delay in performance or breachis due to natural disaster, war, strikes or other labor disputes, any loss or disruption offacilities, or any other cause beyond the reasonable control of such party. The affected partyshall promptly provide the other party with notice of such occurrence, shall diligently attempt torestore or continue its performance, and shall advise when such event of force majeure shall haveended.
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AMENDED AND RESTATED SUPPLY AGREEMENT, December 2006     (e) Housemark Usage. In connection with the transactions contemplated under this Agreement,SHI has authorized HearUSA to use SHI’s housemark ‘SIEMENS’ in accordance with SHI’s regulationsand guidelines for the use of such housemark. In order to assure proper usage of its housemark,SHI reserves the right to review all proposed usages of the housemark by HearUSA.     (f) Complete Agreement. This Agreement, and the Exhibits hereto, represents the complete andexclusive statement of the arrangement between the parties with respect to the matters containedherein and supersedes all prior agreements and representations, oral or written, on the samesubject matter. Amendments to this Agreement shall not be effective unless made in writing andsigned by the parties hereto. If there is an irreconcilable conflict between the terms containedin any of the Exhibits relating to this Agreement and the terms of this Agreement, the text of thisAgreement shall govern. If there are terms in the Exhibits which govern activities related theretoand which are not addressed in this Agreement, the terms of the Exhibit shall govern. If thenature of the activities to be conducted pursuant to this Agreement anticipate the preparation,execution and use of other agreements (“ancillary documents”) in respect of specific activities,such ancillary documents will be subject to the terms of this Agreement to the extent the termstherein are not in conflict with this Agreement, and in an event of conflict, the terms of theancillary documents shall control the activities described therein.     (g) No Agency. The relationship established hereby is in all respects a commercialrelationship. Nothing herein shall be construed as imposing any fiduciary obligations on eitherparty, or as establishing any partnership or joint venture between the parties, or as rendering oneparty an agent of the other. No agent or employee of one party shall be deemed to be an employeeor agent of the other. The parties acknowledge that their relationship is one of independence andthat, as separate entities, they each have entered into this Agreement for their respectivebusiness interests.     (h) Confidentiality. HearUSA and SHI agree that this Agreement, including any Exhibits,appendices or ancillary agreements, as well as the nature of the services to be provided one to theother hereunder, are confidential. The parties agree to keep this Agreement and the informationdisclosed in, in connection with and with respect to this Agreement as confidential and not revealsuch information to any other entity now, during or after the termination or expiration of thisAgreement. The parties may, however, admit to the existence of a supply agreement between them.This restriction does not apply to any information that (i) is or becomes public through theprocess of law, or through no fault of either party, or (ii) that was revealed to either party by athird party not owing an obligation of confidentiality to the party who owns the informationdisclosed, (iii) information that is rightfully in the recipient’s possession or part ofrecipient’s general knowledge prior to the receipt of such confidential information, or (iv)information that is required to be disclosed by law, the order of a court or regulation of agovernmental agency having jurisdiction over the parties; provided, however, if this Agreement is a“Material Agreement” or HearUSA is otherwise required by the SEC to file this Agreement, HearUSAshall provide to SHI for SHI’s prior review: (i) a copy of HearUSA’s proposed redacted version ofthe Agreement, and (ii) HearUSA’s explanatory cover letter to the SEC. HearUSA shall incorporateall redactions reasonably requested by SHI, provided all redactions are requested upon the adviceof SHI’s counsel.     (i) Taxes. Each party shall remain responsible for any taxes assessed against such partywhich are to be paid by such party as a result of the transactions hereunder.
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AMENDED AND RESTATED SUPPLY AGREEMENT, December 2006     Any reductions in pricing that are realized by Purchaser as a result of meeting ComplianceObligations, or otherwise, are reportable to any Federal or State Reimbursement Program to whichPurchaser participates pursuant to Section 1128 (B) (b) of the Social Security Act. As such SHIshall notify Purchaser at the time that any discount, rebate or cost reduction is achieved of thevalue to Purchaser to assist Purchaser in complying with this obligation.     (j) Headings; Counterparts. The headings contained in this Agreement are for convenience ofreference only and shall not constitute a part hereof, or define, limit or in any was affect themeaning of any of the terms or provisions hereof. This Agreement may be executed in two or morecounterparts and any party hereto may execute any such counterpart. Each counterpart, whenexecuted and delivered, shall be deemed to be an original and all of such counterparts takentogether shall be deemed to be one and the same instrument.     (k) Public Announcements. Except as the other party shall authorize in writing, or asrequired by law, the parties shall not disclose, and shall cause their respective officers,directors, employees, affiliates and advisors not to disclose, any matter or matters relating tothis transaction to any person not an officer, director, employee, affiliate or advisor of suchparty. If a party is required by law to make a public announcement or disclosure, then such partyshall, if practicable, consult with the other as to the timing and content of such announcementbefore such announcement is made. The parties shall agree about the content of any statement orcommunication to the public or the media prior to the release thereof.     (l) Survival of Certain Provisions. Notwithstanding the termination or expiration of thisAgreement, the following provisions shall survive, along with either party’s obligations to pay anypayments or fees accrued prior to termination or expiration: Sections 7, 8, 9, 10, 11(d), 13, 14,and 16.     (m) Audits. SHI may, at reasonable intervals, conduct audits of HearUSA’s relevant books andrecords to ascertain whether or not HearUSA is meeting its obligations under this Agreement. Ifany audit shows that HearUSA has deviated five percent (5%) or more from the Minimum PurchaseRequirement reported by HearUSA for one or more Fiscal Quarters covered by the audit, then thereasonable costs of such audit shall promptly be paid by HearUSA and an adjustment in the rebatesmay be required.[SIGNATURE PAGE FOLLOWS.]
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AMENDED AND RESTATED SUPPLY AGREEMENT, December 2006     IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of theEffective Date.         **HearUSA, INC.**           By: