Document:

<PAGE>

                                                                   EXHIBIT 10.14

                                   SUBLEASE

     1.   Parties:

     This Sublease is made and entered into as of August 6,1999 by and between
Excite, Inc. ("Sublandlord") and Tioga Systems, Inc., a Delaware Corporation,
("Subtenant") under the Master Lease dated March 14, 1997 as amended by the
First Amendment To Lease dated October 1, 1997 (as amended, the "Master Lease")
between Martin/Campus Associates, L.P., as "Lessor" and Sublandlord under this
Sublease as "Lessee". A copy of the Master Lease is attached hereto as
Attachment I and incorporated herein by this reference.

     2.   Provisions Constituting Sublease:

          2.1  This Sublease is subject and subordinate to all of the terms and
conditions of the Master Lease.  Subtenant hereby assumes and agrees to perform
all of the obligations of "Lessee" under the Master Lease to the extent said
obligations apply to the Subleased Premises and Subtenant's use of the Common
Areas, except as specifically set forth herein.  Sublandlord hereby agrees to
use commercially reasonable efforts to cause Lessor to perform all of the
obligations of Lessor under the Master Lease to the extent said obligations
apply to the Subleased Premises and Subtenant's use of the Common Areas.
Subtenant shall not commit or permit to be committed on the Subleased Premises
or on any other portion of the Project any act or omission which violates any
term or condition of the Master Lease.  Except to the extent waived or consented
to in writing by the other party or parties hereto who are affected thereby,
neither of the parties hereto will, by renegotiation of the Master Lease,
assignment, subletting, default or any other voluntary action, avoid or seek to
avoid the observance or performance of the terms to be observed or performed
hereunder by such party, but will at all times in good faith assist in carrying
out all the terms of this Sublease and in taking all such action as may be
necessary or appropriate to protect the rights of the other party or parties
hereto who are affected thereby against impairment.  Nothing contained in this
Section 2.1 or elsewhere in this Sublease:  (i) shall obligate Sublandlord to
exercise its option to extend the Term of the Master Lease; or (ii) shall
prevent or prohibit Sublandlord (a) from exercising its right to terminate the
Master Lease pursuant to paragraph 23 thereof or (b) from assigning its interest
in this Sublease or subletting the Premises to any other third party.

          2.2  All of the terms and conditions contained in the Master Lease are
incorporated herein, except as specifically provided below, and such terms and
conditions, together with the terms and conditions specifically set forth in
this Sublease, shall constitute the complete terms and conditions of this
Sublease, except the following paragraphs of the Master Lease which shall remain
solely the rights and obligations of Sublandlord: 1, 4, 5, 7, 9, 15, 16, 17, 35,
Work Letter C, Exhibit D and E.

     3.   Subleased Premises and Rent:

          3.1  Subleased Premises:  Sublandlord leases to Subtenant and
               ------------------
Subtenant leases from Sublandlord the Subleased Premises upon all of the terms,
covenants and conditions contained in this Sublease.  The Subleased Premises
consist of those portions of the premises located at 575 Broadway, Redwood City,
CA, as displayed in the floor plan attached hereto as Exhibit A, of
                                                      ---------
approximately 23,216=/- square feet.
<PAGE>

          3.2  Rent:  Subtenant shall pay to Sublandlord as Full Service Rent
               ----
for the Subleased Premises the sum of Eighty-One Thousand Two Hundred Fifty-Six
Dollars ($81,256.00) per month, without deductions, prior notice or demand. Rent
shall be payable by Subtenant to Sublandlord in consecutive monthly installments
on or before the first (1st) day of each calendar month from September 1, 1999
through August 14, 2000. Effective September 1, 2000 through August 14, 2001,
the monthly Full Service Rent shall be increased to Eighty-Three Thousand Five
Hundred Seventy-Eight Dollars ($83,578.00). If the Sublease Commencement Date or
the Termination Date of the Sublease occurs on a date other than the first (1st)
day of a calendar month, then the Rent for such partial month shall be prorated
and the prorated Rent shall be payable on the Sublease Commencement Date or on
the first (1st) day of the calendar month in which the Sublease Termination Date
occurs, respectively.

          3.3  Security Deposit:  In addition to the Rent specified above,
               ----------------
Subtenant shall pay to Sublandlord, upon execution of this Sublease, an
equivalent of one month's Rent, the sum of Eighty-One Thousand Two Hundred
Fifty-Six Dollars ($81,256.00), as a non-interest bearing Security Deposit.
Sublandlord may commingle the Security Deposit with its other funds and is not a
trustee of the Security Deposit.  Subtenant is not entitled to interest on the
Security Deposit.  Sublandlord may use the Security Deposit to cure Subtenant's
defaults and to compensate Sublandlord for damages suffered by reason of
Subtenant's defaults.  If Sublandlord so uses a portion of the Security Deposit,
Subtenant must replenish the Security Deposit to its full amount within five (5)
days after written demand.  The Security Deposit shall not be applied by
Subtenant against the last month's Rent.  In the event Subtenant has performed
all of the terms and conditions of this Sublease during the term hereof,
Sublandlord shall return to Subtenant, within ten (10) days after Subtenant has
vacated the Subleased Premises, the Security Deposit less any sums due and owing
to Sublandlord.

     4.   Use:

     Subtenant shall use the Subleased Premises only for those purposes
permitted in the Master Lease, unless Sublandlord and Lessor consent in writing
to other uses prior to the commencement thereof.

     5.   Sublease Term:

          5.1  Sublease Term: The Sublease Term shall be for the period
               -------------
commencing September 1, 1999 ("Commencement Date") and continuing through August
14 31, 2001, or such earlier date as the Master Lease or this Sublease may be
terminated in accordance with its terms ("Sublease Termination Date"). In no
event shall the Sublease Term extend beyond the Term of the Master Lease.

          5.2  Inability to Deliver Possession: Subtenant shall be entitled to
               -------------------------------
early occupancy of the Subleased Premises as of August 20, 1999 ("Early
Occupation Date").  Subtenant shall not be obligated to pay Rent for early
occupancy, but otherwise the early occupancy shall be on the terms

                                       2
<PAGE>

and conditions of this Sublease and Subtenant's obligation to pay Rent shall
commence on the Commencement Date.  In the event Sublandlord is unable to
deliver possession of the Subleased Premises at the Early Occupation Date,
Sublandlord shall not be liable for any damage caused thereby, nor shall this
Sublease be void or voidable but Subtenant shall not be liable for Rent on or
after the Commencement Date until such time as Sublandlord offers to deliver
possession of the Subleased Premises to Subtenant. The Sublease Term shall not
be extended by such delay. If Subtenant, with Sublandlord's consent, takes
possession prior to commencement of the Sublease Term, Subtenant shall do so
subject to all the covenants and conditions hereof and shall pay Rent for the
period ending with the commencement of the Sublease Term at the same rental as
that prescribed for the first month of the Sublease Term prorated at the rate of
1/30/th/ thereof per day. In the event Sublandlord has been unable to deliver
possession of the Subleased Premises within thirty (30) days from the
Commencement Date, Subtenant, at Subtenant's option, may terminate this Sublease
by written notice to Sublandlord prior to delivery of the Subleased Premises.

          5.3  Right of First Offer: Subtenant shall have no right to remian in
               --------------------
the Subleased Premises at any time after the Sublease Termination Date. In the
event that prior to the Sublease Termination Date Sublandlord elects in its sole
discretion to sublease the Subleased Premises for any period that commences on
or after the day following the Sublease Termination Date, Sublandlord shall so
notify Subtenant in writing and shall offer to continue to sublease the
Subleased Premises to Subtenant for a fair market rental determined by
Sublandlord in its sole discretion exercised in good faith for such period as
Sublandlord may elect in its sole discretion and otherwise on terms
substantially the same as those contained in this Sublease. Subtenant shall have
fifteen (15) days in which to accept Sublandlord's offer and enter into a new
sublease agreement or extension of this Sublease. If Subtenant fails to do so,
this right of first offer shall be of no further force or effect, Subtenant
shall have no further rights hereunder, and Sublandlord shall have the right to
sublease the Subleased Premises to such persons and on such terms (subject to
the Master Lease) as Sublandlord may elect in its sole discretion.

     6.   Operating Expenses:

     This is a Full Service Sublease and Sublandlord shall pay all direct
operating expenses of the Subleased Premises and expense pass throughs for the
property as may be provided for in the Master Lease.  Except as expressly
provided herein, Sublandlord shall provide all standard utility services (except
telephone usage), all of the telephone and data communication equipment listed
in the Inventory of Communications Equipment (attached hereto as Exhibit B) and
                                                                 ---------
janitorial services (as described in the attached Exhibit D) to the Subleased
                                                  ---------
Premises. Subtenant acknowledges that the Building provides HVAC from 6:00 a.m.
to 10:00 p.m., Monday through Friday, and 6:00 a.m. to 5:00 p.m. on Saturdays
and Sundays. If Subtenant desires after-hours HVAC service, Sublandlord and
Subtenant shall make an arrangement so that Subtenant may procure such after-
hours HVAC directly from the Lessor, all at Subtenant's sole cost and expense.
If the Lessor invoices Sublandlord for Subtenant's after-hours HVAC usage,
Subtenant shall pay such amount directly to Sublandlord within ten (10) days
after receipt of invoice so that Sublandlord may timely pay Lessor without
advancing funds on Subtenant's behalf.

     7.   Personal Property:

                                       3
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     The furniture and fixtures provided by Sublandlord for Subtenant's use
during the term of this Sublease are listed on Exhibit C attached hereto and
                                               ---------
are collectively referred to as the "Personal Property".  Sublandlord shall
deliver such Personal Property to Subtenant in good condition and repair.  By
taking possession of the Subleased Premises, Subtenant shall be deemed to have
acknowledged and agreed that all Personal Property is present at the Subleased
Premises and is in good condition and repair.  On the Termination Date,
Subtenant shall return all of the Personal Property to Sublandlord in good
condition and repair, reasonable wear and tear and damage by fire, earthquake or
other casualty excepted.  Subtenant shall not modify or remove any of the
workstations or other Personal Property without Sublandlord's consent.

     8.   Security and Telephones:

     Sublandlord shall have absolutely no responsibility or liability with
respect to the security of the Subleased Premises.  Without limiting the
generality of the foregoing: (a) with respect to the card-key system,
Sublandlord shall leave the existing card-key system in place, and upon
Subtenant's request, Sublandlord shall provide card-keys to Subtenant and shall
program the card-key system to limit access to the Subleased Premises to
Subtenant's employees; (b) Subtenant may perform whatever rekeying it may elect,
all at its sole risk and cost, and Subtenant shall ensure that Sublandlord has
operative keys to all areas of the Subleased Premises at all times; and (c) the
fire alarm and burglar alarm systems shall be left in place for Subtenant's use
if Subtenant so elects, but without any Sublandlord representation, warranty or
other duty to Subtenant with respect thereto. Sublandlord shall provide
reasonable access to Sublandlord's existing telephone and voice mail systems (as
described in Exhibit B) for the use of Subtenant and Subtenant's employees in
the conduct of their business, but all telephone service shall be the sole
responsibility of Subtenant.

     9.   Sublandlord's Right to Enter Upon the Subleased Premises:

     In accordance with paragraph 19 of the Master Lease, Subtenant shall permit
Sublandlord and Sublandlord's Agents to enter the Subleased Premises at all
reasonable times with reasonable notice except for emergencies in which case no
notice shall be required.

     10.  Indemnity:

     Except for claims arising from the gross negligence or willful misconduct
of Sublandlord (against which Sublandlord shall indemnify and hold Subtenant
harmless), Subtenant shall indemnify, defend and hold Sublandlord harmless from
and against any and all claims, damages, losses, liabilities and costs
(including without limitation reasonable attorneys' fees, costs and
disbursements) relating in any manner, directly or indirectly, in whole or in
part, to: (a) any failure by Subtenant to timely and properly perform each of
its obligations under this Sublease; (b) any accident occurring or other
circumstance existing on or about the Subleased Premises at any time during the
period between the Early Occupation Date or Sublease Commencement Date,
whichever is earlier, and the Termination Date (and any holdover period) due to
any cause whatsoever; and (c) any negligence or willful misconduct on the part
of Subtenant or any of its officers, directors, employees, guests, invitees,
agents or contractors. Subtenant shall promptly assume its defense and
indemnification obligations upon written notice from Sublandlord. Subtenant
shall not settle any

                                       4
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claim without the consent of Sublandlord if Sublandlord would incur any
liability for such claim under or following such a settlement, which consent
shall not be unreasonably withheld.

     11.  Condition of the Subleased Premises:

     The Subleased Premises shall be delivered in their "AS IS" condition.
Sublandlord shall have no obligation to make any capital improvements, repairs
or alterations to the Subleased Premises.  By taking possession of the Subleased
Premises, Subtenant shall be deemed to have accepted the Subleased Premises in
its condition on the date of delivery of possession.  Subtenant acknowledges
that neither Sublandlord nor any agent of Sublandlord has made any
representation or warranty with respect to the condition of the Subleased
Premises, the parking and common areas surrounding the Subleased Premises, or
with respect to the suitability of same for the conduct of Subtenant's business.
Subtenant further acknowledges that Sublandlord shall have no obligation to
construct or complete any additional alterations or improvements within or about
the Subleased Premises.  Subtenant shall not alter or improve the Subleased
Premises without the consent of Sublandlord and Lessor, to the extent required
under the Master Lease.  Notwithstanding the foregoing, to Sublandlord's actual
knowledge, the existing electrical and data communications equipment and
associated wiring in the Subleased Premises is in good working condition and
repair.

     12.  Sublandlord's Representations and Warranties:

     Sublandlord represents and warrants to Subtenant that: (a) there are no
amendments to the Master Lease other than the First Amendment To Lease dated
October 1, 1997; (b) to Sublandlord's actual knowledge, neither Sublandlord nor
Lessor is in default under the Master Lease; and (c) to Sublandlord's actual
knowledge, there is no claim or threatened claim by Lessor that Sublandlord is
in default under the Master Lease.

     13.  Notices:

     All notices, demands, consents and approvals which may or are required to
be given by either party to the other hereunder shall be given in the manner
provided in the Master Lease, at the addresses shown on the signature page
hereof. Sublandlord shall notify Subtenant of any default under the Master
Lease, or of any other event of which Sublandlord has actual knowledge which
will impair Subtenant's ability to conduct its normal business at the Subleased
Premises, as soon as reasonably practicable following Sublandlord's receipt of
notice from the Landlord of a default or actual knowledge of such impairment. If
Sublandlord elects to terminate the Master Lease, Sublandlord shall so notify
Subtenant by giving at least thirty (30) days notice prior to the effective date
of such termination pursuant to paragraph 23 thereof.

     14.  Broker Fee:

     Each party represents and warrants to the other that it has not had any
contract or dealings regarding the Property, or any communication in connection
with the subject matter of this transaction, through any licensed real estate
broker or other person who can claim a commission or finder's fee. In the event
that any broker or finder asserts a claim for a commission or finder's fee based
upon any contract, dealing or communications with either party, such party shall
indemnify, defend and hold the other party harmless from all costs and expenses
(including without limitation reasonable attorneys' fees and costs of defense at
the trial and appellate levels) incurred in

                                       5
<PAGE>

connection with such claim.  The provisions of this section shall survive any
termination of this Sublease.

     15.  Subtenant Improvements/Compliance With Americans With
Disabilities Act:

     Subtenant shall be responsible for the installation and cost of any and all
improvements, alterations or other work required on or to the Subleased Premises
or to any other portion of the property and/or building of which the Subleased
Premises are a part, required or reasonably necessary because of: (1)
Subtenant's use of the Subleased Premises or any portion thereof; or (2) the use
by a subtenant by reason of assignment or sublease. Compliance with the
provisions of this Section 13 shall be a condition of Sublandlord granting its
consent to any assignment or sublease of all or a portion of this Sublease and
the Subleased Premises described in this Sublease. Sublandlord shall be
responsible for the installation and cost of any and all improvements,
alterations or other work required on or to the Subleased Premises or to any
other portion of the property and/or building of which the Subleased Premises
are a part, required or reasonably necessary under the Americans With
Disabilities Act of 1990.

     16.  Toxic Contamination Disclosure:

     Sublandlord and Subtenant each acknowledge that they have been advised that
numerous federal, state, and/or local laws, ordinances and regulations ("Laws")
affect the existence and removal, storage, disposal, leakage of and
contamination by materials designated as hazardous or toxic ("Toxics"). Many
materials, some utilized in everyday business activities and property
maintenance, are designated as hazardous or toxic.

     Some of the Laws require that Toxics be removed or cleaned up by
landowners, future landowners or former landowners without regard to whether the
party required to pay for "clean up" caused the contamination, owned the
property at the time the contamination occurred or even knew about the
contamination. Some items, such as asbestos or PCBs, which were legal when
installed, now are classified as Toxics, and are subject to removal
requirements. Civil lawsuits for damages resulting from Toxics may be filed by
third parties in certain circumstances.

     Sublandlord and Subtenant each acknowledge that Sublandlord has made no
representations or warranties with respect to environmental assessment or
physical condition of the Subleased Premises, including, but not limited to,
matters relating to: (i) problems which may be posed by the presence or disposal
of hazardous or toxic substances on or from the Subleased Premises, (ii)
problems which may be posed by the Subleased Premises being within the Special
Studies Zone as designated under the Alquist-Priolo Special Studies Zone Act
(Earthquake Zones), Section 2621-2630, inclusive of the California Public
Resources Code, and (iii) problems which may be posed by the Subleased Premises
being within a HUD Flood Zone as set forth in the U.S. Department of Housing and
Urban Development "Special Flood Zone Area Maps," as applicable.

     independent investigation or determination of the physical or environmental
condition of the Subleased Premises, including, but not limited to, the
existence or nonexistence of any underground tanks, sumps, piping, toxic or
hazardous substances on the Subleased Premises. Subtenant agrees that it will
rely solely upon its own investigation and/or the investigation of professionals
retained by it.

                                       6
<PAGE>

     17.  Rent Abatement and Damages to Personal Property:

     In the event Sublandlord, pursuant to the terms of the Master Lease, is
entitled to and receives rent abatement, then to the extent such rent abatement
affects the Subleased Premises, Subtenant shall be entitled to a corresponding
rent abatement in an amount that the net rentable area of the Subleased Premises
bears to the total net rentable area of the Master Lease, and only to the extent
any such abatement applies to the Sublease Term. In addition, any amounts paid
or credited to Sublandlord under the terms of the Master Lease for damage to
Subtenant's personal property shall be credited to Subtenant, subject to the
same limitations set forth above.

     18.  Sign Rights:

     Subtenant shall be permitted to place its sign on the exterior of the
Subleased Premises in accordance with paragraph 20 of the Master Lease.
Sublandlord shall remove its signage within fifteen (15) days after the Sublease
Commencement Date.

     19.  Entire Agreement:

     This Sublease and the Exhibits attached hereto set forth the entire
agreement between the parties with respect to the Sublease of the Subleased
Premises. Except as specifically set forth herein, there are no agreements,
representations, or warranties whatsoever between the parties as to any matter.
Any prior agreements, conversations, or writings, are merged herein, superseded
hereby and extinguished.

     Exhibits to be attached include:

     Exhibit A  -   Floor plan showing the improvements to the Premises
     ---------

     Exhibit B  -  Inventory of Communications Equipment supplied by Sublandlord
     ---------

     Exhibit C  -  Inventory list of all furniture, fixtures and other
     ---------
                   equipment supplied by Sublandlord

     Exhibit D  -  Janitorial services specification or copy of Sublandlord's
     ---------
                   current janitorial services agreement

Sublandlord:  EXCITE, INC.                   Address:  555 Broadway
                                                       Redwood City, CA 94063

By          /s/ Elizabeth M. Berez           Date:     8/6/99
   ------------------------------------            -----------------------------
Subtenant:  TIOGA SYSTEMS, INC., a           Address:  1816 Embarcadero Road
            Delaware corporation                             Palo Alto, CA 94303

By          /s/ Mark Vranesh                 Date:     8/6/99
   ------------------------------------            -----------------------------

                                       7
<PAGE>

                              CONSENT TO SUBLEASE
                              -------------------

DATE:                  ___________________ 1999

RE: BUILDING:          MidPoint Technology Park, 575 Broadway, Redwood City, CA

SUBLET PREMISES:       Approximately 23,216 rentable square feet

DATE OF MASTER LEASE:  Lease dated March 14, 1997, ("Master Lease")

MASTER LESSOR:         Martin/Campus Associates, L.P., a Delaware limited
                        partnership

MASTER TENANT:         Excite, Inc., a Delaware corporation

SUBTENANT:             Tioga Systems, Inc., a Delaware corporation

TERM OF SUBLETTING:    August 15, 1999 through August 14, 2001

Mr.  Robert Hood
Excite, Inc.

Dear Mr.  Hood:

     Pursuant to the terms of the Master Lease covering the above-captioned
premises ("Sublet Premises"), Excite has requested Landlord's consent to your
subletting the Sublet Premises to the above-referenced Subtenant, hereinafter
referred to as the "Sublease."

     Landlord hereby grants consent to such Subletting upon the following
express terms and conditions:

     Such subletting is subject and subordinate to the Master Lease and to all
of its terms, covenants, conditions, provisions and agreements.

     1.   The Subtenant shall perform faithfully and be bound by all of the
applicable terms, covenants, conditions, provisions and agreements of the Master
Lease, for the period of such subletting and to the extent of the Sublet
Premises.

     2.   Neither such subletting nor this consent thereto shall:

          (a)  release or discharge you from any liability, whether past,
present or future, under the Master Lease;

          (b)  operate as a consent or approval by us to or of any of the terms,
covenants, conditions, provisions or agreements of the Sublease and we shall not
be bound thereby;
<PAGE>

          (c)  be construed to modify, waive or affect any of the terms,
covenants, conditions provisions or agreements of the Master Lease, or to waive
any breach thereof, or any of our rights as Landlord thereunder; or to enlarge
or increase our obligations as Landlord thereunder, or

          (d)  be construed as a consent by us to any further subletting either
by you or by the Subtenant or to any assignment by you of the Master Lease or
assignment by the Subtenant of the Sublease, whether or not the Sublease
purports to permit the same and, without limiting the generality of the
foregoing, both you and the Subtenant agree that the Subtenant has no right
whatsoever to assign, mortgage or encumber the Sublease nor to sublet any
portion of the Sublet Premises or permit any portion of the Sublet Premises to
be used or occupied by any other party; in connection herewith, both you and the
Subtenant agree that an assignment by operation of law or a transfer of control
of Subtenant (including but not limited to transfer of the controlling interest
of the stock of Subtenant, if Subtenant is a corporation) shall be deemed to be
a prohibited assignment hereunder, subject to our consent.

     4.   You shall not be released from any liability under the Master Lease
because of our failure to give notice of default under or in respect of any of
the terms, covenants, conditions, provisions or agreements of the Master Lease.

     5.   In the event of your default under the provisions of the Master Lease,
the rent due from the Subtenant under the Sublease shall be deemed assigned to
us and we shall have the right, under such default, at any time at our option,
to give notice of such assignment to the Subtenant and to demand that Subtenant
pay the rent and any other charges due under the Sublease directly to us. We
shall credit you with any rent received by us under such assignment but the
acceptance of any payment on account of rent from the Subtenant as the result of
any such default shall in no manner whatsoever be deemed an attornment by the
Subtenant to us, or serve to release you from liability under the terms,
covenants, conditions and provisions of agreements under the Master Lease.
Notwithstanding the foregoing, any other payment of rent from the Subtenant
directly to us, regardless of the circumstances or reasons therefor, shall in no
manner whatsoever be deemed an attornment by the Subtenant to us in the absence
of a specific written agreement signed by us to such an effect.

     6.   Both you and the Subtenant shall be and continue to be liable for the
payment of all bills rendered by us for charges incurred by the Subtenant for
services and materials supplied to the Sublet Premises.

     7.   The term of the Sublease shall expire and come to an end on its
natural expiration date or any premature termination date thereof or
concurrently with any premature termination or expiration of the Master Lease
(whether by consent or other right, now or hereafter agreed to by Landlord or
Tenant under the Master Lease, or by operation of law or at Landlord's option in
the event of default by tenant under the Master Lease).

     8.   This consent is not assignable, nor shall this consent be deemed a
consent to any amendment, modification, extension or renewal of the Sublease,
without our prior written consent.
<PAGE>

     9.   You and the Subtenant covenant and agree that under no circumstances
shall we be liable for any brokerage commission or other charge or expense in
connection with the Sublease and you both agree to indemnify us against same and
against any cost or expense (including but not limited to counsel fees) incurred
by us in resisting any claim for any such brokerage commission.

     10.  Notwithstanding any provision of the Sublease or this Consent to the
contrary, the Subtenant agrees that Master Landlord shall not be: (i) liable for
any act or omission of the Master Tenant as Sublessor under the Sublease; (ii)
subject to any offsets or defenses which the Subtenant may have against the
Master Tenant as Sublessor; (iii) bound by any payment of rent or other sums
made by the Subtenant for any advance period under the Sublease; (iv) bound by
any security deposits which the Subtenant might have paid to the Master Tenant
as Sublessor or any other party, or (v) bound by any amendment or modification
of the Sublease made without Master Landlord's prior written consent, which may
be withheld in the sole and absolute discretion of Master Landlord.

     11.  This Consent shall not be effective until executed by all the parties
hereto.

     12.  Concurrent with the execution of this Consent, Master Tenant shall pay
to Master Landlord an amount equal to $300.00, representing Master Landlord's
attorney fees and costs incurred in connection with the review of the Sublease
and the preparation of this Consent.

     13.  Master Landlord shall be named as an additional insured under all
liability insurance required to be carried by the Subtenant pursuant to the
Sublease, and Master Tenant shall furnish Master Landlord with a certificate of
insurance before the commencement of the term of the Sublease.

     14.  Master Landlord hereby waives all rights under paragraph 15.D of the
Lease during the term of the Sublease, including the ability to collect fifty
percent (50%) of any excess of the Subrent over the Rent payable pursuant to the
Lease and caused by this Consent to Sublease.

                         [SIGNATURES FOLLOW THIS PAGE]
<PAGE>

     The execution of a copy of this Consent by you (as Master Tenant) and by
the Subtenant shall indicate your joint and several confirmation of the
foregoing conditions and of your agreement to be bound thereby and shall
constitute Subtenant's acknowledgment that it has received a copy of the Master
Lease from you.

MASTER LESSOR:
Martin/Campus Associates., a Delaware limited partnership

By:  Martin/Redwood Associates, L.P., a California limited partnership
     Its: General Partner

     By:  The Martin Group of Companies, Inc., a California corporation
          Its: General Partner

          By: _____________________________________________
          Name: ___________________________________________
          Title: __________________________________________
          Date: ___________________________________________

MASTER TENANT:
Excite, Inc., a Delaware corporation

          By:    /s/ Elizabeth M. Berez
                 ------------------------------------------
          Name:  Elizabeth M. Berez
                 ------------------------------------------
          Title: VP, Finance
                 ------------------------------------------
          Date:  August 6, 1999
                 ------------------------------------------

SUBTENANT:
Tioga Systems, Inc., a Delaware corporation

          By:    /s/ Mark Vranesh
                 ------------------------------------------
          Name:  Mark Vranesh
                 ------------------------------------------
          Title: Dir Fin/Corp. Sec
                 ------------------------------------------
          Date:  8/6/99
                 ------------------------------------------
<PAGE>

                                  EXHIBIT A
                                  ---------

graphic indicating offices around the inside perimeter of the office building,
cubicles throughout the interior of the office building and a common use area
in the middle of the office building.

Excite@Home
575 Broadway
Revised:  8/16/99
R. Spieler

<PAGE>

                                  EXHIBIT B
                                  ---------
                     Inventory of Communications Equipment

<TABLE>
<CAPTION>
Quantity         Part #                                         Description
                 Meridian 1 Opt 11C
<S>               <C>                                           <C>
  1               NTSF1001                                      OPTION 11C SNGL CABNT HW PKG (AC)
  1               NTSF2001                                      OPTION 11C 30FT EXPANSION CABINET
  1               NTDK22AA                                      30 FT FIBER DAUTERBOARD
  1               NT6R78AB                                      OPT 11C R23 ENG DOCUMEN PKG COIL
  1               NTSF8021                                      OPT 11 C ENTERPRISE BUS SW PKG
  1               NTSF8103                                      OPT 11 C 100 ADD TNS ENTERPRISE
  1               NT8D09AL                                      ANALOG MESSAGE WAITING LINE CARD
  4               NT8D14BB                                      UNIVERSAL TRUNK CARD
 10               NT8D02GA                                      DIGITAL LINE CARD (DLC)
  1               AMP1102                                       CREDIT: System AMP
                  Meridian Mail 12Port/24 Hour
  1               NTZC49AA                                      ENH MM CARD OPT 4-12 PS, 5/10/24/54HRS
  1               SW7100H                                       MMAIL CARD OPTION R12 BASE SW
  2               NTZC51AA                                      ENH MM OP FS PORTS - 5&6 OR 9&10
  2               NTZC51BA                                      ENH MM OP FS PORTS - 7&8 OR 11&12
 10               NT1F94AA                                      MMAIL 12 VOICE MESSAGING PKG
  1               NTAK30DB                                      EXTERNAL TAPE DRIVE, TANDBERG
  1               A0630697                                      MAGNUS 2.5B DATA CARTRIDGE
  1               SW7102                                        MM CARD OPT EXP STRG SW LEVEL 1
  1               SW7103                                        MM CRD OPT EXP STRG SW LEVEL 2
  1               SW7140                                        MM CRD OPT EXP STRG SW LEVEL 3-4
                  Peripheral Equipment
  1               017-102-XX                                    CFR1500 1500 VA/1005W ON-LINE UPS
  1               032-047-21                                    EBP48E EXTERNAL BATTERY PACK
  1               LX300                                         EPSON LX-300 9-PIN DOT MTX PRINTER-SE
  1               70364                                         M/F 10' RS232 SERIAL CABLE
  1               000839-0                                      US ROBOTICS 28.8 KBPS MODEM
  1               HQ-P1331A                                     MICO-MINI PRINTER BUFFER, 64K, SER/SE
  1               SEBII                                         SITE EVENT BUFFER - 2 PORT/128K
 30               -----------------------                       MERIDIAN 266 DISPLAY PHONES
 60               -----------------------                       MERIDIAN 2008 PHONES
  1               -----------------------                       RECEPTIONIST CONSOLE
</TABLE>
                                   EXHIBIT B
                                  Page 1 of 1

<PAGE>

                                   EXHIBIT C

                            575 Broadway Inventory

<TABLE>
<CAPTION>

Hardwall Offices
<S>                              <C>
Rosemount Workstations            12
Task Chairs                       12
Guest Chairs                      24
Ped (BBF)                         12
Ped (FF)                          12

Cubicles                         103

Herman Miller Ethospace
Task Chairs                      103
White Boards                     102
Ped (BBF)                        103
Ped (FF)                         103
Overhead Bin                     103
Overhead Shelf                   103

Break/Common Areas

8' Racetrack Table                 2
Credenza                           2
Red Conference Room Chairs        14
Blue Conference Room Chairs       10
Green Conference Room Chairs      10

Black Soft Seating                20
Coffee Tables                      4

Lowenstein High Seating Red        6
Lowenstein High Seating Black      6
Lowenstein Low Seating Red         4
Lowenstein Low Seating Black       4
48" square table                   2
</TABLE>

<PAGE>

                                   EXHIBIT D

                       PENINSULA JANITORIAL SERVICE CO.
================================================================================

<PAGE>

<TABLE>
<CAPTION>

Monthly Service Plan:                                           Monthly
---------------------                                           -------
<S>                                                     <C>
Routine 5 x weekly service (Sunday - Thursday)...........       $3,675.00

Day porter service 5 x weekly (Monday - Thursday 10:00
to 6:00, and Friday 1:00 to 7:00)........................       $1,980.00

Optional:
---------
Second floor area 5 x weekly service.....................       $1,840.00

Floor Care Program:
-------------------
Window wash 2 x yearly inside/outside....................       $   80.00
Clean carpets quarterly..................................       $  740.00
Shampoo all wall to wall 1 x yearly......................       $  440.00
Scrub & wax all floors 1 x yearly & buff monthly.........       $  320.00
4 x yearly dust all high areas...........................       $  210.00

Total Monthly Professional Fee...........................       $7,445.00

</TABLE>

<TABLE>
<CAPTION>

PERIODIC SERVICES (priced separately)                    Per Service       Per Sq. Ft.       $ Minimum
                                                       ----------------  ---------------  ----------------
<S>                                                    <C>               <C>              <C>
Carpeting:
----------
 Truck-mounted steam extraction......................                                .06      $45.00

 Tile:  Vinyl
-------------
 Spray & buff tile...................................                                            "
 Machine scrub & recoat..............................                                .10         "
 Strip & wax tile....................................                                .15         "

 Tile:  Ceramic
---------------
 Machine scrub & reseal..............................                                .10         "
 Strip, restore grout & reseal.......................                                .15         "
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

ENTRANCES / OUTSIDE                                            Weekly    Monthly  Verify
<S>                                                           <C>        <C>      <C>
  Remove trash including all small pieces of debris.........     5
  Remove cobwebs at entrances (as needed)...................     5
  Clean ash urns............................................     5
  Clean entrance glass & door frames........................     5
  Empty trash receptacles...................................     5
  Clean trash receptacles (as needed).......................     1
  Spot clean lobby windows, especially lower areas..........     5

LOBBY AND RECEPTION AREA                                      Weekly     Monthly  Verify
All routine services apply, including:
--------------------------------------
  Entrance doors:  Clean inside and out.....................    5
  Detail clean & dust all furniture & furnishings...........    5
  Polish bright metal.......................................    5
  Detail clean reception desk...............................    5
  Remove cobwebs (high, low, corners).......................    5
  Spot clean upholstered furniture (as needed)..............    5
  Vacuum upholstered furniture (as needed)..................    5
  Vacuum carpeting..........................................    5
  Dry mop and damp mop wooden grain vinyl...................    5
  Detail clean floor edges & corners........................    1
  Dust ceiling lights (as needed) & high ceiling............    1
  Scrub entry thresholds....................................               1
  Clean carpeting...........................................               1
  Fully clean lobby glass (inside & outside)................               1

GENERAL OFFICE AREAS & CONFERENCE ROOMS                       Weekly     Monthly  Verify
  Vacuum carpet (moving light furniture)....................    5
  Spot clean carpets........................................    5
  Dust desks, work surfaces, filing cabinets and furniture..    5
  Clean all table tops......................................    5
  Damp wipe surfaces to remove stains (as needed)...........    5
  Empty trash & replace liners as needed....................    5
  Sweep & damp mop tile floors..............................    5
  Remove scuff marks from tile..............................    5
  Clean and polish bright metal as needed...................    5
  Clean & polish drinking fountains.........................    5
  Empty water cooler tray scrub / disinfect as needed.......    5
  Spot clean interior partition glass.......................    5
  Remove cobwebs / high, low, corners.......................    5
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

GENERAL OFFICE AREAS (continued)                              Weekly     Monthly  Verify
<S>                                                           <C>        <C>      <C>
  Dust white board trays....................................    5
  Properly arrange all furniture............................    5
  Turn off all designated lights when finished..............    5
  Remove smudges from doors & frames........................    5
  Dust partition tops.......................................    3
  Wipe clean copiers, printers, & fax machines..............    1
  Clean & disinfect telephones..............................    1
  Detail dust and wipe: e.g. chair legs, picture frames.....    1
  Detail clean desks & work surfaces........................    1
  Wipe clean monitor & computer casings.....................    1
  Feather dust computer keyboards & screens.................    1
  Dust silk plants..........................................    1
  Dust window sills.........................................    1
  Wipe clean light switches.................................    1
  Detail clean counters, bookcases, shelves, file cabinets..    1
  Dust skylights for cobwebs................................    1
  Detail vacuum carpet edges, around & behind furniture.....    1
  Vacuum & spot clean upholstered chairs: offices...........             1
  Dust high surfaces including door frames..................             1
  Dust all window blinds....................................             1
  Vacuum under photo copy machines..........................             1
  Brush vacuum ceiling air vents............................             1
  Dust & high areas for cobwebs.............................             1
  Polish conference room & executive furniture..............  Per specs
  Clip off any loose carpet loops (safety hazard)...........  As needed
  Vacuum fabric partition walls.............................                         4
  Total clean interior partition glass......................                         4

EXECUTIVE SERVICE                                             Weekly     Monthly  Verify
  Areas include lobby, conference / demo rooms,
-----------------------------------------------
  executive offices
-------------------
  All routine services apply, including:
----------------------------------------
  Detail clean furniture & furnishings......................    5
  Detail clean floors.......................................    1
  Polish conference room & executive furniture..............  Per specs
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
COFFEE AREAS                                                  Weekly     Monthly  Verify
<S>                                                           <C>        <C>      <C>
  Empty trash & replace liners..............................    5
  Clean coffee machines / remove old grounds................    5
  Scrub clean coffee pots / clean cups as needed............    5
  Wipe clean entire counter top & cabinet fronts............    5
  Wipe clean inside cabinet doors & trash container.........    5
  Detail clean entire coffee areas walls & floor............    1

LUNCHROOMS                                                    Weekly     Monthly  Verify
  Empty trash / replace liners..............................    5
  Clean trash receptacles...................................    5
  Clean walls near trash receptacles........................    5
  Scrub clean coffee pots...................................    5
  Turn off & clean coffee makers & appliances...............    5
  Clean microwaves, refrigerator & vending machines.........    5
  Wipe clean tables, chairs & bases (detail edges)..........    5
  Clean inside microwaves...................................    5
  Spot clean all walls......................................    5
  Remove scuff marks from tile floor........................    5
  Clean & polish water cooler...............................    5
  Clean entry doors.........................................    5
  Vacuum carpets & remove spots.............................    5
  Sweep & damp mop tile floor with mild degreaser...........    5
  Properly arrange furniture................................    5
  Detail clean entire lunchroom.............................    1
  Detail clean tables and chairs............................    1
  Detail clean all surfaces, entire facility................    1
  Clean tops of cabinets....................................    1
  Detail clean & scrub baseboards & edges...................    1
  Clean inside cabinets especially doors....................    1
  Clean inside refrigerators/clean up any spills............    1
  Discard spoiled food from refrigerators...................    1
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

RESTROOM MAINTENANCE                                          Weekly     Monthly  Verify
<S>                                                           <C>        <C>      <C>
  Clean and sanitize sinks & counter tops...................    5
  Clean and disinfect all toilets & urinals.................    5
  Clean & disinfect handles.................................    5
  Clean partitions & walls by urinals.......................    5
  Wet mop tile floor using a germicidal cleaner.............    5
  Dispose of waste and clean waste receptacles..............    5
  Check for paper products and refill as needed.............    5
  Check for soap products and refill as needed..............    5
  Clean and shine all chrome fixtures and mirrors...........    5
  Wipe clean light switches.................................    5
  Clean doors & push-plates.................................    5
  Check all dispensers for proper operation.................    5
  Report any items needing repair or maintenance............    5
  Check feminine hygiene product dispensers for product.....    5
  Disinfect floor drains / Keep traps filled................    5
  Detail clean & disinfect entire restroom..................    1
  Totally clean partitions & walls..........................    1
  Wipe clean baseboards.....................................    1
  Brush vacuum ceiling air vents............................    1
  Replace or replenish deodorizers (as needed)..............               1

SHOWERS                                                       Weekly     Monthly  Verify
  Wash walls w/ non-scratch disinfectant cleaners...........    5
  Wash & polish all faucets and shower heads................    5
  Wet mop floor w/ disinfectant germicidal cleaner..........    5
  Report any items needing repair...........................    5
  Detail clean & disinfect entire shower area...............    1
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

DAY PORTER                                                    Weekly     Monthly  Verify
<S>                                                           <C>        <C>      <C>
  LOBBY:
  Spot clean entry doors....................................     5
  Sweep any debris (at entrance)............................     5
  Scrub clean metal entry thresholds........................               1

  LUNCHROOMS:
  Duties, performed after lunch:
  ------------------------------
  Clean all table tops and chairs with a moistened cloth
  including all edges & bases...............................    5
  Empty trash & replace liners..............................    5
  Clean trash receptacles...................................    5
  Sweep/damp mop the floor..................................    5
  Vacuum carpeting, moving tables & chairs to reach all
  food & debris.............................................    5
  Clean coffee area including sink, water dispenser,
  coffee machine and counter................................    5
  Check all walls and clean as required.....................    5
  Check all microwaves, inside and out......................    5
  Perform additional duties as needed.......................    5

  RESTROOMS:
  Check for paper products and refill as needed.............    5
  Check for soap products and refill as needed..............    5
  Wipe down counter tops / pick up trash....................    5
  Check trash receptacles and empty as needed...............    5

  OFFICE AREAS:
  Duties performed "as required" daily, weekly, monthly
  -----------------------------------------------------

  OUTSIDE ENTRANCES & GROUNDS:
  Duties to be determined & performed as needed
  ---------------------------------------------

  DUMPSTER AREA:
  Dispose of loose trash around bins........................    5
  Detail sweep around bins (or often as needed).............    1
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

COMPUTER ROOM                                                 Weekly     Monthly  Verify
<S>                                                           <C>        <C>      <C>
  Wipe clean tables, chairs, & stools.......................    5
  Wipe clean other specified surfaces.......................    5
  Dry mop floor.............................................    5
  Damp mop floor (as needed)................................    5
  Empty trash & replace liners..............................    5
  Detail clean all surfaces.................................    1
  Vacuum floor edges & corners..............................    1

WINDOW & PARTITION GLASS:  Routine Cleaning)                  Weekly     Monthly  Verify
  Entrance glass: Clean entry doors & glass.................    5
  Spot clean lobby glass....................................    5
  Clean all lobby glass.....................................                1
  Interior partition glass: Spot clean......................    5
  Interior partition glass: Clean total surface.............                        4

TILE FLOOR & CARPET CARE (routine maintenance)                Weekly     Monthly  Verify
  Carpeting:
  Vacuum floors thoroughly..................................    5
  Spot clean................................................    5
  Detail vac (edges, corners, behind furniture).............    1

  Vinyl Tile:
  Dust mop w/ treated mop...................................    5
  Damp mop..................................................    5
  Remove scuff marks........................................    5
  Detail clean edges and corners............................    1

  Ceramic Tile:
  Sweep & damp mop..........................................    5
  Detail clean edges & corners..............................    1

  Other:
  Wipe clean baseboards.....................................                1
  Scrub metal entry threshold (main entrance)...............                1

RECYCLING                                                     Weekly     Monthly  Verify
  Process recycling appropriately: aluminum, glass,
  paper, cardboard. (Non-recyclables put into compactor)
</TABLE>

<PAGE>

<TABLE>
<CAPTION>

JANITORIAL CLOSET                                             Weekly     Monthly  Verify
<S>                                                           <C>        <C>      <C>
  Organize janitorial closet (all items shelved if poss.)...     5
  Clean, sanitize mop heads & hang up.......................     5
  Empty & clean mop bucket..................................     5
  Inventory supplies........................................     1
  Sweep and mop floor.......................................     1
  Replace mop heads with new ones...........................                1
  Remove trash and excess cleaning agents...................  as needed
  Deodorize.................................................  as needed

COMPACTOR AREA                                                Weekly     Monthly  Verify
  Insure trash goes into compactor..........................     5
  Report problems with overflow or mixing recycling.........     5
  Sweep area under & around compactor.......................     1

HEALTH & SAFETY
  Maintain MSDS sheets in Janitor's closet                     always
  Report safety hazards immediately, repair if possible      as needed

SECURITY
  No persons admitted into building by servicers
  No employee substitutions will be made without auth.
  Make sure all doors are locked during & following work
  Keep building secured when dumping trash in back.

QUALITY ASSURANCE
  1.  Servicers use checklists
  2.  Supervisor inspects work & documentation per
      schedule nightly.
  3.  Quality Assurance Inspector will arrange routine
      inspection w/client once each week.

INITIAL SERVICES (No charge)
  1.  Detail clean entire facility.
  2.  Service includes all services routinely performed
      daily, weekly & monthly.
</TABLE>

<PAGE>

MAINTENANCE:  Routine or Emergency
  1. Maintenance is available.  As needed
  2. Duties will vary according to the need.

NOTES
  1. Team leader working nights will speak English.
  2. Day Porter / Utility person during the day will speak
     English & will be very good-natured, helpful, &
     proactive.
  3. Computer Room: When floor is being cleaned,
     dedicated mop bucket will be kept outside the
     computer room.

CHEMICALS AND PAPER PRODUCTS
  1. Peninsula provides cleaning agents and equipment.
  2. Paper goods, trash can liners, hand soaps &
     deodorants are either provided by client or billed
     separately through Peninsula Janitorial Service.

<TABLE>
<CAPTION>

SQUARE FOOTAGE / FLOOR COVERINGS                         Square Ft.
                                                         ----------
<S>                                                      <C>
  Vinyl tile...........................................    2,000
  Wood grain tile......................................      500
  Ceramic tile.........................................    2,200
  Raised floor.........................................    5,000
  Carpeting............................................   78,521
                                                         -------
  Total Square Footage.................................   88,221
</TABLE>
CLEANING DAYS
   5 x Weekly                       S M T W T F S

   Days Specified: Times Specified:
   Time Specified:

<PAGE>

<TABLE>
<CAPTION>
PERIODIC SERVICES (continued)                                   Per Service  Per Sq. Ft.  $ Minimum
                                                                -----------  -----------  ---------
<S>                                                             <C>        <C>          <C>
  Window Cleaning:
  ----------------
  Clean windows outside................................         $   240                         "
  Clean windows inside.................................         $   240                         "
  Interior Partition Glass.............................         $   280                         "

  Cubicle Panels:
  ---------------
  Steam/dry clean fabric panels........................        $2/side/panel

  Skylights:
  ----------
  Clean interior.......................................         $   200                         "
  Clean exterior.......................................         $   100                         "

  Construction clean inside & outside..................         $   600                         "

  High Areas: (pipers, air ducts, fluorescent lights)
  ---------------------------------------------------
  Brush vacuum (recommended 2 x yrly)..................         $   400                         "
</TABLE>

<PAGE>

STAFFING
  Nights:     3 cleaners
              1 supervisor
  Days:       1 day porter
  Inspector:  1 x weekly Q.A. Inspection
  Floors:     Separate 2 man crew conducting periodic
              floor care

FORM OF OWNERSHIP
  1.  Corporation
  2.  All cleaners & supervisors are employees on payroll

TERM OF PROPOSAL
  1.  Peninsula guarantees pricing 1 year
  2.  Client month-to-month

EQUIPMENT LIST
  1.  Bucket w/ wringers
  2.  Mops (heads replaced monthly)
  3.  Treated dust mops
  4.  Upright vacuums
  5.  Back pack vacuum w/pole extension
  6.  Buffer-scrubbing
  7.  Buffer-high speed buffing
  8   Steam extractor portable
  9.  Steam extractor-truck mount
  10. Dry chemical carpet cleaning available
  11. Chem 5 cleaning solution system
  12. Tall ladder for high cleaning<PAGE>

                                                                    EXHIBIT 10.6

                            SONIC INNOVATIONS, INC.

                                     AND

                          STARKEY LABORATORIES, INC.

                                OEM AGREEMENT

                                April 19, 1999

[ * ]= CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.

<PAGE>

                                 OEM AGREEMENT

          This OEM AGREEMENT, including the attached Exhibits (the "Agreement"),
                                                                    ---------
made and entered into as of April 1, 1999 (the "Effective Date"), is by and
                                                --------------
between Sonic Innovations, Inc. ("Sonic"), a Delaware corporation with an office
                                  -----
at 5330 S 900 East, Ste. 240, Salt Lake City, Utah 84117, and Starkey
Laboratories, Inc. ("Starkey"), a Minnesota corporation with an office at 6600
                     -------
Washington Ave., So., Eden Prairie, Minnesota 55344 (each of Sonic and Starkey,
a "Party"; together, the "Parties").
   -----                  -------

                                   BACKGROUND
                                   ----------

          A.  Sonic is engaged in the business of manufacturing, distributing,
and selling Hybrids (as defined below) for use in hearing aid devices and other
products; and

          B.  Starkey desires to purchase Hybrids from Sonic, and distribute and
sell Products (as defined below) to, customers in the Territory (as defined
below); and

          C.  Starkey desires to purchase from Sonic, and Sonic desires to sell
to Starkey, such Hybrids for the purpose of incorporating the same into Products
for resale to customers in the Territory.

          NOW, THEREFORE, in consideration of the mutual promises contained
herein, the Parties agree as follows:

1.  DEFINITIONS.
    -----------

          1.1  "Date Code" shall mean the date of manufacture of each Hybrid
                ---------
manufactured and sold by Sonic.

          1.2  "Hybrid" shall mean Sonic's proprietary integrated circuit for
                ------
digital signal processing as it exists as of the Effective Date.

          1.3  "Product(s)" shall mean Starkey's proprietary hearing aid product
                ----------
which incorporates a Hybrid.

          1.4  "Reliability Specification" shall mean the reliability
                -------------------------
specification documents numbers 99012-008 (Effective Date 7/9/95), Rev. A and
99012-006 (Effective Date 7/9/95), Rev. A, as provided by Starkey to Sonic and
attached hereto as Exhibit C.

          1.5  "Specifications" shall mean the specifications for the use and
                --------------
operation of the Hybrid as set forth in Exhibit A.

                                      -1-
<PAGE>

          1.6  "Starkey Affiliate" shall mean, with respect to Starkey, a
                -----------------
corporation, company or other entity that is owned or controlled by Starkey by
virtue of Starkey's direct or indirect ownership or control of more than fifty
percent (50%) of the outstanding shares or securities (representing the right to
vote for the election of directors or other managing authority) of such
corporation, company or other entity, but such corporation, company or other
entity shall be deemed to be a Starkey Affiliate only so long as such ownership
or control exists.

          1.7  "Term" shall have the meaning set forth in Section 11.1.
                ----

          1.8  "Territory" shall mean, until October 1, 1999, any country
                ---------
outside the United States of America and its territories in which Starkey
operates wholly-owned manufacturing or distribution facilities; provided,
however, that after October 1, 1999, the Territory shall expand to include such
entities within the United States of America and its territories.

2.  GRANT OF OEM RIGHTS.
    -------------------

          2.1  Appointment. Subject to the terms and conditions of this
               -----------
Agreement, Sonic hereby grants to Starkey and Starkey Affiliates the non-
exclusive rights to (i) manufacture Products, and (ii) market, sell and
distribute Products to end user customers in the Territory.

          2.2  Sale Conveys No Right to Manufacture or Modify. The Hybrids are
               ----------------------------------------------
offered for sale and are sold by Sonic subject in every case to the condition
that (i) except as necessary to program such Hybrid for a particular end-user,
such sale does not convey any license, expressly or by implication, to modify,
duplicate, reverse engineer or otherwise copy or reproduce any of the Hybrids,
(ii) Starkey and Starkey Affiliates shall use each Hybrid only as incorporated
into and sold as part of a Product and for no other purpose whatsoever, (iii)
Starkey and Starkey Affiliates shall not use Hybrids for any purpose except to
manufacture and service Products, and (iv) Starkey and Starkey Affiliates will
not sell or otherwise distribute Hybrids except incorporated into a Product.

          2.3  Reservation of Rights; No Rights Beyond OEM Rights. Except as
               --------------------------------------------------
expressly provided in this Article 2, (i) no right, title, or interest is
granted, whether express or implied, by Sonic to Starkey or a Starkey Affiliate,
(ii) nothing in this Agreement shall be deemed to grant to Starkey or a Starkey
Affiliate rights in any products or technology other than the Hybrids, and (iii)
no provision of this Agreement shall be deemed to restrict Sonic's right to
exploit technology, know-how, patents, or any other intellectual property
rights.

3.  PRICE AND PAYMENT.
    -----------------

               3.1  Hybrid Prices.  Starkey shall pay to Sonic the sum of [ * ]
                    -------------
for each Hybrid that it receives from Sonic.

[ * ]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.

                                      -2-
<PAGE>

          3.2  Payment.
               -------

               (a) Sonic shall invoice Starkey and Starkey shall make payments
to Sonic under this Agreement in United States dollars in immediately available
funds to a bank account designated by Sonic by wire transfer as follows: [Sonic
to provide]. All payments made hereunder shall be paid in full, without any
deduction of taxes or charges of any kind, except to the extent that a
governmental authority imposes income taxes or other taxes on payments made to
Sonic pursuant to this Agreement. In the event that such taxes must be paid by
Starkey, then Starkey may deduct such taxes from the payment and send Sonic tax
payment certificates, receipts, and other such supporting data and to take other
reasonable acts as may be requested by Sonic to establish that such taxes have
been deducted and paid by Starkey on behalf of Sonic. Starkey shall cooperate
with Sonic to aid Sonic to recover any such taxes paid.

               (b) Payment for Hybrids supplied subject to Section 3.1 shall be
made net thirty (30) days after the date of shipment of the relevant Hybrids by
Sonic to Starkey.

               (c) Any payments due hereunder which are not paid within five (5)
days of the date such payments are due in accordance with Section 3.2(b) shall
bear interest at the lesser of one and one-half percent (1-1/2%) per month or
the maximum rate permitted by law, calculated on the number of days such payment
is delinquent. This Section 3.2(c) shall in no way limit any other remedies
available to Sonic.

4.  TERMS OF PURCHASE AND SALE.
    ---------------------------

               4.1  Minimum Annual Order.  Upon Starkey's successful evaluation
                    --------------------
of the Hybrid and calibration test systems, which evaluation period will end no
later than May 31, 1999, Starkey shall place a binding purchase order with Sonic
for a minimum of [ * ] Hybrids to be delivered no later than twelve (12) months
after the Effective Date.

               4.2  Forecasts.  On the ninetieth (90/th/) day prior to the first
                    ---------
(1/st/) anniversary of the Effective Date, and every year thereafter during the
Term, Starkey shall provide to Sonic a [non-binding] written forecast of the
number of Hybrids that Starkey expects to purchase over the subsequent twelve
(12) months ("Forecasts").

               4.3  Order and Acceptance.   All orders for Hybrids shall be made
by signed written purchase orders by Starkey to a Sonic employee designated in
writing by Sonic, sent to Sonic at Sonic's address for notice hereunder and
proposing a delivery date that is consistent with the Forecasts and not less
than sixty (60) days after Sonic's receipt of such purchase order. To the extent
that any one purchase order exceeds [  *  ] Hybrids, such purchase order must be
submitted to Sonic at least ninety (90) days in advance of any requested
delivery date. Orders shall be placed by a signed written purchase order, which
may be provided to Sonic by fax. Sonic shall accept or reject purchase orders by
fax or in writing within seven (7) days of receipt, it being understood that no
purchase order shall be binding upon Sonic until accepted by Sonic. Sonic shall
fulfill purchase orders accepted by Sonic pursuant to the terms and conditions
of this Agreement.

[ * ]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.

                                      -3-
<PAGE>

No partial shipment of an order shall constitute the acceptance of the entire
order, absent the written acceptance of such entire order. Once accepted by
Sonic, Starkey may cancel or reschedule purchase orders for Hybrids only with
Sonic's prior written approval.

    4.4  Invoicing. Sonic shall submit an invoice to Starkey upon shipment by
         ---------
Sonic of Hybrids ordered by Starkey. Each such invoice shall state Starkey's
aggregate price for Hybrids in a given shipment, plus any freight, taxes or
other costs incident to the purchase or shipment initially paid by Sonic but to
be borne by Starkey hereunder.

    4.5  Shipping.  All Hybrids delivered pursuant to the terms of this
         --------
Agreement shall be suitably packed for surface or air shipment, in Starkey's
discretion, in Sonic's standard shipping cartons, and delivered, at Starkey's
direction, to Starkey or a carrier agent FCA (per Incoterms, ICC Ed. 1990) the
shipping location designated by Starkey (the "Shipping Location"), at which time
                                              -----------------
risk of loss shall pass to Starkey.  Sonic shall ship Hybrids using the carrier
specified in Starkey's purchase order provided that if Starkey does not provide
instructions with respect to the carrier to be used, Sonic shall select the
carrier.  All freight, insurance, and other shipping expenses, as well as any
special packing expenses incurred by Sonic at the request of Starkey, shall be
paid by Starkey.  Starkey shall also bear all applicable taxes, export taxes,
duties and similar charges, and any charges that may be assessed against the
Hybrids after delivery to Starkey or the carrier at the Shipping Location.  All
shipments and freight charges shall be deemed correct unless Sonic receives from
Starkey, no later than forty-five (45) days after the shipping date of a given
shipment, a written notice specifying the shipment, the purchase order number,
and the exact nature of the discrepancy between the order and shipment or
discrepancy in the freight cost, as applicable.  To the extent that there is any
conflict between any invoice or purchase order delivered hereunder and the terms
and conditions of this Agreement, the terms and conditions of this Agreement
shall control as to such conflict.

    4.6  Returns.  Except as set forth in Article 5 below, Starkey may return
         -------
Hybrids only with Sonic's prior written approval. Hybrids returned to Sonic
other than under Article 7 shall be returned FCA (per Incoterms, ICC Ed. 1990)
the destination point designated by Sonic and shall be subject to a restocking
fee in an amount equal to five percent (5%) of the price paid by Starkey to
Sonic for such Hybrid as set forth in Section 3.1. Starkey shall also bear all
applicable taxes, export taxes, duties and similar charges, and any charges that
may be assessed against the Products in connection with such delivery to Sonic
at the destination point.

5.  ACCEPTANCE.  Starkey shall inspect all Hybrids promptly upon receipt thereof
    ----------
and may reject any Hybrid [that fails to conform to the warranties set forth in
Article 7 below at the time of delivery to Starkey,] provided that Starkey
notifies Sonic of such non-conformity within thirty (30) days of delivery.
Except as set forth in this Article 5 and Article 7 below, Starkey shall return
Hybrids to Sonic only with Sonic's prior written approval.

6.  SONIC MANUFACTURING CALIBRATION SYSTEM.  In order to permit Starkey to test
    --------------------------------------
and calibrate Products, Sonic shall sell to Starkey units of its Sonic
Manufacturing Calibration System at Sonic's cost.  Such sale is made subject to
the condition that (i) such sale does not convey

                                      -4-
<PAGE>

any license, expressly or by implication, to modify, duplicate, reverse
engineer, or otherwise copy or reproduce the Sonic Manufacturing Calibration
System, and (ii) Starkey shall not make any other use of the Sonic Manufacturing
Calibration System other than to test Hybrids sold by Sonic to Starkey pursuant
to this Agreement.

7.        LIMITED WARRANTY.
          ----------------

          7.1  Hybrid Limited Warranty.  Sonic warrants to Starkey that, subject
               -----------------------
to the exclusions set forth in this Section 7.1 and in Section 7.2 below, for a
period of one hundred twenty (120) days following delivery to Starkey, Hybrids
manufactured and delivered hereunder shall:  (i) substantially conform to the
Specifications and the Reliability Specification; (ii) be manufactured in
accordance with good manufacturing practices and standards established in the
trade; and (iii) be manufactured in accordance with all applicable laws,
regulations, rules and governmental directives.  The foregoing warranty is
contingent upon proper use of the Hybrid in the applications for it was intended
as indicated in the Specifications.  The above limited warranty applies only to
defects reported to Sonic in accordance with Sonic's standard reporting
procedures [described in the Specifications] and does not apply to any Hybrid
which after dispatch from the Shipping Location (i) has been altered or subject
to undue electrical or mechanical force or stresses, (ii) has not been
maintained in accordance with any transportation, storage, handling or
maintenance instructions supplied by Sonic, (iii) has been damaged by negligence
or accident, or (iv) has been damaged by acts of nature, vandalism, burglary,
neglect, or misuse.  In the event of any breach of the above limited warranty
and provided that the Parties agree to upon a Return Merchandise Authorization
(an "RMA"), Starkey's exclusive remedy and Sonic's sole and exclusive liability
     ---
shall be, at Sonic's sole election, to replace the Hybrid at Sonic's expense or
to provide Starkey with a credit or refund in the amount of the price paid by
Starkey for the non-conforming Hybrid(s) properly assigned an RMA.

          7.2  Disclaimer of Other Warranties.  EXCEPT FOR THE LIMITED
               ------------------------------
WARRANTIES PROVIDED IN SECTION 7.1 ABOVE, SONIC GRANTS NO OTHER WARRANTIES OR
CONDITIONS, EXPRESS OR IMPLIED, BY STATUTE, OR OTHERWISE, REGARDING THE HYBRID,
AND SONIC SPECIFICALLY DISCLAIMS THE IMPLIED WARRANTIES OF FITNESS FOR A
PARTICULAR PURPOSE, MERCHANTABILITY, AND NONINFRINGEMENT.  SONIC DISCLAIMS ANY
WARRANTY THAT OPERATION OF THE HYBRID WILL BE UNINTERRUPTED OR ERROR-FREE.  ANY
OTHER REPRESENTATIONS OR WARRANTIES MADE BY ANY PERSON OR ENTITY, INCLUDING
EMPLOYEES OR REPRESENTATIVES OF SONIC, THAT ARE INCONSISTENT HEREWITH SHALL BE
DISREGARDED AND SHALL NOT BE BINDING UPON SONIC.

8.        EXCHANGE OF DATA; GOVERNMENTAL APPROVAL.
          ---------------------------------------

          8.1  Exchange.  Starkey shall promptly provide to Sonic all [technical
               --------
and/or clerical] data made, developed, or acquired by or for Starkey with
respect to the Hybrid.  Sonic shall provide to Starkey access to data from
Hybrid studies that Sonic possesses as of the Effective Date, or develops or
acquires during the Term, and that is reasonably necessary for Starkey to obtain
those

                                      -5-
<PAGE>

governmental approvals that Starkey is responsible for obtaining pursuant to
this Article 8 below, to the extent that Sonic has the right to disclose such
data to Starkey for the foregoing purposes and subject to Article 13 below.

          8.2  Disclosure.  Starkey will only use, reference, and disclose Data
               ----------
relating to the Hybrid to third parties as required to obtain governmental
approval to market and distribute Products pursuant to this Article 8, as
required by law, or, to the extent Sonic has the right to authorize Starkey to
do so and only with Sonic's prior written approval which shall not be
unreasonably withheld, to market and promote the Products, in each case subject
to Article 13 below.

          8.3  Health Regulatory Approval.  Starkey, at Starkey's expense, shall
               --------------------------
be responsible for obtaining regulatory approvals from [the U.S. Food and Drug
Administration] and its foreign equivalents in the Territory to the extent
required by the foregoing regulatory authorities to sell and distribute the
Products in the Territory.

          8.4  Registrations, Licenses and Permits.  Starkey, at Starkey's
               -----------------------------------
expense, shall obtain all registrations, licenses, and permits required to
comply with the laws and regulations within the Territory for sale and
distribution of the Products.

9.        ADDITIONAL OBLIGATIONS OF STARKEY.
          ---------------------------------

          9.1  Translation.  Starkey shall at its cost provide any and all
               -----------
resources necessary to translate all manuals, instructions, literature, and
package insert data sheets relating to the Hybrid for use in the Territory.

          9.2  Business Obligations.  Any and all obligations associated with
               --------------------
Starkey's business shall remain the sole responsibility of Starkey.  Any and all
sales and other agreements between Starkey and its customers are and shall
remain Starkey's exclusive responsibility and shall have no effect on Starkey's
obligations pursuant to this Agreement.

          9.3  Foreign Corrupt Practices Act.  In conformity with the United
               -----------------------------
States Foreign Corrupt Practices Act, Starkey and its employees and agents shall
not directly or indirectly make any offer, payment, promise to pay, or authorize
payment, or offer a gift, promise to give, or authorize the giving of anything
of value for the purpose of influencing an act or decision of an official of any
government within the Territory or the United States Government (including a
decision not to act) or inducing such official to use his influence to affect
any such governmental act or decision in order to assist Sonic in obtaining,
retaining, or directing any such business.

          9.4  Custom Fitting.  Except as otherwise permitted in this Agreement,
               --------------
Starkey shall not, nor allow any third party to, make any use of or otherwise
attempt to copy Sonic's proprietary Best Fit Fast/TM/ and ExpressFit/TM/ custom
fitting system.

                                      -6-
<PAGE>

          9.5  Advertising and Promotions.  Starkey shall not make any reference
               --------------------------
in its marketing or sales literature to the following:  Natura/TM/, Sonic
innovations, or Best Fit Fast/TM/, ExpressFit/TM/ or any other promotional
materials used by Sonic in the sales and marketing of the Natura/TM/.

          9.6  Product Packaging, Patent Marking, and Labeling.  Starkey shall
               -----------------------------------------------
label the Products with the Starkey tradename and trademarks and the Starkey
tradename and trademarks only, and Starkey shall not label the Products with any
of the following proprietary Sonic marks:  Natura/TM/, Sonic innovations, or
Best Fit Fast/TM/, ExpressFit/TM/ or any other trademark of Sonic unless
required by applicable law.  Starkey shall mark all Products it sells or
distributes pursuant to this Agreement in accordance with the applicable patent
statute or regulations in the country or countries of manufacture and sale
thereof, including with those patent numbers listed on Exhibit B.

          9.7  No Reverse Engineering.  Starkey shall not, nor shall it allow
               ----------------------
any third party to, disassemble or reverse engineer the Hybrid or decompile or
otherwise attempt to obtain to the source code from the object code of any
software embedded on any Hybrid.

10.       REPORTS. Pursuant to the FDA's Medical Device Reporting (MDR)
          -------
Regulations, Sonic and/or Starkey may be required to report to the FDA
information that reasonably suggests that a Hybrid may have caused or
contributed to a death or serious injury or has malfunctioned and that the
device would be likely to cause or contribute to a death or serious injury if
the malfunction were to recur. The Parties agree to supply to each other any
such information regarding Hybrids used in Products promptly after becoming
aware of it so that each party can comply with its own governmental reporting
requirements.

11.       TERM AND TERMINATION.
          --------------------

          11.1  Term.  The term of this Agreement shall commence on the
                ----
Effective Date and continue in full force and effect until three (3) years from
the Effective Date, unless earlier terminated pursuant to this Article 11 (such
period, the "Term"); provided that after the Term, the Agreement will
             ----
automatically renew for additional one (1) year periods unless either Party
provides written notice of its intent not to renew at least one hundred eighty
(180) days prior to the expiration of the Term or such additional one (1) year
period.

          11.2  Termination for Convenience.  Either party may terminate this
                ---------------------------
Agreement for its convenience upon one hundred eighty (180) days written notice
to the other.

          11.3  Termination for Cause.  Either Sonic or Starkey may terminate
                ---------------------
this Agreement by written notice stating its intent to terminate in the event
the other shall have breached or defaulted in the performance of any of its
material obligations hereunder, and such default shall have continued for sixty
(60) days after written notice thereof was provided to the breaching party by
the non-breaching party.  In addition, Sonic may terminate this Agreement by
written notice in the event Starkey does not pay Sonic in accordance with the
provisions of Section 3.2 and such failure shall have continued for ten (10)
days after written notice thereof was provided to Starkey by Sonic.

                                      -7-
<PAGE>

Further, Sonic may terminate this Agreement immediately upon written notice in
the event of any breach or threatened breach by Starkey of any of Sections 2,
9.4, 9.5, 9.6, or 9.7.

          11.4  Termination for Infringement. Starkey may terminate this
                ----------------------------
Agreement immediately upon notice if (i) a court of competent jurisdiction
determines in a non-appealable final judgment that the Hybrid infringes the
Intellectual Property rights of a third party, or (ii) the use, manufacture,
sale, offer for sale or import of Hybrids is enjoined as the result of such
Hybrid's infringement of a third party's Intellectual Property rights.

          11.5  Termination for Bankruptcy.  Either party may terminate this
                --------------------------
Agreement effective upon written notice to the other party in the event the
other party declares bankruptcy or becomes the subject of any voluntary or
involuntary proceeding under the U.S. Bankruptcy Code or any state insolvency
proceeding, and such proceeding is not terminated within one hundred twenty
(120) days of its commencement.

          11.6  Effect of Termination.
                ---------------------

               (a) Expiration or termination of this Agreement for any reason
shall not release any party hereto from any liability which, at the time of such
termination, has already accrued to the other party or which is attributable to
a period prior to such termination nor preclude either party from pursuing any
rights and remedies it may have hereunder or at law or in equity with respect to
any breach of this Agreement. It is understood and agreed that monetary damages
may not be a sufficient remedy for any breach of this Agreement and that the
non-breaching party may be entitled to injunctive relief as a remedy for any
such breach. Such remedy shall not be deemed to be the exclusive remedy for any
such breach of this Agreement, but shall be in addition to all other remedies
available at law or in equity.

               (b) Within thirty (30) days after the effective date of
termination of this Agreement, Starkey shall use its reasonable efforts to
provide Sonic with a complete inventory of Hybrids in Starkey's possession, in
transit to Starkey from Sonic or otherwise in Starkey's control. Starkey's
rights under Article 2 shall survive to the extent reasonably necessary for
Starkey to dispose of all such Hybrids pursuant to the terms and conditions of
this Agreement. Upon any expiration or other termination of this Agreement,
Sonic may inspect Starkey's Hybrid inventory. [Sonic may at cost repurchase any
inventory of Hybrids in Starkey's possession.]

               (c) Repairs or Replacement. Upon termination of this Agreement
                   ----------------------
and for five (5) years thereafter, Sonic shall agree to provide repair or
replacement Hybrids for sale to Starkey; provided that, (i) such repair or
replacement Hybrid is distributed to Starkey or a Starkey Affiliate end-user
customer who purchased a Product prior to the end of the Term and solely for the
purpose of repairing, replacing or servicing such Product.

          11.7  No Renewal, Extension or Waiver.  Acceptance of any order from,
                -------------------------------
or sale of, any Hybrid to Starkey after the date of termination of this
Agreement or pursuant to Section 11.6(c) shall not be construed as a renewal or
extension hereof, or as a waiver of termination by Sonic.

                                      -8-
<PAGE>

    11.8  Limitation of Liability Upon Termination.  In the event of termination
          ----------------------------------------
by either party in accordance with any of the provisions of this Agreement,
neither party shall be liable to the other, because of such termination, for
compensation, reimbursement or damages on account of the loss of prospective
profits or anticipated sales or on account of expenditures, inventory,
investments, leases or commitments in connection with the business or goodwill
of Sonic or Starkey.

    11.9  Survival of Certain Terms.  The provisions of Articles 7, 12, 13, 14,
          -------------------------
15, and Sections 11.6, 11.8, and 11.9 shall survive termination for any reason.

12.  LIMITATION OF LIABILITY.
     -----------------------

     SONIC'S ENTIRE LIABILITY ARISING OUT OF THIS AGREEMENT AND/OR THE SALE OF
HYBRIDS SHALL BE LIMITED TO THE AGGREGATE AMOUNTS PAID BY STARKEY TO SONIC FOR
THE PRODUCTS UNDER THIS AGREEMENT. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR
COSTS OF PROCUREMENT OF SUBSTITUTE GOODS BY ANYONE. IN NO EVENT SHALL EITHER
PARTY BE LIABLE TO THE OTHER PARTY OR ANY OTHER PERSON FOR ANY SPECIAL,
CONSEQUENTIAL OR INCIDENTAL DAMAGES, HOWEVER CAUSED AND ON ANY THEORY OF
LIABILITY ARISING OUT OF THIS AGREEMENT, AND WHETHER OR NOT SUCH PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGE. THESE LIMITATIONS SHALL APPLY
NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY PROVIDED
HEREIN. NOTWITHSTANDING THE FOREGOING PROVISIONS OF THIS ARTICLE 12, THE
FOREGOING LIMITATIONS OF LIABILITY SET FORTH IN THIS ARTICLE 12 SHALL NOT APPLY
TO LIABILITY ARISING UNDER ARTICLES 13 OR 14 OR SECTION 2.3, AND SHALL NOT
DIMINISH THE REMEDIES EXPRESSLY PROVIDED IN ARTICLE 7.

13.  CONFIDENTIALITY.
     ---------------

     13.1  Confidential Information.  Except as expressly provided herein, the
           ------------------------
parties agree that, for the Term of this Agreement and for seven (7) years
thereafter, the receiving party shall not publish or otherwise disclose and
shall not use for any purpose, except as expressly permitted herein any
information furnished to it by the other party hereto pursuant to this Agreement
which if disclosed in tangible form is marked "Confidential" or with other
similar designation to indicate its confidential or proprietary nature, or if
disclosed orally is confirmed as confidential or proprietary by the party
disclosing such information at the time of such disclosure or within thirty (30)
days thereafter ("Confidential Information"). Notwithstanding the foregoing, it
is understood and agreed that Confidential Information shall not include
information that, in each case as demonstrated by written documentation:

                (a) was already known to the receiving party, other than under
an obligation of confidentiality, at the time of disclosure;

                                      -9-
<PAGE>

                (b) was generally available to the public or otherwise part of
the public domain at the time of its disclosure to the receiving party;

                (c) became generally available to the public or otherwise part
of the public domain after its disclosure and other than through any act or
omission of the receiving party in breach of this Agreement; or

                (d) was subsequently lawfully disclosed to the receiving party
by a person other than a party hereto or developed by the receiving party
without reference to any information or materials disclosed by the disclosing
party.

          13.2  Confidentiality of Agreement.  Each Party agrees that the terms
                ----------------------------
and conditions, but not the existence, of this Agreement shall be treated as the
other's Confidential Information and that no reference to the terms and
conditions of this Agreement or to activities pertaining thereto can be made in
any form of public or commercial advertising without the prior written consent
of the other Party; provided, however, that each Party may disclose the terms
                    --------  -------
and conditions of this Agreement:  (i) as required by any court or other
governmental body; (ii) as otherwise required by law; (iii) to legal counsel of
the Parties; (iv) in connection with the requirements of an initial public
offering or securities filing; (v) in confidence, to accountants, banks, and
financing sources and their advisors; (vi) in confidence, in connection with the
enforcement of this Agreement or rights under this Agreement; or (vii) in
confidence, in connection with a merger or acquisition or proposed merger or
acquisition, or the like.

          13.3  Compelled Disclosure.  If a Receiving Party believes that it
                --------------------
will be compelled by a court or other authority to disclose Confidential
Information of the Disclosing Party, it shall give the Disclosing Party prompt
written notice so that the Disclosing Party may take steps to oppose such
disclosure.

14.  INDEMNIFICATION.
     ---------------

          14.1  Indemnification of Starkey.
                --------------------------

                (a) Sonic shall indemnify, defend, and hold harmless Starkey and
the Starkey Affiliates and their respective directors, officers, employees, and
agents, and the successors and assigns of any of the foregoing (the "Starkey
Indemnitees") from and against all claims, losses, costs, and liabilities
(including, without limitation, payment of reasonable attorneys' fees and other
expenses of litigation), and shall pay any damages (including settlement
amounts) finally awarded with respect to claims, suits, or proceedings (any of
the foregoing, a "Claim") brought by third parties against a Starkey Indemnitee,
caused by (a) a failure by Sonic to manufacture the Hybrid in accordance with
the Specifications, (b) breach of any representation made by Sonic hereunder, or
(c) the negligence or willful misconduct of Sonic, except to the extent such
Claim is covered under Section 14.2 below or is caused by the negligence or
willful misconduct of a Starkey Indemnitee.

                                     -10-
<PAGE>

          (b) Starkey agrees that Sonic has the right to defend, or at its
option to settle, and Sonic agrees, at its own expense, to defend or at its
option to settle, any claim, suit or proceeding brought against Starkey by any
third party for infringement of any U.S. or foreign patents or copyright by the
Hybrid arising out of or in connection with this Agreement, and Sonic agrees to
indemnify, defend and hold harmless the Starkey Indemnitees (as defined in
Section 14.1(a) above) from and against any and all claims, losses, damages,
costs and liabilities (including payment of reasonable attorneys fees and other
expenses of litigation) arising from such infringement claim and shall pay any
damages finally awarded with respect to such a claim, suit or proceeding.
Notwithstanding the provisions of this Section 14.1(b), Sonic assumes no
liability for (i) any combination of Hybrid with other products not provided by
Sonic, which infringement would not arise from the Hybrid standing alone, or
(ii) the modification of the Hybrid by Starkey or any third party where such
infringement would not have occurred but for such modifications.
Notwithstanding the foregoing, if it is adjudicatively determined that the
Hybrid infringes, or in Sonic's sole opinion, may be found to infringe a third
party's patent or copyright, or if the sale or use of the Products is, as a
result of such infringement, enjoined, then Sonic may, at its sole option and
expense either:  (i) replace the Hybrid with other noninfringing functionally
equivalent integrated circuits; or (ii) modify the Hybrid to make the Hybrid
functionally equivalent and noninfringing; or (iii) if (i) - (ii) are deemed
commercially impracticable by Sonic, discontinue sales of the Hybrid to Starkey
under this Agreement.  THE FOREGOING PROVISIONS OF THIS SECTION 14.1(b) STATE
THE ENTIRE LIABILITY OF SONIC AND THE EXCLUSIVE REMEDY OF STARKEY WITH RESPECT
TO ANY ALLEGED INFRINGEMENT OF THIRD PARTY PATENTS, COPYRIGHTS, TRADEMARKS OR
OTHER INTELLECTUAL PROPERTY RIGHTS BY THE HYBRID OR ANY PART THEREOF OR THE USE
OF EITHER.

          14.2  Indemnification of Sonic.  Starkey shall indemnify, defend, and
                ------------------------
hold harmless Sonic, and its Affiliates and their respective directors,
officers, employees and agents, and the successors, and assigns of any of the
foregoing (the "Sonic Indemnitees") from and against all claims, losses, costs,
and liabilities (including, without limitation, payment of reasonable attorneys'
fees and other expenses of litigation), and shall pay any damages (including
settlement amounts) finally awarded with respect to a Claim brought by third
parties against a Sonic Indemnitee, arising out of or relating to (a) acts or
omissions of Starkey in the distribution or marketing of Products; (b) breach of
any of the representations or warranties made by Starkey hereunder, (c) a claim
that the Product infringes any intellectual property rights of a third party,
except in each case to the extent such claim is covered under Section 14.1, (d)
any failure by Starkey to obtain any applicable governmental approvals or
licenses required for the marketing and distribution of the Products, (e) a
claim relating to the manufacture or operation of the Product to the extent that
such claim is not due solely to a manufacturing defect in the Hybrid, or (f) the
negligence or willful misconduct of Starkey, except, in each case, to the extent
such claim is covered under Section 14.1 or is caused by the negligence or
willful misconduct of a Sonic Indemnitee.

          14.3  Indemnification Procedures.  A party (the "Indemnitee") that
                --------------------------
intends to claim indemnification under this Article 14 shall promptly notify the
other party (the "Indemnitor") in writing of any claim in respect of which the
Indemnitee or any of its directors, officers, employees,

                                     -11-
<PAGE>

agents, successors, or assigns intends to claim such indemnification, and the
Indemnitor shall have sole control of the defense and/or settlement thereof,
provided that the indemnified party may participate in any such proceeding with
counsel of its choice at its own expense. The indemnity agreement in this
Article 14 shall not apply to amounts paid in settlement of any Claim if such
settlement is effected without the consent of the Indemnitor, which consent
shall not be withheld unreasonably. The failure to deliver written notice to the
Indemnitor within a reasonable time after the commencement of any such action,
if prejudicial to its ability to defend such action, shall relieve such
Indemnitor of any liability to the Indemnitee under this Article 14, but the
omission to so deliver written notice to the Indemnitor shall not relieve the
Indemnitor of any liability that it may otherwise have to any Indemnitee than
under this Article 14. The Indemnitee under this Article 14, its employees and
agents, shall cooperate fully with the Indemnitor and its legal representatives
and provide full information in the investigation of any Claim covered by this
indemnification. Notwithstanding anything to the contrary contained in this
Article 14, neither party shall be liable for any costs or expenses incurred
without its prior written authorization.

15.  MISCELLANEOUS PROVISIONS.
     ------------------------

     15.1  Independent Contractors.  The relationship of Sonic and Starkey
           -----------------------
established by this Agreement is that of independent contractors, and nothing
contained in this Agreement shall be construed to (i) give either party the
power to direct or control the day-to-day activities of the other, (ii)
constitute the parties as partners, joint venturers, co-owners or otherwise as
participants in a joint or common undertaking, or (iii) allow a party to create
or assume any obligation on behalf of the other party for any purpose
whatsoever.

     15.2  Governing Law.  This Agreement and all acts and transactions
           -------------
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and interpreted in accordance with the laws of the State of
Utah, without reference to rules of conflicts or choice of laws.  This Agreement
shall not be governed by the 1980 United Nations Convention on Contracts for the
International Sale of Goods.

     15.3  Arbitration.  If a dispute arises between the parties relating to the
           -----------
interpretation or performances of this Agreement or the grounds for the
termination thereof, representatives of the parties with decision-making
authority shall meet to attempt in good faith to negotiate a resolution of the
dispute prior to pursuing other available remedies. If within thirty (30) days
after such meeting the parties have not succeeded in negotiating a resolution of
the dispute, such dispute shall be submitted to final and binding arbitration
under the then current Commercial Arbitration Rules of the American Arbitration
Association ("AAA") by one (1) arbitrator in Salt Lake City, Utah. Such
arbitrator shall be selected by the mutual agreement of the parties or, failing
such agreement, shall be selected according to the aforesaid AAA rules. The
arbitrator will be instructed to prepare and deliver a written, reasoned opinion
stating his decision within thirty (30) days of the completion of the
arbitration. Such arbitration shall be concluded within nine (9) months
following the filing of the initial request for arbitration. The parties shall
bear the costs of arbitration equally and shall bear

                                     -12-
<PAGE>

their own expenses, including professional fees. The decision of the arbitrator
shall be final and non-appealable and may be enforced in any court of competent
jurisdiction.

          15.4  Notices.  Any notice required or permitted by this Agreement
                -------
shall be in writing and shall be sent by prepaid registered or certified mail,
return receipt requested, internationally recognized courier or personal
delivery, or by fax with confirming letter mailed or otherwise delivered under
the conditions described above in each case addressed to the other party at the
address shown below or at such other address for which such party give notice
hereunder.  Such notice shall be deemed to have been given when delivered:

          If to Starkey:  Starkey Laboratories, Inc.
                          6600 Washington Ave., South
                          Eden Prairie, Minnesota 55344
                          Attn: Jerome Ruzicka
                          Tel.: (612) 941-6401
                          Fax: (612) 828-9262

          If to Sonic:    Sonic Innovations, Inc.
                          5330 S 900 East, Ste. 240
                          Salt Lake City, Utah 84117
                          Attn.: Jorgen Heide
                          Tel.: (801) 288-0993
                          Fax: (801) 288-0998

          15.5  Force Majeure.  Nonperformance of any party hereto (except for
                -------------
payment obligations) shall be excused to the extent that performance is rendered
impossible by strike, fire, earthquake, flood, governmental acts or orders or
restrictions, delay or failure of suppliers, or any other reason where failure
to perform is beyond the reasonable control and not caused by the gross
negligence or willful misconduct of the nonperforming party.

          15.6  Assignment.  This Agreement shall not be assignable by either
                ----------
party to any third party hereto without the written consent of the other party
hereto, except that either party may assign this Agreement without the other
party's consent to an entity that acquires all or substantially all of the
business or assets of the assigning party pertaining to the subject matter
hereof, in each case whether by merger, acquisition, or otherwise.  Any assignee
shall agree to perform the obligations of the assignor of this Agreement, and
this Agreement shall be binding on and inure to the benefit of any permitted
assignee.

          15.7  Partial Invalidity.  If any provision of this Agreement is held
                ------------------
to be invalid by a court of competent jurisdiction, then the remaining
provisions shall remain, nevertheless, in full force and effect.  The parties
agree to renegotiate in good faith any term held invalid and to be bound by the
mutually agreed substitute provision in order to give the most approximate
effect originally intended by the parties.

                                     -13-
<PAGE>

          15.8   Publicity.  The parties may agree upon a press release to
                 ---------
announce the execution of this Agreement, together with a corresponding question
and answer outline for use in responding to inquiries about the Agreement;
thereafter, Sonic and Starkey may each disclose to third parties the information
contained in such press release and question and answer outline without the need
for further approval by the other.  From time to time during the term of this
Agreement, the Parties may agree upon additional press releases.
Notwithstanding the foregoing, neither party may issue any press release or
other publicity or use the name of the other party without both parties' express
written consent.

          15.9   Export Laws.  Notwithstanding anything to the contrary
                 -----------
contained herein, all obligations of Sonic and Starkey are subject to prior
compliance with United States and foreign export regulations and such other
United States and foreign laws and regulations as may be applicable, and to
obtaining all necessary approvals required by the applicable agencies of the
government of the United States and the governments in the Territory. Sonic and
Starkey shall cooperate with each other and shall provide assistance to the
other as reasonably necessary to obtain any required approvals.

          15.10  No Waiver.  No waiver of any term or condition of this
                 ---------
Agreement shall be valid or binding on either party unless agreed in writing by
the party to be charged.  The failure of either party to enforce at any time any
of the provisions of the Agreement, or the failure to require at any time
performance by the other party of any of the provisions of this Agreement, shall
in no way be construed to be a present or future waiver of such provisions, nor
in any way affect the validity of either party to enforce each and every such
provision thereafter.

          15.11  Counterparts.  This Agreement may be executed in two or more
                 ------------
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.

          15.12  Entire Agreement.  This Agreement, including the Exhibits
                 ----------------
attached hereto, constitutes the entire agreement of the parties with respect to
the subject matter hereof, and supersedes all prior or contemporaneous
understandings or agreements, whether written or oral, between Sonic and Starkey
with respect to such subject matter.  The terms of any purchase order are
expressly excluded.  No amendment or modification hereof shall be valid or
binding upon the parties unless made in writing and signed by the duly
authorized representatives of both parties.

                                     -14-
<PAGE>

          IN WITNESS WHEREOF, the undersigned are duly authorized to execute
this Agreement on behalf of Sonic and Starkey as applicable.

SONIC INNOVATIONS, INC.                        STARKEY LABORATORIES, INC.

("Sonic")                                      ("Starkey")

By:  /s/ Jorgen Heide                          By:  /s/ Jerome C. Ruzicka
     --------------------------------------         --------------------------

Print Name:  Jorgen Heide                      Print Name:  Jerome C. Ruzicka
             ------------------------------                -------------------

Title:  Vice President Business Development    Title:  President
        -----------------------------------            -----------------------

                                     -15-
<PAGE>

                                   EXHIBIT A
                                   ---------

                                 SPECIFICATION

                                      [*]
<PAGE>

                                   EXHIBIT B
                                   ---------

                                 Patent Numbers

                       United States Patent No. 5,500,902

                       United States Patent No. 5,848,171
<PAGE>

                                   EXHIBIT C

                           RELIABILITY SPECIFICATION
<PAGE>

TITLE: Solder Stress testing                               SPEC.NO.99012-006

                                    Purpose
1.0  Purpose
-----------

     This document describes the test methods for performing soldering stress
simulation on hearing aid amplifiers.  This test simulates thermal shock effects
subjected to amplifiers during hearing aid production.  Thermal shock effects
can cause delamination of encapsulation epoxy on thickfilm hybrids, cause
blistering or delamination in FR4 epoxy boards, or cause failure due to poor
electrical connections.  This testing determines if the amplifier under test is
prone to the above types of failures or any other type of failure.

2.0  Equipment/Materials
------------------------

          Soldering iron
          Solder pot
          Flux
          Tweezers
          Microscope with range of 30X-200X
          Amplifier print (for reference)

3.0  Procedure
--------------

     Check that all test circuits have been electrically tested and an
electrical response representing each is available for later review.  Mark the
test circuits so they may be easily identified after solder stress testing and
submitted for electrical re-test.

     Method 1 (Glencoe wiring simulation)
     ------------------------------------

     Hybrid amplifier circuits: Inspect closely under 200X magnification for any
     evidence of delamination.

     Surface Mount amplifiers: Inspect closely at 30X for any evidence of kapton
     separation or FR4 damage.

     Do not perform Glencoe wiring simulation on any test sample that exhibits
     any evidence of delamination or damage.  Report results to QE before
     continuing test.

     Set-up
     ------

     .    Install new tip into soldering iron.
     .    Set soldering iron tip to approximately 700F.
     .    Apply flux (as needed) to amplifier circuit.
<PAGE>

TITLE: Solder Stress testing                             SPEC.NO.99012-006

     Glencoe Solder Stress test:
     --------------------------

     .    Apply soldering iron to solder pad #1 on test circuit #1 and dwell for
     about three seconds. Remove iron for about three seconds. Repeat
     solder/desolder cycle twice more for a total of three cycles.

     .    Apply soldering iron to solder pad #1 on test circuit #2 and dwell for
     about three seconds. Remove iron for about three seconds. Repeat
     solder/desolder cycle twice more for a total of three cycles.

     .    Return to test circuit #1 and apply soldering iron to solder pad #2
     and apply three cycles of solder/desolder, as described in the previous
     step. Repeat procedure on test circuit #2 with pad #2.

     .    Repeat three cycles of solder/desolder as described in the steps above
     for every pad on all test circuits.

     Note:  Any sequence of applying three cycles of solder/desolder is
     acceptable as long as the circuit under test does not encounter consecutive
                                                                     -----------
     applications of solder/desolder cycling to different pads on the same
     circuit.  Using circuit pairs for the test, as described in this procedure,
     is the simplest and most time effective method.

     Post-test visual inspection:
     ---------------------------

     Hybrid circuits:  Inspect closely at 200X for any evidence of delamination.

     Surface Mount circuits:  Inspect closely at 30X for any evidence of damage.

     Electrical re-test
     ------------------

     Submit all samples to hybrid lab for electrical retest.  Compare post-test
     response with pre-test response for each test circuit.  Note any
     significant shift in response.

     Method 2 (Solder pot method)
     ----------------------------

     Note:  This method applies only to hybrid thickfilm circuit amplifiers.

     Inspect closely under 200X magnification for any evidence of delamination.
     Do not perform Glencoe wiring simulation on any test sample that exhibits
     any evidence of delamination or damage.  Report result to QE before
     continuing test.

     .    If not otherwise directed by QE, set solder pot temperature to
     approximately 238C.

     .    Use tweezers and dip hybrid into solder pot for a duration of three
     seconds. Allow to cool for about thirty seconds, and repeat solder pot
     dips.

     .    After three dips, look closely for delamination at 200X magnification.
     Observe for any evidence of delamination. Three dips is the minimum
     exposure required for method 2 of Solder Stress Testing.
<PAGE>

TITLE: Solder Stress testing                               SPEC.NO.99012-006

     .    If required, remove any solder bridges with soldering iron.

     Electrical re-test
     ------------------

     Submit all samples to hybrid lab for electrical test.  Compare post-test
     response with pre-test response for each test circuit.  Note any
     significant shift in response.

4.0  Reference Documents
------------------------

     None

5.0  Records
------------

     Test Information compiled in reliability lab evaluation report.
<PAGE>

                Amendment to OEM Agreement Dated April 19, 1999
                                    Between
                     SONIC Innovations, Inc. ("SONIC") and
                    Starkey Laboratories, Inc. ("Starkey")

     SONIC and Starkey agree to amend their OEM Agreement as follows:

     DATE OF AMENDMENT
     ------------------
     December 14, 1999

     GENERAL
     -------

     Starkey agrees to provide SONIC a two-year, guaranteed, non-cancelable
     blanket purchase order for the purchase of SONIC Hybrids.

     TERM
     ----
     January 1, 2000 through December 31, 2001.

     QUANTITY
     --------
     Starkey agrees to purchase a minimum of [ * ] Hybrids per calendar year in
     each of 2000 and 2001.

     CURRENT GENERATION HYBRID PRICING
     ---------------------------------

     For the current generation Hybrid, part number 2000444, the pricing for the
     first [ * ] Hybrids ordered shall be $185.00 each.

     For quantities above [ * ] Hybrids, pricing shall be $[ * ] each.

     NEW GENERATION HYBRID PRICING
     -----------------------------

     For new generation Hybrids, the pricing for the first [ * ] Hybrids shall
     be [ * ] each.

     For Hybrid quantities [ * ]  through [ * ], pricing shall be $[ * ]  each.

     For Hybrid quantities [ * ]  through [ * ], pricing shall be $[ * ]  each.

     For Hybrid quantities [ * ]  through [ * ], pricing shall be $[ * ]  each.

     For Hybrid quantities greater than [ * ], pricing shall be negotiated.

/s/ Jorgen Heide                           /s/ Jerome C. Ruzicka
---------------------------                ---------------------
Jorgen Heide                               Jerome C. Ruzicka
VP International & Licensing Division      President, Starkey Laboratories, Inc.
SONIC Innovations, Inc.

[ * ]= CERTAIN INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO
THE OMITTED PORTIONS.

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