Exhibit 10.32













K/S HIMPP



HIMPP A/S



INTRICON CORPORATION







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AGREEMENT

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CONTENTS





1.
        Preamble
        42.
        Subscription for shares in K/S HIMPP
        43.
        Rights and obligations of IntriCon Corporation regarding K/S HIMPP
        44.
        Subscription for shares in HIMPP A/S
        45.
        Rights and obligations of IntriCon Corporation regarding HIMPP A/S
        46.
        Breach of agreement
        57.
        Applicable law and arbitration
        58.
        Signatures
        6






SCHEDULES



Schedule 1
        Subscription Agreement in K/S HIMPPSchedule 2
        Draft Articles of Association of K/S HIMPP with amendments following IntriCon Corporations subscriptionSchedule 3
        Patent License AgreementSchedule 4
        Articles of Association of HIMPP A/S effective March 31, 2005Schedule 5
        HIMPP A/S Shareholders Agreement effective 15 April 2005






2/6



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THIS AGREEMENT IS MADE ON THE 1. DECEMBER 2006 BETWEEN



1.
        K/S HIMPP, Reg No 19502740, Ny Vestergårdsvej 25, DK-3500 Værløse, Denmark


(K/S HIMPP)

AND



2.
        HIMPP A/S, Reg No 19319075, Ny Vestergårdsvej 25, DK-3500 Værløse, Denmark


(HIMPP A/S)



AND



3.
        IntriCon Corporation, 1260 Red Fox Road, Arden Hills, MN 55112, USA


(INTRICON)



(K/S HIMPP, HIMPP A/S and INTRICON each a Party and together the Parties)



3/6



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1.
        PREAMBLE


1.1.
        K/S HIMPP is a Danish limited partnership established on 28 August 1996. The objects of the partnership is to acquire patent rights within the hearing aid industry with the purpose to license such patent rights to third parties.


1.2.
        HIMPP A/S is a Danish limited liability company established on 1 June 1996. The objects of the company is to be the general partner in K/S HIMPP.


1.3.
        INTRICON is an enterprise trading in the hearing aid industry with the intention to become a limited partner in K/S HIMPP and a shareholder in HIMPP A/S.


1.4.
        K/S HIMPP has agreed to accept INTRICON as a limited partner and HIMPP A/S has agreed to accept INTRICON as a shareholder on the terms and conditions provided for in this Agreement.


2.
        SUBSCRIPTION FOR SHARES IN K/S HIMPP


2.1.
        Simultaneously with the signing of this Agreement, INTRICON subscribes for and K/S HIMPP issues 10 A-Shares of USD 180,000 each in K/S HIMPP on the terms and conditions set forth in the attached Subscription Agreement,Schedule 1.


3.
        RIGHTS AND OBLIGATIONS OF INTRICON REGARDING K/S HIMPP


3.1.
        Draft Articles of Association of K/S HIMPP with amendments following INTRICONs subscription for shares are attached asSchedule 2. The amended Articles of Association are to be approved at a general meeting in K/S HIMPP after the signing of this Agreement.




3.2.
        With respect to INTRICONs use of patent rights owned by K/S HIMPP,


INTRICON shall enter into the Patent License Agreement attached asSchedule 3.

4.
        SUBSCRIPTION FOR SHARES IN HIMPP A/S


4.1.
        When INTRICON has paid the sixth instalment, i.e. on 1 January 2012, INTRICON shall subscribe for and HIMPP A/S shall issue 200 shares of DKK 1,000 each.


4.2.
        The total consideration of DKK 200,000 for the shares in HIMPP A/S shall be paid not later than 30 days after the subscription of the shares.


5.
        RIGHTS AND OBLIGATIONS OF INTRICON REGARDING HIMPP A/S


5.1.
        A copy of the current Articles of Association of HIMPP A/S are attached asSchedule4.




4/6



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5.2.
        A copy of the current Shareholders Agreement effective 15 April 2005 is attached asSchedule 5.


5.3.
        INTRICON shall have no rights or obligations regarding HIMPP A/S prior to the issuance of shares according to Article 4.1. However, INTRICON shall have the right to attend board meetings and general meetings without the right to vote.


6.
        BREACH OF AGREEMENT


6.1.
        In the event of a material breach of this Agreement which has not been remedied thirty (30) days from the date of service by a non-defaulting party of a notice in writing specifying the material breach and requiring its remedy, the non-defaulting party(ies) may terminate this Agreement forthwith.


7.
        APPLICABLE LAW AND ARBITRATION


7.1.
        Any dispute arising between the parties concerning this Agreement cannot be brought before the ordinary courts but shall be resolved by arbitration in Copenhagen in accordance with substantive Danish law.


7.2.
        The party intending to convene the arbitration tribunal shall notify the other party by registered letter of such intent providing a short description of the issues, which shall be brought before the arbitration tribunal. Each party shall then within four weeks appoint an arbitrator. The arbitrators shall within two weeks appoint a third arbitrator who shall be qualified as a lawyer. If the arbitrators have not agreed upon the third arbitrator within two weeks or if a party fails within the time given to appoint an arbitrator, the relevant arbitrator shall be appointed if a party shall so direct by the President of the Maritime and Commercial Court in Copenhagen.


7.3.
        The arbitration tribunal shall itself decide its rules of procedure and shall when handing down its ruling, order the distribution of costs involved in the matter including costs to legal counsel and, if necessary, accountants.


7.4.
        To the extent that they have not been varied by the contents of this Article 7 the provision of the Danish Arbitration Act shall apply. The arbitration tribunal shall conduct its proceedings in the English language.




5/6









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8.
        SIGNATURES




This Agreement is signed in three original copies, one for each of the Parties.





For and on behalf ofK/S HIMPP:Copenhagen, December 15, 2006






|/s/ Søren Westermann
|--------------------





For and on behalf ofHIMPP A/S:Copenhagen, December 15, 2006:






/s/ Søren Westermann








For ¦and on behalf ofIntriCon Corporation:December 26, 2006:






/s/ Mark S. Gorder






6/6

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SCHEDULE 1



THIS SUBSCRIPTION AGREEMENT (the Agreement) is made on December 31, 2006 between



1.
        K/S HIMPP, a limited partnership under Danish law resident at Ny Vestergaardsvej 25, 3500 Værløse, Denmark (the Partnership); and




2.
        IntriCon Corporation, 1260 Red Fox Road, Arden Hills, MN 55112, USA (INTRICON)




for the subscription for shares in the Partnership.



1.
        DEFINITIONS




1.1
        In this Agreement the following words and expressions shall have the following meanings unless where the context explicitly requires otherwise:




Shares
        means
10 A shares in the Partnership of a face value of US$180,000.00 each or in the aggregate of US$1,800,000.00 of the
Partnerships total authorised and issued capital of US$19,950,000 after the increase of the capital;




General Partner
        means the general partner of the Partnership; and




Articles
        means
the Articles of Association of the Partnership to be adopted by the Partnership in its general meeting on April 19,
2007.




2.
        SUBSCRIPTION FOR SHARES




The Limited Partner hereby subscribes for the Shares and the Partnership hereby accepts to be bound by the Limited Partners subscription for the Shares.



3.
        PAYMENT FOR THE SHARES




3.1
        The total consideration of US$1,800,000 for the subscription of the Shares in K/S HIMPP shall be paid in the following instalments:




US$ 260,000
        Upon signing of this Agreement


US$ 260,000
        Not later than December 31, 2007


US$ 260,000
        Not later than December 31, 2008


US$ 260,000
        Not later than December 31, 2009


US$ 260,000
        Not later than December 31, 2010


US$ 260,000
        Not later than December 31, 2011


US$ 240,000
        Not later than December 31, 2012






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3.2
        The consideration mentioned in Article 3.1 is accruing interest of 4 per cent p.a. from the signing of this Agreement until the balance has been paid. Interest is calculated and paid once a year together with the instalments listed in Article 3.1, i.e. first time December 31, 2007.




3.3
        The rights of the Limited Partner under the Articles are subject to the timely payment of all instalments of the consideration mentioned in Article 3.1 above. The total consideration of US$ 1.8 Million shall be considered due and payable as of the subscription date and shall be paid in full even if the Limited Partner merges with a licensee of the Partnership or if ownership interest in the Limited Partner is acquired by a licensee or another limited partner of the Partnership.




4.
        THE LIMITED PARTNERS RIGHTS AND OBLIGATIONS




4.1.
        The Limited Partner hereby accepts and assumes all rights and obligations connected with the subscription for and holding of the Shares pursuant to the Articles or Danish law in general.




4.2.
        By his execution of this Agreement the Limited Partner covenants to have full knowledge of and to accept the terms and condition of the Articles.




4.3.
        The Limited Partner hereby in particular covenants to have full knowledge of and to accept the following provision of the Articles:




(i)The Partnerships general partner is HIMPP A/S whose liability is joint, direct and unlimited for all the Partnerships indebtedness and liabilities. The General Partners issued and outstanding share capital is Danish Kroner 2,400,000. Each Limited Partners liability for the Partnerships indebtedness and liabilities is personal, direct and pro rata and limited to the unpaid part (if any) of that Limited Partners share in the Partnerships authorised and issued capital together with such further contributions in cash as the Partnership acting in general meeting may resolve under Article 4.1, or as may be required to be contributed under Article 4.1;



(ii)No Limited Partner shall have any rights of recourse against the General Partner for that Limited Partners proportion of the Partnerships aggregate liabilities and indebtedness (Article 6.2);



(iii)Upon the complete performance of each limited partners obligations under his subscription agreement with the Partnership that limited partner is entitled to receive a certificate evidencing his shares (Article 7.1);



(iv)The Shares and the certificates are non-negotiable instruments and shall be issued in the name of the owner (Article 7.2);



(v)Each Share may be held by only one natural or legal person. No Share can be divided into sub-shares (Article 8.1);



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(vi)The A shares may only be transferred to a transferee who is itself in control of or controlled by the transferor limited partner (Article 8.2);



(vii)If any Limited Partner shall become insolvent or be in breach of his duties and obligations towards the Partnership under the subscription agreement, the Articles or otherwise, the Partnership shall be entitled to request any loss realised thereby reimbursed by the relevant limited partner, and further to terminate without notice any patent license agreement entered into between the Partnership and the Limited Partner (Article 10); and



(viii)The General Partner shall be charged with the administration of the Partnership and is entitled to remuneration for such work to the extent that such remuneration is reasonable when compared to the work and costs involved in the General Partners performance of his duties. The General Partner may delegate administrative functions and tasks to third parties (Article 11.1).



4.4.
        The Limited Partner and the Partnership have agreed to modify the Limited Partners rights during the period where the consideration for the Shares has not been fully paid up. The following exceptions and amendments to the Articles of Association of K/S HIMPP shall apply:




(i)INTRICON shall not have the right to vote at general meetings until INTRICON has paid an amount of US$1,560,000 of the total consideration for the shares in K/S HIMPP. However, INTRICON shall have the right to attend general meetings and other Partnership meetings from the signing of this Agreement (Article 12.11).



5.
        APPLICABLE LAW AND ARBITRATION


5.1
        Any dispute arising between the parties concerning this Agreement cannot be brought before the ordinary courts but shall be resolved by arbitration in Copenhagen in accordance with substantive Danish law.


5.2
        The party intending to convene the arbitration tribunal shall notify the other party by registered letter of such intent providing a short description of the issues, which shall be brought before the arbitration tribunal. Each party shall then within four weeks appoint an arbitrator. The arbitrators shall within two weeks appoint a third arbitrator who shall be qualified as a lawyer. If the arbitrators have not agreed upon the third arbitrator within two weeks or if a party fails within the time given to appoint an arbitrator, the relevant arbitrator shall be appointed if a party shall so direct by the President of the Maritime and Commercial Court in Copenhagen.




5.3
        The arbitration tribunal shall itself decide its rules of procedure and shall when handing down its ruling, order the distribution of costs involved in the matter including costs to legal counsel and, if necessary, accountants.




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5.4
        To the extent that they have not been varied by the contents of this Article 7 the provision of the Danish Arbitration Act shall apply. The arbitration tribunal shall conduct its proceedings in the English language.




AS WITNESS the signatures of the parties hereto on the date first written above.



For the Partnership:/s/ Søren WestermannManaging DirectorFor and on behalf of K/S HIMPPFor the Limited Partner:/s/ Mark S. GorderPresident & CEOFor and on behalf of IntriCon Corporation






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SCHEDULE 2

















DRAFT

(with amendments following IntriCon Corporations subscription)



ARTICLES OF ASSOCIATION



of



K/S HIMPP















Draft December 2006



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1.
        THE LIMITED PARTNERSHIPS NAME AND PRINCIPAL PLACE OF BUSINESS




1.1.
        The name of the limited partnership is K/S HIMPP (the Partnership). The Partnership shall also trade under the name of K/S Hearing Instruments Manufacturers Patent Partnership (K/S HIMPP).




1.2.
        The Partnerships place of residence is in Værløse Kommune.




2.
        OBJECTS




2.1.
        The Partnerships objects are to carry on a business undertaking by acquiring patent rights with an application within the hearing aid industry and licencing such patent rights to third parties.




3.
        THE COMPANYS CAPITAL




3.1.
        The Partnerships authorised and issued capital US$19,950,000 is divided into 110 (one hundred) A-shares of US$180,000 each and 1 (one) A-share of US$ 150,000 which are held by the following companies in the beneath proportions:




GN ReSound A/S
        10
        A-Shares of US$ 180,000


Phonak AG
        10
        A-Shares of US$ 180,000


Oticon A/S
        10
        A-Shares of US$ 180,000


Widex  A/S
        10
        A-Shares of US$ 180,000


Starkey Laboratories, Inc.
        10
        A-Shares of US$ 180,000


GN ReSound Corporation
        10
        A-Shares of US$ 180,000


Beltone Electronics Corporation
        10
        A-Shares of US$ 180,000


Unitron Industries Ltd.
        10
        A-Shares of US$ 180,000


Sonic Innovations, Inc.
        10
        A-Shares of US$ 180,000


RION Co. Ltd.
        10
        A-Shares of US$ 180,000


IntriCon Corporation
        10
        A-Shares of US$ 180,000


HIMPP A/S
        1
        A-Share of US$ 150,000




3.2.
        The Partnership shall be deemed to be fully established on the subscription by the  Partners of all Shares in the Partnerships authorised and issued capital.




4.
        FINANCING




4.1.
        The Partnerships activities shall be financed by the subscription proceeds derived from the Limited Partners. The Partnership acting in general meeting may by simple majority resolve to request the Limited Partners to make further contributions in cash to the Partnership in excess of the authorised and issued capital to cover running costs of the business. However, annually each Limited Partner shall be obliged to contribute by a maximum of USD 25,000 to cover his proportionate share of the yearly deficit.






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5.
        OWNERSHIP AND APPLICATION OF ANNUAL PROFITS




5.1.
        The Partnership shall be owned by the Limited Partners in the same proportion as each Limited Partners share in the Partnerships authorised and issued capital shall bear to the Partnerships aggregate authorised and issued capital.




5.2.
        The Partnerships net annual profits and losses as evidenced by the Partnerships annual accounts shall be apportioned between the Limited Partners in the same proportion as each Limited Partners share in the Partnerships authorised and issued capital shall bear to the Partnerships aggregate authorised and issued capital. The Partnership acting in general meeting may with the approval of all Limited Partners resolve to apportion a net annual loss differently.




5.3.
        The Partnerships authorised and issued capital may be increased by the subscription of new A-Shares on the same terms and conditions applying to the initial subscription of the Shares.




5.4.
        The A-Shares are irredeemable.




6.
        THE PARTNERS LIABILITY




6.1.
        The Partnerships general partner is A/S HIMPP (the General Partner) whose liability is joint, direct and unlimited for all the Partnerships indebtedness and liabilities. Each Limited Partners liability for the Partnerships indebtedness and liabilities is personal, direct and pro rata and limited to the unpaid part (if any) of that Limited Partners share in the Partnerships authorised and issued capital together with such further contributions in cash as the Partnership acting in general meeting may resolve under Article 4.1, or as may be required to be contributed under Article 4.1.




6.2.
        No Limited Partner shall have any rights of recourse as against the General Partner for that Limited Partners proportion of the Partnerships aggregate liabilities and indebtedness.




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7.
        SHARE CERTIFICATES




7.1.
        Each Limited Partner is on the complete performance of the Limited Partners obligations under his subscription agreement with the Partnership entitled to receive a certificate evidencing his Share.




7.2.
        The Shares and the certificates are non-negotiable instruments and shall be issued in the name of the owner.




7.3.
        The General Partner shall create and maintain a list of the names and addresses of the Limited Partners. Each certificate evidencing Shares shall be endorsed with a notification of the certificates entry in the list of Limited Partners.




7.4.
        If it can be established that a Share certificate has been lost, the General Partner may on the request of the Limited Partner registered in the list of Limited Partners as the owner of the relevant Share certificate notify such person who holds the certificate by no less than three months notice in the Official Gazette to appear at the Partnerships address and there present to the Partnership such evidence of his right and title to the relevant Share certificate as he is relying on. In the event that no one shall come forward as a result of the notice the General Partner shall be entitled to deem the lost Share certificate null and void whereupon the same shall so become null and void and issue a new Share certificate to such person who reported the Share certificate lost and missing.




7.5.
        All costs involved in connection with the annulment and subsequent re-issue of a Share certificate shall be borne by the Limited Partner requesting the annulment.




8.
        ASSIGNMENT AND TRANSFER




8.1.
        Each Share may be held by only one natural or legal person. No Share can be divided into sub-shares.




8.2.
        Shares are non-transferable except where the transfer occurs from a Limited Partner to a transferee which is itself controlled by or in control of such Limited Partner.




8.3.
        No transfer and assignment of ownership to Shares shall be deemed valid and binding as against the Partnership unless and until such time that it has been entered on the list of the Partnerships Limited Partners. The condition for the entry shall be the transferees execution of a certificate that the transferee acquires and assumes all the transferor Limited Partners rights and obligations as against the Partnership in a form satisfactory to the General Partner.




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9.
        EXECUTION




9.1.
        The Partnerships assets cannot be made the subject of attachment or distress orders or any other form of execution for claims unrelated to the Partnership.




10.
        DEFAULT




10.1.
        If any Limited Partner shall become insolvent or be in breach of his duties and obligations towards the Partnership under the subscription agreement, these Articles of Association or otherwise, the Partnership shall be entitled to request any loss realised thereby reimbursed by the relevant Limited Partner and further to terminate without notice any patent license agreement entered into between the Partnership and the Limited Partner.




11.
        ADMINISTRATION




11.1.
        The General Partner shall be charged with the administration of the Partnership and is entitled to remuneration for such work to the extent that such remuneration is reasonable when compared to the work and costs involved in the General Partners performance of his duties. The General Partner may delegate administrative functions and tasks to third parties.




11.2.
        The General Partner shall maintain the Partnerships books and shall prepare the Partnerships budgets.




12.
        GENERAL MEETINGS




12.1.
        The Partnerships highest authority is the general meeting.




12.2.
        The annual general meeting shall be held each year no later than four months after the expiry of the financial year.




12.3.
        The general meeting shall be held in Værløse Kommune unless the General Partner shall direct otherwise.




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12.4.
        The General Partner shall call the general meeting with at least three and no more than five weeks notice by ordinary post to the Limited Partners at the addresses indicated in the list of Limited Partners.




12.5.
        The General Partner may call extra-ordinary general meetings and shall so call an extra-ordinary general meeting if at least two Limited Partners shall reasonably request it. In the latter event the meeting shall be called no later than 14 days after the receipt of the Limited Partners request.




12.6.
        Any general meeting shall be chaired by a person appointed by the General Partner who shall have the final right to resolve all matters regarding the proper calling of the general meeting and the procedures applicable at the general meeting including the casting of votes.




12.7.
        The agenda for the annual general meeting shall as a minimum contain the following items:




1.
        The General Partners account of the Partnerships business in the most recent financial year.


2.
        The presentation of the audited annual accounts for approval.


3.
        The application of the profits and losses pursuant to the annual accounts, including contributions from Limited Partners.


4.
        The approval of the following years budget.


5.
        The appointment of the Partnerships auditor.


6.
        Proposals from Limited Partners if any.


7.
        Miscellaneous.




12.8.
        Proposals from Limited Partners which shall be on the agenda for the annual general meeting shall be presented to the General Partner no later than two weeks before the date of the relevant annual general meeting.




12.9.
        No later than two weeks before the annual general meeting the audited annual accounts shall be circulated to all Limited Partners together with the proposed application of the profits and losses.




12.10.
        Proposals from Limited Partners or the General Partner to amend these Articles of Association shall be circulated to all the Partnerships participants no later than two weeks before the date of the general meeting.




12.11.
        At the general meeting each Limited Partner has one vote for each Share held by him or voted by him under proxy. The right to vote is conditional upon title to the relevant Shares having been registered in the list of Limited Partners no later than 14 days before the date of the general meeting. At the general meeting Limited Partners may be represented and vote by third parties acting under written proxy.




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12.12.
        All resolutions made at the general meeting shall be made by simple majority unless otherwise provided for in these Articles of Association. The general meeting shall not pass resolutions on matters which can be decided by the General Partner.




13.
        SIGNATORY RULE




13.1.
        The Partnership is bound in all respects by the General Partner who is authorised to sign formally on behalf of the Partnership.




14.
        FINANCIAL YEAR




14.1.
        The Partnerships financial year is the calendar year. The Partnerships first financial year commences on the date of incorporation of the Partnership and expires on 31 December 1996.




14.2.
        The Partnerships annual accounts shall be audited by a chartered accountant appointed at the general meeting as the Partnerships auditor for a period of one year.




14.3.
        The Partnerships profit and loss statement and balance sheet shall be available in audited form no later than two months after the expiry of the financial year to which they relate.




14.4.
        The annual accounts shall be prepared in accordance with generally accepted accounting practices and the Annual Accounts Act with such modifications as may be result from the limited partnership form. The Partnership shall advise the Limited Partners not resident in the Kingdom of Denmark of such accounting details as may be necessary for the proper preparation by them of their annual accounts.




15.
        AMENDMENTS TO ARTICLES OF ASSOCIATION




15.1.
        These Articles of Association can only be amended following a proposal to amend made by the General Partner or the Limited Partners and only if the amendment is passed by a general meeting by a majority of 4/5 of the authorized capital. If the proposal is not passed at a general meeting a new general meeting to be held no earlier than four weeks after the first general meeting may pass the resolution with a majority of 4/5 of the Shares represented at the general meeting. Notwithstanding the foregoing, any amendment which could materially and adversely affect any Limited Partner shall require the approval of such Limited Partner.




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15.2.
        Amendments to these Articles of Association which shall be necessary in order to bring them to conform with statutory rules and regulations applying to limited partnerships, the General Partner shall be authorised to complete such amendments without calling a general meeting.




15.3.
        To the extent that changes in the law applying to limited partnerships shall affect the position of the General Partner or the Limited Partner as against public authorities, the General Partner or the Limited Partners shall be entitled to call an extra-ordinary general meeting to debate the necessary amendments.




15.4.
        The General Partner or each Limited Partner may then propose a change in the Partnerships corporate identity and the general meeting can pass such resolution by a majority of 4/5 of the Shares represented at such general meeting. The articles of association applying to the different entity shall to the greatest extent possible be similar to these Articles of Association including the rights and obligations of the General Partner and the Limited Partners.




15.5.
        In the event of the restructuring of the Partnership to another corporate form the Partnerships auditor shall immediately prepare an opening statement evidencing each Limited Partners capital account. No Limited Partner shall be subject to personal liability as a result of the restructuring of the Partnership without in each case having consented to such change in liability.




15.6.
        The Partnership shall cease on the alienation of its assets. The General Partner shall in that event be authorised to resolve to liquidate the Partnership.




16.
        TERM AND TERMINATION




16.1.
        On resolving to liquidate the Partnership the General Partner shall appoint a liquidator who shall be charged with the liquidation of the Partnership accounting at all times to the Partnership acting in general meeting, and who, on the discharge of the Partnerships liabilities shall distribute the net assets of the Partnership to the Limited Partners in equal proportion to their share in the Partnerships authorised and issued share capital.




16.2
        The Partnership shall be liquidated at the latest 20 years after its incorporation or upon the dissolution, liquidation or other event of withdrawal of the General Partner.




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16.3
        At the earliest as from January 31, 1998 a Limited Partner may choose in the future not to participate in the losses or profits of the Partnership. Such decision shall be notified in writing to the General Partner and shall be effective as from a July 1 or January 1 (the Termination Date) if notified no later than three (3) months prior to the Termination Date.




After the Termination Date, any royalty-free license to use Partnership patents shall still continue in full force and effect, but the Limited Partner not participating in losses or profits of the Partnership shall not be granted any right to use partnership patents acquired by the Partnership after the Termination Date.



17.
        ARBITRATION




17.1.
        Any dispute arising between the Limited Partners and the General Partner concerning the Partnership or the interpretation of these Articles of Association cannot be brought before the ordinary courts but shall be resolved in accordance with Danish substantive law by arbitration in Copenhagen.




17.2.
        The party intending to convene the arbitration tribunal shall notify the other party by registered letter of such intent providing a short description of the issues which shall be before the arbitration tribunal. Each party shall then within four weeks appoint an arbitrator. These arbitrators shall within two weeks appoint a third arbitrator who shall be educated as a lawyer. If the arbitrators have not agreed the third arbitrators within two weeks or if a party fails within the time given to appoint an arbitrator, the relevant arbitrator shall be appointed if a party shall so direct by the President of the Maritime and Commercial Court in Copenhagen.




17.3.
        The arbitration tribunal shall itself decide its rules of procedure and shall when handing down its ruling order the taxing of costs involved in the matter including costs to legal counsel and, if necessary, accountants.




17.4.
        To the extent that they have not been varied by the contents of this Article 17 the provision of the Arbitration Act shall apply. The arbitration tribunal shall conduct its proceedings in the English language.




18.
        COSTS




18.1.
        All costs involved in the incorporation of the Partnership shall be borne by the Partnership.






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SCHEDULE 3









PATENT LICENSE AGREEMENT



between



K/S HIMPP



and



IntriCon Corporation











December 2006



---

IntriCon Corporation


1260 Red Fox Road


Arden Hills, MN 55112


USA


(in the following referred to as Licensee)




and




K/S HIMPP


Ny Vestergaardsvej 25


DK- 3500 Vaerloese


Denmark


(in the following referred to as Licensor)




have today entered into the following



1.
        PATENT LICENSE AGREEMENT PREAMBLE




1.1.
        Licensor is the owner of the entire right, title and interest in certain patents and patent applications.




1.2.
        Licensee wishes to obtain a non-exclusive license to the patents and patent applications as defined below, and Licensor is willing to grant said license to Licensee on the terms hereinafter set forth.




2.
        DEFINITIONS




2.1.
        The term Licensed Patents as used in this Agreement shall be defined as all patents and patent applications owned by Licensor as of the effective date of this Agreement, or acquired during the term of this Agreement, and which Licensor has the right to license hereunder, including without limitation the patents and patent applications listed in Exhibit A to this Agreement, as well as any patents which are later issued from patent applications listed in Exhibit A.




2.2.
        The term Licensed Products as used in this Agreement shall mean hearing aids, components thereof or any apparatus, device or system which is designed by Licensee for use with a hearing aid, covered by a claim of a Licensed Patent or made by a process covered by a claim of a Licensed Patent and which does not include features covered by a Licensed Patent not incorporated by Licensee but incorporated by customers of Licensee or other unrelated third parties.




2.3.
        For purposes of this Agreement the term Affiliated Company shall include a company or entity which itself is directly or indirectly controlled by or directly or indirectly controls the Licensee, or any company or entity, which is directly or indirectly controlled by the company or entity controlling the Licensee. For purposes of this Clause 2.3 the term control shall mean a shareholding or similar ownership of more than 50 per cent.




-1-



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3.
        THE LICENSE




3.1.
        Subject to the terms and conditions hereinafter set forth, and subject to any prior conflicting rights that may have been granted under the Licensed Patents, Licensor hereby grants to Licensee a non-exclusive, worldwide license under the Licensed Patents to make, use, sell, have made and import Licensed Products.




3.2.
        Licensee is aware that license agreements substantially identical to this Agreement have already or will be made between Licensor and its present and future limited partners, and that license agreements on terms that are not identical to this Agreement may be entered into between Licensor and third party licensees granting to such licensees a non-exclusive license to the Licensed Patents.




3.3.
        The grant of license hereunder is for the use exclusively by Licensee and Affiliated Companies of Licensee, and Licensee shall not grant to third parties any sub-licenses or other rights under the Licensed Patents.




3.4.
        The above non-exclusive rights of the parties may be subject to restrictions or limitations imposed under mandatory provisions of the EU or under national law or regulations and such provisions shall apply and be considered part of this Agreement.




3.5.
        Licensor hereby covenants and agrees with Licensee that neither it nor any person directly or indirectly controlled by it or claiming through it will bring suit or otherwise assert a claim against Licensee, its affiliates or its customers before any court or administrative agency in the world, based on or arising out of any of the Licensed Patents and based on activities within the scope of the license rights granted herein, whether such claim arose before or after the effective date or is based on events which occurred before or after the Effective Date. This covenant not to sue shall run with title to the Licensed Patents, and shall bind any assignee or other person to whom Licensor may convey an interest in the Licensed Patents. For greater certainty, this covenant shall only extend to customers of Licensee in respect of Licensed
Products or products incorporating Licensed Products.




4.
        THE PATENTS




4.1.
        During the life of this Agreement Licensor in its sole discretion shall decide what steps shall be taken to obtain patents that have been applied for and to maintain the patents already granted. All costs connected with the maintenance and issuance of patents shall be paid by Licensor.




4.2.
        Licensee has been informed that Licensor may at its sole discretion discontinue the maintenance of the Licensed Patents or part thereof, and Licensee agrees that it shall not have any right of compensation or any other claim against Licensor based on the fact that the Licensed Patents or some of them may lapse.




-2-



---

5.
        ASSIGNMENT/SUB-LICENSES




5.1.
        Licensee shall not be entitled to assign its rights and obligations hereunder to a third party without the express permission of Licensor.




5.2.
        Licensee shall not be entitled to grant sub-licenses.




6.
        WARRANTIES OF LICENSOR




6.1.
        Licensor warrants,




(i)
        that Licensor is the owner of the entire right, title and interest in the Licensed Patents and has the right to grant the license granted herein; and




(ii)
        that Licensor is not aware of any prior conflicting rights granted under any of the Licensed Patents except: the Central Institute for the Deaf (CID) has been granted an option for an exclusive license under all patents listed in Exhibit A under patent families CID1 to CID5 for all fields of use except hearing aids.




6.2.
        Nothing in this Agreement shall be construed as a representation or warranty by Licensor as to the technical or commercial results, which can be obtained by the exploitation of the Licensed Patents.




6.3.
        The parties agree that should a patent not issue from any of the applications listed in Exhibit A hereto, the terms hereof inclusive of Licensees obligations hereunder shall be otherwise unaffected by such occurrence.




7.
        INFRINGEMENT




7.1.
        In the case of any third party infringing the Patents, Licensor shall in its sole discretion decide whether legal proceedings shall be initiated to prevent such infringement. If legal proceedings are initiated, Licensee shall, if requested, act under the instructions of Licensor in this regard to the extent that such instructions are not contrary to the interest of Licensee.




7.2.
        Costs incurred in connection with legal proceedings shall be borne by Licensor.




8.
        PRODUCT LIABILITY AND COMPLIANCE




8.1.
        Only Licensee shall be liable for any claim for compensation, which might be set forth by any third party as a consequence of the exploitation of the Licensed Patents.




8.2.
        Licensee shall observe and comply with all local laws, rules and regulations in the territory applicable to the exploitation of the Licensed Patents, and shall at its own cost obtain any necessary governmental permit or approval.




-3-



---

9.
        SECRECY




9.1.
        The parties hereto acknowledge that each party has an interest in maintaining the confidentiality of the Invention and the parties business and trade practices. Therefore the parties shall treat as secret and confidential all information relating to the other partys business and products, and to the Invention (collectively, the Confidential Information). The parties each agree to use their best efforts to prevent the unauthorized use and disclosure of the Confidential Information, which shall include requiring all third parties to whom the Confidential Information is disclosed to execute confidentiality agreements containing terms similar to those contained in this Article 9.1. Notwithstanding the foregoing, the parties may disclose any Confidential Information which has been independently acquired from a third
party, that does not have an obligation of confidentiality to any of the parties, which is made public incident to the filing of patent applications or the issuance of patents, which has otherwise become generally known in the industry in which the parties operate other than as a result of wrongdoing by the party disclosing such information, or the disclosure is required pursuant to judicial order or the mandate of any governmental agency or authority.




9.2.
        The obligations of confidentiality hereunder shall continue after the expiration of this Agreement, irrespective of the cause and irrespective of which of the parties might terminate the Agreement.




10.
        FORCE MAJEURE




10.1.
        Neither party shall be under any liability to the other party hereunder due to circumstances that such party shows is beyond his control, such as change of legislation, government prohibition, or other kind of force majeure. The parties undertake to notify the other party if any force majeure circumstances should occur.




11.
        LICENSE FEES




11.1.
        In consideration of the license granted hereunder, Licensee has under Article 4 of the Articles of Association of Licensor in Licensees capacity as a limited partner of the partnership agreed to pay a proportional share of the partnerships yearly deficit, however not exceeding USD 25,000.




11.2.
        Payment of the above license fees shall be effected in accordance with the terms of the Articles of Association of the limited partnership  first time for the calendar year of 2006.




12.
        TERM OF AGREEMENT




12.1.
        This Agreement shall be deemed to have come into force on January 1, 1997 and shall remain in force and be non-terminable by Licensor until the expiry of all of the Licensed Patents, however, subject to the timely payment by Licensee of all amounts due to Licensor under a subscription agreement entered into simultaneously herewith (in the following referred to as the Subscription Agreement).




-4-



---

12.2.
        Once the total license fee of USD 1.8 million shall have been paid, Licensee shall be entitled to terminate its obligation to pay license fees in accordance with Article 11.1 (ii) above subject to three months notice to terminate at any July 1 or January 1 (the Termination Date). After the Termination Date any license to use the Licensed Patents shall still continue in full force and effect but Licensee shall not have any right to use patents acquired by Licensor after the Termination Date.




13.
        BREACH OF AGREEMENT




13.1.
        In the event of a material breach by Licensee of any of its material obligations under this Agreement or under the Subscription Agreement which is not remedied within thirty (30) days from the date of service by Licensor of a notice in writing specifying the material breach and requiring its remedy, Licensor may terminate this Agreement forthwith.




13.2.
        In the event of a material breach by Licensor of any of its material obligations under this Agreement which is not remedied within thirty (30) days from the date of service by Licensee of a notice in writing specifying the material breach and requiring its remedy, Licensee may terminate this Agreement forthwith.




14.
        APPLICABLE LAW AND ARBITRATION




14.1.
        Any dispute arising between the parties concerning this Agreement cannot be brought before the ordinary courts but shall be resolved in accordance with substantive Danish law by arbitration in Copenhagen.




14.2.
        The party intending to convene the arbitration tribunal shall notify the other party by registered letter of such intent providing a short description of the issues, which shall be before the arbitration tribunal. Each party shall then within four weeks appoint an arbitrator. These arbitrators shall within two weeks appoint a third arbitrator who shall be educated as a lawyer. If the arbitrators have not agreed upon the third arbitrator within two weeks or if a party fails within the time given to appoint an arbitrator, the relevant arbitrator shall be appointed if a party shall so direct by the President of the Maritime and Commercial Court in Copenhagen.




14.3.
        The arbitration tribunal shall itself decide its rules of procedure and shall when handing down its ruling, order the distribution of costs involved in the matter including costs to legal counsel and, if necessary, accountants.






-5-



---

14.4.
        To the extent that they have not been varied by the contents of this Article 14 the provision of the Danish Arbitration Act shall apply. The arbitration tribunal shall conduct its proceedings in the English language.






______________________________, 2006





For the Licensee:
        
        For the Licensor:/s/ Mark S. Gorder
        
        /s/ Søren WestermannIntriCon Corporation
        
        K/S HIMPP








-6-



---

Exhibit A



008

Calibration Device and Auditory Prosthesis Having Calibration Information (Widin et al)



Country
        Serial #
        Patent NumberUnited States
        192,213
        4,992,966Canada
        596,199
        1,321,260Australia
        32674/89
        614,825Japan
        115926/89
        3113661South Korea
        6179/89
        127307Denmark
        1764/89
        175289EPO
        89304712.6
        EP 0 341995 BAustria
        EPO
        123708France
        EPO
        0 341 995Germany
        EPO
        P68923991Netherlands
        EPO
        0 341 995Switzerland
        EPO
        0 341 995United Kingdom
        EPO
        0 341 995






Exhibit A Page1



---

009

Method and Apparatus for Determining Acoustic Parameters of an

Auditory Prosthesis Using Software Model (Widin et al)



Country
        Serial #
        Patent NumberUnited States
        07/888,148
        Re 34,961United States
        192,214
        4,953,112Canada
        596,743
        1,321,635Australia
        33033/89
        619,275South Korea
        6181/89
        109656Denmark
        1766/89
        175521EPO
        89304711.8
        EP 0 396 831 BAustria
        EPO
        114103France
        EPO
        0 396 831Germany
        EPO
        P68919349Netherlands
        EPO
        0 396 831Switzerland
        EPO
        0 396 831United Kingdom
        EPO
        0 396 831






010

Hearing Aid Programming Interface (Rising)



Country
        Serial #
        Patent NumberUnited States
        192,242
        4,961,230








Exhibit A Page2



---

011

Hearing Aid Programming Interface and Method (Mangold)




Country
        Serial #
        Patent NumberUnited States
        192,259
        4,989,251Canada
        599069/89
        1,331,651Japan
        117187/89
        2965995EPO
        89304487.5
        EP 0 341 903 BGermany
        EPO
        P68919270France
        EPO
        0 341 903Netherlands
        EPO
        0 341 903United Kingdom
        EPO
        0 341 903






012

Auditory Prosthesis Using Fitting Vectors (Widin)



Country
        Serial #
        Patent NumberUnited States
        07/192,351
        4,901,353Canada
        596414/89
        1,300,732Australia
        32789/89
        621,101Japan
        115928/89
        3021467South Korea
        6180/89
        115905Denmark
        1765/89
        175586EPO
        89304714.2
        EP 0 341 997 BAustria
        EPO
        111289France
        EPO
        0 341 997Germany
        EPO
        P68917980Italy
        EPO
        0 341 997Netherlands
        EPO
        0 341 997Switzerland
        EPO
        0 341 997United Kingdom
        EPO
        0 341 997






Exhibit A Page3



---

014

Auditory Prosthesis With Datalogging Capability (Mangold et al)



Country
        Serial #
        Patent NumberUnited States
        353,220
        4,972,487Canada
        594962/89
        1,317,666Australia
        31420/89
        610,705Japan
        80196/89
        2664466EPO
        89302689.8
        EP 0 335 542 BFrance
        EPO
        0 335 542Germany
        EPO
        P68920060Netherlands
        EPO
        0 335 542Switzerland
        EPO
        0 335 542United Kingdom
        EPO
        0 335 542






016

Method, Apparatus, System and Interface Unit for Programming a Hearing Aid (Platt)



Country
        Serial #
        Patent NumberUnited States
        525,901
        5,226,086Australia
        75912/91
        641,239Japan
        34867/91
        2516793Germany
        G9106237.3
        G91062373








Exhibit A Page4



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017

Hearing Aid and Method For Preparing same (Woodfill, Jr.)



Country
        Serial #
        Patent NumberUnited States
        887,592
        5,321,757Japan
        512130/91
        2960544EPO
        91912842.1
        EP 0 544 687 BGermany
        EPO
        P69112407






019

Auditory Prosthesis, Noise Suppression Apparatus and Feedback Suppression Apparatus having Focused Adaptive Filtering

(Soli et al)



Country
        Serial #
        Patent NumberUnited States
        912,886
        5,402,496Japan
        5172767/93EPO
        93111138.9
        EP 0 579 152 BGermany
        EPO
        P69327992.








Exhibit A Page5



---

021

Auditory Prosthesis For Adaptively Filtering Selected Auditory

Component By User Activation and Method For Doing Same

(Soli et al)



Country
        Serial #
        Patent NumberUnited States
        07/921,508
        6,563,931Japan
        188281/93
        3313834EPO
        93112050.3
        EP0 581 262 BGermany
        EPO
        P69325211.1France
        EPO
        0 581 262United Kingdom
        EPO
        0 581 262






CID1

Hearing aids, signal supplying apparatus, system for compensating

hearing deficiencies and methods,(Engebretson et al.)



COUNTRY
        Application
        Patent #United States
        645,004
        4,548,082
        Expiry 28-aug-04Canada
        4488699
        1240029
        Expiry 14-aug-05Japan
        503667/85
        8-024399
        Aban   06-mar-05Australia
        47261/85
        579890
        Aban 14-aug-03Australia
        31102/89
        623379
        Aban 14-aug-03Denmark
        1880/86
        
        Aban 24-Apr-04Israel
        76031
        IL76031
        Aban 07-aug-03EP
        85904203.8
        EP 0 191 075Germany
        EP
        P3586098
        Expiry 14-aug-05France
        EP
        0 191 075
        Expiry 14-aug-05Netherlands
        EP
        0 191 075
        Aban 14-aug-03Austria
        EP
        AT76549
        Aban 14-aug-03Belgium
        EP
        0 191 075
        Aban 14-aug-03Switzerland
        EP
        0 191 075
        Aban 14-aug-03GB
        EP
        191 075
        Aban 14-aug-03Italy
        EP
        191 075
        Aban 14-aug-03








Exhibit A Page6



---

CID2

Electronic filters, hearing aids and methods, (Engebretson et al.)



COUNTRY
        Application
        Patent #United States
        07/172,266
        5,016,280United States
        059,800
        5,475,759Canada
        594441
        1,326,285Denmark
        1445/89Australia
        31421/89
        611781JP
        70283/89
        2921849EP
        89302762.3
        EP 0 342 782 BGermany
        EP
        0 342 782France
        EP
        0 342 782UK
        EP
        0 342 782






CID3

Electronic Filters, signal conversion apparatus, Hearingaids and

methods



COUNTRY
        Application
        Patent #United States A
        180,170
        5,111,419United States B
        056,054
        5,357,251United States C
        792,706
        5,225,836United States D
        059/800
        5,475,759Canada
        595860
        1335674Australia
        32458/89
        621100Japan
        91715/89
        3307923Japan
        11-211360
        3308243EP
        89303482.7
        EP 0 339 819Germany
        EP
        P6891974.1France
        EP
        339 819








Exhibit A Page7



---



CID4

Adaptive noise reduction circuit for a sound reproduction system, (Engebretson et al.)



COUNTRY
        Application
        Patent #United States
        842,566
        5,412,735Canada
        2090297
        2090297Australia
        33046
        658476Japan
        40303/93
        3040893EP
        93301401.1
        EP 0 558 312 BGermany
        EP
        P69325529.3France
        EP
        0 558 312






CID5

Adaptive gain and filtering circuit for a sound reproductive system

(Engebretson et al.)



COUNTRY
        Application
        Patent #United States A
        044,246
        5,706,352United States B
        477,621
        5,724,433Canada
        2160133
        2,160,133Japan
        522504/94
        2931101EPO A
        94914764.9
        0 693 249Germany
        EP
        0 693 249France
        EP
        0 693 249UK
        EP
        0 693 249EP0 B
        01121068.9






Exhibit A Page8



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10.
        DECIBEL INSTRUMENTS PATENT LIST






Ref.
        Patent number
        TitleDEC01
        WO US95/17113
US 5,701,348
        Articulated hearing deviceDEC02
        US 5,785,661
        Highly configurable hearing aidDEC03
        WO 98/06330
US 5,645,074
AU 729349
        Intracanal prosthesis for hearing evaluationDEC04
        WO US96/13126
US 5,825,894
US 6,167,138

US 5,923,764
CA 2,235,067
AU 724786
        Spatialization for hearing evaluation



Virtual electroacoustic audiometry for unaided simulated
aided, and aided hearing evaluationDEC11
        US Des. 405,528
        Combined hearing aid and receiverDEC17
        US 6,129,174
        Minimal contact replaceable acoustic couplerDEC42
        US 5,197,332
        Headset hearing tester and hearing aid programmer






Exhibit A Page9



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NEC Patents List



Country
        Appl #
        Patent #
        TitleNEC-01
        Japan
        10-201758
        JP 3045149
        Hearing aid system using directivity microphone arrayNEC-02
        Japan
USA
Denmark
        8-277918
08/955454
97/1190
        JP 3165044
US 6023517
        Digital hearing aidNEC-03
        Japan
USA
Denmark
        8-329354
987617
97/1429
        JP 2904272
US 5838801
DK 142997
        Digital hearing aidNEC-04
        Japan
USA
Denmark
        8-243254
08/929771
97/1043
        JP 2953397
US 6094489
        Digital hearing aid and its hearing sense compensation processing methodNEC-05
        Japan
USA
        7-278648
738556
        JP 2970498
US 5892836
        Digital hearing aidNEC-06
        Japan
USA
DK
        7-268188
08/732879
96/1121
        JP 2763022
US 591099
DK 112196
        Digitally programmable hearing aid communicable with external apparatus through acoustic signalNEC-07
        Japan
        07-117424
        JP 2638563
        History holding type hearing aidNEC-08
        Japan
USA
        7-334525
774069
        JP 2982672
US 583561
        Hearing aid systemNEC-09
        USA
Denmark
        773952
96/1509
        US 585266
DK 150996
        Hearing aid for controlling hearing sense compensation with suitable parameters internally tailoredNEC-10
        USA
Denmark
        08/773954
96/1463
        US 633033
DK 146396
        Hearing aid






Exhibit A Page10



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SCHEDULE 4





HIMPP A/S



VEDTÆGTER
        
        ARTICLES OF ASSOCIATION1.0NAVN
        
        1.0NAMESelskabets navn er HIMPP A/S. Selskabets binavn er Hearing Instruments Manufacturers Patent Partnership A/S (HIMPP A/S).
        
        The name of the Company is HIMPP A/S. The Company shall also trade under the name Hearing Instruments Manufacturers Patent Partnership A/S (HIMPP A/S).2.0HJEMSTED
        
        2.0REGISTERED OFFICESelskabets hjemsted er i Værløse kommune.
        
        The registered office of the Company shall be in the municipality of Værløse.3.0FORMÅL
        
        3.0OBJECTSSelskabets formål er at virke som komplementar i K/S HIMPP, hvis formål er at erhverve og licensiere patenter til høreapparatindustrien samt dermed beslægtet virk­somhed.
        
        The Companys objectives shall be to act as a general partner of K/S HIMPP, whose objective is to acquire and license patents for the hearing aid industry and business related hereto.4.0SELSKABETS KAPITAL
        
        4.0THE COMPANYS SHARE CAPITALSelskabets aktiekapital udgør kr. 2.400.000  for­delt på aktier à kr. 1.000 eller multipla heraf.
        
        The share capital of the Company equals DKK 2,400,000 divided into shares of DKK 1,000 each or any multiple hereof.5.0SELSKABETS AKTIER
        
        5.0THE COMPANYS SHARES5.1
Selskabets aktier skal lyde på navn og noteres i selskabets aktiebog.
        
        5.1.
The shares shall be issued to registered hol­ders and shall be recorded in the Companys register of shareholders.






---



5.2
Selskabets aktier er ikke omsætningspapirer.
        
        5.2
The shares are non-negotiable instruments.5.3
Enhver aktieovergang kræver bestyrelsens forudgående samtykke.
        
        5.3
Any transfer of shares requires the previous consent of the Board of Directors.5.4
Aktier, som er bortkommet, skal kunne mortificeres af bestyrelsen uden dom i henhold til de regler, der gælder vedrørende mortifikation af aktier, som ikke er omsætningspapirer.
        
        5.4
Share certificates which have been lost can without judgement be declared null and void by the Board of Directors according to the sta­tutory rules which are applicable to non-ne­gotiable instruments.




6.0GENERALFORSAMLINGEN, KOMPETENCE, STED OG INDKALDELSE
        
        6.0GENERAL MEETING OF SHAREHOLDERS, AUTHO­RITY, PLACE AND NOTICE6.1
Generalforsamlingen har den højeste myn­dighed i alle selskabets anliggender indenfor de i lovgivningen og nærværende vedtægter fastsatte grænser.
        
        6.1
Within the limits set by law and by these Ar­ticles of Association the General Meeting of Shareholders has the supreme authority in all matters relating to the Company.6.2
Selskabets generalforsamlinger skal afholdes på selskabets hjemsted eller i USA. Den ordinære generalforsamling skal afholdes hvert år inden 5 måneder efter regnskabsårets udløb.
        
        6.2
The General Meetings shall be held at the re­gistered office of the Company or in the USA. The ordinary General Meeting shall be held each year not later than 5 months after the end of the accounting year.6.3
Generalforsamlinger indkaldes af bestyrelsen med mindst 14 dages og højst 4 ugers varsel ved almindeligt brev eller telefax til hver en­kelt aktionær.
        
        6.3
General Meetings shall be convened by the Board of Directors with not less than 14 days notice and not more than 4 weeks notice by letter or telefax to each individual share­holder.






---



7.0GENERALFORSAMLINGEN, DAGSORDEN
        
        7.0GENERAL MEETING OF SHAREHOLDERS, AGENDADagsordenen for den ordinære general­forsamling skal indeholde:
        
        At the ordinary General Meeting the fol­lowing business shall be transacted:1.
Bestyrelsens beretning om selskabets virk­somhed i det forløbne år.
        
        1.
Report of the Board of Directors on the Com­panys activities during the past year.2.
Fremlæggelse af årsregnskab med revi­sionspåtegning til godkendelse samt års­beretning.
        
        2.
Presentation of the annual accounts endorsed by auditor for adoption and annual report.3.
Beslutning om anvendelse af overskud eller dækning af tab i henhold til det godkendte årsregnskab.
        
        3.
Decision as to the appropriation of profit or settlement of loss according to the adopted annual accounts.4.
Valg af bestyrelsesmedlemmer og evt. suppleanter.
        
        4.
Election of members to the Board of Directors and substitutes for same.5.
Valg af revisor.
        
        5.
Election of auditor.6.
Eventuelle forslag fra bestyrelsen og/eller ak­tionærerne.
        
        6.
Proposals, if any, from the Board of Directors and/or the shareholders.8.0GENERALFORSAMLINGEN, STEMMERET OG BE­SLUTNINGER
        
        8.0GENERAL MEETING OF SHAREHOLDERS, VOTING RIGHT AND RESOLUTIONS8.1
Hvert aktiebeløb på kr. 1.000 giver én stemme.
        
        8.1
Each share of DKK 1,000 entitles the share­holder to one vote.8.2
På generalforsamlingen træffes alle beslut­ninger ved simpelt flertal, bortset fra de til­fælde, hvor Aktieselskabsloven kræver kvali­ficeret flertal.
        
        8.2
All resolutions at the General Meeting shall be adopted by simple majority of votes unless special majority of votes is required by the Companies Act.






---



9.0BESTYRELSE OG DIREKTION
        
        9.0BOARD OF DIRECTORS AND MANAGEMENT9.1
Selskabet ledes af en bestyrelse bestående af maksimalt tolv (12) med­lemmer valgt af generalforsamlingen for tiden indtil næste ordinære generalforsamling.
        
        9.1
The Company shall be managed by a Board of Directors of a maximum of twelve (12) members elected at the Gene­ral Meeting, the term being the period until the next ordinary General Meeting.9.2
Bestyrelsen skal ved en forretningsorden træf­fe nærmere bestemmelser om udførelsen af sit hverv.
        
        9.2
The Board must draw up its own rules of pro­cedure.9.3
Bestyrelsen ansætter en direktør til at vare­tage den daglige ledelse af selskabets virk­somhed.
        
        9.3
The Board of Directors shall appoint one re­gistered manager in charge of the day-to-day operations of the Company.




10.0TEGNINGSREGEL
        
        10.0AUTHORITY TO BIND THE COMPANYSelskabet tegnes af direktøren eller tre medlemmer af bestyrelsen i forening.
        
        The Company shall be bound by the registered manager or by the joint signatures of three members of the Board of Directors.11.0REVISION
        
        11.0AUDITINGSelskabets regnskaber revideres af én statsautoriseret revisor, der vælges af den ordinære generalforsamling for et år ad gangen. Genvalg kan finde sted.
        
        The auditing of the Companys accounts shall be carried out by one chartered ac­countant elected by the General Meeting for one year at a time. Re-election may be made.12.0REGNSKABSÅR
        
        12.0ACCOUNTING YEARSelskabets regnskabsår løber fra den 1. januar til den 31. december. Første regnskabsperiode dog fra stiftelsen til 31. december 1996.
        
        The accounting year of the Company runs from January 1 to December 31. However, the first accounting period runs from the formation of the company to December 31, 1996.**********
        
        **********Ovenstående vedtægter gældende fra 15. april 2005 er blevet vedtaget på den ordinære generalforsamling den 31. marts 2005.
        
        The above Articles of Association effective 15 April 2005 have been adopted at the Ordinary General Meeting held on 31 March 2005.






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SCHEDULE 5









SHAREHOLDERS AGREEMENT



between



GN ReSound A/S,



Phonak AG,



William Demant Holding A/S,



Widex A/S,



Starkey Laboratories, Inc.,



GN ReSound North America Corporation,



Siemens Audiologische Technik GmbH,



Beltone Electronics Corporation,



Sonic Innovations, Inc.



Rion Co. Ltd.



Unitron Hearing Ltd.



and



Türk+Türk Electronic GmbH





Effective 15 April 2005



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This Shareholders Agreement is made by and between



GN ReSound A/S

21 Mårkærvej

DK-2635  Tåstrup

Denmark



and



Phonak AG

28 Laubistrütistrasse

CH-8712  Stäfa

Switzerland



and



William Demant Holding A/S


58 Strandvejen

DK-2900  Hellerup

Denmark



and



Widex A/S

25 Ny Vestergaardsvej

DK-3500  Værløse

Denmark



and



Starkey Laboratories, Inc.

Technical Center

6600 Washington Avenue South

Eden Prairie, Minnesota 55344

USA



and



GN ReSound North America Corporation

4201 W. Victoria Street

Chicago, IL 60646

USA



and



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Siemens Audiologische Technik GmbH

Gebbertstrasse 125

91058 Erlangen

Germany



and



Beltone Electronics Corporation

4201 W. Victoria Street

Chicago, IL. 60646

USA



and



Sonic Innovations, Inc.

5330 South 900 East

Suite 240

Salt Lake City

Utah 84117-7261

USA



and



Rion Co. Ltd.

3-20-41 Higashimotomachi

Kokubunji

Tokyo 185-8533

Japan



and



Unitron Hearing Ltd.

20, Beasley Drive

Kitchener, Ontario N2G 4X1

Canada



and



Türk+Türk Electronic GmbH

Am Dännekamp 15

51469 Bergisch Gladbach

Germany



(hereinafter collectively referred to as the Shareholders)



concerning their rights and obligations as shareholders in the joint venture company, HIMPP A/S, (Reg no 19319075), a corporation organised and existing under the laws of Denmark, having its registered office at 25 Ny Vestergårdsvej, DK-3500 Værløse, Denmark (hereinafter referred to as the Company).





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11.
        DEFINITIONS


The following terms shall have the meaning set forth below


Partnership
        shall mean the HIMPP limited partnership established under Danish law having a partnership capital of USD 18,150,000  divided into 100 partnership shares of USD 180,000 and one share of USD 150,000.


Partners
        means the general partner (HIMPP A/S) and the limited partners of the Partnership.


Limited Partners
        means the limited partners of the Partnership.


12.
        PURPOSE


12.1.
        The Companys purpose is to act as the general partner of a limited partnership established under Danish law, as reflected in the Articles of Association of the Company attached asSchedule 1.


12.2.
        The Shareholders agree to let the Company act as a joint legal entity for conducting the activity of the Partnership, which is to own certain patents and patent applications acquired from ReSound Corporation, Inc. and from others, and to license such rights free of charge to the Limited Partners and to third parties on normal commercial terms.


12.3.
        The Shareholders agree that the Shareholders can be joined by any other hearing aids manufacturer that would like to join the Partnership as a limited partner and to join the Company as a shareholder and that such new shareholders should be admitted on terms equal to those offered to the Partners.


13.
        SCOPE


13.1.
        The Shareholders agree as sole shareholders of the Company and represented on the Board of Directors that they are under the obligation to exercise their rights in the Company only through their representatives on the Board of Directors, or at shareholders meetings, in conformity with this Agreement.


13.2.
        In consequence hereof, this Agreement shall have priority between the parties over the Articles of Association of the Company, so that no party can evoke the Articles of Association in support of a result that the party concerned could not have obtained through this Agreement.




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13.3.
        All certificates of shares owned by each of the Shareholders shall bear a legend to the effect that the Shareholders have entered into a shareholders agreement, which affects their rights as shareholders.


14.
        THE SHARE CAPITAL


14.1.
        The share capital of the Company is DKK 2,400,000  - fully paid up and owned by the Shareholders as follows:


GN ReSound A/S
        DKK 200,000


Phonak AG
        DKK 200,000


William Demant Holding A/S
        DKK 200,000


Widex A/S
        DKK 200,000


Starkey Laboratories, Inc.
        DKK 200,000


GN ReSound North America Corporation
        DKK 200,000


Siemens Audiologische Technik GmbH
        DKK 200,000


Beltone Electronics Corporation
        DKK 200,000


Sonic Innovations, Inc.
        DKK 200,000


Rion Co. Ltd.
        DKK 200,000


Unitron Hearing Ltd.
        DKK 200,000


Türk+Türk Electonic GmbH
        DKK 200,000


14.2.
        The Shareholders agree that the share capital should be increased by DKK 200,000  for any new shareholder that would like to join the Company.


15.
        DIVIDEND POLICY


The Shareholders agree that the Company, as far as justified by the results and the future cash flow position of the Company, shall distribute any free reserves as dividends to the Shareholders.

16.
        BOARD OF DIRECTORS


16.1.
        The Board of Directors of the Company (and possibly substitutes for same) shall be elected at a general meeting of the Shareholders in accordance with the Articles of Association of the Company. The Board of Directors shall consist of a maximum of twelve (12) ) members elected by the Shareholders. One (1) prospective member may be nominated by any shareholder holding at least DKK 200,000 shares of the Company unless such shareholder has refrained from nominating a director and vested the decision making authority in another director under Article 5.1 of the Rules of Procedure of the Board of Directors. No shareholder can object to the nomination or appointment of directors or substitutes by the other Shareholders as long as the number of directors shall not have been exceeded.


16.2.
        The chairman of the Board shall be appointed by the directors in a directors meeting convened immediately after the shareholders meeting.


16.3.
        Upon election each director nominated by the Shareholders shall undertake to act in the best interest of the Company and to comply with the provisions set forth in this Agreement.




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16.4.
        In case of death, resignation or other removal of a member of the Board of Directors, an extraordinary general meeting of the Company shall be convened, at which the Shareholders shall cast their votes so as to elect the replacement nominee of the shareholder whose representative on the Board has died, resigned or been otherwise removed.


16.5.
        The functions of the Board of directors shall include the powers provided in the Articles of Association. In all matters concerning the Company the Board of Directors and each member hereof shall refer to and act only through the general manager.


16.6.
        Provided this Agreement does not prescribe any other special majority of votes, the business transacted by the Board of Directors shall be decided with simple majority of votes.


16.7.
        Any remuneration to directors shall be paid by the share­holder nominating such director. The Company shall, how­ever, reimburse the directors for reasonable out of pock­et and travelling expenses in dealing with the Companys business.


17.
        QUORUM


At Board meetings a quorum shall consist of directors nominated by at least seven shareholders.

18.
        BOARD DECISIONS


Important decisions to be made by the Company shall always be referred to directors meetings. Important decisions are any decisions whatsoever, other than strictly ministerial or administrative decisions, including without limitation the following:

a.
        Capital expenditure in excess of DKK 250,000, hereunder acquisition of new patents.


b.
        Consideration and approval of operating expenditure in excess of DKK 250,000, approval of budgets (which shall be produced by the Company annually), financial accounts, resolutions regarding dividends.


c.
        Unusual or major decisions, including creation of credit lines outside the daily business.


Any managing director, general manager or other administrative official that may be appointed shall not be authorized to act on behalf of and bind the Company with respect to any important decisions (as defined herein) unless the board of directors approves.

All day-to-day management decisions which are not important decisions (as defined herein) shall be made by a management group consisting of maximum twelve members of which each Shareholder may appoint one. The management group shall make its decisions in accordance with the rules provided in Article 6.



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19.
        AUDITING AND FINANCIAL REPORTING


19.1.
        The Company and its subsidiaries shall be audited by one chartered accountant of international standing approved by all Shareholders.


19.2.
        The Companys accounts will be maintained in accordance with the tax statutes and general accounting principles of Denmark, applied consistently from year to year, and the Company shall supply to the Board of Directors on a quaterly basis all information necessary to enable the Board of Directors to follow the business of the Compa­ny. The auditor shall also provide the annual ac­counts according to US generally accepted auditing stan­dards (US GAAP), and upon request submit to the Shareholders such financial information regarding the Company and the Partnership which is necessary for any local tax filing purpose.


20.
        TRANSFER OF SHARES


20.1.
        Any Shareholder (hereinafter called the Assigning Shareholder) may sell, assign, or otherwise dispose of all or any part of its shares only in accordance with the provisions of this clause. In respect of this Clause, a Shareholder and a company controlled by or controlling such Shareholder shall be considered one shareholder.


20.2.
        If the Assigning Shareholder wants to assign or transfer his shares this may only take place if approved by the Board of Directors and no such approval for the sale, transfer or disposition of any shares shall be given unless and until the rights of pre-emption contained herein shall have been exhausted.


20.3.
        Prior to making any sale, assignment, or other disposi­tion of its shares, the Assigning Shareholder shall give writ­ten notice of such proposed transfer to the other Shareholders. Such notice shall specify the terms the Assign­ing Shareholder will accept for such shares. For a period of three (3) weeks after receipt of such notice the other Shareholders or any of them in proportion to their present holding of shares of the Company shall have the irrevoca­ble right to acquire all of the Assigning Shareholders shares being transferred on the terms specified by the Assign­ing Shareholder as aforesaid. If the other Shareholders do not want to acquire all of the shares on the terms of­fered to it/them, the Assigning Shareholder shall be free to complete the transfer during the subsequent sixty (60) day
period of all of its shares to a third party, and the approval of the Board of Directors pursuant to Clause 10.2 shall not be withheld, but the transfer shall be for no less consideration or at no more favour­able terms than those offered by the Assigning Shareholder and rejected by the other Shareholders.


20.4.
        In the event that a Shareholder (hereinafter called the Trans­feror) receives a bona fide third party offer to pur­chase all or part of its shares, which it is willing to accept, it shall promptly give written notice of such of­fer to the other Shareholders. The notice shall specify the terms of such offer and shall include copies of all proposed agreements with respect thereto. For a period of three (3) weeks after receiving such notices the oth­er Shareholders shall have the irrevocable right to elect to acquire all of the Transferors shares subject to such offer in proportion to their present holding of shares of the Company. If none of the other Shareholders want to acquire all of the shares on the terms offered to it/them, the Transferor shall be free to complete the transfer
during the subsequent sixty (60) days period of all or part of its shares to the third party, and the approval of the Board of Directors pursuant to Clause 10.2 shall not be withheld, but the transfer shall be for the same proportion of shares as covered by the of­fer from the third party and be for no less considera­tion or at no more favourable terms than those of­fered by the Transferor and rejected by the other Shareholders.




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20.5.
        The rights of pre-emption contained in this Clause 10 do not apply to transfers from a shareholder to a compa­ny/entity controlled by or controlling such shareholder or a fellow subsidiary of the shareholder (An Affiliated Company). If the control should cease after such trans­fer of shares to An Affiliated Company has been effect­ed, then the pre-emption procedure referred to above shall apply.


20.6.
        Any transfer, assignment or other agreement with respect to the shares of a Shareholder shall be conditioned on the rec­ognition and assumption in writing of all rights and ob­ligations under this Agreement by the transferee, assign­ee, or other successor in interest with respect to such shares. In any transfer described or permitted under Clause 10 the transferee shall give its written under­taking to be bound by all the terms, conditions, and cov­enants of this Agreement.


20.7.
        The Board of Directors may refuse approval under Clause 10.2 above of any transferee or assignee who is not the holder of at least ten (10) partnership shares of the Partnership.


20.8.
        A shareholder which under Article 16.3 of the Articles of Association of the Partnership has withdrawn from the future business of the Partnership shall be obliged to offer his shares in the Company to the other Shareholders in accordance with the procedure set forth in this Article 10.


The purchase price for the shares so offered shall be calculated by the auditor of the Company and be equal to the proportional share of the net equity based on book value as of the date of transfer.

21.
        SHARE CERTIFICATES


The share certificates of the Company shall bear the following legend:

The assignment of this share certificate is restricted under the terms of a shareholders agreement.

22.
        THE TERMS OF THE AGREEMENT


This Agreement is entered into for an unlimited period of time, and the contracting parties shall be bound by the Agreement as long as they are shareholders of the Company.



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23.
        LAW AND JURISDICTION


23.1.
        This Agreement shall be construed under and governed by substantive Danish law.


23.2.
        All disputes arising in connection with the present Agreement shall be finally settled by arbitration with three arbitrators.


23.3.
        Each party shall appoint one arbitrator.


23.4.
        The President of the Arbitration Tribunal shall, in case the two arbitrators cannot agree upon his appointment, be appointed by the President of the Maritime and Commercial Court, Copenhagen.


23.5.
        The venue for the arbitration shall be Copenhagen, Den­mark.


23.6.
        The rules and procedure of the arbitration shall be gov­erned by the Law of Arbitration of Denmark. The language of the arbitration proceedings shall be English.




In witness whereof and effective 15 April 2005 the Shareholders have duly executed this Agreement as of the date and year stated below.



Date:  31/03/05



/s/
        
        /s/For and on behalf of
        
        For and on behalf ofGN ReSound A/S
        
        Phonak AG/s/
        
        /s/For and on behalf of
        
        For and on behalf ofWilliam Demant Holding A/S
        
        Widex A/S/s/
        
        /s/For and on behalf of
        
        For and on behalf ofStarkey Laboratories, Inc.
        
        GN ReSound North America Corporation/s/
        
        /s/For and on behalf of
        
        For and on behalf ofSiemens Audiologische Technik GmbH
        
        Beltone Electronics Corporation/s/
        
        /s/For and on behalf of
        
        For and on behalf ofSonic Innovations, Inc.
        
        Rion Co. Ltd./s/
        
        /s/For and on behalf of
        
        For and on behalf ofUnitron Hearing Ltd.
        
        Türk+Türk Electronic GmbH






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