1
                                                                   EXHIBIT 10.39

                               RESOUND CORPORATION

                          CONTRACT CONSULTING AGREEMENT


        This Agreement, commencing as of January 1, 1999, between Rodney
Perkins, M.D. and ReSound Corporation, a California corporation, respectively
referred to hereinafter as "Consultant" and "Company", is for the purpose of
expressing the mutual obligations of Consultant and Company as follows:

1.      Consultant agrees to perform the duties set forth in Section 2 below for
        a period commencing January 1, 1999 and terminating no later than
        December 31, 1999, and will be compensated for said services at the rate
        of $4,000.00 per month by Company.

2.      Consultant's duties:

        o       Product development relating to non-implantable acoustic hearing
                devices (as defined in Section 6 below); and

        o       Marketing and financial consulting relating to non-implantable
                acoustic hearing devices

3.      Timing of payment will be within thirty (30) days from time of
        submission of an invoice unless otherwise agreed upon, but in no case
        will exceed forty-five (45) days after termination of this Agreement.

4.      Either the Company or the Consultant may terminate this Agreement at any
        time by giving of written notice of such intention to terminate to the
        other party. The expiration or termination of this Agreement shall not
        terminate the obligation of the Consultant specified hereinafter.

5.      Consultant agrees not to disclose, publish or reveal to any other party
        whatsoever any trade secrets, techniques, inventions, discoveries,
        technology or processes which relate to the practices and businesses of
        the Company (collectively, the "Information") and to treat all such
        Information as secret and confidential, both during the duration of this
        Agreement and after its termination. Consultant further agrees not to
        make use of, either directly or indirectly, any of the Information which
        Consultant receives from the Company other than with the specific prior
        written authorization of an authorized officer of the Company.

6.      a) All concepts, designs, design analyses, inventions, improvements,
        trade secrets and other proprietary information created in whole or in
        part by Consultant during the term of this Agreement which relate solely
        to non-implantable acoustic hearing devices shall be the sole property
        of the Company. Consultant agrees to promptly and fully disclose in
        writing all such concepts, designs, design analyses, inventions,
        improvements, trade secrets and other 


   2
        proprietary property relating solely to non-implantable acoustic hearing
        devices to the Company and to execute patent applications relating to
        such inventions and assignments of the entire interest therein to the
        Company as requested, whether or not within the term of this Agreement.

        b) All concepts, designs, design analyses, inventions, improvements,
        trade secrets and other proprietary information created in whole or in
        part by Consultant during the term of this Agreement which relate to
        implantable acoustic hearing devices shall, as between the parties
        hereto, remain the sole property of the Consultant.

7.      All notes and records and copies there of made or maintained by
        Consultant relating to this performance of this Agreement are the
        property of Company and will be delivered to Company upon termination of
        this Agreement.

8.      Consultant agrees to indemnify Company against any losses or expenses
        sustained by Company, including reasonable attorney's fees, by reason of
        the breach of Consultant of any term of this Agreement.

9.      Nothing contained in this Agreement shall be construed to constitute a
        partnership, joint venture, agency or employment relationship between
        the Company and Consultant, it being understood that Consultant shall at
        all times remain an independent contractor, and that the Company shall
        in no event be liable for the debts, liabilities or other obligations of
        the Consultant. Consultant shall have no authority to bind or otherwise
        obligate the Company to any contract or agreement and Consultant agrees
        that he will not represent to third parties that he has the authority to
        do so.

10.     The rights and obligations of the parties under this Agreement shall be
        binding upon, and insure to the benefit of, their respective successors
        and assigns:

RESOUND CORPORATION                                CONSULTANT


         /s/ Russell D. Hays                     /s/ Dr. Rodney Perkins
- -------------------------------------       -------------------------------
President and Chief Executive Officer