EXECUTION VERSION

PATENT TRANSFER AGREEMENT

        THIS PATENT TRANSFER AGREEMENT is made and entered into this 16th day of August 2004 (this "Agreement"), by and between HARRIS CORPORATION, a corporation organized under the laws of the State of Delaware, ("Harris"), and TELTRONICS, INC., a corporation organized under the laws of the State of Delaware ("Teltronics"). 

        WHEREAS: 

        (a)      Teltronics purchased certain of the assets, business, rights and goodwill of Harris used in the Enhanced Services Business Unit pursuant to the Asset Sale Agreement entered into as of June 30, 2000 (as amended to the date here of, the "Asset Sale Agreement"); and 

        (b)      Pursuant to the Asset Sale Agreement, certain patents and patent applications were included in the assets that were sold by Harris to Teltronics, which patents and patent applications are listed in Schedule 2.1(a)(iii) of the Asset Sale Agreement; and 

        (c)      Pursuant to the Asset Sale Agreement, Teltronics issued and delivered to Harris on June 30, 2000, a Secured Promissory Note (which note was subsequently amended and restated as of October 4, 2000), and which note was secured pursuant to a General Security Agreement, dated as of June 30, 2000, covering collateral including the Patents (as defined below); and 

        (d)      Teltronics and Harris entered into a Master Restructuring Agreement, dated as of March 27, 2002 (the "Master Restructuring Agreement"), wherein the parties agreed to, among other things, restructure and refinance the amounts owing from Teltronics to Harris under (i) the Secured Promissory Note restated as of October 4, 2000, (ii) the April 13, 2000 Invoice Amount (as defined in the Master Restructuring Agreement), and (iii) the Additional Invoices Amount (as defined in the Master Restructuring Agreement), and pursuant to which (1) Teltronics issued to Harris an Amended, Restated and Consolidated Secured Promissory Note in the original principal amount of $9,196,801.23 (the "2002 Amended and Restated Promissory Note"), (2) Harris and Teltronics executed and entered into the Amended and Restated General Security Agreement, originally dated as of June 30, 2000, and amended and restated as of March 27, 2002 (the "Amended and Restated General Security Agreement"), and (3) Harris and Teltronics amended and modified certain other agreements entered into between Teltronics and Harris; and 

        (e)      Teltronics has failed to make the payments under the terms of the 2002 Amended and Restated Promissory Note and Teltronics has not fully complied with the 2002 Amended and Restated Promissory Note, and as of June 1, 2004, Teltronics owes to Harris under the terms of the 2002 Amended and Restated Promissory Note the amount of $9,177,646.27 representing principal in the amount of $8,599,624.27 and accrued and unpaid interest to June 1, 2004 in the amount of $578,022.00; and 

        (f)      Pursuant to the terms of this Agreement, Harris and Teltronics have agreed that Teltronics shall convey and transfer all of its rights, title, and interest in the Transferred Patents (as defined below) to Harris in exchange for a consideration consisting of, inter alia, (i) a credit in the 

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