Document:

Exhibit - 10.1 IMN Investment Agreement

EXHIBIT 10.1

INVESTMENT AGREEMENT 

between 

TELTRONICS, INC. 

and 

INTERNATIONAL MEDIA NETWORK AG 

Dated as of October 19, 2004 

TABLE OF CONTENTS 

	1. 	Definitions	1
	 	(a)	Definitions	1
		(b) 	Other Definitional Provisions 	6 
	2. 	Authorization and Consent 	6 
		(a) 	Authorization of Purchaser Shares 	6 
		(b) 	Consent to Transfer of Series A Preferred Shares 	6 
		(c) 	Amended Certificate of Designation, Preferences and Rights 	6
	3. 	Sale and Purchase of the Purchaser Shares 	7 
	4. 	The Closing 	7 
		(a) 	Place and Date 	7 
		(b) 	Purchase Price; Payment 	7 
	5.	Representations and Warranties of the Company 	7 
		(a) 	Organization and Good Standing 	7 
		(b) 	Authorization 	8 
		(c) 	Capital Stock 	8 
		(d) 	Subsidiaries 	9 
		(e) 	Material Compliance With Material Instruments 	10 
		(f) 	Good Title 	10 
		(g) 	Litigation 	10 
		(h) 	Tax Matters 	10 
		(i) 	Contracts 	11 
		(j) 	Governmental Approvals and Other Consents. 	13 
		(k) 	Officers, Benefit Plans and Labor 	13 
		(l) 	Intellectual Property 	14 
		(m) 	Certain Environmental and Safety Laws 	14 
		(n) 	Financial Statements 	15 
	6. 	Representations and Warranties of the Purchaser 	15 
		(a) 	Investment Intent 	15 
		(b) 	Sophistication 	15 

	  	(c) 	Illiquidity 	15 
		(d) 	Accredited Investor 	15 
		(e) 	Restricted Securities 	15 
	7. 	Covenants 	16 
		(a) 	Pre-Closing Actions 	16 
		(b) 	Conduct of Business 	16 
		(c) 	Books and Records 	16 
		(d) 	Use of Proceeds 	17 
		(e) 	Employment Agreements 	17 
		(f) 	Reservation of Common Stock 	17 
	8. 	Conditions to Obligations of the Purchaser 	17 
		(a) 	Representations and Warranties 	17 
		(b) 	Performance 	17 
		(c) 	Absence of Litigation 	17 
		(d) 	Governmental Approvals; Consent 	17 
		(e) 	Contemporaneous Transactions 	18 
		(f) 	Closing Papers 	18 
		(g) 	Proceedings 	18 
	9. 	Conditions to the Obligations of the Company 	18 
		(a) 	Representations and Warranties 	18 
		(b) 	Performance 	18 
		(c) 	Employment Agreements 	19 
		(d) 	Absence of Litigation 	19 
		(e) 	Exchange of Series A Preferred Stock 	19 
		(f) 	Promissory Notes 	19 
		(g) 	Pledge and Escrow Agreement 	19 
		(h) 	Redemption of Series B Preferred Stock and Series C Preferred Stock 	19 
	10. 	Additional Covenants of Purchaser 	19 
	11. 	General Provisions 	19 
		(a) 	Notices 	19 
				

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	  	(b) 	Severability. 	20 
		(c) 	Governing Law 	20 
		(d) 	Publicity 	21 
		(e) 	Captions and Section Headings 	21 
		(f) 	Amendments and Waivers 	21 
		(g) 	Successors and Assigns 	21 
		(h) 	Expenses 	21 
		(i) 	Entire Agreement 	22 
		(j) 	Exhibits; Schedules 	22 
		(k) 	Further Assurances 	22 
		(l) 	Counterparts 	22 
		(m) 	Attorneys’ Fees 	22 

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EXHIBITS 

	EXHIBIT A	SUMMARY OF TERMS OF THE AMENDED CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS OF SERIES A PREFERRED STOCK OF COMPANY
	EXHIBIT B	SUMMARY OF TERMS OF FIRST PROMISSORY NOTE
	EXHIBIT C	SUMMARY OF TERMS OF SECOND PROMISSORY NOTE
	EXHIBIT D	SUMMARY OF TERMS OF PLEDGE AND ESCROW AGREEMENT
	EXHIBIT E	SUMMARY OF TERMS OF EMPLOYMENT AGREEMENTS
	EXHIBIT F	USE OF PROCEEDS

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SCHEDULES 

	SCHEDULE 5(c)(ii)	Options, Rights, Etc.
	SCHEDULE 5(c)(iii)	Preemptive Rights
	SCHEDULE 5(d)	Subsidiaries
	SCHEDULE 5(g)(i)	Actions Against Company
	SCHEDULE 5(h)	Tax Matters
	SCHEDULE 5(i)(i)	Agreements, Contracts, Licenses, Orders
	SCHEDULE 5(j)	Government Approvals and Other Consents
	SCHEDULE 5(k)(i)	Employment Agreements
	SCHEDULE 5(k)(iii)	Executive Officers of Company
	SCHEDULE 5(k)(v)	Employee Benefit Plans
	SCHEDULE 5(l)	Intellectual Property

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INVESTMENT AGREEMENT 

        This Investment Agreement is made and entered into as of October ___, 2004, between Teltronics, Inc., a Delaware corporation (the "Company"), with principal offices at 2150 Whitfield Industrial Way, Sarasota, Florida 34243, and International Media Network AG, a Switzerland _____________________________ (the "Purchaser"), with principal offices at ______________________________, Zurich, Switzerland. 

RECITALS 

        WHEREAS, the Company is engaged in the business of designing, developing, manufacturing, marketing and installing hardware and software application products, and engaging in electronic manufacturing services, primarily in the telecommunications industry (the "Business"). 

        WHEREAS, at the Closing, the Company desires to sell to the Purchaser, and the Purchaser desires to purchase from the Company, 24,000,000 shares of the Common Stock of the Company (the "Purchaser Shares"), which Purchaser Shares will constitute at least fifty-one percent (51%) of all the issued and outstanding fully-diluted shares of the Common Stock of the Company on the Closing Date, all on the terms and conditions set forth herein. 

AGREEMENT 

        In consideration of the premises, the mutual covenants and agreements, hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which hereby are acknowledged, the parties to this Agreement agree as follows: 

        1.    Definitions. 

                 (a)  Definitions.   For the purposes of this Agreement, the following terms shall have the meanings specified below: 

                 "Actions" shall have the meaning set forth in Section 5(g)(i). 

                 "Affiliate" means, with respect to any specified Person, (i) any other Person that, alone or together with any other Person, directly or indirectly through one or more intermediaries, controls, or is controlled by or is under common control with such specified Person (or in the case of a natural Person, any of such Person’s Immediate Family Members), or (ii) in the case of a natural Person, any of such Person's Immediate Family Members, or any trust solely for the benefit of such Person or such Person's Immediate Family Members. For purposes of this definition, "control" (including the correlative terms "controlled by" and "under common control with"), as used in respect of any Person, means the power, directly or indirectly, to direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities, by contract, credit arrangement or proxy, as trustee, executor, agent or otherwise. For purposes of this 

definition, a Person shall be deemed to control another Person if such first Person directly or indirectly owns or holds ten percent (10%) or more of the equity interests in such other Person. 

                 "Agreement" shall mean this investment agreement (including the Schedules), as amended, supplemented or modified from time to time in accordance with the provisions hereof. 

                 "Applicable Law" shall mean, with respect to any Person, any and all provisions of any constitution, treaty, statute, law, regulation, ordinance, code, rule, judgment, rule of common law, order, decree, award, injunction, judgment, Governmental Approval, concession, grant, franchise, license, agreement, directive, published guideline, policy or requirement, or other governmental restriction or any similar form of decision of, or determination by, or any published interpretation or administration of any of the foregoing by, any Governmental Authority, whether in effect as of the date hereof or thereafter and in each case as amended, applicable to such Person or its Subsidiaries or their respective assets. Whenever the term "Applicable Law" is used in a representation or warranty contained in Section 5 or Section 6, it
shall be without reference to any changes in Applicable Law made after the date that such representation or warranty is made or deemed to be made. 

                 "Applicable Securities Laws" means the securities laws of any jurisdiction applicable under the relevant circumstances. 

                 "Benefit Plan" shall mean any plan, agreement or arrangement, formal or informal, whether oral or written, whereby the Company provides any benefit to any present or former officer, director or employee, or dependent or beneficiary thereof, including any profit sharing, deferred compensation, stock option performance stock, pension, death benefit or other fringe benefit, employee stock purchase, bonus, severance, retirement, health or insurance plan. 

                 "Board" shall mean the board of directors of the Company. 

                 "Business" shall have the meaning set forth in the recitals hereto. 

                 "Certificate" shall have the meaning set forth in Section 2. 

                 "Closing" shall have the meaning set forth in Section 4(a). 

                 "Closing Date" shall have the meaning set forth in Section 4(a). 

                 "Common Stock" shall have the meaning set in Section 5(b)(iii). 

                 "Company" shall have the meaning set forth in the first paragraph hereof. 

                 "Consent" shall mean any consent, approval, authorization, waiver, permit, grant, franchise, concession, agreement, license, exemption or order of, registration, certificate, declaration or filing with, or report or notice to, any Person, including any Governmental Authority. 

                 "Contracts" shall have the meaning set forth in Section 5(l)(i). 

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                 "Conversion Shares" shall have the meaning set forth in Section 5(c)(iv). 

                 "Convertible Securities" shall mean (i) any rights, options or warrants to acquire Common Stock or any capital stock of the Company and (ii) any notes, debentures, shares of preferred stock or other securities or rights, which are convertible or exercisable into, or exchangeable for, Common Stock or any capital stock of the Company. 

                 "$" or "dollars" shall mean lawful money of the United States of America. 

                 "Encumbrance" shall mean any lien, encumbrance, hypothecation, right of others, proxy, voting trust or similar arrangement, pledge, security interest, collateral security agreement, limitations on voting rights, limitations on rights of ownership filed with any Governmental Authority, claim, charge, equities, mortgage, objection, title defect, title retention agreement, option, restrictive covenant, restriction on transfer, right of first refusal, right of first offer, or any comparable interest or right created by or arising under Applicable Law, of any nature whatsoever. 

                 "Financial Statements" shall have the meaning set forth in Section 5(v). 

                 "Fully Diluted Basis" shall mean, when used with respect to outstanding shares of Common Stock, all shares of Common Stock which would be outstanding after giving effect to the transactions contemplated by this Agreement and assuming the exercise, conversion or exchange of all Convertible Securities. 

         "GAAP" shall mean United States generally accepted accounting principles consistently applied. 

                 "Governmental Approvals" shall mean any action, order, authorization, consent, approval, license, lease, waiver, franchise, concession, agreement, license, ruling, permit, tariff, rate, certification, exemption of, filing or registration by or with, or report or notice to, any Governmental Authority. 

                 "Governmental Authority" shall mean any nation or government, any state or other political subdivision thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government (including any government authority, agency, department, board, commission or instrumentality of the United States, any State of the United States or any political subdivision thereof), or any tribunal or arbitrator(s) of competent jurisdiction, or any self-regulatory organization having jurisdiction over the relevant Person or Persons. 

         "Immediate Family Members" shall mean, with respect to any natural Person, such natural Person’s spouse, siblings, lineal descendants (including by means of adoption) and living ancestors, and spouses of any of the foregoing. 

                 "include", "includes", "included" and "including" shall be construed as if followed by the phrase "without being limited to". 

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                 "Intellectual Property" shall mean any and all interest, title or right, whether worldwide, international, or in any country, in or to any and all patents, all applications therefor and all reissues, reexaminations, continuations, continuations-in-part, divisions, and patent term extensions thereof; inventions (whether patentable or not), discoveries, improvements, concepts, innovations, technology, engineering, industrial models, registered and unregistered copyrights, copyright registrations and applications therefor, author’s rights, works of authorship (including any artwork of any kind, and software of all types in whatever medium, inclusive of computer programs, source code, object code and executable code, and related documentation), URLs, web sites, web pages and any part thereof, technical information, know-how, trade
secrets, drawings, blueprints, designs, design protocols, specifications for materials, parts or devices, mask works, ASIC and chip designs, and manufacturing procedures therefor, circuit layouts, circuit board designs, quality assurance and control procedures, design tools, manuals, research data concerning historic and current research and development efforts, including the results of successful and unsuccessful designs, databases and proprietary data, proprietary processes, systems, formulae, algorithms, operational and manufacturing procedures, drawing or data packages used in obtaining government authorizations with respect to services, products, or installation thereof, trade names, trade dress, trademarks, domain names, and service marks, and registrations and applications therefor and the goodwill of the business symbolized or represented by the foregoing, customer lists and any other proprietary information and intangible common-law rights. 

                 "Material Adverse Effect" shall mean any event, circumstance, occurrence, fact, condition, change or effect that, with or without the passage of time, the giving of notice or both, is or could reasonably be expected to be, materially adverse to (i) the Business, operations, results of operations, financial condition, properties, assets or liabilities of the Company, taken as a whole, or (ii) the ability of the Company to perform fully its obligations hereunder and under the Other Agreements and to consummate the transactions contemplated hereby and thereby. For the purposes of this Agreement, a material currency devaluation or material foreign exchange restriction or other actions by any Governmental Authority limiting repatriation of capital or any other material change in the governmental or political climate of the
countries in which the Company carries out the Business shall be deemed to have a Material Adverse Effect. 

                 "Material Instruments" shall have the meaning set forth in Section 5(e). 

                 "Notice" shall have the meaning set forth in Section 13(a). 

                 "Other Agreements" shall have the meaning set forth in Section 5(b)(i). 

                 "Person" or "person" shall mean any natural person, company, corporation, association, partnership, organization, business, firm, joint venture, trust, unincorporated organization or any other entity or organization, and shall include any Governmental Authority. 

                 "Permitted Encumbrances" shall mean: (i) unregistered liens for taxes, assessments or similar charges incurred in the ordinary course of business that are not yet due and payable; (ii) inchoate mechanic's construction and carrier's liens and other similar inchoate liens arising by operation of law or statute in the ordinary course of the business of the Business

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for obligations which are not delinquent and will be paid or discharged in the ordinary course of business of the Business; (iii) title defects which are of a minor nature and, individually or in the aggregate, are immaterial with respect to value or use; (iv) any right of expropriation conferred upon, reserved to or vested in any Governmental Authority; (v) zoning restrictions, easements and rights of way or other similar encumbrances or privileges in respect of real property which in the aggregate are immaterial with respect to the Business and which are not violated in any respect by existing or proposed structures or land use; (vi) encumbrances created by others upon other lands over which there are easements, rights-of-way, licenses or other rights of user in favor of the property of the Company and which do not materially impede the use of such easements, rights-of-way, licenses or other rights of user for the purposes for which
they are held; (vii) the reservations, limitations, provisos, conditions, restrictions and exceptions in the letters patent or grant, as the case may be, from any Governmental Authority and statutory exceptions to title; (viii) liens arising from court or arbitral proceedings, provided that the claims secured thereby are being contested in good faith by the Company or any of its Subsidiaries, execution thereon has been stayed and continues to be stayed at all times and such liens do not, in the aggregate, materially detract from the value of the property of the Company or any of its Subsidiaries or materially impair the use thereof in its Business; or (ix) restrictions on transfer of the Company's securities set forth in the certificate of incorporation or by-laws (or equivalent documents) of the Company or the Stockholders Agreement. 

                 "Preferred Stock" shall have the meaning set forth in Section 2. 

                 "Purchaser" shall have the meaning set forth in the recitals hereto. 

                 "Purchaser Shares" shall have the meaning set forth in the recitals hereto. 

                 "Securities Act" has the meaning set forth in Section 5(i) hereof. 

                 "Series A Preferred Stock" shall have the meaning set forth in Section 2. 

                 "Subsidiary" means each corporation or other Person in which the Company owns or controls, directly or indirectly, capital stock or other equity interests representing at least 50% of the outstanding voting stock or other equity interests. 

                 "Taxes" shall mean any domestic or foreign taxes, charges, fees, levies or other assessments, including any income, alternative, minimum, accumulated earnings, personal holding company, franchise, capital stock, net worth, capital, profits, windfall profits, gross receipts, value added, sales, use, goods and services, excise, customs duties, transfer, conveyance, mortgage, registration, stamp, documentary, recording, premium, severance, environmental, real property, personal property, ad valorem, intangibles, rent, occupancy, license, occupational, employment, unemployment insurance, social security, disability, worker’s compensation, payroll, health care, withholding, estimated or other taxes, charges, fees, levies or other assessments, and including any interest, penalties or additions relating thereto, imposed by any
Governmental Authority or other taxing authority on the Company or any of its Subsidiaries. 

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                 (b)  Other Definitional Provisions.   The words "hereof", "herein", and "hereunder" and words of similar import shall refer to this Agreement as a whole and not to any particular provision of this Agreement. Terms defined in the singular shall have a comparable meaning when used in the plural and vice versa. Whenever a representation or warranty made by a Person herein refers to the knowledge of such Person, such knowledge shall be deemed to consist of the actual knowledge of such Person or the knowledge which would have been present after reasonable due inquiry by such Person. A Person (other than an individual) will be deemed to have "knowledge" of a particular fact or other matter if any individual who is serving, or who has at any time served, as a director, officer, senior employee,
member, partner, executor or trustee of such Person (or a Person acting in any similar capacity) has, or at any time had, actual knowledge of such fact or other matter, or should have had knowledge thereof given such individual’s office or capacity and given industry standards or given reasonable due inquiry by such individual. 

        
2.   Authorization and Consent. 

                 (a)  Authorization of Purchaser Shares. The Company has authorized the issuance and sale pursuant to the terms and conditions of this Agreement of the Purchaser Shares. 

                 (b)   Consent to Transfer of Series A Preferred Stock. The Company has consented to the transfer by Norman R. Dobiesz ("NRD") of 100,000 shares of its Preferred Stock, $.001 par value per share (the "Preferred Stock"), designated as Series A Preferred Stock (the "Series A Preferred Stock") under and subject to the terms of an Exchange Agreement between NRD and the Purchaser dated the date of this Agreement. 

                 (c)   Amended Certificate of Designation, Preferences and Rights. At the Closing, the Series A Preferred Stock will have the rights, preferences, privileges and restrictions to be set forth in the Amended Certificate of Designation, Preferences and Rights of Series A Preferred Stock of Teltronics, Inc. (the " Amended Certificate"), a copy of which will be delivered five days prior to Closing for filing with the Secretary of State of the State of Delaware. The terms of the Amended Certificate are summarized in Exhibit A hereto. 

        
3.  Sale and Purchase of the Purchaser Shares. Subject to and upon the terms and conditions set forth in this Agreement, at the Closing, the Company shall sell to the Purchaser, and the Purchaser shall purchase from the Company the Purchaser Shares in the manner provided in Section 4 below for the Purchase Price as defined in Section 4. 

        
4.   The Closing. 

                 (a)   Place and Date. Following satisfaction or waiver of each of the conditions set forth in Section 8, the closing of the purchase and sale of the Purchaser Shares pursuant to this Agreement (the "Closing") shall take place at 10:00 a.m., New York time, on or before February 28, 2005, at the offices of the Company, or at such other place or at such other time and date as the Purchaser and the Company shall mutually agree in writing. The day on which the Closing actually occurs is herein sometimes referred to as the "Closing Date". 

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                 (b)   Purchase Price; Payment. The Purchase Price for the Purchaser Shares shall be an aggregate of Forty-Five Million and 00/100 Dollars ($45,00,000) ("Purchase Price"). On the terms and subject to the conditions set forth in this Agreement, the Purchaser shall pay to the Company at the Closing, the Purchase Price (i) by wire transfer of immediately available funds, an aggregate of Fifteen Million and 00/100 Dollars ($15,000,000); and (ii) delivery of its promissory notes, each payable to the Company in the respective amounts of Fifteen Million and 00/100 Dollars ($15,000,000) without interest (collectively, the "Promissory Notes"). One of the Promissory Notes shall be payable on or before February 28, 2006 (the "First Promissory Note"). The other Promissory Note shall be subject to the Company achieving the budget
set forth in Exhibit C attached to this Agreement; be payable on or before February 28, 2007 (the "Second Promissory Note"). The Promissory Notes and the obligations of Purchaser under this Agreement shall be secured by a pledge of the Purchaser Shares pursuant to a Pledge and Escrow Agreement ("Pledge and Escrow Agreement"). The terms of the First Promissory Note, Second Promissory Note and Pledge and Escrow Agreement respectively are summarized in Exhibits B, C and D to this Agreement. 

        
5.  Representations and Warranties of the Company The Company represents and warrants to the Purchaser, as of the date hereof and as of the Closing Date, as follows: 

                
(a)  Organization and Good Standing. The Company is a corporation duly organized and validly existing under and by virtue of the laws of its state of incorporation and is in good standing under the laws of its jurisdiction of incorporation. The Company is duly qualified or licensed to do business and is in good standing in all jurisdictions in which the failure to be so qualified would have a Material Adverse Effect. The Company has full power and authority (corporate or otherwise) to own, lease and operate its properties and assets and to carry on the Business. 

                
(b)  Authorization. 

        
        
        
(i)   The Company has all requisite right, power and authority (corporate or otherwise) to execute and deliver this Agreement and each of the other agreements and instruments to be entered into by the Company at or prior to the Closing (collectively, the "Other Agreements") and to perform its obligations and consummate all of the transactions contemplated hereunder and thereunder, including the issuance and sale of the Purchaser Shares. All corporate proceedings have been taken and all corporate authorizations have been secured which are necessary on the part of the Company to authorize the execution, delivery and performance of this Agreement and each of the Other Agreements. 

                          (ii)   This Agreement constitutes, and each of the Other Agreements when executed and delivered by the Company, will constitute, legal, valid and binding obligations of the Company, enforceable in accordance with their respective terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors' rights generally and by equitable principles, including those limiting the availability of specific performance, injunctive relief and other equitable remedies and those providing for equitable defenses. 

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(iii)  The Purchaser Shares have been duly authorized and, when delivered and paid for pursuant to the terms of this Agreement, will be duly and validly issued and outstanding, fully paid and nonassessable, and free and clear of all Encumbrances (other than Permitted Encumbrances of the type specified in clause (ix) of the definition of "Permitted Encumbrances" contained in Section 1(a) and except for restrictions on subsequent transfer of such Purchaser Shares imposed under Applicable Securities Laws). 

                
(c)  Capital Stock. 

                
        
(i)  (A) On the date hereof, the authorized capital stock of the Company consists of (1) 40,000,000 shares of Common Stock, of which 7,829,736 shares of Common Stock are issued and outstanding, (2) 5,000,000 shares of Non-Voting Common Stock, of which none are outstanding and (3) 5,000,000 shares of Preferred Stock, of which shares of Preferred Stock, 100,000 shares are designated as Series A Preferred Stock, 12,625 shares are designated as Series B Preferred Stock and 40,000 shares are designated as Series C Preferred Stock, are issued and outstanding; (B) immediately prior to the Closing, the authorized capital stock of the Company will consist of (1) 40,000,000 shares of Common Stock, of which 7,829,736 shares of Common Stock will be issued and outstanding, (2) 5,000,000
shares of Non-Voting Common Stock, of which none are outstanding and (3) 5,000,000 shares of Preferred Stock, of which shares of Preferred Stock, 100,000 shares designated as Series A Preferred Stock, 12,625 shares designated as Series B Preferred Stock and 40,000 shares designated as Series C Preferred Stock will be issued and outstanding; and (C) immediately after the Closing, the authorized capital of the Company will consist of (1) 40,000,000 shares of Common Stock, of which _______ shares of Common Stock will be issued and outstanding, (2) 5,000,000 shares of Non-voting Common Stock of which none will be outstanding; and (3) 5,000,000 shares of Preferred Stock, of which shares of Preferred Stock, 100,000 shares designated as Series A Preferred Stock, 12,625 shares designated as Series B Preferred Stock and 40,000 shares designated as Series C Preferred Stock, will be issued and outstanding. 

                 
        
(ii)   Except as set forth on Schedule 5(c)(ii), the Company has not (A) issued or granted or (B) agreed to issue or grant, any option, warrant, right or other Convertible Security which affords any Person the right to purchase or otherwise acquire any shares of the Common Stock, Preferred Stock, or any other security of the Company. Except as set forth on Schedule 5(c)(ii), the Company is not subject to any obligation (contingent or otherwise) to redeem, retire, purchase or otherwise acquire any of its securities. 

                          (iii)   Except as set forth in Schedule 5(c)(iii), all the issued and outstanding securities of the Company have been duly authorized and validly issued, are fully paid, nonassessable and free and clear of preemptive rights and other Encumbrances (other than Permitted Encumbrances of the type specified in clause (ix) of the definition of "Permitted Encumbrances" contained in Section 1(a) and except for restrictions on subsequent transfer of such securities imposed under Applicable Securities Laws), and were issued in compliance with all Applicable Laws, including those regulating the offer, sale or issuance of securities. 

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                          (iv)  Except as set forth in Schedule 5(c)(iii), no Person has any rights of first refusal or similar rights or any preemptive rights in connection with the issuance of the Purchaser Shares or with respect to any future offer, sale or issuance of securities by the Company. 

                 (d)  Subsidiaries. 

                          (i)  The Company does not own, directly or indirectly, beneficially or of record, or have any obligation to retire, redeem, purchase or otherwise acquire, any capital stock or other securities of any Person other than the Company’s ownership of the capital stock of the Subsidiaries. The Subsidiaries do not own, directly or indirectly, beneficially or of record, or have any obligation to retire, redeem, purchase or acquire, any capital stock or other securities of any Person. 

                          (ii)   The name of the Subsidiaries of the Company, the jurisdiction of their incorporation and the ownership of its capital stock on the date hereof are listed in Schedule 5(d). 

                 (e)  Material Compliance With Material Instruments. The Company is in material compliance with (i) its certificate of incorporation and by-laws (or equivalent documents), and (ii) each Contract to which it is subject and which is material to the Business (collectively, the "Material Instruments"). The execution and delivery by the Company of this Agreement and the Other Agreements, the performance by the Company of its obligations hereunder and thereunder and assuming the consents described in Schedule 5(j) are obtained, the consummation by the Company of the transactions contemplated hereby and thereby, including the issuance and sale of the Purchaser Shares, and the taking of any other action contemplated by this Agreement or the Other Agreements, will not: (A) result in (1) any violation of
any Applicable Law, except for any such violation that would not reasonably be expected to have a Material Adverse Effect, (2) any violation of any term of the Company’s certificate of incorporation or by-laws (or equivalent documents), or (3) any violation of or any conflict with or a default (with or without notice, lapse of time or both) under any of the Material Instruments, which violation, conflict or default might reasonably be expected (x) to materially and adversely affect the ability of the Company to satisfy its obligations under this Agreement, any of the Other Agreements or any of the Material Instruments, or (y) to result in a Material Adverse Effect; (B) accelerate or constitute an event entitling the holder of any indebtedness of the Company to accelerate the maturity of any such indebtedness or to increase the rate of interest presently in effect with respect to such indebtedness; or (C) result in the creation of any Encumbrance (other than Permitted
Encumbrances) upon any of the properties or assets of the Company. The performance by the Company of its respective obligations and the enforcement of its respective rights under the Material Instruments will not have a Material Adverse Effect. 

                 (f)  Good Title. The Company has good, valid and indefeasible title to, or a valid leasehold interest in, the properties and assets used by it, in each case free and clear of all Encumbrances (other than Permitted Encumbrances). The buildings, equipment and other tangible assets of the Company are in all material respects in good operating condition and 

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repair, free from any known material defects and are usable in the ordinary course of the Business. The Company owns, or has a valid leasehold interest in or license to use, all assets which are material to the operations of the Business. 

                 (g)  Litigation. Except as set forth on Schedule 5(g)(i), there is no action, suit, proceeding, arbitration, citation, summons or subpoena (civil, criminal, regulatory, or otherwise of a like nature, in law or in equity), claim, demand, grievance, inquiry or investigation (collectively, "Actions") pending against the Company which could result in a Material Adverse Effect. 

                 (h)  Tax Matters. Except as set forth in Schedule 5(h), the Company (i) has timely filed all Tax returns that are required to have been filed by it with all appropriate Governmental Authorities (and all such Tax returns are true, complete and correct in all material respects to the best knowledge of the Company), (ii) has timely paid all Taxes owed by it or withheld and remitted to the appropriate Governmental Authority all Taxes which it is obligated to withhold and remit from amounts owing to any employee (including social security taxes), creditor, customer or third party, and (iii) has not waived any statute of limitations with respect to Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency. The assessment of any additional Taxes for periods for which returns have been filed is
not expected to exceed the recorded liability therefor, and there are no material unresolved questions or claims concerning the Tax liability of the Company. There is no pending dispute with, or notice from, any taxing authority relating to any of the Tax returns which, if determined adversely to the Company, would result in the assertion by any taxing authority of any valid deficiency in a material amount for Taxes, and to the best knowledge of the Company, there is no proposed liability for a deficiency in any Tax to be imposed upon the properties or assets of the Company or the Business. There are no federal, state, local or foreign Tax Encumbrances on any asset of the Company or the Business (other than Permitted Encumbrances). 

                 (i)  Contracts. 

                          (i)  Schedule 5(i)(i) contains a true, complete and correct list of all agreements, contracts, commitments, orders, licenses, leases and other instruments and arrangements (whether written or oral) which, in each case, are related to the Business or the Company of the types described below to which the Company is a party or by which it, the Business or the assets of the Business are bound and under which any such Person continues to have any material obligation, the violation of which would have a Material Adverse Effect (the "Contracts"): 

	  	
        
(A)  any pension, profit sharing, stock option, employee stock purchase or other plan
providing for deferred, incentive or other compensation to employees, any other employee benefit plan, or any
contract with any labor union; 

	  	
        
(B)    any contract for the employment or personal services of any officer, individual employee or
other person or entity on a full-time, part-time, consulting, advisory or other basis providing annual
compensation in excess 

10 

	  	
of $40,000 or which, in any way, restricts or limits the right of the Company to terminate
such contract at will; 

	  	
         (C)   any loan agreement, indenture,
letter of credit, security agreement, mortgage, pledge agreement, deed of trust, bond, note, or other agreement
relating to the borrowing of money or to the mortgaging, pledging, transferring of a security interest, or otherwise
placing an Encumbrance (other than Permitted Encumbrances) on any material asset or material group of assets (whether
tangible or intangible) of the Company; 

	  	
        
(D)  any guarantee of the payment or performance of any Person; any agreement to indemnify any Person or
act as a surety; any other agreement to be contingently or secondarily liable for the obligations of any Person;
or any "keep well" or similar credit support arrangements; 

	  	
        
(E)   any lease or agreement under which it is the lessee of or holds or operates any material property,
real or personal, owned by any other party; 

	  	
         (F)   any contract or agreement or group of related
agreements with the same party or any group of affiliated parties which requires or may in the future require a payment in excess of
$500,000, individually or in the aggregate, by or to the Company, other than the payment of the fees and expenses of the Company
incurred in connection with the completion of the transactions contemplated by this Agreement and the Other Agreements; 

	  	
         (G)   any contract or agreement prohibiting it
from freely engaging in any business or competing anywhere in the world; 

	  	
         (H)  any material licenses, licensing arrangements
and other similar contracts providing in whole or in part for the use by a third party of, or limiting the use by the Company of,
any Intellectual Property; 

	  	        
(I)  any brokerage or finder’s agreements; 

	  	
         (J)   any joint venture, partnership and similar
contracts involving a sharing of profits or expenses (including joint development and joint marketing contracts); 

	  	
         (K)   any asset purchase agreements, stock purchase
agreements and other acquisition or divestiture agreements, including any agreements relating to the sale, lease or disposal of any
assets of the Company out of the ordinary course of business or or involving continuing indemnity or other obligations; 

	  	
         (L)   any material sales agency, marketing
or distributorship agreements; 

11 

	  	
        
(M)   any material contracts, agreements or arrangements with respect to the representation of the
Business in foreign countries; 

	  	
         (N)  any other contract, agreement or commitment not
the subject matter of clauses (A) through (M) above which is or could be reasonably expected to be material to the Company or the
Business. 

                
         (ii)   The Company has performed all material obligations required to
be performed by it and is not in material default under, or in material breach of, or in receipt of any claim of default under or
breach of, any Contract. The Company has no present expectation or intention of not fully performing in all material respects all
such obligations. The Company does not have any knowledge of any material breach or anticipated material breach by the other parties
to any Contract. 

                
         (iii)  To the best knowledge of the Company, none of the officers of the
Company is a party to any oral or written contract which prohibits, restricts or limits his or her performance of his or her duties
or the fulfillment of his or her obligations as an employee and an officer of the Company in any material respect. 

                
(j)   Governmental Approvals and Other Consents. No Governmental Approvals or other Consents are required to
be obtained under Applicable Law or the certificate of incorporation and by-laws (or equivalent documents) of the Company in
connection with (i) the execution, delivery or performance by the Company of this Agreement or any of the Other Agreements
or the consummation of any transaction contemplated hereby or thereby, and (ii) the carrying on of the Business as it is
presently carried on and is contemplated to be carried on, except for such Governmental Approvals and other Consents set forth in
Schedule 5(j). All such Governmental Approvals and other Consents have been duly obtained or accomplished and are in full
force and effect and the Company is in compliance in all material respects with each such Governmental Approval and Consent. 

                
(k)  Officers, Benefit Plans and Labor. 

                
        
(i)   Except as set forth on Schedule 5(k)(i),
there are no employment agreements to which the Company, on the one hand, and any executive officers of the Company,
on the other hand, are a party. 

                
        
(ii)   The Company has complied in all material respects with all Applicable Laws relating to the employment of labor,
including provisions thereof relating to wages, hours, social welfare, equal opportunity and collective bargaining.
The Company has no material labor relations problems. 

                 
        
(iii)   Schedule 5(k)(iii) contains a true, complete and correct list of all executive officers of the
Company, together with their current job titles. None of the Persons listed in Schedule 5(k)(iii) has notified the Company
that such Person will cancel or otherwise terminate such Person’s relationship with the Company, or is being terminated by the
Company. 

12 

                 
         (iv)   To the Company's knowledge, none of the persons listed on
Schedule 5(k)(iii) is in breach of any covenant or agreement with any previous employer or other Person with regard to
(A) restrictions on competition with the business of such previous employer or other Person, (B) solicitation of the employees of
such previous employer or other Persons, or (C) non-disclosure of the confidential or proprietary information of such previous
employer or other Person. 

                 
        
(v)   Except as set forth in Schedule 5(k)(v), the Company does not have any Benefit Plans.
The Company has delivered to the Purchaser true, correct and complete copies of all documents, summary plan descriptions,
insurance contracts, third party administration contracts and all other documentation created to embody all Benefit Plans, plus
descriptions of any Benefit Plans that have not been reduced to writing. 

                 
        
(vi)   Except for required contributions or benefit accruals for the current plan year, no material liability has been
or is expected to be incurred by the Company under or pursuant to any Applicable Law relating to Benefit Plans and, to the best
knowledge of the Company, no event, transaction or condition has occurred or exists that could result in any such liability to the
Company or, following the Closing, the Company, the Purchaser or any such Benefit Plan. 

                 
        
(vii)   Each of the Benefit Plans listed in Schedule 5(k)(v), is and has at all times been in compliance in all
material respects with all applicable provisions of Applicable Laws. 

        
         (l)   Intellectual Property.  Except as set forth in
Schedule 5(l), (i) the Company owns, free and clear of all Encumbrances (other than Permitted Encumbrances), and possesses
or is validly licensed under all Intellectual Property material to the operation of the Business, as conducted in the past and as
presently conducted and as contemplated to be conducted, and any such licenses are in full force and effect; (ii)to the Company's
knowledge, no past, current or currently planned activity, service or product of the Company infringes or conflicts with the
Intellectual Property of any third party; (iii) the Company has taken appropriate steps and measures to establish and preserve
ownership of or right to use all Intellectual Property material to the operation of the Business; and (iv) there has been no
judgment, decree, injunction, rule, or order rendered by
any Governmental Authority, and no claim made against the Company asserting the invalidity, abuse, misuse or unenforceability
of any Intellectual Property material to the operation of the Business, or that would limit, cancel, or question the validity of,
 or the rights of the Company in, any Intellectual Property material to the operation of the Business. 

                 
(m)   Certain Environmental and Safety Laws. The Company has no knowledge of any claim, and no proceeding has been
instituted raising any material claim against the Company or any of its respective real properties now or formerly owned, leased or
operated by it or other assets, alleging any damage to the environment or violation of any applicable statute, law or regulation
relating to the environment or occupational safety and health. 

13 

                 
(n)   Financial Statements. The Purchaser has reviewed the audited consolidated financial statements contained in
the Company's Annual Report on Form 10-K filed for the year ended December 31, 2003, and its unaudited consolidated financial
statements contained in its Quarterly Reports on Form 10-Q for all periods ended after December 31, 2003 and other reports,
schedules and filings under the Securities Exchange Act of 1934 (the "Financial Statements"). The Financial Statements
present fairly in all material respects the financial position, results of operation and statements of cash flow of the Company
 as of the dates and for the periods indicated therein and have been prepared in accordance with United States generally accepted
accounting principles, on a consistent basis for the periods involved. 

         6.   Representations and Warranties of the
Purchaser.   The Purchaser represents and warrants to the Company, as of the date hereof and as of the Closing Date,
that: 

                 
(a)  Investment Intent. The Purchaser Shares are being acquired by the Purchaser solely for its own account,
for investment purposes only, and with no present intention of distribution. 

                 
(b)  Sophistication. The Purchaser is able to bear the economic risk of an investment in the Purchaser Shares
and can afford to sustain a total loss of such investment, and has such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of the proposed investment and therefore has the capacity to protect its own
interests in connection with the purchase of the Purchaser Shares. 

                 
(c)   Illiquidity. The Purchaser understands that there is a limited public market for the Purchaser Shares and that
there can be no assurance that the existing public market for such stock will be maintained, and that even if the market for such
stock is maintained, such Purchaser may never be able to sell or dispose of the Purchaser Shares and may thus have to bear the risk
of its investment in such stock for an indefinite period of time. 

                 
(d)  Accredited Investor. The Purchaser is an "accredited investor" within the meaning of Regulation D promulgated
under the Securities Act. 

                 
(e)  Restricted Securities. The Purchaser acknowledges that the Purchaser Shares will
be deemed "restricted securities" as defined in Rule 144 under the Securities Act and that the transfer thereof is restricted
by any applicable provisions of Rule 144, unless registered under the Securities Act, or unless there exists an exemption from
registration under the Securities Act confirmed by an opinion of reputable counsel for Purchaser in form and substance satisfactory
to the Company and its counsel. 

        
7.   Covenants. 

                 
(a)  Pre-Closing Actions. As promptly as practicable, each of the parties to this Agreement will: (i) use all
reasonable efforts to take all actions required of such party to do all other things reasonably necessary, proper or advisable to
consummate the transactions contemplated hereby by the Closing Date; (ii) file or supply, or cause to be filed or supplied, all
applications, notifications and information required to be filed or supplied by such party pursuant

14 

to Applicable Law in connection with this Agreement, the issuance of the Purchaser Shares pursuant hereto and the
consummation of the other transactions contemplated hereby and by the Other Agreements; (iii) use all reasonable efforts
to obtain, or cause to be obtained, all Consents (including all Governmental Approvals and any Consents required under any contract)
necessary to be obtained by such party in order to consummate the transactions contemplated pursuant to this Agreement and the Other
Agreements; and (iv) coordinate and cooperate with the other parties in exchanging such information and supplying such assistance as
may be reasonably requested by the other parties in connection with any filings and other actions to be made or taken in order to
consummate the transactions contemplated pursuant to this Agreement and by the Other Agreements. 

                 
(b)  Conduct of Business. Except as otherwise permitted by this Agreement or with the written consent of the
Purchaser, from the date hereof to the Closing Date, the Company shall: 

        
        
        
(i)  carry on the Business in the ordinary course, consistent with past practice and in substantially the same manner
as heretofore conducted and use commercially reasonable steps to preserve its relationships with customers, suppliers and others
having business dealings with the Company; 

        
        
        
(ii)  not declare or make any dividend, payment or distribution to its shareholders or purchase, retire, acquire
or redeem any shares of its capital stock or other securities, except as required under the terms of its Series B and Series C
Preferred Stock; 

        
                 
(iii)  not merge or consolidate with or into any other Person; 

        
        
        
(iv)  maintain in full force and effect existing insurance to the extent available on commercially
reasonable terms; 

        
        
(c)   Books and Records. The Company shall, and shall cause each Subsidiary to, maintain, at all times, books and
records accurately disclosing all payments made. 

        
        
(d)   Use of Proceeds. The Company will use the net proceeds of the sale of the Purchaser
Shares as set forth on Exhibit F attached to this Agreement. 

        
        
(e)   Employment Agreements. At the Closing, the Company shall enter into employment agreements with each of
NRD and Ewen R. Cameron, containing the terms summarized in Exhibit E attached to this Agreement. 

        
        
(f)   Reservation of Common Stock. The Company shall at all times reserve and keep available for issue such
number of its authorized but unissued shares of Common Stock as shall be sufficient to permit the conversion of all the Series A
Preferred Stock. 

        
8.   Conditions to Obligations of the Purchaser. The obligation of the Purchaser to purchase and pay for the
Purchaser Shares at the Closing and the other obligations of the Purchaser under this Agreement are subject to the fulfillment at
or prior to the Closing of the

15 

following conditions, any of which may be waived in writing in whole or in part by the Purchaser: 

                 
(a)   Representations and Warranties. As of the date hereof and as of the Closing Date, each of the representations
and warranties of the Company set forth in this Agreement that is qualified as to materiality shall be true and correct and each such
representation and warranty that is not so qualified shall be true and correct in all material respects. 

        
        
(b)   Performance. The Company shall have performed and complied
in all material respects with all agreements and conditions contained herein required to be performed or complied
with by it prior to
or at the Closing. 

                 
(c)   Absence of Litigation.   (i) The consummation of the transactions contemplated hereby shall not
have been restrained, enjoined or otherwise prohibited by any Applicable Law, including any order, injunction, decree or judgment
of any court or other Governmental Authority; (ii) no court or other Governmental Authority shall have determined that any Applicable
Law makes illegal the consummation of the transactions contemplated hereby and no Action with respect to the application of any such
Applicable Law to such effect shall be pending or threatened; and (iii) no Action shall be pending or shall have been
threatened which seeks to impose liability upon the Purchaser by reason of the consummation of the transactions contemplated
by this Agreement. 

        
         (d)   Governmental Approvals; Consents. The Company shall have
obtained any and all Governmental Approvals and Consents set forth in Schedule 5(j), and shall have made any and all filings
and declarations necessary or appropriate (i) for the consummation of the transactions contemplated by this Agreement,
(ii) pursuant to Applicable Law, and (iii) pursuant to Contracts applicable to the Company in connection with the transactions
contemplated by this Agreement and the Other Agreements. 

                 
(e)   Contemporaneous Transactions. Prior to or contemporaneously with the Closing, the following shall have
occurred: 

                 
         (i)   The Amended Certificate of Designation Rights and Preferences of
Series A Preferred Stock of Teltronics, Inc. shall have been executed and filed by the Company. 

                 
         (ii)   The Company shall have delivered to the Purchaser a
certificate or certificates representing the Purchaser Shares. 

                 
(f)   Closing Papers. The Company shall have delivered to the Purchaser all of the following: 

                 
        
(i)   Copies (certified by the President, Secretary or Assistant Secretary of the Company) of the resolutions duly
adopted by the Board of Directors of the Company authorizing the adoption and filing of the Amended Certificate of Designation,
Rights and Preferences of Series A Preferred Stock and authorizing the execution, delivery and performance

16 

of this Agreement, the Other Agreements and all other agreements referred to in this Agreement as
being executed at or prior to the Closing. 

                 
        
(ii)   Copies (certified by the Secretary or Assistant Secretary of the Company) of the Amended Certificate of Designation,
Rights and Preferences of Series A Preferred Stock of the Company, as amended through the date of the Closing. 

                 
         (iii)   Such other documents relating to the transactions contemplated by
this Agreement as the Purchaser may reasonably request. 

                 
(g)   Proceedings. All corporate and other proceedings of the Company taken or to be taken in connection with the
transactions contemplated hereby and by the Other Agreements to be consummated at the Closing and all documents incident thereto
shall be reasonably satisfactory in form and substance to the Purchaser. 

        
9.   Conditions to the Obligations of the Company. The obligations of the Company under this Agreement are subject
to the fulfillment on or prior to Closing Date of the following conditions, any of which may be waived in writing, in
whole or in part, by the Company: 

                 
(a)   Representations and Warranties. As of the date hereof and as of the Closing Date, each of the representations
and warranties of the Purchaser set forth in this Agreement that is qualified as to materiality shall be true and correct and
each such representation and warranty that is not so qualified shall be true and correct in all material respects. 

                 
(b)   Performance. The Purchaser shall have performed and complied in all material respects with all agreements
and conditions required to be performed by or complied with by it prior to the Closing with respect both to the Company and to
Norman R. Dobiesz. 

        
        
(c)   Employment Agreements. Each of NRD and Ewen R. Cameron shall have entered into an Employment Agreement with
the Company as contemplated by paragraph 7(e) of this Agreement. 

        
         (d)   Absence of Litigation. the conditions described in
paragraph 8(c) shall have been satisfied. 

                 
(e)   Exchange of Series A Preferred Stock. The Purchaser and NRD shall have consummated the Exchange Agreement
dated the date of this Agreement. 

                 
(f)   Promissory Notes. The Purchaser shall have executed and delivered to the Company the
Promissory Notes. 

        
        
(g)   Pledge and Escrow Agreement. The Purchaser shall have executed and delivered to the Company the Pledge
and Escrow Agreement. 

17 

                 
(h)   Redemption of Series B Preferred Stock and Series C Preferred Stock. All of the shares of Series B Preferred
Stock and Series C Preferred Stock shall have been redeemed by the Company. 

                 
(i)   Board Approval. Approval of this Agreement by the Board of Directors of the Company on or before
November 2, 2004. 

        
 10.   Additional Covenants of Purchaser. At the Closing, Purchaser shall execute such documents and further
agreements under which Purchaser shall for a minimum period of five (5) years after the Closing and continuing so long as the
Company maintains budgets mutually acceptable to Purchaser and NRD: 

                 
(a)   Maintain a Board of Directors comprised of seven (7) members, five (5) of whom shall be designated by NRD and
two (2) of whom shall be designated by Purchaser. 

                 
(b)   Maintain and cause the Company to comply with the Employment Agreements of NRD and Ewen Cameron
described in Exhibit E of this Agreement. 

                  (c)   Delegate to NRD the right to select and approve the attorneys and accountants for the Company. 

                 
(d)   Maintain the principal office of the Company in Sarasota, Florida unless another office is approved in writing by
NRD. 

        
11.   General Provisions. 

                 
(a)   Notices. All notices, requests, demands, approvals, consents, waivers or other communications required or
permitted to be given hereunder (each, a "Notice") shall be in writing, and in English and shall be (a) personally
delivered, (b) sent by facsimile transmission, provided that the original copy thereof also is sent by pre-paid, first class,
registered or certified mail (return receipt requested) or by next-day or overnight mail (to any United States address) or by an
internationally recognized express delivery service (to any foreign address), (c) sent by first class, registered or certified
 mail (return receipt requested) or by next-day or overnight mail (to any United States address), postage and charges prepaid, or
(d) delivered by an internationally recognized express delivery service (to any foreign address), postage and charges
prepaid: 

        
                 
(i)   if to the Purchaser, at the address and numbers set forth at the end of this Agreement, marked for attention as
therein indicated; 

18 

        
                 
(ii)   if to the Company, to: 

	 	
Teltronics, Inc.
2150 Whitfield Industrial Way
Sarasota, Florida 34243

Attention: Chief Executive Officer
Telephone: (941) 753-5000
Facsimile: (941) 751-7724

With a copy to:

Blair & Roach, LLP
2645 Sheridan Drive
Tonawanda, New York 14150

Attention: John N. Blair, Esq.
Telephone: (716) 834-9181
Facsimile: (716) 834-9197

or, in each case, at such other address and numbers as may have
been furnished in a Notice by such Person to the other parties. Any Notice shall be deemed effective or given upon receipt
(or refusal of receipt). 

        
         (b)   Severability. Should any Section or any part of a Section
within this Agreement be rendered void, invalid or unenforceable by any court of law for any reason, such invalidity or
unenforceability shall not void or render invalid or unenforceable any other Section or part of a Section in this Agreement. 

        
        
(c)   Governing Law.  This Agreement shall be governed by and construed and enforced in accordance with
the internal laws of the State of Florida without regard to the principles of conflicts of law thereof. Each party hereto hereby
irrevocably submits to the jurisdiction of the courts of the State of Florida and of the United States of America sitting in the
City of Bradenton, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated
hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that the venue thereof may not be appropriate, that such
suit, action or proceeding is improper or that this Agreement or any of the documents referred to in this Agreement may not be
enforced in or by said courts, and each party hereto irrevocably agrees that all claims with respect to such suit, action or
proceeding shall be heard and determined in such a Florida state or federal court. Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such
party in the manner provided in Section 11(a) and agrees that such service shall constitute good and sufficient service of process
and notice thereof. 

19 

Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner
permitted by law.. 

                 
(d)   Publicity. Except as required by Applicable Law or the requirements of any securities exchange or market
(in which case the nature of the announcement shall be described to the other parties (and the other parties shall be allowed
reasonable time to comment) prior to dissemination to the public), no party shall make any public announcement in respect of this
Agreement or the transactions contemplated hereby without the prior written consent of the other parties. 

                 
(e)   Captions and Section Headings. Captions or section headings contained in this Agreement are inserted as a
matter of convenience and for reference purposes only, and in no way define, limit, extend or describe the scope of this Agreement
or the intent of any provision hereof. 

                  (f)   Amendments and Waivers. Neither this Agreement nor any term hereof, may be changed, waived, discharged or terminated orally or in writing, except that any term of this Agreement may be amended and the observance of any such term may be waived (either generally or in a particular instance and either retroactively or prospectively) with (but only with) the prior written consent of the Company and the Purchaser; provided, however, that no such amendment or waiver shall extend to or affect any obligation not expressly waived or impair any right consequent therein. 

                 
(g)   Successors and Assigns. All rights, covenants and agreements of the parties contained in this Agreement
shall, except as otherwise provided herein, be binding upon and inure to the benefit of their respective successors and assigns.
This Agreement may not be assigned (by operation of law, contract or otherwise) by any party hereto; provided, however,
that the Purchaser may assign or otherwise transfer its rights and obligations hereunder to: (i) any Permitted Transferee of the
Purchaser as defined in and pursuant to the Stockholders Agreement; or (ii) any successor-in-interest to substantially all of
the Purchaser’s business (whether by stock sale, asset sale or otherwise). 

                 
(h)   Expenses. Each party hereto shall pay its own expenses incidental to the preparation of this Agreement,
the carrying out of the provisions hereof and the consummation of the transactions contemplated hereby, whether or not such
transactions are consummated. 

        
        
(i)   Entire Agreement. This Agreement (including the attached Exhibits and Schedules) contains the entire
agreement and understanding of the parties and there are no further or other agreements or understandings, written or oral,
in effect between the parties relating to the subject matter hereof. 

                 
(j)   Exhibits; Schedules. The Exhibits and Schedules attached to this Agreement hereby are incorporated into
and made a part of this Agreement. 

20 

        
        
(k)   Further Assurances. Each party shall cooperate and take such actions as may be reasonably requested by the
other party in order to carry out the provisions and purposes of this Agreement and the transactions contemplated hereby. 

                 
(l)   Counterparts. This Agreement may be executed (including by telecopy facsimile transmission) with counterpart
signature pages or in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute
one and the same instrument. 

                 
(m)   Attorneys' Fees. If any party initiates any legal action arising out of or in connection with this
Agreement or any of the Other Agreements, the prevailing party in such legal action shall be entitled to recover from the
other party all reasonable attorneys' fees, expert witness fees and expenses incurred by the prevailing party in connection
therewith. 

[Remainder of page intentionally left blank.] 

21 

         IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement
as of the date first above written. 

	 	TELTRONICS, INC.

	

 	

By:  /s/ Ewen R. Cameron

     
Name:  Ewen R. Cameron
     Title:  President and CEO

	

 	

INTERNATIONAL MEDIA NETWORK AG

	

 	

By:  /s/ Patrick Grotto

     
Name:  Patrick Grotto
     Title:  Chairman & Chief Executive Officer 
	

Address:
_________________________
_________________________
Zurich, Switzerland _________

Attention: Mr. Patrick Grotto	 

22 

EXHIBIT A 

SUMMARY OF TERMS OF THE AMENDED CERTIFICATE
OF DESIGNATION, PREFERENCES AND RIGHTS OF
SERIES A PREFERRED STOCK OF COMPANY

	1. 	
Numer of Shares of Series A Preferred. 100,000 shares. 

	2. 	
Conversion. At any time, each share is convertible on a one-for-one basis into shares of Common Stock at a price of $2.00 (U.S.) per share. 

	3. 	
Dividends. None. 

	4. 	
Liquidation Preference. $15,000,000 (U.S.). 

	5. 	
Voting. 400 votes per share prior to conversion. 

EXHIBIT B 

SUMMARY OF TERMS OF FIRST PROMISSORY NOTE 

	1. 	
Obligor. Purchaser. 

	2. 	
Obligee. Company. 

	3. 	
Term. One year from date of Closing. 

	4. 	
Amount. $15,000,000 (U.S.) payable in cash. 

	5. 	
Events of Default. 

	a. 	  	
Non-payment. 

	b. 	  	
Breach of any of the covenants of Purchaser in the Investment Agreement. 

	c. 	  	
Bankruptcy or similar event of the Obligor. 

	6. 	
Collateral. The shares of common stock acquired by the Obligor from the Obligee under the Investment Agreement prior to full payment. 

EXHIBIT C 

SUMMARY OF TERMS OF SECOND PROMISSORY NOTE 

	1. 	
Obligor.   Purchaser. 

	2. 	
Obligee.   Company. 

	3. 	
Term.   Two years from date of Closing. 

	4. 	
Amount.   $15,000,000 (U.S.) payable in cash. 

	5. 	
Events of Default. 

	a. 	  	
Non-payment. 

	b. 	  	
Breach of any of the covenants of Purchaser in the Investment Agreement. 

	c. 	  	
Bankruptcy or similar event of the Obligor. 

	d. 	  	
Event of Default under the First Promissory Note. 

	6. 	
Collateral.   The shares of common stock acquired by the Obligor from the Obligee under the Investment Agreement prior to full payment. 

	7. 	
Condition.   The payment obligation two years from the date of Closing is conditioned upon the Company maintaining the budget for the calendar year 2005 to be agreed to prior to December 31, 2004 by NRD and the Purchaser. 

EXHIBIT D 

SUMMARY OF TERMS OF PLEDGE AND ESCROW AGREEMENT 

	1. 	
Parties. Company, Purchaser and an Escrow Agent designated by NRD. 

	2. 	
Pledge and Escrowed Property. The shares of common stock of the Company acquired but not fully paid for by the Purchaser. 

	3. 	
Voting. Purchaser prior to an Event of Default under the First Promissory Note and/or the Second Promissory Note. Upon an Event of Default, voting will be vested in the Escrow Agent. 

EXHIBIT E 

SUMMARY OF TERMS OF EMPLOYMENT AGREEMENTS 

	1. 	
Parties. Company and NRD and Ewen R. Cameron respectively to be funded by Purchaser. 

	2. 	
Term. Five (5) years from date of Closing. 

	3. 	
Compensation and Terms. The same terms and conditions of the current Employment Agreements between the Company and NRD and Ewen R. Cameron respectively except the following shall be included: 

	a. 	  	
In the event of termination of either or both Employment Agreements, whether or not permitted under their respective Employment Agreements, Company and Purchaser will be obligated to immediately: 

	(i) 	  	
 Purchase and acquire, at its sole expense, all shares of the Company's Common Stock owned by NRD and/or Ewen R. Cameron as the case may be at the time of such termination for a consideration equal to the market price of the Common Stock at such time; 

	(ii) 	  	
Pay, at its sole expense, an amount with respect to all options held by NRD and/or Ewen R. Cameron as the case may be calculated by subtracting the exercise price of all such options from the fair market value of the Company's Common Stock at such time of termination. 

	b. 	  	
In the event of termination of the employment of Ewen R. Cameron on or after February 1, 2008 for failure to maintain the 2007 budget, Ewen R. Cameron will receive all compensation and benefits for the unexpired balance of the term of h is Employment Agreement. 

EXHIBIT F 

USE OF PROCEEDS 

		
	Paid In Capital	15,000,000 	 
	Pay Off Harris Debt ($7,900,000)	 	5,000,000 
	Pay Off Tri-Link Debt	 	1,980,000 
	Redeem Series B Preferred	 	1,265,000 
	Redeem Series C Preferred ($4,000,000)	 	1,000,000 
	
Working Capital	
5,755,000 
	
 

SCHEDULE 5(c)(iii)

Options, Rights, Etc. 

	Holder	Shares Held	Warrants/
Options Held
	

	Series A Preferred Stock	100,000 	 
	Series B Preferred Stock	12,625 	890,000 
	Series C Preferred Stock	40,000 	 
	1995 Incentive Stock Option Plan	 	1,547,000
	Atlantic American	 	300,000 

SCHEDULE 5(c)(iii)

Preemptive Rights 

None 

SCHEDULE 5(d)

Subsidiaries 

TTG ACQUISITION CORP. 
2150 Whitfield Industrial Way
Sarasota, Florida 34243

          Ownership:........................100% Teltronics, Inc.
          Incorporated:.....................Delaware - June 28, 1991

TELTRONICS, S.A. de C.V. (SERVICIOS ADMINISTRATIVOS TTGAC, S.A. de C.V.)
Circuito Juristas #75-B
Ciudad Satelite
Naucalpan de Juarez, Edo. De Mexico
C.P. 53100

          Ownership.........................100% Teltronics, Inc.
          Incorporated......................Mexico - November 14, 2000

TELTRONICS LIMITED
1st Floor, Regent Court, Laporte Way
Luton, Bedfordshire LU48AE
United
Kingdom

          Ownership.........................100% Teltronics, Inc.
          Incorporated......................London, UK - July 2001

36371 YUKON INC.
#610-4370 Dominion St
Burnaby, BC
Canada V5G 4L7

          Ownership.........................100% Teltronics, Inc.
          Incorporated......................Yukon, Canada - May 13, 2003

SCHEDULE 5(g)(i)

Actions Against Company 

Reference Teltronics, Inc. Form 10-Q for the Period Ended June 30, 2004 filed with the SEC on August 16, 2004 

SCHEDULE 5(h)

Tax Matters 

Extensions have been filed for the 2003 Federal and State Taxes 

SCHEDULE 5(i)(i)

Agreements, Contracts, Licenses, Orders 

	(A)	See Schedule 5(k)(v)
	(B)	See Schedule 5(k)(i)
	(C)	See Form 10-K for Year Ended December 31, 2003 – Note 9 - Debt
	(D)	See Form 10-K for Year Ended December 31, 2003 – Note 19 – Related Party Transactions
	(E)	Leases:
	 	Corporate Office:	2150 & 2240 Whitfield Industrial Way
Sarasota, Florida 34243
	 	Warehouse:	Sarasota Commerce Center
7455 16th Street East, Suite 105
Sarasota, FL 34243
	  	 	119-01 15th Avenue
College Point, NY 11379
	  	Sales & Support Offices: 	1670 Corporate Circle, Suite 100
Petaluma, CA 94954-6912
	  	 	104 Town Park Drive, Suite 150
Kennesaw, GA 30144
	  	 	970 East Hennepin Avenue
Minneapolis, MN 55414
	  	 	2517 Highway 35, Suite 102
Manasquan, NJ 08736
	  	 	19-02 Whitestone Expwy, Suite 204
Whitestone, NY 11357
	  	 	622 3rd Avenue, 33rd Floor
New York, New York 10017
	  	 	4275 Kellway Circle, Suite 166
Addison, TX 75001-4213
	  	 	2180 South 1300 East, Suite 320
Salt Lake City, UT 84106

	  	 	775 Park Avenue, Suite 225/2
Huntington, NY
	  	 	1810 Front Street, Suite 2CF
Scotch Plains, NJ 07076
	  	 	#610-4370 Dominion St.
Burnaby, BC
Canada V5G 4L7
	  	 	1st Floor, Regent Court, Laporte Way
Luton, Bedfordshire
LU48AE UK
	  	 	Circuito Juristas #75-B
Ciudad Satelite
Naucalpan de Juarez,
Edo. De Mexico C.P. 53100
	  	Autos, Office and Manufacturing Equipment: 	Operating leases in the ordinary course of business
	 (F)	New York Department of Education
New York Department of Corrections
Federal Bureau of Prisons
Nielsen Media Research	Bell Atlantic
BellSouth
SouthwesternBell
Verizon
	 (G) 	None - Except the U.S. Export Controls and Limitations
	 (H)	None	 
	 (I)	Rainmaker Capital	
	 (J)	None	
	 (K)	None	
	 (L)	None	
	 (M)	None	
	 (N)	None	

SCHEDULE 5(j)

Government Approvals and Other Consents 

Government Approvals - Reference Teltronics, Inc. Form 10-K for Year Ended December 31, 2003, Filed with the SEC on April 14, 2004 (Part I, Item 1. - Regulatory.)

Other Approvals - The CIT Group/BusinessCredit (assumes full redemption of the Series B and C Preferred Stock)

SCHEDULE 5(k)(i)

Employment Agreements 

Ewen R. Cameron
Norman R. Dobiesz
Robert B. Ramey
Duncan Anderson 

SCHEDULE 5(k)(iii)

Executive Officers of Company 

	President, CEO & Assistant Secretary:	Ewen R. Cameron
	VP Product Management - ISM	Peter G. Tuckerman
	VP Electronic Manufacturing Services	Robert B. Ramey
	Sr. VP Business Development	Norman R. Dobiesz
	

VP Sales - ISM Products	

Patrick Hutchison
	VP Sales - Western Region	Walt Minor
	VP 20-20 Product Management	Richard Begando
	VP Public Safety Solutions	Thomas Clark
	VP Technical Services	Dominick Catinella
	VP Cypreon Product Management	Kevin Wilson
	VP Engineering	Robert Lindsay
	VP Legal Affairs	Blair O'Keefe

SCHEDULE 5(k)(v)
Employee Benefit Plans 

	Teltronics, Inc. Savings Plan (401k)	 
	1995 Incentive Stock Option Plan
	2005 Incentive Stock Option Plan
	2000 Employee Stock Purchase Plan	Suspended
	Health/Dental Insurance	With Flex Spending Accounts
	Life Insurance & AD&D
	Disability Insurance	STD & LTD
	Workers Compensation
	Employee Assistance Program
	Supplemental Life & AD&D*	Employee & Dependent
	Pre-paid Legal Program*

* Employee Paid Option 

SCHEDULE 5(l)

Intellectual Property - Subject to Encumbrances 

All intellectual property subject to security interests granted to The CIT Group/Business Credit and Harris Corporation.Ex 10.2 - IMN Share Exchange Agreement

Exhibit 10.2

SHARE EXCHANGE AGREEMENT 

        
THIS SHARE EXCHANGE AGREEMENT (“Agreement”) is made and entered into this 19 day of October, 2004, by and between International Media Network AG., (“IMN”), a Switzerland ______________, having its principal office at _________________________, Zurich, Switzerland and Norman R. Dobiesz (“NRD”), an individual residing at ________________________________. 

        
W I T N E S S E T H: 

        
WHEREAS, NRD desires to exchange (the “Exchange”) the shares of Series A Preferred Stock he owns in Teltronics, Inc., a Delaware corporation (“Teltronics”) for shares of IMN’s issued and outstanding $_____ par value Common Stock (“IMN Common”) in accordance with the terms and conditions of this Agreement. 

        
NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements of the parties contained herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties, intending to be legally bound hereby, do hereby agree as follows: 

        
1.        Exchange of Stock. 

        
        
(a)        Subject to the terms and conditions of this Agreement, NRD agrees to transfer and deliver at the Closing, as defined in paragraph 2 of this Agreement, all the shares of Series A Preferred Stock (“Series A Preferred Stock”) owned by NRD to IMN in exchange for 33.4% of the issued and outstanding shares of IMN Common (“IMN Shares”). 

        
        
(b)         The certificate evidencing the Series A Preferred Stock to be delivered by NRD to IMN at the Closing shall be accompanied by stock powers duly endorsed by NRD in the manner mutually agreed to by NRD and IMN. 

        
        
(c)        
The certificate representing the IMN Shares to be delivered by IMN to NRD at Closing shall be registered in NRD’s name, shall be free-trading and unrestricted, and shall not contain any legend restricting transfer. 

        
        
(d)        At the Closing and from time to time thereafter, NRD and IMN shall each execute such additional instruments and take such other action as the other may reasonably request to more effectively sell, transfer, convey and assign the Series A Preferred Stock to IMN, and the IMN shares to NRD, and to confirm the title of each thereto. 

        
2.         Closing. 

        
        
(a)         Closing.   The closing of the transactions contemplated by this Agreement (the “Closing”) shall be held at the offices of the Company in Sarasota, Florida on or before February ___, 2005, unless another place or time is agreed upon in writing by the parties (the “Closing Date”). 

        
        
(b)         Conduct of Closing.   Subject to the fulfillment of all of the conditions set forth in paragraph 7 of this Agreement and the delivery of all certificates required thereby, except such conditions as may be waived by the parties in writing pursuant to paragraph 8(b) of this Agreement, on the Closing Date: 

        
        
        
(1)         IMN.   IMN shall deliver to NRD: 

	
(i) 
	the stock certificate(s) for the IMN Shares described in paragraph 1(c); 

2

	
(ii) 
	
the certificate contemplated by paragraph 7(a)(1); and 
	
(iii) 	
an irrevocable proxy and other documents to effect the voting agreement described in paragraph 7(a)(4) of this Agreement.

        
        
        
(2)         NRD.   NRD shall deliver to IMN: 

	(i) 	
the certificate(s) for the Series A Preferred Stock and stock power(s) described in paragraph 1(b); 
	(ii) 	
the certificate contemplated by paragraphs 7(b)(1); and
	(iii) 	
the consent of Teltronics to transfer the shares of Series A Preferred Stock to IMN.

        
3.        
Representations and Warranties by IMN.   IMN represents and warrants that: 

        
        
(a)        
Corporate.   IMN is a ___________________ duly organized, validly existing and in good standing under Switzerland law and has full power and authority to own, operate and lease its properties, owned, operated and leased, and to conduct its business as now and heretofore conducted. 

        
        
(b)        
Ownership of Shares; Authority.   Upon issuance to NRD, NRD will be the record owner and holder of the IMN Shares, which will be fully paid and non-assessable, free and clear of any lien, security interest, liability, encumbrance or other restriction, free-trading and unrestricted as to transfer. IMN has the full and unqualified power and authority 

3

to transfer and deliver the IMN Shares Stock to NRD in accordance with the terms of this Agreement.

        
        
(c)        
 Shares. The authorized capital stock of IMN consists of _____________  (______) shares of IMN Common, of which _____________ (_____) shares are validly issued and outstanding.

        
        
(d)         Litigation and Claims. 
There is no action, suit, proceeding, claim or investigation, environmental or otherwise, which is pending or,
to the knowledge of IMN, threatened against IMN, and there is no outstanding order, writ, injunction or decree of any court or
governmental agency against or affecting IMN. 

        
        
(e)        
Effect of Agreement.  
The execution, delivery, and performance of this Agreement by IMN and the consummation by IMN of the
transactions contemplated hereby do not (i) require the consent, waiver, approval, license or authorization of any
person or public authority, (ii) violate, with or without the giving of notice or the passage of time, any provision
of law applicable to IMN, (iii) conflict with or result in a breach of IMN’s charter, certificate or articles
of incorporation or other governing instruments, however denominated, or any mortgage, deed of trust, license,
indenture or other agreement or instrument, or any judgment, decree, statute, regulation or other restriction of any
kind or character to which IMN is a party or by which any of its assets may be bound, or give to others any right to
terminate or result in termination of any provision of any such instruments, and (iv) result in the creation of any
lien, charge or encumbrance upon any of the property or assets of IMN or in the acceleration or maturity of any debt of IMN. 

        
4.        
Representations and Warranties of NRD.   NRD represents and warrants to IMN as follows: 

4

        
        
(a)        
Corporate.   Teltronics is a corporation duly organized and validly existing under the laws of the
State of Delaware. 

        
        
(b)        
Series A Preferred Shares.   Teltronics has authorized 100,000 shares of the Series A Preferred Stock,
all of which shares are presently issued to him and outstanding. 

        
        
(c)        
Ownership of Series A Preferred Shares; Power.   He is the record owner and holder of all of the
shares of Series A Preferred Stock, which he owns free and clear of any lien, security interest, liability,
encumbrance or other restriction, except that the consent of Teltronics is required to transfer the shares of
Series A Preferred Stock to IMN. He has the power and capacity to execute and perform this Agreement and consummate
the transactions contemplated by this Agreement. 

        
5.        Investment Representations of IMN. 

        
        
(a)        
Investment Intent.   IMN represents that it is acquiring the shares of Series A Preferred Stock for
its own account, for investment and not with a view to the distribution thereof or with any present intention of
distributing or reselling such shares. 

        
        
(b)        
Restrictions on Transfer.   IMN acknowledges that (1) the shares of Series A Preferred Stock have
not been registered under the Securities Act of 1933, as amended, (the “Act”), and the shares of
Series A Preferred Stock are what are commonly referred to as “lettered” or “restricted”
securities; (2) unless the shares of Series A Preferred Stock are registered under the Act, or an exemption from
registration is available and the availability of such exemption is confirmed by an opinion of reputable
counsel for IMN satisfactory in form and substance to Teltronics and its counsel, the shares of Series A Preferred
Stock may not be transferred and IMN may be required to hold them indefinitely, and, hence, to bear the economic 

5

risk of the investment for an indefinite period, such risk IMN is able to bear; (3) the United States
Securities and Exchange Commission has adopted Rule 144 under the Act (“Rule 144”) which deals with the
transfer and sale of restricted securities; (4) IMN understands that the availability of Rule 144 for the sale and
transfer of the shares of Series A Preferred Stock is very limited, and that numerous conditions and events, including,
without limitation, a holding period of not less than two (2) years, must exist before it would be able to utilize
Rule 144 in connection with the sale or other disposition of the shares of Series A Preferred Stock; (5) if the
shares of Series A Preferred Stock are not sold or transferred pursuant to registration under the Act or pursuant
to Rule 144, it may be able to sell the shares of Series A Preferred Stock only at a substantial discount, without
the aid of a broker, and only if it is able to find a purchaser who will agree to take and hold the shares of
Series A Preferred Stock under all of the terms and conditions affecting their ownership; (6) transfer of the
shares of Series A Preferred Stock requires consent of NRD as provided in the voting agreement described in
paragraph 7(a)(4) of this Agreement; and (7) the foregoing only summarizes certain considerations with respect
to the legal matters affecting the transferability of the shares of Series A Preferred Stock. 

        
        
(c)        
Adequate Access to Information.   IMN acknowledges that it has been advised by financial and
legal advisors of its own choosing; that IMN has had access to and has carefully reviewed the information that
is contained in Teltronic’s reports, schedules and other filings under the United States Securities Exchange
Act of 1934. 

        
        
(d)        
Covenants Regarding Restrictions.   IMN agrees that: 

        
        
        
(1)         IMN will not, directly or indirectly, offer or sell, pledge,
transfer or otherwise dispose of all or any portion of the shares of Series A Preferred Stock or solicit any
offer to buy, purchase or otherwise acquire or make a pledge of all or any portion of 

6

the shares of Series A Preferred Stock, except
in the manner and to the extent described (a) in a registration statement in effect under the Act covering the shares
of Series A Preferred Stock and as to which a prospectus meeting the requirements of the Act is available for delivery,
or in the opinion of reputable counsel for IMN, which opinion is in form and substance satisfactory to counsel of
Teltronics, to the effect such proposed offer, sale, pledge, transfer or other disposition of the shares of Series A
Preferred Stock may be made without such registration and availability of a prospectus meeting the requirements of
the Act, and (b) only with the consent of NRD as provided in the voting agreement described in paragraph 7(a)(4) of
this Agreement. 

        
        
        
(2)         The certificates representing the shares of Series A
Preferred Stock will bear a legend, referring to the above transfer restrictions, to the effect that the shares of
 Series A Preferred Stock have not been registered under the Act, that no transfer of the shares of Series A
Preferred Stock may be made unless the shares of Series A Preferred Stock are registered under the Act or an
exemption from such registration is available as required by the Act. 

        
        
(e)        
Illiquidity.   IMN understands that there is no public market for the Series A Preferred, that
Teltronics has only a limited public market for its Common Stock, that it may not be able to maintain, and that
therefore IMN may never be able to dispose of the Series A Preferred Stock, even if converted into Common Stock
of Teltronics. 

        
7.         Conditions Precedent to the Closing. 

        
        
(a)         Obligation of NRD to Close.   
The obligation of NRD to consummate the Exchange on the Closing Date shall be subject to the satisfaction or the
written waiver by NRD of the following conditions on or prior to the Closing Date: 

7

        
        
        
(1)        
Representations and Warranties; Compliance with Agreement.   The representations and warranties of
IMN set forth in this Agreement shall be true and correct in all material respects as of the date of this Agreement
and as of the Closing Date as though made on and as of the Closing Date, and IMN shall have performed all covenants
and agreements to be performed by it under this Agreement and otherwise on or prior to the Closing Date, and IMN shall
have delivered to NRD a certificate to such effect dated the Closing Date signed by IMN’s chief
executive officer. 

        
        
        
(2)         Litigation Affecting the Closing.   
On the Closing Date, no proceeding shall be pending or threatened before any court or governmental agency in
which it is sought to restrain or prohibit or to obtain damages or other relief respecting this Agreement or the
consummation of the transactions contemplated hereby, and no investigation that might eventuate in any such suit,
action or proceeding shall be pending or threatened. 

        
        
        
(3)         Consummation of Teltronics/IMN Investment Agreement.
Teltronics and IMN shall have closed and consummated all of the transactions contemplated by the Investment
Agreement between them of even date herewith (“Investment Agreement”). 

        
        
        
(4)         Voting Agreement.   
IMN and NRD shall have entered into a voting agreement covering the shares of Series A Preferred Stock containing
the terms described in Exhibit A attached to and made a part of this Agreement. 

        
        
(b)         Obligation of IMN to Close.  
The obligation of IMN to consummate the transfer of the Series A Preferred Stock on the Closing Date shall be
subject to the satisfaction of the following conditions on or prior to the Closing Date: 

        
        
        
(1)         Representations and Warranties; Compliance with Agreement.  
 The representations and warranties of NRD set forth in this Agreement shall be true 

8

and correct in all material respects as of the
date of this Agreement and as of the Closing Date as though made on and as of the Closing Date, and NRD shall have
performed all covenants and agreements to be performed by him under this Agreement on or prior to the Closing Date,
and NRD shall have delivered to IMN a certificate to such effect dated the Closing Date and signed by NRD. 

        
        
        
(2)         Litigation Affecting Closing.
On the Closing Date, no proceeding shall be pending or threatened before any court or governmental agency in
which it is sought to restrain or prohibit or to obtain damages or other relief in connection with this Agreement
or the consummation of the transaction contemplated hereby, and no investigation that might eventuate in any such
suit, action or proceeding shall be pending or threatened. 

        
        
        
(3)         Amendment of Series A Preferred Stock.   
Teltronics shall have filed with the Delaware Secretary of State the Amended Certificate of Designation,
Preferences and Rights of Series A Preferred Stock of Teltronics, Inc. as described in Exhibit A to the Investment
Agreement. 

        
8.        
Covenants Relating to IMN.   For a minimum period of five (5) years from and after the Closing Date
and until full and final performance of all of IMN’s obligations and under the Investment Agreement and the
agreements to be executed as described in the Investment Agreement: 

        
        
(a)         NRD will have the irrevocable right to appoint a Swiss person
designated by him in his sole discretion, as member of IMN’s board of directors and all committees of IMN’s board;

        
        
(b)        
 NRD will assign his rights to vote the IMN Shares to a Swiss person designated by NRD, in his sole discretion; and 

9

        
        
(c)         IMN assigns and conveys to NRD or an individual or entity he
designates, in his sole discretion, all rights of IMN, howsoever arising, to appoint members of
Teltronics’ board of directors. 

        
9.         Survival of Agreements and Obligations: Waivers. 

        
        
(a)         All representations, warranties, agreements and covenants made by the parties in this Agreement or pursuant hereto shall survive the Exchange, shall remain in full force and effect and may be relied upon by the parties for a period of five (5) years and until full and final performance by IMN of all of its obligations to NRD and under the Investment Agreement, regardless of any investigation or examination at any time made by them or on their behalf, and shall not be deemed merged into any document or instrument executed or delivered with this Agreement. 

        
        
(b)         The breach, default or nonperformance of any condition, representation, warranty, agreement or covenant contained in this Agreement or contemplated under this Agreement by NRD or IMN may be waived, but only in writing, by the other party or parties hereto; provided, however, that no such waiver shall serve to waive any subsequent breach, default or nonperformance, nor shall any such waiver serve to waive a recurrence of the breach, default or nonperformance so waived, nor shall the failure to enforce any remedy with respect to any such breach, default or nonperformance serve as a waiver thereof. 

        
10.         General. 

        
        
(a)         Entire Agreement. This Agreement, together with the Schedules and Exhibits attached hereto and other documents referred to herein, constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, among the parties hereto with respect to the subject matter hereof. 

10

        
        
(b)         Written Amendments. Any purported termination, amendment, change or modification of this Agreement shall be void unless in writing and duly approved and executed by all the parties to this Agreement. 

        
        
(c)         Headings. The headings of this Agreement are inserted for convenience and identification only, and are in no way intended to describe, interpret, define or limit the scope, extent or intent hereof. 

        
        
(d)         Counsel; Expenses. NRD and IMN each acknowledge that they have been represented by independent legal counsel of their own choosing. NRD and IMN shall each bear and pay all costs and expenses incurred by them or it on their or its behalf as the case may be in connection with this Agreement, including without limitation, fees and expenses of their or its own financial consultants, accountants and counsel. 

        
        
(e)         Notices. All notices or other communications required or permitted to be given pursuant to this Agreement shall be in writing and shall be considered as properly given or made if hand delivered, mailed from within the United States by certified or registered mail, or sent by prepaid telegram to the applicable address(es) appearing in the preamble to this Agreement, or to such other address as a party may have designated by like notice forwarded to the other parties hereto. All notices, except notices of change of address, shall be deemed given when mailed or hand delivered and notices of change of address shall be deemed given when received. 

        
        
(f)         Application of Florida Law.
 This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the
State of Florida without regard to the principles of conflicts of law thereof. Each party hereto hereby
irrevocably submits to the jurisdiction of the courts of the State of Florida and of the United States of
America sitting 

11

in or having jurisdiction over the City of Bradenton, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, that the venue thereof may not be appropriate, that such suit, action or
proceeding is improper or that this Agreement or any of the documents referred to in this Agreement may not be
enforced in or by said courts, and each party hereto irrevocably agrees that all claims with respect to such suit,
action or proceeding shall be heard and determined in such a Florida state or federal court. Each party hereby
irrevocably waives personal service of process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party in the manner provided in
paragraph 9(e) and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve
process in any other manner permitted by law. 

        
        
(g)         Binding Agreement; Non-Assignability. This Agreement shall be binding upon and inure to the benefit of the personal representatives, heirs, devisees, successors and assigns of IMN and NRD, as the case may be, but none of the rights or obligations attaching to any party shall be assignable. 

        
        
(h)         Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 

12

        IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written. 

	 	International Media Network AG

	

 	

By:  /s/ Patrick Grotto

     Patrick Grotto, Chairman & Chief
       Executive Officer

	

 	

 

	

 	

/s/ Norman R. Dobiesz

Norman R. Dobiesz

13

EXHIBIT A 

VOTING AGREEMENT 

	1. 	  	Parties.
NRD or his designee and IMN.  

	2.  	  	Custody
of Shares. The shares of Series A Preferred Stock will be held by an Escrow Agent
designated by NRD.  

	3. 	  	
Voting. NRD or his designee shall have the exclusive, irrevocable right to vote the shares of Series A Preferred Stock during the term of the Voting Agreement to be further effected by an irrevocable proxy. 

	4. 	  	
Term. A minimum period of five (5) years commencing upon the Closing and terminating after complete and final performance by IMN of all of its obligations and under the Investment Agreement.

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