UNITED STATES
                   SECURITIES AND EXCHANGE COMMISSION
                        Washington, D.C. 20549

                              FORM 10-KSB

(Mark One)
[X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
      
                For the fiscal year ended  June 30, 1997  

                                  OR

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

           For the transition period from             to 
                                          -----------    -----------

                     Commission file number  0-17219  

                    GENTNER COMMUNICATIONS CORPORATION
                    ----------------------------------
              (Name of small business issuer in its charter)

                  Utah                              87-0398877
   --------------------------------------       ------------------
   (State or other jurisdiction                  (I.R.S. Employer
  of incorporation or organization)             Identification No.)
 
  1825 Research Way, Salt Lake City, Utah             84119
  ------------------------------------------------------------
  (Address of principal executive offices)          (Zip Code)

                Issuer's telephone number  (801) 975-7200  
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      Securities registered under Section 12(b) of the Exchange Act:

       Title of each class     Name of each exchange on which registered
       -------------------     -----------------------------------------
              None                               None

      Securities registered under Section 12(g) of the Exchange Act:

                      Common Stock, $0.001 par value
                      ------------------------------
                            (Title of class)

Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the
past 90 days.    Yes    X        No 
                       ---            ---

Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-KSB or any amendment to this Form 10-KSB.   X
                                              ---  

The issuer's revenues for its most recent fiscal year ended June 30, 1997
were $13,371,851.

The aggregate market value of the voting stock held by non-affiliates is
approximately $6,300,000.  This value was computed by reference to the
price at which the stock was sold, $1.00, on September 2, 1997 (which
date is within 60 days of the filing of this Form 10-KSB).

The number of shares outstanding of the issuer's Common Stock as of
September 2, 1997 was 7,664,443.


                   DOCUMENTS INCORPORATED BY REFERENCE

If the following documents are incorporated by reference, briefly
describe them and identify the part of the Form 10-KSB (e.g., Part I,
Part II, etc.) into which the document is incorporated:  (1) any annual
report to security holders; (2) any proxy or information statement; and
(3) any prospectus filed pursuant to Rule 424(b) or (c) of the Securities
Act of 1933 ("Securities Act"):

      1.   The Annual Report to Shareholders for fiscal year ended June
           30, 1997 ("Annual Report"), is incorporated into Parts I and
           II.
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      2.   The Proxy Statement provided to shareholders in conjunction
           with election of directors, approval of appointment of      
           independent certified public accountants, and consideration 
           of the 1997 Employee Stock Purchase Plan, at the Company's  
           1997 Annual Meeting of Shareholders to be held on November 21,
           1997 ("Proxy Statement"), is incorporated into Part III.

[EXCEPT AS OTHERWISE NOTED, THE INFORMATION CALLED FOR IN PARTS I AND II
IS INCORPORATED BY REFERENCE FROM THE REGISTRANT'S 1997 ANNUAL REPORT TO
SHAREHOLDERS FURNISHED TO THE COMMISSION PURSUANT TO RULE 14A-3(B).]


                               PART I


Item 1.    Description of Business; see 1997 Annual Report section
           entitled "Description of Business".


Item 2.    Description of Properties; see 1997 Annual Report section   
           entitled "Properties".


Item 3.    Legal Proceedings; None.


Item 4.    Submission of Matters to a Vote of Security Holders; None. 


                              PART II


Item 5.    Market for Registrant's Common Stock and Related Stockholder
           Matters; see 1997 Annual Report section "Market for Common
           Equity and Related Stockholder Matters".


Item 6.    Management's Discussion and Analysis or Plan of Operation; see
           1997 Annual Report section entitled "Management's Discussion
           and Analysis of Financial Condition and Results of Operation".


Item 7.    Financial Statements; see attachment to 1997 Annual Report.


Item 8.    Changes in and Disagreements with Accountants on Accounting
           and Financial Disclosure; None.

[THE INFORMATION CALLED FOR IN PART III IS INCORPORATED BY REFERENCE FROM
THE REGISTRANT'S PROXY STATEMENT, TO BE FILED IN ACCORDANCE WITH SCHEDULE
14A IN CONNECTION WITH THE ELECTION OF DIRECTORS, APPOINTMENT OF
AUDITORS, AND CONSIDERATION OF THE COMPANY'S 1997 EMPLOYEE STOCK PURCHASE
PLAN, AT THE COMPANY'S 1997 ANNUAL MEETING OF SHAREHOLDERS TO BE HELD
NOVEMBER 12, 1997.]


                               PART III




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Item 9.    Directors, Executive Officers, Promoters and Control Persons;
           Compliance with Section 16(a) of the Exchange Act; see Proxy
           Statement sections entitled "Nominees", "Executive Officers",
           and compliance with "Section 16(a) of the Securities Exchange
           Act". 


Item 10.   Executive Compensation; see Proxy Statement section entitled
           "Executive Compensation and Other Matters".


Item 11.   Security Ownership of Certain Beneficial Owners and
           Management; see Proxy Statement section entitled "Stock
           Ownership of Certain Beneficial Owners and Management".


Item 12.   Certain Relationships and Related Transactions; see Proxy
           Statement section entitled "Certain Relationships and Related
           Transactions".



ITEM 13.  EXHIBITS AND REPORTS ON FORM 8-K

Exhibits Required by Item 601 of Regulation S-B

The following exhibits are hereby incorporated by reference from the
Company's Annual Report on Form 10-K for the fiscal year ended June 30,
1989.  The exhibit numbers shown are those in the 1989 Form 10-K as
originally filed.


EXHIBIT
NUMBER             DESCRIPTION     

3.1*+     Articles of Incorporation and all amendments thereto through
          March 1, 1988.  (Page 10)

10.4*+    VRC-1000 Purchase Agreement between Gentner Engineering
          Company, Inc. (a former subsidiary of the Company which
          was merged into the Company) and Gentner Research Ltd., 
          dated January 1, 1987.  (Page 71)

10.6*+    Commercial Lease between the Company and Dell S. Nichols, dated
          January 15, 1988.  (Page 97)

10.8*+    Form of Split-Dollar Insurance Agreement.  (Page 136)

The following exhibit is hereby incorporated by reference from the
Company's Annual Report on Form 10-K for the fiscal year ended June 30,
1990.  The exhibit number shown is the one in the 1990 Form 10-K as
originally filed.


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EXHIBIT
NUMBER             DESCRIPTION

10.1*+    Dealer Agreement between the Company and Allied Broadcast
          Equipment, dated January 19, 1990.  (Page 55)

The following exhibits are hereby incorporated by reference from the
Company's Annual Report on Form 10-K for the fiscal year ended June 30,
1991.  The exhibit numbers shown are those in the 1991 Form 10-K as
originally filed.

EXHIBIT
NUMBER             DESCRIPTION

3.1*+     Amendment to Articles of Incorporation, dated July 1, 1991.

10.1*+    Internal Modem Purchase Agreement between Gentner Engineering
          Company, Inc. and Gentner Research, Ltd., dated October 12,
          1987.

10.2*+    Digital Hybrid Purchase Agreement between Gentner Engineering,
          Inc. and Gentner Research, Ltd., dated September 8, 1988.

The following exhibits are hereby incorporated by reference from the
Company's Form 10-K for the fiscal year ended June 30, 1992.  The exhibit
numbers shown are those in the 1992 Form 10-K as originally filed.

EXHIBIT
NUMBER             DESCRIPTION

10.2*+    Asset Purchase Agreement with MacroMedia, Inc., dated March 16,
          1992.  (Page 96)

The following documents are hereby incorporated by reference from the
Company's Form 10-KSB for the fiscal year ended June 30, 1993.  The
exhibit numbers shown are those in the 1993 Form 10-KSB as originally
filed.

EXHIBIT
NUMBER             DESCRIPTION

3*+       Bylaws, as amended on August 24, 1993.  (Page 16)








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The following documents are hereby incorporated by reference from the
Company's Form 10-KSB for the fiscal year ended June 30, 1996.  The
exhibit numbers shown are those in the 1996 Form 10-KSB as originally
filed.

EXHIBIT      
NUMBER             DESCRIPTION       

10*#     1990 Incentive Plan, as amended August 7, 1996.  (Page 40)


The following documents are filed as exhibits to this Form 10-KSB.

EXHIBIT      
NUMBER             DESCRIPTION

10.1     Commercial Credit and Security Agreement, and Promissory Note,
         between Company and First Security Bank, N.A. ($2,000,000)

10.2#    1997 Employee Stock Purchase Plan

10.3     Promissory Note in favor of Safeco Credit Company ($419,000)

10.4     Commercial Credit and Security Agreement, and Promissory Note,
         between Company and First Security Bank ($322,716.15)

10.5     Lease between Company and Valley American Investment Company

13.1     1997 Annual Report to Shareholders of Company

23.1     Consent of Ernst & Young, LLP, Independent Auditors

23.2     Consent of Ernst & Young, LLP, Independent Auditors

23.3     Consent of Ernst & Young, LLP, Independent Auditors

27       Financial Data Schedule

* Denotes exhibits specifically incorporated in this Form 10-KSB by
reference to other filings pursuant to the provisions of Rule 12B-32
under the Securities Exchange Act of 1934.

# Identifies management or compensatory plans, contracts or arrangements.

+ Denotes exhibits specifically incorporated into this Form 10-KSB by
reference, pursuant to Regulation S-B, Item 10(f)(2).  These documents
are located under File No. 0-17219 and are located at the Securities and
Exchange Commission, Public Reference Branch, 450 5th St., N.W.,
Washington, DC  20549.

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         REPORTS ON FORM 8-K

The Company filed no reports on Form 8-K during the latest fiscal
quarter.



SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the Company
caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

                                   GENTNER COMMUNICATIONS CORPORATION


September 29, 1997                 By:   /s/ Russell D. Gentner
                                      --------------------------------
                                         Russell D. Gentner
                                         Chief Executive Officer

In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the Company and in the capacities
and on the dates indicated.







Signature                        Title                       Date
        
     
/s/ Russell D. Gentner   Director, Chairman of the    September 29, 1997
Russell D. Gentner       Board of Directors, and
                         Chief Executive Officer
                         (Principal Executive Officer)

/s/ Susie Strohm         Vice President of Finance    September 29, 1997
Susie Strohm             (Principal Financial and
                         Accounting Officer)

POWER OF ATTORNEY

Know all men by these presents, that each person whose signature appears
below constitutes and appoints each of Russell D. Gentner and Susie
Strohm, jointly and severally, his true and lawful attorney in fact and



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agent, with full power of substitution for him and in his name, place and
stead, in any and all capacities, to sign any or all amendments to this
report on Form 10-KSB and to file the same, with all exhibits thereto and
other documents in connection therewith with the Securities and Exchange
Commission, hereby ratifying and confirming all that each said attorney
in fact or his substitute or substitutes may do or cause to be done by
virtue hereof.


Signature                       Title                       Date
            
/s/ Edward Dallin Bagley   Director                   September 29, 1997
Edward Dallin Bagley   


/s/ Brad R. Baldwin        Director                   September 29, 1997
Brad R. Baldwin   


/s/ Edward N. Bagley       Director                   September 29, 1997
Edward N. Bagley


/s/ K. Bradford Romney     Director                   September 29, 1997
K. Bradford Romney

 





                            Exhibit 10.1
[FIRST SECURITY BANK LOGO]                               Commercial Credit and
                                                            Security Agreement
                                File Name   Gentner Communications Corporation
                                      Customer/Note No.  0023791 - 9001 & 9002
    



     THIS COMMERCIAL CREDIT AND SECURITY AGREEMENT, dated as of the 24th day
of October, 1996, is entered between Gentner Communications Corporation (the
"Borrower") and First Security Bank, N.A. ("First Security"). 



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     Borrower has requested First Security to extend credits to Borrower for
certain purposes, and First Security is willing to make loans on the terms and
conditions of this Agreement.  Therefore, the parties agree as follows:

     SECTION 1.  DEFINITIONS. The following definitions shall apply to the
credit facilities:

     1.1    "Accounts" shall have the meaning as defined in the Borrowing Base
Schedule to Commercial Credit and Security Agreement.

     1.2    "Accounts Commitment" shall mean First Security's commitment to
advance up to a maximum of Two Million Dollars ($2,000,000.00) in support of
Borrower's Accounts. 

     1.3     "Advance" shall mean an advance by First Security to or for the
account of the Borrower under the Loan. 

     1.4     "Agreement" shall mean this Commercial Credit and Security
Agreement together with all the attached Schedules identified in Section
 8.10,
together with any and all amendments, modifications, extensions, or
substitutions to the same. 
     
     1.5     "Borrowing Base" shall have the meaning ascribed to it in the
Borrowing Base Schedule to this Agreement. 

     1.6     "Collateral" shall mean all the Inventory, Receivables and
General Intangibles referred to and described in the Inventory and Receivables
Schedule to Commercial Credit and Security Agreement to which First Security
is given a security interest pursuant to the Loan Documentation. 

     1.7     "Commitment" shall mean First Security's commitment under Section
2 of this Agreement, subject to the terms and conditions of this Agreement, to
make Advances to Borrower under the Accounts Commitment and under the
Inventory Commitment. 

     1.8     "Eligible Accounts" shall mean only those Accounts of Borrower
which are eligible to be included within the Borrowing Base and which is more
fully defined in the Borrowing Base Schedule to this Agreement. 

     1.9     "Eligible Inventory" shall mean only that Inventory of Borrower
which is eligible to be included within the Borrowing Base and which is more
fully defined in the Borrowing Base Schedule to this Agreement. 

     1.10     "First Security's Prime Rate" is its announced rate of interest
used as a reference point from which it may calculate the cost of credit to
customers.  It is subject to change from time to time. First Security may make
loans bearing interest above, at, or below its Prime Rate. 



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     1.11     "General Intangibles" shall have the meaning ascribed to it in
the Inventory and Receivables Schedule to this Agreement. 

     1.12     "Inventory" shall have the meaning ascribed to it in the
Inventory and Receivables Schedule to this Agreement. 

     1.13     "Inventory Commitment" shall mean First Security's commitment to
advance up to a maximum of Five Hundred Thousand Dollars ($500,000.00)  in
support of Borrower's Inventory. 

     1.14     "Libor Rate Index" shall mean, that interest rate which is
referred to in the most recently published edition of the Wall Street Journal
under the "Money Rates" column as the "London Interbank Offered Rate (LIBOR)"
of one month maturities.  In the event that there is reference to more than
one London Interbank Offered Rate or a range of such rates for various
markets, the Index shall be the highest rate in the range or the highest of
the quoted rates.  Said Libor Rate Index shall adjust on a monthly basis and
shall remain fixed throughout the entire course of any given month. 

     1.15     "Libor Rate" shall mean the rate per annum which is payable by
Borrower under the Note evidencing the Accounts Commitment, calculated by
adding the applicable interest margin as indicated below in the following
table, to the Libor Rate Index at the time of the making of an Advance under
the Accounts Commitment.

              Libor Rate      Libor Rate     Libor Rate      Libor Rate
              Index + 3.00%   Index + 3.5%   Index + 4.0%    Index +5.0%

Tangible                        $4,000,000-    $3,750,000-
 Net Worth    >=$4,500,000.00   $4,499,000     $3,999,999   < $3,750,000 
Debt to 
 Equity Ratio     < = .75       .76 - 1.00     1.01 - 1.50     > 1.5 
Debt Service 
 Coverage     
 (cumulative 
 YTD)             > 2.00       1.51 - 2.00     1.10 - 1.50     <1.10 

     The applicable margins as indicated above shall be based upon the worst
ratio in the matrix.  In order to obtain, for instance, the lowest margin or
3.00% above the Libor Rate Index, all of the criteria in that column must have
been achieved.  If Borrower achieves all but one criterion, and that criterion
would indicate a highest pricing in the matrix, then the highest margin would
be the applicable margin to be added to the Libor Rate Index for the Accounts
Commitment.  The above-indicated margins shall be determined, and remain in
effect at the beginning of each quarter until the beginning of the following
quarter.




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     1.16     "Loan" shall mean either one or both of the Commitments
specified in Section 2 of this Agreement evidenced by a Two Million Dollar
($2,000,000.00) Note, and/or a Five Hundred Thousand Dollars ($500,000.00)
Note.

     1.17     "Loan Documentation" shall mean in addition to this Agreement,
and the Note, all instruments, collateral assignments, trust deeds, mortgages,
other security agreements, other pledge agreements, lien instruments,
guaranties, subordinations, financing statements, notices, lien waivers,
certificates, certificates of title, applications for certificates of title,
environmental indemnities, and all other documents set forth in, contemplated
by, or as otherwise required by First Security as a condition to or in
connection with the Loan, whether now or hereafter executed, including
amendments, extensions, renewals, and substitutions of any of the foregoing.

     1.18    "Maturity Date" shall mean October 24, 1997.

     1.19    "Note" shall collectively refer to a promissory note or notes or
other instrument restating the obligations of Borrower to repay the Loan.

     1.20    "Obligations" shall refer to the obligations, indebtedness,
covenants and liabilities of Borrower set forth or contemplated in the Loan
Documentation, including without limitation any indebtedness resulting from
any overdraft on any account with First Security (provided that nothing herein
shall be a commitment by First Security to honor overdrafts).

     1.21    "Receivables" shall have the meaning ascribed to it in the
Receivables and Inventory Schedule to this Agreement.

     1.22    "Satisfactory Accounts" shall mean only those accounts of
Borrower which are eligible to be included within the Borrowing Base and which
are more fully defined in the Borrowing Base Schedule to this Agreement.


SECTION 2.  AMOUNT AND TERMS OF THE LOAN.  Subject to the terms and conditions
set forth in this Agreement and the related Loan Documentation, First Security
commits to make the following credit facilities available to the Borrower.

     2.1     The Accounts Commitment.  The maximum principal amount of the
Accounts Commitment shall be Two Million Dollars ($2,000,000.00).

             (a)    The Account Commitment shalt be a revolving Loan, with the
right of Borrower to repay principal and to reborrow, until the Maturity Date,
up to a maximum of the lesser of i) the maximum principal amount of the
Accounts Commitment stated above or ii) the Borrowing Base for the Accounts
Commitment, (so Long as no default exists under this Agreement).




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             (b)    The Loan shall be evidenced by a Note restating the
obligation of Borrower to repay the Loan and shall:

                    (a)     Be payable to the order of First Security at its
                    CommerciaL Loan Accounting Center at P.O. Box 7666, Boise,
                    Idaho 83707-1666.

                    (b)     Be stated to be for the principal amount of Two
                    Million Dollars ($2,000,000.00) or the unpaid principal
                    balance due under the Note outstanding from time to time
                    with First Security, whichever is less.

                    (c)     Be stated to mature on October 24, 1997.

                    (d)     Be stated to bear interest for each Advance at the
                    Libor Rate.

                    (e)     Be stated upon the occurrence of an Event of
                    Default, as is defined in either this Agreement or the
                    Note, to increase the rate charged under the Note by four
                    percent (4.00%) over the rate being charged prior to the
                    occurrence of said Event of Default; provided further,
                    however, that if First Security shall waive in writing or
                    allow a cure of such Event of Default, the interest
                    charged on Advances under the Note shall revert to the
                    non-default rate specified above from and after such
                    waiver or completion of cure (whichever is sooner).

                    (e)     Provide for the repayment of the unpaid principal
                    sum, together with accrued and unpaid interest, on the
                    Maturity Date.

     2.2     The Inventory Commitment.  The maximum principal amount of the
Inventory Commitment shall be Five Hundred Thousand Dollars ($500,000.00).

             (a)    The Inventory Commitment shall be a revolving Loan, with
the right of Borrower to repay principal and to reborrow, until the Maturity
Date, up to a maximum of the Lesser of i) the maximum principal amount of the
Inventory Commitment stated above or ii) the Borrowing Base for the inventory
Commitment, (so long as no default exists under this Agreement).

             (b)   The Loan shall be evidenced by a Note restating the
obligation of Borrower to repay the Loan and shall:

                    (f)     Be payable to the order of First Security at its
                    Commercial Loan Accounting Center at P.O. Box 7666, Boise,
                    Idaho 83707-1666.



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                    (g)     Be stated to be for the principal amount of Five
                    Hundred Thousand Dollars ($500,000.00) or the unpaid
                    principal balance due under the Note outstanding from time
                    to time with First Security, whichever is less.

                    (h)     Be stated to mature on October 24, 1997.

                    (i)     Be stated to bear interest at First Security's
                    Prime Rate plus 2.0%.

     2.3     Payments.  All payments shall be made to First Security at the
address specified in this Agreement in lawful money of the United States of
America.  All payments received by First Security shall be applied as follows: 
first, toward the satisfaction of commitment fees, origination fees,
attorneys' fees and costs incidental thereto and to advances made and costs
and expenses incurred by First Security or its agent to enforce Borrower's
Obligations hereunder and under the Loan Documentation or to preserve the
Collateral securing the Obligations; second, toward the reduction of any and
all accrued and unpaid interest, including uncollected late charges; third,
toward the reduction of unpaid principal; and fourth, to prepayment of
Obligations which may arise from any outstanding letters of credit.

     2.4     Accountings.  First Security shall provide periodic accountings
to Borrower of all payments, collections, applications and borrowings. 
Borrower shall promptly examine such accountings and borrowings.  Borrower
shall promptly examine such accountings and shall, after learning of any
discrepancy, immediately notify First Security of any discrepancies.  Fifteen
days after the rendering of such accountings, in the absence of patent
demonstrable error pointed out by Borrower in writing within said fifteen day
period, the accounting shall be deemed to be conclusive as between First
Security and Borrower.

     2.5     Fees.  The Borrower shall pay, at the time of the execution of
this Agreement, an upfront facility fee of 0.25% for the Accounts Commitment
or $5,000.00.  In addition Borrower shall at the same time also pay a 1.00%
fee for the Inventory Commitment, or $5,000.00.

     2.6     Advances.  Borrower agrees that any and all Advances made
hereunder shall be for Borrower's benefit whether or not said Advances are
deposited to  Borrower's account, and that persons other than the undersigned
Borrower may have authority to draw against such account.  Advances may be
made hereunder at the oral or written request of Russ Gentner or David L.
Harmon who are hereby authorized to request Advances until written notice of
revocation of this authority is received by First Security from Borrower. 
Advances shall be made to Borrower or for the account of Borrower unless
Borrower directs otherwise in writing.

     2.7     Costs and Expenses.  Any and all fees, costs and expenses, of


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whatever kind or nature, including but not Limited to attorneys' fees, filing
fees, title insurance premiums, surveys, environmental audits and appraisal
fees, incurred by First Security in connection with this Agreement (whether or
not the Loan is advanced) shall be borne and paid by Borrower on demand by
First Security and until so paid constitute part of the Obligations of
Borrower secured by the Loan Documentation and the Collateral and shalt accrue
interest at the Note rate or, if applicable, at the default rate.  Borrower
hereby authorizes First Security to make advances on the Loan, if available,
to pay such costs and expenses if First Security, in its sole discretion,
chooses to do so.


SECTION 3.  SECURITY.

     3.1      Grant of Interest In Collateral.  To secure repayment and
performance of the Obligations, Borrower hereby grants, assigns and conveys to
First Security a security interest in all of Borrower's right, title and
interest, whether now owned or hereafter acquired, in and to those properties,
interests and rights that are identified as part of the Collateral in those
Schedules that are incorporated herein by Section 8.10.

     3.2      Execution of Loan Documentation.  As a precondition to the Loan
and as security for the payment and performance by Borrower of all the
Obligations, Borrower shall execute and deliver or shall cause to be executed
and delivered all Loan Documentation and shall take all actions that First
Security may at any time deem appropriate to secure, perfect, protect and
enforce the Liens, security interests and rights of First Security granted
under this Agreement and the other Loan Documentation.


SECTION 4.  CONDITIONS.

     4.1      Conditions Precedent.  First Security shalt not be required to
advance funds under this Agreement unless First Security shall have received
from Borrower the following:

         (a)     Current financial statements in such form as First Security
     may require;

         (b)      The fully executed Loan Documentation;

         (c)      Acceptable lien searches evidencing and insuring that the
     Loan Documentation creates first priority, perfected encumbrances against
     the Collateral, subject only to the permitted encumbrances listed on the
     Permitted Encumbrances Schedule attached hereto and incorporated herein
     by Section 8.10;




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         (d)      Corporate resolutions and documents, as applicable,
     evidencing the good standing of Borrower and the due and proper execution
     of the Loan Documentation by authorized representatives;

         (e)      Assurances, satisfactory to First Security, that all other
     conditions and requirements of any applicable commitment Letter have been
     satisfied; and

         (f) Such other documentation and information that First Security or
its counsel may request given the circumstances and terms of the Loan.

     4.2      Rights for Advances Forfeited Upon an Event of Default.  First
Security shall not be required to make any advance under the Loan if a default
or an event of default under the Loan Documentation exists or if an event has
occurred that with the passage of time would constitute such a default or
event of default.


SECTION 5.  REPRESENTATIONS AND WARRANTIES OF BORROWER.

     To induce First Security to make the Loan, Borrower warrants and
represents as follows:

     (1)     Legal Compliance.  Borrower is in good standing under, and in
full compliance with, all applicable laws, codes, rules and regulations under
federal, state and municipal authority, including without limitation the
proper use, storage, registration and disposal of any hazardous materials.

     (2)     Corporate Authority.  Borrower has full power, authority and
capacity to incur the indebtedness described herein and to execute the Loan
Documentation.  The person or persons executing this Agreement and the other
Loan Documentation on behalf of Borrower are duty authorized to do so.

     (3)     No LegaL Bar.  The Loan Documentation is in all respects Legal,
valid, and binding according to its terms.  The execution and performance of
the Loan Documentation will not violate any applicable Law, regulation, order,
judgment or decree, article of incorporation, bylaw, indenture, contract or
agreement that purports to be binding on the Borrower or its assets, and will
not result in the creation of any encumbrance on the assets of Borrower except
as contemplated by the Loan Documentation.

     (4)     Accuracy of Financial Statements.  Any financial statements of
Borrower heretofore delivered to First Security are true and correct in all
respects.  The most recent statements given to First Security accurately
represent the current financial condition of Borrower, and, since the date of
such statements, the business, properties, assets, and liabilities of Borrower
have not been adversely affected or changed in any material way.



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     (5)     Validity of Representations.  All written representations
previously made and information previously given by Borrower or Borrower's
agents to First Security or its agents remain true and correct.

     (6)     No Default.  Borrower is not in default under any indebtedness,
lease, contract, license, undertaking, or other agreement which will affect
the ability of Borrower to perform under any of the Loan Documentation.

     (7)     Litigation.  There are no existing actions, suits, or proceedings
pending or threatened against Borrower or relating to the business,
properties, and assets of Borrower that may have an adverse effect upon the
financial condition, the business or the assets of Borrower or the Collateral,
and no judgment, order, or decree has been rendered which has not been
discharged, satisfied, or complied with other than those disclosed to First
Security in writing.

     (8)     Taxes.  Borrower has filed all federal and state income tax
returns which are required to be filed (except returns for which extensions
have been properly filed) and has paid all taxes, assessments and governmental
charges or levies imposed upon Borrower or upon Borrower's income or profits,
or upon any property belonging to Borrower, to the extent that such taxes and
assessments have become due (except such taxes and assessments that are being
contested in good faith by appropriate proceedings diligently prosecuted and
that have been disclosed to First Security in writing).

     (9)     Title to Properties.  Borrower has good title to its assets,
including the Collateral and including the properties and assets reflected in
the most recent statements given to First Security, and the title to the
Collateral is free and clear of all liens and encumbrances except those in
favor of First Security and those that may be identified as permitted
encumbrances on the Permitted Encumbrances Schedule, if applicable, attached
hereto.  Borrower at its own expense shall defend First Security's interest in
the Collateral.


SECTION 6.  COVENANTS OF BORROWER.

     6.1     Financial Information.  Borrower shall promptly furnish First
Security, during the term of the Loan, copies of such financial reports and
statements as requested by First Security, all prepared in a manner and form
and at such times as are acceptable to First Security.  Such statements shall,
at a minimum, include: (a) Annual audited financial statements to be provided
to First Security within ninety (90) days after the end of each fiscal year;
(b) Quarterly financial statements to be provided within thirty (30) days
after the end of each quarter; and (c) Monthly Borrowing Base Certificates to
be provided within thirty (30) days after the end of each month.  Borrower
shall also furnish such information regarding the Collateral as may be
requested by First Security including, but not Limited to monthly Receivables


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Aging reports and monthly Inventory lists during any month when an Advance has
been outstanding under the Inventory Commitment.  In addition, Borrower shall
provide to First Security within thirty (30) days of each month-end a
compliance certificate certifying Borrower's compliance with all the financial
covenants made a part of this Agreement.

     6.2      Notices.  Borrower shalt promptly give notice to First Security
of (a) the occurrence of any default or event of default under any of the Loan
Documentation; (b) any litigation, proceedings or event that may have an
adverse effect upon the financial condition, the business or the assets of
Borrower or the Collateral; (c) any dispute between Borrower and any
governmental regulatory body or other party that may interfere with the normal
business operation of Borrower or adversely affect the assets of Borrower; (d)
any event that might adversely affect the Collateral; and (e) any adverse
change in the financial condition of Borrower.

     6.3      Compliance with Law: Maintenance of Existence and Properties. 
Borrower will:

     (a)     duly observe and conform to all requirements of any governmental
authorities relative to the conduct of Borrower's business or to Borrower's
properties or assets, including without limitation the proper use, storage,
registration and disposal of any hazardous materials;

     (b)     maintain and keep in full force and effect all licenses and
permits necessary to the proper conduct of Borrower's business, including the
continuance of Borrower's good standing; and

     (c)     pay all obligations and liabilities when due, including without
limitation all taxes, assessments and governmental charges or levies imposed
upon Borrower or upon Borrower's income or profits, or upon any property
belonging to Borrower, and maintain appropriate reserves for the accrual of
the same in accordance with generally accepted accounting principles.

     6.4     Records.  Borrower will keep proper books and records in which
full, true and correct entries (and in a manner acceptable to First Security)
will be made of all dealings or transactions relating to its business and
activities.

     6.5     Insurance.  Borrower will maintain, with financially sound and
responsible companies, hazard and liability insurance in such form and in such
amounts and against such risks as is customarily carried by companies engaged
in the same or a similar business and operating like properties or as
requested by First Security and shall provide First Security evidence of such
coverage.  With respect to the Collateral, such policies shall cover at least
the full insurable value of the Collateral, and such policies shall identify
First Security as an additional insured and shall include a standard mortgagee
clause and/or a lender's loss payable clause, as applicable, in favor of First


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Security.  If Borrower fails to obtain such insurance coverage, First Security
may obtain insurance coverage, and any premiums for such insurance shall
become part of the Obligations, shall be repaid to First Security on demand,
and shall accrue interest at the Note rate or, if applicable, at the default
rate.

     6.6      Right to Inspect.  Borrower will permit First Security or its
agents to inspect the Collateral, corporate books and financial records of
Borrower and to discuss the affairs, finances and assets of Borrower with
Borrower, all at such reasonable times and as often as First Security may
reasonably request.

     6.7      Limitation on Liens.  Borrower will not create or suffer to
exist any lien or encumbrance on any of the Collateral except (1) liens in
favor of First Security; (2) liens for taxes or assessments not yet payable;
(3) mechanic's or materialman's liens arising in the ordinary course of
business that are not overdue; (4) deposits or pledges to secure the payment
of worker's compensation, unemployment or other social security benefits, or
to secure the performance of bids, tenders, contracts (other than for borrowed
money), leases, public or statutory obligations, security or appeal bonds or
other obligations of a similar nature incurred in the ordinary course of
business; (5) liens that may be identified as permitted encumbrances on the
Permitted Encumbrances Schedule attached hereto; or (6) liens to which First
Security has previously consented in writing.  Borrower shall notify First
Security in writing immediately upon receipt of notice of the imposition of
any lien, levy, attachment or execution on the business or assets of Borrower. 
Borrower shall cause such liens or other process not permitted by this Section
to be satisfied immediately.  First Security may discharge such unpermitted
liens and encumbrances, and any such amounts shall become part of the
Obligations, shall be repaid to First Security on demand, and shall accrue
interest as set forth in the Note.

     6.8     Limitation on Obligations of, or Loans to Others.  Borrower will
not guarantee, endorse or otherwise become surety for the obligations of any
other person or entity without the prior written consent of First Security,
except with respect to consumer-related obligations and with respect to
checks, drafts and similar instruments for deposit or collection in the
ordinary course of Borrower's business.  Without prior written consent of
First Security, Borrower agrees that it will not loan to, or provide credit
accommodations to third parties, except as associated with transactions in the
ordinary course of business.

     6.9     Limitation on Sale of Assets.  Except for sales in the ordinary
course of its business, Borrower will not transfer, sell, convey, grant or
otherwise convey any right, title or interest in and to any of the Collateral,
without the prior written consent of First Security.




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     6.10    Changes in Borrower's Structure.  Borrower shall immediately
notify First Security in writing of any change in the Location of Borrower's
business or any change in Borrower's name, any change in the key management or
ownership of Borrower or any change in the agreements affecting the structure
of Borrower or the operation of its business.  Without the prior written
consent of First Security, Borrower will not become party to or involved in
any merger, consolidation or change of form or structure or other like change
or acquisition.  Borrower shall not redeem or purchase its own stock. 
Furthermore, Borrower shalt not commingle its funds with any other entity.

     6.11     Financial Covenants.  Throughout the course of the Loan and
until it is fully and finally paid and no obligation exists on the part of
First Security to make further Advances under the Commitment, Borrower agrees
to maintain the following:

             (a)    A Tangible Net Worth which shall be no less than
                    $3,500,000.00.

             (b)    A Debt-to-Equity Ratio which shall not exceed 1.75 to
                    1.00.

             (c)    A Current Ratio which shall be no Less than 1.50 to 1.00.

             (d)    A Debt Service Coverage Ratio (cumulative YTD) which shall
                    be no less than 1.00 to 1.00.

SECTION 7.     DEFAULT AND REMEDIES

     7.1     Events of Default.  The occurrence of any of the following shall
constitute an event of default under this Agreement (references to "Borrower"
in this Section 7.1 shall include each obligor executing this Agreement and
each other party to the Loan Documentation):

             (a)     Failure to pay when due any principal or interest or
      other monetary indebtedness under the Obligations;

             (b)     Any representation or warranty made by Borrower in the
      Loan Documentation or in connection with any borrowing hereunder, or in
      any certificate, financial statement or other statement furnished by
      Borrower pursuant hereto is untrue in any respect at the time when made; 

             (c)     Failure of Borrower to observe or perform any of the
      covenants or agreements contained in the Loan Documentation;
             
             (d)     Any material provisions of the Loan Documentation shall
      for any reason cease to be in full force and effect;




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             (e)     Borrower shall default on any other obligation owed to
      First Security or other Lender;

             (f)     Filing by or against Borrower of a petition in bankruptcy
      or for any other relief under the Bankruptcy Code, as amended, or under
      any other insolvency act or law, state or federal, now or hereafter
      existing, or any action by Borrower indicating Borrower's consent to,
      approval of, or acquiescence in, any such petition or proceeding; the
      application by Borrower, or the consent or acquiescence of Borrower to
      the appointment of a receiver or trustee for Borrower or for all or a
      substantial part of Borrower's property; the making by Borrower of an
      assignment for the benefit of creditors under state law; or the
      admission of Borrower in writing of Borrower's inability to pay
      Borrower's debts as they mature;

             (g)     The involuntary appointment of a receiver or trustee for
      Borrower or for all or a substantial part of Borrower's property; or the
      issuance of a warrant of attachment, execution or similar process
      against any substantial part of the property of Borrower;

             (h)      All or any substantial part of the property of Borrower
      shall be sold, assigned, transferred, or shall be condemned, seized or
      otherwise appropriated, or custody or control of such property shall be
      assumed by any governmental agency or any court of competent
      jurisdiction at the instance of any governmental agency;

             (i)      The occurrence of any adverse change in the financial
      condition of Borrower or the status of the Collateral deemed material by
      First Security;

             (j)      First Security shall for whatever reason cease to have
      the priority of liens and security interests in any item of Collateral
      or any other lienhoLder commences to foreclose or take any other action
      against any item of Collateral; or

              (k)     First Security deems itself insecure.

      7.2     Remedies.  If any of the events set forth in Section 7.1 occurs:

              (a)     First Security may (i) terminate any obligation to make
      further Advances under the Loan; (ii) declare the entire Obligations
      outstanding hereunder to be immediately due and payable, whereupon the
      principal amount of the outstanding Loan, together with accrued interest
      thereon, shall become immediately due and payable without presentment,
      demand, protest or other notice of any kind, all of which are hereby
      expressly waived, anything contained herein or in the Note to the
      contrary notwithstanding; and/or (iii) proceed to enforce any of its
      remedies under the Loan Documentation, including this Agreement.


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              (b)     First Security may, in its sole discretion and for its
      sole account, advance such sums and costs and take such other steps as
      it may deem necessary or advisable to protect the Collateral.  All sums
      advanced or paid by First Security for such purposes shall accrue
      interest at the Note rate or, if applicable, at the default rate and
      shall be payable by the Borrower to First Security on demand, as loans
      from First Security to the Borrower under this Agreement, and shall be
      part of the Obligations.

              (c)     First Security may, at its sole option, without demand
      and upon such notice as may be required by law, and irrespective of
      negative consequences to Borrower or any other party to the Loan
      Documentation, do any one or more of the following:  (i) require
      Borrower to assemble the Collateral and make it available to First
      Security at a place designated by First Security; (ii) immediately take
      possession of the Collateral wherever it may be found, using all
      necessary and lawful actions to do so, and Borrower waives all claims to
      damages due to or arising from or connected with any such taking; (iii)
      proceed in the foreclosure of this Agreement and sell all the Collateral
      in any manner permitted by law or provided for herein; (iv) sell the
      Collateral at public or private sale with or without having said
      Collateral at the place of sale and upon terms and in such manner as
      First Security may determine, with Borrower agreeing that if notice of
      such a sale is required by law, a ten (10) day notice period shall be
      commercially reasonable unless a shorter time period is permitted by law
      or the Loan documentation; (v) complete the processing of any of the
      Collateral or repair or recondition any of the Collateral to such extent
      as First Security may deem advisable, and any sums expended therefor by
      First Security shall be repaid by Borrower and be part of the
      Obligations; (vi) take possession of Borrower's premises to complete
      such processing, repairing and reconditioning, using the facilities and
      other property of Borrower to do so, to store any of the Collateral
      subject to First Security's security interest and to conduct any state
      as provided for herein, all without compensation to Borrower; (vii)
      sell, in one or more sales, at public or private sale, for such price as
      it may deem fair, any or all of the Collateral; and (viii) be the
      purchaser of any of the Collateral so sold and hold the same thereafter
      in its own right, absolutely free from any claims or rights of Borrower.

             The net proceeds of any sale as hereinbefore described shall be
      applied against the amount owed on the Obligations in such order as
      First Security may elect.  Borrower shall forthwith pay to First
      Security any deficiency upon demand.  Demand of performance,
      advertisement and presence of property at sale are hereby waived, and
      First Security is hereby authorized to sell hereunder any evidence of
      debt it may hold as security for the Obligations.  All demands and
      presentments of any kind or nature are expressly waived by Borrower. 
      Borrower hereby waives any right to require First Security to proceed
      against any Collateral.  Borrower waives the right to require First

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      Security to pursue any other remedy for the benefit of Borrower and
      agrees that First Security may proceed against Borrower for the amount
      of the Obligations owed by Borrower to First Security without taking any
      action against any other party and without setting or otherwise
      proceeding against or applying any Collateral.  Borrower authorizes
      First Security, at its option, to apply toward the payment of the
      Obligations all balances of any deposit account in the name of Borrower
      held by First Security.

              (d)     First Security may exercise and enforce with respect to
      the Collateral any and all other rights and remedies available on
      default to a secured party under the Loan Documentation, the Uniform
      Commercial Code or other applicable law.

No remedy given to First Security in the Loan Documentation is intended to be
exclusive of any other available remedy or remedies, but each and every such
remedy shall be cumulative and shall be in addition to any other remedy given
under the Loan Documentation or now or hereafter existing at law or in equity
or by statute.

      7.3     Borrower's Cooperation.  The Borrower agrees to cooperate with
First Security in effectuating First Security's rights notwithstanding any
unanticipated inability of Borrower to pay the Loan or otherwise perform the
Obligations.


SECTION 8.  MISCELLANEOUS.

      8.1     Time is of the Essence.  Single Action Shall Not Preclude Other
Actions.  Time is of the essence of this Agreement.  No advance under the Loan
shall constitute a waiver of any of the conditions to First Security's
obligation to make further advances, nor, in the event Borrower is unable to
satisfy any such condition, shall any failure on First Security's part to
immediately enforce its remedies have the effect of precluding First Security
from thereafter declaring such inability to be an event of default under this
Agreement.  No failure or delay on the part of First Security in exercising
any right, power or privilege hereunder or under the Loan Documentation shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege hereunder or thereunder preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege.  The consent or approval by First Security to or of any subsequent
act.  The rights and remedies herein provided are cumulative and not exclusive
of any rights or remedies provided by law.

      8.2     Payment for Fees and Expenses.  Borrower shall pay all
attorneys' fees, paralegal fees, costs, including without limitation costs of
appraisals, environmental audits and evidences of title, and other expenses
incurred by First Security in the enforcement of its rights hereunder and the


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other Loan Documentation, whether any default is ultimately cured or First
Security is obligated to pursue its remedies hereunder, including such
expenses incurred before legal action, during the pendency of any such legal
action, during the enforcement of First Security's rights in any bankruptcy or
insolvency proceedings, and continuing to all such expenses in connection with
any appeal to higher courts arising out of matters associated herewith.  Until
so paid, all such fees, costs, and expenses shall constitute part of the
obligations of Borrower secured by the Loan Documentation and the Collateral
and shall accrue interest at the Note rate or, if applicable, at the default
rate.

      8.3     Indemnification.  Borrower hereby agrees to indemnify and hold
harmless First Security, its directors, officers and employees from any and
all liability, expense, costs, charges or assessments, including attorneys'
fees and expenses, with respect to hazardous or toxic substances or waste
handling, disposal, storage, repairs or cleanup, whether incurred or imposed
pursuant to local, state or federal taw.  Borrower also agrees to indemnify
and hold harmless First Security, its directors, officers and employees from
and against any and all liability, expense, damage, demands, claims and
lawsuits, including attorneys' fees and expenses, arising out of this
Agreement or the other Loan Documentation or in connection therewith, unless
arising from First Security's willful misconduct.

      8.4     Integration.  In addition to this Agreement and the other Loan
Documentation, this finance transaction may include closing documentation such 
as resolutions, waivers, notices, acknowledgments, statements, closing or
escrow instructions, loan purpose statements, and other documents that First
Security may customarily use in closing such transactions.  Such additional
documents are incorporated herein by this reference.  The Loan Documentation
and the closing documents to which this Section refers, as applicable,
express, embody and supersede any previous understandings, agreements or
promises (whether oral or written) with respect to this finance transaction,
and said documents represent the final expression of the agreement between
First Security and Borrower, the terms and conditions of which cannot
hereafter be contradicted by any oral understanding not reduced to writing and
identified above.  This Section shall govern in the event it is inconsistent
with any similar provision in any other Loan Documentation.

      8.5     Notices.  Any notice required by any Loan Documentation will be
deemed effective if personally delivered to the party to which notice is being
given, or, in the alternative, on the date such notice is placed, first-class
mail, in the U.S. Mail addressed to the party to which notice is being given,
at such address as is set forth below.  In the event another agreement
constituting part of the Loan Documentation sets forth a notice procedure,
such procedure shall govern for purposes of that document and thus supersede
the terms of this Section if inconsistent.

      8.6     Survival of Representations and Warranties: Successors and
Assigns.  All representations and warranties made in this Agreement and the

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Note and in any certificates delivered pursuant hereto and thereto shall
survive the execution and delivery of this Agreement and the making of the
Loan hereunder and shalt survive payment of the Loan.  This Agreement shall be
binding upon and inure to the benefit of Borrower and First Security and their
respective successors and assigns, except that the Borrower may not assign or
transfer its rights hereunder without the written consent of First Security. 
It is understood that First Security may sell the Loan and its interests under
the Loan Documentation without the need for Borrower's consent and may procure
other lenders to participate in the Loan, and First Security may issue
participation certificates to such other tenders.

      8.7     Other Documentation: Separability.  Borrower agrees to execute
any other documentation and provide such other information  and documentation
as First Security may reasonably require. Any provision of this Agreement or
any other constituents of the Loan Documentation, which may be found to be
invalid, shalt be deemed separable and shall not invalidate the remainder of
the provisions.  No third party shall, under any circumstances, be deemed to
be a beneficiary under the Loan Documentation or any condition set forth
therein.  Nothing in the Loan Documentation shall create a partnership or
joint venture between First Security and Borrower.

      8.8     Counterparts; Construction.  This Agreement may be signed in any
number of counterparts, each of which shall be deemed an original, and such
counterparts together shall constitute one and the same instrument.  This
Agreement and the other Loan Documentation shall be governed by, and construed
and interpreted in accordance with, the laws of the State of Utah.  If
Borrower is not a resident of the State of Utah, Borrower hereby consents to
the jurisdiction of the courts of the State of Utah to enforce this Agreement
and the other Loan Documentation.

      8.9     Joint and Several.  The obligations of Borrower under the Loan
Documentation, including warranties and representations, shall be joint and
several.

      8.10    Additional Terms.  This Agreement incorporates by reference all
additional terms set forth in the following Schedules attached hereto:

    /X/ Inventory and Receivables Schedule     /X/  Borrowing Base Schedule
    / / Permitted Encumbrance Schedule         / /  --------------------------

Unless the context otherwise requires, the terms in the Schedules shall have
the meanings set forth in this Agreement and other terms which are defined in








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the Uniform Commercial Code shall have the meanings set forth therein.

    DATED this 24th day of October, 1996.

                                 BORROWER:

                                 Gentner Communications Corporation

                                 By:-----------------------------------
                                     David L. Harmon
                                 Its:  Vice President 

                                 Address:  1825 Research Way 
                                           Salt Lake City, Utah 84119

                                 FIRST SECURITY:

                                 First Security Bank, N.A.


                                 By:-----------------------------------------
                                     D. Kevin Imlay
                                 Its:  Vice Presidnet

                                 Address:  Commercial Banking Division
                                           15 East 100 South 2nd Floor
                                           Salt Lake City, Utah  84111         
                        
                 INVENTORY AND RECEIVABLES SCHEDULE TO COMMERCIAL
                           CREDIT AND SECURITY AGREEMENT

     (a)     The term "Collateral" shall include without limitation the        
             following (check the applicable box(es)):

             /X/  All inventory (as defined below)

            /X/   All Receivables (as defined below)

whether now owned or hereafter acquired or arising, together with all products
and proceeds therefrom (including without limitation proceeds of insurance
policies insuring any Collateral against loss by theft, casualty or
otherwise).  Collateral shall also include any substitutions for, accessions
and modifications to and other additions and replacements for any of the
Collateral and any other rights or interests arising out of or in connection
with any of the Collateral.  Collateral shall also include all records,
accountings, reports, papers and documents relating to any of the Collateral,
including all computer records, data programs, software, disks, etc., relating
to or arising out of or used in connection with any of the Collateral.


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     (b)     The term "General Intangibles" shall have the meaning specified
in the Uniform Commercial Code, including without limitation all patents,
patent applications, copyrights, licensing agreements, trademarks, trademark
applications, licenses, permits, goodwill, intellectual property, customer
lists, chooses in action, contracts and contract rights, whether now owned or
hereafter acquired and wherever located.

     (c)     The term "Inventory" or "Inventories" shall have the meaning
specified in the Uniform Commercial Code, and shall include without limitation
all raw materials, stock in trade, finished goods, goods in process, parts,
supplies, tools, farm products (as defined in the Uniform Commercial Code),
all of Borrower's right as the seller of goods under the Uniform Commercial
Code, and all Inventory which may be returned or repossessed, whether now
owned or hereafter acquired or created and wherever located.  "Inventory" or
"Inventories" shall include all General Intangibles related to or arising from
the ownership, manufacturing, processing, storing, shipping or distribution of
any of the foregoing.

     (d)     The term "Receivables" shall mean any and all of Borrower's
accounts (as defined in the Uniform Commercial Code) and any and all rights of
any kind of Borrower to payment from a third party, including without
limitation all instruments, executory contract rights, contract rights,
chattel paper, documents, tax refunds and any and all General Intangibles
relating to or arising from Borrower's goods or services and Borrower's
operations.

Receivables shall also include all ledger sheets, files, records and documents
relating to the same, including but not limited to invoices, purchase orders,
contracts, etc.  For purposes hereof, any person, party or entity obligated in
any way to Borrower on any of the Receivables shall be referred to herein as
an "account debtor" or collectively as "account debtors".

     (e)     If the Collateral includes Receivables, Borrower shall fully
cooperate and act at First Security's discretion and direction in giving
notices, assurances or other information to account debtors of the assignment
to First Security and in turning over receipts to First Security.  Upon
request, any and all instruments, documents or other writing constituting or
evidencing any Receivable shall be delivered to First Security.  All payments
made by or on behalf of account debtors on any Receivables shall be deemed to
be received and held by Borrower in trust for First Security, provided that
unless and until an event of default under this Agreement has occurred,
Borrower may utilize such funds in its business operations.

     (f)     If the Collateral includes Receivables, First Security is
entitled to receive all payments made by or on behalf of account debtors on
Receivables.  Whether or not an event of default has occurred, First Security
shall be entitled, at its sole option and discretion and at any time, to



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require one or more of the following procedures:

             (i)    All receipts shall be deposited with First Security or
endorsed for such deposit in an account that shall bear the name of Borrower
and shall be designated as a "bancontrol" account under the full control of
First Security, with Borrower having no drafting or withdrawal rights.
Notwithstanding the foregoing, so long as no event of default shall be
existing, First Security shall on a periodic basis, determined by it, transfer
funds from the bancontrol account to an operating account of Borrower at First
Security.  Borrower hereby grants a security interest in that account and the
funds therein as further security for performance of the Obligations.

             (ii)    Notice shall be given to one or more of the account
debtors that the Receivables have been assigned to First Security and that
payments thereon are to be made directly to First Security, Borrower agreeing
to sign and acknowledge any such notice.  So long as no event of default shall
have occurred, funds so collected may be applied against the Obligations,
subject to any right of Borrower to reborrow funds under the provisions of
this Agreement.

             (iii)   Account debtors shall be notified by Borrower that
payments be sent to a post office box designated by First Security as a "lock
box".  That post office box shall be under the exclusive ownership and control
of First Security, and Borrower shall have no access or rights to its
contents.  So long as no event of default shall have occurred, funds so
collected may be applied against the Obligations, subject to any right of
Borrower to reborrow funds under the provisions of this Agreement.

In the event First Security elects one or more of the procedures set forth in
subsection (f)(i) through (iii) above, all monies and remittances in any form
received by Borrower shall be kept by Borrower separate and apart from any
other monies or property in the possession of Borrower and shall be
transmitted immediately to First Security.

Borrower shall cooperate in executing, delivering and otherwise giving
necessary notices in assuring that the foregoing procedures are fully
implemented. Borrower hereby constitutes First Security its attorney-in-fact
for all purposes necessary for implementation of any of the above procedures,
with full authority to endorse and negotiate instruments, make collections,
give notices and otherwise act to implement any of those procedures mentioned.
Borrower hereby expressly authorizes First Security to make direct contact
with account debtors for purposes of verifying the character, amount,
enforceability and status of Receivables.  Such verification process may be
accomplished directly by First Security or through any officer, agent,
contractor or employee of First Security.  If an event of default has
occurred, First Security may settle or adjust all disputes or claims directly
with the account debtors with respect to any Receivables and may compromise or
extend the time of payment for any Receivables on such terms and conditions as

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First Security may determine without affecting the liability of Borrower
hereunder.

      (g)     Borrower hereby irrevocably appoints First Security, or any
person designated by First Security, its true and lawful attorney-in-fact to
receive, open and dispose of all mail addressed to Borrower, to endorse the
name of Borrower on any notes, acceptances, checks, drafts,money orders or
other remittances, to endorse the name of Borrower on any invoice, freight or
express bill or bill or lading, storage receipt, warehouse receipt or other
instrument or document in respect to any account or invoice, to sign the name
of Borrower to drafts against account debtors, assignments or verifications of
Collateral and notices to account debtors, to station a representative of
First Security on the premises of Borrower for the purpose of taking any of
the actions described in this paragraph, including but not limited to taking
possession books and records relating to the Collateral, and to do all other
acts and things necessary to carry out the intent of this Agreement.  The
authority herein granted First Security shall remain in full force and effect
until all the Obligations have been paid and discharged in full.

      (h)     Borrower agrees that all Inventory now owned or subsequently
acquired by it shall be kept in (or shall be in transit to or from) the state
of Utah.  Borrower may keep inventory in any other state only if (i) it shall
have given First Security prior written notice of its intention to keep
inventory in that other state, clearly describing such new location and
providing such other information in connection therewith as First Security may
reasonably request, and (ii) with respect to such new location, Borrower shall
have taken all actions satisfactory to First Security to cause the security
interest in the Inventory granted hereby to be and continue at all times fully
perfected and in full force and effect.

     (i)     Borrower shall notify all, warehouses, issuers of warehouse
receipts, and issuers of negotiable bills of lading or other documents of
title relating to any of the Inventory concerning the security interest
granted hereby to First Security, and, if requested by First Security,
Borrower shall make arrangements to have all warehouse receipts, negotiable
bills of lading, and other documents of title relating to any of the Inventory
delivered into First Security's possession for purposes of protecting First
Security's interests hereunder.  Borrower agrees to take all such further
actions as First Security may deem necessary to protect and perfect First
Security's security interest in any of the Inventory that might be in transit
or storage at any time.

                  BORROWING BASE SCHEDULE TO COMMERCIAL CREDIT 
                            AND SECURITY AGREEMENT

1.     The amount of the outstanding Loan shall at no time exceed the
       "Borrowing Base." Borrower agrees that if at any time First Security
       determines that the aggregate outstanding principal amount of either


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<PAGE>
       Note, which includes the face amounts of all outstanding letters of
       credit, exceeds the Borrowing Base, Borrowers shall immediately prepay,
       together with accrued interest to and including the date of prepayment,
       an amount equal to such excess.  Failure to prepay immediately such
       amounts shall constitute an event of default.

2.     The "Borrowing Base" for the Accounts Commitment shall mean a figure
       obtained by multiplying seventy-five percent (75%) times the dollar
       amount of "Satisfactory Accounts" of Borrower.

       The "Borrowing Base" for the Inventory Commitment shall mean a figure
       obtained by multiplying twenty-five percent (25%) times the dollar
       amount of "Eligible Inventory" of Borrower.

3.     "Inventory" shall have the meaning designated in the Inventory and
       Receivables Schedule to Commercial Credit and Security Agreement.

4.     "Eligible Inventory" shall mean all Inventory in which First Security
       has been given a security interest (valued at the lower of cost or
       market) that can be physically inspected by First Security or by an
       agent appointed by First Security or as otherwise determined by First
       Security, excluding: (i) Inventory received for sale on consignment,
       delivered to another for sale on consignment, or subject to vendor's
       rights of reclamation; (ii) Inventory for which payment has not or will
       not be made in the ordinary course to the vendor thereof; (iii)
       Inventory that is subject to any lien (except those of First Security);
       (iv) used Inventory; (v) work-in-process; and (vi) Inventory determined
       by First Security to be unsuitable for inclusion in the Borrowing Base.

5.     "Accounts" shall have the meaning designated for "Receivables" in the
        Inventory and Receivables Schedule.

6.     "Satisfactory Accounts" shall mean all Accounts in which First Security
       has been given a security interest except: (i) Accounts that are 90
       days past invoice (unless otherwise affirmatively approved by First
       Security in writing); (ii) Accounts where the account debtor is not
       incorporated in, or is otherwise not resident in, the United States of
       America; (iii) Accounts any part of which is unearned (including rental
       payments not yet due or contracts not yet performed); (iv) Accounts
       which have been rewritten or the original terms of which have otherwise
       been modified to cure any delinquency or default; (v) Accounts not
       arising out of the sale of goods and services in the ordinary course of
       business (sales of equipment, sales of Accounts and/or sales of real
       property shall not be considered to be sales conducted in the ordinary
       course of business); (vi) tax refunds applied for but not received;
       (vii) Accounts on which the account debtor is an affiliate; (viii)
       Accounts all or any part of which is subject to an existing
       counterclaim, setoff or defense being asserted by the account debtor.


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<PAGE>
       (ix) Accounts with respect to which the extension of credit to the
       account debtor is not deemed by First Security in its reasonable
       discretion to be in accordance with sound credit practice by reason of,
       including but not limited to, the unsatisfactory credit history of the
       account debtor, or the excessive amount of the credit extended, or the
       unsatisfactory documentation or collateralization of the indebtedness,
       or the unsatisfactory financial condition of the account debtor; (x)
       Finance Charges; (xi) Accounts the terms and conditions of which are
       subject to any other default which is continuing; (xii) Accounts of an
       account debtor of which fifty percent (50%) or more, by outstanding
       principal amount, with the Borrower are not Satisfactory Accounts for
       any other reason stated in this definition of Satisfactory Accounts or
       (xiii) Accounts which are deemed by First Security for any other reason
       not to be satisfactory for inclusion in the Borrowing Base.  If the
       United States Government is the account debtor, such Accounts (assuming
       they meet all other eligibility requirements) shall be included in the
       Borrowing Base only if all notices of the assignment in favor of First
       Security have been given as required by federal law.

7.     As long as any Obligations are outstanding under the Agreement,
       Borrower shall certify and deliver to First Security a Borrowing Base
       Certificate, in the form attached hereto or provided by First Security
       within thirty (30) days after the end of each month, certifying the
       Borrowing Base as of the end of that period.  Any certificate supplied
       shall be accompanied by such supporting documentation, data and
       information as shall be reasonably required by First Security showing
       the accuracy of the representations made.  Such supporting materials
       shall include explanations and data for valuation of Inventory shown on
       the Borrowing Bass Certificate.  In establishing the value of Inventory
       or in assessing the status of Accounts for inclusion in the Borrowing
       Base, First Security may consult such sources and undertake such
       analysis or appraisal as it deems necessary.  Any calculation of the
       Borrowing Base and the conclusions of First Security as to valuation
       and inclusion for Borrowing Base purposes shall be final and
       conclusive.  First Security shall have the right at any time in the
       future to require Borrower to provide First Security a more frequent
       Borrowing Base Certificate if First Security determines that such is
       necessary to obtain sufficient information to calculate the amounts of
       the Borrowing Base on a current basis.
                          FIRST SECURITY BANK, N.A.
                           ACCOUNTS REVOLVING NOTE

Date:              October 24, 1996

Note No.           0023791 - 9001





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Borrowers:         Gentner Communications Corporation
                   1825 Research Way
                   Salt Lake City, UT 84119

Principal Amount:  Two Million Dollars ($2,000,000.00)


     FOR value received, Gentner Communications Corporation (the "Borrower")
promises to pay to First Security Bank, N.A. ("First Security"), or to its
order, the total principal amount of Two Million Dollars ($2,000,000.00), or
such other amount then outstanding on this Revolving Note ("Note"), together
with interest as stated below, in lawful money of the United States of
America.

INTEREST:

     INTEREST on the outstanding unpaid principal balance, shall be calculated
on the following basis, until the occurrence of an Event of Default or until
said principal balance is paid in full:

     Variable Rate:

     The interest on this Note shall be calculated as a variable rate which
     shall accrue at various increments above the Libor Rate Index defined in
     the Commercial Credit and Security Agreement (the "Credit Agreement")
     executed of even date with this Note (the "Libor Rate") until paid; The
     Libor Rate will be adjusted on a monthly basis, and the interest payable
     on this Note will continue to fluctuate at an increment above the Libor
     Rate Index as is specified in the Credit Agreement.  Any changes in the
     interest rate under this Note shall become effective without prior
     notice, on the date on which the Libor Rate Index changes.

     Notwithstanding the foregoing, upon the occurrence of an Event of
Default, as is defined in either this Note, or the Credit Agreement, the
interest charged on the Note shall be increased by four percent (4.00%);
provided further, however, that if First Security shall waive in writing or
allow a cure of such Event of Default, the interest charged under the Note
shall revert to the non-default rate specified above from and after such
waiver or completion of cure (whichever is sooner).

     THE actual interest to be charged under this Note shall be calculated
daily on the outstanding balance on a 360 day base year. Should the rate of
interest as calculated exceed that allowed by law, the applicable rate of
interest will be the maximum rate of interest lawfully allowed.

     INTEREST on this Note is payable monthly, on the 24th day of each month,
commencing on November 24, 1996.



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<PAGE>
     THE principal amount outstanding on which the interest rate shall be
charged shall be determined from First Security's records, which shall at all
times be conclusive.

PAYMENT SCHEDULE:

     THE principal amount outstanding on this Note (together with all accrued
and unpaid interest and other amounts owing under this Note) shall be due and
payable in full on October 24, 1997.

     PRINCIPAL and interest shall be payable at the Commercial Loan Accounting
Center at P.O. Box 7666, Boise, Idaho 83707-166 [sic], or at such other place
as the holder of this Note may designate.  At First Security's option,
payments received on the Note may be applied first toward the satisfaction of
commitment fees, origination fees, late fees, attorneys' fees and costs
incidental thereto, all as more fully described in the Credit Agreement,
second to accrued interest with the remainder (if any) applied to the
principal.

     If First Security has not received the full amount of any payment,
whether of principal or interest or both, by the end of fifteen (15) calendar
days after the date such payment is due under the Note, including the balance
due at maturity, Borrower will pay a late charge to First Security in the
amount of five percent (5%) of the unpaid amount of the overdue payment or
$1,000.00, whichever is lesser.  Borrower agrees(s) to pay the late charge
promptly, but only once on each late payment.

     THIS Note is a revolving promissory note and evidences the Accounts
Commitment described in the Credit Agreement and is entitled to the benefits
and covenants set forth in said Credit Agreement.  This Note is a revolving
line of credit not to exceed the lesser of the maximum principal amount stated
above or the Accounts Commitment Borrowing Base at any one time.  The amount
outstanding on this Note at any specific time shall be the total amount
advanced by First Security, plus the outstanding amount of to the release of
any collateral or part thereof and the release of any surety, with or without
substitution.

                                            BORROWER

                                            Gentner Communications Corporation


                                            By:  /s/ David L. Harmon
                                             -------------------------------
                                            Its: Vice President





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<PAGE>
                      FIRST SECURITY BANK, N.A.
                      INVENTORY REVOLVING NOTE

Date:              October 24, 1996

Note No.           0023791 - 9002

Borrowers:         Gentner Communications Corporation
                   1825 Research Way
                   Salt Lake City, UT 84119

Principal Amount:  Five Hundred Thousand Dollars ($500,000.00)



     FOR value received, Gentner Communications Corporation (the "Borrower")
promises to pay to First Security Bank, N.A. ("First Security"), or to its
order, the total principal amount of Five Hundred Thousand Dollars
($500,000.00), or such other amount then outstanding on this Revolving Note
("Note"), together with interest as stated below, in lawful money of the
United States of America.

INTEREST:

     INTEREST on the outstanding unpaid principal balance, shall be calculated
on the following basis, until the occurrence of an Event of Default or until
said principal balance is paid in full:

     Variable Rate:

          The interest on this Note shall be calculated as a variable rate 
     which shall accrue at two percentage points (2.00%) above First 
     Security's Prime Rate until paid; said interest rate being a total of 
     10.25% on the date of this Note.  First Security's Prime Rate may change 
     from time to time, and the interest payable on this Note will continue to
     fluctuate at the same increment above the Prime Rate as stated above.  
     Any changes in the interest rate under this Note shall become effective 
     without prior notice, on the date on which First Security's Prime Rate 
     changes.  First Security's Prime Rate is its announced rate of interest 
     used as a reference point from which it may calculate the cost of credit 
     to customers.  It is subject to change from time to time.  First Security
     may make loans bearing interest above, at, or below its Prime Rate.

     Notwithstanding the foregoing, upon the occurrence of an Event of
Default, as is defined in either this Note, or the Commercial Credit and
Security Agreement executed of even date herewith (the "Credit Agreement") ,
the interest charged on the Note shall be increased by four percent (4.00%);
provided further, however, that if First Security shall waive in writing or


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<PAGE>
allow a cure of such Event of Default, the interest charged under the Note
shall revert to the non-default rate specified above from and after such
waiver or completion of cure (whichever is sooner).

     THE actual interest to be charged under this Note shall be calculated
daily on the outstanding balance on a 360 day base year. Should the rate of
interest as calculated exceed that allowed by law, the applicable rate of
interest will be the maximum rate of interest lawfully allowed.

     INTEREST on this Note is payable monthly, on the 24th day of each month,
commencing on November 24, 1996.

     THE principal amount outstanding on which the interest rate shall be
charged shall be determined from First Security's records, which shall at all
times be conclusive.

PAYMENT SCHEDULE:

     THE principal amount outstanding on this Note (together with all accrued
and unpaid interest and other amounts owing under this Note) shall be due and
payable in full on October 24, 1997.

     PRINCIPAL and interest shall be payable at the Commercial Loan Accounting
Center at P.O. Box 7666, Boise, Idaho 83707-166 [sic], or at such other place
as the holder of this Note may designate.  At First Security's option,
payments received on the Note may be applied first toward the satisfaction of
commitment fees, origination fees, late fees, attorneys, fees and costs
incidental thereto, all as more fully described in the Credit Agreement,
second to accrued interest with the remainder (if any) applied to the
principal.

     If First Security has not received the full amount of any payment,
whether of principal or interest or both, by the end of fifteen (15) calendar
days after the date such payment is due under the Note, including the balance
due at maturity, Borrower will pay a late charge to First Security in the
amount of five percent (5%) of the unpaid amount of the overdue payment or
$1,000.00, whichever is lesser.  Borrower agrees(s) to pay the late charge
promptly, but only once on each late payment.

     THIS Note is a revolving promissory note and evidences the Inventory
Commitment described in the Credit Agreement and is entitled to the benefits
and covenants set forth in said Credit Agreement. This Note is a revolving
line of credit not to exceed the lesser of the maximum principal amount stated
above or the Inventory Commitment Borrowing Base at any one time. The    
amount outstanding on this Note at any specific time shall be the total amount
advanced by First Security, plus the outstanding amount of any undrawn letters
of credit, less the amount of principal payments made from time to time, plus
any interest due and payable.


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<PAGE>
ADVANCES:

     Borrower agrees that any and all Advances made hereunder shall be for
Borrower's benefit whether or not said Advances are deposited to Borrower's
account, and that persons other than the undersigned Borrower may have
authority to draw against such account.  Advances may be made hereunder at the
oral or written request of Russ Gentner or David L. Harmon who are hereby
authorized to request Advances until written notice of revocation of this
authority is received by First Security from Borrower. Advances shall be made
to Borrower or for the account of Borrower unless Borrower directs otherwise
in writing.

SECURITY:

     THIS Note is secured by all of Borrower's Inventory, Receivables, and
General Intangibles as are more fully described in the Credit Agreement.

     IF Borrower fails to make any scheduled payment on this Note when due or
otherwise defaults in any other obligations imposed by this Note, or by the
Credit Agreement, or any document which may now or hereafter secure this Note,
or is executed in connection with this Note, First Security, at its option,
may declare immediately due and payable all amounts outstanding under this
Note, and any other liabilities of Borrower to First Security, direct or
indirect, absolute or contingent, now existing or hereafter arising.  First
Security shall have the right of offset against any and all accounts or
property of Borrower held by First Security.  Borrower shall pay all costs and
expenses incurred by First Security or by any other holder of this Note in
connection with any failure to pay or other default of Borrower, including
attorney's fees, collection costs, court costs, and costs on appeal, whether
incurred before or after judgment, and whether or not litigation or suit is
commenced.

     THIS Note is to be construed under the laws of the State of Utah.

     THE makers, sureties, guarantors and endorsers of this Note jointly and
severally waive presentment for payment, protest, notice of protest, and
notice of non-payment of this Note, and consent that this Note or any payment
due under this Note may be extended or renewed without demand or notice, and
further consent to the release of any collateral or part thereof and the











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release of any surety, with or without substitution.

                                BORROWER

                                Gentner Communications Corporation


                                By:   /s/   David L. Harmon
                                   -------------------------------
                                Its: Vice President




                             Exhibit 10.2



             THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS
          COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER
                     THE SECURITIES ACT OF 1933









                  GENTNER COMMUNICATIONS CORPORATION

                  1997 EMPLOYEE STOCK PURCHASE PLAN





                    500,000 Shares of Common Stock
                       par value $.001 per share


   These shares are being offered by Gentner Communications Corporation 
     (the "Company") to the Company's employees pursuant to the terms 
       and conditions of the Company's 1997 Employee Stock Purchase 
                 Plan (the "Plan") as described herein

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<PAGE>
                The Common Stock is listed on the NASDA
                         under the symbol GTNR











                           January 1, 1997


                        AVAILABLE INFORMATION

    The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements, and other information
with the Securities and Exchange Commission (the "Commission").  Reports,
proxy statements, and other information filed by the Company can be inspected
and copied at the public reference facilities maintained by the Commission at
Room 1024, 450 Fifth Street, N.W., Washington D.C. 20549.  Copies of such
material can be obtained from the Public Reference Section of the Commission,
450 Fifth Street,
 N.W., Washington D.C. 20549, at prescribed rates.

    NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED HEREIN IN CONNECTION WITH THE
OFFERING MADE HEREBY, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY.  THIS DOCUMENT DOES NOT CONSTITUTE AN OFFER OF ANY SECURITIES OTHER
THAN THOSE TO WHICH IT RELATES OR AN OFFER TO SELL OR SOLICITATION OF AN OFFER
TO BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION IN WHICH IT IS
UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION.  NEITHER THE DELIVERY OF THIS
DOCUMENT NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, IMPLY
THAT INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.











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<PAGE>
                   GENTNER COMMUNICATIONS CORPORATION

                   1997 EMPLOYEE STOCK PURCHASE PLAN

                              PLAN SUMMARY



                              INTRODUCTION

    The Company is hereby offering up to 500,000 shares of its Common Stock,
$.001 par value per share ("Common Stock"), to its employees under the
Company's 1997 Employee Stock Purchase Plan (the "Plan").  The terms and
conditions, including the prices and shares of Common Stock issuable under the
Plan, are governed by the Plan and the enrollment form attached thereto that
is completed by participants of the Plan (the "Participants").  This
description of the Plan is qualified in its entirety by reference to the full
text of the Plan, a copy of which and any other additional information
relating thereto may be obtained by contacting David L. Harmon at the
Company's executive offices located at 1825 West Research Way, Salt Lake City,
Utah 84119.  The telephone number at that location is (801) 975-7200.


                        DESCRIPTION OF THE PLAN

IN GENERAL

    The purpose of the Plan is to provide Company employees with an
opportunity to purchase Common Stock through weekly payroll deductions. 
Participants will be able to purchase ten shares of Common Stock for the price
of nine shares, effectively giving them a 10% discount on the purchase price
of the Common Stock.  The Plan is not qualified under Section 423 of the
Internal Revenue Code of 1986, as amended (the "Code"), and is not expected to
be subject to the provisions of the Employee Retirement Income Security Act of
1974.

DURATION

    The Plan will become effective on January 1, 1997 and will expire on June
30, 2010, unless terminated or extended by the Companys Board of Directors
(the "Board"). 

ELIGIBILITY

    Any current employee with at least 90 days of continuous employment with
the Company is eligible to participate in the Plan.

COMPANY CONTRIBUTIONS


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<PAGE>
    The Company will contribute share of Common Stock into the individual
accounts of Participants, at no cost, for each nine shares of Common Stock
purchased by such Participant under the Plan.  This effectively gives
Participants a 10% discount on the purchase price for ten shares of Common
Stock.

TRANSACTION FEES AND COMMISSIONS

    The Company will pay all transaction fees and commissions associated with
the purchase of Common Stock for the individual accounts of Participants. 
However, all transaction fees and commissions incurred by subsequent transfers
or resales of the Common Stock will be the responsibility of the respective
Participant.

HOLDING PERIOD

    Participants cannot dispose of Common Stock in their account for one year
from the date of purchase of those shares.

PAYROLL DEDUCTIONS

    Employees who wish to participate in the Plan must fill out an enrollment
form specifying the amount they wish to have withheld from each paycheck. 
Participants may elect to have up to 10% of their gross compensation, or a
minimum of $25 withheld from each paycheck.  Any withholdings will remain in
the Participants' accounts until the withholdings are used to purchase Common
Stock.  Enrollment forms must be returned to the Company's Human Resources
Department at least five business days prior to the issuance of the first
paycheck on which payroll deductions are to be made.

PURCHASES

    Purchases of Common Stock will be made once per quarter by a broker
appointed by the Committee.  All accumulated withholdings from the previous
purchase date (if applicable) will be used to purchase Common Stock in whole
share increments for the respective accounts of each Participant.  Any
residual amounts in each account too small to purchase an entire share of
Common Stock will remain in such account until the next quarterly purchase
date.

CHANGES IN WITHHOLDINGS

    Participants may change the amounts withheld from their future paychecks
by filling out a new enrollment form and submitting it to the Company's Human
Resources Department.  Any changes by a Participant in amounts to be withheld
may be made a maximum of once every six months.

WITHDRAWAL FROM THE PLAN

    A Participant may elect to withdraw all accumulated payroll deductions
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<PAGE>
not already used to purchase Common Stock for such Participant's account. 
Such an election can be made by filling out another enrollment form and
indicating that no further withholdings are to be made, and then returning the
enrollment form to the Human Resources Department at least five days before
the paycheck for which the withdrawals are to be terminated has been issued.

ADMINISTRATION OF THE PLAN

    The Plan is intended to be administered by a compensation committee
established by the Board (the "Committee").  The Committee shall be composed
of at least three members of the Board.

    The Committee shall be responsible for maintaining individual accounts of
all Participants, including (i) the keeping of transaction records and account
balances, (ii) the receipt and processing of Plan enrollment forms, (iii) the
receipt and holding of payroll deductions made under the Plan, (iv) the
delivery of such payroll deductions to a predesignated broker or brokers at
quarterly intervals for purchases of Common Stock, (v) any elections and/or
changes made by Participants, (vi) the delivery of stock certificates to
Participants representing purchased Common Stock, and (vii), and other
administrative functions of the Plan.

REPORTS

    The Company will provide all Participants with a periodic statement of
their respective accounts, including a statement of the amount of payroll
deductions for the period, the purchase price for each date on which Common
Stock was purchased for their account, the number of shares purchased on each
quarterly and the remaining cash balance, if any, in the Participants'
respective accounts.

AMENDMENTS AND PLAN TERMINATION

    The Board may amend or terminate the Plan at any time and for any reason. 
The Committee may also amend the Plan, consistent with the requirements of the
Code.

SPECIAL ADJUSTMENTS

    Because the Company will contribute shares of Common Stock into the
accounts of Plan Participants (as opposed to offering all shares at a
discount), such Participants' accounts will not be adjusted for stock splits,
reverse stock splits, and changes in the Companys capitalization.

DISSOLUTION OR LIQUIDATION OF THE COMPANY

    In the event of a proposed dissolution or liquidation of the Company, a
sale of all or substantially all of the assets of the Company, or the merger 
of the Company with or into another corporation, the Plan will terminate

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<PAGE>
immediately prior to the consummation of such proposed action, unless
otherwise provided by the Committee, and the Company shall return to each
Participant the accumulated withholdings in such Participant's account, as
well as any Common Stock purchased for such Participant's account, with such
Participant subject to the one-year holding period restriction described
below.

NON-TRANSFERABILITY

    Payroll deductions not yet used to purchase Common Stock may not be
assigned, transferred, pledged, or otherwise disposed of except by will or the
laws of inheritance.  Any attempts to assign, transfer, pledge, or dispose of
withheld funds shall be without effect, except that the Company may treat such
attempts as an election to withdraw from the Plan.

RESTRICTIONS ON RESALE

    Participants will not be able to sell, assign, pledge, or otherwise
transfer the Common Stock in their individual accounts for a period of one (1)
year from the date of purchase of those shares.  Since purchases of the Common
Stock are made at quarterly intervals on the applicable Purchase Date, each
Purchase Date serves as the beginning point for the one-year holding period.

TAX IMPLICATIONS

    NOTE: THE FOLLOWING SUMMARY OF FEDERAL INCOME TAX CONSEQUENCES TO
PARTICIPANTS DOES NOT PURPORT TO BE COMPLETE AND PARTICIPANTS SHOULD REFER TO
THE APPLICABLE PROVISIONS OF THE CODE.  THE SUMMARY DOES NOT ADDRESS OTHER
TAXES THAT MAY AFFECT AN INDIVIDUAL SUCH AS STATE AND LOCAL INCOME TAXES,
FEDERAL AND STATE ESTATE, INHERITANCE AND GIFT TAXES, AND FOREIGN TAXES. 
PARTICIPANTS SHOULD CONSULT THEIR PERSONAL TAX ADVISOR BEFORE THE ACQUISITION
OR DISPOSITION OF COMMON STOCK UNDER THE PLAN.

    At each quarterly purchase date, a Participant must include as
compensation, in computing his gross income for the taxable year of such
quarterly purchase date, the fair market value of any shares of Common Stock
contributed by the Company into the Participant's account.  Any taxable gain
received from a subsequent disposition of such Common Stock pursuant to the
holding period requirements described above shall be considered gain upon the
sale of a capital asset.

BENEFICIARIES

    Each Participant may designate a beneficiary on the Plan enrollment form
to receive such Participant's accumulated withholdings and shares of Common
Stock in the event of the Participant's death.  If no such designation is
made, then the heirs of the Participant or the Participant's estate may



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receive the Common Stock and accumulated withholdings.

EMPLOYMENT RIGHTS

    The Plan does not create a right in any employee to continue employment
with the Company, and will not be deemed to interfere with the Company's right
to terminate, or otherwise modify, an employee's employment at any time.

OTHER DOCUMENTS

    In addition to the receipt of this Summary of the Plan, Participants may
also request and receive without charge, copies of (i) the Company's most
recent Annual Report on Form 10-KSB for the fiscal year ended June 30, 1996,
(ii) the Company's Quarterly Reports on Form 10-QSB for the quarters ended
September 30, 1996 and December 31, 1996, (iii) the description of the Common
Stock to be offered under the Plan, which description is contained in the
Company's Form 10 Registration Statement, including any amendments or updates
pertaining thereto, and (iv) all other reports as filed with the Securities
and Exchange Commission pursuant to Section 13(a), 13(c), 14, and 15(d) of the
Securities Exchange Act of 1934.


                 GENTNER COMMUNICATIONS CORPORATION

                  1997 EMPLOYEE STOCK PURCHASE PLAN


                          ARTICLE I - PURPOSE

    The Gentner Communications Corporation (hereafter, the "Company") 1997
Employee Stock Purchase Plan (the "Plan") is intended to provide a method
whereby employees of the Company will have an opportunity to acquire a
proprietary interest in the Company through the purchase of shares of the
Company's Common Stock at a discount.


                        ARTICLE II - DEFINITIONS

    2.1 - Base Pay.  "Base Pay" shall mean regular straight-time earnings
excluding payments for overtime, shift premium, bonuses and other special
payments, commissions and other marketing incentive payments.

    2.2 - Board.  "Board" shall mean the Company's board of directors.

    2.3 - Commencement Date.  "Commencement Date" means the date on which
shares of Common Stock become available for purchase under the Plan.

    2.4 - Committee.  "Committee" shall mean the committee described in
Article IX.

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    2.5 - Common Stock.  "Common Stock" means the Company's issued and/or
outstanding Common Stock.

    2.6 - Employee.  "Employee" means any person who is customarily employed
on a full-time or part-time basis by the Company and is regularly scheduled to
work more than 20 hours per week.

    2.7 - Offering.  "Offering" means the Company's offer of shares of its
Common Stock for purchase under the Plan.

    2.8 - Participant.  "Participant" means any person who, being eligible
under Article III herein, participates in the Plan.

    2.9 - Purchase Date.  "Purchase Date" means the date each quarter on
which the Company, through the Participating Broker, purchases shares of
Common Stock for the individual accounts of Plan Participants.

    2.10 - Participating Broker.  "Participating Broker" means the securities
broker or brokers retained by the Company for purposes of executing orders to
buy or sell shares of Common Stock on behalf of Plan Participants.


                ARTICLE III - ELIGIBILITY AND PARTICIPATION

    3.1 - Initial Eligibility.  Any Employee who has completed ninety (90)
days' continuous employment and is currently employed by the Company on the
date his participation in the Plan is to become effective shall be eligible to
participate in the Plan on or after such ninety day period has concluded.

    3.2 - Leave of Absence.  For purposes of participation in the Plan, a
person on leave of absence shall be deemed to be an Employee for the first 90
days of such leave of absence and such Employee's employment shall be deemed
to have terminated at the close of business on the 90th day of such leave of
absence unless such Employee shall have returned to regular full-time or
part-time employment (as the case may be) prior to the close of business on
such 90th day.  Termination by the Company of any Employee's leave of absence,
other than termination of such leave of absence on return to full time or part
time employment, shall terminate an Employee's employment for all purposes of
the Plan and shall terminate such Employee's participation in the Plan
pursuant to Section 6.3 herein.


                  ARTICLE IV - OPERATION OF THE PLAN

    4.1 - Subscription.  An eligible Employee may become a Participant by
completing an authorization for payroll deductions in the form of Exhibit "A"
attached hereto (the "Enrollment Form"), in the amount specified by such
Participant.  The Enrollment Form executed by the Participant together with
this Plan constitutes a subscription for shares of Common Stock.  The

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Enrollment Form shall be filed with the Companys Human Resources Department
at least five (5) business days prior to issuance of the first paycheck on
which payroll deductions are to be made, unless a later time for filing the
Enrollment Form is set by the Committee.

    4.2 - Right to Purchase.  Once payroll deductions have been made from a
Participants paycheck pursuant to Article V herein, such Participant shall be
deemed to have been granted a right to purchase shares of Common Stock.  Each
Participant will be deemed to have exercised his right to purchase Common
Stock on the Purchase Date, unless such Participant notifies the Committee
pursuant to Section 6.1 herein.

    4.3 - Purchases; Purchase Price.  On the Purchase Date, the Company shall
deliver the amounts withheld from each Participant's compensation pursuant to
Article V and direct the Participating Broker to conduct open market purchases
of shares of Common Stock.  The purchase price for individual shares of Common
Stock purchased under the Plan shall be the closing quoted market price of
such stock by the NASDAQ National Market System as of the Purchase Date. 

    4.4 - Company Contributions.  The Company shall contribute to the account
of each Participant, for no consideration, one (1) share of its Common Stock
for every nine (9) shares purchased by such Participant under the Plan. 
Fractional shares will not be contributed.

    4.5 - Transaction Fees and Commissions.  The Company shall be responsible
for all transaction fees and commissions incurred in connection with the
purchase of shares of Common Stock for purposes of the Plan.  Each Participant
shall be responsible for all transaction fees and commissions incurred in
connection with any subsequent sales or transfers of Common Stock from the
Participant's account.

    4.6 - Holding Period.  Subject to death, disability, or a medical
condition of the Participant or the Participant's immediate family that will
incur significant costs to the Participant, each Participant shall be
obligated to hold shares of Common Stock, both purchased under the Plan and
contributed by the Company under Section 4.4, in such Participant's account
for not less than one (1) year from the Purchase Date applicable to the
purchase of such shares.

    4.7 - Termination Date.  The Plan shall terminate on June 30, 2010 unless
sooner terminated under Section 10.5 or by the Company pursuant to Section
10.6 (the "Termination Date").


                      ARTICLE V - PAYROLL DEDUCTIONS

    5.1 - Amount of Deduction.  Each Participant shall file an Enrollment
Form as specified in Section 4.1 and shall elect to have deductions made from


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each paycheck at the rate of not less than twenty-five dollars ($25.00), nor
more than ten percent (10%) of the Participant's Base Pay for the period
covered by the paycheck.  In the case of a part-time hourly Employee, such
Employee's Base Pay shall be determined by multiplying such Employee's hourly
rate by the number of regularly scheduled hours of work for such Employee. 
Payroll deductions for a Participant shall commence on the Offering
Commencement Date or when such Participant's Enrollment Form become
effective, whichever is later, and shall end on the Termination Date (as
defined in Section 4.7) unless sooner terminated by the Participant as
provided in Article VI.

    5.2 - Participant's Account.  All payroll deductions made for a
Participant shall be credited to such Participant's account under the Plan. 
A Participant may not make any separate cash payment into such account except
when on leave of absence and then only as provided in Section 5.4.

    5.3 - Changes in Payroll Deductions.  A Participant may change the
amounts withheld from the Participants future paychecks by filing a new
Enrollment Form with the Human Resources Department, and specifying the
amounts to be withheld from such future paychecks.  Any changes in the amount
withheld from such Participants future paychecks under this Section shall
only be permitted if not less than six (6) months has elapsed since the
Participant last made changes to the amounts withheld under this Section.

    5.4 - Leave of Absence.  If a Participant goes on a leave of absence,
such Participant shall have the right to elect: (a) to withdraw the balance
in his or her account pursuant to Section 6.1, (b) to discontinue
contributions to the Plan but remain a Participant in the Plan, or remain a
Participant in the Plan during such leave of absence, authorizing deductions
to be made from payments by the Company to the Participant during such leave
of absence and undertaking to make cash payments to the Plan at the end of
each payroll period to the extent that amounts payable by the Company to such
Participant are insufficient to meet such Participant's authorized Plan
deductions.


                     ARTICLE VI - WITHDRAWAL

    6.1 - In General.  A Participant may withdraw from the Plan by electing
to withdraw all accumulated payroll deductions credited to such Participants
account under the Plan at any time by giving written notice to the Companys
Human Resources Department within five (5) business days before the paycheck
is issued on which payroll deductions have been terminated.  With the
exception of any payroll deductions of such Participant used to purchase
Common Stock prior to the giving of such written notice, all of the
Participant's payroll deductions credited to his account will be paid to him
promptly after receipt of his notice of withdrawal, and no further payroll



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deductions will be made from his pay.  Any Common Stock purchased on behalf
of the Participant pursuant to the Plan shall be returned to him pursuant to
Section 6.6 herein.  The Company may, at its option, treat any attempt to
borrow by an Employee on the security of his accumulated payroll deductions
as an election, under Section 3.2, to withdraw such deductions.

    6.2 - Effect on Subsequent Participation.  A Participant's withdrawal
from the Plan will not have any effect upon his eligibility to participate in
any succeeding Offering or in any similar plan which may hereafter be adopted
by the Company.

    6.3 - Termination of Employment.  Upon termination of the Participant's
employment for any reason, including retirement (but excluding death while in
the employ of the Company or continuation of a leave of absence for a period
beyond 90 days), any payroll deductions credited to his account and not used
to purchase Common Stock will be returned to him.  Any Common Stock purchased
for the Participants account shall be returned to the Participant pursuant
to Section 6.6 herein.  In the case of the Participants death subsequent to
the termination of his employment, such accumulated payroll deductions and/or
Common Stock purchased for his account shall be returned to the person or
persons entitled thereto under Section 10.1.

    6.4 - Termination of Employment Due to Death.  Upon termination of the
Participant's employment because of his death, his beneficiary (as defined in
Section 10.1) shall have the right to elect, by written notice given to the
Company Secretary prior to the earlier of the Termination Date or the
expiration of a period of sixty (60) days commencing with the date of the
death of the Participant, either:

         a) to withdraw all of the payroll deductions credited to the
    Participant's account under the Plan, or

         b) to purchase the number of full shares of stock which the
    accumulated payroll deductions in the Participant's account at the date
    of the Participant's death will purchase at the applicable purchase price
    (as defined in Section 4.3), together with any applicable contributions
    by the Company under Section 4.4, and any excess in such account will be
    returned to said beneficiary, with interest as specified in Article VII.

In the event that no such written notice of election shall be duly received by
the office of the Secretary of the Company, the beneficiary shall
automatically be deemed to have elected, pursuant to paragraph (b), to
purchase the applicable number of shares under the Plan on the next Purchase
Date.

    6.5 - Leave of Absence.  A Participant on leave of absence shall, subject
to the election made by such Participant pursuant to Section 5.4, continue to
be a Participant in the Plan so long as such Participant is on continuous
leave of absence.  A Participant who has been on leave of absence for more

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than 90 days and who therefore is not an Employee for the purpose of the Plan
shall not be entitled to participate in the Offering if the Offering
Commencement Date is after the 90th day of such leave of absence. 
Notwithstanding any other provisions of the Plan, unless a Participant on
leave of absence returns to regular full time or part time employment with
the Company at the earlier of: (a) the termination of such leave of absence
or (b) three months from the 90th day of such leave of absence, such
Participant's participation in the Plan shall terminate on whichever of such
dates first occurs.

    6.6 - Closing of Account.  If a Participants participation under the
Plan is terminated pursuant to this Article or Sections 3.2, 10.5, or 10.6
herein, then the Company shall return any accumulated amounts withheld from
the Participant's account not used to purchase Common Stock, and shall direct
the Participating Broker to close such Participant's account with the
Participating Broker, and remit to the Participant or his beneficiary
pursuant to Section 10.1, any Common Stock purchased on his behalf.  Any
Common Stock remitted under this Section shall retain the holding period
restrictions as defined in Section 4.6 herein. 


                       ARTICLE VII - INTEREST

    7.1 - Payment of Interest.  No interest will be paid or allowed on any
money paid into the Plan or credited to the account of any Participant
Employee; provided, however, that interest shall be paid on any and all money
which is distributed to an Employee or his beneficiary pursuant to the
provisions of Sections 6.1, 6.3, 6.4, 6.6, and 8.1.  Such distributions shall
bear simple interest during the period from the date of withholding to the
date of return at the regular passbook savings account rates per annum in
effect at First Security Bank, Salt Lake City, Utah, during the Offering
period or, if such rates are not published or otherwise available for such
purpose, at the regular passbook savings account rates per annum in effect
during such period at another major commercial bank in Salt Lake City, Utah
selected by the Committee. Where the amount returned represents an excess
amount in an Employee's account after such account has been applied to the
purchase of stock, the Employee's withholding account shall be deemed to have
been applied first toward purchase of stock under the Plan, so that interest
shall be paid on the last withholdings during the period which results in the
excess amount.


                          ARTICLE VIII - STOCK

    8.1 - Maximum Shares.  The maximum number of shares of Common Stock which
shall be issued under the Plan shall be five hundred thousand (500,000)
shares.  If the total number of shares of Common Stock for which payroll
deductions have been made under Article V herein exceeds the maximum number


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of shares for the Offering, the Company, on the applicable Purchase Date,
shall make a pro rata allocation of the shares available for delivery and
distribution in an nearly a uniform manner as shall be practicable and as it
shall determine to be equitable, and the balance of payroll deductions
credited to the account of each Participant under the Plan shall be returned
to him as promptly as possible.

    8.2 - Participant's Interest in Common Stock.  The Participant shall not
have an interest in any Common Stock until purchases of such Common Stock
have been made for the Participants account.

    8.3 - Registration of Stock.  Stock to be delivered to a Participant
under the Plan will be registered in the name of the Participant, or, if the
Participant so directs by written notice to the Company's Human Resources
Department prior to the Termination Date, in the names of the Participant and
one such other person as may be designate by the Participant, as joint
tenants with rights of survivorship or as tenants by the entireties, to the
extent permitted by applicable law.


                        ARTICLE IX - ADMINISTRATION

    9.1 - Appointment of Committee.  The Board shall appoint a compensation
committee  (the "Committee") to administer the Plan.  The Committee shall
consist of no fewer than three members of the Board.  No member of the
Committee shall be eligible to purchase stock under the Plan.

    9.2 - Authority of Committee.  Subject to the express provisions of the
Plan, the Committee shall have plenary authority in its discretion to
interpret and construe any and all provisions of the Plan, to adopt rules and
regulations for administering the Plan, and to make all other determinations
deemed necessary or advisable for administering the Plan.  The Committee's
determination on the foregoing matters shall be conclusive.

    9.3 - Rules Governing the Administration of the Committee.  The Board may
from time to time appoint members of the Committee in substitution for or in
addition to members previously appointed and may fill vacancies, however
caused, in the Committee.  The Committee may select one of its members as its
Chairman and shall hold its meetings at such times and places as it shall
deem advisable and may hold telephonic meetings.  A majority of its members
hall constitute a quorum. All determinations of the Committee shall be made
by a majority of its members.  The Committee may correct any defect or
omission or reconcile any inconsistency in the Plan, in the manner and to the
extent it shall deem desirable.  Any decision or determination reduced to
writing and signed by a majority of the members of the Committee shall be as
fully effective as if it had been made by a majority vote at a meeting duly
called and held.  The Committee may appoint a secretary and shall make such
rules and regulations for the conduct of its business as it shall deem
advisable.

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    9.4 - Administration and Record Keeping.  The Committee or its
representatives shall be responsible for the following functions of the Plan:
(i) maintaining individual accounts and transaction records of Plan
Participants, (ii)  receiving and processing Enrollment Forms, (iii)
receiving and holding payroll deductions from the paychecks of Plan
Participants, (iv) delivering payroll deductions under the Plan to the
Participating Broker at quarterly intervals for purchase of Common Stock, (v)
elections and changes in elections made by Plan Participants, (vi) delivery
of certificates representing the shares of Common Stock purchased by Plan
Participants, (vii) keeping minutes of its actions under the Plan, and (viii)
any and all procedures and functions of the Plan not otherwise specified
herein or assigned to another party in accordance with the terms of the Plan
or by authority of the Committee.

    9.5 - Reports.  The Company shall provide to each Participant, on at
least an annual basis, statements setting forth the amounts of payroll
deductions, the purchase price for each Purchase Date, the number of shares
purchased on each Purchase Date, the total number of shares purchased, and
the remaining cash balance, if any, for such Participant's account.

    9.6 - Professional Assistance.  The Committee may employ such legal
counsel, including, without limitation, independent legal counsel regularly
employed by the Company, consultants and agents as the Committee may deem
appropriate for the administration of the Plan and may rely upon any opinion
received from any such counsel or consultant and any computations received
from any such consultant or agent.  All expenses incurred by the Committee in
interpreting and administering the Plan, including, without limitation,
meeting fees and expenses and professional fees, shall be paid by the
company.

    9.7 - Participating Broker.  The Committee shall designate a
Participating Broker to act as the Company's agent pursuant to the operation
of the Plan.  Functions of the Participating Broker may include, without
limitation, the execution of orders to purchase Common Stock with the
proceeds obtained pursuant to Article V herein and the closing of a
Participant's brokerage account with the Participating Broker pursuant to
Section 6.6 herein.

    9.8 - Liability.  No member or former member of the Committee or the
Board shall be liable for any action or determination made in good faith with
respect to the Plan or any deduction or withholding made under the Plan. 
Each member or former member of the Committee or the Board shall be
indemnified and held harmless by the Company against all costs or expenses
(including counsel fees) or liability (including any sum paid in settlement
of a claim with the approval of the Board) arising out of any act or omission
to act in connection with the Plan to the extent allowed by law.




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                      ARTICLE X - MISCELLANEOUS

    10.1 - Designation of Beneficiary.  A Participant may file a written
designation of a beneficiary who is to receive any Common Stock and/or cash. 
Such designation of beneficiary may be changed by the Participant at any time
by written notice to the Secretary of the Company.  Upon the death of a
Participant and upon receipt by the Company of proof of identity and
existence at the Participant's death of a beneficiary validly designated by
him under the Plan, the Company shall deliver such Common Stock and/or cash
to such beneficiary. In the event of the death of a Participant and in the
absence of a beneficiary validly designated under the Plan who is living at
the time of such Participant's death, the company shall deliver such Common
Stock and/or cash to the executor or administrator of the estate of the
Participant, or if no such executor or administrator has been appointed (to
the knowledge of the Company), the Company, in its discretion, may deliver
such Common Stock and/or cash to the spouse or to any one or more dependents
of the Participant as the Company may designate.  No beneficiary shall, prior
to the death of the Participant by whom he has been designated, acquire any
interest in the Common Stock or cash credited to the Participant under the
Plan.

    10.2 - Transferability.  Neither payroll deductions credited to a
Participant's account nor any rights to receive Common Stock under the Plan
may be assigned, transferred, pledged, or otherwise disposed of in any way by
the Participant other than by will or the laws of descent and distribution. 
Any such attempted assignment, transfer, pledge or other disposition of such
rights shall be without effect, except that the Company may treat such act as
an election to withdraw from the plan under Section 6.1.

    10.3 - Use of Funds.  All payroll deductions received or held by the
Company under the Plan may be used by the Company for any corporate purpose
and the Company shall not be obligated to segregate such payroll deductions.

    10.4 - No Adjustment Upon Changes in Capitalization.  No adjustment shall
be made to a Participant's account due to stock splits, reverse stock splits,
changes in the Company's capitalization, or similar transaction.   No
adjustments shall be made for stock dividends. 

    10.5 - Dissolution or Liquidation.  In the event of a proposed
dissolution or liquidation of the Company, a sale of all or substantially all
of the assets of the Company, or the merger of the Company with or into
another corporation, the Plan will terminate immediately prior to the
consummation of such proposed action, unless otherwise provided by the
Committee, and the Company shall return to each Participant, with interest,
the accumulated withholdings in such Participant's account, as well as any
Common Stock purchased for such Participant's account, with such Participant
subject to the one-year holding period restriction described in Section 4.6.



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    10.6 - Amendment and Termination.  The Board shall have complete power
and authority to terminate or amend the Plan at any time and for any reason. 
No termination, modification, or amendment of the Plan may, without the
consent of an Employee then having a right to purchase Common Stock under the
Plan, adversely affect the rights of such Employee to purchase Common Stock.

    10.7 - Effective Date.  The Plan shall become effective as of January 1,
1997.

    10.8 - No Employment Rights.  The Plan does not, directly or indirectly,
create any right for the benefit of any Employee or class of Employees to
purchase any shares under the Plan, or create in any Employee or class of
Employees any right with respect to continuation of employment by the
Company, and it shall not be deemed to interfere in any way with the
Company's right to terminate, or otherwise modify, an Employee's employment
at any time.

    10.9 - Effect of Plan.  The provisions of the Plan shall, in accordance
with its terms, be binding upon, and inure to the benefit of, all successors
of each Participant, including, without limitation, such Participant's estate
and the executors, administrators or trustees thereof, heirs and legatees,
and any receiver, trustee in bankruptcy or representative of creditors of
such Participant.

    10.10 - Governing Law.  The provisions of the Plan and all matters
relating thereto shall be governed by the laws of the State of Utah, except
to the extent such laws are superseded by the laws of the United States.


                              EXHIBIT "A"



                      GENTNER COMMUNICATIONS CORPORATION 
                      1997 EMPLOYEE STOCK PURCHASE PLAN
                        ENROLLMENT FORM AUTHORIZATION

PARTICIPANT NAME (LAST, FIRST, M.I.) SOCIAL SECURITY NUMBER    

HIRE DATE              INITIAL ELECTION / /           CHANGE ELECTION / /

BIRTH DATE             MARRIED / /                    SINGLE / /


                                     





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I hereby authorize and direct that my employer withhold from each pay period
the indicated amount from my gross compensation for quarterly purchases of
shares of the company's common stock for my account.  I understand that under
the Plan I may authorize no less than $25.00 and no more than 10% of my gross
compensation to be withheld from each paycheck.

      / / 3%       / / 5%       / / 10%     %----------    $-----------

I understand that I may change, suspend, and resume contributions at such
times as outlined in the terms of the plan and that my salary reduction and
participation in the plan is completely voluntary

I hereby authorize the above payroll deduction.

Signature--------------------------------------  Date-------------------------





BENEFICIARY DESIGNATION

Designate the following beneficiaries for any interest due from the Plan upon
the event of death:

Beneficiary (Primary)--------------------- Relationship-----------------------
                                                      -----------------------
                                                      ----------------------- 

Beneficiary (Secondary) ------------------ Relationship---------------------

Signature -------------------------------- Relationship---------------------

*PLEASE NOTE: If you are married and your spouse is NOT the 100% Primary
Beneficiary, under provisions of the Retirement Equity Act of 1984, your
spouse must consent to his or her waiver as the Primary Beneficiary.  Such
consent is only valid when authorized by his or her signature which must be
witnessed by a notary public or Plan representative.  Please obtain a waiver
from your employer.

We suggest that you consult your tax or legal advisor regarding the
consequences of the designation of the beneficiary you have made.  You may
change your designation by properly completing a new Beneficiary Designation
section of this form.






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                               Exhibit 10.3 

                             PROMISSORY NOTE
                           (Multiple Advances)


$419,000                                                    December 12, 1996

Account Name:  Gentner Communications Corporation     Account No.:  GENT 7584


For value received, the undersigned jointly and severally promises to pay to
the order of SAFECO Credit Company, Inc., its successors and assigns
("Payee"), at SAFECO Plaza, Seattle, Washington 98185, or at such other place
as Payee may designate in writing, the principal sum of Four Hundred Nineteen
Thousand and 00/100 Dollars, or so much thereof as may be advanced, plus
interest thereon from the date of disbursement until paid at the rate of 11.5
percent per annum.

Subject to the terms and conditions of any underlying agreement between the
parties, the principal of this note shall be advanced from time to time from
the date hereof until March 1, 1997 at the request of David L. Harmon who is
authorized to request advances and direct the disposition of any advances
until written notice of the revocation of this authority is received by Payee
at the place designated for payments hereunder.  Any advance made pursuant to
such a request shall conclusively be presumed to have been made for the
benefit of the undersigned.

Principal and interest shall be repaid in accordance
 with the following
schedule: Forty-Eight (48) payments of $10,931.29 each, including interest due
at the time of payment.  The first payment shall be due on January 31, 1997,
and a like payment on the same day of each succeeding month thereafter until
December 31, 2000.  Any principal and interest remaining unpaid shall be due
and payable on December 31, 2000.  All payments on this note shall be applied
first to accrued interest and then to the unpaid principal.

If any payment or part thereof remains unpaid ten (10) days after its due
date, the undersigned agrees to pay to Payee, in addition to the payment, a
late charge equal to the lesser of 10% of the payment or the maximum such
charge permitted by applicable law. The assessment of a late charge is in
addition to, and not in lieu of, any other right or remedy of Payee under this
note or under any agreement securing this note.


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<PAGE>
Any failure to pay the full amount of any payment when due or any event of
default on any agreement securing this note shall be an event of default on
this note.  Upon the occurrence of an event of default, the entire unpaid
balance of principal and accrued interest shall, at the option of the Payee,
become immediately due and payable.  After default, the principal shall bear
interest at the default rate, which shall be 6% above the interest rate stated
above.  All amounts past due must be paid at the time of and as a condition to
the curing of any default.  The undersigned agrees to pay all reasonable costs
and expenses incurred in the collection and enforcement of this note and in
the enforcement of any agreement securing this note or in bankruptcy or
insolvency proceedings, including reasonable attorney fees, whether or not
litigation is commenced.  Any forbearance by Payee in exercising any right or
remedy hereunder or under any document securing this note shall not be a
waiver of or preclude the exercise of any right or remedy.

The undersigned waives presentment, demand, protest and notice of dishonor.

Interest payable under this note shall not exceed the highest rate permitted
by law.  If and to the extent interest is payable which exceeds the maximum
amount permitted by law, it shall be applied to reduction of principal or
refunded.

This note is made and shall be construed under the internal laws (without
applying the conflicts of law rules) of the State of Utah.



The Note may not be prepaid in     Gentner Communications Corporation
whole or in part during the full
term of the loan term unless       By:   /s/ David J. Harmon
Borrower pays a fee for such          --------------------------------
privilege equal to 2.5% of the        Chief Financial Officer
amount prepaid.                       --------------------------------
                                                                 Title
                          [SAFECO LOGO]



                           Exhibit 10.4

                                                         COMMERCIAL CREDIT AND
                                                           SECURITY AGREEMENT


     THIS COMMERCIAL CREDIT AND SECURITY AGREEMENT (the "Agreement"), dated as
of the date written below, is entered between the undersigned borrower(s)

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(individually and collectively "Borrower") and FIRST SECURITY BANK, N.A.
("First Security").

     Borrower has requested First Security to extend credit to Borrower for
certain purposes, and First Security is willing to make such a loan
(hereinafter the "Loan") on the terms and conditions of this Agreement. 
Therefore, the parties agree as follows:

SECTION 1.  AMOUNT OF TERMS OF THE LOAN.

     1.1  The maximum principal amount of the Loan shall be $322,716.15.

     1.2  The Loan shall be (check one or more, as applicable):

     / /  A revolving loan (with the right of Borrower to repay principal and
          to reborrow up to the maximum principal amount of the Loan so long
          as no default exists under this Agreement)

     / /  A term loan (with no right to reborrow repaid principal)

     / /  A nonrevolving loan with funds to be advanced over a period of time
          (with no right to reborrow repaid principal)

If none of the boxes is checked, the Loan shall be deemed to be a term loan.

     1.3  The Loan shall be evidenced by a promissory note or notes or other
Instrument restating the obligation
 of Borrower to repay the Loan
(collectively the Note).  The Loan shall be repaid to First Security and shall
accrue interest as set forth in the Note.  All payments shall be made to First
Security at the address specified in this Agreement in lawful money of the
United States of America.  All payment received by First Security shall be
applied as follows:  first, toward the satisfaction of commitment fees,
origination fees, attorneys' fees and costs incidental thereto and to advances
made and costs and expenses incurred by First Security or its agent to enforce
Borrower's Obligations hereunder and under the Loan Documentation or to
preserve the Collateral securing the Obligations; second, toward the reduction
of any and all accrued and unpaid interest, including uncollected late
charges; third, toward the reduction of unpaid principal; and fourth, to
prepayment of Obligations which may arise from any outstanding letters of
credit.

     1.4  First Security shall provide periodic accountings to Borrower of all
payments, collections, applications and borrowings.  Borrower shall promptly
examine such accountings and shall, after learning of any discrepancy,
immediately notify First Security of any discrepancies.  Fifteen days after
the rendering of such accountings, in the absence of patent demonstrable error
identified by Borrower in writing within said fifteen day period, the
accounting shall be deemed to be conclusive as between First Security and
Borrower.

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     1.5  The Borrower shall pay the following fee:  $1,210.00 upon execution
of this Agreement.

     1.6  In addition to this Agreement, the Note and any applicable
commitment letter, reference to "Loan Documentation" shall include all
instruments, letter of credit agreements, trust deeds, mortgages, other
assignments, other security agreements, other pledge agreements, lien
instruments, guaranties, subordinations, financing statements, notices, lien
waivers, certificates, certificates of title, applications for certificates of
title, environmental indemnities, and all documents set forth in or
contemplated by any applicable commitment letter or as otherwise required by
First Security as a condition to or in connection with the Loan, whether now
or hereafter executed.

Guarantors of all indebtedness of Borrower to First Security, including
without limitation the Loan, shall include the following:  N/A

     1.7  any one of the following persons is authorized to make a written or
oral request to First Security to advance funds under this Agreement:  Russ
Gentner or David L. Harmon.  First Security is under no obligation to verify
the identity of an individual representing to be one of the foregoing persons. 
Any advance made pursuant to said written or oral request is irrebuttably
presumed to be made for Borrower's benefit.  First Security shall make
disbursements on the Loan to Borrower or for the account of Borrower unless
Borrower directs otherwise in writing.

     1.8  The obligations, indebtedness, covenants and liabilities of Borrower
set forth or contemplated in the Loan Documentations shall be referred to as
the "Obligations," including without limitations any indebtedness resulting
from any overdraft on any account with First Security (provided that nothing
herein shall be a commitment by First Security to honor overdrafts).

     1.9  Any and all fees, costs and expenses, of whatever kind or nature,
including but not limited to attorneys' fees, filing fees, title insurance
premiums, surveys, environmental audits and appraisal fees, incurred by First
Security in connection with this Agreement (whether or not the Loan is
advanced) shall be borne and paid by Borrower on demand by First Security and
until so paid constitute part of the Obligations of Borrower secured by the
Loan Documentation and the Collateral and shall accrue interest at the Note
rate, or, if applicable, at the default rate.  Borrower hereby authorizes
First Security to make advances on the Loan, if available, to pay such costs
and expenses if First Security, in its sole discretion, chooses to do so.

     1.10  The real and.or personal property in which First Security is
granted a lien or security interest pursuant to this Agreement and the other
Loan Documentation shall be referred to as the "Collateral."

SECTION 2.  SECURITY


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     2.1  To secure repayment and performance of the Obligations, Borrower
hereby grants, assigns and conveys to First Security a security interest in
all of Borrower's right, title and interest, whether now owned or hereafter
acquired, in and to those properties, interests and rights that are identified
as part of the Collateral in those Schedules that are incorporated herein by
Section 7.10.  In addition, Borrower shall grant to First Security liens on
any real property interests described in those Schedules.

     2.2  As a precondition to the Loan and as security for the payment and
performance by Borrower of all the Obligations, Borrower shall executed and
delivered all Loan Documentation and shall take all actions that First
Security may at any time deem appropriate to secure, perfect, protect and
enforce the liens, security interests and rights of First Security granted
under this Agreement and the other Loan Documentation.

SECTION 3.  CONDITIONS

     3.1  First Security shall not be required to advance funds under this
Agreement unless First Security shall have received from Borrower the
following:

     (a)  Current financial statements in such form as First Security may
require;

     (b)  The fully executed Loan Documentation;

     (c)  Acceptable lien searches and title insurance commitments evidencing
and insuring that the Loan Documentation creates first priority, perfected
encumbrances against the Collateral, subject only to the permitted
encumbrances listed on the Permitted Encumbrances Schedule attached hereto and
incorporated herein by Section 7.10 (if the Permitted Encumbrances Schedule is
not attached or no encumbrances are listed thereon, there shall be no
permitted encumbrances);

     (d)  Evidence satisfactory to First Security that any real property
constituting part of the Collateral (or surrounding real property) does not
contain hazardous substances, hazardous waste, toxic substances, or other
similar materials or substances;

     (e)  Corporate, partnership, limited liability company, or trust
resolutions and documents, as applicable evidencing the valid existence and
good standing of Borrower and the due and proper execution of the Loan
Documentation by authorized representatives;

     (f)  Assurances, satisfactory to First Security, that all other
conditions and requirements of any applicable commitment letter have been
satisfied; and



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     (g)  Such other documentation and information that First Security or its
counsel may request given the circumstances and terms of the Loan.

     3.2  First Security shall not be required to make any advance under the
Loan if a default or an event of default under the Loan Documentation exists
or if an event has occurred that with the passage of time would constitute
such a default or event of default.

SECTION 4.  REPRESENTATIONS AND WARRANTIES OF BORROWER

     To induce First Security to make the Loan, Borrower warrants and
represents as follows:

     (1)  Borrower is in good standing under, and in full compliance with, all
applicable laws, codes, rules and regulations under federal, state and
municipal authority, including without l,imitation the proper use, storage,
registration and disposal of any hazardous materials and any applicable
provisions of "ERISA."

     (2)  Borrower has full power, authority and capacity to incur the
indebtedness described herein and to execute the Loan Documentation.  The
person or persons executing this Agreement and the other Loan Documentation on
behalf of Borrower are duly authorized to do so.

     (3)  The Loan Documentation is in all respects legal, valid, and binding
according to its terms.  The execution and performance of the Loan
Documentation will not violate any applicable law, regulation, order, judgment
or decree, partnership agreement, articles of incorporation, bylaw, articles
of organization, operating agreement, indenture, contract or agreement that
purports to be binding on the Borrower or its assets, and will not result in
the creation of any encumbrance on the assets of Borrower except as
contemplated by the Loan Documentation.

     (4)  Any financial statements of Borrower heretofore delivered to First
Security are true and correct in all respects.  The most recent statements
given to First Security accurately represent the current financial condition
of Borrower, and, since the date of such statements, the business, properties,
assets, and liabilities of Borrower have not been adversely affected or
changed in any material way.

     (5)  All written representations previously made and information
previously given by Borrower or Borrower's agents to First Security or its
agents remain true and correct.

     (6)  Borrower is not in default under any indebtedness, lease, contract,
license, undertaking, or other agreement which will affect the ability of
Borrower to perform under any of the Loan Documentation.

     (7)  There are not existing actions, suits, or proceedings pending or

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threatened against Borrower or relating to the business, properties, and
assets of Borrower that may have an adverse effect upon the financial
condition, the business, or the assets of Borrower or the Collateral, and no
judgment, order, or decree has been rendered which has not been discharged,
satisfied, or compiled with other than those disclosed to Bank in writing.

     (8)  Borrower has filed all federal and state income tax returns which
are required to be filed (except returns for which extensions have been
properly filed) and has paid all taxes, assessments and governmental charges
or levels imposed upon Borrower or upon Borrower's income or profits, or upon
any property belonging to Borrower, to the extent that such taxes and
assessments have become due (except such taxes and assessments that are being
contested in good faith by appropriate proceedings diligently prosecuted and
that have been disclosed to First Security in writing).

     (9)  Borrower has good title to its assets, including the Collateral and
including the properties and assets reflected in the most recent statements
given to First Security and the title to the Collateral is free and clear of
all liens and encumbrances except those in favor of First Security and those
that may be identified as permitted encumbrances on the Permitted Encumbrances
Schedule attached hereto.  Borrower at its own expense shall defend First
Security's interest in the Collateral.

SECTION 5.  COVENANTS OF BORROWER.

     5.1  Borrower shall promptly furnish First Security, during the term of
the Loan, copies of such tax returns and financial reports and statements as
requested by First Security, all prepared in a manner and form and at such
times as are acceptable to First Security.  Such statements shall be provided
annually within 90 days after the end of each fiscal year.  Interim statements
shall be provided (check the applicable period):

      monthly,        X   quarterly,            semi-annually within 30 days 
- - - -----               -----                 -----
after the end of each such interim period.  Borrower shall also furnish such
information regarding the Borrower and the Collateral as may be requested by
First Security.  Upon request, Borrower shall provide to First Security a
quarterly certification that Borrower is in compliance with this Agreement.

     5.2  Borrower shall promptly give notice to First Security of (a) the
occurrence of any default or event of default under any of the Loan
Documentation; (b) any litigation, proceedings or event that may have an
adverse effect upon the financial condition, the business or the assets of
Borrower or the  Collateral; (c) any dispute between Borrower and any
governmental regulatory body or other party that may interfere with the normal
business operation of Borrower or adversely affect the assets of Borrower; (d)
any event that might adversely affect the Collateral; and (e) any adverse
change in the financial condition of Borrower.


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     5.3  Borrower will:

     (a)  duly observe and conform to all requirements of any governmental
authorities relative to the conduct of Borrower's business or to Borrower's
properties or assets, including without limitation the proper use, storage,
registration and disposal of any hazardous materials and any applicable
provisions of "ERISA";

     (b)  maintain and keep in full force and effect all licenses and permits
necessary to the proper conduct of Borrower's business, including the
continuance of Borrower's good standing; and

     (c)  pay all obligations and liabilities when due, including without
limitation all taxes, assessments and governmental charges or levies imposed
upon Borrower or upon Borrower's income or profits, or upon any property
belonging to Borrower, and maintain appropriate reserves for the accrual of
the same in accordance with generally accepted accounting principles.

     5.4  Borrower will keep proper books and records in which full, true and
correct entries (and in a manner acceptable to First security) will be made of
all dealings or transactions relating to its business and activities.

     5.5  Borrower will maintain with financially sound and responsible
companies, hazard and liability insurance in such form and in such amounts and
against such risks as is customarily carried by companies engaged in the same
or a similar business and operating like properties or as requested by First
Security and shall provide First Security evidence of such coverage.  With
respect to the Collateral, such policies shall cover at least the full
insurable value of the Collateral, and such policies shall identify First
Security as an additional insured and shall include a standard mortgage clause
and.or a lender's loss payable clause, as applicable, in favor of First
Security.  If Borrower fails to obtain such insurance coverage, First Security
may obtain such insurance coverage, and any premiums for such insurance shall
become part of the Obligations, shall be repaid to First Security on demand,
and shall accrue interest at the Note rate or, if applicable, at the default
rate.

     5.6  Borrower will permit First Security or its agents to inspect the
Collateral, corporate books and financial records of Borrower and to discuss
the affairs, finances and assets of Borrower with Borrower, all at such
reasonable times and as often as First Security may reasonably request.

     5.7  Borrower will not create or suffer to exist any lien or encumbrance
on any of the Collateral except (1) liens in favor of First Security; (2)
liens for taxes or assessments not yet payable; (3) mechanic's or
materialman's liens arising in the ordinary course of business that are not
overdue; (4) deposits or pledges to secure the payment of worker's
compensation, unemployment or other social security benefits, or to secure the
performance of bids, tenders, contracts (other than for borrowed money),

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leases, public or statutory obligations, security or appeal bonds or other
obligations of a similar nature incurred in the ordinary course of business;
(5) liens that may be identified as permitted encumbrances on the Permitted
Encumbrances Schedule attached hereto; or (6) liens to which First Security
has previously consents in writing.  Borrower shall notify First Security in
writing immediately upon receipt of notice of the imposition of any lien,
levy, attachment or execution on the business or assets of Borrower.  Borrower
shall cause such liens or other process not permitted by this Section to be
satisfied immediately.  First Security may discharge such unpermitted liens
and encumbrances, and any such amounts shall become part of the Obligations,
shall be repaid to First Security on demand, and shall accrue interest as set
forth in the Note.

     5.8  Borrower will not guarantee, endorse or otherwise become surety for
the obligations of any other person or entity without the prior written
consent of First Security, except with respect to consumer-related obligations
and with respect to checks, drafts and similar instruments for deposit or
collection in the ordinary course of Borrower's business.  Without prior
written consent of First Security, Borrower agrees that it will not loan to or
provide credit accommodations to third parties, except as associated with
transactions in the ordinary course of business.

     5.9  Except for sales in the ordinary course of its business. Borrower
will not transfer, sell, convey, grant or otherwise convey any right, title or
interest in and to any of the  Collateral, without the prior written consent
of First Security.

     5.10  Borrower shall immediately notify First Security in writing of any
change in the location of Borrower's business or any change in Borrower's
name, any change in the key management or ownership of Borrower or any change
in the agreements affecting the structure of Borrower or the operation of its
business.  Without the prior written consent of First Security, Borrower will
not become party to or involved in any merger, consolidation or change of form
or structure or other like change or acquisition.  Borrower shall not redeem
or purchase its own stock.  Furthermore, Borrower shall not commingle its
funds with any other entity.


SECTION 6.  DEFAULT AND REMEDIES

     6.1  The occurrence of any of the following shall constitute an event of
default under this Agreement (references to "Borrower" in this Section 6.1
shall include each obligor under any guaranty executed in connection with this
Agreement and each other party to the Loan Documentation):

     (a)  Failure to pay when due any principal or interest or other monetary
indebtedness under the Obligations;



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     (b)  Any representation or warranty made by Borrower in the Loan
Documentation or in connection with any borrowing hereunder, or in any
certificate, financial statement or other statement furnished by Borrower
pursuant hereto is untrue in any respect at the time when made;

     (c) Failure of Borrower to observe or perform any of the covenants or
agreements contained in the Loan Documentation;

     (d)  Any material provisions of the Loan Documentation shall for any
reason cease to be in full force and effect;

     (e)  Filing by or against Borrower or a petition in bankruptcy or for any
other relief under the Bankruptcy Code, as amended, or under any other
insolvency act or law, state or federal, now or hereafter existing, or any
action by Borrower indicating Borrower's consent to, approval or acquiescence
in, any such petition or proceeding; the application by Borrower, or the
consent or acquiescence of Borrower to the appointment of receiver or trustee
for Borrower or for all or a substantial part of Borrower's property; the
making by Borrower of an assignment for the benefit of creditors under state
law; or the admission of Borrower in writing of Borrower's inability to pay
Borrower's debts as they mature;

     (f) The involuntary appointment of a receiver or trustee for Borrower or
for all or a substantial part of  Borrower's property; or the issuance of a
warrant of attachment, execution or similar process against any substantial
part of the property of Borrower;

     (g)  All or any substantial part of the property of Borrower shall be
sold, assigned, transferred, or shall be condemned, seized or otherwise
appropriated, or custody or control of such property shall be assumed by any
governmental agency or any court of competent jurisdiction at the instance of
any governmental agency;

     (h)  The occurrence of any adverse change in the financial condition of
Borrower or the status of Collateral deemed material by First Security;

     (i)  First Security shall for whatever reason cease to have the priority
of liens and security interests in any item of collateral or any other
lienholder commences to foreclose or take any other action against any item of
Collateral.

     6.2  If any event set forth in Section 6.1 occurs:

     (a)  First Security may (i) terminate any obligation to make further
advances under the Loan; (ii) declare the entire Obligations outstanding
hereunder to be immediately due and payable, whereupon the principal amount of
the outstanding Loan, together with accrued interest thereon, shall become
immediately due and payable without presentment, demand, protest or other


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notice of any kind, all of which are hereby expressly waived, anything
contained herein or in the Note to the contrary notwithstanding; and.or (iii)
proceed to enforce any of its remedies under the Loan Documentation, including
this Agreement.

     (b)  First Security may, in its sole discretion and for its sole account,
advance such sums and costs and take such other steps as it may deem necessary
or advisable to protect the Collateral.  All sums advanced or paid by First
Security for such purposes shall accrue interest at the Note rate or, if
applicable, at the default rate and shall be payable by the Borrower to First
Security on demand, as loans from First Security to the Borrower under this
Agreement, and shall be part of the Obligations.

     (c)  First Security may, at its sole option, without demand and upon such
notice as may be required by law, and irrespective of negative consequences to
Borrower or any other party to the Loan Documentation, do any one or more of
the following: (ii) immediately take possession of the Collateral wherever it
may be found using all necessary and lawful actions to do so, and Borrower
waives all claims to damages due to or arising from or connected with any such
taking; (iii)  proceed in the foreclosure of this Agreement and sell all the
Collateral in any manner permitted  by law or provided for herein; (iv) sell
the Collateral at public or private sale  with or without having said
Collateral at the place of sale and upon terms and in such manner as First
Security may determine, Borrower agreeing that if notice of such a sale is
required by law, a ten day notice period shall be commercially reasonable
unless a shorter time period is permitted by law or the Loan Documentation;
(v) complete the processing of any of the Collateral or repair or recondition
any of the Collateral to such extent as First Security may deem advisable, and
any sums expended therefore by First Security shall be repaid by Borrower and
be part of the Obligations; (vi) take possession of Borrower's premises to
complete such processing, repairing and reconditioning, using the facilities
and other property of Borrower to do so, to store any of the Collateral
subject to First Security's security interest and to conduct any sale as
provided for herein, all without compensation to Borrower; (vii) sell, in one
or more sales, at public or private sale, for such price as it may deem fair,
any or all of the Collateral; and (viii) be the purchaser of any of the
Collateral so sold and hold the same thereafter in its own right, absolutely
free from any claims or rights of Borrower.

The net proceeds of any sale as hereinbefore described shall be applied
against the amount owed on the Obligations in such order as First Security may
elect.  Borrower shall forthwith pay to First Security any deficiency upon
demand.  Demand of performance, advertisement and presence of property at sale
are hereby waived, and First Security is hereby authorized to sell hereunder
any evidence of debt it may hold as security for the Obligations. All demands
and presentments of any kind or nature are expressly waived by Borrower. 
Borrower hereby waives any right to require First Security to proceed against
any Collateral.  Borrower waives the right to require First Security to pursue
any other remedy for the benefit of Borrower and agrees that First Security

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may proceed against Borrower for the amount of the obligations owed by
Borrower to First Security without taking any action against any other party
and without selling or otherwise proceeding against or applying any
Collateral.  Borrower authorizes First Security, at its option, to apply
toward the payment of the Obligations all balances of any deposit account in
the name of Borrower held by First Security.

     (d)  First Security may exercise and enforce with respect to the
Collateral any and all other rights and remedies available on default to a
secured party under the Loan Documentation, the Uniform Commercial Code or
other applicable law.

No remedy given to First Security in the Loan Documentation is intended to be
exclusive of any other available remedy or remedies, but each and every such
remedy shall be cumulative and shall be in addition to any other remedy given
under the Loan Documentation or now or hereafter existing at law or in equity
or by statute.

     6.3  The Borrower agrees to cooperate with First Security in effectuating
First Security's rights notwithstanding any subsequent inability of Borrower
to pay the Loan or otherwise perform the Obligations.

SECTION 7.   MISCELLANEOUS

     7.1  Time is of the essence of this Agreement.  No advance under the Loan
shall constitute a waiver of any of the conditions to First Security's
obligation to make further advances, nor, in the event Borrower is unable to
satisfy any such condition, shall any waiver have the effect of precluding
First Security from thereafter declaring such inability to be an event of
default under this Agreement.  No failure or delay on the part of First
Security in exercising any right, power or privilege hereunder or under the
Loan Documentation shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege hereunder or thereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.  The consent or approval by First Security to or of
any act by Borrower  requiring further consent or approval shall not be deemed
to waive or render unnecessary the consent or approval to or of any subsequent
act.  The rights and remedies herein provided are cumulative and not exclusive
of any rights or remedies provided by law. 

     7.2  Borrower shall pay all attorneys' fees, paralegal fees, costs,
including without limitations costs of appraisals, environmental audits and
evidences of title, and other expenses incurred before legal action, during
the pendency of any such legal action, during the enforcement of First
Security's rights in any bankruptcy or insolvency proceedings, and continuing
to all such expenses in connection with any appeal to higher courts arising
out of matters associated herewith.  Until so paid, all such fees, costs, and
expenses shall constitute part of the Obligations of Borrower secured by the
Loan Documentation and the Collateral and shall accrue interest at the Note

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rate or, if applicable, at the default rate.

     7.3  Borrower hereby agrees to indemnify and hold harmless First
Security, its directors, officers and employees from any and all liability,
expense, costs, charges or assessments, including attorneys' fees and
expenses, with respect to hazardous or toxic substances or waste handling,
disposal, First Security, its directors, officers and employees from and
against any and all liability, expense, damage, demands, claims and lawsuits,
including attorneys' fees and expenses, arising out of this Agreement or the
other Loan documentations or in connection therewith, unless arising from
First Security's willful misconduct.

     7.4  In addition to this Agreement and the other Loan Documentation, this
finance transaction may include closing documentation such as resolutions,
waivers, notices, acknowledgements, statements, closing or escrow
instructions, loan purpose statements, and other documents that First Security
may customarily use in closing such transactions.  Such additional documents
are incorporated herein by this reference. The Loan Documentation and closing
documents to which this Section refers, as applicable, express, embody and
supersede any previous understandings, agreements or promises (whether oral or
written) with respect to this finance transaction, and said documents
represent the final expression of the agreement between First Security and
Borrower, the terms and conditions of which cannot hereafter be contradicted
by any oral understanding not reduced to writing and identified above.  This
Section shall govern in the event it is inconsistent with any similar
provision in any other Loan Documentation.

     7.5  Any notice required by any Loan Documentation will be deemed
effective if personally delivered to the party to which notice is being given,
or, in the alternative, on the date such notice is placed, first-class mail,
in the U.S. Mail addressed to the party to which notice is being given, at
such address as is set forth below.  In the event another agreement
constituting part of the Loan Documentation sets forth a notice procedure,
such procedure shall govern for purposes of that document and thus supersede
the terms of this Section if inconsistent.

          First Security                    Borrower
          15 East 100 South, 2nd Floor      1825 Research Way
          Salt Lake City, UT  84111         Salt Lake City, UT  84119

     7.6  All representations and warranties made in this Agreement and note
and in any certificates delivered pursuant hereto and thereto shall survive
the execution and delivery of this Agreement and the making of the Loan
hereunder and shall survive payment of the Loan.  This Agreement shall be
binding upon and inure to the benefit of Borrower and First Security and their
respective successors and assigns, except that the Borrower may not assign or
transfer its rights hereunder without the written consent of First Security. 
It is understood that First Security may sell the Loan and its interests under
the Loan Documentation without the need for Borrower's consent and may procure

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other lenders to participate in the Loan, and First Security may issue
participation certificates to such other lenders.

     7.7  Borrower agrees to execute any other documentation and provide such
other information and documentation as First Security may reasonably require. 
Any provision of this Agreement or any other constituents of the Loan
Documentation, which may be found to be invalid, shall be deemed separable and
shall not invalidate the remainder of the provisions.  No third party shall,
under any circumstances, be deemed to be a beneficiary under the Loan
Documentation or any condition set forth therein.  Nothing in the Loan
Documentation shall create a partnership or joint venture between First
Security and Borrower.

     7.8  This Agreement may be signed in any number of counterparts, each of
which shall be deemed an original, and such counterparts together shall
constitute one and the same instrument. This Agreement and the other Loan
Documentation shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Utah.  If Borrower is not resident
of the State of Utah, Borrower hereby consents to the jurisdiction of the
courts of the State of Utah to enforce this Agreement nd the other Loan
Documentation.

     7.9  The obligations of Borrower (if there is more than one Borrower)
under the Loan Documentation, including warranties and representation, shall
be joint and several.

     7.10  This Agreement incorporates by reference all additional terms set
forth in the following Schedule(s) attached hereto (check the applicable
boxes):

/ /  Additional Terms Schedule            / /  Real Property Schedule
/ /  Pledged Assets Schedule              /X/  Permitted Encumbrances Schedule
/ /  Inventory and Receivables Schedule   / /  Schedule of Collateral Granted
                                               by Other Parties, together with
                                               references to related Schedules
/ /  Borrowing Base Schedule              / /  
                                               -------------------------------
/X/  Equipment Schedule                   / /  
                                               -------------------------------

Unless the context otherwise requires, the terms in the Schedules shall have
the meanings set forth in this Agreement and other terms which are defined in








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the Uniform Commercial Code shall have the meanings set forth therein.

DATED  January 23, 1997  

FIRST SECURITY:

First Security Bank, N.A.


- - - ---------------------------------
D. Kevin Imlay, Vice President

BORROWER:

GENTNER COMMUNICATIONS CORPORATION


- - - ----------------------------------
David L. Harmon, Vice President

<PAGE>
        EQUIPMENT SCHEDULE TO COMMERCIAL CREDIT AND SECURITY AGREEMENT

     (a)  The term "Collateral" shall include without limitation all Equipment
(as defined below), whether now owned or hereafter acquired, together with all
products and proceeds therefrom including without limitation proceeds of
insurance policies insuring any Collateral against loss by theft (casualty or
otherwise).  Collateral shall also include any substitutions for, accessions
and modifications to and other additions and replacements for accountings,
reports, appears and documents relating to any of the Collateral, including
all computer records, data programs, software, disks, etc., relating to or
arising out of or used in connection with any of the Collateral.

     (b)  [Select either box (1) or (2) for definition of "Equipment".  If
neither box is checked, the term "Equipment" shall be defined as set forth in
(1)]:

     /X/  (1) The term "Equipment" shall have the meaning specified in the
Uniform Commercial Code and shall also include without limitation any and all
equipment, (as defined in the Uniform Commercial Code), machinery, computers,
furniture, furnishings, tools, supplies, motor vehicles, rolling stock,
aircraft, farm products (as defined in the Uniform Commercial Code), parts,
manuals, instructional materials and warranties, whether now owned or
hereafter acquired or created and wherever located, and including without
limitation the following identified items.



"Equipment" shall also include all General Intangibles related to or arising
from the ownership, operation, installation, servicing or use of any of the
foregoing.

     / /  (2) The term "Equipment" shall include the following identified
items, together with all parts, manuals, instructional materials and
warranties related thereto:

           ADDITIONAL TERMS SCHEDULE TO COMMERCIAL CREDIT 
                       AND SECURITY AGREEMENT


FINANCIAL COVENANTS.  Through the course of the Loan, and until it is fully
paid, Borrower agrees to maintain the following:

     A.  DEBT TO WORTH.  Ratio of total liabilities to net worth at a level
not to exceed 1.75:1.00.

     B.  DEBT SERVICE COVERAGE RATIO.  "Debt Service Coverage Ratio" means, as
of the last day of each fiscal quarter, the ratio of (a) EBITDA for the fiscal
period consisting of that fiscal quarter and the three immediately prior
fiscal quarters to (b) to the sum of (i) Interest Expense for such fiscal

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<PAGE>
quarter and the three previous quarters plus (ii) the scheduled long term debt
reductions for the four fiscal quarters ending with the current period
quarter.

                             EBITDA
                 ------------------------------    1.00:1:00
                 Int. Exp. + Current Maturities

     C.  EBITDA.  "EBITDA" means, for any period, for the Borrower, determined
in accordance with GAAP, the sum of (a) the net income ( or net loss) PLUS (b)
all amounts treated as expenses for depreciation and interest and the
amortization of intangibles of any kind to the extent included in the
determination of such net income (or loss), PLUS (c) all accrued taxes on or
measured by income to the extent included in the determination of such net
income (or loss); PROVIDED, HOWEVER, that net income (or loss) shall be
computed for these purposes without giving effect to extraordinary losses or
extraordinary gains.

     D.  CROSS-COLLATERALIZATION.  BORROWER agrees that all security
agreements and security interests which First Security has acquired in
relation to certain loans dated 10/24/96 represented by an Accounts Revolving
Note, Inventory Revolving Note, and Commercial Credit and Security Agreement
dated of even date, shall also have applicability and shall serve as
collateral for the payment and performance of this Loan represented by the
Note and this Agreement, and all the provisions contained in the earlier
Credit Agreement as amended with regards to the collateral securing the
earlier Loan shall also apply to this Loan.

     A.  PREPAYMENT FEE.  For purposes of the Note, "prepayment" shall mean
any instance in which the principal debt evidenced hereby is fully or
partially satisfied in any manner, whether voluntarily or involuntarily
(excluding  scheduled payments required hereunder), prior to the maturity date
or any extension thereof.  If prepayment occurs, the following payment shall
also be required (as liquidated damages for loss of a bargain and not as a
penalty):

      (a)  Four percent (4%) of the amount prepaid during the first year of
           the Note.
      (b)  Three percent (3%) of the amount prepaid during the second year of
           the Note.
      (c)  Two percent (2%) of the amount prepaid during the third year of the
           Note.
      (d)  One percent (1%) of the amount prepaid during the fourth year of
           the Note, and thereafter.
 
These prepayment fees shall be due and payable upon prepayment.  Prepayment
made during the last six (65) months of the Note may be made without a
prepayment fee being required.  The term "year" as used herein means each
succeeding twelve (12) month period from the date of the Note.

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<PAGE>
Prepayment shall be first applied to attorneys' fees and other expenses
incurred by the holder of the Note, as provided in this Agreement, second to
accrued interest on the unpaid principal amount of the Note to the date of
prepayment, third to the prepayment charge required herein, and then to the
unpaid principal amount of the Note.  Any reduction in principal resulting
from the prepayment shall not excuse or defer any scheduled payments under the
Note when due.

[FIRST SECURITY BANK LOGO]                      Nonrevolving Promissory Note
                                                Loan No.:    00223791-9003

PRINCIPAL AMOUNT: $ 322,716.15                  Date: January 23, 1997

BORROWER:   GENTNER COMMUNICATIONS CORPORATION

ADDRESS:    1825 RESEARCH WAY, SALT LAKE CITY, UT 84119


For value received, the undersigned Borrower promises to pay to First Security
Bank N.A. ("First Security"), or to its order, the total principal amount
outstanding on this Nonrevolving Promissory Note ("Note") together wit
interest as stated below, in lawful money of the United States of America.

INTEREST:  Interest on the outstanding principal balance shall be calculated
on the following basis until paid:

       Fixed Rate:  9.250 per cent per annum until paid in full.

The actual interest to be charged under this Note shall be calculated daily on
the outstanding balance on a 360-day year.  Should the rate of interest as
calculated, exceed that allowed by law, the applicable rate of interest will
be the maximum rate of interest lawfully allowed.  The principal amount
outstanding on which the interest rate shall be charged shall be determined
from First Security's records, which shall at all times be conclusive.

PAYMENT SCHEDULE:  This Note shall be paid in equal installments of principal
and interest in the amount of $8,087.69 each, beginning on February 23, 1997
and continuing on the 17th day of each month thereafter until January 23, 2001
when the entire balance of outstanding principal and accrued but unpaid
interest shall be due and payable, If the interest rate selected above is a
Variable Rate, First Security shall have the right, in its sole discretion, to
recalculate at any time the amortized payment to reflect any change in the
interest rate.  The changed amortized payment shall be effective on the first
payment date after written notice is given to Borrower of such recalculation. 
Payments shall be made at First Security's Commercial Loan Accounting Center
at P.O. Box 7666, Boise, Idaho 83707-1666, or at such other place as the
holder or assignee of this Note may designate.  Payments will be applied first
to accrue interest with the remainder (if any) applied to principal.


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<PAGE>
ADVANCES:  Borrower agrees that any and all advances made hereunder shall be
for Borrower's benefit whether or not said advances are deposited to
Borrower's account, and that persons other than the undersigned Borrower may
have authority to draw against such account.  Advances may be made hereunder
at the oral or written request of Russ Gentner or David L. Harmon who is (are)
hereby authorized to request advances until written notice of revocation of
this authority is received by First Security from Borrower. Advances shall be
made to Borrower or for the account of Borrower unless Borrower directs
otherwise in writing.

If Borrower fails to make any scheduled payment on this Note when due, or
otherwise defaults in any other obligations imposed by this Note [deleted
text], any document securing this Note, or any other document executed in
connection with this Note, First Security, at its option, may declare
immediately due and payable all amounts then outstanding on this Note.
[deleted text] Borrower shall pay all costs and expenses incurred by First
Security or by any other holder of this Note incurred in connection with any
failure to pay or other default of Borrower, including[*] attorneys, fees,
collection costs, costs incurred to protect any collateral, court costs and
costs on appeal, including, without limitation, all such fees and[*] costs
incurred before the commencement of a proceeding to collect this Note, during
any such proceeding, during any bankruptcy or insolvency proceeding, and
during any appeal.

[*]Reasonable

If First Security has not received the full amount of an payment by the end of
fifteen (15) calendar days after the date due, including the balance due at
maturity, Borrower will pay a late charge to First Security in the amount of
five percent (5%) of the overdue payment of principal and interest or
$1000.00, whichever is less.  Borrower hereby agrees to pay the late charge
promptly, but only once on each late payment.  In addition to any late charges
that may be assessed as herein provided, the outstanding balance of this Note
after a default in payment of principal and/or interest or any part thereof,
including but not limited to a default in making the final payment due at
maturity, [deleted text] any document securing this Note, or any other
document executed in connection with this Note, shall accrue interest from the
date of the default at the rate equal to four (4) percentage points per annum
in excess of the interest rate charged if this Note were not in default.  If
First Security shall waive in writing or permit a cure of such default, the
interest rate shall revert to the non-default rate from and after such waiver
or completion of such cure.

This Note is secured by A Commercial Credit and Security Agreement of even
date of such herewith, covering the property described or referenced therein.

This Note is to be construed under the laws of the State of Utah.

The makers, sureties, guarantors, and endorsers of this Note jointly and

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<PAGE>
severally waive presentment for payment, notice of protest, notice of protest,
and notice of nonpayment of this Note, and consent that this Note or any
payment due under this Note may be extended or renewed without prior demand or
notice, and further consent to the release of any collateral or part thereof
or any surety or guarantor, with or without substitution.

For all terms hereunder and as dictated by the actual signatory or signatories
hereto, references to the singular shall include the plural and references to
the male gender shall include the female gender as well as the neuter.  In
particular, "Borrower" shall include "Borrowers" if the undersigned is more
than one party or entity.  In the event that there are multiple signatories,
all obligations hereunder are joint and several.


BORROWER:

GENTNER COMMUNICATIONS CORPORATION


/s/  DAVID L. HARMON, VICE PRESIDENT
- - - ------------------------------------



                              Exhibit 10.5 

                       VALLEY AMERICAN INVESTMENT
                        VALLEY BUSINESS CENTER AT
                               DECKER LAKE
                          WEST VALLEY CITY, UTAH


    This Lease is made and entered into this 26 day of February, 1996, by and
between VALLEY AMERICAN INVESTMENT COMPANY of P.O. Box 186, Midvale, Utah
84047, as Landlord and GENTNER COMMUNICATIONS CORPORATION of 1825 W. Research
Way, West Valley City, Utah 84119, as Tenant.

    WHEREAS, this Lease is made and entered into with regard to certain real
property located in West Valley City, County of Salt Lake, State of Utah, more
particularly described on the attached site plan labeled as Exhibit "A" and
Exhibit "F" which is incorporated herein by reference (Hereinafter referred to
as the Real Property).

    WHEREAS, there is attached hereto and marked Exhibit "A" a site plan for
the Real Property.  The site plan discloses the location of and the certain
specifications for the building and other improvements which are presently

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existing and which are to be constructed by Landlord pursuant to the terms of
this Lease.  Said site plan is incorporated herein by reference.

    WHEREAS, Landlord is desirous of leasing said building and improvements to
Tenant and Tenant is desirous of leasing the same from Landlord upon the
 terms
and conditions hereafter set forth.

    THEREFORE, in consideration of the foregoing promises and each and all of
the mutual and reciprocal covenants, terms, provisions, conditions and
agreements hereinafter set forth, Landlord does hereby lease, let and demise
unto Tenant and Tenant does hereby accept, take and hire from Landlord, upon
the terms and conditions set forth herein the Real Property, together with the
improvements to be constructed thereon by Landlord as described on the
attached Exhibit "A".

                              1.  BUILDING
                                  --------
                                    
    1.1  Building:
         --------
    Landlord hereby agrees that, subject to the terms and conditions
hereinafter provided, it will cause to be constructed upon the Real Property a
65,902 square foot building addition from which Tenant will lease a total of
40,250 square feet of space consisting of 23,202 square feet of office space
and 17,048 square feet of warehouse space and other improvements as described
on the site plan, specifications and a floor plan attached hereto as Exhibit
"B" which were prepared by Kenny Nichols of A.S.W.N. and bear the date
February 1, 1996.

    1.2  Architect:
         ---------
     Upon the parties execution of this Lease, Landlord shall direct Allred,
Soffe, Wilkinson and Nichols to prepare construction drawings and
specifications for the improvements.  The construction drawings and
specifications shall be submitted to the Lessee for approval prior to their
submission to West Valley City.  Lessee agrees that it will promptly, but not
later than fourteen (14) days from receipt, make any necessary or appropriate
corrections to the construction drawings and specifications and make the same
available to the Landlord for its approval.  The plans and specifications for
the improvements to be constructed are subject to the approval of both the
Landlord and the Tenant.  The construction drawings and specifications in
final form and as approved by the parties shall be incorporated herein and
attached hereto as Exhibit "C" as though they were fully set forth at length
herein and shall constitute the plans and specifications in accordance with
which Landlord shall construct the improvements.

    1.3  Costs:
         -----
    The total cost of construction, subject to the limitations described in

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<PAGE>
Section 1.5 and 1.7, of the improvements, including, but not limited to,
architectural, engineering and supervision fees, including all plans,
specifications, etc., all permits of whatever nature, cost of construction,
cost of clearing the premises, cost of preparing the site for construction,
materials, supervision, contractor's fees, or profit, labor, sub-contracting
prices, all fees such as sewer hook-up, bonded sewer charges, landscape costs,
performance and lien bonds, construction interest, insurance and financing
charges and any and all other charges incurred in the course of and during
construction and all other necessary or incidental expenses connected with the
development of the improvements, shall be borne by the Landlord.  It shall be
the duty of the Landlord to file any and all applications and obtain any
consents or authorizations as may be required of Landlords, owners, builders
by any governmental agency or authority upon a fun and fair disclosure of the
facts to it; the liability of the Tenant shall not accrue until the Landlord
has fully complied with all terms and conditions of such consents and
authorizations.

    1.4  Occupancy:
         ---------
    Occupancy by the Tenant shall be deemed to be that of a Tenant under all
of the terms, covenants and conditions of this Lease and Tenant's liability
for rent, taxes, insurance and common area maintenance obligations shall
commence and become payable on the date Tenant takes possession of the
premises.  As used herein, the phrase "the day Tenant takes possession" shall
mean the day that Landlord has provided the Tenant with written notice that
the improvements have been substantially completed in accordance with the
plans and specifications, which notice shall have attached a certificate of
occupancy or a photocopy thereof issued by the proper governmental authority
or project architect.  Should the occupancy date occur on any day other than
the first day of the month, rent, taxes, insurance and maintenance charges for
the month shall be prorated and the initial ten (10) year term of this Lease
shall commence on the first day of the month following the occupancy date.

    1.4(a) It is the intent of both Landlord and Tenant to have the new space
ready for occupancy within seven (7) months after receipt of building permit. 
If the Leased Premises are not substantially completed (as hereinafter
defined) within ten (10) months after receipt of building permit, then
Landlord agrees to reimburse Tenant all reasonable costs of securing, moving
to and from, and renting temporary alternative facilities.  If the Leased
Premises are not substantially completed (as hereinafter defined) within
sixteen (16) months after receipt of building permit, then Tenant shall have
the option to terminate this Lease as well as the lease dated January 15,
1988.  Provided the cause of the delay was not due to the actions or
negligence of Tenant, or through acts of "Force Majeure" as described in
Article 36.  Tenant's right to terminate said Leases for failure of Landlord
to "Substantially Complete" the leased premises within said time period will
be Tenant's sole remedy.  Promptly after the Lease Commencement Date is
ascertained, Landlord and Tenant shall execute an amendment affirming the
Lease Commencement Date and the Lease Expiration Date.

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<PAGE>
    1.5  Change Orders:
         -------------
     Tenant, without invalidating this Lease, may order changes in the work as
contemplated by the construction drawings and specifications attached hereto
as Exhibit "C", provided that any such changes shall be subject to the
approval of the Landlord which approval shall not be unreasonably withheld,
and that any additional cost to Landlord from a change in the work shall be
paid for by Tenant to Landlord in cash or in equal monthly installments over
the first ten years of the initial Lease term which shall be payable at the
same times and in the same manner as the monthly installments of rent.  The
amount of the monthly installments shall be determined by amortizing the
additional costs over a period of one hundred twenty (120) months utilizing an
interest rate equal to eleven percent (11%) per annum.  All such changes in
the work shall be authorized by a written change order signed by Landlord and
Tenant.  The cost to Tenant for a change in the work shall be determined by
mutual agreement between Landlord and Tenant in writing, before the Landlord
shall be responsible for executing such change.

    1.6   Existing Lease:
          ---------------
    Tenant's current lease expires on August 30, 1998. Landlord and Tenant
mutually agree to terminate the existing lease and amendments by and between
Dell S. Nichols as Landlord (which was assumed by Valley American Investment
as Landlord) and Tenant dated January 15, 1988.  Landlord and Tenant will have
no further obligations to each other at the termination of the existing lease
with the exception of real property taxes and real property tax refunds which
will be pro rated and charged or credited to the new Lease.  The termination
date of the existing lease will be the commencement date of the new lease as
described above in Section 1.4.

    1.7   Tenant Improvement Allowance: 
          -----------------------------
    Tenant shall receive a Tenant Improvement Allowance equal to $19.00 per
rentable square feet of newly constructed interior office space, plus a
remodel allowance of thirty thousand ($30,000) dollars. (For example, if
Tenant lease 5,000 square feet of office space then the Tenant Improvement
Allowance win be 5,000 square feet @ $19.00 per square foot which is equal to
$95,000 plus the $30,000 remodel allowance for a total allowance of $125,000). 
    The Tenant Improvement Allowance shall be used for all necessary interior
office improvements desired by Tenant, including but not limited to painting,
plumbing, electrical, heating, ventilating and cooling, drywall, carpet,
architectural and space planning fees, wiring, cabling, security system,
consulting engineers, etc.  Any expenses over and above the allowance or any
additional improvement desired by Tenant shall be paid for by the Tenant.  Any
actual expense under and below the amount allowed for Tenant Improvements
shall be used at Tenant's discretion.




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1.8  Substantial Completion: 
         -----------------------

    The term "Substantially Completed" shall mean the completion of
Landlord's Work in accordance with Exhibits A, B and C, except for minor
details of construction, mechanical adjustments or decorations or other punch
list items which do not adversely affect Tenant's use or occupancy of the
Leased Premises.  Landlord agrees to complete such punch fist items within
thirty (30) days of Landlord's receipt of such punch list items from Tenant. 
The Leased Premises shall not be deemed Substantially Completed if certain
portions of the Building or Project are not completed, and said lack of
completion interferes with the efficient conduct of Tenant's business in the
Leased Premises.

                                 2. TERM
                                    ----

    2.  Term:
        ----
    The term of this Lease shall be for a period of ten (10) years to
commence as provided for in Section 1.4 herein.  It is understood and agreed
that the date for the commencement of the Lease term may be modified as herein
provided.  However, the term of this Lease shall at all times be for a period
of ten (10) years from and after the date of commencement of said term.

    2.1  Termination Option: 
         -------------------
    Tenant shall have a one time option to terminate this Lease at the end of
the 84th month of the original ten (10) year Lease term.  Said option to
terminate must be exercised by Tenant on or before the end of the 78th month
of the original ten (10) year Lease term by providing Landlord with written
notice of its intention to so terminate.

    2.2  Termination Penalty: 
         -------------------
    Should Tenant exercise its right to terminate the Lease as described in
Section 2.1 above, then Tenant shall pay Landlord a termination fee equal to
six (6) months of rental payments plus a applicable common area expenses,
property taxes and insurance.  In addition to the termination penalty, Tenant
agrees to pay Landlord the unamortized portion of Tenant's Improvement
Allowance as defined in Section 1.7 above.  The straight line amortization
shall be based on ten years at 12% with a tenant improvement allowance of
$300,750.00. The Lease termination shall not become effective until Landlord
receives the termination penalties described above and Landlord and Tenant
mutually execute a Lease termination document.  Landlord agrees to waive all
such penalties in the event that Tenant secures a new tenant financially
acceptable to Landlord, with no additional out of pocket expenses to Landlord. 
    Should any out of pocket expenses to Landlord be nonetheless necessary to
secure the next tenant, Tenant shall reimburse Landlord up to the amount of

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the Termination penalty.



    2.3  Options: 
         -------
    Providing that Tenant is not in default under the terms of this Lease,
Tenant shall have the option to extend the Lease term for two additional
periods of five (5) years each beyond the original ten (10) year Lease term. 
The first option must be exercised by Tenant no later than the end of the 14th
month of the original ten (10) year Lease term by providing Landlord with
written notice of its election.  During the first option period Tenant shall
give Landlord written notice of Tenant's desire to exercise their second
option no later than the 54th month of the option period.  During the option
periods, all terms, conditions and provisions of this Lease shall remain in
full force and effect with all time periods extended accordingly with the
exception of Section three (3) and six (6) dealing with the amount of rent,
periodic rent adjustments and the availability of incentive monies payable by
the West Valley City Redevelopment Agency.  The amount of rent due Landlord
during the option period shall be:

                Monthly Rent:  Annual Rent:
                ------------   ------------

    Option #1:  $30,282.00     $363,382.00

    Option #2:  $32,704.00     $392,453.00

                                 3. RENT
                                    ----
    3.  Minimum Base Rent: 
        -----------------
    Tenant shall pay Landlord an annual base rent of $247,312 in equal monthly
installments of $20,609.00 each due on the first day of each month during the
term hereof, said rent being payable without notice or demand.  The minimum
base rent for the first twenty four (24) months of the original ten (10) year
Lease term shall be based upon the following rent schedule:

  Existing Space:     20,000 s.f. @ $6.00 per s.f. per year, triple net
  New Office Space:   14,250 s.f. @ $7.25 per s.f. per year, triple net
  New Warehouse Space: 6,000 s.f. @ $4.00 per s.f. per year, triple net

    3.1  Adjustment to Minimum Base Rent: 
         -------------------------------
    The annual minimum base rent of ($247,312) provided for herein shall be





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paid as follows during the initial ten (10) year term hereof.

                            Monthly Rent:   Annual Rent: 
                            ------------    ------------
          Months 1 - 24      $20,609.00     $247,312.00 
          Months 25 - 48     $22,258.00     $267,097.00 
          Months 49 - 72     $24,039.00     $288,465.00 
          Months 73 - 96     $25,962.00     $311,542.00 
          Months 97 - 120    $28,039.00     $336,465.00

     3.1.a  If any installment of rent, additional rent or any other sum due
from Tenant shall not be received by Landlord within fifteen (15) days after
said amount is due, then Tenant shall also pay to Landlord a late charge equal
to five (5%) per cent of any such overdue amount.

     3.2  Security Deposit: 
          -----------------
    Tenant has paid a security deposit on behalf of Landlord in the amount of
$8,236.00 which shall be held by Landlord as security for the faithful
performance by Tenant of all terms, covenants and conditions of the Lease to
be kept and performed by Tenant during the term hereof.  If Tenant defaults
with respect to any provision of this Lease, including, but not limited to the
provisions relating to the payment of rent, Landlord may (but shall not be
required to) use, apply or retain all or any part of this security deposit for
the payment of any rent or any other sum in default, or for the payment of any
amount which Landlord may spend or become obligated to spend by reason of
Tenant's default, or to compensate Landlord for any other loss or damage which
Landlord suffers by reason of Tenant's default.  If any portion of said
deposit is so used or applied Tenant shall, within five (5) days after written
demand therefore, deposit cash with Landlord in an amount sufficient to
restore the security deposit to its original amount and Tenant's failure to do
so shall be a default under this Lease.  Landlord shall not be required to
keep this security deposit separate from its general funds, and Tenant shall
not be entitled to interest on such deposit.  If Tenant shall fully and
faithfully perform every provision of this Lease to be performed by it, the
security deposit or any balance thereof shall be returned to Tenant (or at
Landlord's option, to the last assignee of Tenant's interest hereunder) within
ten (10) days following expiration of Lease term.  In the event of termination
of Landlord's interest in this Lease, Landlord shall transfer said deposit to
Landlord's successor in interest.

                   4.  COMMON AREA MAINTENANCE EXPENSE
                       -------------------------------

    4.  It is the intent of both parties that the minimum rentals herein
specified shall be absolutely net to Landlord throughout the term of this
Lease, and that Tenant shall pay its proportionate share of all costs,
expenses, and obligations of every kind relating to the maintenance,
management and general up-keep of the Common Areas and the exterior premises

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(more fully described below) which may arise or become due during the term
hereof.  Landlord shall be indemnified by Tenant against such proportionate
costs, expenses, and obligations.  In furtherance thereof, Tenant shall pay as
additional rent, without demand therefore and without set off or deduction, it
proportionate share of expenses and charges as set forth in Section 4.1 below.

    4.1    Tenant shall pay to Landlord its Proportionate Share of the
Project's operating cost.  The "Project's Operating Cost" means the total cost
and expense incurred in operating and maintaining the common areas,
hereinafter defined, actually used or available for use by Tenant and the
employees, agents, servants, customers, and other invitees of Tenant excluding
only items of expense commonly known and designated as carrying charges, but
specifically including without limitation, utility expenses for lighting and
or watering the landscaping, personal property taxes and assessments on the
common area improvements and equipment, premiums on fire and extended
insurance coverage, vandalism, insurance and plate-glass insurance for the
common areas; maintenance, repair and cleaning of common area pavement and
mechanical equipment repair, maintenance, and cleaning of the common area
structure including floors, ceiling, roof, sky lights, gardening and
landscaping repairs, traffic and parking line painting, fighting, sanitary
control, removal of snow, common area trash, rubbish, garbage, and other
refuse, depreciation on machinery and equipment used in such maintenance, the
cost of personnel to implement such services, to direct parking, and to police
the common areas, and ten percent (10%) of all the foregoing costs to cover
administrative and overhead costs.

    As part of the Common Area Expenses described in Section 4.1 above,
Landlord agrees to keep all buildings and improvements and equipment on, in or
appurtenant to the property including all alterations and additions insured
against loss or damage by fire and all extended  coverage casualties in such
companies as the Landlord may select, for the full, fair insurable value
thereof The policies for such insurance shall be made and taken in the name of
the Landlord as an additional insured party with loss thereunder payable to
the Landlord and/or Mortgagee.  Such policy or policies shall be deemed to be
and remain in the possession of the Landlord or Mortgagee.

    4.2  Tenant's Proportionate Share:
         -----------------------------
    Tenant's Proportionate Share of the Project's operating cost, based on
Tenant's proportionate square footage of rentable space within the project,
shall be computed on the basis of a period of twelve consecutive calendar
months as designated by Landlord and estimated payments toward the same shall
be made by Tenant in twelve equal installments in advance on the first day of
each calendar month in an amount to be established by the Landlord.  Within
sixty (60) days after the end of each twelve (12) month period, Landlord shall
furnish to Tenant a C.P.A. prepared statement showing the Project's operating
cost for the preceding period and any adjustments to be made as a result
thereof.  In the case of a deficiency, Tenant shall promptly remit the amount
of such deficiency to Landlord. In the case of a surplus, Landlord shall apply

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said surplus to payments next falling due from Tenant under this Section 4.2.

    4.3  Annual Common Area Maintenance (C.A.M.) Budget:
         ----------------------------------------------
    The annual C.A.M. budget for the leased premises is $22,942.50. Tenant
agrees to pay to Landlord monthly installments of $1,911.88 towards the C.A.M.
budget.  Tenant further agrees to pay any C.A.M. shortages as described in
Section 4.2 above.

    "Common Areas" means all areas, space, equipment, and special services
provided for the common or joint use and benefit of the tenants or occupants
of the Project, or portions thereof, their employees, agents, servants,
customers, and other invitees, including without limitation, parking areas,
access roads, driveways, retaining walls, landscaped areas, truck service bays
or tunnels, loading docks, pedestrian malls, courts, stairs, ramps and
sidewalks, comfort and first-aid stations, washrooms and parcel pick-up
stations.

                                 5.  USE
                                     ---
     5.  Use:
         ---
     The premises shall be used only for the purposes of light manufacturing,
assembly, warehousing, receiving, storing, shipping and selling products,
materials and merchandise made and/or distributed by Tenant and for such other
lawful purposes as may be incidental thereto.  Tenant shall, at its own cost
and expense, obtain any and all license and permits necessary for such use. 
Notwithstanding the foregoing, the premises shall not be used for any purpose
which would violate local zoning restrictions or declarations or covenants
affecting the premises.

    5.1  Restrictive Covenants: 
         ----------------------
    Landlord will prepare restrictive covenants for filing against the real
property prior to commencement of construction.  Prior to recording, the
restrictive covenants will be submitted to the Tenant for its review and
approval which shall not be unreasonably withheld.  Tenant agrees that the
real property, the improvements and its interest in this Lease shall be
subject to the restrictive covenants upon their recordation and further agrees
to execute whatever documents are reasonably necessary to effectuate the
subordination of this Lease to the restrictive covenants.

                                6. TAXES
                                   -----

    6.  Taxes: 
        -----
    Tenant agrees to pay, as additional rent and before they become
delinquent, all real and personal taxes (both general and special), water and

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sewage rents, assessments or governmental charges (hereinafter collectively
referred to as "taxes") lawfully levied or assessed against the premises or
any part thereof, provided, however, Tenant may, at its sole cost and expense,
dispute and contest the same, and in such case, such disputed items need not
be paid until finally adjudged to be valid so long as the validity or the
amount thereof is contested by Tenant in good faith and in accordance with
Utah State law.  At the conclusion of such contest, Tenant shall pay the items
contested to the extent that they are held valid, together with all liens,
court costs, interest and penalties relating thereto.  Proration of said
payments by Tenant shall be made when necessary for the first and last years
of the lease term or any extensions thereof This covenant shall survive the
expiration of this Lease, for a period not greater than one year.

    6.1  Tax Notices: 
         ------------
    Landlord shall provide Tenant copies of the "property valuation and tax
notice" covering the premises each year as they are issued by the Salt Lake
County Treasurer and of any other tax notices immediately upon their receipt
by Landlord.  Tenant shall notify Landlord of any proposed contest by Tenant
of the valuation, amount of the tax or legality thereof prior to the deadline
for filing the necessary protest, appeal or petition.  Any such contest by
Tenant must be timely made and may be made in the name of Landlord or Tenant,
or both, but if the name of the Landlord is used therein, Landlord shall be
notified thereof at least five (5) days prior to the commencement of the
proceeding.  If requested by Tenant, Landlord shall actively participate in
any such contest, but Tenant shall be entitled to any refund of any tax,
penalty, or interest thereon which may have been paid by Tenant or by
Landlord, and reimbursed by Tenant to Landlord.  Landlord is to be notified in
advance in writing of the intention of Tenant to make such contest.

    6.2  Personal Property Tax: 
         ---------------------
    Tenant shall be liable for all taxes levied against Tenant's personal
property and trade fixtures on or about the premises, including, but without
prejudice to the generality of the foregoing, shelves, counters, vaults, vault
doors, partitions, fixtures, machinery, plant equipment, and if any such taxes
on Tenant's property or trade fixtures are levied against Landlord, and if
Landlord pays the same, Tenant, upon demand, shall repay to Landlord the taxes
so levied against Landlord.

    6.3  Other Taxes: 
         -----------
    Nothing herein contained shall be construed as requiring Tenant to pay any
franchise, excise, corporate, estate, inheritance, successorship, capitol levy
or transfer tax of Landlord growing out of, or connected with, this Lease, or
Landlord's right in the building, or any income, excess profits, or revenue
tax upon the income of the Landlord. Provided, however, that in any case where
a tax (other than an income tax) may be levied, assessed or imposed upon
Landlord for the privilege of renting or leasing the demised premises or which

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is based upon the rental revenue derived therefrom, Tenant shall pay to
Landlord as additional rent hereunder the amount of said tax, but in no event
shall the Tenant be obligated to pay an amount greater than that which would
be payable if the demised premises were the only asset of the Landlord.

    6.4  The Redevelopment Agency of West Valley City has agreed to make
certain incentives available to the Landlord and Tenant in order to induce the
Landlord to construct the improvements within the West Valley City
redevelopment area and to induce the Tenant to locate its business within said
improvements.  The inducements will likely be in the form of rebates on
personal and real property taxes assessed against the premises and the
personal property of Tenant as set forth in the letter of the Redevelopment
Agency dated January 14, 1988 which is attached hereto as Exhibit "D" and
which is by reference incorporated herein (hereinafter referred to as the
"Letter").

    6.4.a   As between Landlord and Tenant it is understood and agreed that
the total amount of the incentives provided by the Redevelopment Agency shall
be the property of Tenant and shall be assigned to Tenant as long as Tenant is
in possession of the premises under the terms of this Lease and is not in
default of any of the terms, conditions or agreements contained herein. Both
parties agree to use their best efforts to pursue the Redevelopment Agency of
West Valley City for the incentives.  This Lease and the obligations of
Landlord and Tenant hereunder shall in no way be subject to or conditioned
upon the performance of the Redevelopment Agency in delivering the inducements
agreed upon in the Agreement for Disposition of Land nor upon the amount of
the inducements actually delivered by the Redevelopment Agency.

                       7.  MAINTENANCE AND REPAIR
                           -----------------------

    7.  Tenant's Responsibilities: 
        --------------------------
    Any and all improvements which may be erected or placed on the Real
Property at any time during the term of this Lease shall be kept and
maintained in good order and repair and replaced where necessary by Tenant at
its sole cost and expense.  The Tenant's maintenance obligation shall include,
but not be limited to, HVAC systems, interior plumbing and interior electrical
systems, windows, glass, doors, interior walls, finish work, floors, floor
coverings, fixtures and appliances.  Tenant shall also comply at its sole cost
and expense with all laws, ordinances, orders, regulations, rules and
requirements of every kind and nature whether they relate to ordinary or
extra-ordinary, structural or nonstructural additions, changes, repairs or
alterations to the premises made necessary by Tenant's use. Notwithstanding
the items described above, Landlord will maintain the common areas of the
property as described in Section 4 and will bill Tenant for its proportionate
share.



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    7.1  Landlord's Responsibilities: 
         ----------------------------
    Notwithstanding the provisions of the immediately preceding paragraph,
Landlord shall be responsible for the maintenance of the building's structural
integrity and structural components including brickwork, exterior sewage
systems and drains, exterior plumbing and exterior electrical at its sole cost
and expense.  In addition, Landlord shall be responsible for replacement of
the roof, asphalt parking surfaces, concrete pavements and driveways in the
event that repairs and maintenance can no longer reasonably maintain their
integrity and their utility.  However, "Tenant's Proportionate Share" of those
items of routine maintenance required by the roof, the exterior walls, the
asphalt parking surfaces and the driveways (i.e. re-striping, sealing,
patching, snow removal, sweeping) shall continue to be the responsibility of
the Tenant as described in Section 4. 1.

    7.2  Rights to Enter: 
         ----------------
    Upon prior notice the Landlord and its agents shall have the right to
enter into and upon the Real Property or any part thereof at all reasonable
hours for the purpose of examining the same or making such repairs or
alterations therein as may be necessary for the safety and preservation
thereof.  In case of the neglect or default of the Tenant in making the same,
the Landlord may do so after written notice to the Tenant (except that no
notice shall be required in case of emergencies) during said term or after its
expiration and all the costs and expenses incurred thereon, together with
interest shall be repaid by the Tenant to the Landlord according to the
provisions of Section 19.

     7.3  Warranties: 
          ----------
     Landlord shall assign a new construction warranties to Tenant upon
Tenant's occupancy of the premises.  Said assignment shall include the general
contractor's one year guarantee and the roof warranty and/or guaranty.

    7.4  Preventative Maintenance: 
         ------------------------
    Tenant shall enter into a regularly scheduled preventative
maintenance/service contract with a maintenance contractor for servicing all
heating and air conditioning systems and equipment within the premises.  The
service contract must include a services suggested by the equipment
manufacturers within the operation/maintenance manual and must become
effective within thirty (30) days of the date Tenant takes possession of the
premises.  All guarantees/warranties provided with the heating and air
conditioning systems will be recognized by Landlord within this program.

                     8.  NET LEASE; NO ABATEMENT
                         -----------------------
    8.  This Lease is intended, and is hereby declared, to be a "net" lease,
it being the intention of the parties hereto that the Landlord shall have and

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enjoy the rent herein reserved to it without deduction therefrom.  Nothing
herein contained shall be construed so as to require the Tenant to pay or be
liable for any gift, inheritance, estate, franchise, income, profit, capital,
or similar tax, or any other tax in lieu of any of the foregoing, imposed upon
the Landlord, or the successor or assigns of the Landlord, unless such tax
shall be imposed or levied upon or with respect to rents payable to the
Landlord hereunder in lieu of real estate taxes upon the premises.

    8.1     No abatement, diminution, or reduction of the fixed rental or
other charges payable by the Tenant under this Lease shall be claimed by or
allowed to the Tenant for any inconvenience, interruption, cessation, or loss
of business, or otherwise caused directly or indirectly by any present or
future laws, rules, requirements, orders, directions, ordinances, or
regulations of the United States of American or of the State, County, or City
government or any other municipal, government, or lawful authority whatsoever
or by priorities, rationing, or curtailment of labor or materials or by war or
any matter or things resulting therefrom or by any other cause or causes;
except if otherwise specifically provided in this Lease.  It is understood
that the Landlord is not entitled to retain rent by the Tenant and also to
retain the proceeds of any rent insurance that it might receive where both
cover the same periods of time.

                              9.  UTILITIES
                                  ---------

    9.  Not including its proportionate share of the Project's operating costs
as described in Section 4.1, Tenant shall also pay for its own water, gas,
heat, light, power, telephone and other utilities and services supplied to the
property together with taxes thereon.  Throughout the term of this Lease, the
Tenant shall, at its own cost and expense hire and provide for its own trash
removal.  The arrangements made shall comply with local ordinances for refuse
pick-up as to frequency and time, and shall not, to the best of Tenant's
knowledge, result in any violation of environmental standards.

                          10.  INDEMNIFICATION
                               ---------------

    10.  Landlord shall not be liable to Tenant or Tenant's employees, agents,
patrons or visitors, or to any other person whomsoever, for any injury to
person or damage to property on or about the premises, caused by the
negligence or affirmative acts of Tenant, its agents, servants or employees,
or of any other persons entering upon the premises under express or implied
invitation of Tenant, or caused by the building and improvements becoming out
of repair; or caused by leakage of gas, oil, water or steam or by electricity
emanating from the building, or due to any cause whatsoever, and Tenant agrees
to indemnify Landlord and hold it harmless from any loss, expense or claims,
including attorney's fees arising out of such damage or injury; except that
any injury to person or damage to property caused by the negligence or
affirmative acts including required repairs of Landlord shall be the liability

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of Landlord and not of Tenant, and Landlord agrees to indemnify Tenant and
hold it harmless from any and all loss, expense or claims, including
attorney's fees, arising out of such damage or injury.

    10.1  Landlord's Indemnification of Hazardous Waste: 
          ---------------------------------------------
    Landlord, as of the date of this Lease, agrees to hold Tenant harmless for
any current or present environmentally hazardous materials (EHM).  Landlord
further represents that as of the date of this Lease, there are no known EHM. 
However if during the term of this lease or any time after the expiration of
this Lease, if Landlord determines that Tenant has violated the hazardous
waste covenants described in Section 10.2, then Landlord has the right to have
Tenant remedy any damage caused by Tenant's negligence.

    10.2  Hazardous Waste: 
          ---------------
    In addition to the provisions of Section 10 Landlord and Tenant agree not
to cause or permit any hazardous material to be brought upon, kept or used in
or about the Project including the Leased Premises.  As used herein, the term
"hazardous material" is defined as any hazardous or toxic substance, material
or waste which now is or becomes regulated or restricted by any governmental
authority, the State of Utah, or the United States Government.  The term
hazardous material includes, without limitation, any petroleum products or by
products, asbestos, (in any form), chemicals, gases or any other material or
substance which upon exposure or ingestion may reasonably be anticipated to
cause a hazard to the health or safety of the anticipated occupation of, or
visitor to the premises or adjacent property.  In the event Tenant, in the
normal course of the operation of its business at the premises, as stated
herein, is required to use certain substances which may be considered
hazardous material, Tenant may in such event and notwithstanding the foregoing
provision, use such substances in its business operations.  Provided, however,
Tenant shall be solely responsible for the proper use and disposal of such in
compliance with all applicable laws and regulations and Tenant hereby agrees
to indemnify, defend and hold harmless Landlord and the premises with respect
to the use and disposal of such substances (both during and after the term of
the Lease).

                              11. INSURANCE
                                  ---------

    11.  During the term of this Lease, Tenant, at its sole cost and expense,
and as additional rent shall provide:

    a.  Public Liability Insurance: 
        ---------------------------
    Provide and keep in force in such form as the Landlord shall direct,
public liability insurance policies protecting the Landlord and Tenant against
all insurable risks in the amounts of not less than One Million
($1,000,000.00) Dollars in respect to any one accident or disaster and in the

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amount of not less than Five Hundred Thousand ($500,000.00) Dollars, in
respect to injuries to any one person.

    b.  Premiums to be Paid by Lessee: 
        ------------------------------
    All premiums and charges for all of said policies shall be paid by the
Tenant and if the Tenant shall fail to make any such payment when due, or
carry any such policy, the Landlord may, but shall not be obligated to, make
such payment or carry such policy, and the amount paid by the Landlord, with
interest thereon, shall be repaid to the Landlord by the Tenant on demand, and
all such amounts so repayable together with such interest, shall be considered
as additional rent payable hereunder, for the collection of which the Landlord
shall have all of the remedies in Section 26 herein or by law provided for the
collection of rent.  Payment by the Landlord of any such premium or carrying
by the Landlord of any such policy shall not be deemed to waive or release the
default of the Tenant with respect thereto.

    c.  Renewal of Insurance: 
        ---------------------
    Thirty (30) days prior to the expiration of such policy, the Tenant she
deliver a binder renewing such policy which binder shall provide that at least
thirty (30) days written notice of any change in or cancellation thereof shall
be given by the insurance company to the Landlord and Mortgagee.  The Tenant
shall promptly pay the premiums for renewal and deliver to the Landlord upon
request, a copy of the original policy, and if requested, a photo copy of a
canceled check evidencing payment thereof.

    d.  Compliance with Insurance Company Requirements: 
        -----------------------------------------------
    The Tenant shall not violate or permit to be violated any of the
conditions or provisions of any such policy, and the Tenant shall so perform
and satisfy the requirements of the companies writing such policies that at
all times companies of good standing satisfactory to the Landlord within
reason shall be willing to write and/or continue such insurance.

     e.  Collection of Insurance Monies: 
         ------------------------------
     The Tenant and the Landlord shall cooperate with each other in connection
with any insurance monies that may be due in the event of loss and the Tenant
shall execute and deliver to the Landlord such proofs of loss and other
instruments which may be required for the purpose of obtaining the recovery of
any such insurance monies.

    f.  Liability Policies - Coverage: 
        ------------------------------
    Liability policies specified in subsection "a." of this Section shall
cover that portion of the building and premises occupied by Tenant as well as
the sidewalks in front of or adjacent thereto.  A liability policy or policies
covering the Landlord and the Tenant as their interest may appear, but

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otherwise in the form hereinbefore provided, shall be deemed a compliance with
this covenant.

    g.  Waiver of Subrogation: 
        ---------------------
    Tenant shall at all times during the term hereof and at its cost and
expense, maintain in effect policies of insurance covering its trade fixtures,
merchandise and other personal property from, in, on, or upon the premises, in
an amount equal to their full replacement value, providing protection against
any peril included within the classification "Fire and Extended Coverage". 
Landlord shall not be liable to Tenant for any damage to any such property
from any cause, unless (1) such damage is due to Landlord's negligence or
wilful misconduct, and (2) such damage is caused by an occurrence which is not
an insurable hazard under the standard fire and broad form coverage insurance
which is required to be maintained by Tenant under the terms of this Section;
it being understood that it is not the intention of the parties that Landlord
be relieved from liability to Tenant for negligence contrary to any stature of
public policy of the State of Utah, but rather that Tenant avail itself of
available insurance coverage without subjecting Landlord to liability for
losses that are insurable by policies required under the terms of this
Section, and without subjecting Landlord to subrogation claims of any insurer.

                            12.  ALTERATIONS
                                 -----------

    12.  Tenant shall have the right, within the premises, at its own cost and
expense and in a good and workmanlike manner, to make alterations, additions
or improvements or erect, remove or alter partitions, or erect shelves, bins,
machinery and trade fixtures as it may deem advisable and to mark, paint,
drill into any surface, bore, cut, string wires, lay floor coverings and
install locks or bolts, provided (1) such acts do not adversely affect the
structure of the building, (2) Tenant restores the premises to their prior
condition (reasonable wear and tear excepted), (3) Tenant complies with all
applicable laws and governmental rules and regulations and (4) Tenant obtains
prior written approval of Landlord to any proposed alterations or additions
which approval shall not be unreasonably withheld.

    12.1    Notwithstanding anything to the contrary in this Lease (1) Tenant
is not required to remove any fixtures or other items installed by Landlord on
Tenant's behalf, and (2) Tenant shall have the right, unless in default under
the provisions of the Lease to remove any fixtures or other items installed by
Tenant (including any flat wire cable and carpet tile), provided Tenant
restores the premises to their condition prior to such installation,
reasonable wear and tear excepted.

                             13.  INSPECTION
                                  ----------

    13.  Landlord shall have the right to enter and inspect the premises at

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any time, on reasonable notice to Tenant, during normal business hours. 
During the period that is six (6) months prior to the end of the term hereof,
Landlord and Landlord's agents and representatives shall have the right to
enter the premises at any time during reasonable business hours on reasonable
notice to Tenant and at reasonable intervals for the purpose of showing the
premises to prospective purchasers or Tenants and shall have the right to
erect on the premises a suitable sign indicating the premises are available.

                     14.  ASSIGNMENT AND SUBLETTING
                          -------------------------

    14.  Tenant shall not have the right to assign this Lease or to sublet the
whole or any part of the premises without the prior written consent of
Landlord which consent shall not be unreasonably withheld.  Notwithstanding
the aforesaid, Tenant may assign this Lease or sublet the whole or any part of
the premises to any of its affiliates or subsidiaries (as defined in the
Internal Revenue Code of 1954, as amended) during the term hereof or any
extension hereof without the consent of the Landlord, provided Tenant notifies
Landlord of such assignment or subletting.  Notwithstanding any permitted
assignment or subletting, Tenant shall at all times remain fully responsible
and liable for the payment of the rent and additional rent specified herein
and for compliance with all of its other obligations under the terms,
provisions and covenants of the Lease unless otherwise agreed to in writing. 
Upon the occurrence of an "event of default" as hereinafter defined, if the
premises or any part hereof are then assigned or sublet, Landlord, in addition
to any other remedies herein provided, or provided by law, may, at its option,
collect directly from such assignee or subtenant all rents becoming due to
Tenant under such assignment or sublease and apply such rent against any sums
due to it by Tenant hereunder, and no such collection shall be construed to
constitute a novation or a release of Tenant from the further performance of
its obligations hereunder.

                      15.  FIRE AND CASUALTY DAMAGE
                           ------------------------

    15.  If the premises should be destroyed or damaged by fire, tornado or
other casualty, Tenant shall give immediate written notice thereof to
Landlord.

    15.1   If the premises should be totally destroyed by fire, tornado or
other casualty, or if they should be so damaged that rebuilding or repairs
cannot be completed within one hundred eighty (180) days after the date upon
which Landlord is notified by Tenant of such damage, this Lease shall
terminate and the rent shall be abated during the unexpired portion of this
Lease, effective upon the date of the occurrence of such damage.  The
determination as to whether or not the premises can be reconstructed within
one hundred eighty (180) days of the date of the notice of the casualty to
Landlord shall be made by an architect selected by Landlord who shall certify
to the parties within fifteen (15) days of the casualty whether or not the

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premises can be repaired within one hundred eighty (180) days of the date of
notice of such casualty to Landlord.

    15.2   If the premises should be damaged by fire, tornado or other
casualty, but only to such extent that rebuilding or repairs can be completed
within one hundred eighty (180) days after the date upon which Landlord is
notified by Tenant of such damage, this Lease shall not terminate, but
Landlord shall, at its sole cost and expense, proceed with reasonable
diligence to rebuild and repair the building and improvements to substantially
the same condition in which they existed prior to such damage, except that
Landlord shall not be required to rebuild, repair or replace any part of the
partitions, fixtures and other improvement which may have been placed in the
building by Tenant.  During the reconstruction period, there shall be an
abatement of rent and additional rent due Landlord.  Additional time for
completion of said repairs shall be added equal to any delays in the repairs
caused by acts of God, inclement weather, strikes, boycotts or any other
causes beyond the control of Landlord and not due to any act or omission on
its part.  In the event that Landlord should fail to complete such repairs and
rebuilding within one hundred eighty (180) days after the date upon which
Landlord is notified by Tenant of such damage (plus any additional time due to
delays caused by acts of God, etc.) Tenant may, at its option, terminate this
Lease by giving Landlord no less than thirty (30) days written notice of
termination.
                            16.  CONDEMNATION
                                 ------------

    16.  If the whole or any substantial part of the budding or the land
should be taken for any public or quasi-public use under governmental law,
ordinance or regulation, or by right of eminent domain, or by private purchase
in lieu thereof, this Lease shall terminate and the rent shall be abated
during the unexpired portion of this Lease, calculated as of the date when the
Tenant must surrender possession of the premises.  Tenant waives all rights to
exercise any and all options to extend the lease term and specifically agrees
to make no claims against condemnation or purchase proceeds payable to
Landlord

    16.1   If less than a substantial part of the building or the land shall
be taken for any public or quasi-public use under any governmental law,
ordinance or regulation, or by right of eminent domain, or by private purchase
in lieu thereof, this Lease shall not terminate, but the rent payable
hereunder during the unexpired portion of the Lease shall be reduced to such
extent as may be fair and reasonable under all of the circumstances.

    16.2   In the event of any such taking or private purchase in lieu
thereof, Tenant shall be entitled to recover only with respect to its trade
fixtures, personal property and moving expenses. Tenant waives all rights to
exercise any and all options to extend the lease term and specifically agrees
to make no claim against condemnation or purchase proceeds payable to
Landlord.

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    16.3   Tenant shall have the right to make a separate claim to the
condemning authority for any and all damages Tenant incurred as a result of
such taking.

                            
                            17.  HOLDING OVER
                                 ------------

    17.  Should Tenant, or any of its successors in interest, hold over the
premises or any part thereof, after the expiration of the term of the Lease,
unless otherwise agreed in writing, such holding over shall constitute and be
construed as tenancy from month to month only, at a rental rate equal to the
last month's rent of the term for the first thirty (30) days of holdover,
thereafter the holdover rent shall be 150% of the rental payable for the last
month of the term of this Lease.  The inclusion of the preceding sentence
shall not be construed as Landlord's permission for Tenant to hold over.

                          18.  QUIET ENJOYMENT
                               ---------------

    18.  Landlord covenants that it now has, or will acquire before Tenant
takes possession of the premises, good title to the land.  Landlord represents
and warrants that it has full right and authority to enter into this Lease and
that Tenant, upon paying the rental herein set forth and performing its other
covenants and agreements herein set forth, shall reasonably and quietly have,
hold and enjoy the premises for the term hereof without hindrance or
molestation.

         19.  PERFORMANCE OF OBLIGATIONS BY TENANT AND LANDLORD
              -------------------------------------------------

    19.  In any case where either party shall pay or be compelled to pay any
sum of money or do any act which shall require the expenditure or payment of
any sum by reason of the failure of the other party to perform any one or more
of the terms, covenants, conditions or agreements herein contained, the
failing party shall immediately repay the same to the other party upon demand,
provided the failing party is notified in writing prior to making such
payment, and in default thereof then the sums so paid, together with all
interest, reasonable costs and damages, shall or may be added or deducted as
additional or decreased rent on the next installment of rent becoming due on
the next rent day, or on any subsequent rent day fixed by this Lease, and
shall for all purposes whatsoever be deemed to be rent due and payable or
deductible on such rent day, or on any subsequent rent day, and shall be
payable or deductible as such, but it is expressly covenanted and agreed
hereby that payment by the Landlord of any such sums of money or the doing of
any such acts shall not be deemed to waive or release the default in the
payment or doing thereof by Tenant of the right of the Landlord to recover
possession, at Landlord's election, of the premises by reason of Tenant's
default with respect to any such payment or act, in accordance with Section

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26.

                          20.  LANDLORD'S LIEN
                               ---------------

    20.  In the event of a default under this Lease, Landlord shall have, in
addition to any other remedies herein or by law, all rights and remedies
available under applicable Utah law. Any statutory lien for rent is not hereby
waived.

                             21.  MORTGAGES
                                  ---------

    21.  If the land is subject to any mortgage prior to the commencement
date, then Landlord shall procure a non-disturbance agreement from the
Mortgagee in standard form which provides that so long as Tenant is not in
default hereunder, its possession shall not be disturbed by mortgagee and the
mortgagee shall not name Tenant as a defendant in a foreclosure suit. Tenant
shall at any time after the commencement date execute an instrument required
by any mortgagee for the purpose of subordinating this Lease to the lien of a
mortgage in consideration for a non-disturbance agreement from the mortgagee
in standard form which provides that so long as Tenant is not in default
hereunder, its possession will not be disturbed by the mortgagee and the
mortgagee will not name Tenant as a defendant in a foreclosure suit.  For the
purposes of this paragraph the word mortgage and/or mortgagee shall include
any other equivalent designations including, but not limited to, Deed of
Trust, Trustee, etc.  Upon request, Tenant will execute an estoppel
certificate and subordination agreement in a form suitable to Landlord's
lender.

                          22. MECHANIC'S LIENS
                              ----------------

    22.  Landlord shall have no authority, express or implied, to create or
place any lien or encumbrance of any kind or nature whatsoever upon, or in any
manner to bind, the interest of Landlord in the premises or to charge the
rental payable hereunder for any claim in favor of any person dealing with
Tenant, including those who may furnish materials or perform labor for any
construction or repairs, and each such claim shall affect and each such Hen
shall attach, if at all, only to the leasehold interest granted to Tenant by
this instrument.  Tenant covenants and agrees that it will pay or cause to be
paid all sums legally due and payable by it on account of any labor performed
or materials furnished in connection with any work performed on the premises,
on which any lien is or can be validly and legally asserted against its
leasehold interest in the premises or the improvements thereon and that it
will save and hold Landlord harmless from any and all loss, cost or expense
based on or arising out of asserted claims or liens against the leasehold
estate or against the rights, titles and interest of the Landlord in the
premises or under the terms of this Lease based upon Tenant's failure to pay

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such sums.  If Tenant disputes an amount charged by such a lienor but admits
that it authorized the work to be done, Tenant may dispute the claim provided
that it posts the requisite bond necessary to remove the lien.

                               23. NOTICES
                                   -------

    23.  Each provision of this instrument or of any applicable governmental
law, ordinance, regulation and other requirements with reference to the
sending, mailing or delivery of any notice or the making of any payment by
Landlord to Tenant or with reference to the sending, mailing or delivery of
any notice or the making of any payments by Tenant to Landlord shall be deemed
to be complied with when and if the following steps are taken:

    a.  All rent and other payments required to be made by Tenant to Landlord
hereunder shall be payable to Landlord at the address hereinbelow set forth or
at such other address as Landlord may specify from time to time by written
notice delivered in accordance herewith.

    b.  Any notice or document required or permitted to be delivered hereunder
shall be deemed to be delivered whether actually received or not when
deposited in the United States Mail, postage prepaid, Certified or Registered
Mail, Return Receipt Requested, addressed to the parties hereto at the
respective addresses set out opposite their names below, or at such other
address as they have theretofore specified by written notice delivered in
accordance herewith:

     Landlord:       Valley American Investment Company 
                     Attn: William C. Roderick 
                     P.O. Box 186 Midvale, UT 84047

     Tenant:         Gentner Communications Corporation 
                     Attn: Russell D. Gentner 
                     1825 Research Way 
                     West Valley City, UT 84119

     With Copies To:  Mr. Jeff Fillmore, Esq. 
                      Parsons, Behle, & Latimer 
                      201 South Main Street # 1800 
                      Salt Lake City, UT 84111

    23.1  If and when included within the term "Landlord", as used in this
instrument, there are more than one person, firm or corporation, all shall
jointly arrange among themselves for their joint execution of such a notice
specifying some individual at some specific address for the receipt of notices
and payments to Landlord.  All parties included within the term "Landlord"
shall be bound by notices given in accordance with the provisions of this
paragraph to the same effect as if each had received such notice.


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<PAGE>
                        24. SURRENDER OF PREMISES
                            ---------------------

    24.  The Tenant shall, on or before the last day of the lease term hereof
or upon the sooner termination of such term, peaceably and quietly leave,
surrender and yield up unto the Landlord the land and the improvements in good
order, condition and state of repair, reasonable wear and tear excepted,
together with all alterations, additions and improvements, including air
conditioning equipment, machinery and ducts which may have been made upon the
premises, except movable furniture, movable personal property or movable trade
fixtures at the expense of the Tenant.  All property removable pursuant to the
provisions of this Section shall be removed by the Tenant on or before the
date hereinabove in this Section indicated and all property not so removed
shall be deemed abandoned by the Tenant to the Landlord.  Where any personal
property is removed, any damage to the premises will be repaired by the
Tenant.

    24.1    All buildings, additions, improvements, equipment and
appurtenances on or in the premises at the date hereof and which may be
erected on or in the premises during the term hereof including all
alterations, changes, additions, and improvement at any time placed upon the
premises by the Tenant, as well as all fixtures and articles of personal
property attached to or used in connection with the premises, are and shall be
deemed to be and become part of the realty and the sole and absolute property
of the Landlord at the end or other termination of this Lease and shall be
surrendered to the Landlord; provided, however, that movable furniture,
movable personal property and movable trade fixtures put in at the expense of
the Tenant or any subtenant, which pursuant to the provisions of this Section
may be removed by the Tenant, shall not be deemed to be attached to the
leasehold nor the property of, nor surrendered to, the Landlord.

                          25. EVENTS OF DEFAULT
                              -----------------

    25.  The following events shall be deemed to be events of default by
Tenant under this Lease:

    a.  Tenant shall fail to pay any installment of rent or additional rent
when due.

    b.  Tenant shall become insolvent, or shall make a transfer in fraud of
creditors, or shall make an assignment for the benefit of creditors.

    c.  Tenant shall file a petition under any section or chapter of the
Federal Bankruptcy Code, as amended, or under any similar law or statute of
the United States or any State thereof, or Tenant shall be adjudged bankrupt
or insolvent in proceedings filed against Tenant thereunder.

    d.  A receiver or trustee shall be appointed for all or substantially all

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of the assets of Tenant.

    e.  Tenant shall desert or vacate the premises; provided, however,
desertion or vacation of the premises shall not be deemed to be an event of
default if Tenant is not in arrears in the payment of rent and Landlord can
obtain fire and liability insurance covering the premises.

    f.  Tenant shall fail to comply with any term, provision or covenant of
this Lease, and shall not cure such failure within thirty (30) days after
written notice thereof to Tenant or in the case of non-payment of rent or
additional rent, 15 days after written notice to Tenant.

    25.1   With respect to curing any default listed in this Section or
elsewhere herein, it is understood that if a cure cannot be completed with the
time period for cure referred to herein, despite best efforts of the Tenant,
using all possible speed, then it will be deemed sufficient if Tenant has
begun to cure within said time period; provided, however, that Tenant shall
continue to use its best efforts and all possible speed to cure such default
and does, in fact, effect a cure within a reasonable period of time.

                              26. REMEDIES
                                  --------

    26.  Upon the occurrence of any such events of default described in
Section 25 hereof and following the written notice to Tenant to cure said
events of default, Landlord shall have the option to pursue any one or more of
the following remedies without any notice or demand whatsoever:

    a.  Terminate this Lease, in which event Tenant shall immediately
surrender the premises to Landlord, and if Tenant fails so to do, Landlord
may, without prejudice to any other remedy which it may have for possession or
arrearages in rent, enter upon and take possession of the premises and expel
or remove Tenant and any other person who may be occupying such premises or
any part thereof, and Tenant agrees to pay to Landlord on demand the amount of
all loss and damage which Landlord may suffer by reason of such termination,
whether through inability to relet the premises on satisfactory terms or
otherwise.

    b.  Enter upon and take possession of the premises and expel or remove
Tenant and any other who may be occupying such premises or any part thereof,
and relet the premises and receive the rents therefor; and Tenant agrees to
pay to Landlord on demand any deficiency and reasonable expenses that may
arise by reason of such reletting.

    c.  Enter upon the premises and do whatever Tenant is obligated to do
under the terms of this Lease, and Tenant agrees to reimburse Landlord on
demand for any reasonable expenses which Landlord may incur in effecting
compliance with Tenant's obligations under the Lease, and Tenant further
agrees that Landlord shall not be liable for any damages resulting to the

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Tenant from such action, unless caused by the gross negligence of Landlord.

    d.  In case suit shall be brought for recovery of possession of the
premises, for the recovery of rent or any other amount due under the
provisions of this Lease, or because of the breach of any other covenant
herein contained on the part of Tenant to be kept or performed, and a breach
shall be established, Tenant shall pay to the Landlord all other reasonable
expenses incurred therefor, including attorney fees and costs of Court.

Pursuit of any of the foregoing remedies shall not preclude pursuit of any of
the other remedies herein provided or any other remedies provided by law, nor
shall pursuit of any remedy herein provided constitute a forfeiture or waiver
of any rent due to Landlord or of any damages accruing to Landlord by reason
of the violation of any of the terms, provisions and covenants herein
contained.  No waiver by Landlord of any violation or breach of any of the
terms, provisions and covenants herein contained shall be deemed or construed
to constitute a waiver of any other violation or breach of any of the terms,
provisions and covenants herein contained. Landlord's acceptance of the
payment of rental or other payments hereunder after the occurrence of an event
of default shall not be construed as a waiver of such default.  Forbearance by
Landlord to enforce one or more of the remedies herein provided upon an event
of default shall not be deemed or construed to constitute a waiver of such
default.

                           27.  GOVERNING LAW
                                -------------

    27.  This Lease and Building shall be governed by and construed in
accordance with the laws of the State of Utah, and the building shall be
constructed to meet all applicable laws, codes and regulations whether local
or national in origin.

                             28.  BROKERAGE
                                  ---------

    28.  Each party hereto represents that no agent or finder, other than
Consolidated Realty Group, who represents Tenant and Roderick Realty Services
who represents Landlord (hereinafter referred to as Agents) negotiated or
arranged this Lease, and that, apart from those due to agents no fees or
commissions are due anyone for the procurement hereof, and each party agrees
to indemnify and hold the other harmless from and against any other expenses
which the party so indemnified may incur by reason of claims of any other
person, firm or corporation claiming any brokerage commission, finder's fee or
similar compensation based upon any alleged negotiations or dealing with such
indemnifying party, contrary to the foregoing representation.

    Landlord and Tenant agrees to pay Consolidated Realty Group a real estate
advisory fee of $10,000 payable 50% upon lease execution and 50% upon Tenant's
occupancy of the building.  The fee is be split $5,000 payable by Landlord and

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$5,000 payable by Tenant as previously agreed.

                             29.  RECORDING
                                  ---------

    29.  The parties undertake, at the request of either of them, to execute a
memorandum of this Lease in recordable form.  If either party shall record
this Lease or a memorandum of this Lease, the party so recording shall be
liable for the entire cost thereof.

                30.  PRE-OCCUPANCY EXPANSION/CONTRACTION
                     -----------------------------------

    30.1  Pre-Occupancy Expansion/Contraction: 
          -----------------------------------
    Provided that Tenant is not in default on their current Lease and only if
space is available in the new addition, Tenant shall have the one time option
to expand or reduce their initial space requirement by up to 3,000 square
feet.

                           31. EXPANSION SPACE
                               ---------------

     31.  Expansion Space Options: 
          -----------------------
     Landlord hereby grants Tenant a right of first refusal on the 5,760
square feet immediately contiguous to Tenant's current and added location, as
highlighted as Space "A" on Exhibit "E".  Landlord may lease such space to
other tenants for any time increment, provided that such increment be no more
than four (4) years.  Landlord also grants Tenant a right of first refusal on
all other second generation space in the project as it becomes available, and
during the term of this Lease agrees to lease all other building space in
increments of no more than seven (7) years. (Second Generation Space is
defined as any vacant space that becomes available after the initial newly
constructed space.)

    31.1  Expansion Space Terms: 
          ----------------------
    All rights of first refusal shall be offered to Tenant no earlier than six
and no later than four months prior to the date the expansion space is
available for Tenant's occupancy.  Tenant may, at its sole option, waive this
timing requirement.  Tenant shall have ten (10) calendar days to exercise
their rights of first refusal on any such space.  All notices between the
parties shall be in writing.  The rental rates for all expansion space shall
be offered at prevailing fair market values and shall be negotiated between
the parties.




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    31.2  Expansion Space Tenant Improvement Allowance: 
          ---------------------------------------------
    Tenant shall receive an improvement allowance of $19.00 per rentable
square foot of newly constructed office space on any expansion space accepted
by Tenant, provided that Tenant extends the lease term on such expansion space
to cover a period totaling ten years from the date of occupancy.  If Tenant
extends the term for a period covering less than ten years, this improvement
allowance shall be reduced accordingly.  For example, if Tenant leases
expansion space of 5,000 square feet for a period of five years, then the
tenant improvement allowance will be 5,000 s.f. x (5/10 x $19.00) = $47,500. 
This $19.00 rate will be adjusted up or down in the same proportion that the
rental rate for such expansion space bears to the original base rate specified
in Section 3.

                              32.  PARKING:
                                   --------

    32.  Parking:
         -------
    Landlord will provide free surface parking (other than Common Area Fees)
to Tenant based on the following:

        Up to 40,000 s.f.    5 stalls per 1,000 s.f. or 200 stalls 
        Above 41,000 s.f.    Tenant shall receive 2.45 stalls per 1,000
                                rentable square feet

          33.  HEATING, VENTILATING AND AIR CONDITIONING (HVAC)
               ------------------------------------------------

    33.  HVAC: 
         ----
    Landlord shall design and provide an HVAC system capable of complying with
the following:

    a.  Heating. Ventilation and Air Conditioning:

         1.  Heating systems shall be capable of maintaining 72 degrees
             Fahrenheit in all spaces at ASHRAE design winter conditions.

         2.  Cooling systems shall be capable of maintaining 75 degrees
             Fahrenheit in a spaces at ASHRAE design summer conditions.
             Conditioned air shall be delivered through an overhead sheet
             metal duct system with a series of control boxes.  These boxes
             shall be arranged to provide separate zones for interior and
             exterior spaces.

        3.  Ventilation systems shall be designed to provide a minimum of 20
            CFM fresh outside air per person in accordance with the latest
            ASHRAE Performance Guide standards for office occupancies.  System

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            noise levels shall not exceed an N.C. of 38 - 40.

    b.  Cost Allocation:
        ---------------
    As part of Landlord's build out specification Landlord shall be
responsible to provide and install the following:

        1.  2 individual 7.5 ton roof top units.
        2.  Space heaters as required in the new warehouse area.
        3.  H.V.A.C. Engineering and design costs.

    Tenant shall be responsible for all other H.V.A.C. costs as part of the
Tenant Improvement Allowance described in Section 1.7.

                          34.  BUILDING SIGNAGE
                               ----------------

    34.  Building Signage:
         ----------------
    Landlord will provide a monument sign base for a Tenant supplied sign. 
Landlord has reviewed Tenant sign graphics and approves of such.  Any
additional signage desired by Tenant must be approved by Landlord.

    34.1  Project Signage:
          ---------------
    Landlord agrees that it will not name the building or the project after
any of Tenant's competitors.

    34.2    Tenant shall not place or suffer to be placed or maintained on any
exterior door, wall, or window of the Premises, or elsewhere in the Project,
any sign, awning, or canopy, or advertising matter or other thing of any kind,
and will not place or maintain any decoration lettering, or advertising matter
on the glass or window or door of the Premise; without first obtaining
Landlord's written approval.  Tenant further agrees to maintain such sign,
awning, canopy, decoration, lettering, advertising matter, or other things as
may be approved in good condition and repair at all times.  Landlord, may, at
Tenant's cost, remove any item erected in violation of this Section.

                           35.  MISCELLANEOUS
                                -------------

    35.  Words of any gender used in this Lease shall be held and construed to
include any other gender, and words in the singular number shall be held to
include the plural, unless the context otherwise requires.

    35.1  The terms, provisions, covenants and conditions contained in this
Lease shall apply to, inure to the benefit of, and be binding upon, the
parties hereto and upon their respective heirs, legal representatives,
successors and permitted assigns, except as otherwise herein expressly

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provided.

    35.2  The captions are inserted in this Lease for convenience only and in
no way to define, limit, or describe the scope or intent of this Lease, or any
provision hereof, nor in any way affect the interpretation of this Lease.

    35.3  Whenever this Lease refers to the prior consent or approval (written
or oral) by Landlord or Tenant, Landlord and Tenant, respectively, agree that
such consent or approval shall not be unreasonably withheld or delayed.

    35.4  This Lease may not be altered, changed or amended except by an
instrument in writing signed by Landlord and Tenant.

    35.5  If this Lease is terminated for any reason other than default of the
Tenant, all liabilities of the parties shall be adjusted as of the effective
date of the termination.  Any termination hereof by reason of a default of
Tenant shall not affect any obligation or liability of Tenant under this Lease
which accrued prior or subsequent to the effective date of termination, and
all such obligations and liabilities of Tenant shall survive such termination.

    35.6  The terms and conditions contained herein are not independent
covenants, but are mutually dependent upon each other.

    35.7  If any of the terms of this Lease, or the application thereof to any
person or circumstances shall, to any extent, be invalid or unenforceable, the
remainder of this Lease, or the application of such term to persons or
circumstances other than those as to which it is invalid or unenforceable,
shall not be affected thereby and each term of this Lease shall be valid and
enforceable to the fullest extent permitted by law.

    35.8  The parties signing this lease have obtained corporate, partnership
or individual authority to execute the lease on behalf of the entity. 
Furthermore, the individuals are deemed to be officers of the appropriate
entities with proper authority.

    35.9  Landlord hereby reserves the right at any time to make changes,
alterations or additions, including the building and leasing of additional
commercial space, in or on the building in which the Premises are contained,
anywhere in the Project, except in the space occupied by the Tenant, unless
prior approval is obtained by Tenant.  Tenant shall not, in such event, be
allowed the right to terminate this Lease for injury or inconvenience
occasioned thereby.  However, Tenant shall be allowed to claim damages for
injury or unreasonable inconvenience occasioned by Landlord's negligence in
connection therewith.

    35.10  All common areas in the Project which Tenant may be permitted to
use and occupy are to be used and occupied under a revocable license, and if
any such license be reasonably revoked or if the amount of such areas be
reasonably changed or diminished, Landlord shall not be subject to any

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liability nor shall Tenant be entitled to any compensation or diminution or
abatement of rent nor shall reasonable revocation or diminution of such areas
be deemed constructive or actual eviction.  All common areas and other
facilities in or about the Project shall be subject to the exclusive control
and management of Landlord.  Landlord shall have the right to construct,
maintain, and operate fighting and other facilities on all said areas and
improvements; to police the same; to change the arc, level, location, and
arrangement of parking areas and other facilities; to restrict parking by
Tenants, their officers, agents, and employees; to close all or any portion of
said areas or facilities to such extent as may be legally sufficient to
prevent a dedication thereof or the accrual of any right to any person or the
public therein; and to close temporarily all or any portion of the parking
areas or facilities to discourage non-customer parking.  However, in no event
will Landlord restrict the number of parking spaces to a number less than
provided for in Section 32, nor will any parking space ever be located on a
site non-contiguous to the building described in Section I.O. Landlord shall
operate and maintain the common areas in such a manner as Landlord in its
discretion shall determine, shall have full right and authority to employ and
discharge all personnel with respect thereto, and shall have the right,
through reasonable rules, regulations, and/or restrictive covenant promulgated
by it from time to time, to control use and operation of the common areas in
order that the same may occur in a proper and orderly fashion.

                            36. FORCE MAJEURE
                                -------------

    36. If either party hereto shall be delayed or hindered in or prevented
from the performance of any act required hereunder by reason of strikes,
lockouts, labor troubles, inability to procure materials, failure of power,
restrictive governmental laws or regulations, riots, insurrection, war or
other reason of a like nature beyond the reasonable control of the party
delayed in performing work or doing acts required under the terms of this
Lease, then performance of such act shall be excused for the period of the
delay and the period for the performance of such act shall be extended for a
period equivalent to the period of such delay.

    IN WITNESS WHEREOF, Landlord and Tenant have respectively signed and
sealed this Lease on the dates set forth below.

LANDLORD:                             VALLEY AMERICAN

                                      BY: /s/  William C. Roderick
                                         ----------------------------------
                                      ITS:  Vice President
                                      DATE: March 18, 1996





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<PAGE>
TENANT:                               GENTNER COMMUNICATIONS CORPORATION

                                      BY:  /s/  David L. Harmon
                                         ----------------------------------
                                      ITS:  Chief Financial Officer
                                      DATE: February 26, 1996



STATE OF UTAH         )
County of Salt Lake   )

     On the 18 day of March, 199[6], personally appeared before me 
WILLIAM C. RODERICK, the signer of the foregoing lease who duly 
acknowledged to me that he executed the same.


   /s/   Notary Public
- - - ----------------------------
[ S E A L ]




STATE OF UTAH         )
County of Salt Lake   )

     On the 26th day of February, 199[6], personally appeared before me
David L. Harmon, the signer of the foregoing lease who duly acknowledged
to me that he executed the same.


   /s/   Notary Public
- - - ----------------------------
[ S E A L ]

                                EXHIBIT A

                                SITE PLAN


                            [Graphic Entitled
                 "Overall Development & Landscape Plan"
                           Depicting Site Plan]


                                EXHIBIT B



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<PAGE>
                             FLOOR PLAN - 1


                            [Graphic Entitled
                         "Phase One Floor Plan"
                          Depicting Floor Plan]

                                EXHIBIT B

                             FLOOR PLAN - 2


                           [Untitled Graphic
                         Depicting Floor Plan]



                                EXHIBIT C

                CONSTRUCTION DRAWINGS AND SPECIFICATIONS


                     TO BE ATTACHED AT A LATER DATE

                                EXHIBIT D

                          REDEVELOPMENT LETTER
                            JANUARY 14, 1988


[West Valley City Letterhead]                         [REDEVELOPMENT AGENCY]

                                                              HAND-DELIVERED

                            January 14, 1988

Dell S. Nichols
2444 S. Progress Drive
West Valley City, Utah  84119

Dear Dell,

   Pursuant to your request, the following is the understanding we have
reached with regard to the financial assistance provided by the Redevelopment
Agency of West Valley City for the project called "Gentner Electronics".

   The agreement for the disposal of land (ADL), as yet unsigned by the
parties, provides that the Agency will allocate to Dell S. Nichols 75% of the
tax increment accruing to the Agency from the "Gentner Electronics" project. 

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<PAGE>
The term of that allocation from the Agency to dell S. Nichols shall be 10
years.  In years one through five, the Agency is entitled to 100% of the tax
increment for the aforementioned project.  Dell S. Nichols will receive 75% of
that 100% allocation.  In years six through ten, the Agency is entitled to 80%
of the tax increment.  In those years Dell S. Nichols will receive 75% of that
80% figure.

   It is the further understanding of the Agency that Dell Nichols will assign
the tax increment amount to Gentner Electronics Corp. pursuant to a lease
agreement between the parties.

   If you have any questions with regard to this understanding, I am anxious
to be advised.  Thank you for your assistance in making the Redwood
Neighborhood Development Project area a viable and vital industrial park
project in West Valley City.

                                        Sincerely,


                                        /s/   Larry Catten

                                        Redevelopment Agency Administrator

LC:jm

cc:  Joseph L. Moore, Deputy Executive Director

              2470 South Redwood Road   West Valley City, Utah  84119
                           Phone:  (801) 974-5501

                                EXHIBIT E

                         EXPANSION SPACE, R.O.F.R.


                            [Graphic Entitled
                 "Overall Development & Landscape Plan"
                           Depicting Site Plan]




                                EXHIBIT F

                            LEGAL DESCRIPTION


                     TO BE SUPPLIED AT A LATER DATE


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<PAGE>
                         FIRST ADDENDUM TO LEASE

     This addendum is entered into this, 31st day of January, 1997, by and
between VALLEY AMERICAN INVESTMENT COMPANY, P.O. Box 186, Midvale, Utah 84047,
as Landlord; and GENTNER COMMUNICATIONS CORPORATION, of 1825 West Research
Way, West Valley City, UT 84119, as Tenant.

     Whereas, both Tenant and Landlord have executed a uniform lease agreement
dated the 26th day of February, 1996.

     In accordance with Section 2 of the uniform lease agreement, the term of
the lease shall be ten years.  This Addendum shall ratify the commencement
date of the original lease term as November 1, 1996.  The lease shall expire
on October 31, 2006.

     Whereas this addendum shall also verify that during the course of
construction Landlord incurred expenses over and above the tenant improvement
allowance in the amount of $35,470.  In accordance to Section 1.7 of the lease
agreement, Tenant shall pay for any improvements above the allowance.

     Whereas, Landlord and Tenant have agreed to amortize the tenant
improvement cost over-runs over the term of the lease.  Tenant agrees to pay
to Landlord $35,470.00 at 11% over ten years, which equates to a monthly
payment of $488.60.

     The monthly rent payment for November 1, 1996 through October 31, 1998
shall be as follows:

     Base Rent per Lease:         $20,609.00
     Amortized Cost Over-runs:    $   488.60
     C.A.M. Budget:               $ 1,912.00
                                  ----------

     Total Monthly Payment:       $23,009.60
                                  ==========

     In accordance with Section 3 of the lease, the Base Rent shall be
adjusted on November 1, 1998, November 1, 2000, November 1, 2002, and
November 1, 2004.

     Except as modified by the provisions of this Addendum, all terms,
conditions and provisions of the Lease shall remain unchanged and in full
force and effect.

                        SECOND ADDENDUM TO LEASE

     This addendum is entered into this, 30 day of April, 1997, by and between
VALLEY AMERICAN INVESTMENT COMPANY, P.O. Box 186, Midvale, Utah 84047, as
Landlord; and GENTNER COMMUNICATIONS CORPORATION, of 1825 West Research Way,

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<PAGE>
West Valley City, UT 84119, as Tenant.

     Whereas, both Tenant and Landlord have executed a uniform lease agreement
dated the 26th day of February, 1996, and a First Addendum to Lease dated the
31st day of January, 1997.

     Whereas, this addendum shall also verify that during the course of
construction Landlord incurred expenses over and above the tenant; improvement
allowance in the amount of $74,357.

     In accordance with Section 2 of the uniform lease agreement, the term of
the lease shall be ten years.  This Addendum shall ratify the commencement
date of the original lease term as November 1, 1996.  The lease shall expire
on October 31, 2006.

     Whereas this addendum shall also verify that during the course of
construction Landlord incurred expenses over and above the tenant improvement
allowance in the amount of $35,470.  In accordance to Section 1.7 of the lease
agreement, Tenant shall pay for any improvements above the allowance.

     Whereas, Landlord and Tenant have agreed to amortize the tenant
improvement cost over-runs over the term of the lease.  Tenant agrees to pay
to Landlord $35,470.00 at 11% over ten years, which equates to a monthly
payment of $488.60.

     Whereas, Landlord and Tenant have agreed to amortize the tenant
improvement cost over-runs over the term of the lease.  Tenant agrees to pay
to Landlord $74,357.00 at 11% over 115 months, which equates to a monthly
payment of $1,049.00.

     The monthly rent payment for April 1, 1997 through October 31, 1998 shall
be as follows:

       Base Rent per Lease:                               $20,609.00
       Amortized Cost Over-runs per First Addendum:       $   488.60
       Amortized Cost Over-runs per Second Addendum:      $ 1,049.00
       C.A.M. Budget:                                     $ 1,912.40
                                                          ----------
       Total Monthly Payment:                             $24,059.00


     In accordance with Section 3 of the lease, the Base Rent shall be
adjusted on November 1, 1998, November 1, 2000, November 1, 2002, and
November 1, 2004.

     Except as modified by the provisions of this Addendum, all terms,
conditions and provisions of the Lease shall remain unchanged and in full
force and effect.


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     Executed by the parties on the day and year first written above in Salt
Lake City, Utah.







                              Exhibit 13.1

                             Annual Report




                  Gentner Communications Corporation
                           1997 Annual Report












Harnessing the momentum of change

(Butterfly Graphic)
(overleaf of front cover)

                               Contents

Report to Stockholders


1997 - The Year in Review


Description of Business



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<PAGE>
Properties


Market for Common Equity and Related Stockholder Matters


Management's Discussion and Analysis of Financial Condition and Results
of Operations


Financial Statements

Single page with Words (CHANGE)
Single page with Words (CHANGE)
To the owners of Gentner Communications Corporation:

Fiscal 1997 represented a year of change for Gentner Communications.  We
restructured our organization, adding strength to our executive
management team.  This fine tuning enabled us to take a fresh look at our
organization, offer a different perspective and provide a diverse
approach to running our business.

Our culture is transitioning from a boutique manufacturing organization
to a highly specialized service provider and an innovative technology
company.  More than ever, we are focused on our customers, our markets,
our bottom line and what Gentner will look like in the new millennia.

Since our inception, our primary focus was on the broadcast
 market. 
Utilizing the same technology, in the late 1980's we expanded our
concentration on quality audio products into the teleconferencing arena.
When our reputation in the teleconferencing product area grew, many of
our product clients requested that Gentner provide conference calling
services, hence 1-800-LETS MEET(TM) was created.  Now, it is the fastest
growing division of our corporation.

Gentner is a company that is squarely focused on its core markets.  As
the Broadcast industry continues to evolve and experience convergence, Gentner
has adapted well to this new environment.  We have positioned 
ourselves to capture a fair share of the explosive teleconferencing
market with both products and service.  We continually challenge
ourselves to carefully consider all of our product offerings to ensure
we are placing our energy and resources on those things that have the
greatest growth potential and rate of return.  These strategies are
clearly taking effect as our broadcast sales increased 20% and teleconferencing
sales grew 29% during the past fiscal year over the prior year.  Revenue from
other product sales decreased by 10% during the same period - clearly reflecting
a shift in focus.

While we will retain the agility and responsiveness of our entrepreneurial 
roots,

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we are honing in on our core lines of business - teleconferencing products and
services, remote site control and telephone interface for broadcast.  This focus
enable us to effectively leverage our reputation, intellectual property and
distribution channels.

As an organization that has acquired an enviable list of prestigious clients as
represented throughout this document, we recognize that Gentner has been a best
kept secret in the marketplace.  It is now time to let the market know the power
of our solutions.

Going forward, each new venture at Gentner must pass our return on investment
model to ensure we are continually focused on consistent profitability.  Every
new product and service will be developed as a result of research validating
consumer demand.  This new discipline was put into effect in early calendar year
1997, with our market research for the Audio Perfect(TM) product line.  As a
result of our study, we developed products which were designed by our end user
dealers and consultants.

Our business plan for last fiscal year called for a sizable investment in sales,
marketing, facility expansion and returning to profitability by fourth quarter. 
We recognized the need to develop an infrastructure that would enable us to
support growth going forward.  We made a short term investment aimed at creating
long term growth and profitability.

As you read through this annual report, you will discover that we have
effectively accomplished our plan for 1997, with fourth quarter profitability of
$119,000 and annual sales growth of 17% compared to fiscal 1996.  Our investment
in sales and marketing has begun to provide a return and the new facilities
enables us to gain efficiencies while accommodating our anticipated growth.

There have been many successful initiatives in fiscal 1997.  The restructuring
of our senior management team and recruitment of new talent.  The introduction
of several new products and expansion of our international distribution.  All of
these efforts will inevitably fuel Gentner's success in fiscal 1998.

The most significant accomplishment for fiscal 1997, however, was perhaps our
ability to establish a plan, accomplish it and make the hard changes that 
Gentner had to make in order to move forward.

With record sales and a keen eye on managing operating expense, we have been 
able to navigate Gentner into profitability.  The task to achieve sustained
profitability and growth has begun.  Our newly added strength and clearly 
defined strategies will enable us to accomplish our corporation's purpose: to
provide a fair rate of return on investment to our shareholders.

Our plan for fiscal year 1998 has been developed and is underway.  We are
projecting $15.4 million in sales and $850,000 ($.11/share) in net profit.  We
will engage our total commitment and energy to realize these goals.


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Gentner Communications Corporation is a great organization that is getting even
better.  We are focused on clear goals, and we have instilled in all of our
associates a passion to accomplish them.  Never before has this organization 
been more poised to harness the momentum of change.



                                 Russell Gentner
                                 Chairman of the Board, President
                                 and Chief Executive Officer


September 26, 1997


                        1997 THE YEAR IN REVIEW

As a communications company that focuses on audio solutions, Gentner has
developed a core line of products and services which connect organizations that
are geographically separated.  This connection enables organizations to
communicate more efficiently, timely and cost effectively.  Our core lines of
business enable us to leverage our technological expertise and the sales 
channels which distribute them.

               Teleconferencing Products and Services

VISION:  Position the Gentner brand name as synonymous with mission critical
audio teleconferencing products and services.  [Picture of teleconference]

According to a recent article which appeared in USA Today, nearly one-third of
corporations in the United States are utilizing audio teleconferencing as a new
communication tool.

The teleconferencing products and services market is burgeoning.  The
International Teleconferencing Association (ITCA) reports that sales in calendar
year 1996 were over $5 billion for teleconferencing products and services.  In
North America alone, over five million teleconferencing calls took place.  In
addition, the ITCA estimates that revenue for 1997 should increase to nearly $7
billion in both product and service sales.  While video conferencing is on the
rise, audio conferencing continues to increase at a greater growth rate.

As organizations continue to search for greater cost and time efficiencies,
teleconferencing will continue to be utilized as one of the available 
solutions. However, to be accepted as a viable solution, the quality of the 
audio must be good and the delivery of the conference calling service must 
be excellent.

In the late 1980's, utilizing the same technology platform as our broadcast
products, Gentner expanded into the teleconferencing product environment.  Over
the past several years, we have built a strong reputation for enabling quality

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audio in mission critical applications such as boardrooms, courtrooms and
distance learning facilities.  Mission critical means, when the quality of audio
must be absolutely flawless.  This recognition for high quality audio enabled
Gentner to advance as one of the premier providers of mission critical audio
products.

In fiscal 1997, our sales for teleconferencing products increased by 29%.  We
anticipate that sales growth for our teleconferencing products will continue to
increase as the demand for high end installed products grows.  High end
installations are defined as boardrooms, hotel conference rooms, court rooms,
telemedicine environments, long distances learning applications and rooms with
complex audio systems.  Our distribution channel of over 600 dealers, 
integrators and consultants select Gentner equipment for these mission critical
installations.

Text Box Identifying Specific Clients:

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 
A&M Records . America West Airlines . American Airlines . Bell Atlantic . Boeing
 . Bristol Meyers . Burlington Northern . Coca Cola Corporation . Columbia Gas
Company . Cummins Engine . Davis, Polk, Wardwell . Gitano Jeans . Goldman Sachs
 . Hamilton . Honeywell . IBM . Intel . LDS Church . Marshalls Department Stores
 . Mayo Clinic . Morgan Stanley Capital Group . USAA . U.S. Bankruptcy Courts .
U.S. West Communications
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 

As a result of our reputation for providing quality teleconferencing products,
many of our clients turned to Gentner to provide conference calling service. 
Four years ago, we installed a conference calling service unit to accommodate ou
our customer's needs.  After extensive research, we realized the potential of 
this service sector and established what we believe to be a "best in class" 
conference calling division under the brand name 1-800-LETS MEET(TM).

Our 1-800-LETS MEET(TM) conference calling service has grown quarter over
quarter, with sales up by 94% from 1996.  Because of our reputation as a quality
audio company, Gentner has been recognized as a highly specialized conference
call provider.  When the call must be absolutely perfect and requires more hands
on attention, Gentner is often the provider of choice.  Our conference calling
expertise has been used in many of the same environments where our products have
been installed.

An example of this synergy is our program with the Federal Bankruptcy Court
System.  Almost four years ago, the Honorable James R. Grube of the U.S.
Bankruptcy Court of Northern District of California pioneered a new way for
attorneys to meet with judges to handle bankruptcy cases.  By enabling attorneys
and their respective clients to appear telephonically in the courtroom, Judge
Grube's visionary, new media of communication has saved the government literally
thousands of dollars in hard cost and time savings.  Under his guidance, Gentner
Court Conferencing(TM) was established to facilitate these telephonic

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appearances.  Today, attorneys, clients and judges conduct court sessions 
through Gentner's service.  We continue to see strong sales growth in this 
service sector and will build the commensurate infrastructure to support this 
core business.

Perhaps the most synergistic sales opportunity for Gentner is our ability to use
our existing dealer distribution channel to cross sell conference calling
service.  When our products are specified, many times they are used to
accommodate conference calls or augment the audio of video conferencing.  This
represents a great opportunity to cross sell our services.  We have established
an incentive program for our dealers to identify these opportunities to sell our
service.  The ability to provide both technology and service is a key
differentiation for Gentner in the audio manufacturing market.

As a result of our extensive experience in teleconferencing products, education
and service, several organizations have asked us to assist them in exploring
teleconferencing as an alternative communication media.  Through our
Communications Audit Process(TM), we work with organizations to explore ways of
improving overall communications and evaluate how they may save the travel time
and expense associated with face to face meetings.  In the later part of fiscal
1997, we established a team of communication consultants and have sent them to
organizations around the country to explore the feasibility of this service. 
Preliminary results hold promise for 1998.

In mid fiscal 1998, we will introduce a new line of products - the Audio
Perfect(TM) series.  This product is being developed based on feedback from the
end user audience to provide a series of solutions in one box, eliminating the
need to integrate multiple manufacturers.

Text Box Identifying Specific Clients:

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 
Amoco . Arthur Anderson . Ball State University . Bank of America . Capitol 
Group . Chevron . Chicago Board of Trade . Citicorp . Egleston Children's 
Hospital . Federal Express . GTE . General Electric . Jones, Day, Reavis & Poque
 . Jones, Waldo, Holbrook & McDonough . Kaiser Permanente . Capitol Group . 
Pacific Gas and Electric . Santa Fe Railroad . TRW . Texaco . Time Warner . 
University of North Carolina . University of Iowa . University of Oklahoma
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 
The Audio Perfect(TM) Series provides a breakthrough technology with its eight
channel Distributed Echo Cancellation, microphone and matric mixing 
capabilities. 
This product series is a one-box solution that was designed and requested by our
distributors and customers.

As Gentner Communications continues to seek real growth opportunities, we see 
the niche markets of our teleconferencing products and services as the greatest
potential for our organization.  Gentner is in an excellent position to provide
products, education and service solutions to this growing multi-billion dollar
consumer base.


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               Broadcast:  Telephone Interface & Site Control

Vision:  Make Gentner the dominant world-wide brand of radio and television
products that connect to a telephone line.

[Picture of broadcaster using Gentner Equipment]

Broadcast sales increased by 20% last fiscal year.  We continue to
introduce innovative products that meet the needs of this changing industry and
leverage our name brand recognition while expanding our distribution worldwide.

Telephone Interface

For nearly twenty years, Gentner has served the broadcast market with telephone
interface products that bring callers live "on-air" to millions of listeners. 
The Gentner name in the broadcast industry is synonymous with telephone 
interface products.  Our prestigious clientele includes:  CNN, WGN and the major
networks, to name a few.

Our focus during fiscal 1997 was to develop a new line of CE compliant digital
telephone hybrids, enabling worldwide distribution.  This new product family was
introduced at the National Association for Broadcasters (NAB) Trade Show in
April, 1997 - the largest worldwide forum for this industry.  The new digital
hybrid products began shipping in June, 1997 -with orders far exceeding our
expectations.

This new product line is used for radio and television shows, allowing the
audience to call in and talk with the talk show host.

The changing worldwide broadcast environment is ripe for opportunities.  By
understanding the dynamics of the industry, we have positioned ourselves to 
seize international growth by establishing a network of dealers throughout 
Europe, Asia, Australia, Latin America, Africa and new markets in North America.
In late calendar year 1997, we will be conducting marketing research in the 
broadcast market to garner closer intelligence of this industry, its changing 
dynamics and identify future opportunities for Gentner Communications.

Remote Site Control:

In November 1996, Gentner began to ship its GSC3000 Remote Site Control product
family.  This Product resides at the remote transmitter site for radio and
television stations.  It serves as an off site engineer that can, for example,
turn the generator on in the event of a power failure, adjust settings and let
the engineers know there is a problem at a specific site.

Text Box Identifying Specific Clients:
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 
Aim International, Nampa, ID . Arbor Radio, Ann Arbor, MI . Christian TV 
Network, Largo, FL . EMI/FEMA/NETC, Emmitsburg, MD . Imagine Publishing/Radio, 
\Brisbane,

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CA . Jones Radio Network, Englewood, CO . KCXL Radio, Liberty, MO . KPDX TV,
Portland, OR . 
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 

This new product is easy to install, simple to use and is scaleable to meet the
specific size of sites involved - whether one or twenty one.

In April 1997, the GSC3000 was also a featured product at the NAB trade show. 
While the predecessor product, the VRC2000, was sold almost exclusively to the
radio market, this new product received a great deal of attention from the
television group.  This exposure to a broader buying audience has increased
sales, and we anticipate that sales for fiscal 1998 will continue at a strong
pace.  Additionally, the GSC3000 has been well received by the international
community.

By fall 1997, Gentner will ship the voice interface feature of the GSC 3000,
which enables the end user to interact with the system via the telephone.  This
feature, has been much awaited for by the broadcast community and should boost
sales of this product even further.

While our fiscal 1997 sales goals were fairly aggressive, the results eclipsed
our expectations.  We sold more than three times the sales volume over the prior
fiscal year.  Broadcast remains a profitable foundation for our growth.

                            Other Markets

Over the years, Gentner has established a full line of products that were either
tangential to our core competencies or profitable in their own right.  More
recently, Gentner has made a strategic decision to eliminate those products 
which are no longer key to the organization's core competencies or whose growth
potential is no longer congruent with our financial model.  As a result, several
products have been eliminated and several others have been placed under
consideration.

As a result of this strategy, we have seen a reduction of 10% in our other 
income category from fiscal 1996.  Through a very methodical process, we have 
been slowly eliminating our dependence on other income revenue streams and
transitioning to greater growth from our core lines of business.  This is
evidenced by our continued sales revenue growth in Broadcast by 20% and
Teleconferencing by 29%, respectively, compared to fiscal 1996.  Our projections
for fiscal 1998 are to see a continued decrease in our other income category and
a continuing increase in our core competencies.

Included in the other income category is our Assistive Listening Systems product
line.  With the American with Disabilities Act and the aging baby boomer
population, sales of our Assistive Listening Systems increased 40% as compared
to fiscal 1996.

The enactment of the Americans with Disabilities Act, which requires four 
percent

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of public seating to have assistive listening devices, is creating a large 
market for Gentner's Assistive Listening Systems product line.

Text Box Identifying Specific Clients:

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 
Four Corners Broadcasting, LLC, Durango, CO .  KPTV-TV, Portland, OR . KPWR
Radio, Burbank CA . Paxson Communications of Milwaukee, WI . Salt Lake City
Department of Transportation .  WJJA TV, Oakcreek, WI . WKOW TV, Madison, WI.
WPTA, Mechanicsburg, PA . WRAW/WRFY Radio, Reading, PA . WRTK the Radio Center,
Youngstown, OH . WTGI TV, Philadelphia, PA . WTWB TV, Morroeville, PA . WXTV
Channel 41, Secaucus, NJ 
 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 

During fiscal 1997, we focused our attention on providing OEM customers with 
this product line, thus increasing the sales channels beyond our traditional 
dealer network.  The Company's sales to the OEM market for this product have 
grown as evidenced by our addition of two new alliances during fiscal 1997.

With the installation of our teleconferencing products in many public settings,
the sale of Assistive Listening Systems is a natural progression to ensure the
conference room is complete with quality audio and equal access to those who are
hearing impaired.

                       Operational Highlights

Fiscal year 1997 was a year for building an infrastructure that would support 
our future operations and growth at Gentner Communication Corporation.  We 
expanded our facility, invested in factory automation, and streamlined many of 
our operating procedures to create greater efficiency.

During the third quarter, Gentner completed a facilities expansion with the
addition of 20,400 square feet, bringing the total facility to 40,400 square
feet.  Utilizing modular office furniture, we created an open environment for
greater team participation.  Additionally, we integrated modern telephony and
computing tools to improve our communication responsiveness to customers.  All
of these enhancements were implemented to create effectiveness in our 
production, communications and teamwork.

The building expansion created needed space for sales & marketing, research and
development, finance team resources, a communications center, a conference call
center, training rooms, and the manufacturing facility.

We made many changes to our production factory during the year as well.  We
installed a complete Surface Mount Technology (SMT) production line, designed 
and implemented automated product test and quality control processes, and 
focused on improving our shop floor layout and material flow.  Each enhancement 
was designed to increase quality and improve our overall gross profit margin.


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The installation of our SMT production line rewarded Gentner by reducing
inventory, increasing product reliability and enhancing production velocity. 
This tool added the needed capacity to produce the latest SMT- based Gentner
products, enabling us to produce products in minutes that once took us hours to
manufacture.

Gentner's technology resources invented new processes to improve product 
testing. Many automated systems are now in place, also adding to our production 
velocity and product quality.  We reorganized the production floor to improve 
material flow.  New raw material and finished goods stockrooms have also been 
brought on line.  These changes have also increased our production 
efficiencies.  Our product distribution center was also redesigned to improve 
customer responsiveness and increase capacity.

Gentner continues to focus on driving our factory inputs, using an advanced,
computerized Manufacturing Resource Planning (MRP) system.  This tool, together
with increased focus on vendor relations, has contributed to our successful
inventory management.  Our goal is to constantly challenge the model of what we
produce and how we produce it to optimize every efficiency possible.

(Picture of Company Facility)

                          On the Horizon

Our corporation has undergone many positive changes during fiscal 1997.  While
we restructured our organization to eliminate specific positions, we also
recruited new talent to our team.  The addition of new senior management team
members brings over sixty years of collective experience across a diverse group
of industries and geographic areas.  This experience is serving Gentner
exceptionally well in our determination to advance our organization to the next
level.

(Picture of Senior Management Team)

We have actively recruited additional key personnel to build a more diverse
organization - thus broadening our perspective and adding new disciplines to our
team.

(Pictures of teleconferencing products, 800 Lets Meet Sales and Operations Team,
Broadcast team and products)

Our core businesses grew over 25.5% during fiscal 1997.  Our ancillary lines of
products are now under careful consideration to ensure they are providing the
maximum results in both sales and profits.  

(Pictures of a sampling of Gentner ad campaigns and literature)

We have established a professional, internal ad agency to heighten the quality
of our marketing campaigns, research and image advertisement.  

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(Pictures of Ticker Tape Gentner Trading Symbol)

To encourage associate (employee) ownership, we have established an employee
stock purchase program.  This allows our associates to purchase shares of stock
through payroll deduction, with the Company making a matching contribution of 
ten percent.

(Picture of employee on the phone)

We have introduced sales and client retention incentive programs to our
associates to ensure that they are focused on client satisfaction.

(Picture of classroom setting)

In early fiscal 1998, the doors to Gentner University will open to educate our
associates and our dealers on all products and services.  

(Picture of Gentner employees)

We have established a profit sharing program for all employees through our
matching 401(k) contributions. 



                      DESCRIPTION OF BUSINESS


OVERVIEW

Gentner Communications Corporation (the "Company") is a corporation organized
under the laws of the State of Utah in 1983.  The Company develops, markets, and
distributes technologically advanced products and services, for the
teleconferencing and broadcast markets.  Up to 1991, the Company's primary
business was the sale of studio and transmitter related equipment and 
accessories to broadcast facilities.  Since then, the Company has applied its 
core digital technology gained in the broadcast telephone interface market to 
the development of products for the teleconferencing market.  In addition, the 
Company offers aconference calling service.  The Company now sees an opportunity
to position itself as the supplier of premium, mission critical audio 
teleconferencing products and services used in conference rooms, distance 
learning facilities and court rooms and is engaged in expanding its 
infrastructure, marketing, selling and product development capabilities to 
pursue this vision.

In 1991, using the technological expertise gained in the Broadcast market, the
Company commenced marketing products specifically developed for the
Teleconferencing market.  The Company's teleconferencing products, which are 
used to conduct audio teleconferences, allow users to speak into microphones and
listen through speakers without the cut-offs, distortion, and noise associated
with traditional speakerphones, providing for a more natural, two-way
conversation among participants.  The Company's product lines consist of 
high-end

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teleconferencing systems installed in conference rooms, distance learning
facilities, and court rooms.  In fiscal 1993, the Company commenced a conference
calling service operation, branded 1-800 LETS MEET(TM).  This service is 
marketed to geographically separated corporations, and organizations requiring 
mission critical conference calling services.  Sales of products and services to
the Teleconferencing market accounted for 39% of the Company's total sales 
during fiscal 1997.

The Company initially began selling its products to the telephone interface
portion of the Broadcast market.  This product line is primarily used to put
callers on the air for call-in talk shows.   Additionally, the Company sells
remote site control products that help engineers monitor and control remote
transmitter sites for the broadcast market.  During fiscal year 1997, the
broadcast market accounted for 44% of the Company's total sales. 

The Company also has other products and services that account for the remaining
17% of sales which include assistive listening products, product repair and 
other products. 

BUSINESS STRATEGY

The Company's teleconferencing strategy is to provide teleconferencing solutions
that help businesses facilitate group communication, avoid wasted travel time,
solve problems through group input, and get faster results.  In addition to
growing its conference calling service, the Company plans to continue developing
and manufacturing teleconferencing equipment for conference rooms, distance
learning facilities and courtrooms.  Sales growth is expected to come through
growth in conference calling service and  new equipment introductions,
enhancements, and increased international distribution.  During fiscal 1997 the
Company made a significant investment in the sales and marketing area, hiring a
Vice President of Sales and Marketing, expanding its marketing efforts, and
hiring additional sales people in order to pursue this market.  In addition, the
Company has been developing a new line of products under the brand name Audio
Perfect(TM) that it plans to begin shipping in the second quarter of fiscal year
1998.

The Company believes that there is a significant growth potential in the U.S.
Teleconferencing market.  According to statistics published by the International
Teleconferencing Association, Teleconferencing sales grew 24% during calendar
year 1996, with sales of both teleconferencing equipment and conferencing
services at $1.95 billion for calendar 1996.  While the past is at best only an
indicator of what the future might hold, the Company plans to allocate a large
portion of its resources to develop and market teleconferencing products and
services to this market. Due to the larger market size and potentially greater
competition, the marketing of Teleconferencing products and services will
continue to require substantial marketing resources and research and development
efforts.  To this end, the Company will continue to seek highly trained and
experienced personnel.  Additionally, the Company has aggressively focused on
research and development to create an expanded and technologically superior line

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of products. The Company's strategy continues to be to sell its 
teleconferencing products through national and international dealers who focus 
on integrating teleconferencing facilities for organizations.  

The Company is building a direct sales staff to sell the Company's conference
calling service directly to end users through telemarketing.  The Company
believes that it has the potential to market and sell both its products and
services by partnering with key dealers in the selling process.  The Company
believes its strategic differentiation is that it can provide higher quality
products and services as a package for organizations who require premium, 
mission critical solutions. 

BROADCAST PRODUCTS

In Broadcast, the Company continues to market and develop new products and
enhancements for telephone interface and remote site control product lines.  The
Company has developed a strong brand awareness in this market, and has
experienced continued sales growth.  However, growth in this market is limited
by the small size of the market.  Thus, the Company's strategy is to use the
broadcast portion of its business as a foundation to grow its share of the 
larger teleconferencing market.

The Company feels it is critical to stay focused on its core competencies by
concentrating on the teleconferencing and broadcast markets by eliminating any
product line that does not fit strategically.  The Company has stopped selling
audio processing equipment, and will evaluate each product offering that does 
not fit in its core competency.

TELECONFERENCING PRODUCTS

In 1991 the Company developed a line of audio teleconferencing products that is
used in conference rooms, distance learning facilities and court rooms by
applying the digital technology developed in its broadcast telephone products. 
These products are used to provide high quality audio teleconferencing, 
replacing and improving audio quality as compared to a speakerphone or in 
conjunction with video teleconferencing products and sound systems.  Gentner 
products are used, for example, by the North Carolina school system as the audio
portion of their video teleconferencing system in distance learning classes.  
Another example is the Federal Bankruptcy Courts in San Jose which use Gentner 
products for audio teleconferencing and sound reinforcement.  Gentner has become
well known for these types of products.

Recently the Company has introduced a new line of products under the brand name
of Audio Perfect(TM) that the Company plans to begin shipping during the second
quarter of fiscal 1998.   These new products use a new digital technology called
Distributed Echo Cancellation(TM) and incorporate several functional devices
including automatic microphone mixing, echo cancellation, audio routing, audio
equalization, audio processing and remote control into a single device.  Here-to
fore, these functions required a separate electronic device to perform each

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function.  The Company believes that its Audio Perfect(TM) product line will
provide its customers with significantly better performance with less equipment
and complexity.  The Company believes there is a much larger market for its new
line of teleconferencing products.

When these products are used with Gentner's conference calling service, the
Company can deliver its customers a total audio teleconferencing solution. The
Company believes that by providing both product and services to its customers,
it can provide a significantly better solution than its competitors.  

CONFERENCE CALL SERVICE

In February 1993, the Company launched its new conference call service to 
provide customers with a complete offering of teleconferencing solutions.  This
service can connect many different telephone callers worldwide with superior 
service and excellent clarity.  While not a significant part of the Company's 
overall sales in the past, the Company saw significant growth from this segment 
during the last fiscal year as a result of hiring a  dedicated sales force to 
target businesses that need  mission critical conference calling services.  The 
Company believes a significant opportunity exists in pursuing vertical markets 
for its products and services in conference rooms, distance learning facilities 
and courtrooms. By providing premium mission critical products and services, the
Company believes these vertical markets will be highly responsive to a higher 
level of quality and service. 

TELEPHONE INTERFACE PRODUCTS

The Company's telephone interface product line offers a full selection of
products ranging from simple single line couplers to computerized multiple line
systems used in talk show programs.  An example of the computerized multi-line
system is the Company's TS612 product, which it began selling in fiscal 1995. 
Using the TS612, broadcast talk show hosts can screen calls, transfer calls to
on-air, conference several callers together, or monitor which callers are on 
hold and which are talking to the show's producer.  The Company has recently
introduced a new line of digital hybrids that replace other products.  These new
products offer improved performance, and the Company has experienced excellent
market acceptance of these new products.

REMOTE SITE CONTROL PRODUCTS  

These products help broadcasters fulfill legal requirements for monitoring and
controlling their transmitters, which are often located in remote areas such as
on mountain tops.  The Company's products provide monitoring of conditions at 
the transmitter site and permit users to make adjustments to transmitters by 
remote control.  The components offer users the option of monitoring and making 
such adjustments either via desktop computer or via touch tone telephones.  In 
fiscal year 1997, the Company began shipping the new GSC3000 product series.  
These new hardware and software products are designed to augment the Company's 
existing transmitter site control products by permitting station managers to 
monitor

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several different sites using the same equipment.  The GSC3000 has enjoyed 
betterthan expected sales performance.

ASSISTIVE LISTENING PRODUCTS

In March 1993, the Company began shipping its new Assistive Listening System
("ALS") products.  These products provide a specially-processed audio signal for
the hearing impaired in such facilities as houses of worship, schools, theaters,
cinemas, etc.  The equipment processes the program's audio for maximum clarity. 
Then the audio is transmitted over a limited range to small, portable receivers
provided by the facility to patrons to listen to the program.  Since introducing
the ALS line, the Company has seen demand for its ALS products steadily increase
as a result of additional products and increased emphasis in distribution and
marketing.  In fiscal 1995, the Company expanded its ALS product line with the
introduction of an additional multi-channel receiver, a battery charger and 
other accessories.  During fiscal 1996, the new PTX portable transmitter was
introduced, and in fiscal 1997 both the TX37 transmitter and the RX1 receiver
were re-engineered for better performance.  ALS products and accessories
currently are one of the Company's fastest growing product lines.

TELECONFERENCING MARKET

Sales to the audio segment of the teleconferencing market represented
approximately 39% of total Company sales in fiscal 1997.  The audioconferencing
segment is a part of the total teleconferencing market, which also includes the
Videoconferencing market segment.  Although the Company designs and manufactures
audio equipment that works in connection with the videoconferencing segment, it
specializes in the audio portion of the teleconferencing market.

Products and services sold by all companies to the teleconferencing market
include terminal equipment, telephone bridge equipment, conference calling
services, and transmission services.  The Company's primary focus is in the
terminal equipment and conference calling service categories.  According to
industry sources, the calendar 1996 U.S. market for all teleconferencing 
products and services exceeded $5.1 billion.  Industry sources also reported 
that this market has been growing at an average rate of 27% over the past three 
years, and is expected to grow to $6.4 billion in calendar 1997.

The Company believes that the audioconferencing segment of the teleconferencing
market provides its most significant sales growth potential for the future, and
plans to continue providing solutions to businesses and other end users through
the sale of teleconferencing equipment and services.

BROADCAST MARKET

For fiscal 1997, the Broadcast market, which is served by telephone interface 
and remote site control products, was still the Company's largest revenue 
source, generating  44% of the Company's total sales.  The Company's products 
are targeted and sold to radio and television stations, broadcast networks, and 
other

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professional audio customers.

The Company believes that the worldwide market for its telephone interface and
site control products is approximately $40 million.  The Company believes it has
a worldwide market share of approximately 15%. 

The United States is considered to be the predominant segment of the worldwide
Broadcast market, with over 12,000 radio and television stations in operation. 
The Company estimates that this market will grow at an average annual rate of
approximately 5%.  The Company's products are sold mainly to renovate older
studios and/or replace obsolete equipment.  Although little new broadcast 
station construction has taken place in the past several years in the United 
States (due to the limited number of frequencies that become available at any 
given time), the Company believes that it will continue to experience growth in 
the Broadcast market as product innovations allow broadcast stations to upgrade 
their existing equipment and reduce operating costs.  Furthermore, the Company 
has noted a recent organizational shift in the Broadcast industry, as an 
increasing number of stations have come under consolidated ownership and/or 
management control. The Company expects this trend to continue over the next few
years.  Due to its newer telephone interface and site control products' features
that provide centralized monitoring and control of several facilities, the 
Company believes its broadcast products are especially well-suited to provide 
sales growth during this industry trend.

The Company has traditionally concentrated its efforts on selling its products
in the United States.  However, while the United States is considered to be the
largest single Broadcast market segment in the world, it is believed to 
represent only 20% of the total worldwide Broadcast market.  The 
international Broadcast market is expanding due largely to government 
deregulation and privatization of stations and due to an expansion in the number
of frequencies available for commercial use.  In 1991, the Company began 
focusing efforts on expanding its international market share and has 
appointed dealers located in key areas around the world (see "Description of 
Business -Distribution").  Such overseas Broadcast
sales accounted for 19% of all sales by the Company to the Broadcast market. 
Sales of all products to all foreign markets, which includes both export sales
and sales intended for overseas installation, principally in Canada, Europe, and
Asia, accounted for 13% of total sales in both fiscal 1996 and 1995.




OTHER MARKETS

In addition to the Broadcast and Teleconferencing markets, the Company's 
products are sold into other markets, particularly the Professional Audio 
market.  The Professional Audio market includes sound contractors who install 
audio and other equipment in churches, schools, auditoriums and other large 
facilities.  The Company sells its products into this market generally through 
the same manufacturers' representatives and dealers that represent the Company 
in the

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Teleconferencing market.  The products sold to this market are primarily the
telephone interface products, teleconferencing products and ALS products.

MARKETING AND SALES

Teleconferencing systems sales efforts are primarily aimed at audio/visual
equipment dealers and consultants.  These companies in turn provide audio
solutions to end users in applications such as corporate board room audio and
video systems, distance learning classrooms and facilities, telemedicine
examination and diagnosing systems, court rooms, etc.  The Company reaches these
end users through a sales representative and dealer network that regularly
interacts with potential end users in the target market.  The Company actively
participates alongside this network at communication forums, trade shows, and
industry promotions.  The Company intends to reinforce those efforts and 
increase sales by remaining involved in the distribution network and to offer 
training through Gentner University (an educational setting where dealers can 
obtain training on Gentner products).  

Historically, the Company relied on its existing sales force and outside
representative network to sell its conference calling service.  During the past
fiscal year, the Company hired a direct sales staff in an effort to increase
sales.  In addition, the Company is beginning to conduct its Communication Audit
Process(TM) to help organizations determine if they are using conference calling
as effectively and efficiently as possible.
 
The Company's Telephone Interface and Remote Site Control product sales efforts
focus on domestic and international sales of these products through a worldwide
network of dealers.  Such efforts have included a combination of product
catalogs, trade shows, telemarketing, direct mail, trade advertising, fax on
demand, an Internet world wide web page, direct selling, and the creating of
Gentner University.  The Company will continue to support dealers with product
information, brochures, and data sheets, and has been increasing its activities
aimed at garnering the attention of end users.  The Company will continue to
sponsor sales promotions to encourage dealers to feature the Company's products,
and will also focus more on end user interaction efforts.  The Company will also
continue to exhibit its products at selected high profile industry trade shows
to ensure that the Company's products remain highly visible to dealers and
broadcasters.

TECHNICAL SUPPORT

Technical support, which is generally provided over the telephone, provides
timely, interactive help to customers needing operational or technical 
assistance with their products.  The Company's technical support team regularly 
communicates with the Company's engineering and manufacturing groups to ensure 
up-to-date information is being given to the customers and to provide feedback 
to the Company that can be useful in initiating product improvements.  The 
technical support team provides a vital role in solving customer problems and 
building customer confidence.  The Company has focused its resources to ensure 
that strong 
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technical support to its customers remains a competitive advantage.  In 
addition, the technical support team generated approximately $133,000 in revenue
for the Company for repairs not covered under warranty.

WARRANTY AND SERVICE

The Company provides a one year warranty on its products which covers both parts
and labor.  The Company, at its option, repairs or replaces products that are
defective during the warranty period if the proper preventative maintenance
procedures have been followed by customers.  Repairs that are necessitated by
misuse of such products or that are required outside the warranty period are not
covered by the Company's warranty.

In case of a defective product, the customer typically returns it to the
Company's facility in Salt Lake City, Utah.  The Company's service personnel 
then replaces or repairs the defective item and ships it back to the customer. 
Generally, all servicing is done at the Company's plant, and the Company charges
its customers a fee for those service items that are not covered by warranty. 
The Company does not offer its customers any formal written service contracts.

DISTRIBUTION

Teleconferencing Products.  
- - - -------------------------

The Company sells its teleconferencing systems and components through 
independent audio/visual equipment dealers and consultants.  The Company also 
uses a national network of independent sales representatives.  Currently, most 
of the Company's teleconferencing system sales are in the United States.  The 
Company's primary strategy for foreign expansion is to establish dealers and 
master distributors in markets where it believes there is a growing need for 
products and services of the type offered by the Company.

The Company distributes products to the Professional Audio market via this same
network of sales representatives and to independent sound contractors.  These
products include the Company's assistive listening system product line and other
audio processing and routing equipment.

Teleconferencing Service.
- - - ------------------------

The Company primarily sells its conference calling service through 
telemarketing, and has recently expanded its activities and the number of 
employees in this area.  The Company also plans to utilize this sales force in 
selling certain teleconferencing products directly to end users.  The Company 
also sells services through its product dealers and  independent 
representatives and provides wholesale conference calling services to two long 
distance companies. 



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Telephone Interface and Remote Site Control Products.
- - - ----------------------------------------------------

The Company's telephone interface and remote site control products are generally
sold in the United States through non-exclusive independent broadcast equipment
dealers.  End users generally place orders with a dealer by calling a toll free
number.  The market is highly competitive, and it is not unusual for a customer
to call several dealers to get the best possible price.  Once a customer orders
equipment, a dealer either ships the product to the customer from the dealer's
inventory or orders the product from the Company to be shipped directly to the
customer.  Only the Company's largest dealer is also a manufacturer of
communications systems and equipment.  This customer is the Company's 
predominant dealer in the Broadcast market and is believed by the Company to be 
the dominant supplier of equipment for radio stations in the United States.  
Sales to this dealer represent a significant portion of Company sales, 
accounting for approximately 12% of the Company's total sales in fiscal 1997, 
and 11% and 18% during fiscal 1996 and fiscal 1995, respectively.  However, the 
Company believes that if it were to lose this dealer, it could sell its products
to customers either directly or through other dealers.  With respect to 
international sales, the Company has established international relationships 
with dealers for its broadcast products in Europe, Canada, Asia, the South 
Pacific, and Latin America.


COMPETITION

The principal competitive factors in the Company's markets include innovative
product design, product quality, established customer relationships, name
recognition, distribution, and price.

The Company believes that its ability to successfully compete in the
Teleconferencing market is essential to the Company's growth and development. 
There are other companies with substantial financial, technical, manufacturing
and marketing resources currently engaged in the development and marketing of
similar products and services.  Some of these companies have launched products
competitive with those being developed and manufactured by the Company.  
However, the Company has used its core digital technology to produce what it 
believes are audio teleconferencing systems and equipment of superior 
performance. The Company believes it is the only provider of both high end 
teleconferencing products and mission critical conference calling services, and 
feels it can uniquely position itself in the rapidly expanding Teleconferencing 
market.

In the Telephone Interface and Remote Site Control markets, the Company has
several competitors in each of its product lines.  There is not, however, any
single competitor who directly competes with the Company in all such product
lines.  Although some of the Company's competitors are smaller in terms of 
annual revenues and capitalization, such competitors are usually focused on a 
single product line.  They can therefore devote their resources to products that
are directly competitive with, and may adversely impact sales of the Company's

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products.  However, the Company's name is well known with respect to its
products.  This advantage, coupled with the Company's size, will likely enable
it to preserve and increase its market share.


RESEARCH AND DEVELOPMENT

The Company is highly committed to research and development.  The Company views
its investment in research and development as a key ingredient to long-term
business success. The Company expended $1,046,757 and $929,132 on research and
development in the fiscal years ended June 30, 1997 and 1996, respectively.

The Company is continually developing new products and services.  Current new
research and development efforts are focused on the teleconferencing system
products, broadcast telephone interface products and enhancements to the remote
site control product family.  The Company also heavily invests resources in
technically sustaining and refining existing products.  Moreover, the Company
continues to allocate resources to obtain and maintain product regulatory
compliance, both domestic and international, and has three full time employees
dedicated to this effort.

The Company's core technological competencies include many areas of
telecommunications and telephone acoustic echo cancellation.  The Company's
capability to use Digital Signal Processing ("DSP") technology to perform audio
processing operations is also a core competence.  This technology is critical to
the performance of the Company's products.  The Company maintains an internal
computer aided design ("CAD") team.  This team creates the necessary electrical
schematics, printed circuit board designs, mechanical designs, and manufacturing
documentation to support the research and development efforts.  The Company's 
CAD and product design teams use networked computing systems and sophisticated
software programs to facilitate all aspects of product development. 

The Company believes that ongoing development of its core technological
competencies is vitally important to future sales.

PATENTS AND PROPRIETARY RIGHTS

Trade secrets, proprietary information, and technical know-how are important to
the Company's scientific and commercial success.  The Company currently relies
on a combination of trade secrets and nondisclosure agreements to establish and
protect its proprietary rights in its products.  The Company is in the process
of obtaining trademark registration for "1-800 LETS MEET" for its conference
calling service, "Distributed Echo Canceling" to describe the Audio Perfect
products,  "Gentner Court Conferencing" for the service the Company provides to
the courts, and "Communications Audit Process" to describe the consulting 
service it offers to businesses.

GOVERNMENT REGULATION


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The Company designs and manufactures its equipment in accordance with the
technical design standards of the Federal Communications Commission ("FCC") Part
15 and Part 68.  Part 15 of the FCC Rules governs the levels of electromagnetic
radiation emanating from commercial computing equipment.  The Company endeavors
to conform all of its products covered by Part 15 of the FCC Rules based on
testing performed at a FCC approved testing facility.  Part 68 of the FCC Rules
sets forth standards for telephone equipment that is intended to be connected to
the Public Switch Telephone Network ("PSTN") used within the United States.  The
Company's applicable telecommunications products are tested by an independent
testing laboratory and are registered with the FCC.

The Company also designs and manufactures its equipment pursuant to industry
product safety standards.  The Canadian Standards Association ("CSA"), an
approved Nationally Recognized Testing Laboratory ("NRTL") under direction of 
the Occupational Safety and Health Administration ("OSHA"), tests all products 
and performs quarterly audits for continuing compliance to applicable safety
standards.

Several of the Company's products are currently registered for sale in various
international markets.  The Company must conform with design standards similar
to those of the FCC and CSA in each of the foreign countries in which the
products are sold.

MANUFACTURING

The Company currently manufactures and/or assembles its products using purchased
or leased manufacturing equipment.  Most of the equipment presently being used
will continue to be utilized for several years.  The Company's manufacturing
facility incorporates modern, modular assembly work stations and work 
accessories that enhance the efficiency and quality of the manufacturing 
process.  In July 1996, the Company installed a new surface-mount assembly line.
Most new sophisticated electronic equipment designs now utilize surface-mount 
technology, which incorporates smaller, more powerful electronic components and 
computer chips than used on "through-hole" circuit boards in the past.  This new
manufacturing capability has reduced manufacturing costs, and increased
production efficiencies and capacity.  If sales increase substantially, the
Company may be required to invest in additional manufacturing equipment.  
Subject to financial considerations, the Company does not believe it would 
experience any difficulty in obtaining any additional equipment that might be 
needed as a result of any substantial sales increase (see "Management's 
Discussion and Analysis --Financial Condition and Liquidity").

The Company generally purchases its assembly components from distributors, but
also buys a limited amount directly from manufacturers.  Printed circuit boards
and metal work are purchased directly from local suppliers.  Its principal
suppliers are Hamilton Hallmark, Arrow Electronics, Bell Industries, Standard
Supply Company, Precise Metal Products Company, and Precision Technology.  Of
these principal suppliers, only Precise Metal Products, which does all of the
Company's metal stamping work, is single source.  Precise Metal Products could

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be replaced by at least three local and eight regional metal stamping companies
with little disruption in the manufacturing process.  The Company's general
policy is to have a minimum of two vendor sources.  Many of the components
utilized are bonded by certain distributors and manufacturers.  This bonding
process places ordered products on the distributors' shelves until the product
is required by the Company.  This allows the Company to reduce its inventory
while maintaining available stock.

The Company's assistive listening systems products are manufactured in Taiwan 
and shipped to its facility to complete the packaging before shipping to its
customers.

The Company uses a real time computer system to monitor its manufacturing
process, which allows the Company to utilize cost accounting for each product 
and to monitor profitability in each phase of the manufacturing process.  The
software is covered under a maintenance contract which allows for new version
upgrades.  The Company has developed an extensive software back-up system that
provides for daily back-ups housed in a fire-proof safe.

TELECOMMUNICATIONS AND INFORMATION SYSTEMS

The Company has become heavily reliant on its telecommunications and information
systems (network)  in order to conduct its day-to-day operations.  Failure of 
the network for an extended amount of time could be detrimental to the Company's
ongoing business (see "Risk Factors").  As such, the Company endeavored in the
last year and will continue to develop an appropriate infrastructure that could
support and enhance growth, reduce down time and improve operational
efficiencies.  The Company has contracted with outside consultants and companies
to develop what it believes is a state-of-the-art network facility.  Network
features aimed at these objectives include prewiring of the Company's building
for ease of changes and new installations; several different backup power 
sources to guard against power failure; redundant equipment and circuit cards 
for some equipment; alarm systems and monitoring equipment; and temperature 
controlled network room.  In addition, the Company endeavors to fully back up 
its electronic data in case of catastrophic failure.

The Company is now focused on making its network fully scaleable to accommodate
expected growth.  Especially noteworthy is that as conference calling service
revenues grow, the network structure must expand at the same rate.  Last year,
the Company's conference calling services grew 93%.  As such, the Company is
engaged in developing network expansion plan that can accommodate this fast
growth.  In addition, the Company is also developing plans to overhaul its
information database.  Currently, the Company utilizes several different
databases and software tools.  However, the Company plans to develop a single
database system that all employees will utilize.

EMPLOYEES

As of June 30, 1997, the Company had 113 employees, all of which were full time

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employees.  None of the Company's employees are subject to a collective
bargaining agreement.


                             PROPERTIES

All of the Company's operations, including its executive offices, conference 
call service, product sales, research and development, and manufacturing, are
conducted in a 40,000 square feet facility located south of Salt Lake City (the
"Research Way facility").  The Research Way facility is a modern building leased
by the Company.  The base monthly rent for this facility currently is
approximately $22,400.  The facility is in good condition and the Company
believes the facility will be reasonably adequate to meet its foreseeable growth
in the future.  Monthly rents are scheduled to increase ratably over the next 
ten years.  The new facilities will allow the Company to grow steadily during 
this time, as the landlord has granted certain expansion options to the Company 
with respect to adjacent building space.


                    MARKET FOR COMMON EQUITY AND 
                    RELATED STOCKHOLDER MATTERS

The Company's common stock is traded in the over-the-counter market on the 
NASDAQ System under the symbol "GTNR."  Warrants are traded under the symbol 
"GTNRW". The following table sets forth quotations for the common stock for the 
last two fiscal years.

                  1997                          High            Low
                 ------                        ------         -------

          First Quarter                        $ 1.06         $ 0.75
          Second Quarter                         0.94           0.69
          Third Quarter                          0.97           0.66
          Fourth Quarter                         0.78           0.59
 


                  1996
                 ------
          First Quarter                        $ 1.94         $ 0.78
          Second Quarter                         1.63           0.88
          Third Quarter                          1.31           0.94
          Fourth Quarter                         1.28           0.75


The above inter-dealer quotations were obtained from the National Association of
Securities Dealers (NASD), do not reflect markups, markdowns, or commissions, 
and may not represent actual transactions.


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The Company does not pay a cash dividend and does not anticipate doing so in 
the foreseeable future.  Currently, the Company's line of credit prohibits the
payment of dividends.

As of September 1, 1997, there were approximately 2,800 holders of common stock
of the Company.





                 MANAGEMENT'S DISCUSSION AND ANALYSIS OF 
              FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Year Ended June 30, 1997 Compared to Year Ended June 30, 1996.

Sales for the year ended June 30, 1997 ("fiscal 1997") increased 17% compared to
the prior fiscal year ended June 30, 1996.  This increase is due to the Company
focusing on its core businesses:  teleconferencing products and services, remote
site control and telephone interface products.  

Product and conference calling service revenues from the teleconferencing market
increased 29% during fiscal year 1997 as compared to fiscal year 1996.  Product
sales increased 20% primarily due to sales of the GT724 audio teleconferencing
system.  The Company started shipping this product in the beginning of the 
fiscal year, and sales have remained strong during the entire year.  The GT724 
system is used in conference rooms, distance learning facilities and court 
rooms.  The Company's conference calling service increased 93% in fiscal year 
1997 over fiscal 1996.  This significant increase is due to the Company hiring 
a dedicated, direct sales force and due to aggressive marketing campaigns during
the year. The Company is focused on providing premium, mission critical 
conference calling services for conference rooms, distance learning facilities 
and courtrooms.  

Sales in the broadcast market grew 20%  in fiscal year 1997 as compared to 
fiscal year 1996.  In the telephone interface segment, the Company introduced a 
new product line late in the fiscal year, unveiling the new digital hybrid 
line at the National Association of Broadcasters show in April 1997.  Shipments 
began in June 1997.  Remote site control sales grew significantly when the 
Company began shipping the GSC3000 remote site control product line in November 
1996.  The GSC3000 monitors and adjusts settings at one or more remote 
transmitter sites, or an engineer can adjust the settings via a personal 
computer.  Historically, the Company's remote site control products have sold 
primarily in the radio market, but the GSC3000 has been accepted in the 
television market, resulting in increased sales.

During fiscal 1997, other product sales experienced a 37% decrease as compared
to fiscal 1996 as the Company's primary focus was on its core business lines. 
The Company stopped selling Audio Processing products and has seen decreased

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sales in the audio routing and distribution and portable teleconferencing
products.  The Company believes these product lines have taken focus and
resources away from its core businesses, and expects to see these continue to
decline.   

The Company's gross profit margin increased to 48% in fiscal 1997 as compared to
45% in fiscal 1996.  This improvement in gross profit margin can be attributed
to higher margin product mix, product pricing and the in-house surface mount
manufacturing technology the Company began using in fiscal 1997.  The Company
continues to work towards increasing its gross profit margin.  For products, the
Company has recently increased prices and is working to reduce actual
manufacturing costs.  However, the Company's conference calling service has a
lower gross profit margin, which, as it becomes a higher percentage of total
sales, could negatively impact the Company's overall gross profit margin.  

For the year ending June 30, 1997, the Company's operating expenses increased 
40% compared to the previous fiscal year.  As previously reported, the Company
invested significantly in its infrastructure during fiscal 1997 in an effort to
prepare for future growth.  Sales and Marketing expenses increased 49%, General
and Administrative expenses increased 43% and Product Development expenses
increased 13% from fiscal year 1996 to fiscal year 1997.

The Company underwent some significant changes in its Sales and Marketing area
in fiscal 1997.  It hired its first Vice President of Sales and Marketing to
focus specifically on increasing sales.  The Company also hired a direct sales
force to sell its conference calling service, incurred one time marketing
expenses regarding its conference calling service, hired internal marketing
people and invested significantly in market research prior to developing new
products.  All these events contributed to the increase in sales and marketing
expenses, and the Company believes these initiatives will help sustain long-term
sales growth.

General and Administrative expenses increased 43% in fiscal 1997 as compared to
fiscal 1996.  Most of this increase is due to the Company expanding its 
facility, doubling the square footage.  Occupancy costs also increased 
significantly, as well as other costs associated with expanding operations 
(human resources and information systems management).  The Company feels this 
investment in the infrastructure will sustain long term growth as the Company 
moves forward.

During fiscal 1997, Product Development expenses increased 13% as compared to
fiscal 1996.  This increase is a result of hiring additional engineers to focus
on specific product areas.  The Company also expended significant resources in
developing new teleconferencing and site control products.

Interest expense increased 6% when comparing fiscal 1997 to fiscal 1996 due to
increased borrowing requirements to fund growth.  This increased borrowing
occurred towards the end of the fiscal year when the Company finalized the
financing required for the facility expansion. 


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Year Ended June 30, 1996 Compared to Year Ended June 30, 1995.

Sales for the year ended June 30, 1996 ("fiscal 1996") increased 3% compared to
the prior fiscal year ended June 30, 1995 ("fiscal 1995").  Shipments of new
products during the first half of the fiscal year were the primary reasons for
the increase.  Offsetting this sales growth during the third quarter were 
weather factors and the federal government shutdown.


Broadcast market sales for the year ended June 30, 1996 were up 3% over fiscal
1995.  Increased sales from earlier in the fiscal year were due to the Company's
new TS612 talk show telephone system.  The Company has received favorable
customer response to this product, and has finalized new enhancements which were
introduced during the third quarter.  Increased sales also resulted from another
new product, the Company's recently introduced Telehybrid telephone interface
unit.  This new product allows broadcasters to make easy connections to either
digital or analog phone lines in various "on-air" broadcast applications.  These
sales increases during the first half of the year were offset somewhat by
circumstances which occurred during the third quarter.  Severe winter weather
conditions experienced in the Northeastern part of the United States affected
several of the Company's broadcast dealers and their customers who postponed
orders.  In addition, capital investment plans by broadcast customers were
uncertain due to anticipated changes in station ownership provisions included in
the then pending Telecommunications Act of 1996.  After the Telecommunications
legislation passed, the approval of any such ownership changes was then
interrupted by the temporary shutdown of the Federal Communications Commission. 
The Company feels that these circumstances resulted in a temporary slowdown, and
noted that Broadcast sales during the fourth quarter of fiscal 1996 were at
approximately the same level as during the second quarter.

Sales to the Teleconferencing market rose by 4% during the 1996 fiscal year as
compared to the previous fiscal year.  The Company experienced higher sales
during the first six months of fiscal 1996 primarily due to shipments of the new
AVT line of products.  These units were designed specifically for use in
conjunction with videoconferencing and distance learning.  Also contributing to
Teleconferencing sales throughout fiscal 1996 were shipments of the ET100 and
ET10 portable teleconferencing units.  The Company spent time earlier in the 
year making design modifications and improvements to the ET100, and released 
version 2.0 during the second fiscal quarter.  The ET10 is the first full-duplex
conferencing product designed for use in an individual office or cubicle, and 
the Company began shipments during February of 1996.

In offsetting these sales increases to the Teleconferencing market, the federal
government shutdown during the third quarter affected the Company's sales to 
this market as well.  A significant number of the Company's teleconferencing 
systems are utilized in distance learning applications located at educational 
facilities. The Company's dealers bid many of these systems to universities and 
colleges who purchase the equipment using federal grants.  While grant approvals
at federal agencies were temporarily suspended, time-sensitive bids expired, 
requiring

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dealers to prepare new bid packages.  During the following quarter ended June 
30, 1996, sales of those types of teleconferencing systems resumed to a level
slightly higher than that experienced during fiscal 1996's second quarter.

The Company's gross profit margin percentage increased from 43% to 45% during 
the year ended June 30, 1996, as compared to the prior fiscal year.  Some of the
difference stems from a moderate sales price increase of the Company's products
which took effect on July 1, 1995.  In addition, the prior year's third quarter
gross profit margin was lower than normal.  Included therein were extensive
revisions and updates made to the standard costs of several products and product
subassemblies.  Accordingly, the Company reflected the change as additional cost
of goods sold during that quarter ended March 31, 1995.  The revised product
costs, coupled with the price increase, resulted in improved quarterly margins
during the first half of fiscal 1996 over fiscal year 1995.  As anticipated
however, the Company experienced slightly lower profit margins of new products
introduced during the quarter ended March 31, 1996, which also affected the full
quarter ended June 30, 1996.  The gross profit margin percentage during the
fourth quarter was 42%. 

For the year ended June 30, 1996, operating expenses overall went up 0.7%
compared to fiscal 1995, mainly as a result of a 9% decrease in general and
administrative costs.  Such expenses were lower primarily as a result of cost
saving efforts and efficiencies gained by modifying the organizational structure
, a process which began yielding results during the latter half of fiscal 1995. 
Offsetting these savings, however, were increases in product development costs,
which were up 16%.  This was due primarily to expenses incurred during the
current fiscal year's second and third quarters associated with new product and
product enhancements, and also as a result of lower product development costs
during the third quarter of fiscal 1995.  The reason for the decrease during 
that period was the approximately $75,000 of software development costs that 
were capitalized.  Marketing and selling expenses were up 2% during the year 
over fiscal 1995, due mostly to increased activities and customer research 
conducted during the quarter ended June 30, 1996.

Total interest expense for fiscal 1996 did not vary significantly from that of
fiscal 1995, increasing by only 1%.  Changes in the interest expense amounts
stemmed primarily from differences in usage of the Company's line of credit
facility.  Interest expense for the last half of fiscal 1996 was 31% lower than
during the same period for fiscal 1995, mainly as a result of short-term debt
payoffs using cash generated from operations.  Due to utilizing much of its
excess cash beginning in fiscal 1995, the Company earned significantly less
interest income during the first half of fiscal 1996.

The Company's statutory minimum provision for state income taxes was calculated
using the rate of 0.3%.  The federal rate was different than that which would
normally have been applied, 34%, primarily as a result of changes to the
valuation allowance for deferred tax assets.



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<PAGE>

<PAGE>
FINANCIAL CONDITION AND LIQUIDITY

The Company's financial condition remained strong in fiscal year 1997.  The
Company's current ratio was 2.2 at the end of fiscal 1997 as compared to 2.5 at
the end of fiscal 1996.  While inventories decreased 17% during fiscal 1997,
accounts receivable increased 9% and accounts payable decreased 6%.  These
changes all contribute to the financial strength of the Company.  During fiscal
1997, the Company obtained permanent long-term financing for some furniture and
equipment it purchased during the year.  Because some of the financed equipment
was originally purchased with cash, this enabled the Company to reduce its short
term borrowings against its line of credit.

During fiscal year 1997 the Company continued with efforts to reduce inventory
levels.  Raw material levels decreased 7%,  work in progress decreased 25% and
finished goods decreased 20% when comparing fiscal year 1997 to fiscal year 
1996. The Company has been able to reduce inventory levels, and yet maintain a 
supply sufficient to meet customer demand.  The Company continues to focus on 
improving inventory levels and turns. 

In the first quarter of fiscal 1997, the Company renewed its line of credit with
a commercial bank.  The total available on the line of credit is $2.5 million. 
The interest rate on the line is a variable interest rate (anywhere from three
to five basis points over the London Interbank Offered Rate (LIBOR)).  As of 
June 30, 1997 the outstanding balance was $723,000 with an interest rate of 
10.7%.

As described in the footnotes to the financial statements, the Company has
certain commitments relating to capital expenditures.  These commitments are in
the form of obligations classified as long-term debt and capital leases, both
related to the financing of furniture and equipment.  Together, the current
obligation on these commitments was $331,178 in fiscal year 1997 and will be
$627,750 in fiscal year 1998.

The Company continued to experience positive cash flows despite its losses for
the fiscal year.  The increased sales and decreased inventory levels provided
positive operational cash flows for the Company.  As sales continue to increase
and inventory levels continue to improve, the Company anticipates that it can
achieve its business plan through a combination of internally generated funds 
and short-term and/or long-term borrowing, if necessary. 

FORWARD LOOKING STATEMENTS AND RISK FACTORS

To the extent any statement presented herein deals with information that is not
historical, such statement is necessarily forward looking.  As such, it is
subject to the occurrence of many events outside of the Company's control.  
These occurrences could cause the Company's results to differ materially from 
those anticipated.  A sample listing of such occurrences follows:




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<PAGE>

<PAGE>
Competition - Rapid Technological Change
- - - -----------------------------------------

     The Broadcast, Teleconferencing and ALS markets are highly competitive and
characterized by rapid technological change.  The Company's future performance
will depend in large part upon its ability to remain competitive and to develop
and market new products and services in these markets.  The Company competes 
with businesses having substantial financial, research and development, 
manufacturing, marketing and other resources.  

The markets in which the Company competes have historically involved the
introduction of new and technologically advanced products and services that cost
less or perform better.  If the Company is not competitive in its research and
development efforts, its products may become obsolete or priced above 
competitive levels.

Although management believes that, based on their performance and price, its
products are attractive to customers there can be no assurance that competitors
will not introduce comparable or technologically superior products which are
priced more favorably than the Company's products.

Marketing
- - - ---------

The Company has gained experience over the last several years in marketing its
products;  however it is subject to all of the risks inherent in the sale and
marketing of current and new products and services in an evolving marketplace. 
The Company must effectively allocate its resources to the marketing and sale of
these products through diverse channels of distribution.  The Company's strategy
is to establish distribution channels and direct selling efforts in markets 
where it believes there is a growing need for its goods and services.  There can
be no assurance that this strategy will prove successful.

Dependence on Distribution Network
- - - ----------------------------------

The Company markets its products primarily through a network of representatives,
dealers and master distributors.  All of the Company's agreements retaining such
representatives and dealers are non-exclusive and terminable at will by either
party.  Although the Company believes that its relationship with  such
representatives and dealers is good, there can be no assurance that any of such
representatives or dealers will continue to offer the Company's products.  

Furthermore, there are no obligations on the part of such representatives and
dealers to provide any specified level of support to the Company's products or
to devote any specific time, resources or efforts to the marketing of the
Company's products, nor are there any prohibitions on dealers offering products
that are competitive with those of the Company.  Most dealers do offer
competitive products.  The Company reserves the right to maintain house accounts

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<PAGE>

<PAGE>
which are sold direct, however, the loss of a majority or all representatives 
or dealers could have a material adverse effect on the Company's business.

Limited Capitalization
- - - ----------------------

As of June 30, 1997, the Company had $63,992 in cash and $2,488,555 in working
capital.  The Company may be required to seek additional financing if 
anticipated levels of revenue are not realized, if higher than anticipated costs
are incurred in the development, manufacture or marketing of the Company's 
products, or if product demand exceeds expected levels.  There can be no 
assurance that any additional financing thereby necessitated will be available 
on acceptable terms, or at all.

In addition, the Company's revolving line of credit matures on October 24, 1997
and there can be no assurance that the Company will be able to extend the
maturity date of the line of credit or obtain a replacement line of credit from
another commercial institution.  The Company had an outstanding balance payable
of $723,000 on a $2.5 million line of credit as of June 30, 1997.  To the extent
the line of credit is not extended or replaced and cash from operations is
unavailable to pay the indebtedness then outstanding under the line of credit,
the Company may be required to seek additional financing.  

Telecommunications and Information Systems (Network)
- - - ---------------------------------------------------- 

The Company is highly reliant on its network equipment, data and software to
support all functions of the Company.  The Company's conference calling service
relies 100% on the network for its revenues.  While the Company endeavors to
provide for failures in the network by providing back up systems and procedures,
there is no guarantee that these back up systems and procedures will operate
satisfactorily in an emergency.  Should the Company experience such a failure,
it could seriously jeopardize its ability to continue operations.  In particular
,should the Company's conference calling service experience even a short term
interruption of its network, its ongoing customers may choose a different
provider.

Dependence Upon Officers
- - - ------------------------

The Company is substantially dependent upon certain of its officers, including
Russell D. Gentner, its Chairman, President and Chief Executive Officer and a
principal stockholder of the Company.  The loss of Mr. Gentner by the Company
could have a material adverse effect on the Company.  The Company currently has
in place a key man life insurance policy on the life of Mr. Gentner in the 
amount of $2,000,000.  




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<PAGE>

<PAGE>
Dependence on Supplier and Single Source of Supply
- - - --------------------------------------------------

The Company does not have written agreements with any suppliers.  Furthermore,
certain digital microprocessor chips used in connection with the Company's
products can only be obtained from a single supplier and the Company is 
dependent upon the ability of this supplier to deliver such chips in accordance 
with the Company's specifications and delivery schedules.  The Company does not 
have a written commitment from such sole supplier to fulfill the Company's 
future requirements.  Although the Company maintains an inventory of such chips 
in an amount which it believes is sufficient to cover its requirements for three
months and is attempting to develop alternate sources of supply, there can be no
assurance that such chips will always be readily available, or if at all
available, available at reasonable prices or in sufficient quantities, or
deliverable in a timely fashion.  If such chips or other key components become
unavailable, it is likely that the Company will experience delays, which could
be significant, in production and delivery of its products unless and until the
Company can otherwise procure the required component or components at 
competitive prices, if at all.  The lack of availability of these components 
could have a materially adverse effect on the Company.

Although the Company believes that most of the key components required for the
production of its products are currently available in sufficient production
quantities, there can be no assurance that they will remain available. 
Furthermore, suppliers of some of these components are currently or may become
competitors of the Company, which might also affect the availability of key
components to the Company.  It is possible that other components required in the
future may necessitate custom fabrication in accordance with specifications
developed or to be developed by the Company.  Also, in the event the Company, or
any of the manufacturers whose products the Company expects to utilize in the
manufacture of its products, is unable to develop or acquire components in a
timely fashion, the Company's ability to achieve production yields, revenues and
net income will be adversely affected.

Lack of Patent Protection
- - - -------------------------

The Company currently relies on a combination of trade secret and nondisclosure
agreements to establish and protect its proprietary rights in its products. 
There can be no assurance that others will not independently develop similar
technologies, or duplicate or design around aspects of the Company's 
technology. In addition, several of the Company's employees have not signed 
confidentiality agreements regarding the Company's proprietary information.  The
Company believes that its products and other proprietary rights do not infringe 
any proprietary rights of third parties.  There can be no assurance, however, 
that third parties will not assert infringement claims in the future.




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<PAGE>

<PAGE>
Government Funding and Regulation
- - - ---------------------------------

In the teleconferencing market, the Company is dependent on government funding
to place its distance learning sales and courtroom equipment.  In the event
government funding were stopped, these sales would be negatively impacted.  
Additionally, many of the Company's products are regulated by governmental
regulations.  New regulations could significantly impact sales.

Dividends Unlikely
- - - ------------------

The Company has never paid cash dividends on its securities and does not intend
to declare or pay cash dividends in the foreseeable future.  Earnings are
expected to be retained to finance and expand its business.  Furthermore, the
Company's revolving line of credit prohibits the payment of dividends on its
Common Stock.

Potential Dilutive Effect of Outstanding Options 
and Warrants and Possible Negative Effect of Future Financing 
- - - -------------------------------------------------------------

The Company has outstanding Options, Warrants and a Unit Purchase Option.  The
outstanding options are issued under the Company's 1990 Incentive plan which
includes options to purchase up to 1,500,000 shares of Common Stock granted or
available for grant.  The Company issued Warrants that allow the holder to
purchase one share of Common Stock at an exercise price of $1.50.  There
currently are 2,875,000 Warrants outstanding which expired September 22, 1997. 
The Company also granted the underwriter of the warrants an option to purchase
a total of 125,000 units (a unit consists of  three shares of common stock and
warrants to purchase two shares of common stock) at $3.60 per unit.  Holders of
these Options, Warrants and Unit Purchase Options are given an opportunity to
profit from a rise in the market price of the Company's Common Stock with a
resulting dilution in the interests of the other stockholders.  Further, the
terms on which the Company may obtain additional financing during such periods
may be adversely affected by the existence of the Warrants, the Unit Purchase
Option and such other options.  The holders of the Warrants, the Unit Purchase
Option and such other options may exercise them at a time when the Company might
be able to obtain additional capital through a new offering of securities on
terms more favorable than those provided therein.  In addition, holders of the
Unit Purchase Option have registration rights with respect to such option and 
the underlying securities, the exercise of which may involve substantial expense
to the Company.  







Page 137

<PAGE>

<PAGE>
                        FINANCIAL STATEMENTS





                      Index to Financial Statements
                      -----------------------------

Report of Independent Auditors

Balance Sheets for June 30, 1997 and 1996.

Statements of Operations for fiscal years ended June 30, 1997, 1996, and 1995.

Statements of Cash Flows for fiscal years ended June 30, 1997, 1996, and 1995.

Statements of Shareholders' Equity for fiscal years ended June 30, 1997, 1996,
and 1995.


Notes to Financial Statements





                         Report of Independent Auditors
                         ------------------------------


The Board of Directors and Shareholders
GENTNER COMMUNICATIONS CORPORATION

We have audited the accompanying balance sheets of Gentner Communications
Corporation as of June 30, 1997 and 1996, and the related statements of 
operations, shareholders' equity, and cash flows for each of the three years in
the period ended June 30, 1997.  These financial statements are the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing 
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. 
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in 


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<PAGE>

<PAGE>
all material respects, the financial position of Gentner Communications 
Corporation at June 30, 1997 and 1996, and the results of its operations and its
cash flows for each of the three years in the period ended June 30, 1997, in 
conformity with generally accepted accounting principles.

                                                  ERNST & YOUNG LLP
                                                  /s/
Salt Lake City, Utah                              ----------------------
August 1, 1997 except for Note 13, as to which

the date is September 22, 1997






































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<PAGE>

<PAGE>
                     GENTNER COMMUNICATIONS CORPORATION
                                BALANCE SHEETS


                                                          June 30,
                                                  -----------------------
                                                     1997          1996
                                                  ----------    ---------- 
                           ASSETS
Current assets:
  Cash and cash equivalents . . . . . . . . . .   $   63,992   $  213,763
  Accounts receivable, less allowances of 
    $115,000 in 1997 and $94,000 in 1996. . . .    1,682,254    1,556,436
  Inventory . . . . . . . . . . . . . . . . . .    2,668,761    3,229,765
  Other current assets  . . . . . . . . . . . .      136,177      111,743
                                                  -----------  -----------
    Total current assets  . . . . . . . . . . .    4,551,184    5,111,707

Property and equipment, net . . . . . . . . . .    2,493,287    1,514,629
Related Party Note Receivable . . . . . . . . .      139,000        -
Other assets, net . . . . . . . . . . . . . . .      152,383      153,874

    Total assets  . . . . . . . . . . . . . . .   $7,335,854   $6,780,210
                                                 ============  ===========
























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<PAGE>

<PAGE>
              LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Notes payable . . . . . . . . . . . . . . . .   $  722,997  $   916,041
  Accounts payable  . . . . . . . . . . . . . .      471,072      503,168
  Accrued expenses  . . . . . . . . . . . . . .      356,446      294,729
  Current portion of long-term debt . . . . . .      257,164      163,314
  Current portion of capital lease obligations.      254,951      138,787
                                                   ----------   ----------
    Total current liabilities . . . . . . . . .    2,062,630    2,016,039

Long-term debt. . . . . . . . . . . . . . . . .      687,274      427,250
Capital lease obligations . . . . . . . . . . .      784,354      163,163
                                                   ----------  -----------
    Total liabilities . . . . . . . . . . . . .    3,534,258    2,606,452

Commitments

Shareholders' equity:
  Common stock, 50,000,000 shares authorized, 
    par value $.001, 7,663,405 and 7,662,375
    shares issued and outstanding at 
    June 30, 1997 and 1996  . . . . . . . . . .        7,663        7,662
  Additional paid-in capital  . . . . . . . . .    4,423,482    4,422,747
  Accumulated deficit . . . . . . . . . . . . .     (629,549)    (256,651)
                                                   ----------  ----------- 
    Total shareholders' equity  . . . . . . . .    3,801,596    4,173,758
                                                   ----------  -----------
    Total liabilities and shareholders' equity.   $7,335,854   $6,780,210 
                                                   ==========  ===========

                               See accompanying notes

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<PAGE>

<PAGE>
                          GENTNER COMMUNICATIONS CORPORATION

                               STATEMENTS OF OPERATIONS

                                            Years ended June 30,
                                      -----------------------------------
                                       1997         1996         1995
                                       ----         ----         ----

Net sales  . . . . . . . . . . . . $13,371,851  $11,469,155   $11,106,078
Cost of goods sold . . . . . . . .   6,874,590    6,279,775     6,346,348
                                  ------------- ------------  ------------
  Gross profit . . . . . . . . . .   6,497,261    5,189,380     4,759,730

Operating expenses:
  Marketing and selling  . . . . .   3,572,882    2,394,415     2,355,900
  General and administrative . . .   2,006,998    1,406,786     1,539,291
  Product development  . . . . . .   1,046,757      929,132       802,062
                                  ------------- ------------  ------------
    Total operating expenses . . .   6,626,637    4,730,333     4,697,253
                                  ------------- ------------  ------------
    Operating income (loss). . .      (129,376)     459,047        62,477

Other income (expense):
  Interest income  . . . . . . . .       7,836        1,988        11,479
  Interest expense . . . . . . . .    (196,176)    (185,676)     (183,790)
  Other, net . . . . . . . . . . .     (18,282)       7,525        (5,329)
                                  ------------- ------------  ------------
    Total other income (expense) .    (206,622)    (176,163)     (177,640)
                                  ------------- ------------  ------------
Income (loss) before taxes . . . .    (335,998)     282,884      (115,163)

Provision for income taxes . . . .      36,900          900           900
                                  ------------- ------------  ------------

    Net income (loss)  . . . . .   $  (372,898)  $  281,984   $  (116,063)
                                  ============= ============  ============




Earnings (loss) per common share   $     (0.05)  $     0.04   $    (0.02)
                                  ============= ============  ============

                                 See accompanying notes





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<PAGE>

<PAGE>
                         GENTNER COMMUNICATIONS CORPORATION
                              STATEMENTS OF CASH FLOWS

                                            Years ended June 30,
                                   ---------------------------------------
                                        1997         1996         1995
                                        ----         ----         ----
Cash flows from 
   operating activities:
  Cash received from 
    customers . . . . . . . .      $13,150,200   $ 11,569,740  $ 10,624,914
  Cash paid to suppliers
  and employees . . . . . . .      (12,153,205)   (10,824,274)  (11,937,537)
 Interest received . . . . .             7,836          3,863        10,229
  Interest paid  . . . . . .          (193,500)      (194,148)     (176,075)
  Income taxes (paid)
    refunded . . . . . . . .           (12,800)       (25,900)      243,643
                                   ------------   ------------   -----------

    Net cash provided by (used in) 
     operating activities. .           798,531        529,281    (1,234,826)


Cash flows from investing activities:
  Purchases of property and equipment (623,949)      (176,743)     (632,397)
  Increase in capitalized software 
  development and purchased software 
  costs  . . . . . . . . . . . . . .         -              -       (95,700)
  Issuance of notes receivable . . .  (147,327)             -       (45,320)
  Repayment of notes receivable. . .     8,327         60,320         6,665
  Decrease (increase) in other assets (108,541)           139        75,584
                                    -----------    -----------   -----------

    Net cash used in investing 
    activities . . . . . . . . . . .  (871,490)      (116,284)     (691,168)















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<PAGE>

<PAGE>
Cash flows from financing activities:
  Proceeds from issuance of common
  stock . . . . . . . . . . . . . . .      736              -        73,125
  Exercise of warrants and employee 
  stock options . . . . . . . . . . .        -        142,313             -
  Net (repayment) borrowing under line 
  of credit . . . . . . . . . . . . . (193,044)      (308,959)    1,225,000
  Net financing of trade payables with 
  short-term notes  . . . . . . . . .        -       (283,687)      283,687
  Proceeds from issuance of long-term 
  debt  . . . . . . . . . . . . . . .  566,906        400,000       282,500
  Principal payments of capital lease 
  obligations . . . . . . . . . . . . (238,378)      (135,825)     (172,554)
  Principal payments of long-term debt(213,032)      (132,314)      (80,350)
  
                                    -----------     ----------   -----------
    Net cash provided by (used in) 
    financing activities. . . . . . .  (76,812)      (318,472)    1,611,408


                                               Years ended June 30,
                                      ---------------------------------------
                                           1997         1996         1995
                                           ----         ----         ----


Net increase (decrease) in cash and 
cash equivalents  . . . . . . . . . .    (149,771)       94,525     (314,586)
Cash and cash equivalents at the 
beginning of the year . . . . . . . .     213,763       119,238      433,824
                                         ---------    ----------  -----------

Cash and cash equivalents at the end 
of the year . . . . . . . . . . . . .   $  63,992    $  213,763   $  119,238
                                        ==========   ===========  ===========















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<PAGE>

<PAGE>
Reconciliation of net income (loss) 
  to net cash provided by (used in) 
  operating activities:
  Net income (loss) . . . . . . . . .   $(372,898)   $  281,984   $ (116,063)
  Adjustments to reconcile net income 
    (loss) to net cash provided by (used 
    in) operating activities:
    Depreciation and amortization of 
    property an equipment . . . . . .     621,024       513,781      427,355
    Amortization of other assets. . .      52,654        41,258       23,265
    Gain on investments . . . . . . .      21,378       (36,895)           -
    Other . . . . . . . . . . . . . .      36,000        21,339        1,635
    Changes in operating assets and 
    liabilities,
        Accounts receivable . . . . .    (125,818)       87,940     (307,258)
        Refundable income taxes . . .           -             -      245,343
        Inventory . . . . . . . . . .     561,004        95,101     (881,422)
        Other current assets  . . . .     (24,434)      (31,975)      (6,462)
        Accounts payable and accrued 
        expenses  . . . . . . . . . .      29,621      (443,252)    (621,219)
                                      ------------   -----------  -----------

      Net cash provided by (used in) 
      operating activities  . . . . .   $ 798,531    $  529,281  $(1,234,826)
                                      ============    ===========  ============ 

                         See Accompanying Notes


        SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES

                                               Years ended June 30,
                                      ---------------------------------------
                                          1997         1996         1995
                                          ----         ----         ----
  Property and equipment financed by 
  capital leases . . . . . . . . . .  $  975,732   $   25,490   $  127,113
                                      ==========   ==========   ==========  

                               See accompanying notes










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<PAGE>
                         GENTNER COMMUNICATIONS CORPORATION

                         STATEMENTS OF SHAREHOLDERS' EQUITY

                                                       Retained
                                           Additional  Earnings       Total
                            Common   Stock   Paid-In (Accumulated  Shareholders'
                            --------------  
                            Shares  Amount   Capital    Deficit)       Equity
                            ------  ------   -------    --------       ------

Balances at June 30, 
1994 . . . . . . . . . .  7,338,375   7,338  4,171,633    (422,572)  3,756,399

  Issuance of common 
  stock  . . . . . . . .    117,000     117     73,008        -         73,125

  Net loss . . . . . . .        -        -        -       (116,063)   (116,063)
                           --------   ------   ---------  ---------    -------- 

Balances at June 30, 
1995 . . . . . . . . . .  7,455,375   7,455  4,244,641    (538,635)  3,713,461

  Exercise of employee 
  stock options. . . . .    207,000     207    142,106        -        142,313

  Tax benefits allocated 
    to contributed capital     -       -        36,000        -         36,000

  Net income . . . . . .       -       -          -        281,984     281,984
                          ---------  ------  ---------    --------  ----------

Balances at June 30, 1996 7,662,375  $7,662 $4,422,747   $(256,651) $4,173,758

  Issuance of common stock    1,030       1        735        -            736

  Net loss  . . . . . . .      -       -          -       (372,898)   (372,898)
                          ---------  ------  ---------     --------   ---------

Balances at June 30, 1997 7,663,405  $7,663 $4,423,482   $(629,549) $3,801,596
                          =========  ====== ==========    ========== ==========




                                See accompanying notes




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<PAGE>

<PAGE>
                    GENTNER COMMUNICATIONS CORPORATION

                       NOTES TO FINANCIAL STATEMENTS

1.  ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization
- - - ------------

Gentner Communications Corporation (the "Company"), designs and manufactures
high-technology electronic equipment for the Teleconferencing, Telephone
Interface, and Remote Site Control markets.  The Company also provides domestic
and international conference calling services.  The Company grants credit 
without requiring collateral to substantially all its customers within these 
markets.

Summary of Significant Accounting Policies
- - - ------------------------------------------

Cash Equivalents - The Company considers all highly liquid investments with a
maturity of three months or less when purchased to be cash equivalents.

Inventory - Inventories are stated at the lower of cost (first-in, first-out) or
market.

Revenue Recognition - Revenue from product sales is recognized at the time
product is shipped, net of allowances for returns and uncollectible accounts. 
Revenue from service sales is recognized at the time the service is rendered, 
net 
of allowances for uncollectible accounts.

Property and Equipment - Property and equipment are stated at cost.  
Depreciation and amortization are provided over the estimated useful lives of 
the respective
assets using the straight-line method.  In fiscal 1997, the Company adopted the
provisions of Statement of Financial Accounting Standards (FAS) No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to
be Disposed of" without a significant impact to operating results, financial
position or cash flow.

Other Assets - Other assets consist primarily of intangible assets, which are
stated at cost less accumulated amortization.  The Company amortizes these costs
on a straight-line basis over three to ten years.  The Company performs an
evaluation of these amounts on a periodic basis to determine that the recorded
costs are not in excess of their net realizable value.

Earnings (Loss) Per Common Share -   Earnings (loss) per common share was
calculated using the modified treasury stock method, and was based on weighted
average equivalent shares outstanding of 7,662,494, 7,639,698, and 7,338,697 for
the years ended June 30, 1997, 1996, and 1995.  Stock options and warrants to
purchase common stock have been excluded from the computation of per share
amounts in years when the effect was antidilutive.

Page 147

<PAGE>

<PAGE>
Research and Development Costs - Research and development costs are expensed as
incurred.

Software Development Costs - The Company capitalizes a portion of its software
development costs.  Both capitalized software development costs and purchased
software costs are amortized on a straight-line basis over the estimated useful
life of three years or the ratio of current revenue to the total current and
anticipated future revenue, whichever provides for greater amortization. 
Amortization generally commences when the related products begin shipping.  The
total of purchased software costs and software development costs capitalized
during the year ended June 30, 1995 was $95,700.  Amortization expense recorded
during the respective years ended June 30, 1997, 1996 and 1995 was $31,900, 
$31,900 and $13,292.  Unamortized costs are stated at the lower of cost or net
realizable value and are included in other assets net of accumulated 
amortization of $77,092 in 1997 and $45,192 in 1996.

Income Taxes - The Company provides for income taxes based on the liability
method which requires the recognition of deferred tax assets and liabilities
based on differences between financial reporting and tax bases of assets and
liabilities measured using enacted tax rates and laws that are expected to be in
effect when the differences are expected to reverse.

Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts in the financial statements and
these accompanying notes.  Actual results could differ from those estimates.

Stock Based Compensation - The Company adopted FAS 123 "Accounting for Stock
Based Compensation" effective July 1, 1996.  FAS 123 defines a fair value-based
method of accounting for and measuring compensation expense related to stock
options and encourages adoption of the new standard.  However, the statement
allows entities to continue to measure compensation expense for stock-based 
plans using the intrinsic value-based method prescribed by APB Opinion No. 25,
"Accounting for Stock Issued to Employees".  The Company has elected to continue
to account for stock-based compensation plans using the provisions of APB 
Opinion No. 25.  Pro forma footnote disclosure of net income has been made as if
the fair value based method of accounting defined in the statement had been 
applied.

Advertising Expenses- Advertising expenses are expensed as incurred.  
Advertising expense for fiscal year 1997 was $598,500, $331,300 in fiscal 1996, 
and $362,300
in fiscal 1995.

2.  Significant Customer
    --------------------

The Company sells a substantial portion of its products to a major distributor
in the Telephone Interface and Remote Site Control product areas.  For the 
fiscal years ended June 30, 1997, 1996, and 1995, sales to this distributor 
aggregated to $1,551,811 (12%) , $1,223,438 (11%), and $1,946,775 (18%), 
respectively.  At the

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<PAGE>

<PAGE>
end of those years amounts due from this customer were $77,920, $80,983, and
$239,973, respectively.

3.  Financial Instruments
    ---------------------

The carrying values of cash and cash equivalents, the note receivable, accounts
receivable and payable, the Company's line of credit, and accrued liabilities 
all approximate fair value due to the short-term maturities of these assets and
liabilities.  The carrying values of virtually all long-term notes payable also
approximate fair value due to the fact that applicable interest rates fluctuate
based on market conditions.

4.  Inventory
    ---------

Inventory is summarized as follows:

                                                       June 30,
                                                ------------------------
                                                    1997          1996         
                                                    ----          ----
                                        
Raw Materials                                   $   897,481  $   962,504
Work in progress                                    648,712      866,279
Finished goods                                    1,122,568    1,400,982
                                                ------------ -----------
   Total Inventory                              $ 2,668,761  $ 3,229,765
                                                ------------ -----------


5.  Property and Equipment
    ----------------------

Major classifications of property and equipment and estimated useful lives are
as follows:

Office furniture and equipment - 5 to 10 years  $ 3,174,708  $ 2,169,500
Manufacturing and test equipment - 5 to 10 years  1,616,125    1,195,637
Telephone bridging equipment - 10 years             593,070      443,347
Vehicles - 3 to 5 years                              22,318       22,318
                                                ------------ ------------
                                                  5,406,221    3,830,802
Accumulated depreciation and amortization        (2,912,934)  (2,316,173)
                                                ------------ ------------
   Net property and equipment                   $ 2,493,287  $ 1,514,629
 



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<PAGE>
6.  Other Assets
    ------------

Other assets consist principally of deposits, insurance policy cash values,
capitalized software costs, purchased technology, and deferred taxes. 
Amortization is computed on a straight-line basis over three to ten years for
those assets with limited useful lives.  Accumulated amortization was $168,243
and $115,588 at June 30, 1997 and 1996, respectively.

7.  Line of Credit
    --------------

The Company maintains a line of credit ($722,997 outstanding, $2.5 million
available at June 30, 1997 and $916,041 outstanding, on $1,750,000 available at
June 30, 1996) with a commercial bank that expires October 24, 1997 and which 
the Company anticipates renewing beyond that date.  Borrowings accrue interest 
at a rate of anywhere from three to five basis points over the London Interbank
Offered Rate (LIBOR) (10.7% as of June 30, 1997).  The weighted average interest
rate as of June 30, 1997 and 1996, respectively, was 11.00 %, 9.8% and 9.6%.  
The terms of the line of credit prohibit the payment of dividends and require 
the Company to maintain other defined financial ratios and restrictive 
covenants.  No compensating balance arrangements are required.

8.  Long Term Debt
    --------------

Long-term debt consists of the following:

                                                         June 30,
                                                -------------------------
                                                    1997         1996
                                                    ----         ----
                                                    
8.5% note due to a financial institution, 
with monthly payments of $4,008, due April
1997, secured by manufacturing and test
equipment                                       $     -      $    38,565

1.5% over prime note due to a financial
institution, with monthly payments of 
$5,486 due July 1999, secured by 
manufacturing and test equipment                   140,983       194,917

1.5% over prime note due to a financial
institution, with monthly payments of 
$8,579, due September 2000, secured
generally by equipment, furniture, and
other intangible assets                               -          357,082


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<PAGE>
9.25% note due to a financial institution,
with monthly payments of $8,069, due 
February 2001, secured generally by
equipment, furniture and other assets              292,849

11.50 note due to a financial institution with
monthly payments of 14,851, due December 2000, 
secured by furniture                               510,606          -
                                                 ----------- ------------
                                                   944,438       590,564

Less current portion                              (257,164)     (163,314)
                                                 ----------- -----------
   Total long term debt                         $  687,274   $   427,250
                                                 ----------- ------------  
  
Annual principal installments of long-term debt are $257,164, $285,627, 
$263,698, $137,949 and $0 for the years ending June 30, 1998, 1999, 2000, 2001, 
and 2002, respectively.

9.  Leases
    ------

The Company has entered into capital leases with finance companies to finance 
the purchase of certain furniture and equipment.  Property and equipment under
capital leases are as follows:

                                                       June 30,
                                                -------------------------
                                                    1997         1996
                                                    ----         ----
                                                    
Office furniture and equipment                  $   842,238  $   352,877
Manufacturing equipment                             496,718       92,582 
Telephone and bridging equipment                    477,042      327,520
Vehicles                                             22,318       22,318
                                                ------------ -----------      
                                                  1,838,316      795,297
Accumulated Amortization                           (810,477)    (606,886)
                                                ------------ -----------
   Net property and equipment under  
   capital leases                               $ 1,027,839  $   188,411
                                                ------------ ------------

Future minimum lease payments under capital leases and noncancelable operating





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<PAGE>
leases with initial terms of one year or more are as follows:

                                                  Capital     Operating
                                                  -------     ---------
                                                    
For years ending June 30:
   1998                                         $   370,586  $   288,703
   1999                                             314,570      308,488
   2000                                             281,362      308,488
   2001                                             265,202      329,856
   2002                                             130,787      329,856
   Thereafter                                          -         813,607
                                               ------------- ------------
      Total minimum lease payments                1,362,507    2,378,998
                                                               =========
Less use taxes                                      (78,637)
                                                ------------
      Net minimum lease payments                  1,283,870
Less amount representing interest                  (244,566)
                                                ------------
      Present value of net minimum lease 
      payments                                    1,039,304
Less current portion                               (254,950)
                                                ------------
      Capital lease obligation                  $   784,354
                                                ============

 
Certain operating leases contain escalation clauses based on the consumer price
index.  Rental expense, which was composed of minimum rentals under operating
lease obligations, was $245,996, $144,877, and $146,755 for the years ended June
30, 1997, 1996, and 1995, respectively.  The Company's operating lease on its
facility, which expires 2007, provides for renewal options extending the terms
an additional ten years.  Rates charged would be at prevailing market rates at
the time of renewal. 

10.  Royalty Agreements
     ------------------

The Company is a general partner in two limited partnerships, Gentner Research
Ltd. ("GRL"), and Gentner Research II, Ltd. ("GR2L"), both related parties.  GRL
sold the proprietary interest in a remote control product line to the Company in
exchange for royalty agreements in 1987 and 1988.  Royalty expense under the
agreements with GRL for the years ended June 30, 1997, 1996, and 1995, was
$45,100, $29,400, and $17,900, respectively.  In fiscal year 1997, GR2L sold the
proprietary interest in a new remote site control product to the Company in
exchange for a royalty agreement.  Royalty expense under this agreement with 
GR2L for the year ended June 30, 1997 was $36,588.  As of June 30, 1997 GR2L 
owed the Company $139,000 which is a note receivable from the partnership to the
Company. 

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<PAGE>
The terms of the note are such that 50% of all the royalty proceeds will be
applied to the note first.  The note is payable in full on April 30, 2001, and
the interest rate on the note is equal to the Company's cost of short term 
funds. As of June 30, 1996, GR2L owed the Company $24,379 which was 
reimbursement for expenses the Company incurred on behalf of the partnership.

11.  Income Taxes
     ------------

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.  Significant components
of the Company's deferred tax liabilities and assets are as follows:

                                                       June 30,
                                                ------------------------
                                                    1997         1996
                                                    ----         ----
                                                    
Deferred tax liabilities: 
   Tax over book depreciation                   $   164,000  $   149,000
   Unamortized software costs                         7,000       19,000
                                                ------------ ------------
    Total deferred tax liabilities                  171,000      168,000

Deferred tax assets:
   Accounts receivable and other reserves            29,000       21,000
   Capital loss carryforward                           -           4,000
   Inventory reserves                                34,000       20,000
   Product warranty accruals                          8,000        4,000
   Net operating loss carryforwards                 504,000      388,000
   Tax credit carryforwards                         245,000      245,000
                                               ------------- ------------
    Total deferred tax assets                       820,000      682,000
   Valuation allowance for deferred tax assets     (649,000)    (478,000)
                                               ------------- -----------
    Net deferred tax assets                         171,000      204,000
                                               ------------- ------------
    Net deferred taxes                          $      -     $    36,000
                                               ------------- ------------










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<PAGE>
Significant components of the provision for income taxes are as follows:


                                     Years Ended June 30
                               ---------------------------------
                                 1997         1996        1995
                                 ----         ----        ----
                                 
Current:
 Federal                      $    -       $    -      $    -
 State                             900          900         900
 Tax benefits allocated 
 to contributed capital            -         36,000         -
                              ---------    ---------   ---------
  Total current                    900       36,900         900
                              ---------    ---------   ---------

Deferred:
 Federal                        33,000      (33,000)        -
 State                           3,000       (3,000)        -
                               --------    ---------   ---------
  Total deferred                36,000      (36,000)        -
                               --------    ---------   ---------
                              $ 36,900     $    900    $    900
                               --------    ---------   ---------         

The reconciliation of income tax computed at the U.S. federal statutory tax 
rates to income tax expense is as follows:




















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<PAGE>

<PAGE>
                                     Years Ended June 30
                               ---------------------------------
                                 1997         1996        1995
                                 ----         ----        ----
                                 
Tax at federal statutory rate  (34.0) %     (34.0) %    (34.0) %
Increase (reduction) in 
computed tax rate resulting
from:                         
 State income tax, net of 
 federal effect                 (3.5)         3.2        (3.5)
 Valuation allowance            45.8        (14.9)       20.0
 Nondeductible expenses 
 applicable to R & D
 tax credit                        -            -        12.1
 Federal income tax credits 
 generated                         -        (20.9)          -
 Statutory tax disallowance
 of entertainment expenses       1.0          0.8         3.4
 Nondeductible life insurance
 premiums                          -          0.3         0.8
 Utilization of capital loss 
 carryforward                      -         (2.1)          -
 Nondeductible intangible asset
 amortization and other          0.6         (0.1)        2.0
                               --------   ---------     ------- 
                                 9.9 %       0.3 %       0.8 %
                               --------   ---------     -------

At June 30, 1997, for income tax purposes the Company had net operating loss and
research and development tax credit carryforwards of approximately $1,344,000 
and $234,000 respectively, that expire beginning in 2009.

12.  Stock Options
     -------------

The Company's 1990 Incentive Plan has shares of common stock available for
issuance to employees and directors.  Provisions of the Plan include the 
granting of stock options.  Stock options vest over a five year period at 10%, 
15%, 20%, 25% and 30% per year over years one through five.  On August 7, 1996 
the Board of Directors approved an increase in the number of shares available 
under the Plan from 700,000 to 1.5 million.  The Plan expires June 30, 2010.  
Changes in








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<PAGE>
the number of stock options granted under the Plan are as follows:

                                                                 Weighted
                                                                 Average
                                                 Price Range     Exercise
                                 Shares           Per Share        Price
                                 ------          -----------     --------
                                                   
Year ended June 30,
1997:
   Granted. . . . . . . . . . .  595,000        $.071 to $.081     $0.79
   Exercised. . . . . . . . . .     -                  -
   Expired and canceled . . . .  (55,000)       $0.69 to $0.84     $0.72
   Outstanding. . . . . . . . .  920,000        $0.69 to $0.84     $0.78
   Outstanding. . . . . . . . .   20,000             $1.81         $1.81
   Exercisable. . . . . . . . .  271,500        $0.69 to $0.84     $0.73
   Exercisable. . . . . . . . .   12,500             $1.81         $1.81
 
1996:
   Granted. . . . . . . . . . .  140,000             $0.84         $0.84
   Exercised. . . . . . . . . . (207,000)            $0.69         $0.69
   Expired and canceled . . . .  (23,000)       $0.69 to $0.84     $0.82
   Outstanding. . . . . . . . .  400,000        $0.69 to $1.81     $0.80
   Exercisable. . . . . . . . .  209,500        $0.69 to $1.81     $0.78

1995:
   Granted. . . . . . . . . . .   25,000              $.81         $.81
   Exercised. . . . . . . . . .     -                 -
   Expired and canceled . . . .  (11,000)       $0.69 to $0.88     $0.85
   Outstanding. . . . . . . . .  490,000        $0.69 to $1.81     $0.74
   Exercisable. . . . . . . . .  396,500        $0.69 to $1.81     $0.70

There were 279,500 options available for future grant at June 30, 1997.

On June 30, 1993 the Company registered with the Securities and Exchange
Commission all shares of common stock previously issued or issuable under the
Plan.

The Company has applied Accounting Principles Board Opinion No. 25 "Accounting
for Stock Issued to Employees" and related interpretations in accounting for its
plan.  No compensation expense has been recognized for the stock option plan
because the exercise price of the options equals the market price of the
underlying stock on the date of the grant.  If compensation expense for the
Company's stock based compensation plan had been determined consistent with FAS
123 "Accounting and Disclosure of Stock-based Compensation", the Company's net





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<PAGE>
income (loss) would have been the pro forma amount indicated below:




                                           Fiscal Year
                                        1997          1996
                                        ------------------

As reported:
          Net Income                  $ (372,898)   $281,984
          Earnings per share          $    (0.05)   $   0.04

Pro Forma:
          Net Income                  $ (460,116)   $264,941
          Earnings per share          $    (0.06)   $   0.03




The pro forma results above are not likely to be representative of the effects
of applying FAS 123 on reported net income (loss) for future years as these
amounts only reflect the expense from two years.

The weighted-average grant-date fair value of options granted during Fiscal 1997
and Fiscal 1996 was $0.50 and $0.36, respectively.  The fair value of each 
option grant is estimated on the date of the grant using the minimum value as 
defined by FAS 123 using the Black-Scholes model and the following 
assumptions for Fiscal 1997 and Fiscal 1996:  expected dividend yield, 0%; 
risk-free interest rate, 6.0%; expected price volatility, 55.1%; and average 
expected life of options, 5 years.  The weighted average remaining contractual 
life of options outstanding at June 30, 1997 was 5.27 years, excluding the 20
,000 options with an exercise price of $1.81, for which the weighted average 
remaining contractual life is 3 years.

13.  Warrants
     --------

During 1991, the Company filed a registration statement with the Securities and
Exchange Commission in connection with a secondary public offering of 1,437,500
units.  Each unit consisted of three shares of common stock and two redeemable
common stock purchase warrants.  As of June 30, 1997 there were 2,874,025
warrants outstanding.  No warrants were exercised during fiscal 1997, 1996, or
1995.

Each warrant entitled the registered holder to purchase one share of the
Company's common stock at an exercise price of $1.50.  The warrants expired on
September 22, 1997.  The warrants were redeemable by the Company on 30 days 
prior 
written notice at a redemption price of $.05 per warrant if the NASDAQ closing

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<PAGE>
bid price of the common stock equals or exceeds $2.50 per share for any 30
consecutive trading days ending within 15 days of the redemption notice.

The Company also granted the underwriter an option to purchase a total of 
125,000 units at $3.60 per unit, each unit consisting of three shares of common 
stock and warrants to purchase two shares of common stock.  The option expired 
September 22, 1997.  On exercise of all or a portion of the option, these 
particular warrants would carry an exercise price of $3.60 per share of common 
stock, and would not be redeemable.

14.  International Sales
     -------------------

The Company provides products to the Telephone Interface, Remote Site Control
markets,  and products and services to the Teleconferencing markets.  These
products and services are all marketed and distributed from, designed and
manufactured, and service provided at the Company's facilities in Salt Lake City
, Utah.

The Company ships products to unaffiliated distributors in worldwide markets. 
In fiscal 1997, 1996 and 1995, respectively, such international sales were 
$2,183,000, $1,454,000 and $1,420,000, and accounted for 15%, 13%, and 13% of
total sales.  During those years the Company shipped the following amounts,
respectively, to the following areas:  Canada - $724,000, $357,900, and $341,000
; Asia - $451,400, $519,000 and $579,800;  Europe - $580,600, $361,000, and
$197,900;  Latin America - $158,800, $31,300 and $78,700;  Other Areas -
$268,200, $183,900, and $221,600.

15.  Retirement Savings and Profit Sharing Plan, and Employee Stock Purchase   
     Plan
     -----------------------------------------------------------------------

The Company has a 401(k) retirement savings and profit sharing plan in which it
makes discretionary matching contribution, as authorized by the Board of
Directors.  All full-time employees who are at least 21 years of age and have a
minimum of six months of service with the Company at the plan date are eligible
to participate in the plan.  Matching contributions, if made, are based upon
amounts participating employees contribute to the plan.  The Company's 
retirement plan contributions for the 1997, 1996, and 1995 fiscal years totaled 
$0, $16,148, and $10,375, respectively.

During 1997, the Company implemented an employee stock purchase plan (the
"Plan"), which Plan is scheduled for submission to the shareholders of the
Company for their approval at the 1997 Annual Shareholders Meeting.  Under the
Plan, employees may purchase shares of common stock at the quoted market price
of the Company's common stock by the NASDAQ National Market System as of the
purchase date.  In addition, the Company contributes to the account of each
participant, one share for every nine shares purchased by the participant. 
Employees are eligible to participate in the Plan after 90 days continuous

Page 158

<PAGE>

<PAGE>
employment.  The maximum number of shares to be issued under the Plan is 
500,000 shares.  Employee purchases and employer contributions under the Plan 
were not significant during fiscal 1997.

Annual Report on Form 10-KSB
- - - ----------------------------

The Company will provide, at the written request of any record beneficial
shareholder of record as of September 30, 1997, a copy of the Company's Annual
Report on Form 10-KSB.  Requests for copies of the Company's Form 10-KSB should
be mailed to:

Gentner Communications
1825 Research Way
Salt Lake City, UT  84119
Attention:  Susie Strohm





                           EXHIBIT 23.1

                 CONSENT OF INDEPENDENT AUDITORS


We consent to the incorporation by reference in this Annual Report 
(Form 10-KSB) of Gentner Communications Corporation of our report
dated August 1, 1997 (except Note 13, as to which the date is
September 22, 1997), included in the 1997 Annual Report to
Shareholders of Gentner Communications Corporation.


                                                   ERNST & YOUNG LLP
                                                   /s/

Salt Lake City, Utah
September 29, 1997











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<PAGE>

<PAGE>





                             EXHIBIT 23.2

                     CONSENT OF INDEPENDENT AUDITORS


We consent to the incorporation by reference in the Registration
Statement (Form S-8 No. 33-65848) pertaining to the 1990 Incentive
Plan of Gentner Communications Corporation of our report dated August
1, 1997 (except Note 13, as to which the date is September 22, 1997),
with respect to the financial statements of Gentner Communications
Corporation included in the Annual Report for the year ended June 30,
1997.

                                                   ERNST & YOUNG LLP
                                                   /s/

Salt Lake City, Utah
September 29, 1997

























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<PAGE>

<PAGE>




                              EXHIBIT 23.3

                     CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in the Registration
Statement (Form S-8) pertaining to the 1997 Employee Stock Purchase
Plan of Gentner Communications Corporation of our report dated August
1, 1997 (except Note 13, as to which the date is September 22, 1997),
with respect to the financial statements of Gentner Communications
Corporation included in the Annual Report for the year ended June 30,
1997.

                                                   ERNST & YOUNG LLP
                                                   /s/

Salt Lake City, Utah
September 29, 1997




























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<PAGE>

<PAGE>





<TABLE> <S> <C>

<ARTICLE> 5
       
<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          JUN-30-1997
<PERIOD-END>                               JUN-30-1997
<CASH>                                         $63,992
<SECURITIES>                                         0
<RECEIVABLES>                               $1,682,254
<ALLOWANCES>                                         0
<INVENTORY>                                 $2,668,761
<CURRENT-ASSETS>                            $4,551,184
<PP&E>                                      $2,493,287
<DEPRECIATION>                                       0
<TOTAL-ASSETS>                              $7,335,854
<CURRENT-LIABILITIES>                       $2,062,630
<BONDS>                                              0
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                        $7,663
<OTHER-SE>                                  $3,793,933
<TOTAL-LIABILITY-AND-EQUITY>                $7,335,854
<SALES>                                    $13,371,851
<TOTAL-REVENUES>                           $13,379,687
<CGS>                                       $6,874,590
<TOTAL-COSTS>                                        0
<OTHER-EXPENSES>                            $6,644,919
<LOSS-PROVISION>                                     0
<INTEREST-EXPENSE>                            $196,176
<INCOME-PRETAX>                             $(335,998)
<INCOME-TAX>                                   $36,900
<INCOME-CONTINUING>                         $(372,898)
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                $(372,898)
<EPS-PRIMARY>                                   $(.05)
<EPS-DILUTED>                                   $(.05)
        

</TABLE>