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Exhibit 10.3

CIT BUSINESS CREDIT
1211 Avenue of the Americas
New York, NY 10036 T: 212 536-1200

> CIT
> 
> 
>         April 25, 2005
> 
> 
> 
> TELTRONICS, INC.
> 2150 Whitfield Industrial Way
> Sarasota,
> FL 34243
> 
> Gentlemen:
> 
> We refer to the Loan and Security Agreement between us dated October 28, 1994
> as amended (the “Loan Agreement”). Capitalized terms used herein and defined
> in the Loan Agreement shall have the same meanings as specified therein unless
> otherwise specifically defined herein.
> 
> You have advised us that you are in violation of Section 6, Paragraph 6.6 of
> the Loan Agreement as a result of a Patent Transfer Agreement with Harris
> Corporation whereby you transferred all rights and interest in certain
> patents.
> 
> This letter is to confirm our agreement that, solely with respect to the
> foregoing violation and/or breach of the Loan Agreement it shall not be deemed
> to be a Default and/or Events of Default under the Loan Agreement. On and
> after the date hereof you shall be in compliance with all of the terms and
> provisions of the Loan Agreement as amended hereby.
> 
> In addition, effective immediately, the Loan Agreement shall be, and hereby
> is, amended as follows:
> 
> 1.      Section 6, Paragraph 6.11 of the Loan Agreement shall be, and hereby
> is, amended by adding the following sentences to the end of such paragraph:
> 
> > “Borrower will not permit EBITDA as of the last day of any fiscal quarter
> > set forth in Section 10.5(d), calculated as set forth therein, to be less
> > than the amount set forth opposite such period.
> > 
> > Borrower shall also maintain a Fixed Charge Coverage Ratio (as defined in
> > Section 10.5) calculated for each of the periods set forth in Section
> > 10.5(e) (as determined in accordance with GAAP (as defined in Section 10) of
> > not less than the ratio set forth opposite each applicable period in such
> > Section.”
> 
> 2.      Section 6, Paragraph 6.13 subsection (d) of the Loan Agreement shall
> be, and hereby is, deleted in its entirety and replaced by the following in
> lieu thereof:
> 
> > “(d) all costs and expenses from time to time incurred by Lender during the
> > course of periodic field examination of the Collateral and Borrower’s
> > operations, the Lender
> 
> --------------------------------------------------------------------------------
> 
> > shall charge the Borrower a fee of $850.00 per examiner for each day, or
> > part thereof, during which such field examination is conducted, plus any
> > out-of-pocket costs and expenses incurred by Lender; and”
> 
> 3.      Section 9, Paragraph 9.1 of the Loan Agreement shall be, and hereby
> is, deleted in its entirety and replaced by the following in lieu thereof:
> 
> > “9.1 This Agreement shall continue in full force and effect until March 31,
> > 2006 (the “Initial Term”) and shall be deemed automatically renewed for
> > successive terms of one (1) year each thereafter (each of “Renewal Term”)
> > unless terminated as of the end of the Initial Term or any Renewal Term by
> > either party giving the other written notice at least sixty (60) days prior
> > to the end of the Initial Term or such Renewal Term.”
> 
> 4.      Section 10, Paragraph 10.1(c) of the Loan Agreement shall be, and
> hereby is, deleted in its entirety and replaced by the following in lieu
> thereof:
> 
> > “(c) Inventory Sublimit: $250,000; provided that such amount shall be
> > decreased in an amount equal to $62,500 per month commencing May 1, 2005 and
> > $62,500 on the first day of each month thereafter until such time as the
> > Inventory Sublimit is reduced to zero dollars ($0).”
> 
> 5.      Section 10, Paragraph 10.4 subparagraphs (b) and (c) of the Loan
> Agreement shall be, and hereby is, deleted in its entirety and replaced by the
> following in lieu thereof:
> 
> > “(b)     Facility Fee: In consideration of Lender’s entering into the
> > Initial Term the Lender shall charge Borrower an annual facility fee equal
> > to 0.60% of the Maximum Credit, which fee shall be in addition to any other
> > fees or commissions Lender is entitled to charge Borrower under the
> > Agreement and shall be deemed due and earned on April 25, 2005 but shall be
> > charged to Borrower’s account in three consecutive equal monthly
> > installments payable on May 31, 2005, June 30, 2005 and July 29, 2005.
> > 
> > (c)    Minimum Loan Fee: If the average outstanding amount of loans
> > (including all Revolving Loans and any Term Loan) in any month is less than
> > $3,500,000, then Lender shall be entitled to receive a fee, payable as of
> > the last day of each month, equal to the difference between $3,500,000 and
> > the actual annual average loan balance for the month in question, multiplied
> > by the Interest Rate in effect on the last day of the month in question.”
> 
> 6.      Section 10, Paragraph 10.4 of the Loan Agreement shall be, and hereby
> is, amended by adding the following subparagraph (e):
> 
> > “(e)  On the first business day of each month, the Borrower shall pay to
> > Lender a Collateral Management Fee In the amount of $1,500, which shall be
> > deemed fully earned when paid. As used herein, “Collateral Management Fee”
> > shall mean the fees Lender shall charge to offset the expenses and costs
> > (excluding out-of-pocket expenses and auditor fees) of Lender in connection
> > with administration, record keeping, analyzing and evaluating the
> > Collateral.
> 
> 7.      Section 10, Paragraph 10.5 of the Loan Agreement shall be, and hereby
> is, amended by adding the following subparagraphs (d) and (e) thereto:
> 
> --------------------------------------------------------------------------------
> 
> > (d)   EBITDA:
> > 
> > Period Amount   (i) For the 3-month period ending March 31, 2005
> > $   730,000  (ii) For the 6-month period ending June 30, 2005 $1,580,000 
> > (iii) For the 9-month period ending September 30, 2005 $2,550,000  (iv) For
> > the 12-month period ending December 31, 2005, and each12-month period Ending
> > at the end of each fiscal quarter thereafter $3,320,000 
> > 
> > (e)   Fixed Charge Coverage Ratio:
> > 
> > Period Ratio   (i) For the 3-month period ending
> > March 31, 2005 1.20 to 1.0 (ii) For the 6-month period ending June 30, 2005
> > 1.15 to 1.0 (iii) For the 9-month period ending September 30, 2005 1.30 to
> > 1.0 (iv) For the 12-month period ending December 31, 2005, and each 12-month
> > period Ending at the end of each fiscal quarter thereafter 1.30 to 1.0
> > 
> > 
> > The foregoing ratio shall be calculated on a cumulative quarterly basis
> > during the first 12 month period ending December 31, 2005 and on a rolling
> > four quarter basis thereafter.
> 
> “Fixed Charge Coverage Ratio” shall mean, for the relevant period, the ratio
> determined by dividing EBITDA by the sum of (a) all interest obligations paid
> or due, (b) the amount of principal repaid or scheduled to be repaid on the
> Term Loan and Subordinated Debt, (c) unfinanced Capital Expenditures actually
> incurred, (d) all federal, state and local income tax expenses due and
> payable, and (e) all dividends paid.
> 
> “EBITDA” shall mean, in any period, all earnings of the Borrower before all
> (i) interest and tax obligations, (ii) depreciation and (iii) amortization for
> said period, all determined in accordance with GAAP on a consistent basis with
> the latest audited financial statements of the Borrower, but excluding the
> effect of extraordinary and/or non-reoccurring gains or losses for such
> period.
> 
> “GAAP” shall mean generally accepted accounting principles in the United
> States of America as in effect from time to time for the period as to which
> such accounting principles are to apply.
> 
> “Subordinated Debt” shall mean the agreement among the Borrower, a
> Subordinating Creditor and us pursuant to which Subordinated Debt is
> subordinated to the prior payment and satisfaction of the Borrower’s
> Obligations to Lender (in form and substance satisfactory to us).
> 
> --------------------------------------------------------------------------------
> 
> “Capital Expenditures” shall mean for any period shall mean the aggregate of
> all expenditures of the Borrower during such period that in conformity with
> GAAP are required to be included in or reflected by the property, plant or
> equipment or similar fixed asset account reflected in the balance sheet of the
> Borrower.
> 
> In addition to the foregoing and upon execution of this amendment letter, the
> Notice of Termination is hereby rescinded and cancelled, and the Loan
> Agreement in its entirety continues in full force and effect. All of the
> terms, provisions and conditions as amended hereby of the Loan Agreement shall
> be, and hereby are, adopted, ratified and confirmed in all respects.
> 
> In consideration of (i) our execution of this Waiver and Amendment Letter you
> agree to pay us an Accommodation Fee of $5,000.00 and (ii) the preparation of
> this agreement by our in-house legal department you agree to pay us a
> Documentation Fee of $1,000.00. Such fees shall be due and payable in full on
> the date hereof and may, at our option, be charged to your Revolving Loan
> Account on the due date thereof. You further agree to pay all Out-of-Pocket
> Expenses incurred in connection with this Waiver and Amendment Agreement and
> the transactions contemplated hereby, all of which may (at our option) be
> charged to your Loan Account.
> 
> Except to the extent set forth herein, no other waiver of, or change in any of
> the terms, provisions or conditions of the Loan Agreement is intended or
> implied. This agreement shall not constitute a waiver of any other existing
> Defaults or Events of Default under the Loan Agreement (whether or not we have
> knowledge thereof), and shall not constitute a waiver of any future Defaults
> or Events of Default whatsoever.
> 
> If the foregoing is in accordance with your understanding of our agreement,
> kindly so indicate by signing and returning the enclosed copy of this letter.
> 
>   Very truly yours,
> 
> THE CIT GROUP/BUSINESS CREDIT, INC.
> 
> By:       /s/ Carl Giordano             
>           Carl Giordano
> Title:    Assistant Vice President     
> 
> 
> 
> 
> Read and Agreed to:
> 
> TELTRONICS, INC.
> 
> By:    /s/ Ewen Cameron          
>          Ewen Cameron
> Title:  President/CEO          
> 
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