Exhibit 10

SECOND AMENDMENT TO
LOAN AND SECURITY AGREEMENT

        THIS SECOND AMENDMENT TO LOAN AGREEMENT AND LOAN DOCUMENTS (“Amendment”)
dated as of the 9th day of September, 2003, is made and entered into on the
terms and conditions hereinafter set forth, by and between TELTRONICS, INC., a
Delaware corporation “Borrower”) and FINOVA MEZZANINE CAPITAL INC., a Tennessee
corporation f/k/a Sirrom Capital Corporation (“Lender”).

RECITALS:

        WHEREAS, Lender has previously made a term loan to Borrowers in the
original principal amount of One Million Two Hundred Eighty Thousand and
No/100ths Dollars ($1,280,000) (the “Loan”) on the terms and conditions set
forth in that certain Loan and Security Agreement dated February 25, 1998 and
that certain First Amendment to Loan and Security Agreement dated September 30,
2002, by and between Lender and Borrowers (the Loan and Security Agreement as
now or hereafter amended, is hereinafter referred to as the “Loan Agreement”) of
which $304,380.81 is outstanding under the Fourth Amended and Restated Secured
Promissory Note dated September 30, 2002.

        WHEREAS, the current payment terms are as set forth in the Fourth
Amended and Restated Secured Promissory Note dated September 30, 2002 in the
principal amount of $830,964.25 (the “Note”); and

        WHEREAS, the Loan is further evidenced and secured by certain
agreements, documents and instruments as more particularly described in the Loan
Agreement and defined therein as the “Loan Documents”; and

        WHEREAS, the parties desire to amend and restate the Note and amend
certain portions of the Loan Agreement; and

        WHEREAS, this Amendment shall amend the Loan Documents.

AGREEMENT:

        NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Borrowers and Lender hereby agree as follows:

    1.        Capitalized terms used herein but not otherwise defined shall have
the meanings ascribed thereto in the Loan Agreement.

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    2.        The first sentence of Section 1.1 of the Agreement is hereby
amended to read in its entirety as follows:

 

        The Loan shall be evidenced by a Fifth Amended and Restated Secured
Promissory Note (the “Note”) in the original principal amount of Three Hundred
Four Thousand Three Hundred Eighty and 81/100th Dollars ($304,380.81), dated
September 9, 2003, executed by Borrowers in favor of Lender. All references to
the Note hereunder shall refer to the Note.

    3.        Section 4.16 of the Agreement is hereby amended to read in its
entirety as follows:

 

     Section 4.16   Mergers, Consolidations and Sales of Assets.

 

(a)     Without the prior written consent of Lender, no Borrower will
consolidate with or be a party to a merger or share exchange with any other
corporation or (2) sell, lease or otherwise dispose of all or any substantial
part (as defined in paragraph (c) of this Section 4.16) of the assets of such
Borrower.

 

(b)     Without the prior written consent of Lender, no Borrower will sell,
transfer or otherwise dispose of any shares of stock in any Subsidiary or any
indebtedness or substantial part of any assets of any Subsidiary, and will not
permit any Subsidiary to sell, transfer or otherwise dispose of (except to
Teltronics or a wholly-owned Subsidiary of Teltronics) any shares of stock or
any indebtedness or substantial part of any assets of any other Subsidiary,
unless all of the following conditions are met:

 

(i)

simultaneously with such sale, transfer or disposition, all shares of stock and
any indebtedness or assets of such Subsidiary at the time owned by Teltronics
and by every other Subsidiary shall be sold, transferred or disposed of as an
entirety;

  (ii)

the Board of Directors of Teltronics shall have determined, as evidenced by a
resolution thereof, that the retention of such stock and indebtedness or assets
is not longer in the best interests of Teltronics;

 

(iii)

such stock and Indebtedness is sold, transferred or otherwise disposed of to a
person, for a cash consideration and on terms reasonably deemed by the Board of
Directors of Teltronics to be adequate and satisfactory;

 

(iv)

the Subsidiary being disposed of shall not have any continuing investment in
Teltronics or any other Subsidiary not being simultaneously disposed of; and

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(v)

such sale or other disposition does not involve a substantial part (as
hereinafter defined) of the assets of Teltronics and its Subsidiaries taken as a
whole.

 

(vi)

The proceeds of any such sale relating to 36371 Yukon Corp shall be used to
retire the indebtedness of such Subsidiary to Tri Links, Inc.

    (c)        As used in this Section 4.16, a sale, lease or other disposition
of assets shall be deemed to be a “substantial part” of the assets of a Borrower
only if the book value of such assets, when added to the book value of all other
assets, sold, leased or otherwise disposed of by all other Borrowers (other than
in the ordinary course of business) during the same twelve month period ending
on the date of such sale, lease or other disposition, exceeds 15% of the
consolidated net tangible assets of all Borrowers determined as of the end of
the immediately preceding fiscal year.

    4.        Borrower hereby represent and warrant to Lender that all of the
representations made in Section 2 of the Loan Agreement are true and correct as
of the date hereof, except as modified or supplemented by Schedule A attached
hereto and incorporated herein by this reference.

    5.        To the best knowledge of Borrower, Borrower hereby represents and
warrants to Lender that the address(es) set forth on Schedule B attached hereto
and incorporated herein by this reference is the principal place of Borrower’s
business and the location of all tangible collateral and the place where the
records concerning all intangible collateral are kept and/or maintained.

    6.        Borrower shall pay to Lender a processing fee of $15,000 and all
expenses of Lender incurred in connection with the extension of the maturity
date on the closing of this Amendment.

    7.        If, at any time while the Loan remains outstanding, Borrower sells
or otherwise issues any shares of its capital stock or any other of its equity
securities (“Equity Financing”), Borrower shall remit a principal payment under
the Loan equal to outstanding principal balance of the Loan if gross cash
proceeds to Borrower from the Equity Financing are in excess of the outstanding
principal balance of the Loan.

    8.        The obligation of Lender to execute this Amendment and agree to
the provisions hereof is subject to Borrowers delivery to Lender of each of the
following:

 

(a)

a Fifth Amended and Restated Secured Promissory Note executed by Borrowers,
substantially in the form of Exhibit B attached hereto;

 

(b)

Receipt by Lender of the principal and interest payment of $55,000 that was due
August 1, 2003.

    9.        Borrower warrants and represents that (a) the Loan Documents are
valid, binding and enforceable against Borrower according to their terms,
subject to principles of equity and laws applicable to the rights of creditors
generally, including bankruptcy laws, (b) no default or Event of

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Default presently exists under the Loan Documents and no condition presently
exists which, with the giving of notice, the passing of time, or both, would
cause such a default or Event of Default. Borrower further acknowledges that
Borrower’s obligations evidenced by the Loan Documents are not subject to any
counterclaim, defense or right of setoff, and Borrower hereby releases Lender
from any claim, known or unknown, that Borrower may have against Lender as of
the execution of this Amendment.

    10.        The terms “Loan Document” and “Loan Documents” as defined in the
Loan Agreement are amended to include this Amendment.

    31.        This Amendment may be executed in any number of counterparts and
by different parties to this Amendment in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same Amendment.

    42.        Except as modified and amended hereby, the Loan Documents shall
remain in full force and effect.

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        IN WITNESS WHEREOF, the parties hereto have executed this Amendment, or
have caused this Amendment to be executed by their duly authorized officers, as
of the day and year first above written.

BORROWER:

TELTRONICS, INC.

LENDER:

FINOVA MEZZANINE CAPITAL INC.

By:   /s/ Patrick G. Min                            
Title:   Vice President Finance & CFO     By:   /s/ Philip S. Clark        
Title:      V.P.                            

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$304,380.81 September 9th, 2003

FIFTH AMENDED AND RESTATED
SECURED PROMISSORY NOTE

        FOR VALUE RECEIVED, the undersigned, TELTRONICS, INC., a Delaware
corporation (“Maker”), promise to pay to the order of FINOVA MEZZANINE CAPITAL,
INC., a Tennessee corporation f/k/a SIRROM CAPITAL CORPORATION, d/b/a Tandem
Capital, Inc., (“Payee” and, together with any subsequent holder(s) hereof,
“Holder”), 500 Church Street, Suite 200, Nashville, TN 37219, or at such other
place as Holder may designate to Maker in writing from time to time, or at such
other place as Holder may designate to Maker in writing from time to time, on
February 1, 2004 (the “Maturity Date”), the principal sum of THREE HUNDRED FOUR
THOUSAND THREE HUNDRED EIGHTY and 81/100 DOLLARS ($304,380.81), together with
interest on the outstanding principal balance hereof from the date of each
advance at the rate of fourteen percent (14%) per annum computed on the basis of
a 360-day year.

        Maker shall make a payment of $55,000 per month beginning September 1,
2003 and due the 1st of each successive month which shall be applied first to
the outstanding interest and then outstanding principal until February 1, 2004
(the “Maturity Date”) at which time all outstanding principal and interest shall
be paid in full.

        The indebtedness evidenced hereby may be prepaid in whole or in part at
any time and from time to time, without penalty. Any such prepayments shall be
credited first to any accrued and unpaid interest and then to the outstanding
principal balance hereof.

        Time is of the essence under this Amended and Restated Note (the
“Note”).

        This is the Note referenced in, and issued pursuant to, the Loan and
Security Agreement dated February 25, 1998 and that First Amendment to Loan and
Security Agreement dated September 30, 2002, between the Maker and the Payee and
that Second Amendment to Loan and Security Agreement dated September 9, 2003 (as
amended, supplemented or otherwise modified from time to time, the “Loan
Agreement”). The Loan Agreement is hereby amended as necessary to make it
consistent with the amendments contained herein. The indebtedness evidenced by
this Note was incurred pursuant to, and is governed and secured by the Loan
Agreement and the other “Loan Documents” defined and referenced therein.
Reference is made to the Loan Agreement for a description of the terms and
conditions governing this Note and the indebtedness evidenced hereby, including
but not limited to the circumstances under which the indebtedness evidenced by
this Note may be declared, or may automatically become, immediately due and
payable prior to the Maturity Date.

        To the extent permitted by applicable law, upon the occurrence of any
Event of Default (as such term is defined in the Loan Agreement), at the option
of Holder and without notice to Maker, all overdue interest, if any, shall be
added to the outstanding principal balance hereof, and the entire

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outstanding principal balance, as so adjusted, shall bear interest thereafter
until paid at an annual rate equal to the otherwise then-applicable interest
rate plus an additional two percent (2%) per annum (computed on he basis of a
360-day year).

        If this Note is placed in the hands of an attorney for collection or for
enforcement or protection of the security, or if Holder incurs any costs
incident to the collection of the indebtedness evidenced hereby or the
enforcement or protection of the security, Maker and any endorsers hereof agree
to pay to Holder an amount equal to all such costs, including, without
limitation, all reasonable attorneys fees and all court costs.

        Presentment for payment, demand, protest and notice of demand, protest
and nonpayment are hereby waived by maker and all other parties hereto. No
failure to accelerate the indebtedness evidenced hereby by reason of default
hereunder acceptance of a past-due installment or other indulgences granted form
time to time, shall be construed as a novation of this Note or as a waiver of
such right of acceleration or of the right of Holder thereafter to insist upon
strict compliance with the terms of this Note or to prevent the exercise of such
right of acceleration or any other right granted hereunder or by applicable
laws. No extension of the time for payment of the indebtedness evidenced hereby
or any installment due hereunder made by agreement with any person now or
hereafter liable of payment of the indebtedness evidenced hereby, shall operate
to release, discharge, modify, change or affect the original liability of Maker
hereunder or that of any other person now or hereafter liable for payment of the
indebtedness evidenced hereby, either in whole or in part, unless Holder agrees
otherwise in writing. This Note may not be changed orally, but only by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification or discharge is sought.

        All interest accruing under this Note is subject to the terms of Section
8.7 of the Loan Agreement. Without limitation to the foregoing, all agreements
herein made are expressly limited so that in no event whatsoever, whether by
reason of advancement of proceeds hereof, acceleration of maturity of the unpaid
balance hereof or otherwise, shall the amount paid or agreed to be paid to
Holder for the use of the money advanced or to be advanced hereunder exceed the
maximum amounts collective under applicable laws in effect from time to time
(the “Maximum Rate”). If, from any circumstances whatsoever, the fulfillment of
any provision of this Note or any other agreement or instrument now or hereafter
evidencing, securing or in any way relating to the indebtedness evidenced hereby
shall involve the payment of interest in excess of said Maximum Rate, then ipso
facto, the obligation to pay interest hereunder shall be reduced to said Maximum
Rate; and if from any circumstance whatsoever, Holder shall ever receive
interest, the amount of which would exceed the amount collectible at said
Maximum Rate, such amount as would be excessive interest shall be applied to the
reduction of the principal balance regaining unpaid hereunder and not to the
payment of interest. This provision shall control every other provision in any
and all other agreements and instruments existing or hereafter arising between
Maker and Holder with respect to the indebtedness evidenced hereby.

        This Note shall be construed and enforced under the internal laws of the
State of Tennessee, without reference to the conflict of laws principles
thereof.

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        Maker hereby irrevocably consents to the jurisdiction of any state or
federal courts sitting in Davidson County, Tennessee, for the purpose of any
litigation to which Holder may be a party and which concerns this Note or the
indebtedness evidenced hereby. It is further agreed that venue for any such
action shall lie exclusively with courts sitting in Davidson County, Tennessee
unless Holder agrees to the contrary in writing.

        As used herein, the terms “Maker” and “Holder” shall be deemed to
include their respective successors, legal representatives and assigns, whether
by voluntary action of the parties or by operation of law.

        This Note is executed, in part, in renewal, amendment, restatement and
modification of, but not in novation or discharge of, the existing obligations
and indebtedness of Maker to Payee as evidenced by that Fourth Amended and
Restated Secured Promissory Note executed and delivered in favor of Payee by
Maker on September 30, 2002.

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[SIGNATURE PAGE TO FIFTH AMENDED AND RESTATED SECURED
PROMISSORY NOTE ($304,380.81)]

  MAKER:

TELTRONICS, INC.

By:     /s/ Patrick G. Min     
Name:  Patrick G. Min        
Its:  VP Finance & CFO     

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