Exhibit 4.1 


GMAC COMMERCIAL
FINANCE LLC 



        (as
successor by merger to GMAC Commercial Credit LLC) 




1290 Avenue of the
AmericasNew 
York, New York 10104 



as of  May  7, 2003 




TII NETWORK
TECHNOLOGIES, INC. 



1385 Akron Street
Copiague,
New York 11726  




Re: Waiver 




Gentlemen: 



        Reference
is made to certain financing arrangements by and among GMAC COMMERCIAL FINANCE LLC, as
successor by merger to GMAC Commercial Credit LLC (“Lender”), TII NETWORK
TECHNOLOGIES, INC., formerly known as TII Industries, Inc., (“Borrower”) and TII
Corporation (which was subsequently dissolved), pursuant to certain financing agreements,
including that certain Revolving Credit, Term Loan and Security Agreement dated April 30,
1998 (the “Credit Agreement”), together with various other agreements, documents
and instruments referred to therein or at any time executed and/or delivered in connection
therewith or related thereto (all of the foregoing, together with the Credit Agreement, as
the same has been, is hereby being, and may hereafter be amended, restated, renewed,
extended, supplemented, substituted or otherwise modified, collectively, the “Loan
Documents”). 



        Borrower
has requested that Lender waive the Borrower’s non-compliance with Minimum Net Worth
covenant as set forth in the Credit Agreement for the Borrower’s fiscal quarter
ending March 31, 2003, which Lender has agreed to do subject to the terms and provisions
hereof. 



        In
consideration of the foregoing, the parties hereto hereby agree as follows: 



         1.       
          With regard to the Minimum Net Worth covenant as set forth in the Credit
          Agreement, Lender hereby waives the non-compliance by the Borrower with the
          provisions of said covenant solely for the Borrower’s fiscal quarter ending
          March 31, 2003, provided that, nothing contained herein shall be
          construed to limit, impair or otherwise affect Lender’s right to declare a
          default with respect to any future non-compliance with the above referenced
          covenant or any other covenants contained in the Credit Agreement or any other
          terms and provisions of the Credit Agreement or any Loan Documents. 



         2.       
          In consideration of the waiver to the Loan Documents set forth herein, Borrower
          unconditionally agrees to pay a fee in the amount of $2,500, which fee shall be
          fully earned as of the date of hereof, shall not be subject to refund, rebate or
          proration for any reason whatsoever, and shall be charged by Lender to Borrower
          as of the date hereof. 



         3.       
          Except as expressly set forth herein, no other changes or modifications to the
          Credit Agreement or any other Loan Document are intended or implied, and the
          Credit Agreement and the other Loan Documents and the liens granted thereunder
          are hereby specifically ratified and confirmed as being in full force and effect
          as of the date hereof. Except as otherwise expressly provided in any of the Loan
          Documents, in all respects, including all matters of construction, validity and
          performance, this letter shall be governed by, and construed and enforced in
          accordance with, the laws of the State of New York applicable to contracts made
          and performed in such state, without regard to the principles thereof regarding
          conflicts of laws, and any applicable laws of the United States of America. 



         4..       
          To the extent that any term or provision of the Credit Agreement or the other
          Loan Documents conflicts with any term or provision hereof, the terms and
          provisions hereof shall control. 



         5.       
          This letter shall be effective upon execution of each of the parties hereto and
          may be executed in any number of counterparts, each of which shall be an
          original, but all of which, when taken together, shall constitute one and the
          same instrument. 







		GMAC COMMERCIAL FINANCE LLC




By:  /s/ David M. Duffy  



Title: Senior Vice President
		








ACKNOWLEDGED AND AGREED: 




TII NETWORK
TECHNOLOGIES, INC. 




By:  /s/ Kenneth A. Paladino   




Title: Vice President-Finance
         and Principal Financial Officer