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Exhibit 10.3

| | CIT BUSINESS CREDIT1211 Avenue of the AmericasNew York, NY 10036 | T: 212 536-1200
| | ---------------------------------------------------------------- | ---------------

> CIT
> 
> April
> 25, 2005
> TELTRONICS, INC.2150 Whitfield Industrial
> WaySarasota, 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 endingJune 30, 2005
>      $1,580,000(iii) For the 9-month period endingSeptember 30, 2005
>      $2,550,000(iv) For the 12-month period endingDecember 31, 2005, and each12-month periodEnding at the end of each fiscal quarter thereafter
>      $3,320,000(e)    Fixed Charge Coverage Ratio:
> 
> Period
>      Ratio(i) For the 3-month period endingMarch 31, 2005
>      1.20 to 1.0(ii) For the 6-month period endingJune 30, 2005
>      1.15 to 1.0(iii) For the 9-month period endingSeptember 30, 2005
>      1.30 to 1.0(iv) For the 12-month period endingDecember 31, 2005, and each 12-month periodEnding at the end of each fiscal quarter thereafter
>      1.30 to 1.0The
> 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 PresidentRead and Agreed to:TELTRONICS, INC.
> By:    /s/ Ewen Cameron
>          Ewen Cameron
> Title:  President/CEO