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| Section/Covenant                                                           | Required      Performance       | Actual      Performance        |
|----------------------------------------------------------------------------|---------------------------------|--------------------------------|
| Section      6.16(a) – MinimumEBITDA                                 | $3,350,000      at May 31, 2008 | 1,908,274      at May 31, 2008 |
| Section      6.16(b) – Minimum Fixed      Charge Coverage Ratio | 0.90:1.00      at May 31, 2008  | 0.39:1.00      at May 31, 2008 |

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| Level | TTM      EBITDA Calculation | Base      Rate Margin       |
|-------|-----------------------------|-----------------------------|
| I     | <      $3,000,000        | 3.75      percentage points |
| II    | ≥ $3,000,000     | 2.50      percentage points |

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| Required      Amount | Applicable      Period                       |
|----------------------|----------------------------------------------|
| ($197,000)           | For      the 12 month period ending 8/31/08  |
| ($215,000)           | For      the 12 month period ending 9/30/08  |
| $105,000             | For      the 12 month period ending 10/31/08 |
| ($78,000)            | For      the 12 month period ending 11/30/08 |
| $512,000             | For      the 12 month period ending 12/31/08 |
| $705,000             | For      the 12 month period ending 1/31/09  |
| $933,000             | For      the 12 month period ending 2/28/09  |
| $1,496,000           | For      the 12 month period ending 3/31/09  |
| $1,995,000           | For      the 12 month period ending 4/30/09  |
| $2,470,000           | For      the 12 month period ending 5/31/09  |
| $2,970,000           | For      the 12 month period ending 6/30/09  |
| $3,060,000           | For      the 12 month period ending 7/31/09  |
| $3,260,000           | For      the 12 month period ending 8/31/09  |
| $3,350,000           | For      the 12 month period ending 9/30/09  |
| $2,940,000           | For      the 12 month period ending 10/31/09 |

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| $2,710,000 | For      the 12 month period ending 11/30/09 |
|------------|----------------------------------------------|
| $2,725,000 | For      the 12 month period ending 12/31/09 |

| Applicable      Ratio | Month    Ending                              |
|-----------------------|----------------------------------------------|
| 0.75:1.0              | For      the 12 month period ending 4/30/09  |
| 0.94:1.0              | For      the 12 month period ending 5/31/09  |
| 1.13:1.0              | For      the 12 month period ending 6/30/09  |
| 1.15:1.0              | For      the 12 month period ending 7/31/09  |
| 1.23:1.0              | For      the 12 month period ending 8/31/09  |
| 1.26:1.0              | For      the 12 month period ending 9/30/09  |
| 1.12:1.0              | For      the 12 month period ending 10/31/09 |
| 1.11:1.0              | For      the 12 month period ending 11/30/09 |
| 1.12:1.0              | For      the 12 month period ending 12/31/09 |

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| Fiscal Year      2008 | Fiscal      Year      2009 | Fiscal      Year 2010 | Fiscal Year      2011 |
|-----------------------|----------------------------|-----------------------|-----------------------|
| $250,000              | $250,000                   | $250,000              | $250,000              |

| Required      Amount | Applicable      Period                       |
|----------------------|----------------------------------------------|
| $9,670,000           | For      the 12 month period ending 8/31/08  |
| $9,547,000           | For      the 12 month period ending 9/30/08  |
| $9,405,000           | For      the 12 month period ending 10/31/08 |
| $9,265,000           | For      the 12 month period ending 11/30/08 |
| $9,214,500           | For      the 12 month period ending 12/31/08 |
| $8,965,000           | For      the 12 month period ending 1/31/09  |
| $8,990,000           | For      the 12 month period ending 2/28/09  |
| $8,905,000           | For      the 12 month period ending 3/31/09  |
| $8,825,000           | For      the 12 month period ending 4/30/09  |
| $8,740,000           | For      the 12 month period ending 5/31/09  |
| $8,781,000           | For      the 12 month period ending 6/30/09  |
| $8,790,000           | For      the 12 month period ending 7/31/09  |
| $8,810,000           | For      the 12 month period ending 8/31/09  |
| $8,815,000           | For      the 12 month period ending 9/30/09  |
| $8,825,000           | For      the 12 month period ending 10/31/09 |
| $8,840,000           | For      the 12 month period ending 11/30/09 |
| $8,850,000           | For      the 12 month period ending 12/31/09 |

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|  TELTRONICS,      INC.,a      Delaware corporation  |
|---------------------------------------------------------------|
|                                                          |   |   |
| By:                                                           |   | /s/      Ewen R. Cameron |
| Name:                                                         |   | Ewen      R. Cameron |
| Title:                                                        |   | President      & CEO |

|  WELLS      FARGO FOOTHILL, INC.,a      California corporation, as Agent and as a Lender  |
|-----------------------------------------------------------------------------------------------------|
|                                                                                                |   |   |
| By:                                                                                                 |   | /s/      Tiffany Ormon     |
| Name:                                                                                               |   | Tiffany      Ormon |
| Title:                                                                                              |   | Vice      President |

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