AMENDMENT NUMBER FIVE TO CREDIT AGREEMENT

This Amendment Number Five to Credit Agreement (“ Amendment ”) is entered into as of July 1, 2009, by and among the lenders identified on the signature pages hereof (such lenders, together with their respective successors and permitted assigns, are referred to hereinafter each individually as a “ Lender ” and collectively as the “ Lenders ”), and WELLS FARGO FOOTHILL, INC., a California corporation, as the arranger and administrative agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “ Agent ”), on the one hand, and TELTRONICS, INC., a Delaware corporation (“ Borrower ”), on the other hand, with reference to the following facts:

A.    Borrower, Agent, and Lenders have previously entered into that certain Credit Agreement, dated as of May 31, 2007 (as amended and modified, from time to time, the “ Agreement ”).

B.     Borrower has requested that Agent and Lenders make certain amendments to the Agreement as provided for and on the conditions set forth herein.

NOW, THEREFORE,   for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby amend and supplement the Agreement as follows:

1.      DEFINITIONS .   All initially capitalized terms used in this Amendment shall have the meanings given to them in the Agreement unless specifically defined herein.

2.     AMENDMENT .  Clause (i) of the definition of “Eligible Accounts” set forth in Schedule 1.1 to the Agreement is hereby amended by deleting such clause in its entirety and replacing it with the following:

(i)  Accounts with respect to an Account Debtor whose total obligations owing to Borrower exceed (i) (1) solely during the period commencing on July 1, 2009 and ending on September 30, 2009 (the “Modified Advance Period”), 75% of all Eligible Accounts, with respect to Accounts owed by the New York City Board of Education and its Affiliates (collectively, “NYBOE”), and (2) at any time other than the Modified Advance Period, 55% of all Eligible Accounts, with respect to Accounts owed by NYBOE, (ii) (1) solely during the Modified Advance Period, 10% of all Eligible Accounts, with respect to Accounts owed by the New York City Department of Corrections and its Affiliates (collectively, “NYDOC”), and (2) at any time other than the Modified Advance Period, 30% of all Eligible Accounts, with respect to Accounts owed NYDOC, (iii) (1) solely during the Modified Advance Period, 15% of all Eligible Accounts, with respect to Accounts owed by the Federal Bureau of Prisons and its Affiliates (collectively, “FBOP”), and (2) at any time other than the Modified Advance Period, 30% of all Eligible Accounts, with respect to Accounts owed by FBOP, but in no event shall the aggregate amount of all Eligible Accounts owed by NYBOE, NYDOC or FBOP (x) solely during the Modified Advance Period, exceed 85% of all Eligible Accounts, and (y) at any time other than