EXHIBIT 10(b)

FOURTH AMENDMENT TO
LOAN AND SECURITY AGREEMENT

               THIS FOURTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (this
“Amendment”) is entered into as of November 18, 2004, but effective as of
October 30, 2004 (the “Effective Date”), among NORSTAN COMMUNICATIONS INC., a
Minnesota corporation (“Communications (US)”), VIBES TECHNOLOGIES, INC., a
Minnesota corporation (“Vibes”; Communications (US) and Vibes are referred to
hereinafter each individually as “Borrower”, and collectively, as “Borrowers”),
NORSTAN, INC., a Minnesota corporation (“Parent”), NORSTAN FINANCIAL SERVICES
INC., a Minnesota corporation (“Norstan Financial”), NORSTAN CANADA INC., a
Minnesota corporation (“Canada Holdings”), NORSTAN INTERNATIONAL, INC., a
Minnesota corporation (“UK Holdings”) and NORSTAN CANADA LTD., an Ontario
corporation (“Communications (Canada)”; Parent, Norstan Financial, Canada
Holdings, Norstan International, UK Holdings and Communications (Canada) are
referred to hereinafter each individually as a “ Credit Party”, and individually
and collectively, jointly and severally, as the “Credit Parties”) and WELLS
FARGO FOOTHILL, INC., a California corporation, as agent for lenders (“Agent”).

               WHEREAS, Borrowers, Credit Parties (Borrowers and Credit Parties
are referred to hereinafter each individually as “Company”, and collectively, as
“Companies”), Agent and Lenders are parties to a Loan and Security Agreement
dated as of December 10, 2003 (as amended, restated, supplemented or otherwise
modified from time to time, and as amended hereby, the “Loan Agreement”);

               WHEREAS, the Companies have requested that Agent amend the Loan
Agreement, and Agent has agreed to do so subject to the terms and conditions
contained herein.

               NOW THEREFORE, in consideration of the promises and mutual
agreements herein contained, the parties hereto agree as follows:

               1. Defined Terms. Unless otherwise defined herein, capitalized
terms used herein shall have the meanings ascribed to such terms in the Loan
Agreement.

               2. Amendment to Loan Agreement. Subject to the satisfaction of
the conditions set forth in Section 3 hereof, the Loan Agreement is hereby
amended, as follows:

               (a) The defined term, “Norstan Resale Business Projections”,
contained in Section 1.1 of the Loan Agreement is hereby amended and restated in
its entirety, as follows:

         “Norstan Resale Business Projections” means, with respect to the fiscal
year ending April 30, 2005, the projections of Communications (US)’s resale
revenue of refurbished products, excluding revenue under the Siemens Agreement
and resale revenue of refurbished products sold by Vibes, attached hereto as
Attachment 1 and, with respect to each fiscal year thereafter,

 

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Communications (US)’s forecasted resale revenue of refurbished products,
excluding revenue under the Siemens Agreement and resale revenue of refurbished
products sold by Vibes, all prepared on a consistent basis with the projections
for the fiscal year ending April 30, 2005 attached hereto as Attachment 1,
together with appropriate supporting details and a statement of underlying
assumptions.

               (b) Attachment 1, the Norstan Resale Business Projections for the
fiscal year ending April 30, 2005, is hereby added to the Loan Agreement as
attached hereto.

               3. Conditions Precedent to Amendment. The effectiveness of this
Amendment is subject to the following conditions precedent (unless specifically
waived in writing by Agent), each to be in form and substance satisfactory to
Agent, and upon the satisfaction and/or waiver of such conditions, this
Amendment shall be effective as of the Effective Date:

               (a) Agent shall have received this Amendment, duly executed by
each Company; and

               (b) No Event of Default or event which with the giving of notice
or passage of time would constitute an Event of Default shall have occurred and
be continuing on the date hereof, nor shall result from the consummation of the
transaction contemplated herein.

               4. Miscellaneous.

               (a) Warranties and Absence of Defaults. In order to induce Agent
to enter into this Amendment, each Company hereby warrants to Agent, as of the
date hereof, that:

         (i) The representations and warranties of each Company contained in the
Loan Agreement are true and correct as of the date hereof as if made on the date
hereof; and

         (ii) No Event of Default or event which, with giving of notice or the
passage of time or both, would become an Event of Default, exists as of the date
hereof.

               (b) Expenses. Each Company agrees, on a joint and several basis,
to pay on demand all costs and expenses of Agent (including the fees and
expenses of outside counsel for Agent) in connection with the preparation,
negotiation, execution, delivery and administration of this Amendment and all
other instruments or documents provided for herein or delivered or to be
delivered hereunder or in connection herewith. In addition, each Company agrees,
on a joint and several basis, to pay, and save Agent harmless from all liability
for, any stamp or other taxes which may be payable in connection with the
execution or delivery of this Amendment or the Loan Agreement and the execution
and delivery of any instruments or documents provided for herein or delivered or
to be delivered hereunder or in connection herewith. All obligations

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provided in this Section 4(b) shall survive any termination of this Amendment
and the Loan Agreement.

               (c) Governing Law. This Amendment shall be a contract made under
and governed by the internal laws of the State of Illinois.

               (d) Counterparts. This Amendment may be executed in any number of
counterparts, and by the parties hereto on the same or separate counterparts,
and each such counterpart, when executed and delivered, shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same Amendment.

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               IN WITNESS WHEREOF, the parties hereto have caused this Amendment
to be executed by their respective officers thereunto duly authorized and
delivered as of the date first above written.

     

  NORSTAN COMMUNICATIONS INC.,

  an Minnesota corporation
 
   

  By /s/ Alice S Vazquez

  Title VP Treasurer
 
   

  VIBES TECHNOLOGIES, INC.,

  an Minnesota corporation
 
   

  By /s/ Alice S Vazquez

  Title VP Treasurer
 
   

  NORSTAN, INC.,

  a Minnesota corporation
 
   

  By /s/ Alice S Vazquez

  Title VP Treasurer
 
   

  NORSTAN FINANCIAL SERVICES INC.,

  a Minnesota corporation
 
   

  By /s/ Alice S Vazquez

  Title VP Treasurer
 
   

  NORSTAN CANADA INC.,

  a Minnesota corporation
 
   

  By /s/ Alice S Vazquez

  Title VP Treasurer

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  NORSTAN INTERNATIONAL, INC.,

  a Minnesota corporation
 
   

  By /s/ Alice S Vazquez

  Title VP Treasurer
 
   

  NORSTAN CANADA LTD.,

  an Ontario corporation
 
   

  By /s/ Alice S Vazquez

  Title VP Treasurer
 
   

  WELLS FARGO FOOTHILL, INC.,

  a California corporation, as Agent
 
   

  By /s/ John T. Leonard

  Title Vice President

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