Exhibit 10.1

THIRD AMENDMENT TO
AMENDED AND RESTATED
CREDIT AND SECURITY AGREEMENT

THIS
THIRD AMENDMENT TO AMENDED AND RESTATED CREDIT AND SECURITY AGREEMENT (this "Amendment") is entered into as of December 26, 2003, by and between NORTECH SYSTEMS INCORPORATED,
a Minnesota corporation ("Borrower"), and WELLS FARGO BANK, NATIONAL ASSOCIATION ("Bank").

RECITALS

WHEREAS,
Borrower is currently indebted to Bank pursuant to the terms and conditions of that certain Amended and Restated Credit And Security Agreement between Borrower and Bank dated as
of December 27, 2002, as amended from time to time ("Credit Agreement").

WHEREAS,
Bank and Borrower have agreed to certain changes in the terms and conditions set forth in the Credit Agreement and have agreed to amend the Credit Agreement to reflect said
changes.

NOW,
THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree that the Credit Agreement shall be amended as follows:



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IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the day and year first written above.

|NORTECH SYSTEMS INCORPORATED                 |                  | WELLS FARGO BANK, NATIONAL ASSOCIATION
|-------------------------------------------- | ---------------- | --------------------------------------
|By:                                          | /s/ Gary Anderly |                                       
|Title:  Sr. V.P. Corporate Finance/Treasurer |                  | Title:  V.P.                          

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AMENDED AND RESTATED REVOLVING NOTE

|$7,000,000.00 |  | Minneapolis, Minnesota
December 26, 2003
|------------- |  | ----------------------------------------

For
value received, the undersigned, Nortech Systems Incorporated, a Minnesota corporation (the "Borrower"), hereby promises to pay on the Termination Date under the Credit Agreement
(defined below), to the order of WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, and as assignee of Wells Fargo Bank Minnesota, N.A. (the "Lender"), at its main office in
Minneapolis, Minnesota, or at any other place designated at any time by the holder hereof, in lawful money of the United States of America and in immediately available funds, the principal sum of
Seven Million and no/100 Dollars ($7,000,000.00) or, if less, the aggregate unpaid principal amount of all Revolving Advances made by Lender to Borrower under the Credit Agreement (defined below)
together with interest on the principal amount hereunder remaining unpaid from time to time, computed on the basis of actual number of days elapsed and a 360-day year, from the date hereof
until this Note is fully paid at the rate from time to time in effect under the Amended and Restated Credit and Security Agreement dated December 27, 2002, as heretofore and hereafter amended
(the "Credit Agreement"), by and between Lender and the Borrower. The principal hereof and interest accruing thereon shall be due and payable as provided in the Credit Agreement. This Note may be paid
only in accordance with the Credit Agreement.

This
note is issued pursuant, and is subject, to the Credit Agreement, which provides, among other things, for acceleration hereof. This Note is the Revolving Note referred to in the
Credit Agreement. This Note is secured, among other things, pursuant to the Credit Agreement and the Security Documents as therein defined, and may now of hereafter be secured by one or more other
security agreements, mortgages, deeds of trust, assignments or other instruments or agreements.

This
Note is issued in replacement of and substitution for, but not in repayment of that certain Amended and Restated Revolving Note dated December 27, 2002 in the principal
amount of $6,000,000.00, which note is of no further force or effect.

The
Borrower shall pay all costs of collection, including reasonable attorneys' fees and legal expenses if this Note is not paid when due, whether or not legal proceedings are commenced.

Presentment
or other demand for payment, notice of dishonor and protest are expressly waived.

| | NORTECH SYSTEMS INCORPORATED                
| | --------------------------------------------
| | By:                                         
| | Title:  Sr. V.P. Corporate Finance/Treasurer

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