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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,



 









 






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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