AMENDED AND RESTATED REVOLVING NOTE

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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:

        1.     Section 1.1 "Maximum Line" is hereby deleted in its entirety, and the following substituted therefor:

"Maximum Line" means $7,000,000.00 unless said amount is reduced pursuant to Section 2.14, in which event it means such lower amount."

        2.     Section 6.2 (a) is hereby deleted in its entirety, and the following substituted therefor:

"SECTION 6.2 (a) Minimum Debt Service Coverage Ratio. The Borrower will maintain its Debt Service Coverage Ratio, determined on a consolidated basis as at the end of each fiscal quarter on a rolling four quarter basis, at not less than 1.75 to 1.00."

        3.     Section 6.2 (e) is hereby deleted in its entirety, and the following substituted therefor:

"SECTION 6.2 (e) Capital Expenditures. The Borrower will not incur or contract to incur Capital Expenditures of more than $1,500,000 in the aggregate during any fiscal year provided that the amount of Capital Expenditures incurred without the use of financing shall not exceed $625,000 and the incurrence of any related Debt shall be subject to the limitations set forth in Section 6.4 hereof."

        4.     Except as specifically provided herein, all terms and conditions of the Credit Agreement remain in full force and effect, without waiver or modification. All terms defined in the Credit Agreement shall have the same meaning when used in this Amendment. This Amendment and the Credit Agreement shall be read together, as one document.

        5.     Borrower hereb