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                                                                    EXHIBIT 10.1


                              SEVENTH AMENDMENT TO
                           LOAN AND SECURITY AGREEMENT


This Amendment is made effective as of the 1st day of December, 2002, by and
among HEI, Inc., a Minnesota corporation ("HEI"), Cross Technology, Inc., a
Minnesota corporation ("Cross" and, together with HEI, the "Borrower"), and
LaSalle Business Credit, Inc., a Delaware corporation (the "Lender").

                                    Recitals

HEI and the Lender have entered into that certain Loan and Security Agreement
dated as of July 31, 2000, as amended (collectively, the "Loan Agreement").

HEI may request certain advances from the Lender from time to time pursuant to
the Loan Agreement, and the Lender has agreed to make capital expenditure loans,
to make term loans, to make machinery and equipment loans, and to make available
letters of credit, to or for the benefit of HEI pursuant to the terms of the
Loan Agreement.

The revolving loan advances under the Loan Agreement are evidenced by HEI's
amended and restated revolving note dated October 31, 2001, in the maximum
principal amount of $5,000,000 and payable to the order of the Lender (the
"Revolving Note"). The capital expenditure loans made under the Loan Agreement
to date are evidenced by HEI's amended and restated capital expenditure notes
dated November 1, 2002 in the respective original principal amounts of
$715,750.00, $423,333.40, $315,000.00 and $505,966.61 (collectively, the "Capex
Note").

All indebtedness of HEI to the Lender is secured pursuant to the terms of the
Loan Agreement and all Other Agreements as defined therein.

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and
agreements herein contained, it is agreed as follows:

1. Terms used in this Amendment which are defined in the Loan Agreement shall
have the same meanings as defined therein, unless otherwise defined herein.

2. The Loan Agreement is hereby amended as follows:

         (a)  Section 1(a) of the Loan Agreement is hereby amended by (i)
              deleting the figure "$5,000,000.00" contained in the definition of
              REVOLVING LOAN COMMITMENT set forth in said Section and replacing
              the same with the figure "$3,000,000.00", and (ii) by deleting the
              definition of REVOLVING NOTE set forth in said Section and
              replacing the same with the following: "REVOLVING NOTE" shall mean
              the amended and restated revolving note in the maximum original
              principal amount of $3,000,000, executed by Borrower to the order
              of LaSalle, dated as of December 1, 2002, as the same may be
              amended, restated and/or modified from time to time.

         (b)  Section 1(a) of the Loan Agreement is hereby further amended by
              deleting the definition of DEBT SERVICE COVERAGE RATIO set forth
              therein and replacing the same with the following: "DEBT SERVICE
              COVERAGE RATIO" shall mean with respect to any period, and on an
              aggregate basis including the Borrower and all Affiliates of the
              Borrower, the ratio of (i) net income after taxes for such period
              (excluding any after-tax gains or losses on the sale of assets
              (other than the sale of Inventory in the ordinary course of
              business) and excluding other after-tax extraordinary gains or
              losses), plus deferred taxes, plus depreciation and amortization
              deducted in determining net income for such period, plus interest
              expense, minus Capital Expenditures for such period not financed,
              minus any cash dividends paid or accrued and cash withdrawals paid
              or accrued to shareholders or other Affiliates for such period
              which were not calculated in determining net income after taxes,
              and plus the after-tax increase in LIFO reserves or minus the
              after-tax decrease in LIFO reserves, to (ii)current principal
              maturities of long term debt and capitalized leases paid or
              scheduled



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              to be paid during such period, plus interest expense, plus any
              prepayments on indebtedness owed to any Person (except trade
              payables, revolving loans and any prepayment to the Lender
              required pursuant to Section 5 of the Seventh Amendment to Loan
              and Security Agreement dated as of December 1, 2002 by and between
              the Lender and the Borrower) and paid during such period.

         (c)  Section 5(a) of the Loan Agreement is hereby amended by deleting
              said Section in its entirety and replacing the same with the
              following:

              "(a)Rates of Interest. Interest accrued on all loans shall be due
              on the earliest of (i) the first day of each month (for the
              immediately preceding month), computed thru the last calendar day
              of the preceding month, and also, in the case of a LIBOR Rate
              Loan, in addition to monthly, at the end of the Interest Period
              applicable thereto; (ii) the occurrence of an Event of Default in
              consequence of which LaSalle elects to accelerate the maturity and
              payment of the liabilities; and (iii) termination of this
              Agreement pursuant to paragraph 12 hereof. At Borrower's election,
              except as otherwise provided in paragraph 6 hereof, interest shall
              accrue on: (A) the unpaid principal balance of the Capex Loan made
              to Borrower outstanding at the end of each day at (x) a
              fluctuating rate per annum equal to three percent (3.0%) above the
              Prime Rate or (y) a fixed rate per annum equal to five and
              one-half percent (5.50%) above the LIBOR Rate; (B) the principal
              amount of the Revolving Loans made to Borrower outstanding at the
              end of each day at (x) a fluctuating rate per annum equal to two
              and three-fourths percent (2.75%) above the Prime Rate or (y) a
              fixed rate per annum equal to five and one-fourth percent (5.25%)
              above the LIBOR Rate; (C) the unpaid principal balance of the Term
              Loan made to the Borrower at a fluctuating rate per annum equal to
              five percent (5.00%) above the Prime Rate; and (D) the unpaid
              principal balance of the M&E Loan made to Borrower outstanding at
              the end of each day at (x) a fluctuating rate per annum equal to
              three percent (3.0%) above the Prime Rate or (y) a fixed rate per
              annum equal to five and one-half percent (5.50%) above the LIBOR
              Rate. Notwithstanding the foregoing, the interest rates set forth
              above (other than the interest rate set forth in clause (C) above)
              shall be reduced by one percent (1.0%) on the first day of the
              first calendar month following LaSalle's receipt and satisfactory
              review of Borrower's financial statements (the "Rate Reduction
              Date") if such financial statements, delivered to LaSalle in
              accordance with paragraph 11. hereof, reflect that the Borrower's
              Debt Service Coverage Ratio (calculated on a trailing 12-month
              basis) equals or exceeds 1.25 to 1.0. The rate of interest payable
              on Prime Rate Loans shall increase or decrease an amount equal to
              the increase or decrease in the Prime Rate, effective as of the
              opening of business on the day that any such change in the Prime
              Rate occurs. Upon and after the occurrence of an Event of Default,
              and during the continuation thereof, the principal amount of all
              loans shall bear interest on demand at a rate per annum equal to
              (1) with respect to the Capex Loan, the rate of interest then in
              effect in paragraph 5(a)(A) plus two percent (2.0%), (2) with
              respect to Revolving Loans, the rate of interest then in effect
              under paragraph 5(a)(B) plus two percent (2.0%), (3) with respect
              to Term Loans, the rate of interest then in effect under paragraph
              5(a)(C) plus two percent (2.0%), and (4) with respect to the M&E
              Loan, the rate of interest then in effect under paragraph 5(a)(D)
              plus two percent (2.0%)."

         (d)  Section 5(d) of the Loan Agreement is hereby amended by deleting
              said Section in its entirety and replacing the same with the
              following: "(d) Letter of Credit Fees. Borrower shall remit to
              LaSalle a letter of credit fee equal to four and one-fourth
              percent (4.25%) per annum on the aggregate undrawn face amount of
              the Victoria Letter of Credit, which fee shall be payable monthly
              in arrears on each day that interest is payable hereunder;
              provided, however, that such fee shall be reduced by one percent
              (1.0%) per annum on the first day of the first calendar month
              following LaSalle's receipt and satisfactory review of Borrower's
              financial statements if such financial statements, delivered to
              LaSalle in accordance with paragraph 11 hereof, reflect that the
              Borrower's Debt Service Coverage Ratio (calculated on a trailing
              12-month basis) equals or exceeds 1.25 to 1.0."

         (e)  Section 5(i) of the Loan Agreement is hereby amended by deleting
              said Section in its entirety.

         (f)  Section 14(n)(i) of the Loan Agreement is hereby amended by
              deleting said Section in its entirety and replacing the same with
              the following: "(i) Tangible Net Worth. Borrower shall maintain,
              on an aggregate basis with all Affiliates of Borrower, at all
              times (A) from December 1, 2002 through August 2, 2003, a Tangible
              Net Worth of not less than eleven million two hundred fifty
              thousand dollars ($11,250,000); (B) as of the fiscal year ending
              August 31, 2003, a Tangible Net Worth of not less than eleven
              million five



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              hundred thousand dollars ($11,500,000), (C) as of each fiscal year
              end thereafter, a Tangible Net Worth of not less than five hundred
              thousand dollars ($500,000) in excess of the actual Tangible Net
              Worth as of the immediately previous fiscal year end, and (D)
              throughout each fiscal quarter after the fiscal year ending August
              31, 2003, a Tangible Net Worth of not less than ninety percent
              (90%) of the actual Tangible Net Worth for the most recently ended
              fiscal year."

         (g)  Section 14(n)(ii) of the Loan Agreement is hereby amended by
              deleting said Section in its entirety and replacing the same with
              the following:

              "(ii) Interest Coverage Ratio. Borrower shall maintain, on an
                  aggregate basis with all Affiliates of Borrower, as of the end
                  of each fiscal quarter commencing with the fiscal quarter
                  ending August 31, 2003 (and measured on a cumulative fiscal
                  year-to-date basis) a ratio of (A) net income, plus interest,
                  taxes, depreciation and amortization, less unfinanced Capital
                  Expenditures to (B) interest expense, of not less than 1.50 to
                  1.00;"

         (h)  Section 14(n)(iii) of the Loan Agreement is hereby amended by
              deleting said Section in its entirety and replacing the same with
              the following:

              "(iii) Debt Service Coverage Ratio. Borrower shall maintain, on an
                  aggregate basis with all Affiliates of Borrower, a Debt
                  Service Coverage Ratio, (1) as of the fiscal quarter ending
                  August 31, 2003 of not less than 0.35 to 1.0, and (2) as of
                  the end of each fiscal quarter thereafter, of not less than
                  1.25 to 1.00."

         (i)  Section 14(n)(iv) of the Loan Agreement is hereby amended by
              deleting said Section in its entirety and replacing the same with
              the following:

              "(iv) Year to Date Loss. Borrower shall have a loss before taxes,
                  measured as of the end of each fiscal month on a fiscal year
                  to date basis, of not more than (1) $1,750,000 through and
                  including the fiscal month ending August 2, 2003, and (2)
                  $1,500,000 as of the fiscal year ending August 31, 2003."

         (i)  Section 14(s) of the Loan Agreement is hereby amended by deleting
              said Section in its entirety and replacing the same with the
              following:

              "(s) Borrower shall at all times maintain Excess Availability in
                  an amount not less than $500,000."

         (j)  Section 14(u) of the Loan Agreement is hereby amended by deleting
              said Section in its entirety.

3. The Borrower has provided the Lender with certain information indicating a
violation by the Borrower of the covenants set forth at Sections 14(n)(i) and
14(n)(iv) of the Loan Agreement relating to Tangible Net Worth and Year to Date
Loss, in each case with respect to the Borrower's fiscal quarter ended November
30, 2002, and has requested that the Lender waive such violations. In addition,
the Borrower has not delivered or caused to be delivered to the Lender the
annual financial statements of the Borrower and its Subsidiaries described in
Section 14(b)(ii) of the Loan Agreement for the Borrower's fiscal year ended
August 31, 2002. Such financial statements were to be delivered to the Lender by
November 30, 2002. The Borrower's breach of the covenants set forth in Sections
14(n)(i), 14(n)(iv), and 14(b)(ii) described above each constitutes an Event of
Default under the Loan Agreement, absent appropriate waivers. The Lender hereby
waives each Event of Default which is the result of the covenant violations
specifically described above; provided, however, that such waiver as to the
violation of the financial statement covenant set forth in Section 14(b)(ii)
shall be null and void and of no force or effect whatsoever if the annual
financial statements described above for the Borrower's fiscal year ended August
31, 2002 are not delivered to the Lender on or before December 31, 2002. Except
for the specific waivers set forth in the immediately preceding sentence, the
Lender is not waiving any Default, Event of Default, covenant, violation, or
breach of the Loan Agreement or any of the Other Agreements, whether or not
known to the Lender and whether or not existing on the date hereof or any other
event, circumstance or condition which with the giving of notice or the passage
of time, or both, would constitute a Default, Event of Default, violation or
breach of the Loan Agreement or any of the Other Agreements. Lender specifically
reserves the right to exercise any and all rights and remedies available to it
under the Loan Agreement and the documents related thereto in the event of a
Default or an Event of Default at any time in the future. Without limiting the
foregoing, Lender expects that the Borrower will maintain compliance with all
its covenants under and relating to the



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Loan Agreement, including the covenant regarding Tangible Net Worth, the
covenant regarding Interest Coverage Ratio, the covenant regarding Debt Service
Coverage Ratio and the net income (loss) covenant, and Lender will closely
monitor the same in the future to ascertain such continued compliance. The
failure or forbearance by Lender to exercise any of its rights or remedies at
any time shall not constitute a waiver of any such rights or remedies.

4. Except as otherwise provided in this Amendment, all of the terms and
conditions of the Loan Agreement shall remain in full force and effect and shall
apply to any advance thereunder.

5. This Amendment shall be effective as of December 1, 2002, upon receipt by the
Lender of (1) an executed original hereof, together with such promissory notes,
resolutions, opinions of counsel and other documents, instruments and agreements
as the Lender may require, (2) a fully-earned, non-refundable amendment fee in
an amount equal to $50,000, and (3) a one-time principal payment in the amount
of $1,000,000 to be applied by the Lender to the Capex Note in such manner as
the Lender may determine in its sole and absolute discretion.

6. The Borrower hereby represents and warrants to the Lender as follows:

         (a) The Borrower has requisite power and authority to execute this
         Amendment and to perform all of its obligations hereunder, and this
         Amendment has been duly executed and delivered by the Borrower and
         constitutes the legal, valid and binding obligation of the Borrower,
         enforceable in accordance with its terms.

         (b) The execution, delivery and performance by the Borrower of this
         Amendment have been duly authorized by all necessary corporate action
         and do not (i) require any authorization, consent or approval by any
         governmental department, commission, board, bureau, agency or
         instrumentality, domestic or foreign, (ii) violate any provision of any
         law, rule or regulation or of any order, writ, injunction or decree
         presently in effect, having applicability to the Borrower, or the
         articles of incorporation or by-laws of the Borrower, or (iii) result
         in a breach of or constitute a default under any indenture or loan
         Agreement or any other agreement, lease or instrument to which the
         Borrower is a party or by which it or its properties may be bound or
         affected, except that the consent of U.S. Bank National Association
         ("US Bank") is required under the Business Loan Agreement dated May 24,
         1999 with US Bank (the "US Bank Agreement") for any additional
         indebtedness incurred after the date of the US Bank Agreement.

         (c) All of the representations and warranties contained in paragraph 13
         of the Loan Agreement are correct on and as of the date hereof as
         though made on and as of such date, except to the extent that such
         representations and warranties relate solely to an earlier date, and
         except to the extent that such representations and warranties are
         incorrect as a result of a failure to obtain the above-described
         consent under the US Bank Agreement.

7. All references in the Loan Agreement to "this Agreement" shall be deemed to
refer to the Loan Agreement as amended hereby; and any and all references in the
Other Agreements to the Loan Agreement shall be deemed to refer to the Loan
Agreement as amended hereby.

8. The Borrower hereby absolutely and unconditionally releases and forever
discharges the Lender, and any and all participants, parent corporations,
subsidiary corporations, affiliated corporations, insurers, indemnitors,
successors and assigns thereof, together with all of the present and former
directors, officers, agents and employees of any of the foregoing, from any and
all claims, demands or causes of action of any kind, nature or description,
whether arising in law or equity or upon contract or tort or under any state or
federal law or otherwise, which the Borrower has had, now has or has made claim
to have against any such person for or by reason of any act, omission, matter,
cause or thing whatsoever arising from the beginning of time to and including
the date of this Amendment, whether such claims, demands and causes of action
are matured or unmatured or known or unknown.

9. The Borrower hereby reaffirms its agreement under the Loan Agreement to pay
or reimburse the Lender on demand for all costs and expenses incurred by the
Lender in connection with the Loan Agreement, the Other Agreements and all other
documents contemplated thereby, including without limitation all reasonable fees
and disbursements of legal counsel. Without limiting the generality of the
foregoing, the Borrower specifically agrees to pay all fees and disbursements of
counsel to the Lender, for the services performed by such counsel in connection
with the preparation of this Amendment and the documents and instruments
incidental hereto. The Borrower hereby agrees that the Lender may, at any time
or from time to time in its sole discretion and without further authorization by
the Borrower, make a loan to


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the Borrower under the Loan Agreement, or apply the proceeds of any loan, for
the purpose of paying any such fees, disbursements, costs and expenses.

10. This Amendment may be executed in any number of counterparts, each of which
when so executed and delivered shall be deemed an original and all of which
counterparts, taken together, shall constitute one and the same instrument.


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

                                       HEI, INC.


                                       By:
                                          --------------------------------------
                                          Its:
                                              ----------------------------------


                                       CROSS TECHNOLOGY, INC.


                                       By:
                                          --------------------------------------
                                          Its:
                                              ----------------------------------


                                       LASALLE BUSINESS CREDIT, INC.


                                       By:
                                          --------------------------------------
                                          Its:
                                              ----------------------------------