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                                                                   EXHIBIT 10.1c


                               SECOND AMENDMENT TO
                           LOAN AND SECURITY AGREEMENT


This Amendment is made effective as of the 16th day of April, 2001, by and
between HEI, Inc., a Minnesota corporation (the "Borrower"), and LaSalle
Business Credit, Inc., a Delaware corporation (the "Lender").

                                    Recitals

The Borrower and the Lender have entered into that certain Loan and Security
Agreement dated as of July 31, 2000, as amended by that certain First Amendment
to Credit Agreement dated August 31, 2000 (collectively, the "Loan Agreement").

The Borrower 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, and to make available letters of credit,
to or for the benefit of the Borrower pursuant to the terms of the Loan
Agreement.

The revolving loan advances under the Loan Agreement are evidenced by the
Borrower's revolving note dated July 31, 2000, 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
the Borrower's capital expenditure note dated July 31, 2000, in the original
principal amount of $1,665,000, and by the Borrower's capital expenditure note
dated February 16, 2001, in the original principal amount of $635,000
(collectively, the "Capex Note").

All indebtedness of the Borrower to the Lender is secured pursuant to the terms
of the Loan Agreement and all Other Agreements as defined therein (collectively,
the "Security Documents").

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)  Paragraph (xv) under the definition of "ELIGIBLE ACCOUNTS" in Section
          1 of the Loan Agreement is hereby amended by deleting said Section in
          its entirety and replacing the same with the following:

          "(xv) it is not an Account which, when added to a particular Account
               Debtor's other indebtedness to Borrower, exceeds the lesser of
               ten percent (10%) of the aggregate of Borrower's Accounts or a



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               credit limit determined by LaSalle in its reasonable credit
               judgment for that Account Debtor, provided, however, that the 10%
               credit limit set forth herein shall instead be (A) 20% for
               Accounts owed by Agere Systems, Inc., formerly known as Lucent
               Technologies, Inc., (B) 15% for Accounts owed by AMP, Inc., (C)
               50% for Accounts owed by Siemens Medical Instruments, through the
               date which is one (1) year after the Closing Date, and 40%
               thereafter, and (D) the greater of 25% or the amount of credit
               insurance obtained for Accounts owed by Sonic Innovations which
               are paid within sixty (60) days after the applicable stated
               invoice date; provided, further, that Accounts excluded from
               Eligible Accounts solely by reason of this paragraph 1(a)(xv)
               shall be Eligible Accounts to the extent of the applicable credit
               limit;"

     (b)  Section 5(a) of the Loan Agreement is hereby amended by deleting the
          second sentence of that Section in its entirety and replacing the same
          with the following: "At Borrower's election, except as otherwise
          provided in paragraph 6 (c) 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 one and one-fourth of one percent (1.25%) above the Prime
          Rate or (y) a fixed rate per annum equal to three and three-fourths
          percent (3.75%) above the LIBOR Rate; and (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 one percent (1.00%)
          above the Prime Rate or (y) a fixed rate per annum equal to three and
          one-half percent (3.50%) above the LIBOR Rate."

     (c)  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 two and one-fourth percent (2.25%) 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."

     (d)  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, as of the end of (A) the fiscal
               quarter ending June 2, 2001, a Tangible Net Worth of not less
               than nine million five hundred thousand dollars ($9,500,000); (B)
               the fiscal year ending August 31, 2001, a Tangible Net Worth of
               not less than ten million dollars ($10,000,000), (C) each fiscal
               quarter thereafter, a Tangible Net Worth of not less than ninety
               percent (90%) of the actual Tangible Net Worth for the most
               recently ended fiscal year, and (D) the fiscal year ending August
               31, 2002 and each fiscal year end thereafter, a Tangible Net
               Worth of not less than one million dollars ($1,000,000) in excess
               of the actual Tangible Net Worth as of the previous fiscal year
               end;"



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     (e)  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, 2001, a ratio of (A) net income, plus interest, taxes,
               depreciation and amortization, less unfinanced Capital
               Expenditures, on a year-to-date basis through such fiscal quarter
               to (B) year-to-date interest expense through such fiscal quarter,
               of not less than 1.50 to 1.00;"

     (f)  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, as of the end of each fiscal quarter, commencing
               with the fiscal quarter ending December 1, 2001, of not less than
               1.25 to 1.00, provided however, that for the fiscal quarter
               ending August 31, 2001, such ratio shall be not less than 0.90 to
               1.00; and"

     (g)  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 Net Loss. The Borrower shall have a net loss,
               measured on a fiscal year to date basis, of not more than (A)
               $1,250,000 as of June 2, 2001, and (B) $1,000,000 as of August
               31, 2001."

3. Lender consents to Borrower's request to incur subscription notes receivable
of up to $2,700,000 in connection with the exercise of stock options by various
officers and directors of the company, which action, absent such consent by
Lender, would constitute a violation of Section 14(j), Section 14(l), and
Section 14(p) of the Loan Agreement. Lender's consent is conditioned upon said
notes being personally guaranteed by each debtor, and being payable over five
years, with interest payable on the notes quarterly at the rate of 0.25% in
excess of the Prime Rate; provided however, that each such note shall be
reviewed by Lender's legal counsel and approved as containing terms acceptable
to Lender.

4. Borrower will make a one time $200,000 prepayment on the Capex Loan to be
applied against outstanding principal on the Capex Note dated July 31, 2000, in
the original principal amount of $1,665,000.

5. The Borrower's (a) violation of Section 14(n)(i) by failing to maintain at
least the minimum required Tangible Net Worth; (b) violation of Section
14(n)(ii) by failing to maintain at least the minimum required Interest Coverage
Ratio; and (c) violation of Section 14(n)(iii) by failing to maintain at least
the minimum required Debt Service Coverage Ratio, in each case as of the
Borrower's fiscal quarter ending March 3, 2001, each independently constitutes



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an Event of Default under the Loan Agreement. Lender hereby waives these three
specific Events of Default by the Borrower arising due to Borrower's violations
of the Tangible Net Worth covenant, the Interest Coverage Ratio covenant and the
Debt Service Coverage Ratio covenant, as described herein. Except as expressly
set forth above in this paragraph, and subject to the limitations set forth
herein, Lender is not waiving any other covenant, violation, or breach of the
Loan Agreement which may exist as of 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 violation or breach of the Loan Agreement.
Lender specifically reserves the right to exercise any and all rights and
remedies available to it under the Credit and Security 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 Loan Agreement, including the covenant regarding Tangible Net Worth, the
covenant regarding Interest Coverage Ratio and the covenant regarding Debt
Service Coverage Ratio, 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. The waiver set forth in this letter is limited
to the specific waiver set forth herein, and should not be construed as an
express or implied agreement of Lender to waive any future violations of any
covenant or obligation of the Borrower under the Loan Agreement or any documents
related thereto.

6. Except as explicitly amended by 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.

7. This Amendment shall be effective as of April 16, 2001, upon receipt by the
Lender of (i) an executed original hereof, together with the acknowledgement and
agreement of guarantor set forth at the end of this Amendment, executed by the
Corporate Guarantor, and (ii) a fully-earned, non-refundable amendment fee in
the amount of $25,000.

8. 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 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.



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     (c)  All of the representations and warranties contained in Article V 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.

9. 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
Security Documents to the Loan Agreement shall be deemed to refer to the Loan
Agreement as amended hereby.

10. Except as expressly detailed in Section 5 herein, the execution of this
Amendment and any documents related hereto shall not be deemed to be a waiver of
any other Default or Event of Default under the Loan Agreement or other breach,
default or event of default under any Security Document or other document held
by the Lender, whether or not known to the Lender and whether or not existing on
the date of this Amendment.

11. 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.

12. 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 Security Documents 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 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 and the fee required under paragraph 6
hereof.

13. 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.

              [THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.
                    SIGNATURES APPEAR ON THE FOLLOWING PAGE.]



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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: ________________________________


                                       LASALLE BUSINESS CREDIT, INC.


                                       By: _____________________________________

                                           Its: ________________________________



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                    ACKNOWLEDGMENT AND AGREEMENT OF GUARANTOR

     The undersigned, a guarantor of the indebtedness of HEI, Inc. (the
"Borrower") to LaSalle Business Credit, Inc. (the "Lender") pursuant to a
Continuing Unconditional Guaranty dated as of July 31, 2000 (the "Guaranty"),
hereby (i) acknowledges receipt of the foregoing Amendment; (ii) consents to the
terms (including without limitation the release set forth in paragraph 8 of the
Amendment) and execution thereof; (iii) reaffirms its obligations to the Lender
pursuant to the terms of the Guaranty; and (iv) acknowledges that the Lender may
amend, restate, extend, renew or otherwise modify the Loan Agreement and any
indebtedness or agreement of the Borrower, or enter into any agreement or extend
additional or other credit accommodations, with such notice to or consent of the
undersigned as may be expressly required pursuant to the terms of the Guaranty
for all of the Borrower's present and future indebtedness to the Lender.


                                       CROSS TECHNOLOGY, INC.


                                       By:______________________________________

                                          Its: _________________________________



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