EXHIBIT 10(h)

           AMENDED AND RESTATED LETTER LOAN AGREEMENT


                          June 2, 1999

Ault Incorporated
7300 Boone Ave. N.
Minneapolis, MN  55428
Attn: Frederick M. Green


     RE:  $4,000,000 Line of Credit and $3,200,000 Advancing Term
Loan

Dear Mr. Green:

     Reference is made to that certain Letter Loan Agreement
dated February 25, 1997 between Ault Incorporated, a Minnesota
corporation (the "Borrower") and U.S. Bank National Association
(the "Lender") as amended by a First Amendment to Letter Loan
Agreement, a Second Amendment to Letter Loan Agreement and a
Third Amendment to Letter Loan Agreement (said Agreement with all
amendments, collectively, the "Prior Agreement").  This Amended
and Restated Letter Loan Agreement (the "Agreement") is issued in
replacement and substitution of the Prior Agreement.  All amounts
outstanding under the revolving line of credit, if any, under the
Prior Agreement as of the date hereof, shall be deemed Revolving
Advances (as defined below) under this Agreement.  The Lender
agrees to make (i) revolving advances ("Revolving Advances") to
the Borrower, in an aggregate amount outstanding from time to
time of up to the lesser of $4,000,000 or the Borrowing Base
(defined below), from now until December 1, 1999 under a
promissory note dated the date of this Agreement (as the same may
hereafter be amended, restated, extended, renewed or otherwise
modified from time to time, the "Revolving Note"), and (ii) an
advancing term loan (the "Advancing Term Loan") available in
multiple term loan advances ("Term Loan Advances") from the date
hereof through January 1, 2000, in an aggregate amount
outstanding not to exceed the lesser of $3,200,000 or 80% of the
appraised value of the "Project" (defined below). The Advancing
Term Loan shall be evidenced by the Advancing Term Note dated the
date of this Agreement (as the same may hereafter be amended,
restated, extended, renewed or otherwise modified from time to
time, the "Advancing Term Note") (the Revolving Note and the
Advancing Term Note herein, with any other Note covered by this
Agreement, collectively called the "Notes").  Revolving Advances
and Term Loan Advances will be made upon the following terms and
conditions:

1.   (a)  The Term Loan Advances and Revolving Advances.  The
     Lender does not have to make any Revolving Advances or Term
     Loan Advances until the conditions of paragraph 7 have been
     satisfied.  The proceeds of the Revolving Advances will be
     the used by the Borrower for its general business purposes.
     The proceeds of the Term Loan Advances will be used to
     finance construction of a new building on the Borrower's
     property located at the northeast corner of U.S. Highway 169
     and Interstate 694, Northland Industrial Park, Brooklyn
     Park, Minnesota (the "Project").

     (b)  Revolving Advances.  The unpaid principal balance of
     Revolving Advances outstanding at any time shall never
     exceed the lesser of (a) $4,000,000, or (b) the Borrowing
     Base (as defined below). The Lender does not have to make
     any Revolving Advance if an Event of Default (as defined
     below) has occurred, if the Lender has terminated its
     commitment or such commitment has been automatically
     terminated under this Agreement pursuant to paragraph 13
     below or if any of the representations and warranties in
     this Agreement would not be true if made on the date of that
     Revolving Advance.  The Borrower may prepay all or a portion
     of the Revolving Note at any time, without premium or
     penalty except as the Revolving Note may otherwise provide.
     Amounts prepaid on the Revolving Note may be reborrowed,
     within the limitations specified above.

     (c) Nonuse fee.  The Borrower will pay to the Lender a
     nonuse fee equal to one quarter of one percent of the
     amounts by which $4,000,000 exceeds the daily outstanding
     principal balance of the Revolving Advances from the date
     hereof until the maturity date of the Revolving Note.  Such
     nonuse fee shall be payable on a semi annual basis on June 1
     and December 1 of each year and on the maturity date of the
     Revolving Note.

     (d) Interest.  The outstanding principal balance of the
     Revolving Note and the Advancing Term Note shall bear
     interest at a variable annual rate equal to the Lender's
     reference rate minus one-half of one percent per annum.  The
     reference rate is the rate publicly announced by the Lender
     from time to time as its reference rate.  The Lender may
     lend to its customers at rates that are at, above or below
     the reference rate.  Any change in the interest rate shall
     take effect as and when the reference rate changes.
     Interest shall be determined on the basis of actual days
     elapsed and a  year of 360 days.  Interest shall be due and
     payable, in arrears, on the first day of each month and at
     final maturity of the Note in question.

     (e) Default Interest.  Upon the occurrence and during the
     continuance of any Event of Default, the outstanding balance
     of the Advancing Term Note and the Revolving Note, shall, at
     the option of the Lender, bear interest at the rate
     otherwise applicable thereto, plus 2% per annum.  Default
     interest shall be payable on demand.

2.   Borrowing Base.  The Borrowing Base shall be equal to 80% of
     Eligible Receivables.  "Eligible Receivables" means the book
     value of the Borrower's accounts receivable, minus the sum
     of (1) the book value of all receivables that remain unpaid
     90 days or more after the date of the relevant invoice, plus
     (2) the book value of all receivables due from officers,
     directors, shareholders, partners, or affiliated
     corporations, plus (3) the book value of all receivables
     owed by debtors outside the United States, plus (4) the book
     value of all receivables owed by debtors 10% or more of the
     receivables from which are otherwise ineligible, and
     excluding all other accounts receivables or types of
     accounts receivable the Lender may deem ineligible.  Any
     limitations on advances or required prepayments relating to
     the Borrowing Base shall be based on the latest borrowing
     base certificate (described below) the Borrower shall have
     delivered to the Lender.

3.   Procedure for Advances.  The Borrower may request any
     Advance to its corporate account by telephone or in writing.
     The Borrower agrees to repay each Advance, regardless of
     whether the person requesting it was authorized to do so.
     Each request for an Advance will be deemed a representation
     by the Borrower that at the time of such Advance and after
     giving effect thereto, all conditions to Advances will be
     satisfied.


4.   Other Loans. The provisions of this Agreement shall apply to
     other loans the Lender may make to the Borrower from time to
     time when the notes evidencing such loans make reference to
     this Agreement.  This Agreement shall apply to (i) that
     certain promissory note from the Borrower to the Lender
     dated as of February 3, 1997 in the original principal
     amount of $300,000, (ii) that certain promissory note from
     the Borrower to the Lender dated as of October 10, 1997 in
     the original principal amount of $300,000, and (iii) that
     certain promissory note from the Borrower to the Lender
     dated as of December 10, 1998 in the original principal
     amount of $400,000 (collectively, the "Existing Term
     Notes").

5.   Repayment.  All amounts outstanding under the Revolving Note
     shall be due and payable in full on the earlier of December
     1, 1999 or the date the Lender terminates its commitment or
     such commitment is automatically terminated under this
     Agreement pursuant to paragraph 13 below.  If the principal
     balance of the Revolving Note at any time exceeds the
     Borrowing Base, the Borrower shall immediately prepay the
     Revolving Note by the amount of that excess. The Advancing
     Term Note shall be due and payable in full on January 1,
     2000, subject to acceleration as provided in this Agreement.
     Each Existing Term Note shall be payable at the dates and in
     the amounts specified in such Existing Term Note. Existing
     Term Notes may be prepaid only to the extent and upon the
     terms, if any, set forth in the Existing Term Notes.  The
     Revolving Note and the Advancing Term Note may be prepaid in
     whole or in part at any time without premium or penalty.

6.   Cleanup Period.  For a Cleanup Period of 30 consecutive days
     during each calendar year the Borrower shall pay in full the
     entire principal balance of the Revolving Note and during
     such period no Revolving Advances will be made.

7.   Conditions.  The Lender will not make a Term Loan Advance or
     the first Revolving Advance until the following conditions
     have been satisfied:

     a)   The Lender shall have received the Revolving Note
          substantially in the form of Exhibit A hereto, and the
          Advancing Term Note substantially in the form of
          Exhibit B hereto, each duly executed by the Borrower.

     b)   The Lender shall have received the Security Agreement
          substantially in the form of Exhibit C hereto, duly
          executed by the Borrower. (The Security Agreement, this
          Agreement and the Notes are the "Loan Documents").

     c)   The Lender shall have received any insurance
          certificates, stock certificates, bonds, notes and
          other documents required under any of the Loan
          Documents, all in form satisfactory to the Lender.

     d)   The Lender shall have received the initial borrowing
          base certificate completed as required (if a Revolving
          Advance is requested).

     e)   The Lender shall have received the following:

               A certificate of good standing for Borrower from
               the jurisdiction of Borrower's incorporation.

               An incumbency certificate for the Borrower's
               officers.

               A copy of the resolution of the Borrower's Board
               of Directors authorizing those Loan Documents
               executed by the Borrower and the transactions
               contemplated hereby and thereby.

               A certification of the Borrower's Secretary or
               Assistant Secretary that the Borrower's Articles
               of Incorporation and bylaws have not been amended
               or modified since the same were last certified to
               the Lender (or if amended, certifying a true,
               complete and correct copy of such Articles, bylaws
               and all amendments thereto).

          Each document listed above shall be certified to the
          satisfaction of the Lender.

     f)   The priority and perfection of the Lender's interest in
          any collateral taken under the Loan Documents shall
          have been established to the satisfaction of the
          Lender.

     g)   There shall not exist any Event of Default or any event
          which, with the passage of time or the giving of
          notice, would become an Event of Default.

     8)   The Lender shall have received the opinion of counsel to the
          Borrower covering such matters as the Lender may reasonably
          require.

     9)   The Lender shall have received a commitment fee of $8,000
          for the Advancing Term Loan.

8.   Representations.  The Borrower represents and warrants to
     the Lender as follows:

     a)   The Borrower is a corporation duly organized, validly
          existing and in good standing under the laws of the
          State of Minnesota.

     b)   The Borrower's execution, delivery and performance of
          this Agreement, the Notes and the other Loan Documents
          have been properly authorized by all necessary
          corporate action, do not require governmental approval
          and do not conflict with any agreement binding on the
          Borrower or its property.

     c)   The Loan Documents have been properly executed and
          constitute the Borrower's legal, valid and binding
          obligations, enforceable against the Borrower in
          accordance with their terms.

     d)   The financial statements that the Borrower has
          furnished to the Lender fairly represent the Borrower's
          financial condition on the date of those statements and
          the results of the Borrower's operations for the
          periods referred to in those statements.  Those
          statements were prepared in accordance with generally
          accepted accounting principles.  There have been no
          material adverse changes in the Borrower's properties
          or financial condition since the date of the latest
          statements.

     e)   Except as disclosed on Schedule 8.e) hereto, there are
          no actions, suits or proceedings pending or threatened
          against or affecting the Borrower or the Borrower's
          properties before any court or governmental agency.

     f)   All federal, state and local tax returns of the
          Borrower required to be filed have been filed and the
          Borrower has paid or made provision for the payment of
          all taxes due and payable pursuant to such returns and
          pursuant to any assessments made against it or any of
          its property.

     g)   The Borrower is in compliance with all applicable
          requirements of the Employee Retirement Income Security
          Act of 1974, as amended ("ERISA"), and all rules and
          regulations thereunder.

     h)   There are no security interests, mortgages,
          encumbrances or other liens on any of the Borrower's
          property except (i) as previously disclosed to the
          Lender in writing, and (ii) in favor of the Lender.

     i)   The Borrower is not in default under or in violation of
          any law, statute, rule or regulation, order, writ,
          judgment, injunction, decree, determination or award or
          any indenture, loan or credit agreement or other
          agreement, lease or instrument in any case in which the
          consequences of such default or violation could have a
          material adverse effect on the business, operations,
          properties, assets or condition (financial or
          otherwise) of the Borrower.

     10)  The Borrower has reviewed and assessed its business
          operations and computer systems and applications to address the
          "year 2000 problem" (that is, that computer applications and
          equipment used by Borrower may be unable to properly perform date-
          sensitive functions before, during and after January 1, 2000).
          Borrower reasonably believes that the year 2000 problem will not
          result in a material adverse change in Borrower's business
          condition (financial or otherwise), operations, properties or
          prospects or ability to repay Lender.  Borrower is in the process
          of implementing a plan to remediate year 2000 problems and will
          complete implementation of such plan with respect to any material
          year 2000 problems and testing thereof, by September 30, 1999.
          Borrower agrees that this representation will be true and correct
          on and shall be deemed made by Borrower on each date Borrower
          requests any Revolving Advance or Term Loan Advance under this
          Agreement or delivers any information to Lender.  Borrower will
          promptly deliver to Lender such information relating to this
          representation and covenant as Lender reasonably requests from
          time to time.

9.   Reporting.  The Borrower will not change its fiscal year end
     from May 31, and will provide to the Lender the following
     reports in a form acceptable to the Lender:

     a)   The Borrower's annual consolidated financial statements
          within 120 days after the end of each fiscal year,
          audited by an independent certified public accountant
          satisfactory to the Lender.

     b)   The Borrower's quarterly internally-prepared financial
          statements within 45 days after the end of each fiscal
          quarter, certified as accurate by an officer of the
          Borrower.

     c)   A compliance certificate in the form attached hereto as
          of the end of each month by the thirtieth day of the
          following month.

     d)   Immediate notice of (i) any uninsured litigation
          totaling over $50,000 or dealing with the Loan
          Documents; (ii) any arbitration or government
          investigation or development  (including notification
          of environmental or pollution law violations) pending
          or threatened that does or would materially adversely
          affect the Borrower or its ability to perform under
          this Agreement; (iii) any Event of Default; or (iv) any
          reportable event, prohibited transaction or impositions
          of withdrawal liability under ERISA.

     e)   A borrowing base certificate in the form attached
          hereto.  Borrowing base certificates shall (i) be dated
          as of the last day of each month during which there are
          outstanding Revolving Advances and shall be delivered
          to the Lender by the thirtieth day of the next month,
          (ii) be dated as of the date the Lender requests such a
          certificate and be delivered to the Lender within 10
          days of the Lender's request therefor, and (iii) be
          dated as of the last day of the most recent month when
          requesting a Revolving Advance and no Revolving
          Advances are currently outstanding.  Each borrowing
          base certificate shall state the amount of Eligible
          Receivables and the Borrowing Base as of the end of the
          previous month or the date of the Lender's request, as
          appropriate.

     11)  On request of the Lender, an accounts receivable aging in
          form and substance satisfactory to the Lender.  Each aging shall
          be with respect to accounts receivable as of the end of the
          previous month.

     g)   From time to time, such other information regarding the
          business, operation and financial condition of the
          Borrower as the Lender may reasonably request,
          including, without limitation, an accounts payable
          aging, upon request.

     The financial statements described in clauses (a) and (b)
     above shall be prepared in accordance with generally
     accepted accounting principles, consistently applied.

10.  Other Affirmative Covenants.  Unless the Lender shall
     otherwise consent in writing, the Borrower will:

     a)   Pay the Borrower's taxes (including payroll and
          withholding taxes) when due.

     b)   Keep adequate and proper financial records, and permit
          the Lender to examine those records and inspect the
          Borrower's inventory and other property, and discuss
          the Borrower's affairs and finances with the Borrower's
          officers, at any reasonable time.  Without limiting the
          generality of the foregoing sentence, the Borrower
          shall pay the costs of annual collateral audits by the
          Lender or its agents.

     c)   Keep the Borrower's business adequately insured in such
          amounts and against such hazards as is customary in the
          case of reputable organizations engaged in the same or
          similar business and similarly situated, and maintain
          the insurance required under any other Loan Document.

     d)   Maintain the Borrower's corporate existence in good
          standing under the laws of the state of Minnesota.

     e)   Maintain the Borrower's properties in good condition,
          repair and working order.

     f)   Comply in all material respects with all laws, rules
          and regulations to which the Borrower may be subject.

11.  Negative Covenants.  Unless the Lender shall otherwise
     consent in writing, the Borrower will not:

     a)   Grant any mortgage, security interest or any other lien
          on any of the Borrower's assets (including capitalized
          leases), or permit any such lien to exist or continue,
          except for (i) liens in the Lender's favor, (ii)
          deposits or pledges to secure payment of workers'
          compensation, unemployment insurance, old age pensions
          or other social security obligations and liens of
          carriers, warehousemen, mechanics and materialmen for
          sums not due, in each case arising in the ordinary
          course of business of the Borrower, (iii) liens for
          taxes, fees, assessments and governmental charges not
          delinquent, (iv) liens incurred or deposits or pledges
          made or given in connection with, or to secure payment
          of, indemnity, performance or other similar bonds, (v)
          encumbrances in the nature of zoning restrictions,
          easements and rights or restrictions of record on the
          use of real property and landlord's liens under leases
          on the premises rented, which do not materially detract
          from the value of such property or impair the use
          thereof in the business of the Borrower, (vi)
          capitalized leases provided that the aggregate annual
          payments owed by the Borrower under such capitalized
          leases do not exceed $200,000, (vii) purchase money
          security interests, provided that, (A) the debt secured
          thereby is otherwise permitted by this Agreement and
          (B) such security interests are limited to the property
          acquired and do not secure debt other than the purchase
          price of such property, and (viii) a mortgage on the
          Project to secure permanent financing of the Project
          and to pay off the Advancing Term Loan.

     b)   Borrow any money, or sign any promissory note, except
          for loans from the Lender and notes to the Lender, and
          indebtedness secured by liens permitted under a) above.

     c)   Guarantee any obligations of unrelated parties, except
          the endorsement of checks for collection.

     d)   Invest in any other person or entity or hold an
          investment other than (i) as presently held in the
          Borrower's affiliates, if any, and as planned for Ault
          Energy Systems, Inc., (ii) investments in bank
          accounts, bank certificates of deposit or bankers'
          acceptances issued by any United States commercial bank
          with a combined capital and surplus and credit rating
          for unsecured indebtedness satisfactory to the Lender,
          (iii) commercial paper with the highest rating by
          Moody's Investors Services of Standard and Poor's or
          readily marketable direct obligations of the United
          States government (and repurchase agreements relating
          to such securities), in each case with a maturity or
          one year or less, and (iv) travel advances to the
          Borrower's officers and employees in the ordinary
          course.

     e)   Sell any of the Borrower's assets other than inventory
          in the ordinary course of business.

     f)   Consolidate or merge with any other business, acquire
          the assets of any other business or liquidate, wind up
          or dissolve itself (or suffer any liquidation or
          dissolution).

     g)   Engage in any line of business substantially different
          from the Borrower's current business.

     h)   Permit the Borrower's net after tax earnings for any
          fiscal year to be less than $500,000.

     i)   Permit the ratio of liabilities (including subordinated
          indebtedness) to tangible net worth to be more than 1.0
          to 1 at any time.

     j)   Pay any dividends or otherwise make any distributions
          on, or redemptions of, any of its outstanding stock.

     "Tangible net worth" means net worth computed in accordance
     with generally accepted accounting principles less the book
     value of all intangible items such as goodwill, trademarks,
     trade names, service marks, copyrights, patents, licenses,
     unamortized debt discount and expenses and the excess of the
     purchase price of the assets of any business acquired by the
     Borrower over the book value of such assets and less any
     receivables due from officers, managers, directors,
     shareholders, partners, members or affiliated corporations
     or other entities, the cost or value of any leasehold
     improvements, or any organizational costs.  "Subordinated
     indebtedness" shall be any indebtedness of the Borrower that
     is subordinated to the Borrower's obligations to the Lender
     on terms and conditions that have been reviewed by and are
     satisfactory to the Lender.  The other accounting terms used
     above and elsewhere in this Agreement shall be computed or
     interpreted in accordance with generally accepted accounting
     principles consistently applied.

12.  Right to Charge Checking Account.  The Borrower authorizes
     the Lender to charge the Borrower's checking account with
     the Lender for any amounts due under the Notes.

13.  Events of Default.  Each of the following shall be an Event
     of Default:

     a)   The Borrower shall fail to pay when due (whether by
          acceleration or otherwise) any amount owing on any of
          the Notes or any other indebtedness to the Lender that
          the Borrower owes or has guaranteed and such failure
          shall continue for more than the period of grace, if
          any applicable thereto.

     b)   The Borrower shall breach any of the Borrower's other
          obligations under this Agreement and such breach shall
          continue for five days after the Lender gives the
          Borrower notice thereof.

     c)   Any default shall occur under any security agreement,
          mortgage or other document securing any of the Notes
          and such default shall continue for more than the
          period of grace, if any applicable thereto.

     d)   Any representation or warranty that the Borrower has
          made under this Agreement or any other Loan Document
          shall prove to have been untrue when made.

     e)   The Borrower shall (i) become insolvent or unable to
          pay its debts generally as they mature; (ii) make a
          general assignment for the benefit of creditors; (iii)
          admit in writing its inability to pay its debts
          generally as they mature; (iv) consent to the
          appointment of a trustee or receiver for the Borrower
          or for a substantial part of the property thereof; (v)
          have an order, judgment or decree entered appointing,
          without its consent, a trustee or receiver for the
          Borrower or for a substantial part of the property
          thereof; (vi) file a petition under the United States
          Bankruptcy Code or any other state or federal law
          relating to insolvency, reorganization, receivership or
          relief of debtors; or (viii) take any action for the
          purpose of effecting or consent to any of the
          foregoing.

     If (i) any Event of Default described in paragraph 13 e)
                                   shall occur with respect to
                                   the Borrower, the Lender's
                                   commitment to make Revolving
                                   Advances under this Agreement
                                   and to make additional Term
                                   Loan Advances shall
                                   automatically terminate and
                                   the Notes and all other
                                   obligations of the Borrower to
                                   the Lender under this
                                   Agreement shall automatically
                                   become immediately due and
                                   payable, or (ii) upon
                                   occurrence of any other Event
                                   of Default, the Lender may,
                                   without giving the Borrower
                                   notice, declare the Lender's
                                   commitment to make Revolving
                                   Advances and additional Term
                                   Loan Advances under this
                                   Agreement terminated and/or
                                   declare the principal balance
                                   of the Notes and  all accrued
                                   interest to be immediately
                                   due, and, upon the occurrence
                                   of the events described in
                                   either clause (i) or (ii) of
                                   this sentence, the Lender may
                                   exercise any other rights and
                                   remedies available to the
                                   Lender by law or agreement.
                                   The Borrower hereby
                                   irrevocably authorizes the
                                   Lender to set off all sums
                                   owing by the Borrower to the
                                   Lender against all deposits
                                   and credits the Borrower may
                                   have with, and any claims the
                                   Borrower may have against, the
                                   Lender at any time after an
                                   Event of Default occurs.

14.  Fees and Expenses; Indemnity.  The Borrower agrees to pay
     all of the reasonable costs and expenses incurred by the
     Lender in connection with the negotiation, preparation,
     execution, perfection, administration, amendment, or
     enforcement of this Agreement and the other Loan Documents,
     including attorney's fees and expenses and internal time
     charges reasonably determined by the Lender for lawyers
     employed by the Lender.  The Borrower agrees to indemnify
     the Lender, its employees, agents and independent
     contractors from all actions, losses, damages and expenses
     (including attorneys' fees) arising out of or relating to
     transactions under the Loan Documents except for actions,
     losses, damages and expenses arising from the wrongful
     intentional actions or gross negligence of the Lender, its
     employees, agents and independent contractors, which
     obligation survives the termination of this Agreement and
     includes expenses and costs associated with environmental
     and pollution laws of any kind.

15.  Miscellaneous.

     a)   If the Lender does not exercise some right the Lender
          has against the Borrower, or if the Lender delays in
          exercising a right, that does not mean that the Lender
          gives up that right.

     b)   No Loan Document can be changed unless the Lender signs
          a written amendment.

     c)   If any part of the Loan Documents is unenforceable, the
          rest of their provisions will still be enforceable.

     d)   The Lender may assign its rights or obligations under
          the Loan Documents or grant participations therein at
          any time and share information about the Borrower in
          connection therewith, without the Borrower's consent.

     e)    Except when telephonic notice is expressly authorized
          by this Agreement, any notice or other communication to
          any party in connection with this Agreement shall be in
          writing and shall be sent by manual delivery, telegram,
          telex, facsimile transmission, overnight courier or
          United States mail (postage prepaid) addressed to the
          Borrower at the address above and to the Lender at the
          address on the signature page hereof, or at such other
          address as such party shall have specified to the other
          party hereto in writing.  All periods of notice shall
          be measured from the date of delivery thereof if
          manually delivered, from the date of sending thereof if
          sent by telegram, telex or facsimile transmission, from
          the first business day after the date of sending if
          sent by overnight courier, or from four days after the
          date of mailing if mailed; provided, however, that any
          notice to the Lender regarding Advances or rates of
          interest shall be deemed to have been given only when
          received by the Lender.

     f)   This Agreement and the other Loan Documents constitute
          the entire agreement between the Lender and the
          Borrower with respect to the subject matter hereof and
          thereof.  This Agreement takes the place of any
          conversations, oral agreements and commitment letters
          or other letters between the Lender and the Borrower.
          This Agreement amends, restates, supersedes and
          replaces the Prior Agreement.  The security agreement
          between the Borrower and the Lender dated February 25,
          1997 remains in full force and effect and secures all
          amounts and obligations under this Agreement,
          notwithstanding the execution and delivery of the
          Security Agreement attached hereto as security for the
          Advancing Term Note.

     g)   This Agreement shall be binding upon the Borrower, its
          successors and assigns (except that the Borrower may
          not assign its rights or delegate its obligations
          hereunder or under the other Loan Documents without the
          prior written consent of the Lender) and upon the
          Lender and its successors and assigns and shall inure
          to the benefit of, and be enforceable by, the Lender
          and its successors, transferees and assigns and also by
          any person or entity to whom all or any part may be
          sold or transferred; provided, however, that in the
          event such sale or transfer covers only part of the
          Lender's interest, the Lender shall have the right to
          enforce this Agreement as to the remainder retained and
          owned by the Lender.

16.  Governing Law and Construction.  THE VALIDITY, CONSTRUCTION
     AND ENFORCEABILITY OF THIS AGREEMENT AND THE NOTES SHALL BE
     GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MINNESOTA,
     WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES
     THEREOF, BUT GIVING EFFECT TO FEDERAL LAWS OF THE UNITED
     STATES APPLICABLE TO NATIONAL BANKS.

17.  Jurisdiction.  AT THE OPTION OF THE LENDER, THIS AGREEMENT
     AND THE OTHER LOAN DOCUMENTS MAY BE ENFORCED IN ANY FEDERAL
     COURT OR MINNESOTA STATE COURT SITTING IN HENNEPIN OR RAMSEY
     COUNTY, MINNESOTA; AND THE BORROWER CONSENTS TO THE
     JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY
     ARGUMENT THAT VENUE IN SUCH FORUMS IS NOT CONVENIENT.  IN
     THE EVENT THE BORROWER COMMENCES ANY ACTION IN ANOTHER
     JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY
     ARISING DIRECTLY OR INDIRECTLY FROM THE RELATIONSHIP CREATED
     BY THIS AGREEMENT, THE LENDER AT ITS OPTION SHALL BE
     ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE
     JURISDICTIONS AND VENUES ABOVE-DESCRIBED, OR IF SUCH
     TRANSFER CANNOT BE ACCOMPLISHED UNDER APPLICABLE LAW, TO
     HAVE SUCH CASE DISMISSED WITHOUT PREJUDICE.

18.  Waiver of Jury Trial.  EACH OF THE BORROWER AND THE LENDER
     IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
     LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
     AGREEMENT AND THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS
     CONTEMPLATED HEREBY OR THEREBY.


     Please indicate the Borrower's acceptance of this Agreement
by signing the enclosed copy of this letter and returning it to
the undersigned.


Very truly yours,

U.S. BANK NATIONAL ASSOCIATION

By

Its  _______________

Address:
332 Minnesota Street
St. Paul, MN  55101
Fax:  (651) 244-5590

Accepted this ____ day of
______________ , 199 ____ .

BORROWER:

Ault Incorporated

By ____________________
Its