EXHIBIT 10.28


                 FOURTH AMENDMENT TO AMENDED AND RESTATED CREDIT
                  AND SECURITY AGREEMENT AND WAIVER OF DEFAULTS

                  This Amendment, dated as of August __, 2000, is made by and
between RSI SYSTEMS, INC., a Minnesota corporation (the "Borrower"), and WELLS
FARGO BUSINESS CREDIT, INC., f/k/a Norwest Business Credit, Inc., a Minnesota
corporation (the "Lender").



                                    Recitals

                  The Borrower and the Lender have entered into an Amended and
Restated Credit and Security Agreement dated as of April 16, 1998, as amended by
a First Amendment to Amended and Restated Credit and Security Agreement dated as
of September 22, 1998, and a Second Amendment to Amended and Restated Credit and
Security Agreement dated as of September 3, 1999 (as so amended, the "Credit
Agreement"). Capitalized terms used in these recitals have the meanings given to
them in the Credit Agreement unless otherwise specified.

                  The Borrower has requested that the Lender waive certain
defaults and that certain amendments be made to the Credit Agreement, which the
Lender is willing to make pursuant to the terms and conditions set forth herein.

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

                  1. Defined Terms. Capitalized terms used in this Amendment
which are defined in the Credit Agreement shall have the same meanings as
defined therein, unless otherwise defined herein. In addition, Section 1.1 of
the Credit Agreement is amended to add the following definitions:

                  "'Subordinated Debt' means all Debt of the Borrower which has
         been subordinated to the payment and performance of the Obligations
         pursuant to a written subordination agreement in form and content
         acceptable to the Lender in its sole discretion."

<PAGE>

                  2. Financial Covenants. Article VI of the Credit Agreement is
hereby amended as follows:

                  (a) Section 6.7 of the Credit Agreement is hereby amended in
         its entirety to read as follows:

                       "Section 6.7 [RESERVED]"

                  (b) Section 6.8 of the Credit Agreement is hereby amended in
         its entirety to read as follows:

                      "Section 6.8 Minimum Book Net Worth Plus Subordinated
         Debt. The Borrower will maintain its Book Net Worth plus Subordinated
         Debt determined as at the end of each month, at an amount not less than
         the amount set forth opposite such month:


            Month Ended                     Minimum Book Net Worth Plus
            -----------                         Subordinated Debt
                                                -----------------
           June 30, 2000                           $7,000
           July 31, 2000                         ($91,000)
          August 31, 2000                        ($95,000)
         September 30, 2000                       ($5,000)
          October 31, 2000                       ($41,000)
         November 30, 2000                       ($30,000)
         December 31, 2000                        $28,000
          January 31, 2001                        $12,000
         February 28, 2001                        $44,000
           March 31, 2001                        $124,000
           April 30, 2001                        $104,000
            May 31, 2001                         $131,000
           June 30, 2001                         $198,000

                  3. New Compliance Certificate. Exhibit B to the Credit
Agreement is amended in its entirety and replaced with Exhibit A to this
Amendment.



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<PAGE>

                  4. No Other Changes. Except as explicitly amended by this
Amendment, all of the terms and conditions of the Credit Agreement shall remain
in full force and effect and shall apply to any advance or letter or credit
thereunder.

                  5. Waiver of Defaults. The Borrower is in default of the
following provisions of the Credit Agreement (collectively, the "Defaults"):

<TABLE>
<CAPTION>
             ----------------------------------- --------------------- -------------------- ---------------------
             Section/Covenant                        Month Ended            Required               Actual
                                                     -----------            --------               ------
             ----------------------------------- --------------------- -------------------- ---------------------
<S>                                                 <C>                     <C>                   <C>
             Section 6.8/Minimum Book Net Worth     March 31, 2000          $565,000              $143,000
             ----------------------------------- --------------------- -------------------- ---------------------
             Section 6.8/Minimum Book Net Worth     April 30, 2000          $470,000              $13,000
             ----------------------------------- --------------------- -------------------- ---------------------
             Section 6.8/Minimum Book Net Worth      May 31, 2000           $445,000             ($210,000)
             ----------------------------------- --------------------- -------------------- ---------------------
</TABLE>

Upon the terms and subject to the conditions set forth in this Amendment, the
Lender hereby waives the Defaults. This waiver shall be effective only in this
specific instance and for the specific purpose for which it is given, and this
waiver shall not entitle the Borrower to any other or further waiver in any
similar or other circumstances.

                  6. Amendment Fee. The Borrower agrees to pay the Lender as of
the date hereof a fully earned, non-refundable fee in the amount of five
thousand dollars ($5,000) in consideration of the Lender's execution of this
Amendment.

                  7. Conditions Precedent. This Amendment, and the waiver set
forth in Paragraph 5 hereof, shall be effective when the Lender shall have
received an executed original hereof, together with each of the following, each
in substance and form acceptable to the Lender in its sole discretion:

                  (a) A Certificate of the Secretary or Assistant Secretary of
         the Borrower certifying as to (i) the resolutions of the board of
         directors of the Borrower approving the execution and delivery of this
         Amendment, (ii) the fact that the articles of incorporation and bylaws
         of the Borrower, which were certified and delivered to the Lender
         pursuant to the Certificate of Authority of the Borrower's secretary or
         assistant secretary dated as of June 26, 1997, continue in full force
         and effect and have not been amended or otherwise modified except as
         set forth in the Certificate to be



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<PAGE>

         delivered, and (iii) certifying that the officers and agents of the
         Borrower who have been certified to the Lender, pursuant to the
         Certificate of Authority of the Borrower's secretary or assistant
         secretary dated as of April 16, 1998, as being authorized to sign and
         to act on behalf of the Borrower continue to be so authorized or
         setting forth the sample signatures of each of the officers and agents
         of the Borrower authorized to execute and deliver this Amendment and
         all other documents, agreements and certificates on behalf of the
         Borrower.

                  (b) Such other matters as the Lender may require.

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

                  (a) The Borrower has all 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
         credit 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.

                  (c) All of the representations and warranties contained in
         Article V of the Credit 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. References. All references in the Credit Agreement to "this
Agreement" shall be deemed to refer to the Credit Agreement as amended hereby;
and any and all references in the Security Documents to the Credit Agreement
shall be deemed to refer to the Credit Agreement as amended hereby.

                  10. No Other Waiver. Except as set forth in Paragraph 5
hereof, the execution of this Amendment and acceptance of any documents related
hereto shall not be



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<PAGE>

deemed to be a waiver of any Default or Event of Default under the Credit
Agreement or 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. Release. 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. Costs and Expenses. The Borrower hereby reaffirms its
agreement under the Credit Agreement to pay or reimburse the Lender on demand
for all costs and expenses incurred by the Lender in connection with the Credit
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 Credit Agreement, or apply the proceeds of any loan, for the
purpose of paying any such fees, disbursements, costs and expenses.

                  13. Miscellaneous. 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 as of the date first written above.



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<PAGE>

WELLS FARGO BUSINESS CREDIT, INC.           RSI SYSTEMS, INC.



By _________________________________        By _________________________________
     Michael L. Guillou                          Eugene W. Courtney
     Its Officer                                 Its Chief Executive Officer



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<PAGE>


                                                Exhibit A to Third Amendment to
                                                Amended and Restated Credit and
                                                Security Agreement and Waiver of
                                                Defaults

                             COMPLIANCE CERTIFICATE

To:              Michael L. Guillou
                 Wells Fargo Business Credit, Inc.

Date:             __________________, 2000___

Subject:          RSI Systems, Inc.
                  Financial Statements

                  In accordance with our Amended and Restated Credit and
Security Agreement dated as of April 16, 1998, as amended by a First Amendment
to Amended and Restated Credit and Security Agreement dated as of September 22,
1998, a Second Amendment to Amended and Restated Credit and Security Agreement
dated as of September 3, 1999, and a Third Amendment to Amended and Restated
Credit and Security Agreement dated as of August ___, 2000 (as so amended, the
"Credit Agreement"), attached are the financial statements of RSI Systems, Inc.
(the "Borrower") as of and for ________________, 20___ (the "Reporting Date")
and the year-to-date period then ended (the "Current Financials"). All terms
used in this certificate have the meanings given in the Credit Agreement.

                  I certify that the Current Financials have been prepared in
accordance with GAAP, subject to year-end audit adjustments, and fairly present
the Borrower's financial condition as of the date thereof.

                  Events of Default. (Check one):

         |_|      The undersigned does not have knowledge of the occurrence of a
                  Default or Event of Default under the Credit Agreement.

         |_|      The undersigned has knowledge of the occurrence of a Default
                  or Event of Default under the Credit Agreement and attached
                  hereto is a statement of the facts with respect to thereto.



<PAGE>

                  Financial Covenants. I further hereby certify as follows:

                  1. Minimum Book Net Worth Plus Subordinated Debt. Pursuant to
         Section 6.8 of the Credit Agreement, as of the Reporting Date, the
         Borrower's Book Net Worth plus Subordinated Debt was $____________
         which |_| satisfies |_| does not satisfy the requirement that such
         amount be not less than the amount set forth opposite such Reporting
         Date below:

            Month Ended                    Minimum Book Net Worth Plus
            -----------                       Subordinated Debt
                                              -----------------
           June 30, 2000                           $7,000
           July 31, 2000                         ($91,000)
          August 31, 2000                        ($95,000)
         September 30, 2000                       ($5,000)
          October 31, 2000                       ($41,000)
         November 30, 2000                       ($30,000)
         December 31, 2000                        $28,000
          January 31, 2001                        $12,000
         February 28, 2001                        $44,000
           March 31, 2001                        $124,000
           April 30, 2001                        $104,000
            May 31, 2001                         $131,000
           June 30, 2001                         $198,000



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<PAGE>

                  Attached hereto are all relevant facts in reasonable detail to
         evidence, and the computations of the financial covenants referred to
         above. These computations were made in accordance with GAAP.

                                    RSI SYSTEMS, INC.



                                    By ____________________________
                                       Jim Hanzlik
                                       Its Chief Financial Officer




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