Underwriting Agreement

800,000 Shares*


AULT INCORPORATED


Common Shares


UNDERWRITING AGREEMENT


Minneapolis, Minnesota
November ___, 1996


PRINCIPAL FINANCIAL SECURITIES, INC. CRUTTENDEN ROTH INCORPORATED As Representatives of the several Underwriters c/o Principal Financial Securities, Inc. 701 Fourth Avenue South, Suite 1000 Minneapolis, Minnesota 55415


Ladies and Gentlemen:


Ault Incorporated, a Minnesota corporation (the "Company"), confirms its agreement with Principal Financial Securities, Inc. ("Principal") and Cruttenden Roth Incorporated ("Cruttenden") and each of the other underwriters, if any, named in Schedule A hereto (collectively the "Underwriters," which term shall also include any underwriter substituted as hereinafter provided in Section 11), for whom Principal and Cruttenden are acting as representatives (in such capacities, the "Representatives"), with respect to (i) the proposed sale by the Company, and the proposed purchase by the Underwriters, acting severally and not jointly, of an aggregate of 1,800,000 common shares (the "Firm Shares") no par value per share ("Common Stock"), (ii) the grant by the Company to the Underwriters, acting severally and not jointly, of the option described in Section 2(b) hereof to purchase all or any part of 270,000 additional shares of Common Stock for the purpose of covering over-allotments, if any, and (iii) the sale by the Company to the Underwriters of a warrant to purchase up to 144,900 shares of Common Stock of the Company as described in Section 2(c) hereof (the "Underwriters' Warrant"). Any and all shares of Common Stock to be purchased by the Underwriters pursuant to the option described in Section 2(b) hereof are referred to hereinafter as the "Option Shares," and the Firm Shares and the Option Shares, if any, purchased by the Underwriters are hereinafter collectively referred to as the "Shares." It is understood that the Underwriters propose to conduct a public offering and sale of the Shares (the "Offering").


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*Plus an option to purchase up to 270,000 additional shares to cover over-allotments.


1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.


(a) The Company represents and warrants to, and agrees with, each of the several Underwriters as follows:


(i) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-2 (No.
333-_________), including a prospectus subject to completion, for the
registration of the Shares and the Underwriters' Warrant under the
Securities Act of 1933, as amended (the "Act"), and may have filed with
the Commission one or more amendments thereto. After the execution of
this Agreement, the Company will file with the Commission either (A) if
such registration statement, as it may have been amended, has been
declared by the Commission to be effective under the Act as of the time
of effectiveness of this Agreement, a prospectus in the form most
recently included in an amendment to such registration statement (or, if
no such amendment shall have been filed, in such registration statement),
with such changes or insertions as are required by Rule 430A under the
Act or permitted by Rule 424(b) under the Act and as have been provided
to and approved by the Representatives prior to the execution of this
Agreement, or (B) if such registration statement, as it may have been
amended, has not been declared by the Commission to be effective under
the Act as of the time of effectiveness of this Agreement, an amendment
to such registration statement, including a form of prospectus, a copy of
which amendment has been furnished to and approved by the Representatives
prior to the execution of this Agreement. As used in this Agreement, the
term "Registration Statement" means such registration statement, as
amended at the time when it was or is declared effective, including all
financial schedules and exhibits thereto and including any information
omitted therefrom pursuant to Rule 430A under the Act and included in the
Prospectus (as deemed below); the term "Preliminary Prospectus" means
each prospectus subject to completion filed with such registration
statement or any amendment thereto (including the prospectus subject to
completion, if any, included in the Registration Statement or any
amendment thereto at the time the Registration Statement was or is
declared effective); the term "Prospectus" means the prospectus first
filed with the Commission pursuant to Rule 424(b) under the Act or, if no
prospectus is required to be filed pursuant to said Rule 424(b), the
prospectus included in the Registration Statement; and the term "Rules
and Regulations" means the rules and regulations adopted by the
Commission under either the Act or the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), as applicable.


(ii) The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus or any part thereof and, to the
best knowledge of the Company, no proceedings for a stop order have been
instituted or are pending or threatened. When any Preliminary Prospectus
was filed with the Commission, it (A) contained all statements required
to be stated therein in accordance with, and complied in all material
respects with the requirements of, the Act and the Rules and Regulations
and (B) did not include any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements
therein, in the light


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of the circumstances under which they were made, not misleading. When
the Registration Statement or any amendment thereto was or is declared
effective, it (A) contained or will contain all statements required to be
stated therein in accordance with, and complied or will comply in all
material respects with the requirements of, the Act and the Rules and
Regulations and (B) did not or will not include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading. When the Prospectus or any amendment
or supplement thereto is filed pursuant to Rule 424(b) under the Act (or,
if the Prospectus or such amendment or supplement is not required to be
so filed, when the Registration Statement or the amendment thereto
containing such amendment or supplement to the Prospectus was or is
declared effective) and on the Closing Date and the Option Closing Date,
if any (each as defined in Section 2 hereof), the Prospectus, as amended
or supplemented at any such time, (A) contained or will contain all
statements required to be stated therein in accordance with, and complied
or will comply in all material respects with the requirements of, the Act
and the Rules and Regulations and (B) did not or will not include any
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The foregoing
representations with regard to misstatements or omissions in the
Registration Statement and Prospectus do not apply to the statements with
respect to the public offering of the Shares set forth under the heading
"Underwriting" and the stabilization legend in any Preliminary Prospectus
and the Prospectus and the last paragraph on the outside front cover page
of the Prospectus which statements have been furnished by the Underwriters
expressly for use therein and constitute the only information furnished in
writing by or on behalf of the Underwriters for inclusion in the Prospectus
(the "Provided Information").

(iii) The Company and Ault Korea Corporation ("Subsidiary") are
corporations duly organized, validly existing and in good standing under
the laws of the State of Minnesota and the Republic of Korea,
respectively. The Company and Subsidiary are duly qualified to transact
business as a foreign corporation and are in good standing under the laws
of each jurisdiction in which their ownership or leasing of any
properties or the character or conduct of their operations requires such
qualification, except where failure to be so qualified, individually or
in the aggregate, would not result in a material adverse effect on the
condition, financial or otherwise, or on the earnings, business affairs,
financial position, prospects, value, operation, properties, results of
operation or business of the Company and its subsidiary taken as a whole
(each a "Material Adverse Effect"). All of the outstanding shares of
capital stock of Subsidiary have been duly authorized and validly issued,
are fully paid and non-assessable and (except as otherwise stated in the
Registration Statement), all of the outstanding shares of capital stock
of Subsidiary are owned beneficially by the Company free and clear of any
security interest, other encumbrance or adverse claim, subject to the
security interest granted to First Bank National Association (the "First
Bank") in the shares of Subsidiary pursuant to the Financing Agreement,
dated as of


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April 28, 1995, as amended, between First Bank and the Company. There
are no outstanding rights, warrants or options to acquire, or instruments
convertible into or exchangeable for, any shares of capital stock or
other equity interest in Subsidiary. Except for Subsidiary, the Company
does not own any stock of or other equity interest in, or otherwise
control directly or indirectly, any corporation, firm, partnership,
trust, joint venture or other business entity.

(iv) Each of the Company and Subsidiary has all requisite power and
authority (corporate and other), and has obtained and currently maintains
in full force and effect and is operating in compliance with any and all
authorizations approvals, orders, licenses, certificates, franchises and
permits of and from any and all governmental or regulatory officials and
bodies (including those having jurisdiction over environmental or similar
matters) necessary or required to own or lease its properties and conduct
its business as described in the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus) and any amendment
or supplement thereto, and is and has been doing business in compliance
with all applicable federal, state, local and foreign laws, rules and
regulations, except where failure to be in compliance therein
individually or in the aggregate, would not result in a Material Adverse
Effect. Neither the Company nor Subsidiary has received any notice or
notices of proceedings relating to the revocation or modification of any
such authorization, approval, order, license, certificate, franchise or
permit.

(v) The Company has all requisite power and authority (corporate and
other) to enter into this Agreement and to consummate the transactions
provided for herein; and this Agreement has been duly authorized,
executed and delivered by the Company. This Agreement, assuming due
authorization, execution and delivery by the Underwriters, constitutes
the legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms except as enforceability
may be limited by the application of bankruptcy, insolvency, moratorium
or similar laws affecting the rights of creditors generally and by
judicial limitations on the right of specific performance. The Company's
execution and delivery of this Agreement, its performance of its
obligations hereunder, the consummation of the transactions contemplated
hereby, and its conduct of its business and those of Subsidiary as
described in the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus) and any amendment or supplement
thereto, do not and will not conflict with or result in a breach or
violation of any of the terms or provisions of the Company's Restated
Articles of Incorporation or Bylaws, each as amended to date, or the
charter or bylaws of Subsidiary. The Company's execution and delivery of
this Agreement, its performance of its obligations hereunder and the
consummation of the transactions contemplated hereby do not and will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation
or imposition of any material liens, charges, claims, encumbrances,
pledges, security interests, defects or other like restrictions or
material


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equities of any kind whatsoever upon, any right, property or assets
(tangible or intangible) of the Company pursuant to the terms of (A) any
lease, license, contract, indenture, mortgage, deed of trust, voting
trust agreement, shareholders agreement, note, loan, credit agreement,
other indebtedness or any other agreement or instrument to which the
Company is a party or by which it is or may be bound or to which any of
its properties or assets (tangible or intangible) is or may be subject,
or (B) any statute, judgment, decree, order, rule or regulation
applicable to the Company or Subsidiary or any of their activities or
properties adopted or issued by an arbitrator, court, regulatory body or
administrative agency or other governmental agency or body (including
those having jurisdiction over environmental or similar matters),
domestic or foreign, having jurisdiction over the Company or Subsidiary
or any of their activities or properties. The conduct of the business of
the Company and Subsidiary as described in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus)
and any amendment or supplement thereto does not and will not conflict
with or result in a material breach or violation of any of the terms or
provisions of, or constitute a material default under or result in the
creation or imposition of any material liens, charges, claims,
encumbrances, pledges, security interests, defects or other like
restrictions or material equities of any kind whatsoever, upon any right,
property or assets (tangible or intangible) of the Company or Subsidiary
pursuant to the terms of any agreement or instrument described in clause
(A) of the preceding sentence or any statute, judgment, decree, order,
rule or regulation described in clause (B) of the preceding sentence.

(vi) No consent, approval, authorization or order of, or filing with,
any governmental agency or body or any court is required in connection
with the issuance of the Shares to be sold by the Company, the Company's
performance of its obligations hereunder, the Offering or the
consummation of the other transactions contemplated hereby, except (a)
such as may be required under the state securities or "Blue Sky" laws of
any jurisdiction or the bylaws and rules of the National Association of
Securities Dealers, Inc. (the "NASD") in connection with the purchase and
distribution of the Shares by the Underwriters, (b) as of the date hereof
(but not the Closing Date or the Option Closing Date, if any), any filing
of the Prospectus pursuant to Rule 424(b) or 430A of the Rules and
Regulations and, if the Registration Statement is not effective as of the
time of effectiveness of this Agreement, an order of the Commission
declaring the Registration Statement to be effective under the Act, and
(c) such other approvals as have been obtained and remain in full force
and effect.

(vii) The authorized, issued and outstanding capital stock of the
Company is set forth in, and conforms to the description thereof contained
in, the Prospectus (or, if the Prospectus is not in existence, the most
recent Preliminary Prospectus) and any amendment or supplement thereto.
All of the issued shares of capital stock of the Company have been duly
authorized and validly issued, and are fully paid and nonassessable; the
holders thereof have no rights of rescission with respect thereto


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and are not subject to personal liabilities by reason of being such
holders; and none of such shares have been issued in violation of the
preemptive rights of any security holders of the Company. The shares of
Common Stock to be issued upon the exercise of the Underwriters' Warrant,
after payment therefore in accordance with the terms therewith, will be
validly issued, fully paid and non-assessable, with no personal liability
attaching to the ownership thereof. The Firm Shares and the Option
Shares have been duly authorized and at the Closing Date or the Option
Closing Date (as the case may be), after payment therefor in accordance
herewith, will be validly issued, fully paid and nonassessable, with no
personal liability attaching to the ownership thereof. Upon the issuance
and delivery pursuant to this Agreement of the Shares to be sold by the
Company, the Underwriters will acquire good, record and marketable title
to such Shares free and clear of any liens, charges, claims,
encumbrances, pledges, security interests, defects or other like
restrictions or like material equities of any kind whatsoever. There are
no preemptive or other rights to subscribe for or to purchase, nor any
restriction upon the voting or transfer of, any Common Stock pursuant to
the Company's Restated Articles of Incorporation or Bylaws, each as
amended to date, and the Shares to be sold by the Company are not
otherwise subject to any preemptive or other similar rights of any
security holder. The Company is not a party to or bound by any
instrument, agreement or other arrangement providing for it to issue any
capital stock, rights, warrants, options or other securities, except for
this Agreement or as described in the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus). No holders
of any securities of the Company have the right to include any securities
issued by the Company in the Registration Statement or any registration
statement to be filed by the Company within 180 days after the Closing
Date or to require the Company to file a registration statement under the
Act during such 180-day period. The Shares have been approved for
listing upon notice of issuance on the National Market of the National
Association of Securities Dealers, Inc's Automated Quotations System (the
"Nasdaq National Market").

(viii) The historical financial statements and schedules of the
Company and Subsidiary included in the Prospectus (or, if the Prospectus
is not in existence, the most recent Preliminary Prospectus) and any
amendment or supplement thereto fairly present the financial position and
the results of operations of the Company as of the dates and for the
periods therein specified. Such financial statements and schedules have
been prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved and with the Rules
and Regulations, subject, in the case of unaudited quarterly financial
information, to normal year-end adjustments and to the fact that footnote
disclosure with respect thereto may not fully comply with generally
accepted accounting principles as applied to audited financial
statements. The selected financial data set forth under the caption
"Selected Consolidated Financial Data" in the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus)
fairly present, on the basis stated therein, the information included
therein. Each of the Company and Subsidiary


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maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (A) transactions are executed in accordance
with management's general or specific authorizations; (B) transactions
are recorded as necessary to permit preparation of financial statements
in conformity with generally accepted accounting principles and to
maintain asset accountability; (C) access to assets is permitted only in
accordance with management's general or specific authorization; and (D)
the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Company's internal accounting controls
are sufficient to cause the Company to comply in all material respects
with the Foreign Corrupt Practices Act of 1977, as amended. McGladrey &
Pullen, L.L.P., whose reports are filed with the Commission as a part of
the Registration Statement, are independent public accountants as
required by the Act and the Rules and Regulations and McGladrey & Pullen
have been the only public accountants engaged by the Company since July
1, 1990. The Company has not had any "disagreement" (as used in Item 304
of Regulation S-K of the Rules and Regulations) with McGladrey & Pullen
or its Subsidiary's independent public account and has not experienced
any "reportable event" (as used in such Item 304).

(ix) Each of the Company and Subsidiary has filed all federal, state
and local tax returns and all tax returns with foreign tax authorities that
are required to be filed by it or has duly requested extensions thereof.
The Company has paid all taxes required to be paid by it and any other
assessment, fine or penalty levied against it, to the extent that any of
the foregoing is due and payable, except for any such assessment, fine or
penalty that is currently being contested in good faith.

(x) No transfer tax, stamp duty or other similar tax is payable by
or on behalf of the Underwriters in connection with the issuance by the
Company or the purchase by the Underwriters of the Shares to be sold by
the Company.

(xi) Each of the Company and Subsidiary has (A) good, record and
marketable title to all of the properties and assets described in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) as owned by the Company or Subsidiary, free and
clear of all liens, charges, encumbrances or restrictions, except such
liens, charges, encumbrances or restrictions as are described in the
Prospectus (or, if the Prospectus is not in existence, the most recent
Preliminary Prospectus) or such as do not materially affect the condition
(financial or other), business, results of operations or properties of
the Company and Subsidiary taken as a whole, (B) peaceful and undisturbed
possession under all leases to which the Company or Subsidiary is a party
as lessee, (C) all governmental licenses, certificates, permits,
authorizations, approvals, franchises or other rights necessary to engage
in the business currently conducted by the Company or Subsidiary, and (D)
no reason to believe that any governmental body or agency is considering
limiting, suspending or revoking any such license, certificate, permit,
authorization, approval,


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franchise or right. All leases to which the Company or Subsidiary is a
party are valid and binding and no default by the Company or Subsidiary
has occurred and is continuing thereunder except such as do not,
individually or in the aggregate, result in a Material Adverse Effect.

(xii) Each of the Company and Subsidiary owns or has a valid right to
use all Intellectual Property being used in or necessary to the conduct of
its business as now operated and as now proposed to be operated. Except
as disclosed in the Prospectus (or, if the Prospectus is not in
existence, the most recent Preliminary Prospectus) or separately
disclosed in writing to Best & Flanagan, Professional Limited Liability
Partnership (hereinafter "Underwriters' Counsel") prior to the execution
and delivery hereof, no claim is pending or, to the best knowledge of the
Company, threatened against the Company or its officers to the effect
that any Intellectual Property right that is owned by or licensed to the
Company or Subsidiary or that the Company or Subsidiary otherwise has the
right to use is invalid or unenforceable by the Company or Subsidiary, as
the case may be, or infringes the right of a third party (including any
former employer of any of the Company's employees). Except as disclosed
in writing to Underwriters' Counsel prior to the execution and delivery
hereof, to the best of the Company's knowledge, the conduct of the
Company's and Subsidiary's business as now conducted and as now proposed
to be conducted does not and will not infringe (A) any copyright or
legally enforceable right with respect to trade secrets of any third
party or (B) any other Intellectual Property right of any third party.
As used herein "Intellectual Property" means all patents; all trademarks,
service marks, trade names and copyrights, and all registrations thereof;
all trade secrets; all rights in know-how (including all proprietary or
confidential information); all inventions (including all unpatentable
inventions and all unpatented inventions, regardless of whether a patent
application has been made therefor); all designs; all processes; all
works of authorship; all computer programs; all mask works; all technical
data and information; all licenses and rights in and to any of the
foregoing; and all other intellectual property.

(xiii) Each of the Company and Subsidiary is insured (including all
inventory held for others under "stocking" or similar arrangement) by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the business in
which it is engaged. Neither t ...