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RIGHTS AGREEMENT   between   FARGO ELECTRONICS, INC.   and   NORWEST BANK MINNESOTA, N.A.   Dated as of February 9, 2000



TABLE OF CONTENTS

|Section                                                                                  |  |                                                                                                                                |  | Page
|---------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------ |  | ----
|1.                                                                                       |  | Certain Definitions.                                                                                                           |  | 1   
|2.                                                                                       |  | Appointment of Rights Agent.                                                                                                   |  | 5   
|3.                                                                                       |  | Issue of Rights Certificates.                                                                                                  |  | 5   
|4.                                                                                       |  | Form of Rights Certificates.                                                                                                   |  | 7   
|5.                                                                                       |  | Countersignature and Registration.                                                                                             |  | 8   
|6.                                                                                       |  | Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates. |  | 8   
|7.                                                                                       |  | Exercise of Rights; Purchase Price; Expiration Date.                                                                           |  | 9   
|8.                                                                                       |  | Cancellation and Destruction of Rights Certificates.                                                                           |  | 10  
|9.                                                                                       |  | Reservation and Availability of Capital Stock; Registration.                                                                   |  | 11  
|10.                                                                                      |  | Capital Stock Record Date.                                                                                                     |  | 12  
|11.                                                                                      |  | Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights.                                                   |  | 12  
|12.                                                                                      |  | Certificate of Adjusted Purchase Price or Number of Shares.                                                                    |  | 19  
|13.                                                                                      |  | Consolidation, Merger or Sale or Transfer of Assets or Earning Power.                                                          |  | 19  
|14.                                                                                      |  | Fractional Rights and Fractional Shares.                                                                                       |  | 21  
|15.                                                                                      |  | Rights of Action.                                                                                                              |  | 22  
|16.                                                                                      |  | Agreement of Rights Holders.                                                                                                   |  | 22  
|17.                                                                                      |  | Rights Certificate Holder Not Deemed a Shareholder.                                                                            |  | 23  
|18.                                                                                      |  | Concerning the Rights Agent.                                                                                                   |  | 23  
|19.                                                                                      |  | Merger or Consolidation or Change of Name of Rights Agent.                                                                     |  | 24  
|20.                                                                                      |  | Duties of Rights Agent.                                                                                                        |  | 24  
|21.                                                                                      |  | Change of Rights Agent.                                                                                                        |  | 26  
|22.                                                                                      |  | Issuance of New Rights Certificates.                                                                                           |  | 26  
|23.                                                                                      |  | Redemption and Termination.                                                                                                    |  | 27  
|24.                                                                                      |  | Exchange.                                                                                                                      |  | 28  
|25.                                                                                      |  | Notice of Certain Events.                                                                                                      |  | 29  
|26.                                                                                      |  | Notices.                                                                                                                       |  | 29  
|27.                                                                                      |  | Supplements and Amendments.                                                                                                    |  | 30  
|28.                                                                                      |  | Successors.                                                                                                                    |  | 31  
|29.                                                                                      |  | Determinations and Actions by the Board.                                                                                       |  | 31  
|30.                                                                                      |  | Benefits of this Agreement.                                                                                                    |  | 31  
|31.                                                                                      |  | Severability.                                                                                                                  |  | 31  
|32.                                                                                      |  | Governing Law.                                                                                                                 |  | 32  
|33.                                                                                      |  | Counterparts.                                                                                                                  |  | 32  
|34.                                                                                      |  | Descriptive Headings.                                                                                                          |  | 32  
|Exhibits                                                                                 |  |                                                                                                                               
|AForm of Certificate of Designation, Preferences and Rights of Series C Preferred Stock |  |                                                                                                                               
|BForm of Rights Certificate                                                             |  |                                                                                                                               
|CSummary of Rights Agreement                                                            |  |                                                                                                                               

RIGHTS AGREEMENT

This RIGHTS AGREEMENT, dated as of February 9, 2000 (this "Agreement"), is between Fargo Electronics, Inc., a Delaware corporation (the "Company"), and
Norwest Bank Minnesota, N.A., a national banking association, as Rights Agent (the "Rights Agent").

On
February 9, 2000 (the "Rights Dividend Declaration Date"), the IPO Committee of the Board of Directors of the Company (as the composition of Board of Directors may change from time
to time, the "Board") authorized and declared a dividend distribution of one Right for each Common Share (as hereinafter defined) of the Company outstanding at the close of business (as hereinafter
defined) on February 10, 2000 (the "Record Date"), each Right (individually a "Right" and collectively the "Rights") initially representing the right to purchase one one-thousandth of a
Preferred Share (as hereinafter defined) of the Company having the rights, powers and preferences set forth in the form of the Certificate of Designation, Preferences and Rights attached hereto as
Exhibit A, upon the terms and subject to the conditions hereinafter set forth, and has further authorized and directed the issuance of one Right for each Common Share issued between the Record
Date and the earlier of the Distribution Date or the Expiration Date (both as hereinafter defined).

Accordingly,
in consideration of the premises and the mutual agreements herein set forth, the parties hereto, intending to be legally bound, hereby agree as follows:



Section 2.Appointment of Rights Agent.The Company hereby appoints the Rights Agent to act as
agent for the Company and the holders of the Rights (who, in accordance with Section 3 hereof, shall prior to the Distribution Date also be the holders of Common Shares) in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such additional Rights Agents as it may deem necessary or desirable.

Section 3.Issue of Rights Certificates.



Section 4.Form of Rights Certificates.



Section 5.Countersignature and Registration.



Section 6.Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates.



Section 7.Exercise of Rights; Purchase Price; Expiration Date.



Section 8.Cancellation and Destruction of Rights Certificates.

All
Rights Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if surrendered to the Company or to any of its agents, be delivered
to the Rights Agent for cancellation or in canceled form, or, if surrendered to the Rights Agent, shall be canceled by it, and

no Rights Certificates shall be issued in lieu thereof except as expressly permitted by this Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any other Rights Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all canceled Rights
Certificates to the Company, or shall, at the written request of the Company, destroy such canceled Rights Certificates in accordance with the rules and regulations of the Securities and Exchange
Commission, and in such case shall deliver a certificate of destruction thereof to the Company.

Section 9.Reservation and Availability of Capital Stock; Registration.



Section 10.Capital Stock Record Date.

Each
Person in whose name any certificate for a number of Preferred Share Fractions (or Common Shares or other securities, as the case may be) is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of such Preferred Share Fractions (or Common Shares or other securities, as the case may be) represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and all applicable transfer taxes or charges) was
made; provided, however, that if the date of such surrender and payment is a date upon which the applicable transfer books of the Company are closed, such Person shall be deemed to have become the
record holder of such shares (or other securities, as the case may be), fractional or otherwise, on, and such certificate shall be dated, the next succeeding Business Day on which the applicable
transfer books of the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Rights Certificate, as such, shall not be entitled to any rights of a shareholder of the
Company with respect to shares (or other securities, as the case may be) for which the Rights shall be exercisable, including, without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided herein.

Section 11.Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights.

The
Purchase Price, the number and kind of shares or other securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11:





Section 12.Certificate of Adjusted Purchase Price or Number of Shares.

Whenever
an adjustment is made as provided in Section 11 or Section 13, the Company shall (a) promptly prepare a certificate setting forth such adjustment and a
brief statement of the facts accounting for such adjustment, (b) promptly file with the Rights Agent, and with each transfer agent for the Preferred Shares and the Common Shares, a copy of such
certificate, and (c) mail a brief summary thereof to each holder of a Rights Certificate (or, if prior to the Distribution Date, to each holder of a certificate representing Common Shares) in
accordance with Section 26. The Rights Agent shall be fully authorized to rely and be protected in relying on any such certificate and on any adjustment therein contained.

Section 13.Consolidation, Merger or Sale or Transfer of Assets or Earning Power.



Section 14.Fractional Rights and Fractional Shares.



Section 15.Rights of Action.

All
rights of action in respect of this Agreement are vested in the respective registered holders of the Rights Certificates (and, prior to the Distribution Date, the registered
holders of the associated Common Share certificates). Any registered holder of any Rights Certificate (or, prior to the Distribution Date, the associated Common Share certificate), without the consent
of the Rights Agent or of the holder of any other Rights Certificate (or, prior to the Distribution Date, the associated Common Share certificate), may, in his own behalf and for his own benefit,
enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, his right to exercise the Rights in the manner provided in this
Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for
any breach of this Agreement and shall be entitled to specific performance of the obligations hereunder and injunctive relief against actual or threatened violations of the obligations hereunder of
any Person subject to this Agreement.

Section 16.Agreement of Rights Holders.

Every
holder of a Right by accepting the same consents and agrees with the Company and the Rights Agent and with every other holder of a Right that:



Section 17.Rights Certificate Holder Not Deemed a Shareholder.

No
holder, as such, of any Rights Certificate shall be entitled to vote, receive dividends or be deemed for any purpose the holder of the number of Preferred Share Fractions or any
other securities of the Company (including the Common Shares) which may at any time be issuable on the exercise of the Rights represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate, as such, any of the rights of a shareholder of the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting shareholders (except as
provided in Section 25), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by such Rights Certificate shall have been exercised in accordance
with the provisions hereof.

Section 18.Concerning the Rights Agent.



Section 19.Merger or Consolidation or Change of Name of Rights Agent.



Section 20.Duties of Rights Agent.

The
Rights Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, by all of which the Company and the holders of Rights
Certificates (or, prior to the Distribution Date, the associated Common Share certificates), by their acceptance thereof, shall be bound:



Section 21.Change of Rights Agent.

The
Rights Agent or any successor Rights Agent may resign and be discharged from its duties under this Agreement upon 30 days' notice in writing mailed to the Company, and to
each transfer agent of the Common Shares and the Preferred Shares the existence of which the Rights Agent has received notice from the Company, by registered or certified mail, and to the registered
holders of the Rights Certificates (or, prior to the Distribution Date, the associated Common Share certificates) by first-class mail. The Company may remove the Rights Agent or any successor Rights
Agent upon 30 days' notice in writing, mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer agent of the Common Shares and the Preferred Shares, by
registered or certified mail, and to the registered holders of the Rights Certificates (or, prior to the Distribution Date, the associated Common Share certificates) by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the
registered holder of a Rights Certificate (or, prior to the Distribution Date, the associated Common Share certificate) who shall, with such notice, submit his Rights Certificate (or, prior to the
Distribution Date, the associated Common Share certificate) for inspection by the Company, then the registered holder may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be a corporation organized and doing business under the laws of the United States, the State of
Minnesota or the State of New York (or of any other state of the United States so long as such corporation is authorized to do business as a banking institution in the State of Minnesota or the State
of New York) in good standing, having an office in the State of Minnesota or the State of New York, which is authorized under such laws to exercise corporate trust powers and is subject to supervision
or examination by federal or state authority and which has at the time of its appointment as Rights Agent a combined capital and surplus of at least $5 million. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for such
purpose. Not later than the effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Shares and
the Preferred Shares, and mail a notice thereof in writing to the registered holders of the Rights Certificates (or, prior to the Distribution Date, the associated Common Share certificates). Failure
to give any notice provided for in this Section 21 or to appoint a successor Rights Agent, however, or any defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.

Section 22.Issuance of New Rights Certificates.

Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, but subject to Section 7(e), the Company may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be specified by the Board to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or other securities or
property purchasable under the Rights Certificates made in accordance with the provisions of this Agreement. In addition, in connection with the issuance or sale of Common Shares following the
Distribution Date and prior to

the Expiration Date, the Company (a) shall, with respect to Common Shares so issued or sold pursuant to the exercise of stock options, grants or awards outstanding as of the Distribution Date
under any benefit plan or arrangement for employees or directors, or upon the exercise, conversion or exchange of securities issued by the Company prior to the Distribution Date, and (b) may,
in any other case, if deemed necessary or appropriate by the Board, issue Rights Certificates representing the appropriate number of Rights in connection with such issuance or sale; provided, however,
that (i) no such Rights Certificate shall be issued if, and to the extent that, the Company shall be advised by counsel that such issuance could create a significant risk of material adverse
tax consequences to the Company or the Person to whom such Rights Certificate would be issued, and (ii) no such Rights Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of issuance thereof.

Section 23.Redemption and Termination.



Section 24.Exchange.



Section 25.Notice of Certain Events.



Section 26.Notices.



Section 27.Supplements and Amendments.

Prior
to the Distribution Date and subject to the last sentence of this Section 27, the Company may, in its sole and absolute discretion, and the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this Agreement, including without limitation to modify or amend the definition of Acquiring Person set forth in Section 1(a) hereof and
to change the Purchase Price set forth in Section 4(a) and Section 7(b) hereof, without the approval of any holders of certificates representing Common Shares and without the approval of
any holders of Rights or holders of certificates representing Rights. From and after the Distribution Date and subject to the penultimate sentence of this Section 27, the Company may (acting by
the Board), and the Rights Agent shall, if the Company so directs, supplement or amend this Agreement without the approval of any holders of Rights
Certificates in order (a) to cure any ambiguity herein, (b) to correct or supplement any provision contained herein which may be defective or inconsistent with any other provision
herein, (c) to otherwise shorten or lengthen any time period hereunder, or (d) to change or supplement the provisions hereunder in any manner which the Company may deem necessary or
desirable and which shall not adversely affect the interests of the holders of Rights Certificates (other than an Acquiring Person, an Adverse Person or an Affiliate or Associate of any such Person);
provided, however, that this Agreement may not be supplemented or amended to lengthen (i) a time period relating to when the rights may be redeemed at such time as the Rights are not then
redeemable, or (ii) any other time period unless such lengthening is for the purpose of protecting, enhancing or clarifying the rights of,

and/or the benefits to, the holders of Rights (other than an Acquiring Person, an Adverse Person or an Affiliate or Associate of any such Person). Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or amendment is in compliance with the terms of this Section 27, the Rights Agent shall execute such supplement or
amendment. Notwithstanding anything contained in this Agreement to the contrary, no supplement or amendment shall be made which changes the Redemption Price; it being understood that an adjustment of
the Redemption Price in accordance with Section 23 shall not be considered a supplement or amendment of this Agreement.

Section 28.Successors.

All
the covenants and provisions of this Agreement by or for the benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective successors and
assigns hereunder.

Section 29.Determinations and Actions by the Board.

For
all purposes of this Agreement, any calculation of the number of Common Shares outstanding at any particular time, including for purposes of determining the particular percentage
of such outstanding Common Shares of which any Person is the Beneficial Owner, shall be made in accordance with the last sentence of Rule 13d-3d(d)(1)(i) of the General Rules
and Regulations under the Exchange Act, whether or not the Common Shares are registered under the Exchange Act. The Board shall have the exclusive power and authority to administer this Agreement and
to exercise all rights and powers specifically granted to the Board or to the Company, or as may be necessary or advisable in the administration of this Agreement, including, without limitation, the
right and power to (a) interpret the provisions of this Agreement, and (b) make all calculations and determinations deemed necessary or advisable for the administration of this Agreement
(including a determination to redeem or not redeem the Rights or to amend or supplement this Agreement). All such actions, calculations, interpretations and determinations (including for purposes of
clause (ii) below, all omissions with respect to the foregoing) which are done or made by the Board in good faith shall (i) be final, conclusive and binding on the Company, the Rights
Agent, the holders of the Rights and all other parties, and (ii) not subject the Board or any director to any liability to the holders of the Rights.

Section 30.Benefits of this Agreement.

Nothing
in this Agreement shall be construed to give to any Person other than the Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, the associated Common Share certificates) any legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the registered holders of the Rights Certificates (and, prior to the Distribution Date, registered holders of the Common Shares).

Section 31.Severability.

If
any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable for any purpose
or under any set of circumstances or as applied to any Person, such invalid, void or unenforceable term, provision, covenant or restriction shall continue in effect to the maximum extent possible for
all other purposes, under all other circumstances and as applied to all other Persons, and the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated; provided, however, that notwithstanding anything in this Agreement or the Rights to the contrary, if any such term,
provision, covenant or restriction is held by such court or authority to be invalid, void or unenforceable and the Board determines in its good faith judgment that severing the invalid language from
this Agreement would adversely affect the purpose of effect of this Agreement, the right of redemption set forth in Section 23 hereof shall be reinstated and shall not expire until the close of
business on the tenth Business Day following the date of such


determination by the Board. Without limiting the foregoing, if any provisions requiring that a determination be made by less than the entire Board (or at a time or with the concurrence of a group of
directors consisting of less than the entire Board) is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, such determination shall then be made by the
Board in accordance with applicable law and the Company's Articles of Incorporation and Bylaws.

Section 32.Governing Law.

This
Agreement, each Right and each Rights Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such State applicable to contracts made and to be performed entirely within such State.

Section 33.Counterparts.

This
Agreement may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.

Section 34.Descriptive Headings.

Descriptive
headings of the Sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

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

|Attest:                                      |  | FARGO ELECTRONICS, INC.        
|-------------------------------------------- |  | -------------------------------
|By: /s/KENT O. LILLEMOE                      |  | By: /s/GARY R. HOLLAND         
|Name: Kent O. Lillemoe                       |  | Name: Gary R. Holland          
|Title: Chief Financial Officer and Secretary |  | Title: Chief Executive Officer 
|Attest                                       |  | NORWEST BANK MINNESOTA, N.A.   
|By: /s/JOHN D. BAKER                         |  | By: /s/BARBARA M. NOVAK        
|Name: John D. Baker                          |  | Name: Barbara M. Novak         
|Title: Assistant Vice President              |  | Title: Assistant Vice President

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