Document:

Exhibit

10.2

 

CONDITIONAL

RELEASE 

from Pledge Agreement

 

This Conditional Release

is made effective as of October 28, 2002, by and among Gary R. Holland (“Holland”)

and Fargo Electronics, Inc., a Delaware corporation (the “Company”).

 

A.            Holland and the Company are parties to a Restricted Stock

Agreement, dated March 31, 1998, pursuant to which Holland purchased 312,500

restricted shares (the “Shares”) of the Company’s common stock (as

adjusted to account for the Company’s five-for-eight reverse stock split

effective November 1999).  The Shares

became fully vested as of August 1, 2001.

 

B.            As consideration for the Shares, Holland delivered to the

Company a Promissory Note, dated March 31, 1998 (the “Note”), in the principal

amount of $500,000, bearing interest on the unpaid balance thereof at the rate

six percent (6%) per annum, compounded annually.

 

C.            Holland’s obligations to the Company under the Note are

secured by a Pledge Agreement, dated March 31, 1998 (the “Pledge Agreement”), pursuant

to which Holland granted the Company a security interest in all of the Shares,

including all proceeds from the sale of the Shares.

 

D.            Holland wishes to use the proceeds

from the sale of a portion of the Shares to pay off all principal and interest

owing under the Note, plus applicable taxes; and the Company wishes to permit

the sale of a portion of the Shares for such purposes, subject to the terms and

conditions of this Agreement.

 

NOW, THEREFORE, the

parties agree as follows:

 

1.             Release of Collateral.  Subject to the terms and conditions of this Agreement, the

Company hereby releases 108,250 of the Shares (the “Released Shares”) as

collateral under the Pledge Agreement and hereby terminates its security

interest in the Released Shares.  The

Pledge Agreement will remain in full force and effect with respect to the

balance of the Shares until the unpaid principal balance and accrued interest

under the Note is paid in full.

 

2.             Payment of Note. 

Holland agrees to cause his broker to remit directly to the Company from

the proceeds of the sale of the Released Shares an amount sufficient to satisfy

the principal of, and accrued interest on the Note (the “Pay-Off Amount”), which as of

November 15, 2002 will be $638,904. 

Holland will cause his broker to remit such amount by wire transfer of

immediately available funds as soon as commercially possible following the sale

of the Released Shares pursuant to a Sales Plan that complies with the

requirements of Rule 10b5-1(c)(1) under the Securities Exchange Act of 1934, as

amended, which will be in the form attached hereto and executed by Holland and

his broker (the “Sales Plan”).

 

3.             Collateral; Default.  If Holland fails to sell the full amount of the Released Shares

on or before the termination date of the Sales Plan, Holland agrees to return

the unsold balance of the Released Shares, together with the balance of the

Shares, to the Company to hold as collateral to secure Holland’s remaining

obligations under the Note as provided for in the Pledge Agreement.  Holland’s failure to cause the proceeds from

the sale of the Released Shares (not to exceed the Pay-Off Amount) to be

transmitted to the Company and, if the Note is not paid in full,

 

1

 

also to deliver to the Company the unsold amount of

the Released Shares and the balance of the Shares, will be deemed an Event of

Default under the Pledge Agreement.

 

4.             Representations and Warranties.  Holland represents and warrants to the

Company that Holland is the sole owner of the Shares (including the Released

Shares), free and clear of any lien, security interest, option or other charge

or encumbrance, except for the security interest of the Company.

 

5.             No Modification of Note.  Nothing in this Agreement will be deemed to

constitute any modification of any term or provision of the Note or any renewal

or extension of the indebtedness represented by the Note.

 

6.             Compliance with Company Policy and Applicable Law.  Holland agrees that any and all sales of the

Released Shares will be made in compliance with Rule 144 under the Securities

Act of 1933, as amended, Rule 10b-5 under the Exchange Act of 1934, as amended,

and the Company’s insider trading policy. 

Holland agrees to notify the Company immediately upon the execution of

each trade in which the Released Shares are sold.

 

7.             Governing Law. 

This Agreement will governed by and construed in accordance with the

laws of the State of Minnesota.

 

The parties have executed

this Agreement effective as of October 28, 2002.

 

 

	

  /s/ Gary R. Holland

  	

   

  
	

  Gary R. Holland

  
	

   

  
	

   

  
	

  FARGO ELECTRONICS, INC.

  
	

   

  
	

   

  
	

  By: 

  	

  /s/ Jeffrey D. Upin

  	

   

  
	

   

  	

  Jeffrey D. Upin

  
	

   

  	

  Vice President—Business Development &

  General Counsel

  
			

 

2

 

Sales Plan

 

This Sales Plan, dated

October 28, 2002 (the “Sales Plan”), is made between Gary R.

Holland (“Holland”)

and Raymond James & Associates, Inc. (“Broker”).

 

A.            Holland desires to establish this Sales Plan to sell up

to 108,250 shares (“Shares”) of common stock, par value $0.01

per share (the “Stock”), of Fargo Electronics, Inc., a Delaware corporation

(the “Company”),

in accordance with that certain Conditional Release from Pledge Agreement,

dated October 28, 2002, between Holland and the Company.

 

B.            Holland desires to engage Broker to effect sales of Shares

in accordance with the Sales Plan.

 

Intending to be legally

bound, Holland and Broker hereby agree as follows:

 

1.             Starting on Monday, October 28, 2002, on each day on

which the Nasdaq National Market is open Broker will sell (each a “Sale”)

as many Shares as it is able, provided that Broker will only sell Shares

pursuant to this Sales Plan at a price of at least $7.75 per share (before

deducting any commission, commission equivalent, mark-up or differential or

other expenses of sale).

 

2.             This Sales Plan will become effective on October 28,

2002 and will terminate on the earlier of: (i) November 29, 2002, (ii) the date

that aggregate sales proceeds of $811,875 have been received (after deducting

any commission, commission equivalent, mark-up or differential and other

expenses of sale), (iii) the date that 108,250 Shares have been sold], (iv) the

date of the public announcement of a secondary offering of the Stock or (v) the

death of Holland.

 

3.             Holland understands that Broker may not be able to

effect a Sale due to a market disruption or a legal, regulatory or contractual

restriction applicable to the Broker. 

If any Sale cannot be executed as required by paragraph 1, due to a

market disruption, a legal, regulatory or contractual restriction applicable to

the Broker, Broker will effect such Sale as promptly as practical after the

cessation or termination of such market disruption, applicable restriction or

other event.

 

4.             Holland represents and warrants that he is not aware of

material, nonpublic information with respect to the Company or any securities

of the Company (including the Stock), is not subject to any legal, regulatory

or contractual restriction or undertaking that would prevent the Broker from

conducting Sales in accordance with this Sales Plan and is entering into this

Sales Plan in good faith and not as part of a plan or scheme to evade the

prohibitions of Rule 10b5-1.  Holland

will immediately notify the Broker if he becomes subject to a legal, regulatory

or contractual restriction or undertaking that would prevent the Broker from

making Sales pursuant to this Sales Plan, and, in such a case, Holland and

Broker will cooperate to amend or otherwise revise this Sales Plan to take

account of such legal, regulatory or contractual restriction or undertaking

(provided that neither party will be obligated to take any action that would be

inconsistent with the requirements of Rule 10b5-1(c)).

 

5.             It is the intent of the parties that this Sales Plan

comply with the requirements of Rule 10b5-1(c)(1)(i)(B) under the Securities

Exchange Act of 1934, as amended (the “Exchange Act”), and this Sales Plan will be

interpreted to comply with the requirements of Rule 10b5-1(c).

 

6.             Broker agrees to conduct all Sales in accordance with

the manner of sale requirement of Rule 144 under the Securities Act of 1933, as

amended, and in no event will Broker effect any

 

 

1

 

Sale if such Sale would exceed the then applicable

volume limitation under Rule 144, assuming Broker’s Sales under this Sales Plan

are the only sales subject to that limitation. 

Holland agrees not to take, and agrees to cause any person or entity

with which he would be required to aggregate sales of Stock pursuant to

paragraph (a)(2) or (e) of Rule 144 not to take, any action that would cause

the Sales not to comply with Rule 144. 

Broker will be responsible for completing and filing on behalf of

Holland the required Form 144s; provided, however, that Holland will be given

the opportunity to review and revise such Form 144s prior to filing.  Holland understands and agrees that Broker

will make one Form 144 filing at the beginning of each three-month period

commencing October 28, 2002.

 

7.             Broker agrees to remit the proceeds of each Sale

directly to the Company, and as soon as commercially possible following

completion of each such Sale, until the Company has received an aggregate of

$638,904, by wire transfer of immediately available funds to the following

account:                                                            .  If Shares are sold in multiple increments

over a period of more than one day in any one week during the term of this

Sales Plan, the funds may be paid to the Company in a single lump sum

immediately following the sale of the last increment of Shares, but in no event

later than 12:00 p.m.  EST on Friday of

each week.  The balance of the net

proceeds from Sales will be credited to Holland’s account or otherwise

disbursed in accordance with Holland’s separate instructions to Broker.

 

8.             If Broker does not sell a sufficient number of Shares to

remit proceeds of $638,904 to the Company as instructed above, Broker will to

deliver to the Company the unsold amount of the Shares as soon as commercially

possible following termination of this Sales Plan.

 

9.             At the end of each day, Broker agrees to provide all the

details of the transaction to the Company, both by telephone and in writing (by

fax or e-mail).  Broker understands that

Holland needs such information on a timely basis in order to comply with his

reporting responsibilities under Section 16 of the Exchange Act.

 

10.           This Sales Plan will be governed by

and construed in accordance with the laws of the State of Minnesota and may be

modified or amended only by a writing signed by the parties hereto and the

Company.

 

IN WITNESS WHEREOF, the

undersigned have signed this Sales Plan as of the date first written above.

 

	

   

  	

  RAYMOND JAMES &

  ASSOCIATES, INC.

  	 

	

   

  	

   

  	 

	

   

  	

   

  	 

	

  /s/ Gary R. Holland

  	

   

  	

  By:

  	

  /s/ Jeff Fordham

  	 

	

  Gary R. Holland

  	

   

  	 

	

   

  	

  Its:

  	

  Senior Vice President

  
	

   

  	

   

  	 

	

  Acknowledged:

  	

   

  	 

	

   

  	

   

  	 

	

  FARGO ELECTRONICS, INC.

  	

   

  	 

	

   

  	

   

  	 

	

   

  	

   

  	 

	

  By:

  	

  /s/ Jeffrey D. Upin

  	

   

  	

   

  	 

	

   

  	

  Jeffrey D. Upin

  	

   

  	 

	

   

  	

  Vice President—Business

  Development

  & General Counsel

  	

   

  	 

	

   

  	

   

  	 

								

 

 

2Exhibit 10.1

 

FIRST AMENDMENT AND WAIVER

 

This First

Amendment and Waiver (this “First Amendment”) is entered into as of April 15,

2002 by and among TC PipeLines, LP, a Delaware limited partnership (the

“Borrower”), the Lenders party to the Credit Agreement referred to below, and

Bank One, NA, as agent for such Lenders. 

The parties hereto agree as follows:

 

WHEREAS, the

Borrower and Bank One, NA, individually and as Agent, entered into that certain

Credit Agreement dated as of August 22, 2000 (the “Agreement”), pursuant to

which the Lenders party thereto agreed to make extensions of credit available

to the Borrower on the terms and conditions set forth therein; and

 

WHEREAS, the

Borrower has requested that the Lenders remove from the Agreement the requirement

that its accountants report on the existence of Defaults under the Agreement.

 

NOW,

THEREFORE, in consideration of the undertakings set forth herein and other good

and valuable consideration, the receipt of which is hereby acknowledged, the

Borrower, the Agent, and the Lenders hereby agree as follows:

 

Section 1. 

Defined Terms.  Capitalized terms used and not otherwise defined in this First

Amendment shall have the meanings attributed to them in Article I of the

Agreement.

 

Section 2. 

Amendment of Agreement.  Upon the satisfaction of the conditions

precedent set forth in Section 5 of this First Amendment but effective as of

the date hereof, the Agreement shall be amended by deleting in its entirety

Section 6.1(a) of the Agreement and substituting in lieu thereof the following

new Section 6.1(a):

 

“(a)  Within 105 days after the

close of each of its fiscal years, an unqualified (except for qualifications

relating to changes in accounting principles or practices reflecting changes in

GAAP and required or approved by the Borrower’s independent certified public

accountants) audit report certified by independent chartered accountants

acceptable to the Lenders, prepared in accordance with GAAP for itself and its

consolidated Subsidiaries, if any, including a balance sheet as of the end of

such period, a related profit and loss statement, and related statements of

changes in partner’s capital and cash flows, accompanied by any management

letter prepared by said accountants.”

 

Section 3. 

Waiver. 

By its signature below each of the undersigned Lenders hereby

specifically waives any violation of Section 6.1(a) of the Agreement and any

Default or Unmatured Default caused thereby to the extent such violation or

Default or Unmatured Default was caused by the Borrower’s failure to deliver

the report of its accountants required by clause (ii) of Section 6.1(a) of the

Agreement with respect to the Borrower’s fiscal years ended December 31, 2000

and December 31, 2001.  This specific waiver

is limited to the express circumstances described herein and shall not be

construed to constitute (i) a waiver of any other event, circumstance or

condition or of any other right or remedy available to the Agent or any Lender

pursuant to the Agreement, or (ii) a consent to any departure by the Borrower

or any Subsidiary from any other term or requirement under the Agreement.

 

 

Section 4. 

Representations and Warranties.  In order to induce the Lenders to execute

and deliver this First Amendment, the Borrower hereby confirms, reaffirms and

restates as of the date hereof the representations and warranties set forth in

Article V of the Agreement provided that such representations and warranties

shall be and hereby are amended as follows: each reference therein to “this

Agreement” (including, without limitation, each such a reference included in

the term “Loan Documents” and all indirect references such as “hereby”,

“herein”, “hereof” and “hereunder”) shall be deemed to be a collective

reference to the Agreement, this First Amendment and the Agreement as amended

by this First Amendment.  A Default

under and as defined in the Agreement as amended by this First Amendment shall

be deemed to have occurred if any representation or warranty made pursuant to

the foregoing sentence of this Section 4 shall be materially false as of the

date on which made.

 

Section 5. 

Conditions Precedent.  This First Amendment and the amendment and

waiver provided for herein shall become effective as of the date hereof on the

date on which this First Amendment shall have been duly executed and delivered

by the Agent and the Borrower on one counterpart.

 

Section 6. 

Effect on the Agreement.  Except to the extent of the specific

amendment and waiver provided for herein, all of the representations,

warranties, terms, covenants and conditions of the Agreement and the other Loan

Documents (i) shall remain unaltered, (ii) shall continue to be, and shall

remain, in full force and effect in accordance with their respective terms, and

(iii) are hereby ratified and confirmed in all respects.  Upon the effectiveness of this First

Amendment, all references in the Agreement (including references in the

Agreement as amended by this First Amendment) to “this Agreement” (including,

without limitation, each such a reference included in the term “Loan Documents”

and all indirect references such as “hereby”, “herein”, “hereof” and

“hereunder”) shall be deemed to be a collective reference to the Agreement as

amended by this First Amendment.

 

Section 7. 

Expenses.  The Borrower shall reimburse the Agent for any and all reasonable

costs, internal charges and out-of-pocket expenses (including attorneys’ fees

and time charges of attorneys for the Agent, which attorneys may be employees

of the Agent) paid or incurred by the Agent in connection with the preparation,

review, execution and delivery of this First Amendment.

 

Section 8. 

Entire Agreement.  This First Amendment, the Agreement as

amended by this First Amendment and the other Loan Documents embody the entire

agreement and understanding between the parties hereto and supersede any and

all prior agreements and understandings between the parties hereto relating to

the subject matter hereof.

 

Section 9. 

Headings.  The headings, captions, and arrangements used in this First

Amendment are for convenience only and shall not affect the interpretation of

this First Amendment.

 

SECTION 10. 

GOVERNING LAW.  THIS FIRST

AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (INCLUDING,

WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1 ET SEQ, BUT OTHERWISE WITHOUT

REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE STATE OF ILLINOIS, BUT GIVING

EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS LOCATED IN ILLINOIS.

 

2

 

Section 11. 

Counterparts.  This First Amendment may be executed in any number of

counterparts, all of which taken together shall constitute one agreement, and

any of the parties hereto may execute this First Amendment by signing any such

counterpart.

 

IN WITNESS

WHEREOF, the parties hereto have caused this First Amendment and Waiver to be

duly executed as of the date first above written.

 

	

   

  	

  TC PIPELINES

  LP

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

  TC PipeLines

  GP, Inc.,

  
	

   

  	

   

  	

  its general

  partner

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

    /s/ Russell K. Girling

  	

   

  
	

   

  	

   

  	

   

  	

  Name:

  Russell K. Girling

  
	

   

  	

  Title: Chief

  Financial Officer

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

    /s/ Rhondda E. S. Grant

  	

   

  
	

   

  	

  Name:

  Rhondda E. S. Grant

  
	

   

  	

  Title:

  Secretary

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  BANK ONE,

  NA,

  
	

   

  	

  Individually

  and as Agent

  
	

   

  	

   

  	

   

  
	

   

  	

  By:

  	

    /s/ Kenneth J. Fatur

  	

   

  
	

   

  	

   

  	

  Kenneth J. Fatur

  
	

   

  	

  Title:

  	

  Director,

  Capital Markets

  	

   

  
						

 

3

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