UNDERWRITING AGREEMENT

 Prepared by XXXXXXX CORPORATION xxx.xxxxxxxxxxxxxx.xxx



Exhibit 1.1

Fargo Electronics, Inc.
5,000,000 Shares(1)
Common Stock



(1)Plus
an option to purchase from Fargo Electronics, Inc. up to 750,000 additional shares to cover over-allotments.

UNDERWRITING AGREEMENT

    February   , 2000

PRUDENTIAL
SECURITIES INCORPORATED
FLEETBOSTON XXXXXXXXX XXXXXXXX INC.
XXXXXXX XXXXX & ASSOCIATES, INC.
As Representatives of the several Underwriters
c/o Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000

Ladies
and Gentlemen:

    Fargo
Electronics, Inc., a Delaware corporation (the "Company"), hereby confirms its agreement with the several underwriters named in Schedule 1 hereto (the "Underwriters"),
for whom you have been duly authorized to act as representatives (in such capacities, the "Representatives"), as set forth below. If you are the only Underwriters, all references herein to the
Representatives shall be deemed to be to the Underwriters.

    1.  Securities.  Subject to the terms and conditions herein contained, the Company proposes to issue and
sell to the several Underwriters an aggregate of 5,000,000 shares (the "Firm Securities") of the Company's Common Stock, par value $.01 per share ("Common Stock"). The Company also proposes to issue
and sell to the several Underwriters not more than 750,000 additional shares of Common Stock if requested by the Representatives as provided in Section 3 of this Agreement. Any and all shares of
Common Stock to be purchased by the Underwriters pursuant to such option are referred to herein as the "Option Securities", and the Firm Securities and any Option Securities are collectively referred
to herein as the "Securities".

    2.  Representations and Warranties of the Company.  The Company represents and warrants to, and agrees
with, each of the several Underwriters that:

    (a) A
registration statement on Form S-1 (File No. 333-90937) with respect to the Securities, including a prospectus subject to completion, has been filed by the
Company with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933, as amended (the "Act"), and one or more amendments to such registration statement may have been so filed. After the execution of this
Agreement, the Company will file with the Commission either (i) if such registration statement, as it may have been amended, has been declared by the Commission to be effective under the Act, either
(A) if the Company relies on Rule 434 under the Act, a Term Sheet (as hereinafter defined) relating to the Securities, that shall identify the Preliminary Prospectus (as hereinafter
defined) that it supplements containing such information as is required or permitted by Rules 434, 430A and 424(b) under the Act or (B) if the Company does not rely on
Rule 434 under the Act, 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 in the case of either clause (i)(A) or (i)(B) of this sentence as have been provided to
and approved by the Representatives prior to the execution of this Agreement, or (ii) if such registration statement, as it may have been amended, has not been declared by the Commission to be
effective under the Act, 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. The Company may also file a related registration statement with the Commission pursuant to Rule 462(b) under the Act for the purpose of registering certain
additional Securities, which registration shall be effective upon filing with the Commission. As used in this Agreement, the term "Original Registration Statement" means the registration statement
initially filed relating to the Securities, 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 hereinafter defined); the term "Rule 462(b) Registration Statement" means any registration
statement filed with the Commission pursuant to Rule 462(b) under the Act (including the Registration Statement and any Preliminary Prospectus or Prospectus incorporated therein at the
time such Registration Statement becomes effective); the term "Registration Statement" includes both the Original Registration Statement and any Rule 462(b) Registration Statement; 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 it was or is declared effective); the term "Prospectus" means:



    (A) if
the Company relies on Rule 434 under the Act, the Term Sheet relating to the Securities that is first filed pursuant to Rule 424(b)(7) under
the Act, together with the Preliminary Prospectus identified therein that such Term Sheet supplements;

    (B) if
the Company does not rely on Rule 434 under the Act, the prospectus first filed with the Commission pursuant to Rule 424(b) under the Act;
or

    (C) if
the Company does not rely on Rule 434 under the Act and if no prospectus is required to be filed pursuant to Rule 424(b) under the Act, the
prospectus included in the Registration Statement;



and
the term "Term Sheet" means any term sheet that satisfies the requirements of Rule 434 under the Act. Any reference herein to the "date" of a Prospectus that includes a Term Sheet shall
mean the date of such Term Sheet.

    (b) The
Commission has not issued any order preventing or suspending use of any Preliminary Prospectus. When any Preliminary Prospectus was filed with the Commission it
(i) 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 of
the Commission thereunder and (ii) 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 of the circumstances under which they were made,
not misleading. When the Registration Statement or any amendment thereto was or is declared effective, it (i) 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 of the Commission thereunder and (ii) 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
to the Prospectus is filed with the Commission pursuant to Rule 424(b) (or, if the Prospectus or part thereof 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 Firm Closing Date and any Option Closing Date (both
as hereinafter defined), the Prospectus, as

amended or supplemented at any such time, (i) 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 of the Commission thereunder and (ii) 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 the light of the circumstances under which they were made, not misleading. The foregoing provisions of this paragraph
(b) do not apply to statements or omissions made in any Preliminary Prospectus, the Registration Statement or any amendment thereto or the Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to the Company by any Underwriter through the Representatives specifically for use therein.

    (c) If
the Company has elected to rely on Rule 462(b) and the Rule 462(b) Registration Statement has not been declared effective (i) the
Company has filed a Rule 462(b) Registration Statement in compliance with and that is effective upon filing pursuant to Rule 462(b) and has received confirmation of its
receipt and (ii) the Company has given irrevocable instructions for transmission of the applicable filing fee in connection with the filing of the Rule 462(b) Registration Statement, in
compliance with Rule 111 promulgated under the Act or the Commission has received payment of such filing fee.

    (d) The
Company has been duly organized and is validly existing as a corporation in good standing under the laws of the jurisdiction of incorporation and is duly
qualified to transact business as a foreign corporation and is in good standing under the laws of all other jurisdictions where the ownership or leasing of its properties or the conduct of its
business requires such qualification, except where the failure to be so qualified does not amount to a material liability or disability to the Company, taken as a whole.


    (e) The
Company has full power (corporate and other) to own or lease its properties and conduct its business as described in the Registration Statement and the
Prospectus or, if the Prospectus is not in existence, the most recent Preliminary Prospectus; and the Company has full power (corporate and other) to enter into this Agreement and to carry out all the
terms and provisions hereof to be carried out by it.

    (f)  The
Company has an authorized, issued and outstanding capitalization as set forth under the heading "Capitalization" in the Prospectus as of the date set forth
therein or, if the Prospectus is not in existence, the most recent Preliminary Prospectus. 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 Firm Securities and the Option Securities have been duly authorized and at the Firm Closing Date or the related Option Closing Date (as the case may be), after
payment therefor in accordance herewith, will be validly issued, fully paid and nonassessable. Except as disclosed in the Prospectus, no holders of
outstanding shares of capital stock of the Company are entitled as such to any preemptive or other rights to subscribe for any of the Securities which has not been waived, and no holder of securities
of the Company has any right which has not been fully exercised or waived to require the Company to register the offer or sale of any securities owned by such holder under the Act in the public
offering contemplated by this agreement.


    (g) The
capital stock of the Company conforms to the summary description thereof contained in the Prospectus under the heading "Description of Capital Stock" or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus.

    (h) Except
as disclosed in the Prospectus (or, if the Prospectus is not in existence, the most recent Preliminary Prospectus), there are no outstanding (A) securities
or obligations of the Company convertible into or exchangeable for any capital stock of the Company, (B) warrants, rights or options to subscribe for or purchase from the Company any such
capital stock or any such convertible or exchangeable securities or obligations other than the Warrant dated February 18, 1998 issued by the


Company to Xxxxxx X. Xxxxxxx, or (C) obligations of the Company to issue any shares of capital stock, any such convertible or exchangeable securities or obligations, or any such warrants,
rights or options, except for the issuance of additional authorized securities pursuant to the Company's Amended and Restated 1998 Stock Option and Grant Plan.

    (i)  The
financial statements and schedules of the Company included in the Registration Statement and the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus) fairly present the financial position of the Company and the results of operations and changes in financial condition as of the dates and periods therein specified.
Such financial statements and schedules have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods involved subject, in the case of
quarterly financial statements, to normal year-end adjustments (except as otherwise noted therein). The selected financial data set forth under the caption "Selected Financial Data" in the Prospectus
(or, if the Prospectus is not in existence, the most recent Preliminary Prospectus) fairly present, on the basis stated in the Prospectus (or such Preliminary Prospectus), the information included
therein.

    (j)  PricewaterhouseCoopers
LLP, Larson, Allen, Weishair & Co., LLP and Xxxxxx Xxxxxxxx LLP, who have certified certain financial statements of the Company and
delivered their report with respect to the audited consolidated financial statements and schedules included in the Registration Statement and the Prospectus (or, if the Prospectus is not in existence,
the most recent Preliminary Prospectus), are independent public accountants as required by the Act and the applicable rules and regulations thereunder.

    (k) The
execution and delivery of this Agreement have been duly authorized by the Company and this Agreement has been duly executed and delivered by the Company, and is
the valid and binding agreement of the Company, enforceable against the Company in accordance with its terms.

    (l)  No
legal or governmental proceedings are pending to which the Company is a party or to which the property of the Company is subject that are required to be
described in the Registration Statement or the Prospectus and are not described therein (or, if the Prospectus is not in existence, the most recent Preliminary Prospectus), and, to the Company's
knowledge, no such proceedings have been threatened against the Company or with respect to any of its properties; and no contract or other document is required to be described in the Registration
Statement or the Prospectus or to be filed as an exhibit to the Registration Statement that is not described therein (or, if the Prospectus is not in existence, the most recent Preliminary Prospectus)
or filed as required.

    (m) The
issuance, offering and sale of the Securities to the Underwriters by the Company pursuant to this Agreement, the compliance by the Company with the other
provisions of this Agreement and the consummation of the other transactions herein contemplated do not (i) require the consent, approval, authorization, registration or qualification of or with
any governmental authority, except such as have been obtained, such as may be required under state securities or blue sky laws and, if the registration statement filed with respect to the Securities
(as amended) is not effective under the Act as of the time of execution hereof, such as may be required (and shall be obtained as provided in this Agreement) under the Act, or (ii) conflict
with or result in a breach or violation of any of the terms and provisions of, or constitute a default under, any material indenture, mortgage, deed of trust, lease or other material agreement or
instrument to which the Company is a party or by which the Company or any of its properties is bound, or the charter documents or by-laws of the Company, or any statute or any judgment, decree, order,
rule or regulation of any court or other governmental authority or any arbitrator applicable to the Company, which breach, violation or default would not reasonably be expected to have a
material adverse effect on the Company.

    (n) Subsequent
to the respective dates as of which information is given in the Registration Statement and the Prospectus or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus, the Company has not sustained any material loss or interference with its businesses or

properties from fire, flood, hurricane, accident or other calamity, whether or not covered by insurance, or from any labor dispute or any legal or governmental proceeding and there has not been any
material adverse change, or any development involving a prospective material adverse change, in the condition (financial or otherwise), management, business prospects, net worth, or results of the
operations of the Company, except in each case as described in or contemplated by the Prospectus or, if the Prospectus is not in existence, the most recent Preliminary Prospectus.

    (o) The
Company has not, directly or indirectly, (i) taken any action designed to cause or to result in, or that has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities or (ii) since the filing of the
Registration Statement (A) sold, bid for, purchased, or paid anyone any compensation for soliciting purchases of, the Securities or (B) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities of the Company.

    (p) The
Company has not distributed and, prior to the later of (I) the Closing Date and (ii) the completion of the distribution of the Securities, will not
distribute any offering material in connection with the offering and sale of the Securities other than the Registration Statement or any amendment thereto, any Preliminary Prospectus or the Prospectus
or any amendment or supplement thereto, or other materials, if any permitted by the Act.

    (q) Subsequent
to the respective dates as of which information is given in the Registration Statement and the Prospectus (or, if the Prospectus is not in existence, the
most recent Preliminary Prospectus), (1) the Company has not incurred any material liability or obligation, direct or contingent, nor entered into any material transaction not in the ordinary
course of business; (2) the Company has not purchased any of its outstanding capital stock, nor declared, paid or otherwise made any dividend or distribution of any kind on its capital stock
except with respect to the redemption of the Company's Series B Redeemable Preferred Stock and purchase rights relating to the Company's Class C Preferred Stock; and (3) there has
not been any material change in the capital stock, short-term debt or long-term debt of the Company, except in each case as may occur in the ordinary course of business or as described in or
contemplated by the Prospectus (or, if the Prospectus is not in existence, the most recent Preliminary Prospectus), and except for the issuance of additional authorized securities under the Company's
Amended and Restated 1998 Stock Option and Grant Plan.

    (r) The
Company has good and marketable title in fee simple to all items of real property and marketable title to all personal property owned by it, in each case free
and clear of any security interests, liens, encumbrances, equities, claims and other defects, except such as do not materially and adversely affect the value of such property and do not interfere with
the use made or proposed to be made of such property by the Company, and any real property and buildings held under lease by the Company are held under valid, subsisting and enforceable leases, with
such exceptions as are not material and do not interfere with the use made or proposed to be made of such property and buildings by the Company, in each case except as described in or contemplated by
the Prospectus (or, if the Prospectus is not in existence, the most recent Preliminary Prospectus).

    (s) No
labor dispute with the employees of the Company exists or, to the Company's knowledge, is threatened or imminent that could result in a material adverse change
in the condition (financial or otherwise), business prospects, net worth or results of operations of the Company, except as described in or contemplated by the Prospectus (or, if the Prospectus is not
in existence, the most recent Preliminary Prospectus).

    (t)  The
Company owns or possesses, or can acquire on reasonable terms, all material patents, patent applications, trademarks, service marks, trade names, licenses,
copyrights and proprietary or other confidential information currently employed by them in connection with its business, and the Company has not received any notice of infringement of or conflict with
asserted rights of any third party with respect to any of the foregoing which, singly or in the aggregate, if the subject of an

unfavorable decision, ruling or finding, would result in a material adverse change in the condition (financial or otherwise), business prospects, net worth or results of operations of the Company,
except as described in or contemplated by the Prospectus (or, if the Prospectus is not in existence, the most recent Preliminary Prospectus).

    (u) The
Company is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the
businesses in which it is engaged; the Company has not been refused any insurance coverage sought or applied for; and the Company has no reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not materially and
adversely affect the condition (financial or otherwise), business prospects, net worth or results of operations of the Company, except as described in or contemplated by the Prospectus (or, if the
Prospectus is not in existence, the most recent Preliminary Prospectus).

    (v) The
Company possesses all certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct
its business the absence of which would result in a material adverse change in the condition (financial or otherwise), business prospects, net worth or results of operations of the Company, and the
Company has not received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a material adverse change in the condition (financial or otherwise), business prospects, net worth or results of operations of the Company,
except as described in or contemplated by the Prospectus (or, if the Prospectus is not in existence, the most recent Preliminary Prospectus).

    (w) The
Company will conduct its operations in a manner that will not subject it to registration as an investment company under the Investment Company Act of 1940, as
amended, and this transaction will not cause the Company to become an investment company subject to registration under such Act.

    (x) The
Company has filed all foreign, federal, state and local tax returns that are required to be filed or has requested extensions thereof (except in any case in
which the failure so to file would not have a material adverse effect on the Company) and 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 or as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent Preliminary Prospectus).

    (y) The
Company is not in violation of any federal or state law or regulation relating to occupational safety and health or to the storage, handling or transportation
of hazardous or toxic materials and the Company has received all permits, licenses or other approvals required of it under applicable federal and state occupational safety and health and environmental
laws and regulations to conduct its businesses, and the Company is in compliance with all terms and conditions of any such permit, license or approval, except any such violation of law or regulation,
failure to receive required permits, licenses or other approvals or failure to comply with the terms and conditions of such permits, licenses or approvals which would not, singly or in the aggregate,
result in a material adverse change in the condition (financial or otherwise), business prospects, net worth or results of operations of the Company, except as described in or contemplated by the
Prospectus (or, if the Prospectus is not in existence, the most recent Preliminary Prospectus).

    (z) Each
certificate signed by any officer of the Company and delivered to the Representatives or counsel for the Underwriters shall be deemed to be a representation
and warranty by the Company to each Underwriter as to the matters covered thereby.




    (aa) The
Company neither owns any shares of stock or any other equity securities of any corporation nor has any equity interest in any firm, partnership, association or
other entity, except for de minimis amounts or as described in or contemplated by the Prospectus (or, if the Prospectus is not in existence, the most recent Preliminary Prospectus).

    (bb) The
Company maintains a system of internal accounting controls sufficient to provide reasonable assurance that (1) transactions are executed in accordance
with management's general or specific authorizations; (2) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting
principles and to maintain asset accountability; (3) access to assets is permitted only in accordance with management's general or specific authorization; and (4) the recorded
accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

    (cc) No
default exists, and no event has occurred which, with notice or lapse of time or both, would constitute a default in the due performance and observance of any
term, covenant or condition of any indenture, mortgage, deed of trust, lease or other agreement or instrument to which the Company is a party or by which the Company is bound which default would not
reasonably be expected to result in a material adverse change in the property, business or operations of the Company.


    (dd) Neither
the Company nor any other person associated with or acting on behalf of the Company including, without limitation, any director, officer, agent or employee
of the Company, has offered or caused the Underwriters to offer any of the Securities to any person pursuant to the Directed Share Program with the specific intent to unlawfully influence (i) a
customer or supplier of the Company to alter the customer's or supplier's level or type of business with the Company or (ii) a trade journalist or publication to write or publish favorable
information about the Company or its products.

    3.  Purchase, Sale and Delivery of the Securities.  (a) On the basis of the representations,
warranties, agreements and covenants herein contained and subject to the terms and conditions herein set forth, the Company agrees to issue and sell to each of the Underwriters, and each of the
Underwriters, severally and not jointly, agrees to purchase from the Company, at a purchase price of $________ per share, the number of Firm Securities set forth opposite the name of such Underwriter
in Schedule 1 hereto. One or more certificates in definitive form for the Firm Securities that the several Underwriters have agreed to purchase hereunder, and in such denomination or denominations and
registered in such name or names as the Representatives request upon notice to the Company at least 48 hours prior to the Firm Closing Date, shall be delivered by or on behalf of the Company to the
Representatives for the respective accounts of the Underwriters, against payment by or on behalf of the Underwriters of the purchase price therefor by wire transfer in same-day funds (the "Wired
Funds") to the account of the Company. Such delivery of and payment for the Firm Securities shall be made at the offices of Winston & Xxxxxx, 00 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000 at
9:30 A.M., New York time, on February __, 2000, or at such other place, time or date as the Representatives and the Company may agree upon or as the Representatives may determine
pursuant to Section 9 hereof, such time and date of delivery against payment being herein referred to as the "Firm Closing Date". The Company will make such certificate or certificates for the Firm
Securities available for checking and packaging by the Representatives at the offices in New York, New York of the Company's transfer agent or registrar or of Prudential Securities Incorporated at
least 24 hours prior to the Firm Closing Date.

    (b) For
the purpose of covering any over-allotments in connection with the distribution and sale of the Firm Securities as contemplated by the Prospectus, the Company
hereby grants to the several Underwriters an option to purchase, severally and not jointly, the Option Securities. The purchase price to be paid for any Option Securities shall be the same price per
share as the price per share for the Firm Securities set forth above in paragraph (a) of this Section 3, plus if the purchase and sale of any

Option Securities takes place after the Firm Closing Date and after the Firm Securities are trading "ex-dividend", an amount equal to the dividends payable on such Option Securities. The option
granted hereby may be exercised as to all or any part of the Option Securities from time to time within thirty days after the date of the Prospectus (or, if such 30th day shall be a Saturday or Sunday
or a holiday, on the next business day thereafter when the New York Stock Exchange is open for trading). The Underwriters shall not be under any obligation to purchase any of the Option Securities
prior to the exercise of such option. The Representatives may from time to time exercise the option granted hereby by giving notice in writing or by telephone (confirmed in writing) to the Company
setting forth the aggregate number of Option Securities as to which the several Underwriters are then exercising the option and the date and time for delivery of and payment for such Option
Securities. Any such date of delivery shall be determined by the Representatives but shall not be earlier than two business days or later than five business days after such exercise of the option and,
in any event, shall not be earlier than the Firm Closing Date. The time and date set forth in such notice, or such other time on such other date as the Representatives and Company may agree upon or as
the Representatives may determine pursuant to Section 9 hereof, is herein called the "Option Closing Date" with respect to such Option Securities. Upon exercise of the option as provided herein, the
Company shall become obligated to sell to each of the several Underwriters, and, subject to the terms and conditions herein set forth, each of the Underwriters (severally and not jointly) shall become
obligated to purchase from the Company, the same percentage of the total number of the Option Securities as to which the several Underwriters are then exercising the option as such Underwriter is
obligated to purchase of the aggregate number of Firm Securities, as adjusted by the Representatives in such manner as they deem advisable to avoid fractional shares. If the option is exercised as to
all or any portion of the Option Securities, one or more certificates in definitive form for such Option Securities, and payment therefor, shall be delivered on the related Option Closing Date in the
manner, and upon the terms and conditions, set forth in paragraph (a) of this Section 3, except that reference therein to the Firm
Securities and the Firm Closing Date shall be deemed, for purposes of this paragraph (b), to refer to such Option Securities and Option Closing Date, respectively.

    (c) The
Company hereby acknowledges that the wire transfer by or on behalf of the Underwriters of the purchase price for any Securities does not constitute closing of a
purchase and sale of the Securities. Only execution and delivery of a receipt for Securities to be delivered immediately upon receipt of such Securities on the Firm Closing Date or on the Option
Closing Date, as the case may be, by the Underwriters indicates completion of the closing of a purchase of the Securities from the Company. Furthermore, in the event that the Underwriters wire funds
to the Company prior to the completion of the closing of a purchase of Securities, the Company hereby acknowledges that until the Underwriters execute and deliver a receipt for the Securities, by
facsimile or otherwise, the Company will not be entitled to the Wired Funds and shall return the Wired Funds to the Underwriters as soon as practicable (by wire transfer of same-day funds) upon
demand. In the event that the closing of a purchase of Securities is not completed and the Wired Funds are not returned by the Company to the Underwriters on the same day the Wired Funds were received
by the Company, the Company agrees to pay to the Underwriters in respect of each day the Wired Funds are not returned by it, in same-day funds, interest on the amount of such Wired Funds in an amount
representing the Underwriters' cost of financing as reasonably determined by Prudential Securities Incorporated.

    (d) It
is understood that any of you, individually and not as one of the Representatives, may (but shall not be obligated to) make payment on behalf of any Underwriter
or Underwriters for any of the Securities to be purchased by such Underwriter or Underwriters. No such payment shall relieve such Underwriter or Underwriters from any of its or their obligations
hereunder.

    4.  Offering by the Underwriters.  Upon your authorization of the release of the Firm Securities, the
several Underwriters propose to offer the Firm Securities for sale to the public upon the terms set forth in the Prospectus.



    5.  Covenants of the Company.  The Company covenants and agrees with each of the Underwriters that:

    (a) The
Company will use its best efforts to cause the Registration Statement, if not effective at the time of execution of this Agreement, and any amendments thereto
to become effective as promptly as possible. If required, the Company will file the Prospectus and any amendment or supplement thereto with the Commission in the manner and within the time period
required by Rules 434 and 424(b) under the Act. During any time when a prospectus relating to the Securities is required to be delivered under the Act, the Company (i) will comply
with all requirements imposed upon it by the Act and the rules and regulations of the Commission thereunder to the extent necessary to permit the continuance of sales of or dealings in the
Securities in accordance with the provisions hereof and of the Prospectus, as then amended or supplemented, and (ii) will not file with the Commission the prospectus, Term Sheet or the
amendment referred to in the second sentence of Section 2(a) hereof, any amendment or supplement to such Prospectus, Term Sheet or any amendment to the Registration Statement or any Rule
462(b) Registration Statement of which the Representatives previously have been advised and furnished with a copy for a reasonable period of time prior to the proposed filing and as to which
filing the Representatives shall not have given their consent, which consent will not be unreasonably withheld. The Company will prepare and file with the Commission, in accordance with the
rules and regulations of the Commission, promptly upon request by the Representatives or counsel for the Underwriters, any amendments to the Registration Statement or amendments or supplements
to the Prospectus that may be necessary or advisable in connection with the distribution of the Securities by the several Underwriters, and will use its best efforts to cause any such amendment to the
Registration Statement to be declared effective by the Commission as promptly as possible. The Company will advise the
Representatives, promptly after receiving notice thereof, of the time when the Registration Statement or any amendment thereto has been filed or declared effective or the Prospectus or any amendment
or supplement thereto has been filed and will provide evidence satisfactory to the Representatives of each such filing or effectiveness.

    (b) The
Company will advise the Representatives, promptly after receiving notice or obtaining knowledge thereof, of (i) the issuance by the Commission of any
stop order suspending the effectiveness of the Original Registration Statement or any Rule 462(b) Registration Statement or any amendment thereto or any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus or any amendment or supplement thereto, (ii) the suspension of the qualification of the Securities for offering or sale in any
jurisdiction, (iii) the institution, threatening or contemplation of any proceeding for any such purpose or (iv) any request made by the Commission for amending the Original Registration
Statement or any Rule 462(b) Registration Statement, for amending or supplementing the Prospectus or for additional information. The Company will use its best efforts to prevent the
issuance of any such stop order and, if any such stop order is issued, to obtain the withdrawal thereof as promptly as possible.

    (c) The
Company will cooperate with the Underwriters concerning the qualification of the Securities for offering and sale under the securities or blue sky laws of such
jurisdictions as the Representatives may designate and will continue such qualifications in effect for as long as may be necessary to complete the distribution of the Securities, provided, however,
that in connection therewith the Company shall not be required to qualify as a foreign corporation or to execute a general consent to service of process in any jurisdiction.

    (d) If,
at any time prior to the later of (i) the final date when a prospectus relating to the Securities is required to be delivered under the Act or
(ii) the Option Closing Date, any event occurs as a result of which the Prospectus, as then amended or supplemented, would include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if for any other reason it is necessary at any time to
amend or supplement the Prospectus to comply with the Act

or the rules or regulations of the Commission thereunder, the Company will promptly notify the Representatives thereof and, subject to Section 5(a) hereof, will prepare and file with the
Commission, at the Company's expense, an amendment to the Registration Statement or an amendment or supplement to the Prospectus that corrects such statement or omission or effects such compliance.

    (e) The
Company will, without charge, provide (i) to the Representatives and to counsel for the Underwriters a conformed copy of the registration statement
originally filed with respect to the Securities and each amendment thereto (in each case including exhibits thereto) or any Rule 462(b) Registration Statement, certified by the Secretary
or an Assistant Secretary of the Company to be true and complete copies thereof as filed with the Commission by electronic transmission, (ii) to each other Underwriter, a conformed copy of such
registration statement or any Rule 462(b) Registration Statement and each amendment thereto (in each case without exhibits thereto) and (iii) so long as a prospectus relating to
the Securities is required to be delivered under the Act, as many copies of each Preliminary Prospectus or the Prospectus or any amendment or supplement thereto as the Representatives may reasonably
request; without limiting the application of clause (iii) of this sentence, the Company, not later than (A) 6:00 P.M., New York City time, on the date of determination of the
public offering price, if such determination occurred at or prior to 10:00 A.M., New York City time, on such date or (B) 2:00 P.M., New York City time, on the business day
following the date of determination of the public offering price, if such determination occurred after 10:00 A.M., New York City time, on such date, will deliver to the Underwriters, without
charge, as many copies of
the Prospectus and any amendment or supplement thereto as the Representatives may reasonably request for purposes of confirming orders that are expected to settle on the Firm Closing Date. The Company
will provide or cause to be provided to each of the Representatives, and to each Underwriter that so requests in writing, the information filed by the Company as required by Rule 463 under the
Act.

    (f)  The
Company, as soon as practicable, will make generally available to its securityholders and to the Representatives a earnings statement of the Company that
satisfies the provisions of Section 11(a) of the Act and Rule 158 thereunder.

    (g) The
Company will apply the net proceeds from the sale of the Securities substantially as set forth under "Use of Proceeds" in the Prospectus.

    (h) The
Company will not, directly or indirectly, without the prior written consent of Prudential Securities Incorporated, on behalf of the Underwriters, offer, sell,
offer to sell, contract to sell, pledge, grant any option to purchase or otherwise sell or dispose (or announce any offer, sale, offer of sale, contract of sale, pledge, grant of any option to
purchase or other sale or disposition) of any shares of Common Stock or any securities convertible into, or exchangeable or exercisable for, shares of Common Stock for a period of 180 days after the
date hereof, except pursuant to this Agreement and except for issuances of additional authorized securities pursuant to the Company's Amended and Restated 1998 Stock Option and Grant Plan, the
exercise of employee stock options outstanding on the date hereof, pursuant to the Company's dividend reinvestment plan or pursuant to the terms of convertible securities of the Company outstanding on
the date hereof.

    (i)  The
Company will not, directly or indirectly, (i) take any action designed to cause or to result in, or that has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities or (ii) (A) sell, bid for,
purchase, or pay anyone any compensation for soliciting purchases of, the Securities or (B) pay or agree to pay to any person any compensation for soliciting another to purchase any other
securities of the Company.

    (j)  The
Company will obtain the agreements described in Section 7(f) hereof prior to the Firm Closing Date.



    (k) If
at any time during the 25-day period after the Registration Statement becomes effective or the period prior to the Option Closing Date, any rumor, publication or
event relating to or affecting the Company shall occur as a result of which in your opinion the market price of the Common Stock has been or is likely to be materially affected (regardless of whether
such rumor, publication or event necessitates a supplement to or amendment of the Prospectus), the Company will, after notice from you advising the Company to the effect set forth above, forthwith
prepare, consult with you concerning the substance of, and disseminate a press release or other public statement, reasonably satisfactory to you, responding to or commenting on such rumor, publication
or event.

    (l)  If
the Company elects to rely on Rule 462(b), the Company shall both file a Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) and pay the applicable fees in accordance with Rule 111 promulgated under the Act by the earlier of (i) 10:00 P.M. Eastern time on the
date of this Agreement and (ii) the time confirmations are sent or given, as specified by Rule 462(b)(2).

    (m) The
Company will cause the Securities to be duly included for quotation on The Nasdaq Stock Market's National Market (the "Nasdaq National Market") prior to the
Firm Closing Date. The
Company will ensure that the Securities remain included for quotation on the Nasdaq National Market following the Firm Closing Date.

    6.  Expenses.  The Company will pay all costs and expenses incident to the performance of its obligations
under this Agreement, whether or not the transactions contemplated herein are consummated or this Agreement is terminated pursuant to Section 11 hereof, including all costs and expenses incident to
(i) the printing or other production of documents with respect to the transactions, including any costs of printing the registration statement originally filed with respect to the Securities and any
amendment thereto, any Rule 462(b) Registration Statement, any Preliminary Prospectus and the Prospectus and any amendment or supplement thereto, this Agreement and any blue sky
memoranda, (ii) all arrangements relating to the delivery to the Underwriters of copies of the foregoing documents, (iii) the fees and disbursements of the counsel, the accountants and
any other experts or advisors retained by the Company, (iv) preparation, issuance and delivery to the Underwriters of any certificates evidencing the Securities, including transfer agent's and
registrar's fees, (v) the qualification of the Securities under state securities and blue sky laws, including filing fees and fees and disbursements of counsel for the Underwriters relating thereto,
(vi) the filing fees of the Commission and the National Association of Securities Dealers, Inc. relating to the Securities, (vii) any quotation of the Securities on the Nasdaq
National Market, (viii) any meetings with prospective investors in the Securities (other than as shall have been specifically approved by the Representatives to be paid for by the
Underwriters), (ix) advertising relating to the offering of the Securities (other than as shall have been specifically approved by the Representatives to be paid for by the Underwriters). If
the sale of the Securities provided for herein is not consummated because any condition to the obligations of the Underwriters set forth in Section 7 hereof is not satisfied, because this Agreement is
terminated pursuant to Section 11 hereof or because of any failure, refusal or inability on the part of the Company to perform all obligations and satisfy all conditions on its part to be performed or
satisfied hereunder other than by reason of a default by any of the Underwriters, the Company will reimburse the Underwriters severally upon demand for all out-of-pocket expenses (including counsel
fees and disbursements) that shall have been incurred by them in connection with the proposed purchase and sale of the Securities. The Company shall not in any event be liable to any of the
Underwriters for the loss of anticipated profits from the transactions covered by this Agreement.

    7.  Conditions of the Underwriters' Obligations.  The obligations of the several Underwriters to purchase
and pay for the Firm Securities shall be subject, in the Representatives' sole discretion, to the accuracy of the representations and warranties of the Company contained herein as of the date hereof
and as of the Firm Closing Date, as if made on and as of the Firm Closing Date, to the accuracy of the

statements of the Company's officers made pursuant to the provisions hereof, to the performance by the Company of its covenants and agreements hereunder and to the following additional conditions:

    (a) If
the Original Registration Statement or any amendment thereto filed prior to the Firm Closing Date has not been declared effective as of the time of execution
hereof, the Original Registration Statement or such amendment and, if the Company has elected to rely upon Rule 462(b), the Rule 462(b) Registration Statement shall have been
declared effective not later than the earlier of (i) 11:00 A.M., New York time, on the date on which the amendment to the registration statement originally filed with respect to the Securities
or to the Registration Statement, as the case may be, containing information regarding the initial public offering price of the Securities has been filed with the Commission and (ii) the time
confirmations are sent or given as specified by Rule 462(b)(2), or with respect to the Original Registration Statement, or such later time and date as shall have been consented to by the
Representatives; if required, the Prospectus or any Term Sheet that constitutes a part thereof and any amendment or supplement thereto shall have been filed with the Commission in the manner and
within the time period required by Rules 434 and 424(b) under the Act; no stop order
suspending the effectiveness of the Registration Statement or any amendment thereto shall have been issued, and no proceedings for that purpose shall have been instituted or threatened or, to the
knowledge of the Company or the Representatives, shall be contemplated by the Commission; and the Company shall have complied with any request of the Commission for additional information (to be
included in the Registration Statement or the Prospectus or otherwise).

    (b) The
Representatives shall have received an opinion, dated the Firm Closing Date, of Xxxxxxxxxxx Xxxxx & Xxxxxxxx LLP, counsel for the Company, to the effect
that:



    (i)  the
Company has been duly organized and is validly existing as a corporation in good standing under the laws of the jurisdiction of incorporation and is duly
qualified to transact business as a foreign corporation and is in good standing under the laws of all other jurisdictions where the ownership or leasing of properties or the conduct of businesses
requires such qualification, except where the failure to be so qualified does not amount to a material liability or disability to the Company, taken as a whole;

    (ii) the
Company has corporate power to own or lease its properties and conduct its businesses as described in the Registration Statement and the Prospectus, and the
Company has corporate power to enter into this Agreement and to carry out all the terms and provisions hereof to be carried out by it;


    (iii) the
Company has an authorized, issued and outstanding capitalization as set forth under the heading "Capitalization" in the Prospectus as of the dates stated
therein; all of the issued shares of capital stock of the Company have been duly authorized and validly issued and are fully paid and nonassessable and were not issued in violation of or subject to
any preemptive rights or other rights to subscribe for or purchase securities; the Firm Securities have been duly authorized by all necessary corporate action of the Company and, when issued and
delivered to and paid for by the Underwriters pursuant to this Agreement, will be validly issued, fully paid and nonassessable; to such counsel's knowledge, no holders of outstanding shares of capital
stock of the Company are entitled as such to any preemptive or other rights to subscribe for any of the Securities, other than such rights that have been waived; and to the best of such counsel's
knowledge, no holders of securities of the Company are entitled to have such securities registered under the Registration Statement;

    (iv) the
statements set forth under the heading "Description of Capital Stock" in the Prospectus, insofar as such statements purport to summarize certain provisions of
the capital stock of the Company, provide a fair summary of such provisions;



    (v) the
execution and delivery of this Agreement have been duly authorized by all necessary corporate action of the Company and this Agreement has been duly executed
and delivered by the Company;

    (vi) to
the best of such counsel's knowledge, (A) no legal or governmental proceedings are pending to which the Company is a party or to which the property of
the Company is subject that are required to be described in the Registration Statement or the Prospectus and are not described therein, and, to the best knowledge of such counsel, no such proceedings
have been threatened against the Company or with respect to any of its properties and (B) no contract or other document is required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement that is not described therein or filed as required;

    (vii) the
issuance, offering and sale of the Securities to the Underwriters by the Company pursuant to this Agreement, the compliance by the Company with the other
provisions of this Agreement and the consummation of the other transactions herein contemplated do not (A) require the consent, approval,
authorization, registration or qualification of or with any governmental authority, except such as have been obtained and such as may be required under state securities or blue sky laws, or
(B) conflict with or result in a breach or violation of any of the terms and provisions of, or constitute a default under, any indenture, mortgage, deed of trust, lease or other agreement or
instrument, known to such counsel, to which the Company is a party or by which the Company or any of its properties are bound, or the charter documents or by-laws of the Company, or any statute or any
judgment, decree, order, rule or regulation of any court or other governmental authority or any arbitrator known to such counsel and applicable to the Company, which breach, violation or
default would have a material adverse effect on the Company;

    (viii) the
Registration Statement is effective under the Act; any required filing of the Prospectus pursuant to Rules 434 and 424(b) has
been made in the manner and within the time period required by Rules 434 and 424(b); and, to such counsel's knowledge, no stop order suspending the effectiveness of the Registration Statement
or any amendment thereto has been issued, and no proceedings for that purpose have been instituted or, to the best knowledge of such counsel, are threatened or contemplated by the Commission; and


    (ix) any
Rule 462(b) Registration Statement and the Prospectus (in each case, other than the financial statements, schedules and other financial and
statistical information contained therein, as to which such counsel need express no opinion) comply as to form in all material respects with the applicable requirements of the Act and the
rules and regulations of the Commission thereunder.

    (x) if
the Company elects to rely on Rule 434, the Prospectus is not "materially different", as such term is used in Rule 434, from the prospectus
included in the Registration Statement at the time of its effectiveness or an effective post-effective amendment thereto (including such information that is permitted to be omitted pursuant to
Rule 430A).



    Such
counsel shall also state that they have no reason to believe that the Registration Statement, as of its effective date, contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus, as of its date or the date of such opinion, included
or includes any untrue statement of a material fact or omitted or omits to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they
were made, not misleading.

    In
rendering any such opinion, such counsel may rely, as to matters of fact, to the extent such counsel deems proper, on certificates of responsible officers of the Company and public
officials.

    References
to the Registration Statement and the Prospectus in this paragraph (b) shall include any amendment or supplement thereto at the date of such opinion.



    (c) The
Representatives shall have received an opinion, dated the Firm Closing Date, of [NAME OF PATENT COUNSEL], special patent counsel for the
Company, to the effect that such counsel are familiar with the technology used by the Company in its business and the manner of its use thereof and have read the Registration Statement and the
Prospectus, including particularly the portions of the Registration Statement and the Prospectus referring to patents, trade secrets, trademarks, service marks or other proprietary information or
materials and:



    (i)  The
Company is listed in the records of the United States Patent and Trademark Office as the holder of record of the patents listed on a schedule to such opinion
(the "Patents") and each of the applications listed on a schedule to such opinion (the "Applications"). To the knowledge of such
counsel, there are no claims of third parties to any ownership interest or lien with respect to any of the Patents or Applications. Such counsel is not aware of any material defect in form in the
preparation or filing of the Applications on behalf of the Company. To the knowledge of such counsel, the Applications are being pursued by the Company. To the knowledge of such counsel, the Company
owns as its sole property the Patents and pending Applications;

    (ii) The
Company is listed in the records of the appropriate foreign offices as the sole holder of record of the foreign patents listed on a schedule to such opinion
(the "Foreign Patents") and each of the applications listed on a schedule to such opinion (the "Foreign Applications"). Such counsel knows of no claims of third parties to any ownership interest or
lien with respect to the Foreign Patents or Foreign Applications. Such counsel is not aware of any material defect of form in the preparation or filing of the Foreign Applications on behalf of the
Company. To the knowledge of such counsel, the Foreign Applications are being pursued by the Company. To the knowledge of such counsel, the Company owns as its sole property the Foreign Patents and
pending Foreign Applications;

    (iii) Such
counsel knows of no reason why the Patents or Foreign Patents are not valid as issued. Such counsel has no knowledge of any reason why any patent to be
issued as a result of any Application or Foreign Application would not be valid or would not afford the Company useful patent protection with respect thereto;

    (iv) As
to the statements under the captions "Risk Factors — we may not be able to adequately protect or enforce our domestic or international
intellectual property rights which would allow our competitors to offer similar products which could depress our prices and gross margins or to protect ourselves against infringement claims of others
which if successfully brought could require us to redesign or cease marketing our products" and "Business — Intellectual Property," nothing has come to the attention of such counsel
which caused them to believe that the above-mentioned sections of the Registration Statement, at the time the Registration Statement became effective and at all times subsequent thereto up to and on
the Firm Closing Date and on any later date on which Option Securities are to be purchased the Registration Statement and any amendment or supplement thereto made available and reviewed by such
counsel contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, or at the Firm
Closing Date or any later date on which the Option Securities are to be purchased, as the case may be, the above-mentioned sections of the Registration Statement, Prospectus and any amendment or
supplement thereto made available and reviewed by such counsel contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were made, not misleading; and

    (v) Such
counsel knows of no material action, suit, claim or proceeding relating to patents, patent rights or licenses, trademarks or trademark rights, copyrights,
collaborative research, licenses or royalty arrangements or agreements or trade secrets, know-how or proprietary

techniques, including processes and substances, owned by or affecting the business or operations of the Company which are pending or threatened against the Company or any of its officers or directors.



The
foregoing opinion shall also state that the Underwriters are justified in relying upon such opinion of [NAME OF PATENT COUNSEL], and copies of such opinion shall be
delivered to the Representatives and Winston & Xxxxxx.

    (d) The
Representatives shall have received an opinion, dated the Firm Closing Date, of Winston & Xxxxxx, 00 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000, counsel
for the Underwriters, with respect to
the issuance and sale of the Firm Securities, the Registration Statement and the Prospectus, and such other related matters as the Representatives may reasonably require, and the Company shall have
furnished to such counsel such documents as they may reasonably request for the purpose of enabling them to pass upon such matters.


    (e) The
Representatives shall have received from each of Larson, Allen, Weishair & Co., LLP (with respect to the fiscal year ended December 31, 1996
only), Xxxxxx Xxxxxxxx LLP (with respect to the fiscal year ended December 31, 1997 only) and PricewaterhouseCoopers LLP (with respect to the nine month period ended September 30, 1998,
the fiscal year ended December 31, 1999, the nine month period ended September 30, 1999 and thereafter) a letter or letters dated, respectively, the date hereof and the Firm Closing
Date, in form and substance satisfactory to the Representatives, to the effect that:



    (i)  they
are independent accountants with respect to the Company within the meaning of the Act and the applicable rules and regulations thereunder;


    (ii) in
their opinion, the audited financial statements and schedules and pro forma financial statements examined by them and included in the Registration Statement and
the Prospectus comply in form in all material respects with the applicable accounting requirements of the Act and the related published rules and regulations;

    (iii) on
the basis of their limited review in accordance with standards established by the American Institute of Certified Public Accountants of any interim unaudited
condensed financial statements of the Company as indicated in their report included in the Registration Statement and the Prospectus, carrying out certain specified procedures (which do not constitute
an examination made in accordance with generally accepted auditing standards) that would not necessarily reveal matters of significance with respect to the comments set forth in this paragraph (iii),
a reading of the minute books of the shareholders, the board of directors and any committees thereof of the Company, and inquiries of certain officials of the Company who have responsibility for
financial and accounting matters, nothing came to their attention that caused them to believe that:



    (A) the
unaudited condensed financial statements of the Company included in the Registration Statement and the Prospectus do not comply in form in all material respects
with the applicable accounting requirements of the Act and the related published rules and regulations thereunder or are not in conformity with generally accepted accounting principles applied
on a basis substantially consistent with that of the audited financial statements included in the Registration Statement and the Prospectus;


    (B) with
respect to PricewaterhouseCoopers LLP only, at a specific date not more than five business days prior to the date of such letter, there were any changes in the
capital stock or long-term debt of the Company or any decreases in net current assets or stockholders' equity of the Company, in each case compared with amounts shown on the September 30, 1999
balance sheet included in the Registration Statement and the Prospectus, or for the period from the date of such balance sheet to such specified date there were any decreases, as compared with the
nine month period ended September 30, 1998, in net sales, gross profit,

income before provision for income taxes or total or per share amounts of net income of the Company, except in all instances for changes, decreases or increases set forth in such letter; and



    (iv) (A) With
respect to PricewaterhouseCoopers LLP only, they have carried out certain specified procedures, not constituting an audit, with respect to certain
amounts, percentages and financial
information that are derived from the general accounting records of the Company and are included in the Registration Statement and the Prospectus under the captions "Summary—Summary
Financial Data", "Risk Factors", "Use of Proceeds", "Capitalization", "Dilution", "Selected Financial Data", "Management's Discussion and Analysis of Financial Condition and Results of Operations",
"Business", "Management", "Certain Transactions", "Principal Stockholders", "Description of Capital Stock", and "Shares Eligible for Future Sale", and have compared such amounts, percentages and
financial information with such records of the Company and with information derived from such records and have found them to be in agreement, excluding any questions of legal interpretation; and

    (B) With
respect to Larson, Allen, Weishair & Co., LLP and Xxxxxx Xxxxxxxx LLP only, they have carried out certain specified procedures, not constituting an
audit, with respect to certain amounts, percentages and financial information that are derived from the general accounting records of the Company and are included in the Registration Statement and the
Prospectus under the captions "Summary—Summary Financial Data", "Risk Factors", "Selected Financial Data", "Management's Discussion and Analysis of Financial Condition and Results of
Operations", "Business", and "Certain Transactions", and have compared such amounts, percentages and financial information with such records of the Company and with information derived from such
records and have found them to be in agreement, excluding any questions of legal interpretation.



    In
the event that the letters referred to above set forth any such changes, decreases or increases, it shall be a further condition to the obligations of the Underwriters that
(A) such letters shall be accompanied by a written explanation of the Company as to the significance thereof, unless the Representatives deem such explanation unnecessary, and (B) such
changes, decreases or increases do not, in the sole judgment of the Representatives, make it impractical or inadvisable to proceed with the purchase and delivery of the Securities as contemplated by
the Registration Statement, as amended as of the date hereof.

    References
to the Registration Statement and the Prospectus in this paragraph (d) with respect to either letter referred to above shall include any amendment or supplement
thereto at the date of such letter.

    (f)  The
Representatives shall have received a certificate, dated the Firm Closing Date, of the principal executive officer and the principal financial or accounting
officer of the Company to the effect that:



    (i)  the
representations and warranties of the Company in this Agreement are true and correct as if made on and as of the Firm Closing Date; the Registration Statement,
as amended as of the Firm Closing Date, does not include any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading, and the
Prospectus, as amended or supplemented as of the Firm Closing Date, does 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 of the circumstances under which they were made, not misleading; and the Company has performed all covenants and agreements and satisfied all conditions on its part to
be performed or satisfied at or prior to the Firm Closing Date;



    (ii) no
stop order suspending the effectiveness of the Registration Statement or any amendment thereto has been issued, and no proceedings for that purpose have been
instituted or threatened or, to the best of the Company's knowledge, are contemplated by the Commission; and

    (iii) subsequent
to the respective dates as of which information is given in the Registration Statement and the Prospectus, the Company has not sustained any material
loss or interference with its businesses or properties from fire, flood, hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any legal or governmental proceeding, and there has not been any material adverse change, or any development involving a prospective material adverse change, in
the condition (financial or otherwise), management, business prospects, net worth or results of operations of the Company except in each case as described in or contemplated by the Prospectus
(exclusive of any amendment or supplement thereto).



    (g) The
Representatives shall have received from each person who is a director or officer of the Company or who is a beneficial owner of the outstanding issued shares
of Common Stock an agreement to the effect that such person will not, directly or indirectly, without the prior written consent of Prudential Securities Incorporated, on behalf of the Underwriters,
offer, sell, offer to sell, contract to sell, pledge, grant any option to purchase or otherwise sell or dispose (or announce any offer, sale, offer of sale, contract of sale, pledge, grant of any
option to purchase or other sale or disposition) of any shares of Common Stock or any securities convertible into, or exchangeable or exercisable for, shares of Common Stock for a period of 180 days
after the date of this Agreement.

    (h) On
or before the Firm Closing Date, the Representatives and counsel for the Underwriters shall have received such further certificates, documents or other
information as they may have reasonably requested from the Company.

    (i)  Prior
to the commencement of the offering of the Securities, the Securities shall have been included for trading on the Nasdaq National Market.

    All
opinions, certificates, letters and documents delivered pursuant to this Agreement will comply with the provisions hereof only if they are reasonably satisfactory in all material
respects to the Representatives and counsel for the Underwriters. The Company shall furnish to the Representatives such conformed copies of such opinions, certificates, letters and documents in such
quantities as the Representatives and counsel for the Underwriters shall reasonably request.

    The
respective obligations of the several Underwriters to purchase and pay for any Option Securities shall be subject, in their discretion, to each of the foregoing conditions to
purchase the Firm Securities, except that all references to the Firm Securities and the Firm Closing Date shall be deemed to refer to such Option Securities and the related Option Closing Date,
respectively.

    8.  Indemnification and Contribution.  (a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the meaning of Section 15 of the Act or Section 20 of the Securities Exchange Act of 1934 (the "Exchange Act"), against any
losses, claims, damages or liabilities, joint or several, to which such Underwriter or such controlling person may become subject under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon:



    (i)  any
untrue statement or alleged untrue statement made by the Company in Section 2 of this Agreement;

    (ii) any
untrue statement or alleged untrue statement of any material fact contained in (A) the Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto or (B) any application or other document, or any amendment or supplement thereto, executed by the Company or based upon
written information furnished by or on behalf of the Company filed in any jurisdiction in order to qualify

the Securities under the securities or blue sky laws thereof or filed with the Commission or any securities association or securities exchange (each an "Application");

    (iii) the
omission or alleged omission to state in the Registration Statement or any amendment thereto, any Preliminary Prospectus or the Prospectus or any amendment or
supplement thereto, or any Application a material fact required to be stated therein or necessary to make the statements therein not misleading; or


    (iv) any
untrue statement or alleged untrue statement of any material fact contained in any audio or visual materials provided by the Company or based upon written
information furnished by or on behalf of the Company and approved by the Company prior to its use including, without limitation, slides, videos, films, tape recordings, used in connection with the
marketing of the Securities, including, without limitation, statements communicated by or on behalf of the Company to securities analysts employed by the Underwriters;



and
will reimburse, as incurred, each Underwriter and each such controlling person for any legal or other expenses reasonably incurred by such Underwriter or such controlling person in connection with
investigating, defending against or appearing as a third-party witness in connection with any such loss, claim, damage, liability or action; provided, however, that the Company will not be liable in
any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon any untrue statement or alleged untrue statement or omission or alleged omission made in such
registration statement or any amendment thereto, any Preliminary Prospectus, the Prospectus or any amendment or supplement thereto or any Application in reliance upon and in conformity with written
information furnished to the Company by such Underwriter through the Representatives specifically for use therein; and provided, further, that the Company will not be liable to any Underwriter or any
person controlling such Underwriter with respect to any such untrue statement or omission made in any Preliminary Prospectus that is corrected in the Prospectus (or any amendment or supplement
thereto) if the person asserting any such loss, claim, damage or liability purchased Securities from an Underwriter but was not sent or given a copy of the Prospectus (as amended or supplemented) at
or prior to the written confirmation of the sale of such Securities to such person in any case where such delivery of the Prospectus (as amended or supplemented) is required by the Act, unless such
failure to deliver the Prospectus (as amended or supplemented) was a result of noncompliance by the Company with Section 5(d) and (e) of this Agreement. This indemnity agreement will be
in addition to any liability which the Company may otherwise have. The Company will not, without the prior written consent of the Underwriter or Underwriters purchasing, in the aggregate, more than
fifty percent (50%) of the Securities, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action, suit or proceeding in respect of which indemnification
may be sought hereunder (whether or not any such Underwriter or any person who controls any such Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act is a party to
such claim, action, suit or proceeding), unless such settlement, compromise or consent includes an unconditional release of all of the Underwriters and such controlling persons from all liability
arising out of such claim, action, suit or proceeding.

    (b) Each
Underwriter, severally and not jointly, will indemnify and hold harmless the Company, each of its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act against any losses, claims, damages or liabilities to which
the Company or any such director, officer or controlling person may become subject under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement or any amendment thereto, any Preliminary
Prospectus or the Prospectus or any amendment or supplement thereto, or any Application or (ii) the omission or the alleged omission to state therein a material fact required to be stated in
the Registration Statement or any amendment thereto, any

Preliminary Prospectus or the Prospectus or any amendment or supplement thereto, or any Application or necessary to make the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by such
Underwriter through the Representatives specifically for use therein; and, subject to the limitation set forth immediately preceding this clause, will reimburse, as incurred, any legal or other
expenses reasonably incurred by the Company or any such director, officer or controlling person in connection with investigating or defending any such loss, claim, damage, liability or any action in
respect thereof. This indemnity agreement will be in addition to any liability which such Underwriter may otherwise have.

    (c) Promptly
after receipt by an indemnified party under this Section 8 of notice of the commencement of any action, such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section 8, notify the indemnifying party of the commencement thereof; but the omission so to notify the indemnifying party will not
relieve it from any liability which it may have to any indemnified party otherwise than under this Section 8. In case any such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such indemnified party; provided, however, that if the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded that there may be one or more legal defenses available to it and/or other indemnified parties which are different from or
additional to those available to the indemnifying party, the indemnifying party shall not have the right to direct the defense of such action on behalf of such indemnified party or parties and such
indemnified party or parties shall have the right to select separate counsel to defend such action on behalf of such indemnified party or parties. After notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof and approval by such indemnified party of counsel appointed to defend such action, the indemnifying party will not be liable to such
indemnified party under this Section 8 for any legal or other expenses, other than reasonable costs of investigation, subsequently incurred by such indemnified party in connection with the defense
thereof, unless (i) the indemnified party shall have employed separate counsel in accordance with the proviso to the next preceding sentence (it being understood, however, that in connection
with such action the indemnifying party shall not be liable for the expenses of more than one separate counsel (in addition to local counsel) in any one action or separate but substantially similar
actions in the same jurisdiction arising out of the same general allegations or circumstances, designated by the Representatives in the case of paragraph (a) of this Section 8, representing the
indemnified parties under such paragraph (a) who are parties to such action or actions) or (ii) the indemnifying party does not promptly retain counsel satisfactory to the indemnified
party or (iii) the indemnifying party has authorized the employment of counsel for the indemnified party at the expense of the indemnifying party. After such notice from the indemnifying party
to such indemnified party, the indemnifying party will not be liable for the costs and expenses of any settlement of such action effected by such indemnified party without the consent of the
indemnifying party.

    (d) In
circumstances in which the indemnity agreement provided for in the preceding paragraphs of this Section 8 is unavailable or insufficient, for any reason, to hold
harmless an indemnified party in respect of any losses, claims, damages or liabilities (or actions in respect thereof), each indemnifying party, in order to provide for just and equitable
contribution, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as
is appropriate to reflect (i) the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party on the other from the offering of the Securities or
(ii) if the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of the indemnifying party or

parties on the one hand and the indemnified party on the other in connection with the statements or omissions or alleged statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total proceeds from the offering (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions
received by the Underwriters. The relative fault of the parties shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters, the parties' relative intents, knowledge, access to information and
opportunity to correct or prevent such statement or omission, and any other equitable considerations appropriate in the circumstances. The Company and the Underwriters agree that it would not be
equitable if the amount of such contribution were determined by pro rata or per capita allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of
allocation that does not take into account the equitable considerations referred to above in this paragraph (d). Notwithstanding any other provision of this paragraph (d), no Underwriter shall be
obligated to make contributions hereunder that in the aggregate exceed the total public offering price of the Securities purchased by such Underwriter under this Agreement, less the aggregate amount
of any damages that such Underwriter has otherwise been required to pay in respect of the same or any substantially similar claim, and no person guilty of fraudulent misrepresentation (within the
meaning of Section II (f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations to contribute
hereunder are several in proportion to their respective underwriting obligations and not joint, and contributions among Underwriters shall be governed by the provisions of the Prudential Securities
Incorporated Master Agreement Among Underwriters. For purposes of this paragraph (d), each person, if any, who controls an Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act shall have the same rights to contribution as such Underwriter, and each director of the Company, each officer of the Company who signed the Registration Statement and each person, if
any, who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, shall have the same rights to contribution as the Company.

    9.  Default of Underwriters.  If one or more Underwriters default in their obligations to purchase Firm
Securities or Option Securities hereunder and the aggregate number of such Securities that such defaulting Underwriter or Underwriters agreed but failed to purchase is ten percent or less of the
aggregate number of Firm Securities or Option Securities to be purchased by all of the Underwriters at such time hereunder, the other Underwriters may make arrangements satisfactory to the
Representatives for the purchase of such Securities by other persons (who may include one or more of the non-defaulting Underwriters, including the Representatives), but if no such arrangements are
made by the Firm Closing Date or the related Option Closing Date, as the case may be, the other Underwriters shall be obligated severally in proportion to their respective commitments hereunder to
purchase the Firm Securities or Option Securities that such defaulting Underwriter or Underwriters agreed but failed to purchase. If one or more Underwriters so default with respect to an aggregate
number of Securities that is more than ten percent of the aggregate number of Firm Securities or Option Securities, as the case may be, to be purchased by all of the Underwriters at such time
hereunder, and if arrangements satisfactory to the Representatives are not made within 36 hours after such default for the purchase by other persons (who may include one or more of the non-defaulting
Underwriters, including the Representatives) of the Securities with respect to which such default occurs, this Agreement will terminate without liability on the part of any non-defaulting Underwriter
or the Company other than as provided in Section 10 hereof. In the event of any default by one or more
Underwriters as described in this Section 9, the Representatives shall have the right to postpone the Firm Closing Date or the Option Closing Date, as the case may be, established as provided in
Section

3 hereof for not more than seven business days in order that any necessary changes may be made in the arrangements or documents for the purchase and delivery of the Firm Securities or Option
Securities, as the case may be. As used in this Agreement, the term "Underwriter" includes any person substituted for an Underwriter under this Section 9. Nothing herein shall relieve any defaulting
Underwriter from liability for its default.

    10.  Survival.  The respective representations, warranties, agreements, covenants, indemnities and other
statements of the Company, its officers and the several Underwriters set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement shall remain in full force
and effect, regardless of (i) any investigation made by or on behalf of the Company, any of its officers or directors, any Underwriter or any controlling person referred to in Section 8 hereof
and (ii) delivery of and payment for the Securities. The respective agreements, covenants, indemnities and other statements set forth in Sections 6 and 8 hereof shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement.

    11.  Termination.  (a) This Agreement may be terminated with respect to the Firm Securities or any
Option Securities in the sole discretion of the Representatives by notice to the Company given prior to the Firm Closing Date or the related Option Closing Date, respectively, in the event that the
Company shall have failed, refused or been unable to perform all obligations and satisfy all conditions on its part to be performed or satisfied hereunder at or prior thereto or, if at or prior to the
Firm Closing Date or such Option Closing Date, respectively,



    (i)  the
Company shall have, in the sole judgment of the Representatives, sustained any material loss or interference with their respective businesses or properties
from fire, flood, hurricane, accident or other calamity, whether or not covered by insurance, or from any labor dispute or any legal or governmental proceeding or there shall have been any material
adverse change, or any development involving a prospective material adverse change (including without limitation a change in management or control of the Company), in the condition (financial or
otherwise), business prospects, net worth or results of operations of the Company, except in each case as described in or contemplated by the Prospectus (exclusive of any amendment or supplement
thereto);

    (ii) trading
in the Common Stock shall have been suspended by the Commission or the Nasdaq National Market or trading in securities generally on the New York Stock
Exchange or Nasdaq National Market shall have been suspended or minimum or maximum prices shall have been established on any such exchange or market system;

    (iii) a
banking moratorium shall have been declared by New York or United States authorities; or

    (iv) there
shall have been (A) an outbreak or escalation of hostilities between the United States and any foreign power, (B) an outbreak or escalation of
any other insurrection or armed conflict involving the United States or (C) any other calamity or crisis or material adverse change in general economic, political or financial conditions having
an effect on the U.S. financial markets that, in the sole judgment of the Representatives, makes it impractical or inadvisable to proceed with the public offering or the delivery of the Securities as
contemplated by the Registration Statement, as amended as of the date hereof.



    (b) Termination
of this Agreement pursuant to this Section 11 shall be without liability of any party to any other party except as provided in Section 10 hereof.

    12.  Information Supplied by Underwriters.  The statements set forth in the last paragraph on the front
cover page and under the heading "Underwriting" in any Preliminary Prospectus or the Prospectus (to the extent such statements relate to the Underwriters) constitute the only information

furnished by any Underwriter through the Representatives to the Company for the purposes of Sections 2(b) and 8 hereof. The Underwriters confirm that such statements (to such extent) are
correct.

    13.  Notices.  All communications hereunder shall be in writing and, if sent to any of the Underwriters,
shall be delivered or sent by mail, telex or facsimile transmission and confirmed in writing to Prudential Securities Incorporated, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Equity
Transactions Group; and if sent to the Company, shall be delivered or sent by mail, telex or facsimile transmission and confirmed in writing to the Company at 0000 Xxxxxx Xxxxx Xxxxx, Xxxx Xxxxxxx,
Xxxxxxxxx 00000, Attention: Chief Financial Officer.

    14.  Successors.  This Agreement shall inure to the benefit of and shall be binding upon the several
Underwriters, the Company and their respective successors and legal representatives, and nothing expressed or mentioned in this Agreement is intended or shall be construed to give any other person any
legal or equitable right, remedy or claim under or in respect of this Agreement, or any provisions herein contained, this Agreement and all conditions and provisions hereof being intended to be and
being for the sole and exclusive benefit of such persons and for the benefit of no other person except that (i) the indemnities of the Company contained in Section 8 of this Agreement shall
also be for the benefit of any person or persons who control any Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act and (ii) the indemnities of the
Underwriters contained in Section 8 of this Agreement shall also be for the benefit of the directors of the Company, the officers of the Company who have signed the Registration Statement and any
person or persons who control the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act. No purchaser of Securities from any Underwriter shall be deemed a successor
because of such purchase.

    15.  Applicable Law.  The validity and interpretation of this Agreement, and the terms and conditions set
forth herein, shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to any provisions relating to conflicts of laws.

    16.  Consent to Jurisdiction and Service of Process.  All judicial proceedings arising out of or relating
to this Agreement may be brought in any state or federal court of competent jurisdiction in the State of New York. Nothing herein shall affect the right to serve process in any other manner permitted
by law or shall limit the right of any Underwriter to bring proceedings against the Company in the courts of any other jurisdiction.


    17.  Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same instrument.



    If the foregoing correctly sets forth our understanding, please indicate your acceptance thereof in the space provided below for that purpose, whereupon this letter shall constitute
an agreement binding the Company and each of the several Underwriters.













Very
truly yours,
FARGO ELECTRONICS, INC.

By




Title















The
foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.

PRUDENTIAL
SECURITIES INCORPORATED
FLEETBOSTON XXXXXXXXX XXXXXXXX INC.
XXXXXXX XXXXX & ASSOCIATES, INC.

By
PRUDENTIAL SECURITIES INCORPORATED

By



  Xxxx-Xxxxxx
Canfin
  Managing Director

For
itself and on behalf of the Representatives.



SCHEDULE 1

UNDERWRITERS




Underwriter
 
Number of Firm
Securities to
be Purchased


Prudential Securities Incorporated
 
[     ]


FleetBoston Xxxxxxxxx Xxxxxxxx Inc.
 
[     ]


Xxxxxxx Xxxxx & Associates, Inc.
 
[     ]


Total
 
[     ]