PROMISSORY NOTE

October 11, 2000                                        Los Angeles, California

     FOR VALUE RECEIVED, the undersigned (the "Borrower") hereby promises to pay
to the order of SANWA BANK CALIFORNIA (the "Bank"), at its Beverly Hills Office
or at such other place or to such other parties as the holder of this Note may
from time to time designate in writing, the principal sum of FIVE HUNDRED FIFTY
SIX THOUSAND FOUR HUNDRED THIRTY FIVE 74/100's DOLLARS ($556,435.74), whichever
is less, together with interest thereon. Any sums repaid under this Note may not
be reborrowed. This note renews that certain Equipment Purchase Facility
contained in a Credit Agreement dated November 8, 1999 by and between Borrower
and Bank.

     Interest shall accrue and principal and interest shall be payable as
follows:

     For the purposes hereof, "Reference Rate" shall mean an index for a
variable interest rate which is quoted, published or announced by Bank as its
Reference Rate and as to which loans may be made by Bank at, above or below such
rate; "Business Day" shall mean a day, other than a Saturday or Sunday, on which
the Bank is open for business; "Expiration Date" shall mean December 31, 2000.

     1. INTEREST: Interest shall accrue at a variable rate per annum equivalent
to the Reference Rate (the "Variable Rate"). Interest shall be adjusted
concurrently with any change in the Reference Rate. Interest shall be computed
on the basis of 360 days per year, but charged on the actual number of days
elapsed. The Borrower hereby promises and agrees to pay interest in arrears on
the last calendar day of each month

     2. PAYMENT: On the Expiration Date the entire unpaid principal balance,
together with accrued and unpaid interest, shall be due and payable.

     The acceptance by the holder of any payment under this Note after the date
that such payment is due shall not constitute a waiver of the right to require
prompt payment when due of future or succeeding payments or to declare a default
as herein provided for any failure to so pay. The acceptance by the holder of
the payment of a portion of any installment at any time that such installment is
due and payable in its entirety shall neither cure nor excuse the default caused
by failure to pay the whole of such installment and shall not constitute a
waiver of the holder's rights to require full payment when due of all future or
succeeding installments. Any partial payments shall first be applied to pay
accrued interest and the remaining portion of such payments, if any, shall be
applied to reduce the outstanding principal balance.

     Any advance under this Note shall be conclusively presumed to have been
made to and for the Borrower's benefit when the proceeds of such advance payment
are disbursed in accordance with the Borrower's instructions or deposited into
an account of the Borrower maintained at the Bank.


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     3. DEFAULTS. Any one or more of the following described events shall
constitute an event of default under this Note:

     (a) The Borrower shall fail to pay any amount under this Note when due.

     (b) If there is a default under any agreement to which Borrower is a party
with a third party or parties resulting in a right by such third party or
parties, whether or not exercised, to accelerate the maturity of any
indebtedness of the Borrower, whether such indebtedness is direct or indirect,
absolute or contingent.

     (c) Any representation or warranty made by the Borrower under or in
connection with this Note or any financial statement given by the Borrower or
any guarantor of this Note shall prove to have been incorrect in any material
respect when made or given or when deemed to have been made or given.

     (d) The Borrower or any guarantor of this Note shall: (i) become insolvent
or be unable to pay its debts as they mature; (ii) make an assignment for the
benefit of creditors or to an agent authorized to liquidate any substantial
amount of its properties or assets; (iii) file a voluntary petition in
bankruptcy or seeking reorganization or to effect a plan or other arrangement
with creditors; (iv) file an answer admitting the material allegations of an
involuntary petition relating to bankruptcy or reorganization or join in any
such petition; (v) become or be adjudicated a bankrupt; or (vi) apply for or
consent to the appointment of, or consent that an order be made, appointing any
receiver, custodian or trustee for itself or any of its properties, assets or
businesses; or (vii) any receiver, custodian or trustee shall have been
appointed for all or substantial part of its properties, assets or businesses
and shall not be discharged within 30 days after the date of such appointment.

     (e) Any writ of execution or attachment or any judgment lien shall be
issued against any property of the Borrower and shall not be discharged or
bonded against or released within 30 days after the issuance or attachment of
such writ or lien.

     (f) Any guaranty of this Note shall be revoked or limited or its
enforceability or validity shall be contested by any guarantor, by operation of
law, legal proceeding or otherwise or any guarantor who is a natural person
shall die.

     (g) Any subordination agreement shall be revoked or limited or its
enforceability or validity shall be contested by any creditor signatory thereto,
by operation of law, legal proceeding or otherwise.

     (h) The Borrower shall voluntarily suspend the transaction of business or
allow to be suspended, terminated, revoked or expired any permit, license or
approval of any governmental body necessary to conduct the Borrower's business
as now conducted.

     (i) If there occurs a material adverse change in the Borrower's business or
financial condition, or if there is a material impairment of the prospect of
repayment of any portion of the outstanding principal or interest under this
Note or there is a material impairment of the value or priority of the Bank's
security interest in any collateral securing the Borrower's obligations under
this Note.


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     (j) There shall occur a sale, transfer, disposition or-encumbrance (whether
voluntary or involuntary), or an agreement shall be entered into to do so, with
respect to more than 10% of the issued and outstanding capital stock of the
Borrower.

     Upon the occurrence of any event of default described above, the holder of
this Note, at its election, may declare the entire balance of principal and
interest thereon immediately due and payable, together with all costs of
collection, including, but not limited to, reasonable attorney's fees and all
expenses incurred in connection with the protection of, or realization on, the
security for this Note.

     The liability of the makers under this Note is joint and several. The
makers, endorsers and/or guarantors hereof do hereby severally waive
presentment, demand, protest and notice of protest, dishonor and nonpayment.
Such parties expressly consent to the extension of time for the performance of
any obligation hereunder and the release of any party liable for the obligation.
The release of any party liable hereon shall not operate to release any other
party liable hereon.

     If an event of default, or an event which, with notice or passage of time
could become an event of default, has occurred or is continuing, the Borrower
shall pay to the Bank interest on any amount payable under this Note at a rate
which is 3% in excess of the rate or rates then in effect.

     This Note is not assumable without the express prior written consent of the
holder. No obligation is imposed upon the Bank or the holder of this Note to
make any advance to the Borrower, it being agreed that all advances hereunder
are optional.

     Every provision hereof is intended to be several. If any provision of this
Note is determined by a court of competent jurisdiction to be illegal, invalid
or unenforceable, such illegality, invalidity or unenforceability shall not
affect the other provisions hereof, which shall remain binding and enforceable.

     4. LAW. This Note shall be governed by and construed according to the laws
of the State of California without regard to conflict of law principles, to the
jurisdiction of whose courts the Borrower hereby submits.

     THE BORROWER AND THE BANK EACH WAIVE THEIR RESPECTIVE RIGHTS TO A TRIAL BY
JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATED TO
THIS NOTE, ANY OTHER LOAN DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY
ANY. OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER VVITH RESPECT TO
CONTRACT CLAIMS, TORT CLAIMS, OR OTHERVVISE. THE BORROWER AND THE BANK EACH
AGREE THAT ANY SUCH CLAIM' OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL
WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT
THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS SECTION
AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN
PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS NOTE OR ANY OTHER LOAN
DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER


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SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS NOTE AND ANY OTHER LOAN DOCUMENTS.

                                        BORROWERS:

                                        TAG-IT, INC.
Address: ____________________
         ____________________           By: /S/ RONDA SALLMEN
         ____________________              ---------------------------------
                                            CHIEF FINANCIAL OFFICER
                                        ------------------------------------
                                                (Name/Title)


                                        A.G.S. STATIONERY, INC.

                                        BY:   /S/ RONDA SALLMEN
                                           ---------------------------------
                                        NAME: Ronda Sallmen, Chief Financial
                                              Officer


                                        TALON INTERNATIONAL, INC.

                                        BY:   /S/ RONDA SALLMEN
                                           ---------------------------------
                                        NAME: Ronda Sallmen, Chief Financial
                                              Officer


                                        ACKNOWLEDGED:

                                        TAG-IT PACIFIC, INC.

                                        BY:   /S/ RONDA SALLMEN
                                           ---------------------------------
                                        NAME: Ronda Sallmen, Chief Financial
                                              Officer