Document:

TAG-IT PACIFIC, INC.

                   SERIES B PREFERRED STOCK PURCHASE AGREEMENT

         THIS SERIES B PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is
entered into as of May __, 2000, by and among TAG-IT PACIFIC, INC., a Delaware
corporation (the "Company"), and GRUPO INDUSTRIAL CIERRES IDEAL, S.A. de C.V., a
corporation organized under the laws of Mexico ("GICISA" or "Purchaser").

                                    RECITALS

         WHEREAS, the Company, Purchaser and Talon have entered into that
certain letter agreement, dated as of March 24, 2000, and fully executed as of
April ___, 2000, relating to distribution rights granted to the Company by Talon
and Purchaser (the "Letter Agreement");

         WHEREAS, pursuant to the terms of the Letter Agreement and in
connection with the grant of the rights described therein, the Company has
agreed to issue 850,000 shares (the "Shares") of Series B Convertible Preferred
Stock of the Company, par value $0.001 (the "Series B Preferred Stock") to
GICISA upon the terms and conditions set forth herein;

         NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises hereinafter set forth, the parties hereto agree as follows:

          1. AGREEMENT TO SELL AND PURCHASE.

             1.1 AUTHORIZATION OF SHARES. On or prior to the Closing (as defined
in Section 2 below), the Company shall have authorized (i) the issuance of the
Shares to Purchaser and (ii) the issuance of such shares of Common Stock of the
Company, par value $0.001 per share ("Common Stock"), to be issued upon
conversion of the Shares (the "Conversion Shares"). The Shares and the
Conversion Shares shall have the rights, preferences, privileges and
restrictions set forth in the Series B Preferred Certificate of Designations of
the Company in the form attached hereto as Exhibit A (the "Certificate of
Designations").

             1.2 ISSUANCE. Subject to the terms and conditions hereof, at the
Closing (as hereinafter defined) the Company hereby agrees to issue to the
Purchaser the Shares.

          2. CLOSING AND DELIVERY.

2.1 CLOSING. The closing of the issuance of the Shares under this Agreement (the
"Closing") shall take place at 5:00 p.m. on May __, 2000, at the offices of
Troop Steuber Pasich Reddick & Tobey, LLP, 2029 Century Park East, 24th Floor,
Los Angeles, California 90067-3010 or at such

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other time or place as the Company and Purchaser may mutually agree (such date
is hereinafter referred to as the "Closing Date")

             2.2 DELIVERY. At the Closing, subject to the terms and conditions
hereof, the Company will deliver to the Purchaser a certificate representing the
Shares to be issued to the Purchaser at the Closing by such Purchaser, against
satisfaction of the conditions to closing described herein.

          3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

             Except as set forth on a Schedule of Exceptions set forth as
Exhibit B and delivered by the Company to Purchaser at the Closing, the Company
hereby represents and warrants to Purchaser as of the date of this Agreement as
follows:

             3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. The Company has all requisite corporate power and
authority to own and operate its properties and assets, to execute and deliver
this Agreement, the Investor Rights Agreement in the form attached hereto as
Exhibit C (the "INVESTOR RIGHTS Agreement"), the Co-Sale Agreement in the form
attached hereto as Exhibit D (the "CO-SALE AGREEMENT" and together with the
Investor Rights Agreement, the "RELATED AGREEMENTS"), to issue and sell the
Shares and the Conversion Shares, and to carry out the provisions of this
Agreement, the Related Agreements and the Certificate of Designations and to
carry on its business as presently conducted and as presently proposed to be
conducted. The Company is duly qualified and is authorized to do business and is
in good standing as a foreign corporation in all jurisdictions in which the
nature of its activities and of its properties (both owned and leased) makes
such qualification necessary, except for those jurisdictions in which failure to
do so would not have a Material Adverse Effect (as hereinafter defined) on the
Company or its business. "Material Adverse Effect" means any material adverse
effect on the assets, liabilities, business, operations, properties or financial
condition of the Company.

             3.3 CAPITALIZATION; VOTING RIGHTS. (A) The authorized capital stock
of the Company immediately prior to the closing is as set forth in the Company's
most recent filings with the Securities and Exchange Commission in accordance
with the rules and regulations of the Securities and Exchange Act of 1934. All
issued and outstanding shares of the Company's Common Stock (a) have been duly
authorized and validly issued and (b) are fully paid and nonassessable. The
rights, preferences, privileges and restrictions of the Series B Preferred Stock
are as stated in the Certificate of Designations.

                    (B) When issued in compliance with the provisions of this
Agreement and the Certificate of Designations, the Shares and the Conversion
Shares will be validly issued, fully paid and nonassessable, and will have been
issued in compliance with all applicable state and Federal laws concerning the
issuance of securities, and will be free of any liens or encumbrances other than
liens and encumbrances created by or imposed upon them by Purchaser; PROVIDED,
HOWEVER, that the Shares and the Conversion Shares may be subject to
restrictions on

                                     Page 2
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transfer (i) under state and/or Federal securities laws as set forth herein, or
as otherwise required by such laws at the time a transfer is proposed and (ii)
pursuant to the terms of the Related Agreements.

             3.4 AUTHORIZATION; BINDING OBLIGATIONS. The Company has all
requisite corporate power and authority to execute, deliver and perform its
obligations under the Related Agreements. All corporate action on the part of
the Company, its officers, directors and shareholders necessary for the
authorization of this Agreement and the Related Agreements, the performance of
all obligations of the Company hereunder and thereunder at the Closing and the
authorization, issuance and delivery of the Shares pursuant hereto and the
Conversion Shares pursuant to the Certificate of Designations has been taken or
will be taken prior to the Closing. This Agreement and the Related Agreements,
when executed and delivered, will be valid and binding obligations of the
Company enforceable in accordance with their terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application affecting enforcement of creditors' rights; (ii) general
principles of equity that restrict the availability of equitable remedies; and
(iii) to the extent that the enforceability of the indemnification provisions in
Section 2.7 of the Investor Rights Agreement may be limited by applicable laws.

          4. REPRESENTATIONS AND WARRANTIES OF PURCHASER; COVENANTS OF
          PURCHASER.

             Purchaser hereby represents and warrants to the Company as follows
(such representations and warranties do not lessen or obviate the
representations and warranties of the Company set forth in this Agreement):

             4.1 REQUISITE POWER AND AUTHORITY. Purchaser has all necessary
power and authority under all applicable provisions of law to execute and
deliver this Agreement, the Letter Agreement and the Related Agreements and to
carry out their provisions. All action on such Purchaser's part required for the
lawful execution and delivery of this Agreement, the Letter Agreement and the
Related Agreements have been or will be effectively taken prior to the Closing.
Upon their execution and delivery, this Agreement, the Letter Agreement and the
Related Agreements will be valid and binding obligations of such Purchaser,
enforceable in accordance with their terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors' rights, (b) general principles
of equity that restrict the availability of equitable remedies, and (c) to the
extent that the enforceability of the indemnification provisions of Section 2.7
of the Investor Rights Agreement may be limited by applicable laws.

             4.2 INVESTMENT REPRESENTATIONS. Purchaser understands that neither
the Shares nor the Conversion Shares have been registered under the Securities
Act. Purchaser also understands that the Shares are being offered and sold
pursuant to an exemption from registration contained in the Securities Act based
in part upon such Purchaser's representations contained in this Agreement.
Purchaser hereby represents and warrants as follows:

                                     Page 3
<PAGE>

                    (A) PURCHASER BEARS ECONOMIC RISK. Purchaser has substantial
experience in evaluating and investing in private placement transactions of
securities in companies similar to the Company so that it is capable of
evaluating the merits and risks of its investment in the Company and has the
capacity to protect its own interests. Purchaser must bear the economic risk of
this investment indefinitely unless the Shares (or the Conversion Shares) are
registered pursuant to the Securities Act, or an exemption from registration is
available. Purchaser understands that the Company has no present intention of
registering the Shares, the Conversion Shares or any shares of its Common Stock.
Purchaser also understands that there is no assurance that any exemption from
registration under the Securities Act will be available and that, even if
available, such exemption may not allow such Purchaser to transfer all or any
portion of the Shares or the Conversion Shares under the circumstances, in the
amounts or at the times such Purchaser might propose.

                    (B) ACQUISITION FOR OWN ACCOUNT. Purchaser is acquiring the
Shares and the Conversion Shares for Purchaser's own account for investment
only, and not with a view towards their distribution.

                    (C) PURCHASER CAN PROTECT ITS INTEREST. Purchaser represents
that by reason of its, or of its management's, business or financial experience,
Purchaser has the capacity to protect its own interests in connection with the
transactions contemplated in this Agreement, the Letter Agreement and the
Related Agreements. Further, Purchaser is aware of no publication of any
advertisement in connection with the transactions contemplated in this
Agreement.

                    (D) ACCREDITED INVESTOR. Purchaser represents that it is an
accredited investor within the meaning of Regulation D under the Securities Act.

                    (E) COMPANY INFORMATION. Purchaser has had an opportunity to
discuss the Company's business, management and financial affairs with directors,
officers and management of the Company. Purchaser has also had the opportunity
to ask questions of and receive answers from, the Company and its management
regarding the terms and conditions of this investment. The foregoing, however,
does not limit or modify the representations and warranties of the Company in
Section 3 of this Agreement or the right of such Purchaser to rely thereon.

                    (F) RULE 144. Purchaser acknowledges and agrees that the
Shares, and, if issued, the Conversion Shares must be held indefinitely unless
they are subsequently registered under the Securities Act or an exemption from
such registration is available. Purchaser has been advised or is aware of the
provisions of Rule 144 promulgated under the Securities Act as in effect from
time to time, which permits limited resale of shares purchased in a private
placement subject to the satisfaction of certain conditions, including, among
other things: the availability of certain current public information about the
Company, the resale occurring following the required holding period under Rule
144 and the number of shares being sold during any three-month period not
exceeding specified limitations.

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<PAGE>

                    (G) RESIDENCE. The office or offices of such Purchaser in
which its investment decision was made is located at the address or addresses of
such Purchaser set forth on the signature page hereto.

                    (H) FURTHER REPRESENTATIONS BY FOREIGN INVESTORS. Purchaser
hereby represents that it has satisfied itself as to the full observance of the
laws of its jurisdiction in connection with any invitation to subscribe for the
Shares or any use of this Agreement, including (i) the legal requirements within
its jurisdiction for the purchase of the Shares, (ii) any foreign exchange
restrictions applicable to such purchase, (iii) any governmental or other
consents that may need to be obtained, and (iv) the income tax and other tax
consequences, if any, that may be relevant to the purchase, holding, redemption,
sale, or transfer of the Shares. Purchaser's subscription and payment for, and
its continued beneficial ownership of the Shares, will not violate any
applicable securities or other laws of its jurisdiction.

                    (I) LEGENDS. Purchaser understands that the certificates
evidencing the Shares may bear the following legend:

                    "These securities have not been registered under the
         Securities Act of 1933, as amended. The may not be sold, offered for
         sale, pledged, or hypothecated in the absence of a registration
         statement in effect with respect to the securities under such Act or an
         opinion of counsel satisfactory to the Company that such registration
         is not required or unless sold pursuant to Rule 144 of such Act."

             4.3 TRANSFER RESTRICTIONS. Purchaser acknowledges and agrees that
the Shares and, if issued, the Conversion Shares are subject to restrictions on
transfer as set forth in the Investor Rights Agreement.

             4.4 COVENANTS OF PURCHASER.

                    (a) COMPLIANCE WITH LAW. The Purchaser's trading activities
with respect to shares of the Company's Common Stock will be in compliance with
all applicable state and federal securities laws, rules and regulations as well
as the rules and regulations of the American Stock Exchange or such other public
market on which the Company's Stock is listed.

                    (b) NO SHORT SALES. The Purchaser and its affiliates shall
not engage in short sales of the Company's Common Stock (as defined in SEC and
NASD rules) so long as the Purchaser holds any unconverted shares of Series B
Preferred Stock.

          5.   CONDITIONS TO CLOSING.

             5.1 CONDITIONS TO PURCHASER'S OBLIGATIONS AT THE CLOSING. The
Purchaser's obligations at the Closing are subject to the satisfaction, at or
prior to the Closing Date, of the following conditions:

                    (A) REPRESENTATIONS AND WARRANTIES TRUE; PERFORMANCE OF
OBLIGATIONS. The representations and warranties made by the Company in Section 3
hereof shall

                                     Page 5
<PAGE>

be true and correct in all material respects as of the Closing Date
with the same force and effect as if they had been made as of the Closing Date,
and the Company shall have performed all obligations and conditions herein
required to be performed or observed by it on or prior to the Closing.

                    (B) LEGAL INVESTMENT. On the Closing Date, the issuance of
the Shares and the proposed issuance of the Conversion Shares shall be legally
permitted by all laws and regulations to which Purchaser and the Company are
subject.

                    (C) CONSENTS, PERMITS, AND WAIVERS. The Company shall have
obtained any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by this Agreement and the Related
Agreements (except for such as may be properly obtained subsequent to the
Closing).

                    (D) FILING OF CERTIFICATE. The Certificate of Designations
shall have been filed with the Secretary of State of the State of Delaware and
shall continue to be in full force and effect as of the Closing Date.

                    (E) RESERVATION OF CONVERSION SHARES. The Conversion Shares
issuable upon conversion of the Shares shall have been duly authorized and
reserved for issuance upon such conversion.

                    (F) COMPLIANCE CERTIFICATE. The Company shall have delivered
to Purchaser a Compliance Certificate, executed by the President of the Company,
dated the Closing Date, to the effect that the conditions specified in
subsections (a), (c), (d) and (f) of this Section 5.1 have been satisfied.

                    (G) INVESTOR RIGHTS AGREEMENT. The Investor Rights Agreement
shall have been executed and delivered by each of the parties thereto.

                    (H) CO-SALE AGREEMENT. The Co-Sale Agreement shall have been
executed and delivered by each of the parties thereto. The stock certificates
representing the shares subject to the Co-Sale Agreement shall have been
delivered to the Secretary of the Company and shall have had appropriate legends
placed upon them to reflect the restrictions on transfer set forth on the
Co-Sale Agreement.

                    (I) LETTER AGREEMENT. The Letter Agreement shall have been
executed and delivered by each of the parties thereto.

             5.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The Company's
obligation to issue the Shares at the Closing is subject to the satisfaction, on
or prior to such Closing, of the following conditions:

                    (A) REPRESENTATIONS AND WARRANTIES TRUE. The representations
and warranties in Section 4 made by Purchaser shall be true and correct at the
date of the Closing with the same force and effect as if they had been made on
and as of said date.

                                     Page 6
<PAGE>

                    (B) PERFORMANCE OF OBLIGATIONS. Purchaser shall have
performed and complied with all agreements and conditions herein required to be
performed or complied with by Purchaser on or before the Closing.

                    (C) FILING OF CERTIFICATE OF DESIGNATIONS. The Certificate
of Designations shall have been filed with the Secretary of State of the State
of Delaware.

                    (D) INVESTOR RIGHTS AGREEMENT. The Investor Rights Agreement
shall have been executed and delivered by each of the parties thereto.

                    (E) CO-SALE AGREEMENT. The Co-Sale Agreement shall have been
executed and delivered by each of the parties thereto. The stock certificates
representing the shares subject to the Co-Sale Agreement shall have been
delivered to the Secretary of the Company and shall have had appropriate legends
placed upon them to reflect the restrictions on transfer set forth on the
Co-Sale Agreement.

                    (F) LETTER AGREEMENT. The Letter Agreement shall have been
executed and delivered by each of the parties thereto.

                    (G) CONSENTS, PERMITS, AND WAIVERS. The Company shall have
obtained any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by this Agreement and the Related
Agreements (except for such as may be properly obtained subsequent to the
Closing).

          6. MISCELLANEOUS.

             6.1 GOVERNING LAW; CONSENT TO JURISDICTION; DISPUTES. This
Agreement shall be governed by and construed under the laws of the State of
California as applied to agreements among California residents entered into and
to be performed entirely within California. Each party hereto irrevocably and
unconditionally (i) agrees that any action, suit or claim brought hereunder must
be brought in the courts of the United States or the State of California and
occur in the county of Los Angeles in the State of California which shall serve
as the exclusive jurisdiction and venue for any and all disputes arising out of
and/or relating to this Agreement; (ii) consents to the jurisdiction of any such
court in any such suit, action or proceeding; and (iii) waives any objection
which such party may have to the laying of venue of any such suit, action or
proceeding in any such court.

             6.2 SURVIVAL. The representations, warranties, covenants and
agreements made herein shall survive any investigation made by Purchaser and the
closing of the transactions contemplated hereby until the date which is six
months from the date of this Agreement. All statements as to factual matters
contained in any certificate or other instrument delivered by or on behalf of
the Company pursuant hereto in connection with the transactions contemplated
hereby shall be deemed to be representations and warranties by the Company
hereunder solely as of the date of such certificate or instrument.

                                     Page 7
<PAGE>

             6.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by the
Company and each person who shall be a holder of the Shares from time to time.

             6.4 ENTIRE AGREEMENT. This Agreement, the Letter Agreement, the
Exhibits and Schedules hereto, the Related Agreements and the other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and no party
shall be liable or bound to any other in any manner by any representations,
warranties, covenants and agreements except as specifically set forth herein and
therein.

             6.5 SEVERABILITY. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

             6.6 AMENDMENT AND WAIVER. This Agreement may be amended or modified
only upon the written consent of the Company and Purchaser.

             6.7 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under this Agreement, the Related
Agreements or the Certificate of Designations, shall impair any such right,
power or remedy, nor shall it be construed to be a waiver of any such breach,
default or noncompliance, or any acquiescence therein, or of or in any similar
breach, default or noncompliance thereafter occurring. It is further agreed that
any waiver, permit, consent or approval of any kind or character on Purchaser's
part of any breach, default or noncompliance under this Agreement, the Related
Agreements or under the Certificate of Designations or any waiver on such
party's part of any provisions or conditions of this Agreement, the Related
Agreements, or the Certificate of Designations must be in writing and shall be
effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement, the Related Agreements, the Certificate
of Designations, by law, or otherwise afforded to any party, shall be cumulative
and not alternative.

             6.8 NOTICES. All notices required or permitted hereunder shall be
in writing and shall be deemed effectively given: (a) upon personal delivery to
the party to be notified, (b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day, (c) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (d) one (1) day after deposit with
a nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the Company
and the Purchaser at the addresses set forth on the signature pages hereof or at
such other address as the Company or Purchaser may designate by ten (10) days
advance written notice to the other parties hereto.

             6.9 EXPENSES. Each party shall pay all costs and expenses that it
incurs with respect to the negotiation, execution, delivery and performance of
this Agreement.

                                     Page 8
<PAGE>

             6.10 ATTORNEYS' FEES. In the event that any suit or action is
instituted to enforce any provision in this Agreement, the prevailing party in
such dispute shall be entitled to recover from the losing party all fees, costs
and expenses of enforcing any right of such prevailing party under or with
respect to this Agreement, including without limitation, such reasonable fees
and expenses of attorneys and accountants, which shall include, without
limitation, all reasonable fees, costs and expenses of appeals.

             6.11 TITLES AND SUBTITLES. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.

             6.12 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

             6.13 BROKER'S FEES. Each party hereto represents and warrants that
no agent, broker, investment banker, person or firm acting on behalf of or under
the authority of such party hereto is or will be entitled to any broker's or
finder's fee or any other commission directly or indirectly in connection with
the transactions contemplated herein. Each party hereto further agrees to
indemnify each other party for any claims, losses or expenses incurred by such
other party as a result of the representation in this Section 6.13 being untrue.

             6.14 CONFIDENTIALITY. Except where required by law or applicable
regulation or stock exchange rule, each party hereto agrees that, except with
the prior written consent of the other party, it shall at all times keep
confidential and not divulge, furnish or make accessible to anyone any
confidential information, knowledge or data concerning or relating to the
business or financial affairs of the other parties to which such party has been
or shall become privy by reason of this Agreement, or the Related Agreements,
discussions or negotiations relating to this Agreement or the Related
Agreements, the performance of its obligations hereunder or the ownership of the
Shares purchased hereunder. The provisions of this Section 6.14 shall be in
addition to, and not in substitution for, the provisions of any separate
nondisclosure agreement executed by the parties hereto.

             6.15 PRONOUNS. All pronouns contained herein, and any variations
thereof, shall be deemed to refer to the masculine, feminine or neutral,
singular or plural, as the identity of the parties hereto may require.

             6.17 CALIFORNIA CORPORATE SECURITIES LAW. THE SALE OF THE
SECURITIES THAT ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH
THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF
SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION
THEREFOR PRIOR TO SUCH QUALIFICATION OR IN THE ABSENCE OF AN EXEMPTION FROM SUCH
QUALIFICATION IS UNLAWFUL. PRIOR TO ACCEPTANCE OF SUCH CONSIDERATION BY THE
COMPANY, THE RIGHTS OF ALL PARTIES TO THIS

                                     Page 9
<PAGE>

AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED OR AN
EXEMPTION FROM SUCH QUALIFICATION BEING AVAILABLE.

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<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed the SERIES B
PREFERRED STOCK PURCHASE AGREEMENT as of the date set forth in the first
paragraph hereof.

COMPANY:                                 PURCHASER:

TAG-IT PACIFIC, INC.                     GRUPO INDUSTRIAL CIERRES
                                         IDEAL, S.A. DE C.V.

By:                                      By:
   ------------------------------------     -----------------------------------
Name:                                    Name:
Title:                                   Title:

<PAGE>

                                LIST OF EXHIBITS
                                   (CONTINUED)

<PAGE>

                                    EXHIBIT A

                           CERTIFICATE OF DESIGNATIONS

<PAGE>

                                    EXHIBIT B

                             SCHEDULE OF EXCEPTIONS

<PAGE>

                                    EXHIBIT C

                            INVESTOR RIGHTS AGREEMENT

<PAGE>

                                    EXHIBIT D

                                CO-SALE AGREEMENTTAG-IT PACIFIC, INC.

March 24, 2000

Grupo Industrial Cierres Ideal, S.A. de C.V.
Talon, Inc.
Antiguo Camino a San Lorenzo No. 284
Col. Los Angeles Deleg. Iztapalapa
Mexico D.F., 09830

Attention: Chief Executive Officer

Re: EXCLUSIVE DISTRIBUTION AGREEMENT

Gentlemen:

When signed by each of you and Tag-It Pacific, Inc., a Delaware corporation
("DISTRIBUTOR"), in the manner hereinafter provided, this letter agreement (this
"Agreement") shall constitute the binding agreement of Grupo Industrial Cierres
Ideal, S.A., a Mexican corporation and Talon, Inc., a Delaware corporation,
(collectively, "GICISA" or, individually by each of their names) and DISTRIBUTOR
with respect to the matters set forth herein unless subsequently superseded by a
long form agreement executed by the parties (the "Definitive Agreement").

TERRITORY:

United States, Canada, Mexican Maquiladoras and Hong Kong/ China. DISTRIBUTOR
can also ship the Products to any contractors, wherever located, who manufacture
for customers of Talon or DISTRIBUTOR located in the Territory.

APPOINTMENT:

During the Term, GICISA grants DISTRIBUTOR an exclusive license for the
Territory to use, license, market, sell, and distribute the Products (as defined
below), including the exclusive right to use the Talon trademark. Distributor to
be GICISA's sole and exclusive, authorized reseller for the distribution,
promotion, repackaging and sale of all Talon branded products and other products
(as defined below) in the Territory. GICISA will cease its sales of Products
bearing the "Talon" brand and other zippers into the Territory and will act to
prevent gray market sales of all such products into the Territory.

BRANDING:

DISTRIBUTOR will have the exclusive right in the Territory, During the Term, to
refer to itself as a "Talon International" or to operate a subsidiary under that
name to distribute the Products. (As hereinafter defined).

SUB-DISTRIBUTION:

DISTRIBUTOR may appoint subdistributors and dealers to market the Products
within the Territory.

<PAGE>

PRODUCTS:

All Talon brand zippers including all currently manufactured by Talon and other
products as may be mutually agreed upon by the parties in the future and all
zippers manufactured by Cierres Ideal, provided however, that Cierres Ideal
retains the right to sell Cierres Ideal branded zippers manufactured by Cierres
Ideal to-Mexican Maquiladoras.

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XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX
XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX XXXX

TERM:

XXXXXX years, automatically renewing for XXXX years if sales of DISTRIBUTOR
exceed XXXXXX dollars for the XXXXX XXX XXX term, and exceed XXX XXXX for the
XXX XX XX XX If such sales are not achieved, GICISA will have the discretion of
terminating the agreement by providing written notice to DISTRIBUTOR of XX XXXX
prior to the end of the term.

                                     Page 2
<PAGE>

SHOULD GICISA DECIDE TO ISSUE A TERMINATION NOTICE BUT DISTRIBUTOR MEETS THE
ABOVE SALES TARGET, GICISA SHALL REVOKE THE TERMINATION NOTICE AND THE TERM WILL
CONTINUE FOR XXXXXXXXXXXXXXXX.

CUSTOMER LISTS:

Upon signing GICISA will provide DISTRIBUTOR with all Customer lists for the
products and customer information relating customers of Talon in the Territory
(including, to the extent available, detailed sales information and credit
history).

DISTRIBUTOR'S
RESPONSIBILITIES:

DISTRIBUTOR will take XXXXX XXXXX XXXXX X XXXX X XXXX XX on XXXXXXXX XXX XXX XXX
XXX XXX XXXX XXX XXX X X X X X X X X X X after sale. X X X X X X X X X X X X X X
X X X X X X X X X X X X.

     DISTRIBUTOR will do the following, where commercially reasonable, in the
     Territory:

     -    Actively promote the sale of Products;

     -    Advertise the Products using methods customary in the apparel industry
          including customary promotional and print pieces.

     -    Display the Products at major trade shows.

     -    Provide timely deliveries of the Products, subject to GICISA
          delivering the Products within the time limits established herein.

     -    Maintain X X X X X X X X X X X X X X X X X customer records showing
          the customer's name and address, date of sale, product type and
          quantity and such other related information as may reasonably be
          required by GICISA.

     -    Incorporate wherever permitted by DISTRIBUTOR's customers, Products
          into DISTRIBUTOR's single source trim package.

     -    Dedicate a portion of its sales force or appoint subdistributors to
          concentrate specifically on the X X X X X X X X X X X X X X X X X X X
          X X marketing of Products.

     -    Place one or more of its own employees in Talon's manufacturing
          facility to work in conjunction with Talon on production and delivery
          schedules; GICISA will provide office space. X X X X X X X X X X X X X
          X X X X X X X X X X X X X X X X X X X X X X X X

     -    Immediately start efforts for Talon to be specified as an approved
          zipper by DISTRIBUTOR's customer base and additional new customers;

     -    Create new marketing materials and catalogues to enhance Talon's
          image.

     -    Establish, with Talon support an online catalogue through Tag-It
          allowing Turnkey customers to place orders, check on hand

                                     Page 3
<PAGE>

          inventory in GICISA's warehouses and monitor production and shipments.
          Talon will provide work in process reports to support "inventory to be
          available" reporting;

     -    Establish electronic data interchange capabilities for major
          customers;

     -    Include Talon in quarterly management, sales and marketing strategy
          meetings to be held in Los Angeles.

     -    DISTRIBUTOR and Talon will, on a X X X X X X subject to mutual
          agreement on costs to be incurred, establish and implement a plan for
          systems integration between DISTRIBUTOR and Talon Mexico.

          GICISA will cooperate to implement the foregoing. GICISA will supply
          dyed tape for color cards and sample product ranges for all Products.

SALES FORECAST:

DISTRIBUTOR's initial target sales forecast is attached X X X X X X X X X X X X
X X X X X X X X

TRANSFER OF SELECTED PERSONNEL:

DISTRIBUTOR or the subsidiary it establishes X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X XX XX X X X X X XX X X X XX X X X XX X X X X XXX X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X XX X X XX X X X X X X X X X X X
DISTRIBUTOR will assume no obligations or liabilities that Talon may have to any
of the Hired Employees or to any third party. GICISA and/or Talon, as
applicable, will hold DISTRIBUTOR harmless against any such liabilities.

Customer service and equipment service personnel will be offered employment,
subject to their willingness to relocate.

FIELD EQUIPMENT:

DISTRIBUTOR will maintain and move existing Talon field equipment (and provide
replacement parts) for a fee X X X X X X X X X X X X X X X X X X X X X Talon
will transfer existing inventory of parts to DISTRIBUTOR at no cost. X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X XX X X X X X

QUICK SERVICE EQUIPMENT:

Distributor will pay X XXXX to GICISA X X X X after Distribution agreement is
signed for the quick service equipment contained in Exhibit G, as mutually
agreed upon by both parties.

CAPACITY:

GICISA will maintain its current manufacturing capacity and will ensure
sufficient additional capacity to satisfy DISTRIBUTOR's projected requirements
as defined and agreed upon by both parties in writing , at the time of business
plan and budget approval.

                                     Page 4
<PAGE>

FORECASTS, CANCELLATION:

DISTRIBUTOR will furnish to GICISA not less than 30 days prior to the
commencement of each calendar quarter during the Term a preliminary forecast of
the quantity of Products that DISTRIBUTOR expects to order in that calendar
quarter.

DISTRIBUTOR can cancel any order or portion of an order, but if an order is
canceled within X X X of the scheduled delivery, DISTRIBUTOR will X X X X X X X
X (including an allocable portion of GICISA overhead and other allocations)
incurred by GICISA for the Products covered by the canceled order or portion
thereof, not to exceed the price charged to DISTRIBUTOR of the Products
involved.

DELIVERY, DELAYS:

DISTRIBUTOR may retain any early delivered Products and hold GICISA's invoice
until the date it would otherwise be due.

GICISA will confirm delivery dates on all orders of Products at the time of the
order delivery dates will be within 30 days from order unless later delivery
dates are specified by DISTRIBUTOR. If delivery is delayed more than X X X,
DISTRIBUTOR shall have the right to cancel the delayed Products without
liability. Early shipments of Products will be billed at the original order
delivery date.

TRANSITION ARRANGEMENTS:

Transition of distribution and support operations will be in accordance with the
transition plan attached as EXHIBIT "C".

PRICES:

X X X X X X X X X X X X X X X X X X X X X X X X X X

X X X X X X X X X X X X X X X X X X X X X X X X X XX X X X X X X X X X X X X X X
X X X X X X X X X X XX X X X X X X X X X X X X X X X X X X X X X X X X XX X X X
X X X X X X X X X X X X X X X X X X X X X XX X X X X X X X X X X X X X X X X X X
X X X X X X XX X X X X X X X X X X X X X X X X X X X X X X X X XX X X X X X X X
X X X X X X X X X X X X X X X X X X

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

                                     Page 5
<PAGE>

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X

CREDIT TERMS:

GICISA will abide by all terms and conditions of sales as stipulated on the face
of DISTRIBUTOR purchase orders so long as they are not in conflict with the
provisions of this document. X X X X X X X X X X X

X X X X X X X X X X X X X X X X X X X X X X X X X XX X X

X X X X X X X X X X X X X X X X X X X X X X XX X X X

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X

MOST FAVORED CUSTOMER:

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X

CUSTOMS AND DUTIES:

GICISA will obtain all customs, export and other governmental authorizations and
approvals and visas in connection with the Agreement.

LANGUAGE:

The English language version of this Agreement shall be the "official", binding
version of this Agreement, and all communications between the parties will be
conducted in the English language only.

JURISDICTION:

All disputes will be resolved pursuant to AAA arbitration in California by a
panel of three arbitrators except for emergency relief in actions in equity.
Each party submits to the exclusive jurisdiction of the courts of the United
States and California located in Los Angeles jurisdiction, attachment and
execution, whether on the basis of sovereignty or otherwise, to which it might
otherwise be entitled and further waives any claim that any such suit, action or
proceeding brought in any court in Los Angeles County has been brought in an
inconvenient forum.

                                     Page 6
<PAGE>

GOVERNING LAW:

The laws of the State of California as applied to contracts entered into and
performed solely within the State of California. The United Nations Convention
on Contracts for the International Sale of Goods (1980) shall not apply.

INTERPRETATION:

To resolve any inconsistency between this Agreement and its attachments, the
order of precedence shall be: (i) this document excluding attachments; then (ii)
Exhibits attached to this document.

EMPLOYEE NON-SOLICITATION:

During the X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X GICISA shall not directly or indirectly (x) solicit or encourage any
employee of DISTRIBUTOR to leave the employ of DISTRIBUTOR or (y) hire any
employee who has left the employment of DISTRIBUTOR if such hiring is proposed
to occur within one (1) year after the termination of such employee's employment
with DISTRIBUTOR.

WARRANTY:

GICISA warrants and represents that all Products (i) will be free of defects in
workmanship or materials and will be in accordance with their SPECIFICATIONS,
(ii) will be delivered to Tag-It free and clear of all liens and encumbrances,
and that good and valid title shall pass thereto as provided in this Agreement,
(iii) do not infringe the patents or intellectual property rights of others,
GICISA warrants that (a) it has the unencumbered right to grant to DISTRIBUTOR
all of the rights and licenses contemplated hereby (b) this Agreement has been
duly authorized and executed by GICISA and is a binding obligation of GICISA
enforceable in accordance with its terms.

OTHER RIGHTS AND OBLIGATIONS:

DISTRIBUTOR and GICISA shall each comply in all material respects with all
applicable laws, rules, regulations and requirements of any governmental body.

An "Event of Default" will have occurred:

         (a) With respect to any party, if the other party shall fail to perform
any of its other material obligations under this Agreement if the breach is not
cured within 90 days after written notice thereof to the party in default;

         (b) With respect to either party, if there is (A) a dissolution,
termination of existence, liquidation, insolvency or business failure of such
party, or the appointment of a custodian or receiver of any part of such party's
property, if such appointment is not terminated or dismissed within 30 days; (B)
a composition or an assignment or trust mortgage for the benefit of creditors by
such party; or (C) the commencement with respect to such party of any proceeding
under any applicable national or local bankruptcy, reorganization, receivership,
insolvency or other similar law affecting the rights of creditors generally,
which proceeding, if initiated against such party, is not dismissed within 30
days.

                                     Page 7
<PAGE>

Upon an Event of Default, without limitation upon any and all rights and
remedies available to a non-defaulting party at law or in equity upon any breach
of this Agreement by the other party, the non-defaulting party may by written
notice terminate the agreement and/or cancel any or all orders issued hereunder,
without liability (for cancellation charges or otherwise) and may refuse to make
or take, as the case may be, further orders or deliveries.

Notwithstanding the above, if a party disputes in good faith the occurrence of a
material breach of this Agreement and such is resolved, either as a result of
agreement or the entry of a final order by a court of competent jurisdiction or
any arbitrator empowered by the parties to finally resolve such dispute, in
favor of the non-breaching party, then the breaching party shall have an
additional 60-day period following such resolution in order to cure such
material breach and following such cure shall be fully reinstated of all rights
hereunder without prejudice.

STOCK ISSUANCE:

DISTRIBUTOR will, within 30 days from the Effective Date, issue to GICISA Series
B Preferred Stock as described in Exhibit F.

STOCK REPURCHASE:

Without limiting any other remedy that may be available to DISTRIBUTOR
hereunder, in the event that prior to the X X XX X X X X X X X X X X X X X X XX
X X X X GICISA commits an Event of Default or declares bankruptcy, DISTRIBUTOR
shall have the right to buy back a pro rata portion (based on the number of
Contract Years that have expired at the time of the Event of Default relative to
the X X X X initial term of this Agreement) of DISTRIBUTOR's Common Stock
purchased by or granted to GICISA pursuant to that certain Stock Purchase
Agreement, dated March 24, 2000, at the purchase price established in such
agreement, or for an aggregate price of X if no purchase price is established.
For example, if the Event of Default occurs after X X X X the repurchase right
will apply to 80% of the Shares.

PREPARATION OF LONG FORM DOCUMENTATION:

Counsel to the DISTRIBUTOR shall prepare the Definitive Agreement, but if for
any reason the parties do not negotiate and execute the Definitive Agreement,
this Agreement will remain binding and enforceable in accordance with its terms

PREPARATION OF LONG-FORM DOCUMENTATION:

Counsel to the DISTRIBUTOR shall prepare the Definitive Agreement, but if for
any reason the parties do not negotiate and execute the Definitive Agreement,
this Agreement will remain binding and enforceable in accordance with its terms.

EXPENSES:

Each party will bear its own expenses.

                                     Page 8
<PAGE>

COUNSEL TO DISTRIBUTOR:

Murray Markiles, Esq.
Troop Steuber Pasich Reddick & Tobey, LLP
2029 Century Park East, 24th Floor
Los Angeles, California 90067-3010
Phone: (310) 728-3233

E-mail:  MMARKILES@TROOPLAW.COM

COUNSEL TO GICISA:

Francisco J. Flores
Chief Legal Counsel
Paseo de la Reforma 2608-PH
Col. Lomas Altas
Mexico D.F., 11950
Phone: 52 16 40 26

E-mail:  FMFLORES@IUSAMEX.COM

OTHER ITEMS:

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X XX X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X XX X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X XX X X X X X X X X X X X X X X X X X

If the terms and provisions of this Agreement are acceptable to you, please
indicate your acceptance and approval by signing, or by causing to be signed on
your behalf, the enclosed copy of this Agreement and returning it to the
undersigned. This Agreement is subject to the approval of the Board of Directors
of DISTRIBUTOR to be evidenced by the signature of the Chairman of DISTRIBUTOR
below. This Agreement may be executed in counterparts (including by facsimile),
all of which, when taken together, shall constitute one original.

Very truly yours,

TAG-IT PACIFIC, INC., a Delaware corporation

By:  _______________________________
Chief Executive Officer

                                     Page 9
<PAGE>

TAG-IT PACIFIC, INC., a Delaware corporation

By:  _______________________________
Chairman

ACCEPTED:

GRUPO INDUSTRIAL CIERRES IDEAL, S.A. de C.V.,
a Mexican corporation

By:  ________________________________
Name:
Its:

TALON, INC.,
a Delaware corporation

By:  _________________________________
Name:
Its:

                                    Page 10
<PAGE>

                       X X X X X X X X X X X X X X X X X X
                        X X X X X X X X X X X X X X X X X

                              X X X X X X X
                              -------------
               X X X X            X X X

               X X X X            X X X

               X X X X            X X X

               X X X X            X X X

               X X X X            X X X

               X X X X            X X X

               X X X X            X X X

               X X X X            X X X

                                    Exhibit A-1
<PAGE>

                                  X X X X X X X

X X X X X X X X
---------------
X X X X X X X X
X X X X X X X X
X X X X X X X X
X X X X X X X X
X X X X X X X X
X X X X X X X X
X X X X X X X X

X X X X X X X X
---------------
X X X X X X X X
X X X X X X X X

X X X X X X X X
---------------
X X X X X X X X
X X X X X X X X

X X X X X X X X
---------------
X X X X X X X X

X X X X X X X X
---------------
X X X X X X X X

X X X X X X X X
---------------
X X X X X X X X

X X X X X X X X
---------------
X X X X X X X X
X X X X X X X X
X X X X X X X X
X X X X X X X X
X X X X X X X X
X X X X X X X X

                                    Exhibit B-1
<PAGE>

                                   EXHIBIT "B"

                        [TAG-IT PACIFIC, INC. LETTERHEAD]

TALON DISTRIBUTION - TRANSITION PLAN

The following document is intended as a draft for discussion purposes. This
document lays out Tag-It's expectations for the transition of the distribution
of Talon products to Tag-It Pacific.

TRANSITION PLAN

     As soon as the distribution agreement is signed, Talon Inc. is to provide
     Tag-It with 100% access to all US operations and company information,
     including:

     o    Sales Force - we will start working with them immediately

     o    Operations - Tag-It Staff and consultants will start spending time at
          Talon facilities and Talon/Coats distribution centers and
          manufacturing plans

     o    Inventory system, including usage, projections, and all planning
          systems used.

     Talon will also agree to make every effort to ensure that no Talon
     employees leave the company prior to the transition date, X X X X X X X X X
     X X X X X X X X X X X X X . Specifically, X X X will seek to incentivize
     certain key Talon employees, i.e. customer service and assembly and dying
     technicians to remain and assist with the transition for a period of time.

     During the transition planning period, Tag-It will set up all required
     facilities, operations and sales systems required to completely take over
     the business as of the transition date. There will be certain functions,
     detailed below, which Tag-It will ask Talon to continue operating for short
     periods following the transition date to serve as back-up to Tag-It
     provided operations and services. These will strictly serve as back-up and
     will only be called upon in the event that Tag-It is unable to perform a
     certain function after the transition date.

TRANSITION DATE

The plan will call for a 100% conversion to take place X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X.

     X X X X X X X X

     o    Talon sales force fully employed by X X X

     o    All customer orders will be taken by Tag-It

     o    All inventory held by and shipped by X X X

     o    All production orders will be placed by Tag-It to Mexico / N.C.

     o    All quick-service business (non-distributor) performed by Tag-It

     o    All orders invoiced by Tag-It

                                    Exhibit C-1
<PAGE>

KEY PERSONNEL

Tag-It will need to spend considerable time X X X X X X X X X X X X X X during
the transition period to assist in the following:

          X X X X X X X X X X X X X X

         X X X X X X X X X X X X X X X

         X X X X X X X X X X X X X X X

Talon agrees to allow both the above individuals to spend considerable time
working with Tag-It during this transition period.

PRODUCTION PLANNING

Talon agrees to coordinate manufacturing closely to Tag-It's needs. X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X X.

Talon and Tag-It will jointly and both agree to allocate certain production
capacity in each production step X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X will be set on a quarterly basis, and will
not be altered by Talon without the agreement of Tag-It.

Talon agrees to work with Tag-It to implement a system whereby X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X These
individuals will be responsible for tracking production orders at Talon,
advising the US of order status, and acting as conduit for production and
shipping information. These individuals will be employed by X X X, however, X X
X X will provide work space, internet access, telephone and fax facility for
these employees. X X X X X X X X X X X X X

FINANCING

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

CUSTOMER EQUIPMENT

X X X will take over all maintenance and administration of customer equipment,
including customer contracts and billing and collections. X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X Revenue from any
new equipment that Tag-It purchases and places with customers will X X X X X X X
X X X X X X X X X X X X X X

                                  Exhibit C-2
<PAGE>

INTERNAL PRODUCTION EQUIPMENT

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X. Talon will also assist Tag-It
in setting up this facility, in terms of providing technical expertise in
setting up and operating the assembly equipment. XXXXXX will cover all costs
related to relocating this equipment.

Talon will continue to operate it's X X X X X X X X X X X X X for a period of 1
month following the transition to act as a back-up facility.

SALES & MARKETING

On the transition date, Talon's existing sales representatives X X X X X X X X X
X X X and Tag-It Sales force to start selling Talon products as part of Tag-It
Turnkey.

During the transition and prior to the transition date, immediately following
signing of the agreement, Tag-It will start working closely with Talon Sales
Force, including:

     o    Interviewing each Talon Sales Rep to learn about their market areas

     o    Calling on customers jointly with Talon Sales Reps

During the transition, Tag-It will also:

     o    Develop new printed sales and marketing materials (excluding color
          cards, which are to be provided by Talon)

     o    X X X X X X X X X X X X X X X X X X

ASSEMBLY & DISTRIBUTION

Tag-It to establish an assembly plant X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X . This plant will be fully operational by the
transition date. Talon will operate its existing facility, albeit at reduced
capacity for a period X X X X X X X X X X X X X X X X X X X X X X X X after
transition to act as back-up to Tag-It's facility.

Tag-It is to analyze needs for other distribution centers, and to be responsible
to set-up other facilities, before or after transition date as required. Tag-It
may negotiate X X X X to continue to use certain existing distribution
facilities.

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X

During the transition, Tag-It will be given complete access to Talon's Focus
system, including all sales histories, part numbering systems and part numbers
and usage and projections. Tag-It may either request that certain electronic
data be transferred from this system to Tag-It in order to eliminate the need to
recreate information such as part numbers, or may seek to continue to use X X X
X Focus system for a period after the transition in order to maintain
consistency of information systems, provided that X X X X is agreeable.

CUSTOMER SERVICE

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

                                  Exhibit C-3
<PAGE>

Talon must continue to operate its customer service facility X X X X X X X X for
a period X X X X X X X X X X X X X X X X X X X X X X X X X X X X as a back-up to
Tag-It's customer service operation should it be needed.

X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X
X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X X

                                  Exhibit C-4
<PAGE>

                                 X X X X X X X X

                             X X X X X X X X X X X X
                         X X X X X X X X X X X X X X X X
<TABLE>
<CAPTION>
                                                       ----------------------------------------------------
                                                                         X X X X X X X X
                                                       ----------------------------------------------------
<S>                     <C>                 <C>             <C>          <C>              <C>
X X X X X X X X             X X X X         X X X X         X X X X          X X X X          X X X X
                                                       ----------------------------------------------------

                                                            X X X X          X X X X          X X X X
X X X X
X X X X                          X X X X        X X X X X X X X          X X X X           X X X X
                                 X X X X        X X X X X X X X          X X X X           X X X X
                                 X X X X        X X X X X X X X          X X X X           X X X X
                                 X X X X        X X X X X X X X          X X X X           X X X X
                                 X X X X        X X X X X X X X          X X X X           X X X X
                                 X X X X        X X X X X X X X          X X X X           X X X X
                                 X X X X        X X X X X X X X          X X X X           X X X X
                                 X X X X        X X X X X X X X          X X X X           X X X X
                                 X X X X        X X X X X X X X          X X X X           X X X X
                                 X X X X        X X X X X X X X          X X X X           X X X X
                                 X X X X        X X X X X X X X          X X X X           X X X X
                                 X X X X        X X X X X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
X X X X                 X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
X X X X                 X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
</TABLE>

                                  Exhibit D-1
<PAGE>

<TABLE>
<CAPTION>
                                                       ----------------------------------------------------
                                                                         X X X X X X X X
                                                       ----------------------------------------------------
<S>                     <C>                 <C>             <C>          <C>              <C>
X X X X X X X X             X X X X         X X X X         X X X X          X X X X          X X X X
                                                       ----------------------------------------------------

                                                            X X X X          X X X X          X X X X

X X X X                 X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
X X X X                 X X X X         X X X X        X X X X          X X X X           X X X X
X X X X                 X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                 X X X XX X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
X X X X                 X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
X X X X                 X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
X X X X                 X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
</TABLE>

                                  Exhibit D-2
<PAGE>

<TABLE>
<CAPTION>
                                                       ----------------------------------------------------
                                                                         X X X X X X X X
                                                       ----------------------------------------------------
<S>                     <C>                 <C>             <C>          <C>              <C>
X X X X X X X X             X X X X         X X X X         X X X X          X X X X          X X X X
                                                       ----------------------------------------------------

                                                            X X X X          X X X X          X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
X X X X                 X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
X X X X                 X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
X X X X                 X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
</TABLE>

                                  Exhibit D-3
<PAGE>

<TABLE>
<CAPTION>
                                                       ----------------------------------------------------
                                                                         X X X X X X X X
                                                       ----------------------------------------------------
<S>                     <C>                 <C>             <C>          <C>              <C>
X X X X X X X X             X X X X         X X X X         X X X X          X X X X          X X X X
                                                       ----------------------------------------------------

                                                            X X X X          X X X X          X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
X X X X                 X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
X X X X                 X X X X                        X X X X          X X X X           X X X X
X X X X                 X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
X X X X                 X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
X X X X X X X X         X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
X X X X                 X X X X                        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
</TABLE>

                                  Exhibit D-4
<PAGE>

<TABLE>
<CAPTION>
                                                       ----------------------------------------------------
                                                                         X X X X X X X X
                                                       ----------------------------------------------------
<S>                     <C>                 <C>             <C>          <C>              <C>
X X X X X X X X             X X X X         X X X X         X X X X          X X X X          X X X X
                                                       ----------------------------------------------------

                                                            X X X X          X X X X          X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
X X X X X X X X         X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
X X X X                 X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
X X X X X X X X         X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
X X X X X X X X         X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                                 X X X X               X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
</TABLE>

                                  Exhibit D-5
<PAGE>

<TABLE>
<CAPTION>
                                                       ----------------------------------------------------
                                                                         X X X X X X X X
                                                       ----------------------------------------------------
<S>                     <C>                 <C>             <C>          <C>              <C>
X X X X X X X X             X X X X         X X X X         X X X X          X X X X          X X X X
                                                       ----------------------------------------------------

                                                            X X X X          X X X X          X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
X X X X                 X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
X X X X                 X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
</TABLE>

                                  Exhibit D-6
<PAGE>

<TABLE>
<CAPTION>
                                                       ----------------------------------------------------
                                                                         X X X X X X X X
                                                       ----------------------------------------------------
<S>                     <C>                 <C>             <C>          <C>              <C>
X X X X X X X X             X X X X         X X X X         X X X X          X X X X          X X X X
                                                       ----------------------------------------------------

                                                            X X X X          X X X X          X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
X X X X                 X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                                        X X X X X X X X
X X X X                                                X X X X          X X X X           X X X X
X X X X                 X X X X                        X X X X          X X X X           X X X X
X X X X                 X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
X X X X X X X X         X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
X X X X                 X X X X                        X X X X          X X X X           X X X X
</TABLE>

                                  Exhibit D-7
<PAGE>

<TABLE>
<CAPTION>
                                                       ----------------------------------------------------
                                                                         X X X X X X X X
                                                       ----------------------------------------------------
<S>                     <C>                 <C>             <C>          <C>              <C>
X X X X X X X X             X X X X         X X X X         X X X X          X X X X          X X X X
                                                       ----------------------------------------------------

                                                            X X X X          X X X X          X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
X X X X                 X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                                                       X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
</TABLE>

                                  Exhibit D-8
<PAGE>

<TABLE>
<CAPTION>
                                                       ----------------------------------------------------
                                                                         X X X X X X X X
                                                       ----------------------------------------------------
<S>                     <C>                 <C>             <C>          <C>              <C>
X X X X X X X X             X X X X         X X X X         X X X X          X X X X          X X X X
                                                       ----------------------------------------------------

                                                            X X X X          X X X X          X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
X X X X                 X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
X X X X                 X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
                        X X X X                        X X X X          X X X X           X X X X
X X X X                 X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
X X X X                 X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
</TABLE>

                                  Exhibit D-9
<PAGE>

<TABLE>
<CAPTION>
                                                       ----------------------------------------------------
                                                                         X X X X X X X X
                                                       ----------------------------------------------------
<S>                     <C>                 <C>             <C>          <C>              <C>
X X X X X X X X             X X X X         X X X X         X X X X          X X X X          X X X X
                                                       ----------------------------------------------------

                                                            X X X X          X X X X          X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
X X X X X X X X         X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
X X X X                 X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
</TABLE>

                                  Exhibit D-10
<PAGE>

<TABLE>
<CAPTION>
                                                       ----------------------------------------------------
                                                                         X X X X X X X X
                                                       ----------------------------------------------------
<S>                     <C>                 <C>             <C>          <C>              <C>
X X X X X X X X             X X X X         X X X X         X X X X          X X X X          X X X X
                                                       ----------------------------------------------------

                                                            X X X X          X X X X          X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
X X X X                 X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
X X X X                 X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
X X X X                 X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
</TABLE>

                                  Exhibit D-11
<PAGE>

<TABLE>
<CAPTION>
                                                       ----------------------------------------------------
                                                                         X X X X X X X X
                                                       ----------------------------------------------------
<S>                     <C>                 <C>             <C>          <C>              <C>
X X X X X X X X             X X X X         X X X X         X X X X          X X X X          X X X X
                                                       ----------------------------------------------------

                                                            X X X X          X X X X          X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
X X X X                 X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
</TABLE>

                                  Exhibit D-12
<PAGE>

<TABLE>
<CAPTION>
                                                       ----------------------------------------------------
                                                                         X X X X X X X X
                                                       ----------------------------------------------------
<S>                     <C>                 <C>             <C>          <C>              <C>
X X X X X X X X             X X X X         X X X X         X X X X          X X X X          X X X X
                                                       ----------------------------------------------------

                                                            X X X X          X X X X          X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X         X X X X        X X X X          X X X X           X X X X
                        X X X X X X X X X X X X

                                                            X X X X          X X X X
                                                            X X X X          X X X X
X X X X                          X X X X                         X X X X           X X X X
                                 X X X X                         X X X X           X X X X
                        X X X X                        X X X X          X X X X
                        X X X X                        X X X X          X X X X
                        X X X X                        X X X X          X X X X
                        X X X X                        X X X X          X X X X
                        X X X X                        X X X X          X X X X
                        X X X X                        X X X X          X X X X
                        X X X X                        X X X X          X X X X
                        X X X X                        X X X X          X X X X
                        X X X X                        X X X X          X X X X
                        X X X X                        X X X X          X X X X
</TABLE>

                                  Exhibit D-13
<PAGE>

<TABLE>
<CAPTION>
                                                       ----------------------------------------------------
                                                                         X X X X X X X X
                                                       ----------------------------------------------------
<S>                     <C>                 <C>             <C>          <C>              <C>
X X X X X X X X             X X X X         X X X X         X X X X          X X X X          X X X X
                                                       ----------------------------------------------------

                                                            X X X X          X X X X          X X X X

                                                                        X X X X
                                                                        X X X X
                                                       X X X X          X X X X
X X X X                          X X X X               X X X X                     X X X X

X X X X X X X X         X X X X X X X X X X X X
</TABLE>

                                  Exhibit D-14
<PAGE>

                                 X X X X X X X X

<TABLE>
<CAPTION>
                                           X X X X X X X X X X X X
---------------------------------------------------------------------------------------------------------------
<S>       <C>                              <C>               <C>              <C>               <C>
          X X X X X X X X                      X X X X           X X X X          X X X X          X X X X
--------- -------------------------------- ----------------- ---------------- ----------------- ---------------
X X X X   X X X X                              X X X X         X X X X                            X X X X
--------- -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                                 X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                          X X X X           X X X X          X X X X           X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------

X X X X   X X X X                          X X X X           X X X X          X X X X           X X X X
--------- -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                          X X X X           X X X X          X X X X           X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------

X X X X   X X X X                          X X X X           X X X X          X X X X           X X X X
--------- -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                          X X X X           X X X X          X X X X           X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------

X X X X   X X X X                          X X X X           X X X X                              X X X X
--------- -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                          X X X X           X X X X          X X X X           X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------

X X       X X X X                          X X X X           X X X X                              X X X X
--------- -------------------------------- ----------------- ---------------- ----------------- ---------------

                                  Exhibit E-1
<PAGE>

X X       X X X X                          X X X X           X X X X                              X X X X
--------- -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                          X X X X           X X X X          X X X X           X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------

X X X X   X X X X                          X X X X           X X X X                              X X X X
--------- -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
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          X X X X                                                             X X X X
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          X X X X                                                             X X X X
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          X X X X                                                             X X X X
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          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                          X X X X           X X X X          X X X X           X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------

X X X X   X X X X
--------- -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                            X X X X          X X X X           X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X           X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X           X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                            X X X X          X X X X           X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                            X X X X          X X X X           X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X           X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X           X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X           X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                              X X X X       X X X X          X X X X           X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                            X X X X          X X X X           X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X           X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                              X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                              X X X X       X X X X          X X X X           X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
                                                             X X X X          X X X X           X X X X
--------- -------------------------------- ----------------- ---------------- ----------------- ---------------
X X X X   X X X X
--------- -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                            X X X X            X X X X         X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                            X X X X                            X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                                 X X X X       X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                                               X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X           X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                                             X X X X           X X X X

                                  Exhibit E-2
<PAGE>

          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                            X X X X                            X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                            X X X X                            X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                            X X X X                            X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------
          X X X X                                            X X X X              X X X X       X X X X
          -------------------------------- ----------------- ---------------- ----------------- ---------------

          X X X X                                              X X X X            X X X X         X X X X
--------- -------------------------------- ----------------- ---------------- ----------------- ---------------
</TABLE>

                                  Exhibit E-3
<PAGE>

                                   EXHIBIT "F"

                              TERMS OF TALON/TAG-IT
                       PACIFIC AGREEMENT EQUITY COMPONENT

         In connection with the proposed relationship and transactions between
Tag-It Pacific, Inc., and GICISA, Tag-It Pacific would issue to GICISA 850,000
shares of a newly designated series of preferred stock of Tag-It Pacific (the
"PREFERRED STOCK") with the following rights, preferences and privileges:

Securities:

Series B Convertible Preferred Stock

Authorized Shares:

850,000

Dividend Provisions:

The holders of the Preferred Stock would be entitled to dividends equal to any
dividends payable on the Common Stock into which the Preferred Stock are
convertible.

Redemption:

The holders of the Preferred Stock would not be entitled to cause Tag-It Pacific
to redeem the Preferred Stock.

Conversion:

The Preferred Stock would automatically convert into Common Stock at any time
following the third anniversary of issuance if during any 30 day period
commencing on or after the third anniversary of issuance, the average per share
closing price of the Common Stock on the American Stock Exchange (or the
principal market upon which shares of Tag-It Pacific are then listed) for each
day of the 30 day period equals or exceeds $8.00 per share (subject to equitable
adjustment for stock splits, combinations and recapitalizations).

Initially, each share of Preferred would be convertible into a fraction of one
share of Common Stock equal to the sum of (a) one, minus (b) the fraction, the
numerator of which is $2.50, and the denominator of which is the average per
share closing price of the Common Stock on the American Stock Exchange (or the
principal market upon which shares of Tag-It Pacific are then listed) for each
day of the 30 day period prior to the conversion of the Preferred Stock.

The actual structure of the conversion feature and cashless payment mechanism
will be determined by Tag-It's accountants and Board based on financial
presentation and other considerations; provided that Tag-It would receive the
economic equivalent of a $2.50 per share payment upon conversion of the
Preferred Stock.

                                  Exhibit F-1
<PAGE>

Equitable adjustments would be made in respect of stock splits, reverse stock
splits, etc. The Preferred Stock may also be automatically converted to common
stock at the election of Tag-It.

Transfer Restrictions

GICISA may not sell or transfer any Preferred Shares prior to 30 months of
issuance. Thereafter the shares (or the Common Shares issuable upon conversion)
may be sold provided that any such sale (i) is in accordance with the volume
restrictions set forth in Rule 144 as currently in effect (and determined as if
the Shares were at the time of the proposed sale "restricted securities" as
currently defined under Rule 144 subject to the volume and manner of sale
restrictions of Rule 144 as currently in effect), or (ii) is part of a secondary
offering initiated by Tag-It, or (iii) is a block sale in a bona fide private
transaction to a third party financial or strategic investor. To the extent that
a block sale or any other sale not contemplated by the preceding clauses (i) or
(ii) is executed, Tag-It shall have the right of first refusal, which right will
be assignable, to purchase such shares upon the same (or economically
equivalent) terms and conditions as are set forth in the proposed block sale.

Registration Rights:

After three years, the Common Shares issuable upon conversion of the Preferred
Stock would be provided piggyback registration rights junior to those rights
currently outstanding, pari passu participation with any registration of shares
held by Colin Dyne, and junior to registration rights now or hereafter provided
to other members of the Dyne Family.

Voting Rights:

The holders of the Preferred Stock would not have voting rights except as
required by Delaware law.

Liquidation Preference:

In the event of any liquidation, dissolution, sale, merger or winding up of
Tag-It Pacific, the holders of the Preferred Stock would be entitled to receive,
in preference to the holders of Common Stock, $.001 per share of Preferred
Stock. Thereafter, the holders of the Common Stock would then participate pro
rata with respect to the remaining assets of Tag-It Pacific (without
participation by the holders of Preferred Stock).

Tag-Along/Drag Along

Pro rata -- In the context of a sale by Colin Dyne of a majority of his shares

Distribution Agreement:

The Preferred Stock would be issued upon execution of the proposed Distribution
Agreement.

The terms of the equity security set forth above will remain available through
March 21, 2000, so long as the price of Tag-It's Common Stock remains within the
range of $5 - $6 per share.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00013-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00013-of-00352.parquet"}]]