LINE OF CREDIT AGREEMENT
This Line of Credit Agreement ("Agreement") is made and entered into this 30th day of April, 1998 by and
between SANWA BANK OF CALIFORNIA (the "Bank") and TAG- IT, INC. and PACIFIC TRIM &
BELT, INC. (each a "Borrower" and collectively the "Borrowers").
1.0 CERTAIN DEFINED TERMS. Unless elsewhere defined in this Agreement the following terms shall have
the following meanings (such meanings to be generally applicable to the singular and plural forms of the terms
A. "ADVANCE" shall mean an advance to the Borrowers under any line of credit facility or similar facility
provided for in Section II of this Agreement which provides for draws by the Borrowers against an established
B. "BUSINESS DAY" shall mean a day, other than a Saturday or Sunday, on which commercial banks are open
for business in California.
C. "COLLATERAL" shall mean any personal or real property in which the Bank may be granted a lien or
security interest to secure payment of the Obligations.
D. "DEBT" shall mean, with respect to each Borrower or all the Borrowers collectively, as the case may be, all
liabilities of the Borrowers less Subordinated Debt.
E. "EFFECTIVE TANGIBLE NET WORTH" shall mean, with respect to each Borrower or all the Borrowers
collectively, as the case may be, the Borrower's stated net worth plus Subordinated Debt but less all intangible
assets of the Borrower (i.e., goodwill, trademarks, patents, copyrights, organization expense, notes and accounts
receivables received from shareholders related parties and similar intangible items).
F. "ENVIRONMENTAL CLAIMS" shall mean all claims, however asserted, by any governmental authority or
other person alleging potential liability or responsibility for violation of any Environmental Law or for release or
injury to the environment or threat to public health, personal injury (including sickness, disease or death), property
damage, natural resources damage, or otherwise a