This Exchange Agreement (the "Agreement") is made and entered into this 17th day of October, 1997, by and
among Tag-It Pacific L.L.C., a Delaware limited liability company (the "Company"), Tag-It, Inc., a California
corporation ("Tag-It"), Tag-It Printing & Packaging Ltd., a BVI corporation ("Tag-It Hong Kong"), AGS
Holdings L.L.C., a Delaware limited liability company and a subsidiary of the Company ("AGS LLC"), AGS
Stationery, Inc., a California corporation ("AGS Stationery"), Pacific Trim & Belt, Inc., a California corporation
("Pacific Trim"), each of the shareholders and warrant holders of Tag-It listed on Attachment "A" hereto ("Tag-It
Shareholders" and "Tag-It Warrant Holders"), each of the shareholders of Tag-It Hong Kong listed on
Attachment "B" hereto ("Tag-It Hong Kong Shareholders"), each of the shareholders and warrant holders of
AGS Stationery listed on Attachment "C" hereto ("AGS Stationery Shareholders" and "AGS Stationery Warrant
Holders"), each of the shareholders of Pacific Trim listed on Attachment "D" hereto ("Pacific Trim Shareholders"
and collectively with all of the other shareholders listed on the attachments hereto, the "Shareholders") and Tag-It
Pacific, Inc., a Delaware corporation ("Tag-It Pacific").
R E C I T A L S
A. The Company was formed for the purposes of serving as the ultimate parent corporation for Tag-It, Tag-It
Hong Kong, AGS LLC, AGS Stationery and Pacific Trim as well as Tag-It de Mexico, SA de CV, a wholly
owned subsidiary of Tag-It, and Tag-It Brands, Inc., a California corporation, a wholly owned subsidiary of the
Company (collectively the "Subsidiaries").
B. The Shareholders and the Company constitute all of the shareholders of the Subsidiaries and the Tag-It
Warrant Holders and AGS Stationery Warrant Holders constitute all of the option or warrant holders of the
C. Each Tag-It Shareholder desires to contribute to the Company all of the shares of capital stock of Tag-It (the
"Tag-It Shares") set