This WARRANT AGREEMENT (this "Agreement") is made and entered into as of the 1st day of June, 1994,
by and between Tag-It, Inc., a California corporation (the "Company"), and Jonathan Markiles ("Holder"). In
consideration of these premises and the mutual covenants and agreements hereinafter set forth, and other good
and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the Company and
Holder agree as follows:
1. GRANT OF WARRANT.
In consideration of the sum of $100, the Company hereby grants to Holder the right and option (the "Warrant"),
upon the terms and subject to the conditions set forth in this Agreement, to purchase all or any portion of 14
shares of the Common Stock of the Company (the "Warrant Shares") at an exercise price of $2,000 per share
(the "Exercise Price").
2. TERM OF WARRANT.
The Warrant shall terminate and expire at 5:00 p.m., Los Angeles time, on December 31, 2002 (the "Warrant
Expiration Date"), unless sooner terminated as provided herein.
(a) The Warrant is immediately exercisable with respect to all Warrant Shares.
(b) Notwithstanding anything to the contrary contained in this Agreement, the Warrant may not be exercised, in
whole or in part, unless and until any then-applicable requirements of all state and federal laws and regulatory
agencies shall have been fully complied with to the satisfaction of the Company and its counsel.
4. EXERCISE OF WARRANT.
There is no obligation to exercise the Warrant, in whole or in part. The Warrant may be exercised, in whole or in
part, only by delivery to the Company of:
(a) written notice of exercise in form and substance identical to Exhibit "A" attached to this Agreement stating the
number of Warrant Shares then being purchased (the "Purchased Shares"); and
(b) payment of the Exercise Price of the Purchased Shares in cash, by check, or by wire transfer.
Upon receipt of the foregoing, the Company shall promptly issue in the name of the