EXHIBIT 10.40

                                 PROMISSORY NOTE

    $720,666                                                       June 15, 2007

         FOR  VALUE  RECEIVED,  the  undersigned,   COLIN  DYNE,  an  individual
("MAKER"),   hereby  promises  to  pay  to  TAG-IT  PACIFIC,  INC.,  a  Delaware
corporation,  or assigns  ("PAYEE"),  in lawful  money of the  United  States of
America,  the principal sum of Seven Hundred  Twenty  Thousand Six Hundred Sixty
Six Dollars ($720,666). From and after the date hereof, interest shall accrue on
the unpaid balance from time to time outstanding  until the principal balance is
paid in  full,  at a rate of  seven  and  one-half  percent  (7.5%)  per  annum,
compounded  monthly.  The entire unpaid principal balance of this Note, together
with  accrued  interest,  shall be due and  payable  within  fifteen  (15)  days
following receipt by Maker of written demand therefor from Payee.


                                     MAKER:

                                     /S/ COLIN DYNE
                                     -----------------------------
                                     Colin Dyne
                                     Date Executed:  June 27, 2007