EXHIBIT 10.1

                         EXECUTIVE EMPLOYMENT AGREEMENT

         This Executive  Employment  Agreement  (this  "AGREEMENT")  is made and
entered into as of this 16th day of March,  2006 (the "EFFECTIVE  DATE"), by and
between TAG-IT PACIFIC, INC., a Delaware corporation (the "COMPANY") and STEPHEN
FORTE ("EXECUTIVE").

1.       ENGAGEMENT AND DUTIES.

         1.1      Commencing  as of the Effective  Date,  and upon the terms and
                  subject to the  conditions  set forth in this  Agreement,  the
                  Company hereby engages and employs  Executive as an officer of
                  the Company, with the title and designation of Chief Executive
                  Officer  of  the  Company.   Executive   hereby  accepts  such
                  engagement and employment.

         1.2      Executive's  duties  and   responsibilities   shall  be  those
                  normally  and  customarily  vested  in  the  office  of  Chief
                  Executive   Officer   of  a   corporation,   subject   to  the
                  supervision,  direction  and control of the Board of Directors
                  (the "BOARD") of the Company.  Executive shall report directly
                  to the Board.

         1.3      Executive   agrees  to  devote  his  primary   business  time,
                  energies,   skills,   efforts  and  attention  to  his  duties
                  hereunder,  and will not, without the prior written consent of
                  the Board,  which consent will not be  unreasonably  withheld,
                  render any material services to any other for-profit  business
                  concern,  PROVIDED, that Executive's service on the boards (or
                  similar  bodies)  of the  entities  listed on EXHIBIT A hereto
                  shall  not  constitute   any  violation  of  this   Agreement.
                  Executive  will use his best efforts and abilities  faithfully
                  and diligently to promote the Company's business interests.

         1.4      Except for  routine  travel  incident  to the  business of the
                  Company,  Executive  shall perform his duties and  obligations
                  under this Agreement  principally  from an office  provided by
                  the  Company  in  Woodland  Hills,  California,  or such other
                  location in Los Angeles or Ventura County,  California, as the
                  Board may from time to time determine.

2.       TERM OF EMPLOYMENT.  Executive's  employment pursuant to this Agreement
         shall  commence  on the  Effective  Date  and  shall  terminate  on the
         earliest to occur of the following (in any case, the "TERM"):

         (a)      the close of business on December 31, 2008, PROVIDED,  that if
                  the Company has not given Executive Notice of its decision not
                  to renew  the Term on or before  July 1,  2008,  then,  unless
                  otherwise  terminated  as  provided  below,  the Term shall be
                  automatically  extended  until the earlier of (i) a date which
                  is six (6) months following delivery after July 1, 2008 by the
                  Company to  Executive  of Notice of its decision not to extend
                  the Term further, and (ii) December 31, 2009;

         (b)      the death of Executive;

         (c)      delivery to Executive of written  Notice (as defined below) of
                  termination  by  the  Company  if  Executive  shall  suffer  a
                  "PERMANENT  DISABILITY,"  which for purposes of this


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                  Agreement  shall mean a condition  that entitles  Executive to
                  benefits under an applicable Company long-term disability plan
                  or, if no such plan  exists,  a physical or mental  disability
                  which,  in the reasonable  judgment of the Board, is likely to
                  render  Executive unable to perform his duties and obligations
                  under this Agreement for 90 days in any 12-month period;

         (d)      delivery to Executive of written  Notice of termination by the
                  Company  for  "Cause,"   which   Notice  shall   identify  the
                  particular  details of the conduct  that the Company  believes
                  constitutes  Cause.  For purposes of this  Agreement,  "Cause"
                  shall mean:  (i) any act or omission  knowingly  undertaken or
                  omitted by Executive  with the intent of causing damage to the
                  Company,   its   properties,   assets  or   business   or  its
                  stockholders,  officers,  directors  or  employees;  (ii)  any
                  fraud, misappropriation or embezzlement by Executive resulting
                  in a  material  personal  profit  to  Executive,  in any case,
                  involving properties, assets or funds of the Company or any of
                  its  subsidiaries;  (iii)  Executive's  consistent  failure to
                  materially  perform his normal  duties as described in SECTION
                  1.2, other than any such failure  resulting  from  Executive's
                  Permanent  Disability;  (iv)  conviction  of, or pleading nolo
                  contendere  to, (A) any crime or offense  involving  monies or
                  other  property  of the  Company;  or (B) any  felony  offense
                  involving  a crime  of  moral  turpitude;  or (v)  Executive's
                  chronic or habitual use or  consumption  of drugs or alcoholic
                  beverages,  in either case, that causes material damage to the
                  Company, its properties, assets or business, PROVIDED, that to
                  the extent any circumstances  that would otherwise  constitute
                  Cause  shall be capable of cure,  Executive  shall be given no
                  less than thirty days to cure such circumstances  prior to any
                  termination of his employment for Cause;

         (e)      delivery to Executive of written  Notice of termination by the
                  Company "without Cause;"

         (f)      delivery to the Company of written  Notice of  termination  by
                  Executive  for "GOOD  REASON," by reason of: (i) the  material
                  diminution    of    Executive's    duties,    job   title   or
                  responsibilities  as  provided  in  SECTION  1  above;  (ii) a
                  relocation  of  Executive's   principal  work  location  to  a
                  location  that is  inconsistent  with the terms of SECTION 1.4
                  above;  (iii)  a  material  breach  by  the  Company  of  this
                  Agreement,  including without limitation, a material reduction
                  in any component of  Executive's  compensation  or benefits as
                  provided for herein; or (iv) a change in Executive's reporting
                  arrangement  such that Executive no longer reports directly to
                  the Board; or

         (g)      delivery to the Company of written  Notice of  termination  by
                  Executive without "Good Reason."

3.       COMPENSATION; EXECUTIVE BENEFIT PLANS.

         3.1      As soon as  practicable  (but in no event more than 5 business
                  days)  following the Effective Date, the Company shall pay the
                  Executive  a  lump-sum  cash  payment  in an  amount  equal to
                  $7,480.76.

         3.2      The  Company  shall pay to  Executive a base salary (the "BASE
                  SALARY")  at an annual  rate of (i)  $275,000  for the  period
                  commencing  on the  Effective  Date and ending on December 31,
                  2006, and (ii) $325,000 during each  subsequent  calendar year
                  of the Term,  subject to  increase,  but not  decrease,  on an
                  annual basis at the  discretion of the Board.  The Base Salary


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                  shall be payable in  installments  throughout  the year in the
                  same  manner  and at the same  times  the  Company  pays  base
                  salaries  to  similarly  situated  executive  officers  of the
                  Company, but in any event, no less frequently than monthly.

         3.3      Commencing  with  fiscal  year 2006 and for each  fiscal  year
                  during  the  Term   thereafter   during  which   Executive  is
                  performing services to the Company, the Company shall maintain
                  a Management Incentive Program,  pursuant to which the Company
                  will set aside each fiscal year for payment to  Executive  and
                  such other members of management as determined by the Board of
                  Directors,  an amount  equal to fifteen  percent  (15%) of the
                  Company's  EBIT for such  fiscal  year (the "MIP  FUND").  For
                  purposes  hereof,  "EBIT" shall mean earnings  before interest
                  and  taxes,   calculated   based  on  the  Company's   audited
                  consolidated  financial  statements for the applicable  fiscal
                  year prepared in accordance with generally accepted accounting
                  principles in the United States.  Executive  shall be entitled
                  to receive an EBIT based bonus (the "EBIT BONUS") equal to (i)
                  fifty  percent  (50%) of the MIP Fund, if any, for fiscal year
                  2006,  and (ii) thirty three percent (33%) of the MIP Fund, if
                  any, for each subsequent fiscal year during the Term. The EBIT
                  Bonus,  if any,  shall be  payable  in cash on April 15 of the
                  year immediately following the fiscal year for which such EBIT
                  Bonus is calculated.

         3.4      During  the Term,  Executive  shall be  entitled  each year to
                  vacation for a minimum of four calendar  weeks  (pro-rated for
                  any  partial  year of  service  during  the  Term),  plus such
                  additional  period or periods as the Board may  approve in the
                  exercise of its reasonable  discretion,  during which time his
                  compensation  shall  be  paid  in  full.  To the  extent  that
                  Executive  does not use any such vacation  during any year, up
                  to two calendar weeks of such unused vacation shall be carried
                  over from  year to year;  provided,  however  that in no event
                  shall  Executive's  total  accrued but unused  vacation at any
                  time exceed six weeks.

         3.5      As an  inducement  to Executive to accept this  Agreement  and
                  serve as Chief Executive Officer of the Company, Executive has
                  been  granted an option to purchase  900,000  shares of common
                  stock of the  Company  (the  "COMMON  STOCK")  at a per  share
                  exercise  price  of  $0.37  (the  "INDUCEMENT  OPTION").   The
                  Inducement Option was granted to Executive outside of (and not
                  pursuant to) the Company's  1997 Stock Plan (the "STOCK PLAN")
                  and  shall  be   registered   with  the  SEC  on  a  Form  S-8
                  Registration  Statement no later than May 31, 2006.  Except as
                  otherwise  provided below, and subject to earlier  termination
                  in accordance with its terms, the Inducement Option shall vest
                  as  to  300,000  shares  on  October  24,  2006  and  as to an
                  additional  25,000  shares  on the last  day of each  calendar
                  month thereafter until fully vested. In addition,  the Company
                  has  granted  to  Executive  pursuant  to the  Stock  Plan (i)
                  135,135  fully  vested  shares of  Common  Stock  (the  "STOCK
                  GRANT"),  and (ii) an option  to  purchase  135,135  shares of
                  Common  Stock at a per  share  exercise  price  of $0.37  (the
                  "COMPANION  OPTION").  The Companion Option shall vest in full
                  on October 24, 2006.  Consistent  with SECTION  5.1(II) below,
                  the option  agreements  covering the Inducement Option and the
                  Companion  Option (the "OPTION  AGREEMENTS")  will provide for
                  the full acceleration of all applicable  vesting  requirements
                  upon (i) a change of control of the Company, as defined in the
                  applicable   agreement,   and  (ii)  upon  a  termination   of
                  Executive's  employment  without Cause, for Good Reason or due
                  to Executive's death or Permanent Disability.

         3.6      During  the  Term,  the  Company  shall pay to  Executive,  in
                  increments payable at the times that the Company pays the Base
                  Salary to Executive, an allowance of $1,500


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                  per  month for costs  associated  with the lease or  purchase,
                  maintenance and insurance of an automobile.

         3.7      During the Term,  Executive shall be entitled to reimbursement
                  from the Company for the  reasonable  costs and expenses which
                  he incurs in connection with the performance of his duties and
                  obligations  under this Agreement,  substantiated  in a manner
                  consistent  with  the  Company's  practices  and  policies  as
                  adopted  or  approved  from  time  to time  by the  Board  for
                  executive  officers.  For the  avoidance  of doubt,  "business
                  class" travel shall  constitute  reasonable costs and expenses
                  on  any  international  flight  greater  than  five  hours  in
                  duration.

         3.8      The Company shall promptly pay or reimburse to Executive legal
                  fees  actually  incurred by Executive in  connection  with the
                  negotiation and drafting of this  Agreement,  which fees shall
                  not exceed $10,000 in the aggregate.

         3.9      The  Company  may  deduct  from any  compensation  payable  to
                  Executive the minimum amounts  sufficient to cover  applicable
                  federal,   state  and/or  local  income  and   employment  tax
                  withholding.

4.       OTHER  BENEFITS.  During  the  Term,  Executive  shall be  eligible  to
         participate in all operative employee compensation,  fringe benefit and
         perquisite,  and other benefit and welfare plans or arrangements of the
         Company  then  in  effect  from  time to time  and in  which  similarly
         situated  executive  officers of the Company  generally are entitled to
         participate,  including  without  limitation,  to the  extent  then  in
         effect,   incentive,   group  life,  medical,   dental,   prescription,
         disability  and  other  insurance  plans,  all on  terms  at  least  as
         favorable as those  offered to  similarly  situated  executives  of the
         Company.

5.       TERMINATION OF EMPLOYMENT. Subject to the provisions of this Section 5,
         either the Company or Executive may terminate Executive's employment at
         any time for any reason or no reason.  The following  provisions  shall
         control any such termination of Executive's employment.

         5.1      TERMINATION   WITHOUT  CAUSE,  FOR  GOOD  REASON,  OR  DUE  TO
                  EXECUTIVE'S  DEATH OR  PERMANENT  DISABILITY.  The Company may
                  terminate  Executive's  employment  without  Cause at any time
                  upon 15 days' prior written Notice to Executive, and Executive
                  may terminate his employment with Good Reason at any time upon
                  15 days' prior  written  Notice to the Company,  in each case,
                  subject  to any  applicable  cure  periods  (in the  case of a
                  termination  without  Cause  or  for  Good  Reason,  the  date
                  specified in any such Notice in  accordance  with this SECTION
                  5.1 shall constitute the "DATE OF TERMINATION").  For purposes
                  of clarity,  the  Company's  delivery of Notice in  accordance
                  with  SECTION 2(A) of its decision not to renew the Term shall
                  not  constitute   termination  without  Cause,  and  shall  be
                  governed by SECTION 5.5 below.  Executive's  employment  shall
                  also terminate  upon the  occurrence of  Executive's  death or
                  Permanent  Disability  (in the  case of a  termination  due to
                  Executive's  death or  Permanent  Disability,  the date of the
                  death  or the date  specified  in a  Notice  from the  Company
                  indicating  termination  due  to  Permanent  Disability  shall
                  constitute   the  "DATE  OF   TERMINATION").   If  Executive's
                  employment  is  terminated  pursuant to this  SECTION 5.1, the
                  Company  shall  promptly,   or  in  the  case  of  obligations
                  described in clause (e) below, as such obligations  become due
                  to Executive, pay or provide to


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                  Executive (or his estate),  (a) Executive's  earned but unpaid
                  Base Salary  accrued  through  such Date of  Termination,  (b)
                  accrued  but  unpaid   vacation  time  through  such  Date  of
                  Termination,  (c)  any  EBIT  Bonus  required  to be  paid  to
                  Executive  pursuant to this  Agreement  for any fiscal year of
                  the Company  ending prior to the Date of  Termination,  to the
                  extent payable,  but not previously paid, (d) reimbursement of
                  any business  expenses incurred by Executive prior to the Date
                  of Termination that are reimbursable  under SECTION 3.7 above,
                  and (e) any vested benefits and other amounts due to Executive
                  under any plan,  program,  policy of, or other agreement with,
                  the  Company  (together,   the  "ACCRUED   OBLIGATIONS").   In
                  addition,  Executive  (or his estate) shall be entitled to the
                  following  payments and benefits  (the  "SEVERANCE")  from the
                  Company:

                  (i)      payment,  at the time and in the manner  specified in
                           SECTION 5.2 below,  of an  aggregate  amount equal to
                           Executive's  Base Salary (at the rate then in effect,
                           but  disregarding  any  reduction  of Base  Salary in
                           violation  of this  Agreement)  that  would have been
                           payable to the Executive had he remained  employed by
                           the  Company  for the  period  (such  period,  or the
                           period described in the next sentence, as applicable,
                           the  "SEVERANCE  PERIOD")  commencing  on the Date of
                           Termination  and ending on  December  31, 2008 or, if
                           later,  the date  which is six (6)  months  following
                           delivery by the Company of Notice of its decision not
                           to extend the Term (as  contemplated by SECTION 2(A),
                           which  Notice,  if not  previously  given,  shall  be
                           deemed to be given on the Date of Termination for any
                           reason other than death or Permanent Disability).  If
                           termination   occurs   due  to  death  or   Permanent
                           Disability,  then such  amount  shall be equal to the
                           Base  Salary  that  would  have been  payable  to the
                           Executive  had he  remained  employed  by the Company
                           through  December 31, 2008. The Severance  payable to
                           the  Executive  pursuant  to  this  paragraph  (i) is
                           hereinafter   referred   to  as  the   "BASE   SALARY
                           SEVERANCE";

                  (ii)     payment,  at the time specified in SECTION 5.2 below,
                           of a pro  rated  portion  of the EBIT  Bonus  for the
                           fiscal year in which the Date of Termination  occurs,
                           where such pro rated portion is equal to: (a) fifteen
                           percent (15%) of the Company's  EBIT, if any, for the
                           period  (the  "EBIT  Period")  from  January 1 of the
                           applicable  fiscal  year  through the last day of the
                           fiscal  quarter  in which  such  Date of  Termination
                           occurs,  MULTIPLIED  BY  (b) a  ratio  determined  by
                           dividing  the number of days  Executive  was employed
                           during the EBIT Period by the total number of days in
                           the  EBIT  Period,  MULTIPLIED  BY (c)  either  fifty
                           percent (50%) or  thirty-three  percent (33%) if such
                           Date of  Termination  occurs  during  fiscal  2006 or
                           after fiscal 2006, respectively;

                  (iii)    as of the  Date  of  Termination,  full  vesting  and
                           exercisability  of  the  Inducement  Option  and  the
                           Companion   Option,   which   Options   shall  remain
                           outstanding  and  exercisable  for  at  least  twelve
                           months


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                           following  the  Date of  Termination  (and  shall  be
                           exercisable by Executive's estate in the event of his
                           death); and

                  (iv)     continued   healthcare  coverage  for  Executive  (if
                           living) and his dependents for the Severance  Period,
                           to  the   extent   each  such   individual   received
                           healthcare   coverage   immediately   prior  to  such
                           termination  of  employment,  at  the  same  cost  to
                           Executive  and his  dependents  as such coverage cost
                           immediately  prior to such  termination of employment
                           (subject to premium increases affecting  participants
                           in such  plan(s)  generally),  PROVIDED,  that if the
                           Board determines, in its sole discretion,  that it is
                           necessary  or  advisable   for   Executive  to  elect
                           continuation  healthcare coverage under Section 4980B
                           of the Code and the  regulations  thereunder in order
                           for the Company to provide  such  coverage  under its
                           healthcare  plans,  and the Company so  notifies  the
                           Executive,  Executive  hereby  agrees to make such an
                           election.  For the avoidance of doubt, if the Company
                           requires that Executive elect  continuation  coverage
                           under Section 4980B of the Code,  such coverage shall
                           nevertheless   be  provided  to  Executive   and  his
                           dependents  (as described  above) at the same cost to
                           Executive and his  dependents as was paid for medical
                           coverage immediately prior to Executive's termination
                           of employment.

         5.2      TIMING OF  PAYMENT.  The  Company  shall  make  payment of the
                  amounts  specified  in clauses  (i) and (ii) of SECTION 5.1 as
                  follows:

                  (i)      with respect to the Base Salary Severance, (a) 50% of
                           such amount shall be paid on the date of  Executive's
                           "separation  from  service"  within  the  meaning  of
                           Section  409A(a)(2)(A)(i)  of the Code (a "SEPARATION
                           FROM  SERVICE") , and (b) 50% of such amount shall be
                           paid in equal  installments  on the first day of each
                           of  the  twelve  (12)  calendar  months   immediately
                           following such separation from service; and

                  (ii)     the EBIT Bonus amount  contemplated by clause (ii) of
                           SECTION  5.1  shall  be paid on the  date  that is 50
                           calendar  days  following  the last day of the fiscal
                           quarter  during  which  Executive's  separation  from
                           service occurs.

         5.3      CAUSE.  If Executive's  employment  becomes  terminable by the
                  Company  for Cause,  the  Company  may  terminate  Executive's
                  employment  immediately  (subject to the cure rights described
                  above) and Executive  shall be entitled to receive the Accrued
                  Obligations  upon the Date of Termination,  or, in the case of
                  benefits  described  in SECTION  5.1(E),  as such  obligations
                  become due to Executive.

         5.4      RESIGNATION.  Executive may terminate his  employment  without
                  Good Reason upon thirty (30) days' Notice to the  Company.  If
                  Executive so terminates his


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                  employment, Executive shall be entitled to receive the Accrued
                  Obligations promptly, or, in the case of benefits described in
                  SECTION 5.1(E), as such obligations become due to Executive.

         5.5      NONRENEWAL.  In the  event  that  either  the  Company  or the
                  Executive  elects  not to renew  the  Term  (or any  extension
                  thereof) in accordance  with SECTION 2(A),  Executive shall be
                  entitled to receive the Accrued  Obligations  upon the Date of
                  Termination,  or, in the case of benefits described in SECTION
                  5.1(E),  as  such  obligations  become  due to  Executive.  In
                  addition,  Executive shall be entitled to receive payment, (i)
                  if  Executive's  separation  from service occurs during any of
                  the first three fiscal quarters of the applicable fiscal year,
                  on the date that is 50 calendar days following the last day of
                  the fiscal  quarter  during which the  Executive's  separation
                  from service  occurs,  or (ii) if the separation  from service
                  occurs  during the  fourth  fiscal  quarter of the  applicable
                  fiscal year, on April 15 of the immediately following year, of
                  a pro rated  portion of the EBIT Bonus for the fiscal  year in
                  which the Date of  Termination  occurs,  where  such pro rated
                  portion  is  equal  to:  (a)  fifteen  percent  (15%)  of  the
                  Company's EBIT, if any, for the EBIT Period, multiplied by (b)
                  a ratio  determined  by dividing the number of days  Executive
                  was  employed  during the EBIT  Period by the total  number of
                  days in the EBIT Period,  multiplied by  thirty-three  percent
                  (33%).

         5.6      SIX-MONTH DELAY.  Notwithstanding  anything to the contrary in
                  this  Agreement,  no Severance  payments or benefits  shall be
                  paid to Executive  during the six-month  period  following the
                  Executive's  separation  from  service to the extent  that the
                  Company and the  Executive  mutually  determine  in good faith
                  that paying  such  amounts at the time or times  indicated  in
                  this  SECTION  5  would  cause  the   Executive  to  incur  an
                  additional  tax under  Section 409A of the Code (in which case
                  such amounts  shall be paid at the time or times  indicated in
                  this  SECTION  5.6).  If the  payment of any such  amounts are
                  delayed  as a result  of the  previous  sentence,  then on the
                  first day  following  the end of such  six-month  period,  the
                  Company will pay the Executive a lump-sum  amount equal to the
                  cumulative  amount that would have  otherwise  been payable to
                  the Executive during such six-month period.

6.       CONFIDENTIALITY OF PROPRIETARY INFORMATION AND MATERIAL.

         6.1      INDUSTRIAL PROPERTY RIGHTS. For the purpose of this Agreement,
                  "INDUSTRIAL  PROPERTY  RIGHTS" shall mean all of the Company's
                  patents,  trademarks,  trade  names,  inventions,  copyrights,
                  know-how,  formulas and science, now in existence or hereafter
                  developed or acquired by the Company or for its use,  relating
                  to any and all  products  and  services  which are  developed,
                  formulated and/or manufactured by the Company.

         6.2      TRADE  SECRETS.  For the  purpose  of this  Agreement,  "TRADE
                  SECRETS"  shall  mean  any  formula,   pattern,   device,   or
                  compilation  of  information  that is  used  in the  Company's
                  business  and gives the  Company an  opportunity  to obtain an
                  advantage over its  competitors  who do not know and/or do not
                  use it. This term includes, but is not limited to, information
                  relating  to the  marketing  of  the  Company's  products  and
                  services, including price lists, pricing information, customer
                  lists,  customer  names,  the  particular  needs of customers,
                  information  relating  to  their  desirability  as  customers,
                  financial  information,  intangible  property  and other  such
                  information which is not in the public domain.


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         6.3      TECHNICAL DATA. For the purpose of this Agreement,  "TECHNICAL
                  DATA"  shall mean all  information  of the Company in written,
                  graphic or  tangible  form  relating  to any and all  products
                  which are developed,  formulated  and/or  manufactured  by the
                  Company,  as such information  exists as of the Effective Date
                  or is developed by the Company during the term hereof.

         6.4      PROPRIETARY  INFORMATION.  For the purpose of this  Agreement,
                  "PROPRIETARY  INFORMATION"  shall  mean  all of the  Company's
                  Industrial Property Rights,  Trade Secrets and Technical Data.
                  Proprietary  Information  shall not  include  any  information
                  which (i) was lawfully in the possession of Executive prior to
                  Executive's  employment with the Company, (ii) may be obtained
                  by a reasonably diligent businessperson from readily available
                  and public sources of information, (iii) is lawfully disclosed
                  to Executive after termination of Executive's  employment by a
                  third party which does not have an  obligation  to the Company
                  to   keep   such   information   confidential,   or   (iv)  is
                  independently  developed by Executive without utilizing any of
                  the Company's Proprietary Information.

         6.5      AGREEMENT NOT TO COPY OR USE.  Executive  agrees,  at any time
                  during  the term of his  employment  and for a  period  of ten
                  years thereafter,  not to copy, use or disclose (except (i) as
                  required,  authorized  or  permitted  in  connection  with the
                  performance  of his services to the Company,  (ii) as required
                  by law after  first  notifying  the  Company  and giving it an
                  opportunity  to  object,  or  (iii)  as  required  to  enforce
                  Executive's  rights  under  this  Agreement)  any  Proprietary
                  Information  without the Company's  prior written  permission.
                  The Company may withhold  such  permission  as a matter within
                  its sole  discretion  during  the term of this  Agreement  and
                  thereafter.

7.       RETURN OF CORPORATE  PROPERTY.  Upon any termination of this Agreement,
         Executive  shall turn over to the  Company  all  property,  writings or
         documents then in his possession or custody belonging to or relating to
         the affairs of the Company or comprising or relating to any Proprietary
         Information.

8.       DISCOVERIES AND INVENTIONS.

         8.1      DISCLOSURE. Executive will promptly disclose in writing to the
                  Company  complete   information   concerning  each  and  every
                  invention, discovery,  improvement, device, design, apparatus,
                  practice,  process, method, product or work of authorship,  in
                  any  case,  relating  to the  business,  products,  practices,
                  techniques or confidential information of the Company, whether
                  patentable  or  not,  made,  developed,   perfected,  devised,
                  conceived   or  first   reduced  to  practice  by   Executive,
                  (hereinafter referred to as "DEVELOPMENTS"),  either solely or
                  in  collaboration  with  others,  (a) prior to the Term  while
                  working for the Company, (b) during the Term or (c) within six
                  months after the Term .

         8.2      ASSIGNMENT.  Executive,  to the  extent  that he has the legal
                  right  to  do  so,  hereby   acknowledges  that  any  and  all
                  Developments  that  are  created  during  the  Term,  are  the
                  property  of the  Company  and  hereby  assigns  and agrees to
                  assign to the Company any and all of Executive's  right, title
                  and  interest  in and to any  and  all of  such  Developments;
                  PROVIDED,  HOWEVER,  that, in accordance with California Labor
                  Code  Sections 2870 and 2872,  the  provisions of this SECTION
                  8.2  shall  not  apply  to  any  Development   that  Executive
                  developed entirely on his


                                       8
<PAGE>


                  own time  without  using the  Company's  equipment,  supplies,
                  facilities  or  trade  secret  information  except  for  those
                  Developments that either:

                  (a)      relate  at the time of  conception  or  reduction  to
                           practice  of  the   Development   to  the   Company's
                           business,  or  actual  or  demonstrably   anticipated
                           research or development of the Company; or

                  (b)      result  directly from any work performed by Executive
                           for the Company.

         8.3      ASSISTANCE OF EXECUTIVE.  Upon the Company's request and at no
                  expense to Executive,  whether  during the Term or thereafter,
                  Executive will do all reasonable lawful acts,  including,  but
                  not limited to, the  execution  of papers and lawful oaths and
                  the giving of testimony,  that, in the  reasonable  opinion of
                  the Company,  its successors and assigns,  may be necessary or
                  desirable in obtaining,  sustaining,  reissuing, extending and
                  enforcing United States and foreign Letters Patent, including,
                  but  not  limited  to,   design   patents,   on  any  and  all
                  Developments  and for perfecting,  affirming and recording the
                  Company's complete ownership and title thereto, subject to the
                  proviso in SECTION 8.2 hereof,  and Executive  will  otherwise
                  reasonably  cooperate in all proceedings and matters  relating
                  thereto.  Executive shall be compensated at a rate of $250 per
                  hour for any actions he is  required to take  pursuant to this
                  SECTION 8.3 after the Term.

         8.4      RECORDS.  Executive will keep complete and accurate  accounts,
                  notes,  data and records of all Developments in the manner and
                  form  reasonably  requested  by the  Company.  Such  accounts,
                  notes,  data and records shall be the property of the Company,
                  subject to the  proviso  in  SECTION  8.2  hereof,  and,  upon
                  written  request  by  the  Company,  Executive  will  promptly
                  surrender the same to it.

         8.5      OBLIGATIONS,    RESTRICTIONS   AND   LIMITATIONS.    Executive
                  understands  that the  Company  may enter into  agreements  or
                  arrangements with agencies of the United States Government and
                  that the Company may be subject to laws and regulations  which
                  impose  obligations,  restrictions  and limitations on it with
                  respect to inventions  and patents which may be acquired by it
                  or  which  may  be  conceived   or  developed  by   employees,
                  consultants  or  other  agents   rendering   services  to  it.
                  Executive   agrees   that  he  shall  be  bound  by  all  such
                  obligations,  restrictions  and limitations  applicable to any
                  such  invention  conceived or developed by him during the Term
                  and shall take any reasonable  action which may be required to
                  discharge   such   obligations   and  to   comply   with  such
                  restrictions and limitations.

9.       NON-SOLICITATION COVENANT.

         9.1      NONSOLICITATION AND NONINTERFERENCE.  Until the earlier of (i)
                  two years  following  termination  of this  Agreement and (ii)
                  December 31, 2009,  Executive  shall not (a) induce or attempt
                  to induce any  employee  of the Company to leave the employ of
                  the  Company,  (b) induce or attempt to induce any employee of
                  the Company to work for,  render services or provide advice to
                  or supply confidential  business  information or Trade Secrets
                  of the Company to any third person,  firm or  corporation,  or
                  (c)  induce or  attempt  to  induce  any  customer,  supplier,
                  licensee,  licensor or other business  relation of the Company
                  to cease doing business


                                       9
<PAGE>


                  with the Company,  PROVIDED,  that  advertisements and general
                  solicitations  shall not  constitute  a breach of this Section
                  9.1.

         9.2      INDIRECT  SOLICITATION.  Executive  agrees  that,  during  the
                  period covered by SECTION 9.1 hereof, he will not, directly or
                  indirectly,  assist or encourage  any other person in carrying
                  out,  directly  or  indirectly,  any  activity  that  would be
                  prohibited  by the  provisions of SECTION 9.1 if such activity
                  were carried out by Executive,  either directly or indirectly;
                  and,  in  particular,  Executive  agrees  that  he  will  not,
                  directly or indirectly,  induce any employee of the Company to
                  carry out, directly or indirectly, any such activity.

10.      INJUNCTIVE RELIEF. Executive hereby recognizes, acknowledges and agrees
         that in the event of any breach by Executive  of any of his  covenants,
         agreements,  duties or obligations  contained in SECTIONS 6, 7, 8 AND 9
         of this Agreement, the Company would suffer great and irreparable harm,
         injury and damage,  the Company would encounter  extreme  difficulty in
         attempting  to prove the  actual  amount  of  damages  suffered  by the
         Company  as a result  of such  breach,  and the  Company  would  not be
         reasonably or adequately  compensated  in damages in any action at law.
         Executive therefore covenants and agrees that, in addition to any other
         remedy the Company may have at law, in equity, by statute or otherwise,
         in the  event  of any  breach  by  Executive  of any of his  covenants,
         agreements,  duties or obligations  contained in SECTIONS 6, 7, 8 AND 9
         of this  Agreement,  the Company  shall be entitled to seek and receive
         temporary,  preliminary  and permanent  injunctive and other  equitable
         relief from any court of competent  jurisdiction  to enforce any of the
         duties  or  obligations  contained  in  SECTIONS  6, 7, 8 AND 9 of this
         Agreement  without  the  necessity  of proving the amount of any actual
         damage to the Company or any  affiliate  thereof  resulting  therefrom;
         PROVIDED,  HOWEVER,  that nothing contained in this SECTION 10 shall be
         deemed or construed in any manner whatsoever as a waiver by the Company
         of any of the rights  which the Company may have  against  Executive at
         law, in equity,  by statute or otherwise  arising out of, in connection
         with or resulting from the breach by Executive of any of his covenants,
         agreements, duties or obligations hereunder.

11.      CODE SECTION 409A.  Certain amounts under this Agreement may constitute
         "nonqualified  deferred compensation" which are intended to comply with
         the  requirements  of Section 409A of the Code.  To the extent that the
         parties reasonably  determine that any compensation or benefits payable
         under this  Agreement  are  subject to Section  409A of the Code,  this
         Agreement  shall  incorporate  the terms  and  conditions  required  by
         Section  409A of the Code and  Department  of Treasury  regulations  as
         reasonably  determined by the Company and the Executive.  To the extent
         applicable,  this Agreement  shall be  interpreted  in accordance  with
         Section 409A of the Code and  Department  of Treasury  regulations  and
         other  interpretative  guidance  issued  thereunder.  In the event that
         following the Effective Date, the Company and the Executive  reasonably
         determine  that  any   compensation  or  benefits  payable  under  this
         Agreement  may be  subject  to  Section  409A of the Code  and  related
         Department of Treasury  guidance,  the Company and the Executive  shall
         work together to adopt such amendments to this Agreement or adopt other
         policies or procedures (including  amendments,  policies and procedures
         with retroactive effective),  or take any other commercially reasonable
         actions  necessary or  appropriate to (a) exempt the  compensation  and
         benefits  payable  under this  Agreement  from Section 409A of the Code
         and/or  preserve  the intended tax  treatment of the  compensation  and
         benefits  provided with respect to this  Agreement,  or (b) comply with
         the requirements of Section 409A of the Code and related  Department of
         Treasury guidance.


                                       10
<PAGE>


12.      CODE SECTION 280G. If any payment or benefit received or to be received
         by Executive in  connection  with a "change in ownership or control" of
         the Company  (within the meaning of Section 280G of the Code),  whether
         payable  pursuant  to the terms of this  Agreement  or any other  plan,
         arrangement  or  agreement  with the  Company  or an  affiliate  of the
         Company (the "PAYMENTS"), would constitute a "parachute payment" within
         the meaning of Section 280G of the Code,  the Payments shall be reduced
         to the extent  necessary so that no portion thereof shall be subject to
         the  excise tax  imposed  by  Section  4999 of the Code but only if, by
         reason of such reduction,  the net after-tax benefit to Executive shall
         exceed the net after-tax  benefit to Executive if no such reduction was
         made.  For purposes of this SECTION 12, "net  after-tax  benefit" shall
         mean (i) the total of all payments and the value of all benefits  which
         Executive receives or is then entitled to receive from the Company that
         would  constitute  "parachute  payments"  within the meaning of Section
         280G of the Code, less (ii) the amount of all federal,  state and local
         income taxes  payable with respect to the  foregoing  calculated at the
         maximum  marginal  income tax rate for each year in which the foregoing
         shall be paid to  Executive  (based on the rate in effect for such year
         as set forth in the Code as in effect at the time of the first  payment
         of the  foregoing),  less (iii) the amount of excise taxes imposed with
         respect to the payments and benefits  described in (i) above by Section
         4999  of the  Code.  The  foregoing  determination  will  be  made by a
         nationally  recognized accounting firm (the "ACCOUNTING FIRM") selected
         by Executive and reasonably acceptable to the Company,  PROVIDED,  that
         the  Accounting   Firm's   determination   shall  be  made  based  upon
         "substantial authority" within the meaning of Section 6662 of the Code.
         The  Accounting  Firm shall provide  Executive and the Company with its
         determinations  and  detailed  supporting   calculations  with  respect
         thereto at least 15 business days prior to the date on which  Executive
         would be entitled to receive a Payment  (or as soon as  practicable  in
         the  event  that the  Accounting  Firm has less than 15  business  days
         advance  notice  that  Executive  may  receive a Payment) in order that
         Executive may determine  whether it is in Executive's  best interest to
         waive the receipt of any or all amounts  which may  constitute  "excess
         parachute  payments."  If the  Accounting  Firm  determines  that  such
         reduction  is required by this SECTION 12,  Executive,  in his sole and
         absolute  discretion,  may  determine  which of the  Payments  shall be
         reduced to the extent  necessary  so that no portion  thereof  shall be
         subject to the excise tax imposed by Section 4999 of the Code,  and the
         Company shall pay such reduced  amount to Executive.  Executive and the
         Company shall each provide the Accounting  Firm access to and copies of
         any books, records, and documents in the possession of Executive or the
         Company,  as the case may be,  reasonably  requested by the  Accounting
         Firm, and otherwise  cooperate  with the Accounting  Firm in connection
         with  the   preparation   and  issuance  of  the   determinations   and
         calculations contemplated by this SECTION 12. The first $10,000 of fees
         and expenses of the Accounting Firm for its services in connection with
         the  determinations  and  calculations  contemplated by this SECTION 12
         will be borne  exclusively by the Company,  and the balance of any such
         fees and expenses, if any shall be borne exclusively by Executive.

13.      MISCELLANEOUS.

         13.1     ARBITRATION.  The parties  agree that they will use their best
                  efforts to  amicably  resolve  any  dispute  arising out of or
                  relating to this Agreement. Any controversy,  claim or dispute
                  that cannot be so resolved shall be settled by final,  binding
                  arbitration  in  accordance  with the  rules  of the  American
                  Arbitration  Association  and judgment upon the award rendered
                  by the arbitrator or  arbitrators  may be entered in any court
                  having  jurisdiction  thereof.  Any such arbitration  shall be
                  conducted in Los Angeles County or Ventura County, California,


                                       11
<PAGE>


                  or such  other  place as may be  mutually  agreed  upon by the
                  parties.  Within fifteen (15) days after the  commencement  of
                  the arbitration,  each party shall select one person to act as
                  an  arbitrator,  and the two  arbitrators  so  selected  shall
                  select  a third  arbitrator  within  ten  (10)  days of  their
                  appointment.  Each party shall bear its own costs and expenses
                  and  an  equal  share  of  the   arbitrator's   expenses   and
                  administrative fees of arbitration.

         13.2     NOTICES.  All  notices,   requests  and  other  communications
                  (collectively,  "NOTICES")  given  pursuant to this  Agreement
                  shall be in writing,  and shall be  delivered  by fax,  email,
                  personal  service,  reputable  overnight  carrier or by United
                  States  first  class,  registered  or  certified  mail (return
                  receipt requested), postage prepaid, addressed to the party at
                  the address set forth below:

                           If to Company:

                                    Tag-It Pacific, Inc.
                                    21900 Burbank Boulevard, Suite 270
                                    Woodland Hills, CA 91367
                                    Attn: Board of Directors
                                    Fax 818-444-4110
                                    mdyne@ecamail.com

                           If  to  Executive,  at  the  address,  fax  or  email
                  maintained for Executive in the Company's payroll records.

                           Any Notice  shall be deemed duly given when  received
                  by the  addressee  thereof,  provided  that any Notice sent by
                  registered or certified mail shall be deemed to have been duly
                  given  three days from date of  deposit  in the United  States
                  mails,  unless sooner received.  Either party may from time to
                  time  change its  address for  further  Notices  hereunder  by
                  giving  Notice to the other party in the manner  prescribed in
                  this section.

         13.3     ENTIRE  AGREEMENT.  This  Agreement,  together with the Option
                  Agreements,   contains  the  sole  and  entire  agreement  and
                  understanding  of the  parties  with  respect  to  the  entire
                  subject  matter  of this  Agreement,  and  any  and all  prior
                  agreements,   discussions,   negotiations,   commitments   and
                  understandings,  whether  oral or  otherwise,  related  to the
                  subject matter of this Agreement are hereby merged herein.  No
                  representations,  oral or otherwise, express or implied, other
                  than those  contained in this  Agreement have been relied upon
                  by any party to this Agreement.

         13.4     GOVERNING  LAW.  THIS  AGREEMENT  SHALL  BE  GOVERNED  BY  AND
                  CONSTRUED  IN  ACCORDANCE  WITH  THE  LAWS  OF  THE  STATE  OF
                  CALIFORNIA,  WITHOUT  REGARD TO  CONFLICTS  OF LAW  PRINCIPLES
                  THEREOF.

         13.5     INDEMNIFICATION;   INSURANCE.   The  Company   shall   defend,
                  indemnify  and  hold  Executive  harmless  from  any  and  all
                  liabilities,  obligations,  claims or expenses  which arise in
                  connection  with or as a result of  Executive's  service as an
                  officer or director of the Company to the greatest  extent now
                  provided in the Company's Articles and Bylaws and as otherwise
                  allowed  by law.  During the Term and for a period of at least
                  six years thereafter, Executive shall


                                       12
<PAGE>


                  be  entitled to the same  directors  and  officers'  liability
                  insurance  coverage that the Company provides generally to its
                  other  directors and officers,  as may be amended from time to
                  time for such directors and officers.

         13.6     AMENDMENT.  The terms of this  Agreement may not be amended or
                  modified  other than by a written  instrument  executed by the
                  parties hereto or their respective successors.

         13.7     WAIVER.  Failure  by any party  hereto to insist  upon  strict
                  compliance  with any provision of this  Agreement or to assert
                  any right such party may have hereunder shall not be deemed to
                  be a waiver of such provision or right or any other  provision
                  or right of this Agreement.

         13.8     ASSIGNMENT.  This  Agreement is binding on and for the benefit
                  of the parties hereto and their respective successors,  heirs,
                  executors, administrators and other legal representatives.

         13.9     CAPTIONS.  The  various  captions  of this  Agreement  are for
                  reference  only and shall not be  considered or referred to in
                  resolving questions of interpretation of this Agreement.

         13.10    COUNTERPARTS.  This Agreement may be executed in any number of
                  counterparts, each of which shall be deemed to be an original,
                  but all of which  together  shall  constitute one and the same
                  instrument.

         13.11    BUSINESS DAY. If the last day  permissible for delivery of any
                  Notice  under  any  provision  of this  Agreement,  or for the
                  performance of any obligation  under this Agreement,  shall be
                  other than a business  day,  such last day for such  Notice or
                  performance  shall be extended to the next following  business
                  day  (provided,  however,  under no  circumstances  shall this
                  provision be construed  to extend the date of  termination  of
                  this Agreement).

         In witness whereof,  the parties have executed this Agreement as of the
date first set forth above.

Company:                                      Executive:

TAG-IT PACIFIC, INC.



By:  /S/ MARK DYNE                             /S/ STEPHEN FORTE
     ----------------------------------       ----------------------------------
     Mark Dyne                                Stephen Forte
     Chairman of the Board


                                       13
<PAGE>


                                    EXHIBIT A

1. Board of Directors, Ascendent Telecommunications, Inc.

2. Board of Directors, Forte Group, LLC

3. Board of Directors, Forte Design Group, LLC

4. Board of Advisors, Blue Sky Broadcast

5. Member, Young President's Organization

6. Board of Directors - Los Angeles Chapter, Young Entrepreneur's Organization

7. Board of Advisors, The George Washington University


                                       14