<PAGE>

                                                                     EXHIBIT 4.7


                               SECURITY AGREEMENT


         This Security Agreement (this "AGREEMENT") is entered into as of June
1, 2004 (the "EFFECTIVE DATE"), between Island Pacific, Inc. ("IPI"), IPI Merger
Sub II, Inc. ("MERGER SUB II"), Retail Technologies International, Inc. ("RTI"),
and Nathaniel F. Jessup, an individual, Kathleen M. Leacox, an individual, and
Glenn Swenson, an individual, the Lumsden Real Estate Defined Benefit Plan, Mace
and Shirley Lumsden as co-trustees of the Mace Lumsden and S.K. Lumsden Trust of
January 19, 1995, and Merry Youle, an individual (individually, a "SECURED
PARTY," and collectively, the "SECURED Parties").

         WHEREAS, the Secured Parties are holders of certain promissory notes
made and issued by RTI dated December 20, 2002 in the aggregate original
principal amount of $2,200,000 (the "NOTES");

          WHEREAS, RTI entered into an Amended and Restated Agreement of Merger
and Plan of Reorganization, by and among IPI, RTI, IPI Merger Sub, Inc. ("MERGER
SUB"), Merger Sub II and Michael Tomczak and Jeffrey Boone, dated June 1, 2004
(the "MERGER AGREEMENT"), pursuant to which Merger Sub shall merge with and into
RTI, for consideration of a combination of IPI Series B Convertible Preferred
Stock, IPI Common Stock and promissory notes (the "REVERSE MERGER");

         WHEREAS, immediately following the Reverse Merger, pursuant to the
Merger Agreement and an Agreement of Merger dated as of an even date, by and
among RTI, IPI and Merger Sub II (the "SECOND-STEP MERGER AGREEMENT"), under
which RTI shall merge with and into Merger Sub II, with Merger Sub II as the
surviving corporation (the "SURVIVING CORPORATION") and wholly-owned subsidiary
of IPI (the "SECOND-STEP MERGER") (the Reverse Merger and Second-Step Merger are
hereinafter collectively referred to as the "MERGER"); and

          WHEREAS, Surviving Corporation, as the surviving corporation in the
Merger, has agreed to assume the Notes as amended and restated on the date
hereof ("AMENDED NOTES"), which Amended Notes shall be issued in substitution
for and cancellation of RTI's obligations under the Notes, effective as of the
Effective Time of the Merger (as defined in the Merger Agreement); and

         WHEREAS, Surviving Corporation is willing to grant to the Secured Party
a security interest in the Collateral (as hereinafter defined) to secure
performance of the obligations of the Surviving Corporation under the Amended
Notes, in accordance with the terms and conditions set forth in this Agreement.

         The parties agree as follows:

1. DEFINITIONS. All capitalized terms not specially defined in this Agreement
have the meaning ascribed to them in the Merger Agreement, or if not defined in
this Agreement or the Merger Agreement, shall have the meanings set forth in the
California Uniform Commercial Code.

<PAGE>

2. GRANT OF SECURITY INTEREST.

     (a) As security for the payment and performance of Surviving Corporation's
obligations to the Secured Parties under the Amended Notes, this Agreement and
the Merger Agreement, IPI and the Surviving Corporation hereby grant the Secured
Parties a security interest in the Collateral (as defined below). In order to
perfect this security interest, promptly following the Closing UCC-1 financing
statements in favor of the Secured Parties listing the Collateral shall be filed
by the Secured Parties in the manner prescribed by the California Uniform
Commercial Code.

     (b) As used in this Agreement, "COLLATERAL" means all of IPI's and
Surviving Corporation's right, title and interest in and to (i) all accounts
receivable and other rights to payment from customers and other third parties of
IPI and the Surviving Corporation generated after the Closing as a result of the
operation of IPI and the Surviving Corporation and the full benefit of all
security for such accounts or rights to payment, including all such accounts
receivable representing amounts receivable in respect of services rendered to
customers of such; (ii) all other accounts or notes receivable of IPI and the
Surviving Corporation and the full benefit of all security for such accounts or
notes; and (iii) any claim, remedy or other right related to or arising from any
of the foregoing.

3. ASSUMPTION; GUARANTEE OF OBLIGATIONS. Surviving Corporation hereby agrees,
that upon the Effective Time, Surviving Corporation shall assume all
indebtedness, liabilities and other obligations of RTI under the Amended Notes.
IPI hereby agrees, that upon the Effective Time, IPI guarantees to the Secured
Parties the full and prompt payment when due (whether at stated maturity,
declaration, acceleration, demand or otherwise) and performance of all
indebtedness, liabilities and other obligations under the Amended Notes assumed
by Surviving Corporation.

4. DESIGNATION OF SECURED PARTIES' REPRESENTATIVE.

     (a) The Secured Parties hereby appoint Kathleen M. Leacox to act as their
representative and agent with full power and authority to take any and all
actions authorized by the Majority (as defined below) with respect to the
Collateral (the "Representative"). The Representative will also be the
designated recipient for all communications and notices from Surviving
Corporation. The Representative will represent that the content of any such
communication has been approved by, and represents the will of, the Majority.
All communications and notices from the Surviving Corporation and any written
notice required to be delivered to the Secured Parties pursuant to this
Agreement, the Amended Notes or applicable law, shall be delivered to all of the
Secured Parties as set forth in Section 11 below.

     (b) For the purposes of this Agreement "Majority" means the holders of a
majority of the outstanding aggregate principal balance under the Amended Notes.

5. SURVIVING CORPORATION'S COVENANTS. Surviving Corporation warrants and agrees
that as long as this Agreement remains in effect:

     (a) Surviving Corporation shall take all reasonably necessary steps to
defend the Collateral against claims and demands of others;

     (b) Surviving Corporation shall promptly notify the Secured Parties in
writing of any event which materially and adversely affects the value of the
Collateral;

     (c) Surviving Corporation shall maintain the security interest granted
hereunder as a valid and enforceable lien on and security interest in the
Collateral;


                                       2
<PAGE>

     (d) IPI and the Surviving Corporation hereby appoint the Secured Parties'
Representative as its agent in fact to do all acts required of IPI and the
Surviving Corporation after Default (as defined below), it being acknowledged by
IPI and the Surviving Corporation that such appointment is coupled with an
interest and is irrevocable;

     (e) At the written request of a Majority of the Secured Parties, in the
event of a Default (as defined below), IPI and Surviving Corporation shall:

          (1) segregate all collections of money and other property under or in
respect of the Collateral and deliver promptly upon receipt such collections to
the Secured Parties in kind;

          (2) authorize and direct obligors under the Collateral to make all
payments directly to the Secured Parties; and

     (f) IPI and the Surviving Corporation shall pay prior to delinquency all
taxes, charges, liens and assessments against the Collateral, subject to right
of IPI and/or the Surviving Corporation to contest the foregoing in good faith.

6. REMEDIES ON DEFAULT.

     (a) In addition to any and all rights of the Secured Parties under the
Amended Notes or otherwise by law for a default or breach of Surviving
Corporation's obligations under the Amended Notes (any such event being herein
called a "DEFAULT"), the Secured Parties shall have the rights and remedies of a
Secured Party under the California Uniform Commercial Code.

     (b) The Secured Parties' notice of the time and place of public sale of the
Collateral, or the time on or after which a private sale or other disposition of
the Collateral will be made, is reasonable if sent to Surviving Corporation, in
the manner for giving notice at least ten (10) business days before the public
or private sale.

     (c) Any assignment, sale, foreclosure, or levy made under this Section 6
shall divest Surviving Corporation of all right, title, and claim it may have in
and to the Collateral.

7. NO WAIVER BY THE SECURED PARTIES. No failure by the Secured Parties to
exercise, and no delay in exercising, any right, remedy or power under this
Agreement shall operate as a waiver, nor shall any single or partial exercise by
the Secured Parties of any right, remedy or power hereunder preclude any other
or future exercise. Each right, remedy, or power granted to the Secured Parties
or allowed it by law or other agreement shall be cumulative and not exclusive of
any other, and may be exercised from time to time.

8. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without reference to
choice-of-law provisions.

9. COUNTERPARTS. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, and all of which taken together shall
constitute one instrument. Any of the parties hereto may execute this Agreement
by signing any such counterpart.

10. SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to the benefit
of the parties and their respective successors and assigns.

                                       3
<PAGE>

11. NOTICES. All notices or other communications hereunder shall be in writing
(including by facsimile transmission) and mailed, sent or delivered to the
respective parties hereto at or to their respective addresses or facsimile
numbers set forth below their names on the signature pages hereof, or at or to
such other address or facsimile number as shall be designated by any party in a
written notice to the other parties hereto. All such notices and other
communications shall be deemed to be delivered when a record (within the meaning
of the California Uniform Commercial Code) has been (i) delivered by hand, (ii)
sent by mail, upon the earlier of the date of receipt or five business days
after deposit in the mail, first class, (iii) sent by facsimile transmission, or
(iv) sent by email.

12. SEVERABILITY. Each provision of this Agreement is valid and enforceable to
the fullest extent permitted by law. If any provision of this Agreement (or the
application of such provision to any person or circumstance) is or becomes
invalid or unenforceable, the remainder of this Agreement, and the application
of such provision to persons or circumstances other than those as to which it is
held invalid or unenforceable, are not affected by such invalidity or
unenforceability.

13. INTERPRETATION. This Agreement shall be interpreted in a reasonable manner
to effect the purposes of the parties and this Agreement. Each party has been
afforded the right to be represented by independent counsel and hereby waives
any rule of law or legal decision that would require interpretation of any
ambiguities in this Agreement against the party drafting it.

15. ATTORNEY'S FEES. The prevailing party in any litigation, arbitration,
mediation, bankruptcy, insolvency or other proceeding ("PROCEEDING") relating to
the enforcement or interpretation of this Note may recover from the unsuccessful
party all costs, expenses, and actual attorney's fees (including expert witness
and other consultants' fees and costs) relating to or arising out of (a) the
Proceeding (whether or not the Proceeding proceeds to judgment), and (b) any
post-judgment or post-award proceeding including, without limitation, one to
enforce or collect any judgment or award resulting from the Proceeding. All such
judgments and awards shall contain a specific provision for the recovery of all
such subsequently incurred costs, expenses, and actual attorney's fees.

14. ENTIRE AGREEMENT. This Agreement, together with the agreements and
instruments referred to herein, contain the entire agreement of the parties with
respect to the subject matter hereof, and may be amended only by an agreement in
writing.



                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]



<PAGE>


         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the Effective Date.



                                        SURVIVING CORPORATION:

                                        IPI Merger Sub II, Inc.

                                        By:
                                            ------------------------------------

                                        Name:
                                            ------------------------------------

                                        Its:
                                            ------------------------------------




                                        IPI:

                                        Island Pacific, Inc.

                                        By:
                                            ------------------------------------

                                        Name:
                                            ------------------------------------

                                        Its:
                                            ------------------------------------




                                        RTI:

                                        Retail Technologies International, Inc.

                                        By:
                                            ------------------------------------

                                        Name:
                                            ------------------------------------

                                        Its:
                                            ------------------------------------





                                       5


<PAGE>

SECURED PARTIES:
                                                 Address:

------------------------------------
NATHANIEL F. JESSUP, an individual

                                                 Address:

------------------------------------
KATHLEEN M. LEACOX, an individual

                                                 Address:

------------------------------------
GLENN SWENSON, an individual
                                                  Address:

------------------------------------
MERRY YOULE, an individual





LUMSDEN REAL ESTATE DEFINED BENEFIT PLAN

By:
    -----------------------------------

Its:
    -----------------------------------

        Address:
                  --------------------------
                  --------------------------
                  --------------------------

        Facsimile:
                   -------------------------





                                       6
<PAGE>





MACE LUMSDEN AND S.K. LUMSDEN TRUST OF JANUARY 19, 1995

By:
    ---------------------------------
          Mace Lumsden, co-trustee

By:
    ---------------------------------
          Shirley Lumsden, co-trustee


        Address:
                  --------------------------
                  --------------------------
                  --------------------------

        Facsimile:
                  --------------------------



                                       7