Document:

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EXHIBIT 4.3

     THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON
     EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE
     SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS.
     THIS WARRANT AND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
     WARRANT MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
     HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
     STATEMENT AS TO THIS WARRANT UNDER SAID ACT AND ANY APPLICABLE
     STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
     SATISFACTORY TO ISLAND PACIFIC, INC. THAT SUCH REGISTRATION IS
     NOT REQUIRED.

                   Right to Purchase up to 4,444,444 Shares of
                      Common Stock of Island Pacific, Inc.
                   (subject to adjustment as provided herein)

                          COMMON STOCK PURCHASE WARRANT

No. _________________                              Issue Date: _________________

     ISLAND PACIFIC, INC., a corporation organized under the laws of the State
of Delaware ("Island Pacific, Inc."), hereby certifies that, for value received,
LAURUS MASTER FUND, LTD., or assigns (the "Holder"), is entitled, subject to the
terms set forth below, to purchase from the Company (as defined herein) from and
after the Issue Date of this Warrant and at any time or from time to time before
5:00 p.m., New York time, through the close of business May 31, 2012 (the
"Expiration Date"), up to 4,444,444 fully paid and nonassessable shares of
Common Stock (as hereinafter defined), $0.0001 par value per share, at the
applicable Exercise Price per share (as defined below). The number and character
of such shares of Common Stock and the applicable Exercise Price per share are
subject to adjustment as provided herein.

     As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:

     (a) The term "Company" shall include Island Pacific, Inc. and any
corporation that shall succeed, or assume the obligations of, Island Pacific,
Inc. hereunder.

     (b) The term "Common Stock" includes (i) the Company's Common Stock, par
value $0.0001 per share; and (ii) any other securities into which or for which
any of the securities described in (a) may be converted or exchanged pursuant to
a plan of recapitalization, reorganization, merger, sale of assets or otherwise.

     (c) The term "July 2004 Agreements" refers to (i) the Securities Purchase
Agreement, dated as of July 12, 2004 between the Company and the Holder (the
"2004 Purchase Agreement") and (ii) the Related Agreements referred to in the
2004 Purchase Agreement.

     (d) The term "Other Securities" refers to any stock (other than Common
Stock) and other securities of the Company or any other person (corporate or
otherwise) which the holder of the Warrant at any time shall be entitled to
receive, or shall have received, on the exercise of the Warrant, in lieu of or
in addition to Common Stock, or which at any time shall be issuable or shall
have been issued in exchange for or in replacement of Common Stock or Other
Securities pursuant to Section 4 or otherwise.

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     (e) The "Exercise Price" applicable under this Warrant shall be $0.23 for
all shares acquired hereunder.

     1. Exercise of Warrant.

          1.1. Number of Shares Issuable upon Exercise. From and after the date
hereof through and including the Expiration Date, the Holder shall be entitled
to receive, upon exercise of this Warrant in whole or in part, by delivery of an
original or fax copy of an exercise notice in the form attached hereto as
Exhibit A (the "Exercise Notice"), shares of Common Stock of the Company,
subject to adjustment pursuant to Section 4.

          1.2. Fair Market Value. For purposes hereof, the "Fair Market Value"
of a share of Common Stock as of a particular date (the "Determination Date")
shall mean:

               (a) If the Company's Common Stock is traded on the American Stock
Exchange or another national exchange or is quoted on the National or SmallCap
Market of The Nasdaq Stock Market, Inc. ("Nasdaq"), then the closing or last
sale price, respectively, reported for the last business day immediately
preceding the Determination Date.

               (b) If the Company's Common Stock is not traded on the American
Stock Exchange or another national exchange or on the Nasdaq but is traded on
the NASD OTC Bulletin Board, then the mean of the average of the closing bid and
asked prices reported for the last business day immediately preceding the
Determination Date.

               (c) Except as provided in clause (d) below, if the Company's
Common Stock is not publicly traded, then as the Holder and the Company agree or
in the absence of agreement by arbitration in accordance with the rules then in
effect of the American Arbitration Association, before a single arbitrator to be
chosen from a panel of persons qualified by education and training to pass on
the matter to be decided.

               (d) If the Determination Date is the date of a liquidation,
dissolution or winding up, or any event deemed to be a liquidation, dissolution
or winding up pursuant to the Company's charter, then all amounts to be payable
per share to holders of the Common Stock pursuant to the charter in the event of
such liquidation, dissolution or winding up, plus all other amounts to be
payable per share in respect of the Common Stock in liquidation under the
charter, assuming for the purposes of this clause (d) that all of the shares of
Common Stock then issuable upon exercise of the Warrant are outstanding at the
Determination Date.

          1.3. Company Acknowledgment. The Company will, at the time of the
exercise of the Warrant, upon the request of the holder hereof acknowledge in
writing its continuing obligation to afford to such holder any rights to which
such holder shall continue to be entitled after such exercise in accordance with
the provisions of this Warrant. If the holder shall fail to make any such
request, such failure shall not affect the continuing obligation of the Company
to afford to such holder any such rights.

                                       2
<PAGE>

          1.4. Trustee for Warrant Holders. In the event that a bank or trust
company shall have been appointed as trustee for the holders of the Warrant
pursuant to Subsection 3.2, such bank or trust company shall have all the powers
and duties of a warrant agent (as hereinafter described) and shall accept, in
its own name for the account of the Company or such successor person as may be
entitled thereto, all amounts otherwise payable to the Company or such
successor, as the case may be, on exercise of this Warrant pursuant to this
Section 1.

     2. Procedure for Exercise.

          2.1. Delivery of Stock Certificates, Etc., on Exercise. The Company
agrees that the shares of Common Stock purchased upon exercise of this Warrant
shall be deemed to be issued to the Holder as the record owner of such shares as
of the close of business on the date on which this Warrant shall have been
surrendered and payment made for such shares in accordance herewith. As soon as
practicable after the exercise of this Warrant in full or in part, and in any
event within three (3) business days thereafter, the Company at its expense
(including the payment by it of any applicable issue taxes) will cause to be
issued in the name of and delivered to the Holder, or as such Holder (upon
payment by such Holder of any applicable transfer taxes) may direct in
compliance with applicable securities laws, a certificate or certificates for
the number of duly and validly issued, fully paid and nonassessable shares of
Common Stock (or Other Securities) to which such Holder shall be entitled on
such exercise, plus, in lieu of any fractional share to which such holder would
otherwise be entitled, cash equal to such fraction multiplied by the then Fair
Market Value of one full share, together with any other stock or other
securities and property (including cash, where applicable) to which such Holder
is entitled upon such exercise pursuant to Section 1 or otherwise.

          2.2. Exercise. Payment may be made either (i) in cash or by certified
or official bank check payable to the order of the Company equal to the
applicable aggregate Exercise Price, (ii) by cashless exercise, as set forth
below, or (iii) by a combination of any of the foregoing methods, for the number
of Common Shares specified in such Exercise Notice (as such exercise number
shall be adjusted to reflect any adjustment in the total number of shares of
Common Stock issuable to the Holder per the terms of this Warrant) and the
Holder shall thereupon be entitled to receive the number of duly authorized,
validly issued, fully-paid and non-assessable shares of Common Stock (or Other
Securities) determined as provided herein. Notwithstanding any provisions herein
to the contrary, if the Fair Market Value of one share of Common Stock is
greater than the Exercise Price (at the date of calculation as set forth below),
in lieu of exercising this Warrant for cash, the Holder may elect to receive
shares equal to the value (as determined below) of this Warrant (or the portion
thereof being exercised) by surrender of this Warrant at the principal office of
the Company together with the properly endorsed Exercise Notice in which event
the Company shall issue to the Holder a number of shares of Common Stock
computed using the following formula:

                                       3
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                          (A-B)
     X=Y   multiplied by  -----
                            A

     Where X =      the number of shares of Common Stock to be issued to the
                    Holder

     Y =            the number of shares of Common Stock purchasable under the
                    Warrant or, if only a portion of the Warrant is being
                    exercised, the portion of the Warrant being exercised (at
                    the date of such calculation)

     A =            the Fair Market Value of one share of the Company's Common
                    Stock (at the date of such calculation)

     B =            Exercise Price (as adjusted to the date of such calculation)

     3. Effect of Reorganization, Etc.; Adjustment of Exercise Price.

          3.1. Reorganization, Consolidation, Merger, Etc. In case at any time
or from time to time, the Company shall (a) effect a reorganization, (b)
consolidate with or merge into any other person, or (c) transfer all or
substantially all of its properties or assets to any other person under any plan
or arrangement contemplating the dissolution of the Company, then, in each such
case, as a condition to the consummation of such a transaction, proper and
adequate provision shall be made by the Company whereby the Holder of this
Warrant, on the exercise hereof as provided in Section 1 at any time after the
consummation of such reorganization, consolidation or merger or the effective
date of such dissolution, as the case may be, shall receive, in lieu of the
Common Stock (or Other Securities) issuable on such exercise prior to such
consummation or such effective date, the stock and other securities and property
(including cash) to which such Holder would have been entitled upon such
consummation or in connection with such dissolution, as the case may be, if such
Holder had so exercised this Warrant, immediately prior thereto, all subject to
further adjustment thereafter as provided in Section 4.

          3.2. Dissolution. In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, concurrently with any distributions made to holders of its Common
Stock, shall at its expense deliver or cause to be delivered to the Holder the
stock and other securities and property (including cash, where applicable)
receivable by the Holder of the Warrant pursuant to Section 3.1, or, if the
Holder shall so instruct the Company, to a bank or trust company specified by
the Holder and having its principal office in New York, NY as trustee for the
Holder of the Warrant (the "Trustee").

          3.3. Continuation of Terms. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this Section 3, this Warrant shall continue in full force and effect and the
terms hereof shall be applicable to the shares of stock and other securities and
property receivable on the exercise of this Warrant after the consummation of
such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in the
case of any such transfer, the person acquiring all or substantially all of the
properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Warrant as provided in Section 4. In the
event this Warrant does not continue in full force and effect after the
consummation of the transactions described in this Section 3, then the Company's
securities and property (including cash, where applicable) receivable by the
Holders of the Warrant will be delivered to Holder or the Trustee as
contemplated by Section 3.2.

                                       4
<PAGE>

     4. Extraordinary Events Regarding Common Stock. In the event that the
Company shall (a) issue additional shares of the Common Stock as a dividend or
other distribution on outstanding Common Stock, (b) subdivide its outstanding
shares of Common Stock, or (c) combine its outstanding shares of the Common
Stock into a smaller number of shares of the Common Stock, then, in each such
event, the Exercise Price shall, simultaneously with the happening of such
event, be adjusted by multiplying the then Exercise Price by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such event and the denominator of which shall be the number
of shares of Common Stock outstanding immediately after such event, and the
product so obtained shall thereafter be the Exercise Price then in effect. The
Exercise Price, as so adjusted, shall be readjusted in the same manner upon the
happening of any successive event or events described herein in this Section 4.
The number of shares of Common Stock that the holder of this Warrant shall
thereafter, on the exercise hereof as provided in Section 1, be entitled to
receive shall be increased to a number determined by multiplying the number of
shares of Common Stock that would otherwise (but for the provisions of this
Section 4) be issuable on such exercise by a fraction of which (a) the numerator
is the Exercise Price that would otherwise (but for the provisions of this
Section 4) be in effect, and (b) the denominator is the Exercise Price in effect
on the date of such exercise.

     5. Certificate as to Adjustments. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of the Warrant, the Company at its expense will promptly cause its
Chief Financial Officer or other appropriate designee to compute such adjustment
or readjustment in accordance with the terms of the Warrant and prepare a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock (or Other Securities) issued or sold or deemed
to have been issued or sold, (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding, and (c) the Exercise Price
and the number of shares of Common Stock to be received upon exercise of this
Warrant, in effect immediately prior to such adjustment or readjustment and as
adjusted or readjusted as provided in this Warrant. The Company will forthwith
mail a copy of each such certificate to the holder of the Warrant and any
Warrant agent of the Company (appointed pursuant to Section 11 hereof).

     6. Reservation of Stock, Etc., Issuable on Exercise of Warrant. The Company
will at all times reserve and keep available, solely for issuance and delivery
on the exercise of this Warrant, shares of Common Stock (or Other Securities)
from time to time issuable on the exercise of this Warrant.

     7. Assignment; Exchange of Warrant. Subject to compliance with applicable
securities laws, this Warrant, and the rights evidenced hereby, may be
transferred by any registered holder hereof (a "Transferor") in whole or in
part. On the surrender for exchange of this Warrant, with the Transferor's
endorsement in the form of Exhibit B attached hereto (the "Transferor
Endorsement Form") and together with evidence reasonably satisfactory to the
Company demonstrating compliance with applicable securities laws, which shall
include, without limitation, the provision of a legal opinion from the
Transferor's counsel (at the Company's expense) that such transfer is exempt
from the registration requirements of applicable securities laws, and with
payment by the Transferor of any applicable transfer taxes) will issue and

                                       5
<PAGE>

deliver to or on the order of the Transferor thereof a new Warrant of like
tenor, in the name of the Transferor and/or the transferee(s) specified in such
Transferor Endorsement Form (each a "Transferee"), calling in the aggregate on
the face or faces thereof for the number of shares of Common Stock called for on
the face or faces of the Warrant so surrendered by the Transferor.

     8. Replacement of Warrant. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Warrant
and, in the case of any such loss, theft or destruction of this Warrant, on
delivery of an indemnity agreement or security reasonably satisfactory in form
and amount to the Company or, in the case of any such mutilation, on surrender
and cancellation of this Warrant, the Company at its expense will execute and
deliver, in lieu thereof, a new Warrant of like tenor.

     9. Registration Rights. The Holder of this Warrant has been granted certain
registration rights by the Company. These registration rights are set forth in a
Registration Rights Agreement entered into by the Company and Purchaser dated as
of even date of this Warrant.

     10. Maximum Exercise. The Holder shall not be entitled to exercise this
Warrant on an exercise date, in connection with that number of shares of Common
Stock which would be in excess of the sum of (i) the number of shares of Common
Stock beneficially owned by the Holder and its affiliates on an exercise date,
and (ii) the number of shares of Common Stock issuable upon the exercise of this
Warrant with respect to which the determination of this proviso is being made on
an exercise date, which would result in beneficial ownership by the Holder and
its affiliates of more than 4.99% of the outstanding shares of Common Stock of
the Company on such date. For the purposes of the proviso to the immediately
preceding sentence, beneficial ownership shall be determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934, as amended, and Regulation
13d-3 thereunder. Notwithstanding the foregoing, the restriction described in
this paragraph may be revoked upon 61 days prior notice from the Holder to the
Company and is automatically null and void upon an uncured Event of Default
under the Note.

     11. Warrant Agent. The Company may, by written notice to the each Holder of
the Warrant, appoint an agent for the purpose of issuing Common Stock (or Other
Securities) on the exercise of this Warrant pursuant to Section 1, exchanging
this Warrant pursuant to Section 7, and replacing this Warrant pursuant to
Section 8, or any of the foregoing, and thereafter any such issuance, exchange
or replacement, as the case may be, shall be made at such office by such agent.

     12. Transfer on the Company's Books. Until this Warrant is transferred on
the books of the Company, the Company may treat the registered holder hereof as
the absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.

     13. Notices, Etc. All notices and other communications from the Company to
the Holder of this Warrant shall be mailed by first class registered or
certified mail, postage prepaid, at such address as may have been furnished to
the Company in writing by such Holder or, until any such Holder furnishes to the
Company an address, then to, and at the address of, the last Holder of this
Warrant who has so furnished an address to the Company.

                                       6
<PAGE>

     14. Miscellaneous. This Warrant and any term hereof may be changed, waived,
discharged or terminated only by an instrument in writing signed by the party
against which enforcement of such change, waiver, discharge or termination is
sought. This Warrant shall be governed by and construed in accordance with the
laws of State of New York without regard to principles of conflicts of laws. Any
action brought concerning the transactions contemplated by this Warrant shall be
brought only in the state courts of New York or in the federal courts located in
the state of New York; provided, however, that the Holder may choose to waive
this provision and bring an action outside the state of New York. The
individuals executing this Warrant on behalf of the Company agree to submit to
the jurisdiction of such courts and waive trial by jury. The prevailing party
shall be entitled to recover from the other party its reasonable attorney's fees
and costs. In the event that any provision of this Warrant is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of this Warrant.
The headings in this Warrant are for purposes of reference only, and shall not
limit or otherwise affect any of the terms hereof. The invalidity or
unenforceability of any provision hereof shall in no way affect the validity or
enforceability of any other provision hereof. The Company acknowledges that
legal counsel participated in the preparation of this Warrant and, therefore,
stipulates that the rule of construction that ambiguities are to be resolved
against the drafting party shall not be applied in the interpretation of this
Warrant to favor any party against the other party.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK;
                            SIGNATURE PAGE FOLLOWS.]

                                       7
<PAGE>

     IN WITNESS WHEREOF, the Company has executed this Warrant as of the date
first written above.

WITNESS:                              ISLAND PACIFIC, INC.

________________________________      By:_______________________________
                                      Name:_____________________________
                                      Title:____________________________

                                       8
<PAGE>

                                    EXHIBIT A

                              FORM OF SUBSCRIPTION
                   (To Be Signed Only On Exercise Of Warrant)

TO:  Island Pacific, Inc.

     Attention:   Chief Financial Officer

     The undersigned, pursuant to the provisions set forth in the attached
Warrant (No.____), hereby irrevocably elects to purchase (check applicable box):

________       ________ shares of the Common Stock covered by such Warrant; or

________       the maximum number of shares of Common Stock covered by such
               Warrant pursuant to the cashless exercise procedure set forth in
               Section 2.

     The undersigned herewith makes payment of the full Exercise Price for such
shares at the price per share provided for in such Warrant, which is
$___________. Such payment takes the form of (check applicable box or boxes):

________       $__________ in lawful money of the United States; and/or

________       the cancellation of such portion of the attached Warrant as is
               exercisable for a total of _______ shares of Common Stock (using
               a Fair Market Value of $_______ per share for purposes of this
               calculation); and/or

________       the cancellation of such number of shares of Common Stock as is
               necessary, in accordance with the formula set forth in Section
               2.2, to exercise this Warrant with respect to the maximum number
               of shares of Common Stock purchasable pursuant to the cashless
               exercise procedure set forth in Section 2.

     The undersigned requests that the certificates for such shares be issued in
the name of, and delivered to _______________________________________________
whose address is ____________________________________________.

     The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Warrant shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933, as amended (the "Securities Act") or pursuant to an exemption from
registration under the Securities Act.

Dated: ______________________________      ____________________________________
                                           (Signature must conform to name of
                                           holder as specified on the face of
                                           the Warrant)

                                           Address:____________________________
                                                   ____________________________

                                       A-1
<PAGE>

                                    EXHIBIT B

                         FORM OF TRANSFEROR ENDORSEMENT
                   (To Be Signed Only On Transfer Of Warrant)

     For value received, the undersigned hereby sells, assigns, and transfers
unto the person(s) named below under the heading "Transferees" the right
represented by the within Warrant to purchase the percentage and number of
shares of Common Stock of Island Pacific, Inc. into which the within Warrant
relates specified under the headings "Percentage Transferred" and "Number
Transferred," respectively, opposite the name(s) of such person(s) and appoints
each such person Attorney to transfer its respective right on the books of
Island Pacific, Inc. with full power of substitution in the premises.

                                             Percentage            Number
Transferees             Address              Transferred        Transferred
-----------             -------              -----------        -----------

----------------------  -------------------  -----------------  ----------------

----------------------  -------------------  -----------------  ----------------

----------------------  -------------------  -----------------  ----------------

----------------------  -------------------  -----------------  ----------------

Dated: ______________________________      ____________________________________
                                           (Signature must conform to name of
                                           holder as specified on the face of
                                           the Warrant)

                                           Address:____________________________
                                                   ____________________________

                                           SIGNED IN THE PRESENCE OF:

                                           ------------------------------------
                                                         (Name)

ACCEPTED AND AGREED:
[TRANSFEREE]

--------------------------------
              (Name)

                                       B-1<PAGE>
EXHIBIT 4.4

          THIS OPTION AND THE SHARES OF COMMON STOCK ISSUABLE UPON
          EXERCISE OF THE OPTION HAVE NOT BEEN REGISTERED UNDER THE
          SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
          LAWS. THIS OPTION AND THE COMMON STOCK ISSUABLE UPON
          EXERCISE OF THIS OPTION MAY NOT BE SOLD, OFFERED FOR SALE,
          PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
          REGISTRATION STATEMENT AS TO THIS OPTION UNDER SAID ACT AND
          ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF
          COUNSEL REASONABLY SATISFACTORY TO ISLAND PACIFIC, INC. THAT
          SUCH REGISTRATION IS NOT REQUIRED.

          Right to Purchase up to 17,142,857 Shares of Common Stock of
                              Island Pacific, Inc.
                   (subject to adjustment as provided herein)

                                     OPTION

No. _________________                                  Issue Date:  ____________

     Island Pacific, Inc., a corporation organized under the laws of the State
of Delaware ("Company"), hereby certifies that, for value received, LAURUS
MASTER FUND, LTD., or assigns (the "Holder"), is entitled, subject to the terms
set forth below, to purchase from the Company (as defined herein) from and after
the Issue Date of this Option and at any time or from time to time before 5:00
p.m. New York time, through the close of business May 31, 2015, up to 17,142,857
fully paid and nonassessable shares of Common Stock (as hereinafter defined),
$0.0001 par value per share, at the applicable Exercise Price per share (as
defined below). The number and character of such shares of Common Stock and the
applicable Exercise Price per share are subject to adjustment as provided
herein.

     As used herein the following terms, unless the context otherwise requires,
have the following respective meanings:

          (a) The term "Company" shall include Island Pacific, Inc. and any
     corporation that shall succeed, or assume the obligations of, Island
     Pacific, Inc. hereunder.

          (b) The term "Common Stock" includes (i) the Company's Common Stock,
     $0.0001 par value per share; and (ii) any other securities into which or
     for which any of the securities described in (a) may be converted or
     exchanged pursuant to a plan of recapitalization, reorganization, merger,
     sale of assets or otherwise.

          (c) The "Exercise Price" applicable under this Option shall be a price
     of $0.01 per share.

<PAGE>

          (d) The term "Other Securities" refers to any stock (other than Common
     Stock) and other securities of the Company or any other person (corporate
     or otherwise) which the Holder at any time shall be entitled to receive, or
     shall have received, on the exercise of the Option, in lieu of or in
     addition to Common Stock, or which at any time shall be issuable or shall
     have been issued in exchange for or in replacement of Common Stock or Other
     Securities pursuant to Section 4 or otherwise.

     1.   Exercise of Option.

Number of Shares Issuable upon Exercise. From and after the date hereof, the
Holder shall be entitled to receive, upon exercise of this Option in whole or in
part, by delivery of an original or fax copy of an exercise notice in the form
attached hereto as Exhibit A (the "Exercise Notice"), shares of Common Stock of
the Company, subject to adjustment pursuant to Section 4. Notwithstanding
anything contained herein to the contrary, the Holder shall not be entitled to
exercise this Option in connection with that number of shares of Common Stock
which would exceed the difference between (i) 4.99% of the issued and
outstanding shares of Common Stock and (ii) the number of shares of Common Stock
beneficially owned by the Holder. For the purposes of the immediately preceding
sentence, beneficial ownership shall be determined in accordance with Section
13(d) of the Exchange Act and Regulation 13d-3 thereunder. The limitation
described in this Section 1.1 shall automatically become null and void following
notice to the Company upon the occurrence and during the continuance beyond any
applicable grace period of an Event of Default under and as defined in that
certain Security Agreement dated as of the date hereof among the Holder and the
Company, or upon 61 days prior notice to the Company.

          1.1 Fair Market Value. For purposes hereof, the "Fair Market Value" of
a share of Common Stock as of a particular date (the "Determination Date") shall
mean:

          (a) If the Company's Common Stock is traded on the American Stock
     Exchange or another national exchange or is quoted on the National or
     SmallCap Market of The Nasdaq Stock Market, Inc. ("Nasdaq"), then the
     closing or last sale price, respectively, reported for the last business
     day immediately preceding the Determination Date.

          (b) If the Company's Common Stock is not traded on the American Stock
     Exchange or another national exchange or on the Nasdaq but is quoted on the
     NASD Over The Counter Bulletin Board, then the mean of the average of the
     closing bid and asked prices reported for the last business day immediately
     preceding the Determination Date.

          (c) Except as provided in clause (d) below, if the Company's Common
     Stock is not publicly traded, then as the Holder and the Company agree or
     in the absence of agreement by arbitration in accordance with the rules
     then in effect of the American Arbitration Association, before a single
     arbitrator to be chosen from a panel of persons qualified by education and
     training to pass on the matter to be decided.

                                       2
<PAGE>

          (d) If the Determination Date is the date of a liquidation,
     dissolution or winding up, or any event deemed to be a liquidation,
     dissolution or winding up pursuant to the Company's charter, then all
     amounts to be payable per share to holders of the Common Stock pursuant to
     the charter in the event of such liquidation, dissolution or winding up,
     plus all other amounts to be payable per share in respect of the Common
     Stock in liquidation under the charter, assuming for the purposes of this
     clause (d) that all of the shares of Common Stock then issuable upon
     exercise of the Option are outstanding at the Determination Date.

          1.2 Company Acknowledgment. The Company will, at the time of the
exercise of the Option, upon the request of the Holder hereof acknowledge in
writing its continuing obligation to afford to such Holder any rights to which
such Holder shall continue to be entitled after such exercise in accordance with
the provisions of the Option. If the Holder shall fail to make any such request,
such failure shall not affect the continuing obligation of the Company to afford
to such Holder any such rights.

          1.3 Trustee for Option Holders. In the event that a bank or trust
company shall have been appointed as trustee for the Holder of the Option
pursuant to Subsection 3.2, such bank or trust company shall have all the powers
and duties of an option agent (as hereinafter described) and shall accept, in
its own name for the account of the Company or such successor person as may be
entitled thereto, all amounts otherwise payable to the Company or such
successor, as the case may be, on exercise of this Option pursuant to this
Section 1.

     2.   Procedure for Exercise.

          2.1 Delivery of Stock Certificates, Etc., on Exercise. The Company
agrees that the shares of Common Stock purchased upon exercise of this Option
shall be deemed to be issued to the Holder as the record owner of such shares as
of the close of business on the date on which this Option shall have been
surrendered and payment made for such shares in accordance herewith. As soon as
practicable after the exercise of this Option in full or in part, and in any
event within three (3) business days thereafter, the Company at its expense
(including the payment by it of any applicable issue taxes) will cause to be
issued in the name of and delivered to the Holder, or as such Holder (upon
payment by such Holder of any applicable transfer taxes) may direct in
compliance with applicable securities laws, a certificate or certificates for
the number of duly and validly issued, fully paid and nonassessable shares of
Common Stock (or Other Securities) to which such Holder shall be entitled on
such exercise, plus, in lieu of any fractional share to which such Holder would
otherwise be entitled, cash equal to such fraction multiplied by the then Fair
Market Value of one full share, together with any other stock or other
securities and property (including cash, where applicable) to which such Holder
is entitled upon such exercise pursuant to Section 1 or otherwise.

          2.2 Exercise.

                                       3
<PAGE>

          (a) Subject to subsection (b) below, payment shall be made in cash or
     by certified or official bank check payable to the order of the Company
     equal to the applicable aggregate Exercise Price for the number of Common
     Shares specified in such Exercise Notice (as such exercise number shall be
     adjusted to reflect any adjustment in the total number of shares of Common
     Stock issuable to the Holder per the terms of this Option) and the Holder
     shall thereupon be entitled to receive the number of duly authorized,
     validly issued, fully-paid and non-assessable shares of Common Stock (or
     Other Securities) determined as provided herein.

          (b) Notwithstanding any provisions herein to the contrary, in the
     event there is no effective registration statement with respect to the
     shares issuable upon exercise of this Option or a Default or an Event of
     Default (as such terms are defined in the Security Agreement dated as of
     the date hereof among the Holder and the Company, as amended, modified,
     restated and/or supplemented from time to time),) has occurred and is
     continuing, if the Fair Market Value of one share of Common Stock is
     greater than the Exercise Price (at the date of calculation as set forth
     below), in lieu of exercising this Option for cash, the Holder may elect to
     receive shares equal to the value (as determined below) of this Option (or
     the portion thereof being exercised) by surrender of this Option at the
     principal office of the Company together with the properly endorsed
     Exercise Notice in which event the Company shall issue to the Holder a
     number of shares of Common Stock computed using the following formula:

                           (A-B)
     X=Y    multiplied by  -----
                             A

     Where X =      the number of shares of Common Stock to be issued to the
                    Holder

     Y =            the number of shares of Common Stock purchasable under the
                    Option or, if only a portion of the Option is being
                    exercised, the portion of the Option being exercised (at the
                    date of such calculation)

     A =            the Fair Market Value of one share of the Company's Common
                    Stock (at the date of such calculation)

     B =            Exercise Price (as adjusted to the date of such calculation)

     3. Effect of Reorganization, Etc.; Adjustment of Exercise Price.

          3.1 Reorganization, Consolidation, Merger, Etc. In case at any time or
from time to time, the Company shall (a) effect a reorganization, (b)
consolidate with or merge into any other person, or (c) transfer all or
substantially all of its properties or assets to any other person under any plan
or arrangement contemplating the dissolution of the Company, then, in each such
case, as a condition to the consummation of such a transaction, proper and
adequate provision shall be made by the Company whereby the Holder, on the
exercise hereof as provided in Section 1 at any time after the consummation of

                                       4
<PAGE>

such reorganization, consolidation or merger or the effective date of such
dissolution, as the case may be, shall receive, in lieu of the Common Stock (or
Other Securities) issuable on such exercise prior to such consummation or such
effective date, the stock and other securities and property (including cash) to
which such Holder would have been entitled upon such consummation or in
connection with such dissolution, as the case may be, if such Holder had so
exercised this Option, immediately prior thereto, all subject to further
adjustment thereafter as provided in Section 4.

          3.2 Dissolution. In the event of any dissolution of the Company
following the transfer of all or substantially all of its properties or assets,
the Company, concurrently with any distributions made to holders of its Common
Stock, shall at its expense deliver or cause to be delivered to the Holder the
stock and other securities and property (including cash, where applicable)
receivable by the Holder pursuant to Section 3.1, or, if the Holder shall so
instruct the Company, to a bank or trust company specified by the Holder and
having its principal office in New York, NY as trustee for the Holder (the
"Trustee").

          3.3 Continuation of Terms. Upon any reorganization, consolidation,
merger or transfer (and any dissolution following any transfer) referred to in
this Section 3, this Option shall continue in full force and effect and the
terms hereof shall be applicable to the shares of stock and other securities and
property receivable on the exercise of this Option after the consummation of
such reorganization, consolidation or merger or the effective date of
dissolution following any such transfer, as the case may be, and shall be
binding upon the issuer of any such stock or other securities, including, in the
case of any such transfer, the person acquiring all or substantially all of the
properties or assets of the Company, whether or not such person shall have
expressly assumed the terms of this Option as provided in Section 4. In the
event this Option does not continue in full force and effect after the
consummation of the transactions described in this Section 3, then the Company's
securities and property (including cash, where applicable) receivable by the
Holders will be delivered to Holder or the Trustee as contemplated by Section
3.2.

     4. Extraordinary Events Regarding Common Stock. In the event that the
Company shall (a) issue additional shares of the Common Stock as a dividend or
other distribution on outstanding Common Stock or any preferred stock issued by
the Company, (b) subdivide its outstanding shares of Common Stock, or (c)
combine its outstanding shares of the Common Stock into a smaller number of
shares of the Common Stock (each of the preceding clauses (a) through (c),
inclusive, an "Event"), then, in each such event, the number of shares of Common
Stock that the Holder shall thereafter, on the exercise hereof as provided in
Section 1, be entitled to receive shall be increased or decreased to a number
determined by multiplying the number of shares of Common Stock that would,
immediately prior to such Event, be issuable upon the exercise of this Option by
a fraction of which (a) the numerator is the number of issued and outstanding
shares of Common Stock immediately after such Event, and (b) the denominator is
the number of issued and outstanding shares of Common Stock immediately prior to
such Event.

                                       5
<PAGE>

     5. Certificate as to Adjustments. In each case of any adjustment or
readjustment in the shares of Common Stock (or Other Securities) issuable on the
exercise of the Option, the Company at its expense will promptly cause its Chief
Financial Officer or other appropriate designee to compute such adjustment or
readjustment in accordance with the terms of the Option and prepare a
certificate setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based, including a
statement of (a) the consideration received or receivable by the Company for any
additional shares of Common Stock (or Other Securities) issued or sold or deemed
to have been issued or sold, (b) the number of shares of Common Stock (or Other
Securities) outstanding or deemed to be outstanding, and (c) the Exercise Price
and the number of shares of Common Stock to be received upon exercise of this
Option, in effect immediately prior to such adjustment or readjustment and as
adjusted or readjusted as provided in this Option. The Company will forthwith
mail a copy of each such certificate to the Holder and any Option agent of the
Company (appointed pursuant to Section 10 hereof).

     6. Reservation of Stock, Etc., Issuable on Exercise of Option. The Company
will at all times reserve and keep available, solely for issuance and delivery
on the exercise of the Option, shares of Common Stock (or Other Securities) from
time to time issuable on the exercise of the Option.

     7. Assignment; Exchange of Option. Subject to compliance with applicable
securities laws, this Option, and the rights evidenced hereby, may be
transferred by any registered holder hereof (a "Transferor") in whole or in
part. On the surrender for exchange of this Option, with the Transferor's
endorsement in the form of Exhibit B attached hereto (the "Transferor
Endorsement Form") and together with evidence reasonably satisfactory to the
Company demonstrating compliance with applicable securities laws, which shall
include, without limitation, the provision of a legal opinion from the
Transferor's counsel (at the Company's expense) that such transfer is exempt
from the registration requirements of applicable securities laws, and with
payment by the Transferor of any applicable transfer taxes) will issue and
deliver to or on the order of the Transferor thereof a new Option of like tenor,
in the name of the Transferor and/or the transferee(s) specified in such
Transferor Endorsement Form (each a "Transferee"), calling in the aggregate on
the face or faces thereof for the number of shares of Common Stock called for on
the face or faces of the Option so surrendered by the Transferor.

     8. Replacement of Option. On receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this Option and, in
the case of any such loss, theft or destruction of this Option, on delivery of
an indemnity agreement or security reasonably satisfactory in form and amount to
the Company or, in the case of any such mutilation, on surrender and
cancellation of this Option, the Company at its expense will execute and
deliver, in lieu thereof, a new Option of like tenor.

                                       6
<PAGE>

     9. Registration Rights. The Holder has been granted certain registration
rights by the Company. These registration rights are set forth in a Registration
Rights Agreement entered into by the Company and Holder dated as of even date of
this Option.

     10. Option Agent. The Company may, by written notice to each Holder of the
Option, appoint an agent for the purpose of issuing Common Stock (or Other
Securities) on the exercise of this Option pursuant to Section 1, exchanging
this Option pursuant to Section 7, and replacing this Option pursuant to Section
8, or any of the foregoing, and thereafter any such issuance, exchange or
replacement, as the case may be, shall be made at such office by such agent.

     11. Transfer on the Company's Books. Until this Option is transferred on
the books of the Company, the Company may treat the registered holder hereof as
the absolute owner hereof for all purposes, notwithstanding any notice to the
contrary.

     12. Notices, Etc. All notices and other communications from the Company to
the Holder shall be mailed by first class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company in writing by
such Holder or, until any such Holder furnishes to the Company an address, then
to, and at the address of, the last Holder who has so furnished an address to
the Company.

     13. Miscellaneous. THIS OPTION AND ANY TERM HEREOF MAY BE CHANGED, WAIVED,
DISCHARGED OR TERMINATED ONLY BY AN INSTRUMENT IN WRITING SIGNED BY THE PARTY
AGAINST WHICH ENFORCEMENT OF SUCH CHANGE, WAIVER, DISCHARGE OR TERMINATION IS
SOUGHT. THIS OPTION SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. Any
action brought concerning the transactions contemplated by this Option shall be
brought only in the state courts of New York or in the federal courts located in
the state of New York; provided, however, that the Holder may choose to waive
this provision and bring an action outside the state of New York. The
individuals executing this Option on behalf of the Company agree to submit to
the jurisdiction of such courts and waive trial by jury. The prevailing party
shall be entitled to recover from the other party its reasonable attorney's fees
and costs. In the event that any provision of this Option is invalid or
unenforceable under any applicable statute or rule of law, then such provision
shall be deemed inoperative to the extent that it may conflict therewith and
shall be deemed modified to conform with such statute or rule of law. Any such
provision which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision of this Option. The
headings in this Option are for purposes of reference only, and shall not limit
or otherwise affect any of the terms hereof. The invalidity or unenforceability
of any provision hereof shall in no way affect the validity or enforceability of
any other provision hereof. The Company acknowledges that legal counsel
participated in the preparation of this Option and, therefore, stipulates that
the rule of construction that ambiguities are to be resolved against the
drafting party shall not be applied in the interpretation of this Option to
favor any party against the other party.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK;
                            SIGNATURE PAGE FOLLOWS.]

                                       7
<PAGE>

     IN WITNESS WHEREOF, the Company has executed this Option as of the date
first written above.

                                      ISLAND PACIFIC, INC.

WITNESS:
                                      By:    _______________________________
                                      Name:  _______________________________
________________________________      Title: _______________________________

                                       8
<PAGE>

                                    EXHIBIT A

                              FORM OF SUBSCRIPTION
                   (To Be Signed Only On Exercise Of Options)

TO:  Island Pacific, Inc.

     Attention:  Chief Financial Officer

     The undersigned, pursuant to the provisions set forth in the attached
Option (No. ____), hereby irrevocably elects to purchase (check applicable box):

________       ________ shares of the Common Stock covered by such Option; or

________       the maximum number of shares of Common Stock covered by such
               Option pursuant to the cashless exercise procedure set forth in
               Section 2.

     The undersigned herewith makes payment of the full Exercise Price for such
shares at the price per share provided for in such Option, which is
$___________. Such payment takes the form of (check applicable box or boxes):

________       $__________ in lawful money of the United States; and/or

________       the cancellation of such portion of the attached Option as is
               exercisable for a total of _______ shares of Common Stock (using
               a Fair Market Value of $_______ per share for purposes of this
               calculation); and/or

________       the cancellation of such number of shares of Common Stock as is
               necessary, in accordance with the formula set forth in Section
               2.2, to exercise this Option with respect to the maximum number
               of shares of Common Stock purchasable pursuant to the cashless
               exercise procedure set forth in Section 2.

     The undersigned requests that the certificates for such shares be issued in
the name of, and delivered to _______________________________________ whose
address is _____________________________________.

<PAGE>

     The undersigned represents and warrants that all offers and sales by the
undersigned of the securities issuable upon exercise of the within Option shall
be made pursuant to registration of the Common Stock under the Securities Act of
1933, as amended (the "Securities Act") or pursuant to an exemption from
registration under the Securities Act.

Dated: _____________________________      ____________________________________
                                          (Signature must conform to name of
                                          Holder as specified on the face of
                                          the Option)

                                          Address: ___________________________

                                                   ___________________________

<PAGE>

                                    EXHIBIT B

                         FORM OF TRANSFEROR ENDORSEMENT
                    (To Be Signed Only On Transfer Of Option)

     For value received, the undersigned hereby sells, assigns, and transfers
unto the person(s) named below under the heading "Transferees" the right
represented by the within Option to purchase the percentage and number of shares
of Common Stock of Island Pacific, Inc.into which the within Option relates
specified under the headings "Percentage Transferred" and "Number Transferred,"
respectively, opposite the name(s) of such person(s) and appoints each such
person Attorney to transfer its respective right on the books of Island Pacific,
Inc.with full power of substitution in the premises.

                                           Percentage             Number
Transferees            Address             Transferred          Transferred
-----------            -------             -----------          -----------

---------------------  ------------------  -------------------  ----------------

---------------------  ------------------  -------------------  ----------------

---------------------  ------------------  -------------------  ----------------

---------------------  ------------------  -------------------  ----------------

Dated: _____________________________      ____________________________________
                                          (Signature must conform to name of
                                          Holder as specified on the face of
                                          the Option)

                                          Address: ___________________________

                                                   ___________________________

                                          SIGNED IN THE PRESENCE OF:

                                          ------------------------------------
                                                         (Name)

ACCEPTED AND AGREED:
[TRANSFEREE]

-----------------------------
            (Name)

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