SECURITY AGREEMENT


      SECURITY AGREEMENT (this  "Agreement"),  dated as of December 29, 2005, by
and among  Digicorp,  a Utah  corporation  (the  "Company"),  and the Rebel Crew
Holdings,  LLC  and its  respective  endorsees,  transferees  and  assigns  (the
"Secured Party").

                              W I T N E S S E T H:

      WHEREAS,  pursuant  to a  Securities  Purchase  Agreement,  dated the date
hereof,  between Company and the Secured Party (the "Purchase  Agreement"),  the
Company  has  agreed to issue to the  Secured  Party and the  Secured  Party has
agreed to purchase from the Company a 4.5% Secured  Convertible  Note,  due five
years from the date of issue (the "Note"),  which is convertible  into shares of
the Company's Common Stock, par value $.001 per share (the "Common Stock");

      WHEREAS,  simultaneously  herewith,  the Company is entering  into a Stock
Purchase  Agreement  (the  "Stock  Purchase  Agreement")  pursuant  to which the
Company is purchasing all of the issued and outstanding  shares of capital stock
of Rebel Crew Films, Inc., a California  corporation ("Rebel Crew Films"),  from
the stockholders of Rebel Crew Films (the "Rebel Crew Films Stockholders"); and

      WHEREAS,  in order to induce the Rebel Crew  Films  Stockholders  to enter
into the Stock  Purchase  Agreement  and to induce the Secured Party to purchase
the Note,  the Company  has agreed to execute  and deliver to the Secured  Party
this  Agreement  for the benefit of the Secured Party and to grant to it a first
priority  security  interest  in certain  property  of the Company to secure the
prompt  payment,  performance  and  discharge  in full  of all of the  Company's
obligations under the Note.

      NOW,  THEREFORE,  in consideration of the agreements  herein contained and
for other good and valuable consideration,  the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:

      1. Certain  Definitions.  As used in this  Agreement,  the following terms
shall  have  the  meanings  set  forth in this  Section  1.  Terms  used but not
otherwise  defined in this  Agreement  that are  defined in Article 9 of the UCC
(such as  "general  intangibles"  and  "proceeds")  shall  have  the  respective
meanings given such terms in Article 9 of the UCC.

            (a) "Collateral"  means the collateral in which the Secured Party is
granted a security  interest  by this  Agreement  and which  shall  include  the
following,  whether presently owned or existing or hereafter  acquired or coming
into existence,  and all additions and accessions  thereto and all substitutions
and  replacements  thereof,  and all  proceeds,  products and accounts  thereof,
including,  without  limitation,  all proceeds  from the sale or transfer of the
Collateral  and of  insurance  covering  the  same  and of any  tort  claims  in
connection therewith:

            (i) All Goods of the Company,  including,  without limitations,  all
      machinery,  equipment,  computers,  motor vehicles,  trucks, tanks, boats,
      ships,  appliances,  furniture,  special and general tools, fixtures, test
      and quality  control  devices and other equipment of every kind and nature
      and wherever situated,  together with all documents of title and documents
      representing the same, all additions and accessions thereto,  replacements
      therefor, all parts therefor, and all substitutes for any of the foregoing
      and all other  items  used and  useful in  connection  with the  Company's
      businesses and all improvements thereto (collectively, the "Equipment");

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                  (ii) All Inventory of the Company;

            (iii) All of the Company's contract rights and general  intangibles,
      including,  without limitation,  all partnership interests, stock or other
      securities, licenses, distribution and other agreements, computer software
      development rights,  leases,  franchises,  customer lists, quality control
      procedures, grants and rights, goodwill,  trademarks, service marks, trade
      styles, trade names,  patents,  patent applications,  copyrights,  deposit
      accounts,   and   income   tax   refunds   (collectively,   the   "General
      Intangibles");

            (iv)  All  Receivables  of  the  Company   including  all  insurance
      proceeds,  and  rights to  refunds or  indemnification  whatsoever  owing,
      together with all instruments,  all documents of title representing any of
      the foregoing,  all rights in any merchandising,  goods, equipment,  motor
      vehicles  and trucks which any of the same may  represent,  and all right,
      title, security and guaranties with respect to each Receivable,  including
      any right of stoppage in transit; and

            (v) All of the Company's  documents,  instruments and chattel paper,
      files, records, books of account,  business papers,  computer programs and
      the products and proceeds of all of the foregoing  Collateral set forth in
      clauses (i)-(iv) above; and

            (vi) All of the capital  stock of any  corporation  or other  entity
      owned by the Company.

            (b) "Obligations" means all of the Company's  obligations under this
Agreement  and the  Note,  in each  case,  whether  now or  hereafter  existing,
voluntary or involuntary, direct or indirect, absolute or contingent, liquidated
or  unliquidated,  whether or not jointly owed with  others,  and whether or not
from time to time  decreased or  extinguished  and later  decreased,  created or
incurred,  and all or any portion of such  obligations or  liabilities  that are
paid,  to the  extent all or any part of such  payment  is avoided or  recovered
directly  or  indirectly  from the  Secured  Party as a  preference,  fraudulent
transfer  or  otherwise  as  such  obligations  may  be  amended,  supplemented,
converted, extended or modified from time to time.

            (c) "UCC" means the Uniform  Commercial Code, as currently in effect
in the State of California.

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      2. Grant of Security  Interest.  As an inducement for the Secured Party to
purchase the Note and to secure the complete and timely payment, performance and
discharge in full,  as the case may be, of all of the  Obligations,  the Company
hereby, unconditionally and irrevocably, pledges, grants and hypothecates to the
Secured Party, a continuing  security interest in, a continuing first lien upon,
an  unqualified  right to possession  and  disposition of and a right of set-off
against,  in each  case  to the  fullest  extent  permitted  by law,  all of the
Company's right,  title and interest of whatsoever kind and nature in and to the
Collateral (the "Security Interest").

      3. Representations,  Warranties,  Covenants and Agreements of the Company.
The Company  represents  and warrants  to, and  covenants  and agrees with,  the
Secured Party as follows:

            (a) The Company has the requisite  corporate  power and authority to
enter into this Agreement and otherwise to carry out its obligations thereunder.
The execution, delivery and performance by the Company of this Agreement and the
filings  contemplated  therein have been duly authorized by all necessary action
on the part of the  Company and no further  action is  required by the  Company.
This Agreement  constitutes a legal, valid and binding obligation of the Company
enforceable  in  accordance  with its  terms,  except as  enforceability  may be
limited by bankruptcy,  insolvency,  reorganization,  moratorium or similar laws
affecting the enforcement of creditor's rights generally.

            (b) The  Company  represents  and  warrants  that it has no place of
business or offices where its  respective  books of account and records are kept
(other than  temporarily  at the offices of its  attorneys  or  accountants)  or
places where Collateral is stored or located,  except as set forth on Schedule A
attached hereto;

            (c) The  Company is the sole  owner of the  Collateral  (except  for
non-exclusive  licenses  granted  by the  Company  in  the  ordinary  course  of
business), free and clear of any liens, security interests, encumbrances, rights
or claims,  and is fully  authorized  to grant the  Security  Interest in and to
pledge the  Collateral.  There is not on file in any  governmental or regulatory
authority, agency or recording office an effective financing statement, security
agreement, license or transfer or any notice of any of the foregoing (other than
those  that have  been  filed in favor of the  Secured  Party  pursuant  to this
Agreement)  covering  or  affecting  any of the  Collateral.  So  long  as  this
Agreement  shall be in  effect,  the  Company  shall not  execute  and shall not
knowingly  permit to be on file in any such office or agency any such  financing
statement  or other  document  or  instrument  (except  to the  extent  filed or
recorded in favor of the Secured Party pursuant to the terms of this Agreement).

            (d)  No  part  of  the   Collateral   has  been  judged  invalid  or
unenforceable.  No written claim has been  received  that any  Collateral or the
Company's use of any  Collateral  violates the rights of any third party.  There
has been no adverse  decision to the Company's  claim of ownership  rights in or
exclusive  rights to use the Collateral in any  jurisdiction or to the Company's
right to keep and maintain such  Collateral in full force and effect,  and there
is no proceeding  involving said rights pending or, to the best knowledge of the
Company,   threatened  before  any  court,  judicial  body,   administrative  or
regulatory agency, arbitrator or other governmental authority.

            (e) The Company shall at all times maintain its books of account and
records  relating to the  Collateral at its principal  place of business and its
Collateral at the locations set forth on Schedule A attached  hereto and may not
relocate  such books of account  and records or  tangible  Collateral  unless it
delivers to the  Secured  Party at least 30 days prior to such  relocation:  (i)
written notice of such  relocation  and the new location  thereof (which must be
within  the  United  States);  and  (ii)  evidence  that  appropriate  financing
statements and other necessary  documents have been filed and recorded and other
steps have been taken to perfect the Security Interest to create in favor of the
Secured  Party valid,  perfected  and  continuing  first  priority  liens in the
Collateral.

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<PAGE>

            (f) This  Agreement  creates in favor of the  Secured  Party a valid
security interest in the Collateral  securing the payment and performance of the
Obligations and, upon making the filings described in the immediately  following
sentence,  a perfected  first  priority  security  interest in such  Collateral.
Except for the filing of financing  statements  on Form UCC-1 under the UCC with
the jurisdictions  indicated on Schedule B, attached hereto, no authorization or
approval of or filing with or notice to any governmental authority or regulatory
body  is  required  either:  (i)  for  the  grant  by  the  Company  of,  or the
effectiveness  of, the Security  Interest  granted  hereby or for the execution,
delivery and  performance  of this  Agreement  by the  Company;  or (ii) for the
perfection  of or  exercise  by the  Secured  Party of its rights  and  remedies
hereunder.

            (g) On the date of  execution  of this  Agreement,  the Company will
deliver to the Secured Party one or more  executed UCC  financing  statements on
Form  UCC-1  with  respect  to  the  Security   Interest  for  filing  with  the
jurisdictions  indicated  on  Schedule  B,  attached  hereto  and in such  other
jurisdictions as may be requested by the Secured Party.

            (h) The execution,  delivery and  performance of this Agreement does
not conflict with or cause a breach or default, or an event that with or without
the passage of time or notice,  shall constitute a breach or default,  under any
agreement  to which the Company is a party or by which the Company is bound.  No
consent (including,  without limitation,  from stock holders or creditors of the
Company) is required  for the Company to enter into and perform its  obligations
hereunder.

            (i) The Company  shall at all times  maintain the liens and Security
Interest  provided for hereunder as valid and perfected first priority liens and
security  interests in the  Collateral  in favor of the Secured Party until this
Agreement  and the  Security  Interest  hereunder  shall  terminate  pursuant to
Section 11. The  Company  hereby  agrees to defend the same  against any and all
persons.  The Company shall safeguard and protect all Collateral for the account
of the Secured Party. At the request of the Secured Party, the Company will sign
and  deliver to the  Secured  Party at any time or from time to time one or more
financing  statements  pursuant to the UCC (or any other applicable  statute) in
form  reasonably  satisfactory  to the  Secured  Party  and will pay the cost of
filing the same in all public  offices  wherever  filing is, or is deemed by the
Secured Party to be, necessary or desirable to effect the rights and obligations
provided for herein.  Without  limiting the  generality  of the  foregoing,  the
Company shall pay all fees,  taxes and other  amounts  necessary to maintain the
Collateral and the Security Interest hereunder, and the Company shall obtain and
furnish to the  Secured  Party from time to time,  upon  demand,  such  releases
and/or  subordinations of claims and liens which may be required to maintain the
priority of the Security Interest hereunder.

            (j) The Company will not transfer,  pledge,  hypothecate,  encumber,
license  (except  for  non-exclusive  licenses  granted  by the  Company  in the
ordinary course of business), sell or otherwise dispose of any of the Collateral
without the prior written consent of the Secured Party.

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<PAGE>

            (k) The Company shall keep and preserve its Equipment, Inventory and
other  tangible  Collateral  in good  condition,  repair and order and shall not
operate or locate any such  Collateral  (or cause to be  operated or located) in
any area excluded from insurance coverage.

            (l) The Company  shall,  within ten (10)  business days of obtaining
knowledge thereof,  advise the Secured Party promptly,  in sufficient detail, of
any  substantial  change in the  Collateral,  and of the occurrence of any event
which would have a material  adverse effect on the value of the Collateral or on
the Secured Party's security interest therein.

            (m) The Company  shall  promptly  execute and deliver to the Secured
Party such further deeds, mortgages, assignments, security agreements, financing
statements or other instruments, documents, certificates and assurances and take
such  further  action as the  Secured  Party  may from  time to time  reasonably
request to perfect, protect or enforce its security interest in the Collateral.

            (n)  The   Company   shall   permit  the   Secured   Party  and  its
representatives  and agents to inspect the  Collateral at any time,  and to make
copies of  records  pertaining  to the  Collateral  as may be  requested  by the
Secured Party from time to time.

            (o)  The  Company  will  take  all  steps  reasonably  necessary  to
diligently pursue and seek to preserve,  enforce and collect any rights, claims,
causes of action and accounts receivable in respect of the Collateral.

            (p)  The  Company  shall  promptly   notify  the  Secured  Party  in
sufficient detail upon becoming aware of any attachment,  garnishment, execution
or  other  legal  process  levied  against  any  Collateral  and  of  any  other
information  received by the Company that may materially affect the value of the
Collateral,  the  Security  Interest  or the rights and  remedies of the Secured
Party hereunder.

            (q) All information heretofore,  herein or hereafter supplied to the
Secured  Party by or on behalf of the Company with respect to the  Collateral is
accurate and complete in all material respects as of the date furnished.

      4. Defaults. The following events shall be "Events of Default":

            (a) The  occurrence  of an Event of Default (as defined in the Note)
under the Note;

            (b) Any  representation or warranty of the Company in this Agreement
shall prove to have been incorrect in any material respect when made; and

            (c) The  failure by the  Company  to  observe or perform  any of its
obligations  hereunder  for  thirty  (30) days after  receipt by the  Company of
notice of such failure from the Secured Party.

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<PAGE>

      5. Duty To Hold In Trust.  Upon the occurrence of any Event of Default and
at any time  thereafter,  the Company shall,  upon receipt by it of any revenue,
income or other sums subject to the Security Interest,  whether payable pursuant
to the Note or otherwise,  or of any check,  draft,  note,  trade  acceptance or
other instrument  evidencing an obligation to pay any such sum, hold the same in
trust for the Secured  Party and shall  forthwith  endorse and transfer any such
sums or  instruments,  or both,  to the  Secured  Party for  application  to the
satisfaction of the Obligations.

      6. Rights and  Remedies  Upon  Default.  Upon  occurrence  of any Event of
Default and at any time  thereafter,  the Secured  Party shall have the right to
exercise all of the remedies  conferred  hereunder  and under the Note,  and the
Secured  Party shall have all the rights and  remedies of a secured  party under
the UCC and/or any other  applicable law (including the Uniform  Commercial Code
of  any  jurisdiction  in  which  any  Collateral  is  then  located).   Without
limitation, the Secured Party shall have the following rights and powers:

            (a) The Secured Party shall have the right to take possession of the
Collateral  and, for that  purpose,  enter,  with the aid and  assistance of any
person,  any premises where the  Collateral,  or any part thereof,  is or may be
placed and remove the same,  and the Company shall  assemble the  Collateral and
make it available to the Secured  Party at places which the Secured  Party shall
reasonably  select,  whether at the Company's  premises or  elsewhere,  and make
available to the Secured Party,  without rent,  all of the Company's  respective
premises and facilities  for the purpose of the Secured Party taking  possession
of, removing or putting the Collateral in saleable or disposable form.

            (b) The Secured  Party shall have the right to operate the  business
of the Company using the  Collateral  and shall have the right to assign,  sell,
lease or otherwise dispose of and deliver all or any part of the Collateral,  at
public or private sale or otherwise,  either with or without special  conditions
or stipulations, for cash or on credit or for future delivery, in such parcel or
parcels  and at such time or times and at such  place or  places,  and upon such
terms and conditions as the Secured Party may deem commercially reasonable,  all
without (except as shall be required by applicable statute and cannot be waived)
advertisement  or demand upon or notice to the Company or right of redemption of
the Company,  which are hereby  expressly  waived.  Upon each such sale,  lease,
assignment  or other  transfer  of  Collateral,  the Secured  Party may,  unless
prohibited by applicable law which cannot be waived, purchase all or any part of
the Collateral being sold, free from and discharged of all trusts, claims, right
of redemption and equities of the Company, which are hereby waived and released.

      7. Applications of Proceeds. The proceeds of any such sale, lease or other
disposition of the Collateral  hereunder shall be applied first, to the expenses
of retaking,  holding, storing,  processing and preparing for sale, selling, and
the like  (including,  without  limitation,  any  taxes,  fees and  other  costs
incurred  in  connection  therewith)  of  the  Collateral,   to  the  reasonable
attorneys'  fees and expenses  incurred by the Secured  Party in  enforcing  its
rights hereunder and in connection with collecting, storing and disposing of the
Collateral,  and then to satisfaction of the Obligations,  and to the payment of
any other  amounts  required by  applicable  law,  after which the Secured Party
shall pay to the  Company any surplus  proceeds.  If, upon the sale,  license or
other  disposition of the Collateral,  the proceeds  thereof are insufficient to
pay all amounts to which the Secured Party is legally entitled, the Company will
be liable for the  deficiency.  To the extent  permitted by applicable  law, the
Company waives all claims, damages and demands against the Secured Party arising
out of the repossession,  removal,  retention or sale of the Collateral,  unless
due to the gross negligence or willful misconduct of the Secured Party.

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      8. Costs and Expenses.  The Company agrees to pay all out-of-pocket  fees,
costs and expenses  incurred in connection with any filing  required  hereunder,
including without limitation, any financing statements, continuation statements,
partial releases and/or  termination  statements related thereto or any expenses
of any searches reasonably required by the Secured Party. The Company shall also
pay all other claims and charges which in the reasonable  opinion of the Secured
Party  might  prejudice,  imperil  or  otherwise  affect the  Collateral  or the
Security  Interest  therein.  The Company  will also,  upon  demand,  pay to the
Secured  Party the  amount of any and all  reasonable  expenses,  including  the
reasonable fees and expenses of its counsel and of any experts and agents, which
the  Secured  Party may incur in  connection  with (a) the  enforcement  of this
Agreement,  (b) the custody or preservation of, or the sale of, collection from,
or  other  realization  upon,  any of the  Collateral,  or (c) the  exercise  or
enforcement of any of the rights of the Secured Party under the Note.

      9. Responsibility for Collateral.  The Company assumes all liabilities and
responsibility  in connection  with all  Collateral,  and the obligations of the
Company hereunder or under the Note and the Warrants shall in no way be affected
or diminished by reason of the loss, destruction,  damage or theft of any of the
Collateral or its unavailability for any reason.

      10. Security  Interest  Absolute.  All rights of the Secured Party and all
Obligations  of the  Company  hereunder,  shall be absolute  and  unconditional,
irrespective of: (a) any lack of validity or  enforceability  of this Agreement,
the Note or any agreement entered into in connection with the foregoing,  or any
portion  hereof or  thereof;  (b) any  change  in the  time,  manner or place of
payment  or  performance  of,  or in  any  other  term  of,  all  or  any of the
Obligations, or any other amendment or waiver of or any consent to any departure
from  the  Note or any  other  agreement  entered  into in  connection  with the
foregoing; (c) any exchange,  release or nonperfection of any of the Collateral,
or any release or amendment or waiver of or consent to departure  from any other
collateral for, or any guaranty,  or any other  security,  for all or any of the
Obligations;  (d) any action by the Secured Party to obtain,  adjust, settle and
cancel in its sole discretion any insurance claims or matters made or arising in
connection  with the  Collateral;  or (e) any  other  circumstance  which  might
otherwise constitute any legal or equitable defense available to the Company, or
a discharge of all or any part of the Security  Interest  granted hereby.  Until
the  Obligations  shall have been paid and performed in full,  the rights of the
Secured Party shall continue even if the  Obligations are barred for any reason,
including,  without  limitation,  the running of the statute of  limitations  or
bankruptcy.  The  Company  expressly  waives  presentment,  protest,  notice  of
protest,  demand, notice of nonpayment and demand for performance.  In the event
that at any time any transfer of any  Collateral or any payment  received by the
Secured Party  hereunder  shall be deemed by final order of a court of competent
jurisdiction to have been a voidable  preference or fraudulent  conveyance under
the bankruptcy or insolvency laws of the United States, or shall be deemed to be
otherwise  due to any party  other than the  Secured  Party,  then,  in any such
event, the Company's  obligations  hereunder shall survive  cancellation of this
Agreement, and shall not be discharged or satisfied by any prior payment thereof
and/or  cancellation  of this  Agreement,  but shall  remain a valid and binding
obligation  enforceable in accordance with the terms and provisions  hereof. The
Company  waives all right to require  the Secured  Party to proceed  against any
other person or to apply any Collateral  which the Secured Party may hold at any
time, or to marshal assets, or to pursue any other remedy.

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      11. Term of  Agreement.  This  Agreement and the Security  Interest  shall
terminate  on the date on which  all  payments  under the Note have been made in
full  and all  other  Obligations  have  been  paid  or  discharged.  Upon  such
termination,  the  Secured  Party,  at the  request  and at the  expense  of the
Company,  will join in executing any  termination  statement with respect to any
financing statement executed and filed pursuant to this Agreement.

      12. Power of Attorney; Further Assurances.

            (a) The Company  authorizes the Secured Party, and does hereby make,
constitute and appoint it, and its respective  officers,  agents,  successors or
assigns  with full  power of  substitution,  as the  Company's  true and  lawful
attorney-in-fact, with power, in its own name or in the name of the Company, to,
after the  occurrence  and during the  continuance  of an Event of Default:  (i)
endorse any notes, checks, drafts, money orders, or other instruments of payment
(including  payments  payable under or in respect of any policy of insurance) in
respect of the  Collateral  that may come into  possession of the Secured Party;
(ii) to sign and endorse any UCC financing statement or any invoice,  freight or
express bill,  bill of lading,  storage or warehouse  receipts,  drafts  against
debtors, assignments, verifications and notices in connection with accounts, and
other  documents  relating to the Collateral;  (iii) to pay or discharge  taxes,
liens,  security interests or other encumbrances at any time levied or placed on
or threatened  against the  Collateral;  (iv) to demand,  collect,  receipt for,
compromise,  settle and sue for monies due in respect of the Collateral; and (v)
generally,  to do, at the  option of the  Secured  Party,  and at the  Company's
expense,  at any  time,  or from  time to time,  all acts and  things  which the
Secured  Party  deems  necessary  to  protect,  preserve  and  realize  upon the
Collateral  and the  Security  Interest  granted  therein in order to effect the
intent of this  Agreement  and the Note,  all as fully  and  effectually  as the
Company  might or could  do;  and the  Company  hereby  ratifies  all that  said
attorney shall  lawfully do or cause to be done by virtue hereof.  This power of
attorney is coupled  with an interest and shall be  irrevocable  for the term of
this  Agreement  and  thereafter  as long  as any of the  Obligations  shall  be
outstanding.

            (b)  On  a  continuing  basis,  the  Company  will  make,   execute,
acknowledge,  deliver, file and record, as the case may be, in the proper filing
and recording places in any jurisdiction,  including,  without  limitation,  the
jurisdictions  indicated on Schedule B, attached hereto,  all such  instruments,
and take all such action as may reasonably be deemed necessary or advisable,  or
as reasonably  requested by the Secured Party, to perfect the Security  Interest
granted  hereunder  and  otherwise  to carry out the intent and purposes of this
Agreement,  or for assuring  and  confirming  to the Secured  Party the grant or
perfection of a security interest in all the Collateral.

            (c) The Company hereby irrevocably appoints the Secured Party as the
Company's  attorney-in-fact,  with full  authority in the place and stead of the
Company and in the name of the Company, from time to time in the Secured Party's
discretion,  to take any action and to execute any instrument  which the Secured
Party may deem  necessary  or  advisable  to  accomplish  the  purposes  of this
Agreement,  including  the  filing,  in its  sole  discretion,  of  one or  more
financing or continuation statements and amendments thereto,  relative to any of
the Collateral without the signature of the Company where permitted by law.

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            (d)  The  Company  shall  execute  such  additional  agreements  and
documents necessary or advisable to accomplish the purposes of this Agreement.

      13.  Notices.  All  notices,  requests,  demands and other  communications
hereunder shall be in writing,  with copies to all the other parties hereto, and
shall be deemed to have been duly given when:  (a) if  delivered  by hand,  upon
receipt, (b) if sent by facsimile, upon receipt of proof of sending thereof, (c)
if sent by nationally recognized overnight delivery service (receipt requested),
the next  business day or (d) if mailed by  first-class  registered or certified
mail, return receipt requested,  postage prepaid, four days after posting in the
U.S. mails, in each case if delivered to the following addresses:

If to the Company:                       Digicorp
                                         100 Wilshire Boulevard, Suite 1750
                                         Santa Monica, California 90401
                                         Attention:  Chief Executive Officer
                                         Facsimile: (310) 752-1486

With a copy to (which shall not constitute notice):

                                         Sichenzia Ross Friedman Ference LLP
                                         1065 Avenue of the Americas, 21st Floor
                                         New York, New York 10018
                                         Attention:  Marc J. Ross, Esq.
                                         Facsimile: (212) 930-9725

If to the Secured Party:                 Rebel Holdings, LLC
                                         6601 Center Drive West, Suite 200
                                         Los Angeles, California 90045
                                         Attention: Jay Rifkin
                                         Facsimile: (310) 499-4334

With a copy to:                          Danzig Kaye Cooper Fiore & Kay, LLP
                                         30A Vreeland Road
                                         Florham Park, New Jersey 07932
                                         Attention: David M. Kaye, Esq.
                                         Facsimile: (973) 443-0609

      14.  Other  Security.  To the  extent  that  the  Obligations  are  now or
hereafter  secured by property  other than the  Collateral or by the  guarantee,
endorsement or property of any other person, firm,  corporation or other entity,
then the Secured Party shall have the right, in its sole discretion,  to pursue,
relinquish,  subordinate,  modify or take any other action with respect thereto,
without in any way modifying or affecting any of the Secured  Party's rights and
remedies hereunder.

                                       9
<PAGE>

      15. Miscellaneous.

            (a) No course of dealing  between the Company and the Secured Party,
nor any failure to  exercise,  nor any delay in  exercising,  on the part of the
Secured Party, any right,  power or privilege  hereunder or under the Note shall
operate as a waiver  thereof;  nor shall any single or partial  exercise  of any
right, power or privilege  hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.

            (b) All of the rights and remedies of the Secured Party with respect
to the  Collateral,  whether  established  hereby or by the Note or by any other
agreements,  instruments  or documents or by law shall be cumulative  and may be
exercised singly or concurrently.

            (c) This Agreement  constitutes the entire  agreement of the parties
with respect to the subject matter hereof and is intended to supersede all prior
negotiations,  understandings  and agreements  with respect  thereto.  Except as
specifically set forth in this Agreement,  no provision of this Agreement may be
modified or amended except by a written agreement specifically referring to this
Agreement and signed by the parties hereto.

            (d) In the event that any provision of this  Agreement is held to be
invalid,  prohibited or unenforceable in any jurisdiction for any reason, unless
such provision is narrowed by judicial construction, this Agreement shall, as to
such jurisdiction,  be construed as if such invalid, prohibited or unenforceable
provision  had been more narrowly  drawn so as not to be invalid,  prohibited or
unenforceable.   If,  notwithstanding  the  foregoing,  any  provision  of  this
Agreement  is  held  to  be  invalid,   prohibited  or   unenforceable   in  any
jurisdiction,  such provision, as to such jurisdiction,  shall be ineffective to
the  extent  of  such  invalidity,   prohibition  or  unenforceability   without
invalidating the remaining  portion of such provision or the other provisions of
this  Agreement  and without  affecting the validity or  enforceability  of such
provision or the other  provisions of this Agreement in any other  jurisdiction.
(e) No waiver of any breach or default or any right under this  Agreement  shall
be  considered  valid  unless in  writing  and signed by the party  giving  such
waiver,  and no such waiver shall be deemed a waiver of any subsequent breach or
default or right, whether of the same or similar nature or otherwise.

            (f) This Agreement shall be binding upon and inure to the benefit of
each party hereto and its successors and assigns.

            (g) Each  party  shall take such  further  action  and  execute  and
deliver such further  documents as may be necessary or  appropriate  in order to
carry out the provisions and purposes of this Agreement.

            (h) This Agreement shall be construed in accordance with the laws of
the State of  California,  except to the  extent  the  validity,  perfection  or
enforcement  of a security  interest  hereunder  in  respect  of any  particular
Collateral  which  are  governed  by a  jurisdiction  other  than  the  State of
California  in which  case such law shall  govern.  Each of the  parties  hereto
irrevocably  submit to the exclusive  jurisdiction  of any  California  State or
United States federal court sitting in the County of Los Angeles over any action
or  proceeding  arising out of or relating  to this  Agreement,  and the parties
hereto  hereby  irrevocably  agree that all claims in respect of such  action or
proceeding  may be heard and  determined  in such  California  State or  federal
court.  The  parties  hereto  agree that a final  judgment in any such action or
proceeding  shall be conclusive  and may be enforced in other  jurisdictions  by
suit on the judgment or in any other manner  provided by law. The parties hereto
further  waive  any  objection  to venue  in the  State  of  California  and any
objection to an action or  proceeding in the State of California on the basis of
forum non conveniens.

                                       10
<PAGE>

            (i) EACH PARTY HERETO HEREBY AGREES TO WAIVE ITS  RESPECTIVE  RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION  BASED  UPON OR  ARISING  OUT OF
THIS AGREEMENT.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL  ENCOMPASSING OF
ANY DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATER
OF THIS AGREEMENT,  INCLUDING WITHOUT LIMITATION  CONTRACT CLAIMS,  TORT CLAIMS,
BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS.  EACH PARTY
HERETO  ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT FOR EACH PARTY TO
ENTER INTO A BUSINESS  RELATIONSHIP,  THAT EACH PARTY HAS ALREADY RELIED ON THIS
WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH PARTY WILL CONTINUE TO RELY
ON THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS AND
REPRESENTS  THAT IT HAS REVIEWED  THIS WAIVER WITH ITS LEGAL  COUNSEL,  AND THAT
SUCH  PARTY HAS  KNOWINGLY  AND  VOLUNTARILY  WAIVES  ITS RIGHTS TO A JURY TRIAL
FOLLOWING  SUCH  CONSULTATION.   THIS  WAIVER  IS  IRREVOCABLE,   MEANING  THAT,
NOTWITHSTANDING  ANYTHING HEREIN TO THE CONTRARY,  IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT  AMENDMENTS,
RENEWALS AND SUPPLEMENTS OR MODIFICATIONS  TO THIS AGREEMENT.  IN THE EVENT OF A
LITIGATION,  THIS AGREEMENT MAY BE FILED AS A WRITTEN  CONSENT TO A TRIAL BY THE
COURT.

(j) This Agreement may be executed in any number of counterparts, each of which
when so executed shall be deemed to be an original and, all of which taken
together shall constitute one and the same Agreement. In the event that any
signature is delivered by facsimile transmission, such signature shall create a
valid binding obligation of the party executing (or on whose behalf such
signature is executed) the same with the same force and effect as if such
facsimile signature were the original thereof.

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                                       11
<PAGE>



      IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement
to be duly executed on the day and year first above written.

                                                     DIGICORP


                                                      /s/ William B. Horne
                                                     --------------------------
                                                     William B. Horne
                                                     Chief Executive Officer


                                                     REBEL HOLDINGS, LLC


                                                      /s/ Jay Rifkin
                                                     --------------------------
                                                     Jay Rifkin
                                                     Managing Member


                                       12
<PAGE>



                                   SCHEDULE A


Principal Place of Business of the Company:

100 Wilshire Boulevard, Suite 1750
Santa Monica, California 90401


Locations Where Collateral is Located or Stored:

100 Wilshire Boulevard, Suite 1750
Santa Monica, California 90401


                                       A-1
<PAGE>



                                   SCHEDULE B


Jurisdictions:

Utah

                                       B-1