October 17, 2005
VIA FEDERAL EXPRESS
AND FACSIMILE (▇▇▇) ▇▇▇-▇▇▇▇
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Digicorp
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, CEO
Re: Exchange of Warrants
Dear Will:
This letter documents the agreement among ▇▇▇▇▇▇ Capital Management, LLC
("▇▇▇▇▇▇ Capital") and Digicorp to cancel certain warrants owned by ▇▇▇▇▇▇
Capital in exchange for the issuance by Digicorp of a replacement warrant, as
further described below. Pursuant to a Subscription Agreement dated May 18, 2005
between Digicorp and ▇▇▇▇▇▇ Capital (the "Subscription Agreement"), ▇▇▇▇▇▇
Capital purchased 2,941,176 shares of Digicorp's common stock ("Common Stock")
and warrants to purchase an aggregate of 3,000,000 shares of Common Stock with
exercise prices ranging from $0.25 to $1.50 per share (the "May Warrants").
▇▇▇▇▇▇ Capital and Digicorp hereby agree to cancel all of the May Warrants
in exchange for the issuance by Digicorp to ▇▇▇▇▇▇ Capital of a warrant to
purchase 500,000 shares of Common Stock with an exercise price of $0.01 per
share exercisable for a period of five years (the "October Warrant"). ▇▇▇▇▇▇
Capital is delivering herewith the original May Warrants for cancellation by
Digicorp. Upon receipt of the original May Warrants, Digicorp shall immediately
issue and deliver the October Warrant to ▇▇▇▇▇▇ Capital.
▇▇▇▇▇▇ Capital and Digicorp hereby represent and warrant that each of the
representations and warranties of each respective party contained in Articles I
and II of the Subscription Agreement are true and correct in all material
respects on and as of the date of this letter.
If you agree with the foregoing, please indicate your approval of same by
signing this letter in the space provided below.
Very truly yours,
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Managing Member
ACCEPTED AND AGREED TO:
Digicorp
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (10/27/05)
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chief Executive Officer