Document:

Exhibit 10.2

    Exhibit
      10(ii)

    

    REGISTRATION
      RIGHTS AGREEMENT

    

    Registration
      Rights Agreement (the “Agreement”),
      dated
      as of August__, 2005, by and between Nexia Holdings Inc., a corporation
      organized under the laws of State of Nevada, with its principal executive office
      at ,59
      West 100 South, Salt Lake City, UT 84101 (the
      “Company”),
      and
      Dutchess Private Equities Fund, L.P., a Delaware limited partnership with its
      principal office at 312 Stuart Street, Boston, MA 02116 (the “Holder”).

    

    Whereas, in
      connection with the Investment Agreement by and between the Company and the
      Investor of even date herewith (the “Investment
      Agreement”),
      the
      Company has agreed to issue and sell to the Investor an indeterminate number
      of
      shares of the Company’s Common Stock, $0.001 par value per share (the
“Common
      Stock”),
      to be
      purchased pursuant to the terms and subject to the conditions set forth in
      the
      Investment Agreement; and 

    

    Whereas, to
      induce
      the Investor to execute and deliver the Investment Agreement, the Company has
      agreed to provide certain registration rights under the Securities Act of 1933,
      as amended, and the rules and regulations thereunder, or any similar successor
      statute (collectively, the “1933
      Act”),
      and
      applicable state securities laws, with respect to the shares of Common Stock
      issuable pursuant to the Investment Agreement.

    

    Now
      therefore, in consideration of the foregoing premises and the mutual covenants
      contained hereinafter and other good and valuable consideration, the receipt
      and
      sufficiency of which are hereby acknowledged, the Company and the Investor
      hereby agree as follows: 

     

    Section
      1. DEFINITIONS.

    

    As
      used
      in this Agreement, the following terms shall have the following
      meanings:

    

    “Execution
      Date”
means
      the date first written above.

    

    “Investor”
means
      Dutchess Private Equities Fund, L.P., a Delaware limited
      partnership.

    

    “Person”
means
      a
      corporation, a limited liability company, an association, a partnership, an
      organization, a business, an individual, a governmental or political subdivision
      thereof or a governmental agency. 

    

    “Potential
      Material Event”
means
      any of the following: (i)
      the
      possession by the Company of material information not ripe for disclosure in
      the
      Registration Statement, which shall be evidenced by determinations in good
      faith
      by the Board of Directors of the Company that disclosure of such information
      in
      the Registration Statement would be detrimental to the business and affairs
      of
      the Company, or (ii)
      any
      material engagement or activity by the Company which would, in the good faith
      determination of the Board of Directors of the Company, be adversely affected
      by
      disclosure in the Registration Statement at such time, which determination
      shall
      be accompanied by a good faith determination by the Board of Directors of the
      Company that the Registration Statement would be materially misleading absent
      the inclusion of such information.

    

    “Principal
      Market”
shall
      mean The American Stock Exchange, National Association of Securities Dealer’s,
      Inc. Over-the-Counter electronic bulletin board, the Nasdaq National Market
      or
      The Nasdaq SmallCap Market whichever is the principal market on which the Common
      Stock is listed. 

     

    
      
        
        

      

      
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    “Register,”
      “Registered,”
and
      “Registration”
refer
      to the Registration effected by preparing and filing one (1) or more
      Registration Statements in compliance with the 1933 Act and pursuant to Rule
      415
      under the 1933 Act or any successor rule providing for offering securities
      on a
      continuous basis (“Rule
      415”),
      and
      the declaration or ordering of effectiveness of such Registration Statement(s)
      by the United States Securities and Exchange Commission (the
“SEC”).

    

    “Registrable
      Securities”
means
      (i)
      the
      shares of Common Stock issued or issuable pursuant to the Investment Agreement,
      and (ii)
      any
      shares of capital stock issued or issuable with respect to such shares of Common
      Stock, if any, as a result of any stock split, stock dividend, recapitalization,
      exchange or similar event or otherwise, which have not been (x)
      included
      in the Registration Statement that has been declared effective by the SEC or
      (y)
      sold
      under circumstances meeting all of the applicable conditions of Rule 144 (or
      any
      similar provision then in force) under the 1933 Act.

    

    “Registration
      Statement”
means
      the registration statement of the Company filed under the 1933 Act covering
      the
      Registrable Securities.

    

    All
      capitalized terms used in this Agreement and not otherwise defined herein shall
      have the same meaning ascribed to them as in the Investment Agreement.

    

    Section
      2. REGISTRATION.

    

    (a)
      On or
      before the execution of this Agreement, the Company shall have provided a draft
      of the Registration Statement covering the Registrable Securities to the
      Investor. The Company shall, as soon as practicable, but not later than thirty
      (30) calendar days following the Execution of this agreement, file with the
      SEC
      the Registration Statement or Registration Statements (as is necessary) on
      Form
      SB-2 (or, if such form is unavailable for such a registration, on such other
      form as is available for such a registration), covering the resale of all of
      the
      Registrable Securities, which Registration Statement(s) shall state that, in
      accordance with Rule 416 promulgated under the 1933 Act, such Registration
      Statement also covers such indeterminate number of additional shares of Common
      Stock as may become issuable upon stock splits, stock dividends or similar
      transactions. The Company shall initially register for resale
      _________ shares
      of
      Common Stock which would be issuable on the date preceding the filing of the
      Registration Statement based on the closing bid price of the Company’s Common
      Stock on such date and the amount reasonably calculated that represents Common
      Stock issuable to other parties as set forth in the Investment Agreement except
      to the extent that the SEC requires the share amount to be reduced as a
      condition of effectiveness..

    

    (b)
      The
      Company shall use commercially reasonable efforts to have the Registration
      Statement(s) declared effective by the SEC within ninety (90) calendar days
      after the Execution Date. 

    

    (c)
      The
      Company agrees not to include any other securities in the Registration Statement
      covering the Registrable Securities without Investor’s prior written consent
      which Investor may withhold in its sole discretion. Furthermore, the Company
      agrees that it will not file any other Registration Statement for other
      securities, until thirty calendar days after the Registration Statement for
      the
      Registrable Securities is declared effective by the SEC.

    

    Section
      3. RELATED
      OBLIGATIONS.

    

    At
      such
      time as the Company is obligated to prepare and file the Registration Statement
      with the SEC pursuant to Section 2(a), the Company will effect the registration
      of the Registrable Securities in accordance with the intended method of
      disposition thereof and, with respect thereto, the Company shall have the
      following obligations:

     

    
      
        
        

      

      
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    (a)
      The
      Company shall use commercially reasonable efforts to cause such Registration
      Statement relating to the Registrable Securities to become effective within
      ninety (90) days after the Execution Date and shall keep such Registration
      Statement effective until the earlier to occur of (i)
      the date
      on which (A)
      the
      Investor shall have sold all the Registrable Securities; and (B)
      the
      Investor has no right to acquire any additional shares of Common Stock under
      the
      Investment Agreement (the “Registration
      Period”).
      The
      Registration Statement (including any amendments or supplements thereto and
      prospectuses contained therein) shall not contain any untrue statement of a
      material fact or omit to state a material fact required to be stated therein,
      or
      necessary to make the statements therein, in light of the circumstances in
      which
      they were made, not misleading. The Company shall use its commercially
      reasonable efforts to respond to all SEC comments within seven (7) business
      days
      from receipt of such comments by the Company. The Company shall use its
      commercially reasonable efforts to cause the Registration Statement relating
      to
      the Registrable Securities to become effective no later than three (3) business
      days after notice from the SEC that the Registration Statement may be declared
      effective. The Investor agrees to provide all information which it is required
      by law to provide to the Company, including the intended method of disposition
      of the Registrable Securities, and the Company’s obligations set forth above
      shall be conditioned on the receipt of such information.

    

    (b)
      The
      Company shall prepare and file with the SEC such amendments (including
      post-effective amendments) and supplements to the Registration Statement and
      the
      prospectus used in connection with such Registration Statement, which prospectus
      is to be filed pursuant to Rule 424 promulgated under the 1933 Act, as may
      be
      necessary to keep such Registration Statement effective during the Registration
      Period, and, during such period, comply with the provisions of the 1933 Act
      with
      respect to the disposition of all Registrable Securities of the Company covered
      by such Registration Statement until such time as all of such Registrable
      Securities shall have been disposed of in accordance with the intended methods
      of disposition by the Investor thereof as set forth in such Registration
      Statement. In the event the number of shares of Common Stock covered by the
      Registration Statement filed pursuant to this Agreement is at any time
      insufficient to cover all of the Registrable Securities, the Company shall
      amend
      such Registration Statement, or file a new Registration Statement (on the short
      form available therefor, if applicable), or both, so as to cover all of the
      Registrable Securities, in each case, as soon as practicable, but in any event
      within thirty (30) calendar days after the necessity therefor arises (based
      on
      the then Purchase Price of the Common Stock and other relevant factors on which
      the Company reasonably elects to rely), assuming the Company has sufficient
      authorized shares at that time, and if it does not, within thirty (30) calendar
      days after such shares are authorized. The Company shall use commercially
      reasonable efforts to cause such amendment and/or new Registration Statement
      to
      become effective as soon as practicable following the filing thereof.

    

    (c)
      The
      Company shall make available to the Investor whose Registrable Securities are
      included in any Registration Statement and its legal counsel without charge
      (i)
      promptly
      after the same is prepared and filed with the SEC at least one (1) copy of
      such
      Registration Statement and any amendment(s) thereto, including financial
      statements and schedules, all documents incorporated therein by reference and
      all exhibits, the prospectus included in such Registration Statement (including
      each preliminary prospectus) and, with regards to such Registration
      Statement(s), any correspondence by or on behalf of the Company to the SEC
      or
      the staff of the SEC and any correspondence from the SEC or the staff of the
      SEC
      to the Company or its representatives; (ii)
      upon the
      effectiveness of any Registration Statement, the Company shall make available
      copies of the prospectus, via EDGAR, included in such Registration Statement
      and
      all amendments and supplements thereto; and (iii)
      such
      other documents, including copies of any preliminary or final prospectus, as
      the
      Investor may reasonably request from time to time in order to facilitate the
      disposition of the Registrable Securities.

     

    
      
        
        

      

      
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    (d)
      The
      Company shall use commercially reasonable efforts to (i)
      register
      and qualify the Registrable Securities covered by the Registration Statement
      under such other securities or “blue sky” laws of such states in the United
      States as any Investor reasonably requests; (ii)
      prepare
      and file in those jurisdictions, such amendments (including post-effective
      amendments) and supplements to such registrations and qualifications as may
      be
      necessary to maintain the effectiveness thereof during the Registration Period;
      (iii)
      take
      such other actions as may be necessary to maintain such registrations and
      qualifications in effect at all times during the Registration Period, and
(iv)
      take all
      other actions reasonably necessary or advisable to qualify the Registrable
      Securities for sale in such jurisdictions; provided,
      however,
      that
      the Company shall not be required in connection therewith or as a condition
      thereto to (x)
      qualify
      to do business in any jurisdiction where it would not otherwise be required
      to
      qualify but for this Section 3(d), or (y)
      subject
      itself to general taxation in any such jurisdiction. The Company shall promptly
      notify each Investor who holds Registrable Securities of the receipt by the
      Company of any notification with respect to the suspension of the registration
      or qualification of any of the Registrable Securities for sale under the
      securities or “blue sky” laws of any jurisdiction in the United States or its
      receipt of actual notice of the initiation or threatening of any proceeding
      for
      such purpose.

    

    (e)
      As
      promptly as practicable after becoming aware of such event, the Company shall
      notify Investor in writing of the happening of any event as a result of which
      the prospectus included in the Registration Statement, as then in effect,
      includes an untrue statement of a material fact or omission to state a material
      fact required to be stated therein or necessary to make the statements therein,
      in light of the circumstances under which they were made, not misleading
      (“Registration
      Default”)
      and
      use all diligent efforts to promptly prepare a supplement or amendment to such
      Registration Statement and take any other necessary steps to cure the
      Registration Default, (which, if such Registration Statement is on Form S-3,
      may
      consist of a document to be filed by the Company with the SEC pursuant to
      Section 13(a), 13(c), 14 or 15(d) of the 1934 Act (as defined below) and to
      be
      incorporated by reference in the prospectus) to correct such untrue statement
      or
      omission, and make available copies of such supplement or amendment to each
      Investor. The Company shall also promptly notify Investor (i)
      when a
      prospectus or any prospectus supplement or post-effective amendment has been
      filed, and when the Registration Statement or any post-effective amendment
      has
      become effective (the Company will prepare notification of such effectiveness
      which shall be delivered to the Investor on the same day of such effectiveness
      and by overnight mail), additionally, the Company will promptly provide to
      the
      Investor, a copy of the effectiveness order prepared by the SEC once it is
      received by the Company; (ii)
      of any
      request by the SEC for amendments or supplements to the Registration Statement
      or related prospectus or related information, (iii)
      of
      the
      Company’s reasonable determination that a post-effective amendment to the
      Registration Statement would be appropriate, (iv)
      in the
      event the Registration Statement is no longer effective, or
      (v) if
      Registration Statement is stale as a result of the Company’s failure to timely
      file its financials or otherwise. The Company acknowledges that its failure
      to
      cure the Registration Default within ten (10) business days will cause the
      Investor to suffer damages in an amount that will be difficult to ascertain.
      Accordingly, the parties agree that it is appropriate to include a provision
      for
      liquidated damages. The parties acknowledge and agree that the liquidated
      damages provision set forth in this section represents the parties’ good faith
      effort to quantify such damages and, as such, agree that the form and amount
      of
      such liquidated damages are reasonable and will not constitute a penalty. It
      is
      the intention of the parties that interest payable under any of the terms of
      this Agreement shall not exceed the maximum amount permitted under any
      applicable law. If a law, which applies to this Agreement which sets the maximum
      interest amount, is finally interpreted so that the interest in connection
      with
      this Agreement exceeds the permitted limits, then: (1)
      any such
      interest shall be reduced by the amount necessary to reduce the interest to
      the
      permitted limit; and (2)
      any sums
      already collected (if any) from the Company which exceed the permitted limits
      will be refunded to the Company. The Investor may choose to make this refund
      by
      reducing the amount that the Company owes under this Agreement or by making
      a
      direct payment to the Company. If a refund reduces the amount that the Company
      owes the Investor, the reduction will be treated as a partial payment. In case
      any provision of this Agreement is held by a court of competent jurisdiction
      to
      be excessive in scope or otherwise invalid or unenforceable, such provision
      shall be adjusted rather than voided, if possible, so that it is enforceable
      to
      the maximum extent possible, and the validity and enforceability of the
      remaining provisions of this Agreement will not in any way be affected or
      impaired thereby.

     

    
      
        
        

      

      
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    (f)
      The
      Company shall use commercially reasonable efforts to prevent the issuance of
      any
      stop order or other suspension of effectiveness of the Registration Statement,
      or the suspension of the qualification of any of the Registrable Securities
      for
      sale in any jurisdiction and, if such an order or suspension is issued, to
      obtain the withdrawal of such order or suspension at the earliest possible
      moment and to notify the Investor who holds Registrable Securities being sold
      of
      the issuance of such order and the resolution thereof or its receipt of actual
      notice of the initiation or threat of any proceeding for such
      purpose.

    

    (g)
      The
      Company shall permit the Investor and one (1) legal counsel, designated by
      the
      Investor, to review and comment upon the Registration Statement and all
      amendments and supplements thereto at least seven (7) business days prior to
      their filing with the SEC, and not file any document in a form to which such
      counsel reasonably objects. The Company may request to shorten the Investor’s
      review period and the Investor will, if possible, attempt to comply with the
      accelerated review period. The Company shall not submit to the SEC a request
      for
      acceleration of the effectiveness of the Registration Statement or file with
      the
      SEC the Registration Statement or any amendment or supplement thereto without
      the prior approval of such counsel or the Investor, which approval shall not
      be
      unreasonably withheld. 

    

    (h)
      At the
      request of the Investor, the Company shall cause to be furnished to Investor,
      on
      the date of the effectiveness of the Registration Statement, a legal opinion,
      in
      form and substance reasonably acceptable to Investor’s counsel, dated as of such
      date, of counsel representing the Company for purposes of such Registration
      Statement. 

    

    (i)
      The
      Company shall hold in confidence and not make any disclosure of information
      concerning a Investor provided to the Company unless (i)
      disclosure
      of such information is necessary to comply with federal or state securities
      laws, (ii)
      the
      disclosure of such information is necessary to avoid or correct a misstatement
      or omission in any Registration Statement, (iii)
      the
      release of such information is ordered pursuant to a subpoena or other final,
      non-appealable order from a court or governmental body of competent
      jurisdiction, or (iv)
      such
      information has been made generally available to the public other than by
      disclosure in violation of this Agreement or any other agreement. The Company
      agrees that it shall, upon learning that disclosure of such information
      concerning a Investor is sought in or by a court or governmental body of
      competent jurisdiction or through other means, give prompt written notice to
      such Investor and allow such Investor, at the Investor’s expense, to undertake
      appropriate action to prevent disclosure of, or to obtain a protective order
      for, such information.

    

    (j)
      The
      Company shall use commercially reasonable efforts to maintain designation and
      quotation of all the Registrable Securities covered by any Registration
      Statement on the Principal Market. If, despite the Company’s commercially
      reasonable efforts, the Company is unsuccessful in satisfying the preceding
      sentence, it shall use commercially reasonable efforts to cause all the
      Registrable Securities covered by any Registration Statement to be listed on
      each other national securities exchange and automated quotation system, if
      any,
      on which securities of the same class or series issued by the Company are then
      listed, if any, if the listing of such Registrable Securities is then permitted
      under the rules of such exchange or system. The Company shall pay all fees
      and
      expenses in connection with satisfying its obligation under this Section
      3(j).

    

    (k)
      The
      Company shall cooperate with the Investor to facilitate the prompt preparation
      and delivery of certificates representing the Registrable Securities to be
      offered pursuant to the Registration Statement and enable such certificates
      to
      be in such denominations or amounts, as the case may be, as the Investor may
      reasonably request (and after any sales of such Registrable Securities by the
      Investor, such certificates not bearing any restrictive legend).

     

    
      
        
        

      

      
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    (l)
      The
      Company shall provide a transfer agent for all the Registrable Securities not
      later than the effective date of the first Registration Statement filed pursuant
      hereto.

    

    (m)
      If
      requested by the Investor, the Company shall (i)
      as soon
      as reasonably practical incorporate in a prospectus supplement or post-effective
      amendment such information as such Investor reasonably determines should be
      included therein relating to the sale and distribution of Registrable
      Securities, including, without limitation, information with respect to the
      offering of the Registrable Securities to be sold in such offering; (ii)
      make all
      required filings of such prospectus supplement or post-effective amendment
      as
      soon as reasonably possible after being notified of the matters to be
      incorporated in such prospectus supplement or post-effective amendment; and
      (iii)
      supplement or make amendments to any Registration Statement if reasonably
      requested by such Investor.

    

    (n)
      The
      Company shall use commercially reasonable efforts to cause the Registrable
      Securities covered by the applicable Registration Statement to be registered
      with or approved by such other governmental agencies or authorities as may
      be
      necessary to consummate the disposition of such Registrable
      Securities.

     

    (o)
      The
      Company shall otherwise use commercially reasonable efforts to comply with
      all
      applicable rules and regulations of the SEC in connection with any registration
      hereunder.

    

    (p)
      Within
      one (1) business day after the Registration Statement which includes Registrable
      Securities is declared effective by the SEC, the Company shall deliver to the
      transfer agent for such Registrable Securities, with copies to the Investor,
      confirmation that such Registration Statement has been declared effective by
      the
      SEC.

    

    (q)
      The
      Company shall take all other reasonable actions necessary to expedite and
      facilitate disposition by the Investor of Registrable Securities pursuant to
      the
      Registration Statement.

    

    Section
      4. OBLIGATIONS
      OF THE INVESTOR.

     

    (a)
      At least
      five (5) calendar days prior to the first anticipated filing date of the
      Registration Statement the Company shall notify the Investor in writing of
      the
      information the Company requires from Investor if Investor elects to have any
      of
      the Registrable Securities included in such Registration Statement. It shall
      be
      a condition precedent to the obligations of the Company to complete the
      registration pursuant to this Agreement with respect to the Registrable
      Securities of the Investor and Investor shall furnish in writing to the Company
      such information regarding itself, the Registrable Securities held by it and
      the
      intended method of disposition of the Registrable Securities held by it as
      shall
      reasonably be required to effect the registration of such Registrable Securities
      and shall execute such documents in connection with such registration as the
      Company may reasonably request. Investor covenants and agrees that, in
      connection with any sale of Registrable Securities by it pursuant to the
      Registration Statement, it shall comply with the “Plan of Distribution” section
      of the current prospectus relating to such Registration Statement.

    

    (b)
      The
      Investor, by Investor’s acceptance of the Registrable Securities, agrees to
      cooperate with the Company as reasonably requested by the Company in connection
      with the preparation and filing of any Registration Statement hereunder, unless
      Investor has notified the Company in writing of an election to exclude all
      Investor’s Registrable Securities from such Registration Statement.

    

    (c)
      The
      Investor agrees that, upon receipt of written notice from the Company of the
      happening of any event of the kind described in Section 3(f) or the first
      sentence of 3(e), such Investor will immediately discontinue disposition of
      Registrable Securities pursuant to any Registration Statement(s) covering such
      Registrable Securities until Investor’s receipt of the copies of the
      supplemented or amended prospectus contemplated by Section 3(f) or the first
      sentence of 3(e).

     

    
      
        
        

      

      
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    Section
      5. EXPENSES
      OF REGISTRATION.

    

    All
      expenses, other than underwriting discounts and commissions and other than
      as
      set forth in the Investment Agreement, incurred in connection with registrations
      including comments, filings or qualifications pursuant to Sections 2 and 3,
      including, without limitation, all registration, listing and qualifications
      fees, printing and accounting fees, and fees and disbursements of counsel for
      the Company or for the Investor shall be paid by the Company.

    

    Section
      6. INDEMNIFICATION.

    

    In
      the
      event any Registrable Securities are included in the Registration Statement
      under this Agreement:

    

    (a)
      To the
      fullest extent permitted by law, the Company will, and hereby does, indemnify,
      hold harmless and defend Investor who holds Registrable Securities, the
      directors, officers, partners, employees, counsel, agents, representatives
      of,
      and each Person, if any, who controls, any Investor within the meaning of the
      1933 Act or the Securities Exchange Act of 1934, as amended (the “1934
      Act”)
      (each,
      an “Indemnified
      Person”),
      against any losses, claims, damages, liabilities, judgments, fines, penalties,
      charges, costs, attorneys’ fees, amounts paid in settlement or expenses, joint
      or several (collectively, “Claims”),
      incurred in investigating, preparing or defending any action, claim, suit,
      inquiry, proceeding, investigation or appeal taken from the foregoing by or
      before any court or governmental, administrative or other regulatory agency,
      body or the SEC, whether pending or threatened, whether or not an indemnified
      party is or may be a party thereto (“Indemnified
      Damages”),
      to
      which any of them may become subject insofar as such Claims (or actions or
      proceedings, whether commenced or threatened, in respect thereof) arise out
      of
      or are based upon: (i)
      any
      untrue statement or alleged untrue statement of a material fact in the
      Registration Statement or any post-effective amendment thereto or in any filing
      made in connection with the qualification of the offering under the securities
      or other “blue sky” laws of any jurisdiction in which the Investor has requested
      in writing that the Company register or qualify the Shares (“Blue
      Sky Filing”),
      or
      the omission or alleged omission to state a material fact required to be stated
      therein or necessary to make the statements therein, in light of the
      circumstances under which the statements therein were made, not misleading,
      (ii)
      any
      untrue statement or alleged untrue statement of a material fact contained in
      the
      final prospectus (as amended or supplemented, if the Company files any amendment
      thereof or supplement thereto with the SEC) or the omission or alleged omission
      to state therein any material fact necessary to make the statements made
      therein, in light of the circumstances under which the statements therein were
      made, not misleading, or (iii)
      any
      violation or alleged violation by the Company of the 1933 Act, the 1934 Act,
      any
      other law, including, without limitation, any state securities law, or any
      rule
      or regulation thereunder relating to the offer or sale of the Registrable
      Securities pursuant to the Registration Statement (the matters in the foregoing
      clauses (i) through (iii) being, collectively, “Violations”).
      Subject to the restrictions set forth in Section 6(c) the Company shall
      reimburse the Investor and each such controlling person, promptly as such
      expenses are incurred and are due and payable, for any reasonable legal fees
      or
      other reasonable expenses incurred by them in connection with investigating
      or
      defending any such Claim. Notwithstanding anything to the contrary contained
      herein, the indemnification agreement contained in this Section 6(a):
(i)
      shall
      not apply to a Claim arising out of or based upon a Violation which is due
      to
      the inclusion in the Registration Statement of the information furnished to
      the
      Company by any Indemnified Person expressly for use in connection with the
      preparation of the Registration Statement or any such amendment thereof or
      supplement thereto; (ii)
      shall
      not be available to the extent such Claim is based on (a)
      a
      failure of the Investor to deliver or to cause to be delivered the prospectus
      made available by the Company or (b)
      the
      Indemnified Person’s use of an incorrect prospectus despite being promptly
      advised in advance by the Company in writing not to use such incorrect
      prospectus; (iii)
      any
      claims based on the manner of sale of the Registrable Securities by the Investor
      or of the Investor’s failure to register as a dealer under applicable securities
      laws; (iv)
      any
      omission of the Investor to notify the Company of any material fact that should
      be stated in the Registration Statement or prospectus relating to the Investor
      or the manner of sale; and (v)
      any
      amounts paid in settlement of any Claim if such settlement is effected without
      the prior written consent of the Company, which consent shall not be
      unreasonably withheld. Such indemnity shall remain in full force and effect
      regardless of any investigation made by or on behalf of the Indemnified Person
      and shall survive the resale of the Registrable Securities by the Investor
      pursuant to the Registration Statement.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

    (b)
      In
      connection with any Registration Statement in which Investor is participating,
      Investor agrees to severally and jointly indemnify, hold harmless and defend,
      to
      the same extent and in the same manner as is set forth in Section 6(a), the
      Company, each of its directors, each of its officers who signs the Registration
      Statement, each Person, if any, who controls the Company within the meaning
      of
      the 1933 Act or the 1934 Act and the Company’s agents (collectively and together
      with an Indemnified Person, an “Indemnified
      Party”),
      against any Claim or Indemnified Damages to which any of them may become
      subject, under the 1933 Act, the 1934 Act or otherwise, insofar as such Claim
      or
      Indemnified Damages arise out of or are based upon any Violation, in each case
      to the extent, and only to the extent, that such Violation is due to the
      inclusion in the Registration Statement of the written information furnished
      to
      the Company by such Investor expressly for use in connection with such
      Registration Statement; and, subject to Section 6(c), such Investor will
      reimburse any legal or other expenses reasonably incurred by them in connection
      with investigating or defending any such Claim; provided,
      however,
      that
      the indemnity agreement contained in this Section 6(b) and the agreement with
      respect to contribution contained in Section 7 shall not apply to amounts paid
      in settlement of any Claim if such settlement is effected without the prior
      written consent of such Investor, which consent shall not be unreasonably
      withheld; provided, further, however, that the Investor shall be liable under
      this Section 6(b) for only that amount of a Claim or Indemnified Damages as
      does
      not exceed the net proceeds to such Investor as a result of the sale of
      Registrable Securities pursuant to such Registration Statement. Such indemnity
      shall remain in full force and effect regardless of any investigation made
      by or
      on behalf of such Indemnified Party and shall survive the resale of the
      Registrable Securities by the Investor pursuant to the Registration Statement.
      Notwithstanding anything to the contrary contained herein, the indemnification
      agreement contained in this Section 6(b) with respect to any preliminary
      prospectus shall not inure to the benefit of any Indemnified Party if the untrue
      statement or omission of material fact contained in the preliminary prospectus
      were corrected on a timely basis in the prospectus, as then amended or
      supplemented. This indemnification provision shall apply separately to each
      Investor and liability hereunder shall not be joint and several.

    

    (c)
      Promptly
      after receipt by an Indemnified Person or Indemnified Party under this Section
      6
      of notice of the commencement of any action or proceeding (including any
      governmental action or proceeding) involving a Claim, such Indemnified Person
      or
      Indemnified Party shall, if a Claim in respect thereof is to be made against
      any
      indemnifying party under this Section 6, deliver to the indemnifying party
      a
      written notice of the commencement thereof, and the indemnifying party shall
      have the right to participate in, and, to the extent the indemnifying party
      so
      desires, jointly with any other indemnifying party similarly noticed, to assume
      control of the defense thereof with counsel mutually satisfactory to the
      indemnifying party and the Indemnified Person or the Indemnified Party, as
      the
      case may be; provided, however, that an Indemnified Person or Indemnified Party
      shall have the right to retain its own counsel with the fees and expenses to
      be
      paid by the indemnifying party, if, in the reasonable opinion of counsel
      retained by the Indemnified Person or Indemnified Party, the representation
      by
      counsel of the Indemnified Person or Indemnified Party and the indemnifying
      party would be inappropriate due to actual or potential differing interests
      between such Indemnified Person or Indemnified Party and any other party
      represented by such counsel in such proceeding. The indemnifying party shall
      pay
      for only one (1) separate legal counsel for the Indemnified Persons or the
      Indemnified Parties, as applicable, and such counsel shall be selected by the
      Investor, if the Investor are entitled to indemnification hereunder, or the
      Company, if the Company is entitled to indemnification hereunder, as applicable.
      The Indemnified Party or Indemnified Person shall cooperate fully with the
      indemnifying party in connection with any negotiation or defense of any such
      action or Claim by the indemnifying party and shall furnish to the indemnifying
      party all information reasonably available to the Indemnified Party or
      Indemnified Person which relates to such action or Claim. The indemnifying
      party
      shall keep the Indemnified Party or Indemnified Person fully appraised at all
      times as to the status of the defense or any settlement negotiations with
      respect thereto. No indemnifying party shall be liable for any settlement of
      any
      action, claim or proceeding effected without its written consent, provided,
      however, that the indemnifying party shall not unreasonably withhold, delay
      or
      condition its consent. No indemnifying party shall, without the consent of
      the
      Indemnified Party or Indemnified Person, consent to entry of any judgment or
      enter into any settlement or other compromise which does not include as an
      unconditional term thereof the giving by the claimant or plaintiff to such
      Indemnified Party or Indemnified Person of a release from all liability in
      respect to such Claim. Following indemnification as provided for hereunder,
      the
      indemnifying party shall be surrogated to all rights of the Indemnified Party
      or
      Indemnified Person with respect to all third parties, firms or corporations
      relating to the matter for which indemnification has been made. The failure
      to
      deliver written notice to the indemnifying party within a reasonable time of
      the
      commencement of any such action shall not relieve such indemnifying party of
      any
      liability to the Indemnified Person or Indemnified Party under this Section
      6,
      except to the extent that the indemnifying party is prejudiced in its ability
      to
      defend such action.

     

    

    (d)
      The
      indemnity agreements contained herein shall be in addition to (i)
      any
      cause of action or similar right of the Indemnified Party or Indemnified Person
      against the indemnifying party or others, and (ii)
      any
      liabilities the indemnifying party may be subject to pursuant to the
      law.

    

    Section
      7. CONTRIBUTION.

    

    To
      the
      extent any indemnification by an indemnifying party is prohibited or limited
      by
      law, the indemnifying party agrees to make the maximum contribution with respect
      to any amounts for which it would otherwise be liable under Section 6 to the
      fullest extent permitted by law; provided,
      however,
      that:
(i)
      no
      contribution shall be made under circumstances where the maker would not have
      been liable for indemnification under the fault standards set forth in Section
      6; (ii)
      no
      seller of Registrable Securities guilty of fraudulent misrepresentation (within
      the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution
      from any seller of Registrable Securities who was not guilty of fraudulent
      misrepresentation; and (iii)
      contribution
      by any seller of Registrable Securities shall be limited in amount to the net
      amount of proceeds received by such seller from the sale of such Registrable
      Securities.

    

    Section
      8. REPORTS
      UNDER THE 1934 ACT.

    

    With
      a
      view to making available to the Investor the benefits of Rule 144 promulgated
      under the 1933 Act or any other similar rule or regulation of the SEC that
      may
      at any time permit the Investor to sell securities of the Company to the public
      without registration (“Rule
      144”),
      provided that the Investor holds any Registrable Securities are eligible for
      resale under Rule 144 (k), the Company agrees to:

    

    (a) make
      and
      keep public information available, as those terms are understood and defined
      in
      Rule 144;

    

    (b) file
      with
      the SEC in a timely manner all reports and other documents required of the
      Company under the 1933 Act and the 1934 Act so long as the Company remains
      subject to such requirements (it being understood that nothing herein shall
      limit the Company’s obligations under Section 5(c) of the Investment Agreement)
      and the filing of such reports and other documents is required for the
      applicable provisions of Rule 144; and

    

    (c) furnish
      to the Investor, promptly upon request, (i)
      a
      written statement by the Company that it has complied with the reporting
      requirements of Rule 144, the 1933 Act and the 1934 Act, (ii)
      a copy
      of the most recent annual or quarterly report of the Company and such other
      reports and documents so filed by the Company, and (iii)
      such
      other information as may be reasonably requested to permit the Investor to
      sell
      such securities pursuant to Rule 144 without registration.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

    Section
      9. NO
      ASSIGNMENT OF REGISTRATION RIGHTS.

    

    The
      rights under this Agreement shall not be assignable.

    

    Section
      10. AMENDMENT
      OF REGISTRATION RIGHTS.

    

    Provisions
      of this Agreement may be amended only with the written consent of the Company
      and Investor. 

    

    Section
      11. MISCELLANEOUS.

    

    (a)
      Any
      notices or other communications required or permitted to be given under the
      terms of this Agreement that must be in writing will be deemed to have been
      delivered (i)
      upon
      receipt, when delivered personally; (ii)
      upon
      receipt, when sent by facsimile (provided a confirmation of transmission is
      mechanically or electronically generated and kept on file by the sending party);
      or (iii)
      one (1)
      day after deposit with a nationally recognized overnight delivery service,
      in
      each case properly addressed to the party to receive the same. The addresses
      and
      facsimile numbers for such communications shall be:

    

    If
      to the
      Company:

    

    Nexia
      Holdings, Inc.

    59
      West
      100 South

    Salt
      Lake
      City, UT 84101

    Telephone: 801-575-8073

    

    If
      to the
      Investor:

    

    Dutchess
      Private Equities Fund, LP

    312
      Stuart St, Third Floor

    Boston,
      MA 02116

    Telephone:
       617-960-3570

    Facsimile:
       617-960-3772

    

    Each
      party shall provide five (5) business days prior notice to the other party
      of
      any change in address, phone number or facsimile number.

    

    (b)
      Failure
      of any party to exercise any right or remedy under this Agreement or otherwise,
      or delay by a party in exercising such right or remedy, shall not operate as
      a
      waiver thereof.

    

    (c)
      The laws
      of the Commonwealth of Massachusetts shall govern all issues arising from or
      related to this Agreement without regard to the principles of conflict of laws.
      Each party hereby irrevocably submits to the exclusive jurisdiction of the
      state
      and federal courts sitting in the City of Boston, County of Suffolk, for the
      adjudication of any dispute hereunder or in connection herewith or with any
      transaction contemplated hereby or discussed herein, and hereby irrevocably
      waives, and agrees not to assert in any suit, action or proceeding, any claim
      that it is not personally subject to the jurisdiction of any such court, that
      such suit, action or proceeding is brought in an inconvenient forum or that
      the
      venue of such suit, action or proceeding is improper. Each party hereby
      irrevocably waives personal service of process and consents to process being
      served in any such suit, action or proceeding by mailing a copy thereof to
      such
      party at the address for such notices to it under this Agreement and agrees
      that
      such service shall constitute good and sufficient service of process and notice
      thereof. Nothing contained herein shall be deemed to limit in any way any right
      to serve process in any manner permitted by law. If any provision of this
      Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity
      or unenforceability shall not affect the validity or enforceability of the
      remainder of this Agreement in that jurisdiction or the validity or
      enforceability of any provision of this Agreement in any other
      jurisdiction.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    

    (d)
      This
      Agreement and the Transaction Documents constitute the entire agreement among
      the parties hereto with respect to the subject matter hereof and thereof. There
      are no restrictions, promises, warranties or undertakings, other than those
      set
      forth or referred to herein and therein.

    

    (e)
      This
      Agreement and the Transaction Documents supersede all prior agreements and
      understandings among the parties hereto with respect to the subject matter
      hereof and thereof.

    

    (f)
      The
      headings in this Agreement are for convenience of reference only and shall
      not
      limit or otherwise affect the meaning hereof. Whenever required by the context
      of this Agreement, the singular shall include the plural and masculine shall
      include the feminine. This Agreement shall not be construed as if it had been
      prepared by one of the parties, but rather as if all the parties had prepared
      the same.

    

    (g)
      This
      Agreement may be executed in two or more identical counterparts, each of which
      shall be deemed an original but all of which shall constitute one and the same
      agreement. This Agreement, once executed by a party, may be delivered to the
      other party hereto by facsimile transmission of a copy of this Agreement bearing
      the signature of the party so delivering this Agreement.

    

    (h)
      Each
      party shall do and perform, or cause to be done and performed, all such further
      acts and things, and shall execute and deliver all such other agreements,
      certificates, instruments and documents, as the other party may reasonably
      request in order to carry out the intent and accomplish the purposes of this
      Agreement and the consummation of the transactions contemplated
      hereby.

    

    *
      * *

    

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    

    SIGNATURE
      PAGE OF REGISTRATION RIGHTS AGREEMENT

    

     

    Your
      signature on this Signature Page evidences your agreement to be bound by the
      terms and conditions of the Investment Agreement and the Registration Rights
      Agreement as of the date first written above. 

     

     

    The
      undersigned signatory hereby certifies that he has read and understands the
      Registration Rights Agreement, and the representations made by the undersigned
      in this Registration Rights Agreement are true and accurate, and agrees to
      be
      bound by its terms. 

     

    

    DUTCHESS
      PRIVATE EQUITIES FUND, L.P.,

    BY
      ITS
      GENERAL PARTNER,

    DUTCHESS
      CAPITAL MANAGEMENT, LLC 

    

    

    

    By:
      /s/ Douglas H. Leighton

    Douglas
      H. Leighton, Managing Member

    

    

    

    NEXIA
      HOLDINGS, INC.

    

    

    

    By:
      /s/ Richard Surber

         
      Richard Surber

         
      Chief Executive Officer 

     

     

     

    
      
        
        

      

      
        11Exhibit 10:1

                       GIZMONDO EUROPE LIMITED (Gizmondo)
      1 Meadow Gate Avenue, Farnborough Business Park, Farnborough GU14 7FG
                             (Company No: 04620348)

               Promissory Note and separate guarantees (the Note)

Value: Twelve Million Six Hundred and Eighty One Thousand Pounds
Sterling(pound)12,681,000

Reference is made to the letter from Simon Davies to Michael Carrender dated 28
November 2005 and previous promissory notes and separate guarantees by Gizmondo,
Tiger Telematics, Inc. of 550 Water Street, Suite 937, Jacksonville, Florida
(Tiger), Carl Freer and Stefan Eriksson dated 9 May 2005 and June 13, 2005, with
various extensions thereafter. David Warnock and Simon Davies (the Payees) agree
to extend the due date on the three promissory notes and combine the three notes
into one note owing to both David Warnock and Simon Davies on the following
terms: (1) Principal - the principal amount that Gizmondo unconditionally
promises to pay to the Payees is (pound)12,681,000 capitalizing previous accrued
interests and other costs and expenses that remain unpaid, with (pound)1,681,000
of such principal amount payable 14 days after Tiger or any affiliate thereof
raises or borrows equity and/or debt in an aggregate amount in the vicinity of
$75,000,000 or any amount in excess thereof, with all outstanding principal
payable in full on June 30, 2006, (2) Interest - the rate of interest that
Gizmondo unconditionally promises to pay on the unpaid principal amount of this
Note shall be 6.5% per annum for each day during the period from and including
December 1, 2005 to but excluding the date that the principal on this Note is
paid in full, with accrued interest payable on each of January 31, February 28,
March 31, April 28, May 31, and June 30 2006 and thereafter, to the extent any
principal amount of this Note remains outstanding, upon demand; provided that
accrued interest shall not be payable until the earlier of (i) 14 days after
Tiger or any affiliate thereof raises or borrows equity and/or debt in an
aggregate amount in the vicinity of $75,000,000 or any amount in excess thereof
and (ii) June 30, 2006 and (3) Fees - Gizmondo unconditionally promises to pay
the Payees (a) a set up fee equal to (pound)110,000 payable in full on the
earlier of (i) 14 days after Tiger or any affiliate thereof raises or borrows
any equity and/or debt in an aggregate amount in the vicinity of $75,000,000 or
any amount in excess thereof and (ii) the date that the principal amount of this
Note is payable in full, (b) an exit fee equal to (pound)110,000 payable in full
on the date that the principal amount of this Note is payable in full and (c) a
compensation for costs fee in pounds sterling equal to the aggregate of the
interest that would be payable on a principal amount of (pound)1,681,000 with an
interest rate of 6.5% per annum accruing interest from and including December 1,
2005 to but excluding the date that the principal on this Note is paid in full,
with such fee payable on the date that the principal amount of this Note is
payable in full. Gizmondo further agrees to pay all costs, charges and expenses
of the Payees (including counsel fees) in connection with the preparation and
execution of this Note and related security documentation and in connection with
any enforcement or collection proceedings relating to this Note or any security
documentation, including costs of enforcement of this sentence. Notwithstanding
anything to the contrary in this Note, if Tiger or any affiliate thereof has not
raised or borrowed equity and/or debt in an aggregate amount in the vicinity of
$75,000,000 on or before March 31, 2006, all principal, interest and other
amounts set forth above shall be due and payable in full on March 31, 2006.

Tiger hereby guarantees to the Payees the prompt payment in full when expressed
to be due of all amounts outstanding or otherwise owing by Gizmondo under this
Note strictly in accordance with the express terms hereof.

The joint and several guarantees of Carl Freer and Stefan Eriksson provided for
in the promissory notes of May 9, 2005 and June 13, 2005 as referenced above and
as confirmed in various extensions thereafter remain in full force and effect
notwithstanding that they are not being restated in this Note and nothing herein
shall constitute a release or waiver whether express or implied by either Payee
of all or any part of such guarantees or the obligations guaranteed thereunder.

                                       1
<PAGE>

The obligations of Tiger above are absolute and unconditional, irrespective of
the value, genuineness, validity, regularity or enforceability of the
obligations of Gizmondo and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent that the obligations of Tiger hereunder shall be absolute
and unconditional under any and all circumstances.

Tiger hereby expressly waives diligence, presentment, demand of payment, protest
and all notices whatsoever and any requirement that the Payees exhaust any
right, power or remedy or proceed against Gizmondo or against any other person
under any other guarantee or security, it being understood that the guarantees
above are guarantees of payment and not just collection.

As a separate, additional continuing and primary obligation, Tiger,
unconditionally and irrevocably, undertakes to indemnify the Payees (on an after
tax basis) on demand (without requiring the Payees first to take steps against
Gizmondo or any other person) against any and all losses, actions, claims,
proceedings, liabilities, expenditure or costs suffered or incurred by the
Payees should the amounts which would otherwise be due from Gizmondo not be
recoverable for any reason whatsoever including (but not limited to) the Note or
any other document being or becoming void, voidable or unenforceable against
Gizmondo or any other person including Carl Freer and Stefan Eriksson.

If one or more of the following events (Events of Default) shall occur:

(i) Gizmondo or Tiger shall fail to pay an amount when due under this Note
(whether principal, interest or any other amount); or

(ii) any voluntary or involuntary proceeding shall be commenced or petition
filed seeking liquidation, reorganization or other relief with respect to Smart
Adds, Inc. or Tiger, under any insolvency, receivership, administration or other
similar law now or hereinafter in effect,

then the Payees may, by notice to Gizmondo, declare all amounts outstanding
hereunder to be due and payable in whole or in part, and thereupon the principal
under this Note declared to be due and payable, together with accrued interest
thereon and all outstanding fees and other obligations of Gizmondo hereunder so
declared, shall become due and payable immediately, without presentment, demand,
protest or other notice of any kind all of which are hereby waived by Gizmondo
and Tiger.

In addition to the foregoing and for value received, Tiger grants to David
Warnock and Simon Davies and their assigns the option to buy up to 3,027,069
shares of its common stock for a price of US$8.00 per share with such option
exercisable at any time up to and including December 31, 2006.

If any term, provision, covenant or condition of this Note, or the application
thereof to Tiger or Gizmondo or any circumstance, is held to be unenforceable,
invalid or illegal (in whole or in part) for any reason (in any relevant
jurisdiction), the remaining terms, provisions, covenants and conditions of this
Note, modified by the deletion of the unenforceable, invalid or illegal portion
(in any relevant jurisdiction), will continue in full force and effect, and such
unenforceability, invalidity, or illegality will not otherwise affect the
enforceability, validity or legality of the remaining terms, provisions,
covenants and conditions of this Note.

No amendment or waiver in respect of this Note will be effective unless in
writing and executed by each of the parties below. Gizmondo and Tiger shall not
assign any of their rights or obligations under this Note without the prior
written consent of the Payees. The Payees may at any time and from time to time,
without the consent of Gizmondo or Tiger, assign all or any portion of their
rights under this Note to one or more person or entities. This Note may be
executed and delivered in counterparts (including by facsimile transmission)
each of which will be deemed an original.

                                       2
<PAGE>

This Note (and any dispute, controversy, proceedings or claims of whatever
nature arising out of or in any way relating to this Note) shall be governed by
and construed in all respects in accordance with English law.

For an on behalf of
Gizmondo Europe Limited

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

For and on behalf of Tiger Telematics Inc.

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

Accepted and agreed:

David Warnock                                        Simon Davies

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

                                       3
<PAGE>

                          SMART ADDS SECURITY AGREEMENT

SECURITY AGREEMENT dated as of December 21, 2005 between:

SMART ADDS INC., a Delaware corporation (the Grantor); and

SIMON DAVIES and DAVID WARNOCK (the Secured Parties).

WHEREAS:

(1) Gizmondo Europe Limited (Gizmondo) a wholly owned subsidiary of Tiger
Telematics Inc., a Delaware corporation (the Company) extended on or about the
date hereof a promissory note in favor of the Secured Parties (the Promissory
Note) under which Gizmondo has agreed to pay the Secured Parties the principal
sum of (pound)12,700,000 together with interest and certain fees as more fully
described in the Promissory Note.

(2) For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by the Grantor, the Grantor has agreed to enter into
this Security Agreement in order to grant to the Secured Parties a security
interest in certain intellectual property as security for the Secured
Obligations (as defined below).

1.       INTERPRETATION

Capitalized terms used and not otherwise defined in this Security Agreement have
the respective meanings assigned to such terms in the Promissory Note. In
addition, the following terms have the meanings specified below:

NYUCC means the Uniform Commercial Code as in effect in the State of New York.

Secured Obligations means, all indebtedness, liabilities and obligations of
Gizmondo or Tiger or any subsidiary thereof now or hereafter at any time and
from time to time owing to the Secured Parties under the Promissory Note or
under any other document or agreement, whether absolute, fixed or liquidated,
contingent or unliquidated, and whether for principal, reimbursement
obligations, interest, fees, cost, expenses or otherwise.

2.       GRANT OF SECURITY

The Grantor hereby grants to the Secured Parties a security interest in all of
the Grantor's right, title and interest in, to and under the following property,
whether now owned or hereinafter acquired by the Grantor, wherever located, and
whether now or hereafter existing or arising (collectively, the Collateral):

(a)      All United States, international and foreign patents, patent
         applications, utility models, and statutory invention registrations,
         including the patents and patent applications set forth in Schedule II
         together with all reissues, divisions, continuations,
         continuations-in-part, extensions and reexaminations thereof, all
         inventions therein, all rights therein provided by international
         treaties or conventions and all improvements thereto, and all other
         rights of any kind whatsoever of the Grantor accruing thereunder or
         pertaining thereto (the Patents);

                                       4
<PAGE>

(b)      any and all claims for damages for past, present and future
         infringement, misappropriation or breach with respect to the Patents,
         with the right, but not the obligation, to sue for and collect, or
         otherwise recover, such damages; and

(c)      all proceeds of any and all of the foregoing Collateral.

3.       SECURITY FOR SECURED OBLIGATIONS

The security interests granted by the Grantor under this Security Agreement
secure the Secured Obligations. Notwithstanding anything else to the contrary in
this Security Agreement, the maximum aggregate amount recoverable from the
Grantor with respect to the Collateral shall in no event exceed an amount equal
to the largest amount that would not render the Grantor's obligations hereunder
subject to avoidance under any applicable Federal or State fraudulent
obligation, transfer or conveyance laws, including Section 548 of the United
States Bankruptcy Code and Article 10 of the Debtor and Creditor Law of the
State of New York.

4.       REPRESENTATIONS AND WARRANTIES

The Grantor represents and warrants as follows:

4.1      Organization; Location

The Grantor is incorporated under the law of the jurisdiction set opposite the
name of the Grantor in Schedule I, and the name of the Grantor on the signature
pages hereof is the name of the Grantor indicated on the public record of such
jurisdiction. The Grantor's Federal tax identification number and organizational
number (if any) are set opposite the Grantor's name in Schedule I.

4.2      Ownership; Absence of other Liens

The Grantor is the legal and beneficial owner of the Collateral free and clear
of any security interest, lien, claim, option or right of others, except for the
security interest created under this Security Agreement. No effective financing
statement or other instrument similar in effect covering all or any part of such
Collateral or listing the Grantor or any trade name of the Grantor as debtor is
on file in any recording office, except such as may have been filed in favor of
the Secured Parties.

4.3      Filings

All filings and other actions necessary to perfect the security interest in the
Collateral created under this Security Agreement have been duly made or taken
and are in full force and effect and this Security Agreement creates in favor of
the Secured Parties a valid and, together with such filings and other actions,
perfected first priority security interest in the Collateral, subject to no
other security interest or other lien.

4.4      Approvals

No authorization or approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body or any other third party is
required for (a) the grant by the Grantor of the security interest granted
hereunder or for the execution, delivery or performance of this Security
Agreement by the Grantor, (b) the perfection of the security interest created
hereunder (including the first priority nature of such security interest),

                                       5
<PAGE>

except for the filing of financing and continuation statements under the Uniform
Commercial Code, which financing statements have been duly filed and are in full
force and effect and the recordation of this Security Agreement with the U.S.
Patent and Trademark Office which has been duly recorded and is in full force
and effect, or (c) for the exercise by the Secured Parties of their voting or
other rights provided for in this Security Agreement or the remedies in respect
of the Collateral pursuant to this Security Agreement.

4.5      Patents

As to itself and its Collateral:

(a)      The rights of the Grantor in or to the Patents do not conflict with,
         misappropriate or infringe the intellectual property rights of any
         third party, and no claim has been asserted that the use of such
         Patents does or may infringe the intellectual property rights of any
         third party.

(b)      The Grantor is the exclusive owner of the entire and unencumbered
         right, title and interest in and to the Patents and is entitled to use
         all such Patents.

(c)      The Patents set forth on Schedule II includes all of the patents and
         patent applications owned by the Grantor.

(d)      The Patents are subsisting and have not been adjudged invalid or
         unenforceable in whole or part, and to the best of the Grantor's
         knowledge, are valid and enforceable. The Grantor is not aware of any
         uses of any Patent that could be expected to lead to such item becoming
         invalid or unenforceable.

(e)      The Grantor has made or performed all filings, recordings and other
         acts and has paid all required fees and taxes to maintain and protect
         its interest in each and every Patent in full force and effect
         throughout the world, and to protect and maintain its interest therein
         including recordations of any of its interests in the Patents with the
         U.S. Patent and Trademark Office and in corresponding national and
         international patent offices. The Grantor has used proper statutory
         notice in connection with its use of each Patent.

(f)      No action, suit, investigation, litigation or proceeding has been
         asserted or is pending or threatened against the Grantor (i) based upon
         or challenging or seeking to deny or restrict the use of any of the
         Patents, or (ii) alleging that any services provided by, processes used
         by, or products manufactured or sold by, the Grantor infringe or
         misappropriate any Patent or any other proprietary right of any third
         party. To the best of the Grantor's knowledge, no Person is engaging in
         any activity that infringes or misappropriates the Patents or upon the
         rights of the Grantor therein. The Grantor has not granted any license,
         release, covenant not to sue, non-assertion assurance, or other right
         to any Person with respect to any part of the Patents. The consummation
         of the transactions contemplated by the Security Agreement will not
         result in the termination or impairment of any of the Patents.

(g)      To the best of the Grantor's knowledge, no Patent is subject to any
         outstanding decree, order, injunction, judgment or ruling restricting
         the use of such Patent or that would impair the validity or
         enforceability of such Patent.

                                       6
<PAGE>

5.       FURTHER ASSURANCES

The Grantor agrees that from time to time, at the expense of the Grantor, the
Grantor will promptly execute and deliver all further agreements, contracts,
documents, instruments and other records, and take all further action, that the
Secured Parties may request, in order to perfect any security interest granted
or purported to be granted by the Grantor hereunder or to enable the Secured
Parties to exercise and enforce their rights and remedies hereunder with respect
to any Collateral.

6.       COVENANTS

6.1      Maintenance of Intellectual Property

With respect to each item of Collateral, the Grantor agrees to take, at its
expense, all necessary steps, including in the U.S. Patent and Trademark Office
to (a) maintain the validity and enforceability of each such item of Collateral
and maintain each such item of Collateral in full force and effect, and (b)
pursue the registration and maintenance of each patent or application, now or
hereafter included in the Collateral, including the payment of required fees and
taxes, the filing of responses to office actions issued by the U.S. Patent and
Trademark Office, the filing of applications for renewal or extension, the
filing of divisional, continuation, continuation-in-part, reissue and renewal
applications or extensions, the payment of maintenance fees and the
participation in interference, reexamination, opposition, cancellation,
infringement and misappropriation proceedings. The Grantor shall not discontinue
use of or otherwise abandon any Collateral, or abandon any right to file an
application for letters patent.

6.2      Notice of Abandonment or Proceeding

The Grantor agrees promptly to notify the Security Agent if the Grantor learns
(a) that any item of the Collateral may have become abandoned, placed in the
public domain, invalid or unenforceable, or of any adverse determination or
development regarding the Grantor's ownership of any of the Collateral or its
right to register the same or to keep and maintain and enforce the same, or (b)
of any adverse determination or the institution of any proceeding (including the
institution of any proceeding in the U.S. Patent and Trademark Office or any
court) regarding any item of the Collateral.

6.3      Notice of Infringement, Etc.

In the event that the Grantor becomes aware that any item of the Collateral is
being infringed or misappropriated by a third party, the Grantor shall promptly
notify the Secured Parties and shall take such actions, at its expense, as the
Secured Parties deem reasonable and appropriate under the circumstances to
protect such Collateral, including suing for infringement or misappropriation
and for an injunction against such infringement or misappropriation.

6.4      Notice of Change of Organization, Name, Etc.

The Grantor will not re-incorporate, re-form or re-organize itself under the law
of a different jurisdiction, or change its name as appears on the public records
of its jurisdiction of incorporation, without giving the Secured Parties not
less than 30-days prior written notice and, at the request of the Secured
Parties, promptly taking such reasonable action as the Secured Parties may
request to maintain the perfection of the security interests created by this
Security Agreement.

                                       7
<PAGE>

6.5      Authorization to File and Record

The Grantor hereby irrevocably authorizes the Secured Parties, at any time and
from time to time, (i) to file such financing statements, continuation
statements, or amendments thereto in order to perfect the security interest
granted or purported to be granted by the Grantor hereunder and (ii) to record
this Security Agreement with the U.S. Patent and Trademark Office.

6.6      No Lapse, Etc.

The Grantor shall use proper statutory notice in connection with its use of each
item of its Collateral. The Grantor shall not do or permit any act or knowingly
omit to do any act whereby any of its Collateral may lapse or become invalid or
unenforceable or placed in the public domain.

7.       TRANSFERS AND OTHER LIENS

The Grantor agrees that it will not (a) sell, assign or otherwise dispose of, or
grant any option with respect to, any of the Collateral, or (b) create or suffer
to exist any Lien upon or with respect to any of the Collateral except for the
pledge, assignment and security interest created under this Security Agreement.

8.       SECURED PARTIES APPOINTED ATTORNEY-IN-FACT

The Grantor hereby irrevocably appoints the Secured Parties the Grantor's
attorneys-in-fact, with full authority in the place and stead of the Grantor and
in the name of the Grantor or otherwise, from time to time in the Secured
Parties' discretion, to take any action and to execute any agreements,
contracts, documents, instruments or other records that the Secured Parties may
deem necessary or advisable to accomplish the purposes of this Security
Agreement. If the Grantor fails to perform any of its obligations contained
herein, the Secured Parties may, as the Secured Parties deem necessary to
protect the security interest granted hereunder in the Collateral or to protect
the value thereof, but without any requirement to do so and without notice,
themselves perform, or cause performance of, such obligation, and the expenses
of the Secured Parties incurred in connection therewith shall be payable by the
Grantor under Section 10.2.

9.       REMEDIES

If any Event of Default shall have occurred and be continuing:

(a)      The Secured Parties may exercise in respect of the Collateral, in
         addition to other rights and remedies provided for herein or otherwise
         available to it, all the rights and remedies of a secured party upon
         default under the NYUCC (whether or not the NYUCC applies to the
         affected Collateral) and also may without notice except as specified
         below, sell the Collateral or any part thereof in one or more parcels
         at public or private sale, for cash, on credit and upon such other
         terms as the Secured Parties may deem commercially reasonable. The
         Grantor agrees that, to the extent notice of sale shall be required by
         law, at least 10 days' notice to the Grantor of the time and place of
         any public sale or the time after which any private sale is to be made
         shall constitute reasonable notification. The Secured Parties shall not
         be obligated to make any sale of Collateral regardless of notice of
         sale having been given. The Secured Parties may adjourn any public or
         private sale from time to time by announcement at the time and place
         fixed therefor, and such sale may, without further notice, be made at
         the time and place to which it was so adjourned.

                                       8
<PAGE>

(b)      Any funds held by or on behalf of the Secured Parties and all cash
         proceeds received in respect of any sale of, collection from, or other
         realization upon all or any part of the Collateral may, in the
         discretion of the Secured Parties, be held by the Secured Parties as
         collateral for, and/or then or at any time thereafter applied in whole
         or in part by the Secured Parties against, all or any part of the
         Secured Obligations.

         Any surplus of such funds or cash proceeds of the Grantor held by or on
         the behalf of the Secured Parties and remaining after payment in full
         of all the Secured Obligations shall be paid over to the Grantor or to
         whomsoever else may be lawfully entitled to receive such surplus.

10.      INDEMNITY AND EXPENSES

10.1     Indemnity

The Grantor agrees to indemnify, defend and save and hold harmless each Secured
Party (each, an Indemnified Party) from and against, and shall pay on demand,
any and all claims, damages, losses, liabilities and expenses (including,
without limitation, reasonable fees and expenses of counsel) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or resulting from this Security Agreement
(including, without limitation, enforcement of this Security Agreement and this
Section 10.1), except to the extent such claim, damage, loss, liability or
expense is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct.

10.2     Expenses

The Grantor will upon demand pay to the Secured Parties the amount of any and
all reasonable expenses, including, without limitation, the reasonable fees and
expenses of its counsel and of any experts and agents, that the Secured Parties
may incur in connection with (a) the administration of this Security Agreement
and any amendment to or waiver of the terms of this Pledge Agreement, (b) the
custody, preservation, use or operation of, or the sale of, collection from or
other realization upon, any of the Collateral, (c) the exercise or enforcement
of any of the rights of the Secured Parties hereunder with respect to the
Collateral or (d) the failure by the Grantor to perform or observe any of the
provisions hereof.

11.      AMENDMENTS; WAIVERS; ETC.

11.1     Amendments and Waivers

No amendment or waiver of any provision of this Security Agreement, and no
consent to any departure by the Grantor herefrom, shall in any event be
effective unless the same shall be in writing and signed by the Secured Parties,
and then such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which given.

11.2     Limitation on Waivers

A failure or delay in exercising any right, power or privilege in respect of
this Security Agreement will not be presumed to operate as a waiver, and a
single or partial exercise of any right, power or privilege will not be presumed
to preclude any subsequent or further exercise, of that right, power or
privilege or of the exercise of any other right, power or privilege. The
remedies provided herein, in the Promissory Note and in any other agreement or
instrument referred to therein are cumulative, are not exclusive of any remedies
provided by law and may be exercised by the Secured Parties from time to time.

                                       9
<PAGE>

12.      NOTICES; ETC.

All notices and other communications provided for hereunder shall be in writing
(including e-mail or facsimile communication) and mailed, e-mailed, faxed or
delivered to the Secured Parties or each applicable Pledgor, addressed to it at
its address set forth below its name on the signature pages hereto or at such
other address as shall be designated by such party in a written notice to the
other parties. All such notices and other communications shall, when mailed,
e-mailed or faxed, be effective when deposited in the mails, e-mailed or faxed,
respectively, addressed as aforesaid; except that notices and other
communications to the Secured Parties shall not be effective until received by
the Secured Parties.

13.      CONTINUING SECURITY INTEREST; SUCCESSORS AND ASSIGNS

13.1     Continuing Security Interest

This Security Agreement shall create a continuing security interest in the
Collateral and shall remain in full force and effect until the payment in full
in cash of all of the Secured Obligations.

13.2     Successors and Assigns

This Security Agreement shall be binding upon the Grantor and its successors and
permitted transferees and shall inure to the benefit of the Secured Parties and
their successors and permitted transferees. Neither this Security Agreement nor
any interest or obligation in or under this Security Agreement may be
transferred (whether by way of security or otherwise) by the Grantor or the
Secured Parties without the prior written consent of the others. Any purported
transfer that is not in compliance with this Section will be void.

14.      TERMINATION

Upon the payment in full in cash of the Secured Obligations, the security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to the Grantor. Upon any such termination, the Secured Parties will, at
the Grantor's expense, execute and deliver to the Grantor such documents as the
Grantor shall reasonably request to evidence such termination.

15.      COUNTERPARTS

This Security Agreement (and each amendment, modification and waiver in respect
of this Security Agreement) may be executed and delivered in counterparts
(including by facsimile transmission), each of which will be deemed an original.

16.      GOVERNING LAW; JURISDICTION; SERVICE OF PROCESS; WAIVER OF IMMUNITIES

16.1     Governing Law

This Security Agreement will be construed in accordance with, and this Security
Agreement and all matters arising out of or in connection with this Security
Agreement (whether in contract, tort or otherwise) will be governed by, the law
of the State of New York.

                                       10
<PAGE>

16.2     Jurisdiction

With respect to any suit, action or proceedings relating to this Security
Agreement (Proceedings), the Grantor irrevocably:

(a)      submits to the non-exclusive jurisdiction of the Supreme Court of the
         State of New York sitting in the Borough of Manhattan and of the United
         States District Court for the Southern District of New York, and any
         appellate court therefrom; and

(b)      waives any objection which it may have at any time to the laying of
         venue of any Proceedings brought in any such court, waives any claim
         that such Proceedings have been brought in an inconvenient forum and
         further waives the right to object, with respect to such Proceedings,
         that such court does not have any jurisdiction over the Grantor.

Nothing in this Security Agreement precludes the Secured Parties from bringing
Proceedings in any other jurisdiction, nor will the bringing of Proceedings by
the Secured Parties in any one or more jurisdictions preclude the bringing of
Proceedings by the Secured Parties in any other jurisdiction. The Grantor hereby
agrees that a final judgment in any such Proceedings shall be conclusive and may
be enforced in other jurisdictions otherwise having jurisdiction over the
Grantor by suit on such final judgment or in any other manner provided by law.

16.3     Service of Process

The Grantor hereby agrees that service of process in any Proceeding may be
effected by mailing a copy thereof by registered or certified mail or by
overnight courier service, postage prepaid, to it at its address specified
below. Nothing in this Security Agreement will affect the right of the Secured
Parties to serve process in any other manner permitted by law.

17.      WAIVER OF JURY TRIAL

EACH SIGNATORY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
PROCEEDING. Each signatory hereto hereby (a) certifies that no representative,
agent or attorney of another party other has represented, expressly or
otherwise, that the other would not, in the event of a Proceeding, seek to
enforce the foregoing waiver and (b) acknowledges that it has been induced to
sign, or change its position in reliance upon the benefits of, this Security
Agreement by, among other things, the mutual waivers and certifications in this
Section.

18.      TERMS DEFINED IN THE NYUCC AND RULES OF CONSTRUCTION

Except as otherwise expressly provided herein, terms used but not otherwise
defined herein that are defined in the NYUCC shall have the respective meanings
given to such terms in the NYUCC.

Unless the context otherwise clearly requires:

(a)      the definitions of terms herein shall apply equally to the singular and
         plural forms of the terms defined;

                                       11
<PAGE>

(b)      whenever  the  context  may  require,  any  pronoun  shall  include the
         corresponding masculine, feminine and neuter forms;

(c)      the words "include",  "includes" and "including"  shall be deemed to be
         followed by the phrase "without limitation";

(d)      the word "will"  shall be construed to have the same meaning and effect
         as the word "shall";

(e)      any definition of or reference to any agreement, contract, document,
         instrument or other record herein shall be construed as referring to
         such agreement, contract, document, instrument or other record as from
         time to time amended, supplemented, restated or otherwise modified
         (subject to any restrictions on such amendments, supplements or
         modifications set forth herein);

(f)      any  reference  herein to any Person shall be construed to include such
         Person's successors and assigns;

(g)      the words "herein", "hereof" and "hereunder", and words of similar
         import, shall be construed to refer to this Security Agreement in its
         entirety and not to any particular provision hereof;

(h)      all references  herein to Sections and Schedules  shall be construed to
         refer to Sections of, and Schedules to, this Security Agreement; and

(i)      the headings used in this Security Agreement are for convenience of
         reference only and are not to affect the construction of or to be taken
         into consideration in interpreting this Security Agreement.

19.      SEVERABILITY

If any term, provision, covenant or condition of this Security Agreement, or the
application thereof to the Grantor or the Secured Parties or any circumstance,
is held to be unenforceable, invalid or illegal (in whole or in part) for any
reason (in any relevant jurisdiction), the remaining terms, provisions,
covenants and conditions of this Security Agreement, modified by the deletion of
the unenforceable, invalid or illegal portion (in any relevant jurisdiction),
will continue in full force and effect, and such unenforceability, invalidity,
or illegality will not otherwise affect the enforceability, validity or legality
of the remaining terms, provisions, covenants and conditions of this Security
Agreement so long as this Security Agreement as so modified continues to
express, without material change, the original intentions of the Grantor and the
Secured Parties as to the subject matter hereof and the deletion of such portion
of this Security Agreement will not substantially impair the respective
expectations of the Grantor and the Secured Parties or the practical realization
of the benefits hereof that would otherwise be conferred upon the Secured
Parties. The Grantor will endeavor in good faith negotiations with the Secured
Parties to replace the prohibited or unenforceable provision with a valid
provision, the economic effect of which comes as close as possible to that of
the prohibited or unenforceable provision.

                                       12
<PAGE>

IN WITNESS WHEREOF, the Grantor and each Secured Party each has caused this
Security Agreement to be duly executed and delivered duly authorized as of the
date first above written.

GRANTOR

SMART ADDS INC.

By: ________________________________________
    Name:
    Title:

Address for Notices:
-------------------

c/o Tiger Telematics Inc.
550 Water Street, Suite 937
Jacksonville, Florida 32202

Attention:    Michael W. Carrender

                                       13
<PAGE>

SECURED PARTIES

SIMON DAVIES

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

Address for Notices:
-------------------

Onston Hall
Onston Lane
Onston
Cheshire CW8 2RG
United Kingdom

DAVID WARNOCK

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

Address for Notices:
-------------------

Lammasfield
Chelford Road
Alderley Edge
Cheshire SK9 7TG
United Kingdom

                                       14
<PAGE>

                                                               Schedule I to the
                                                              Security Agreement

                            IDENTIFICATION OF GRANTOR

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

                     Type of       State of     Federal Tax     Organizational
     Grantor         Entity      Organization      ID No.          ID No.
----------------- -------------- -------------- -------------- -----------------
Smart Adds Inc.    Corporation    Delaware
----------------- -------------- -------------- -------------- -----------------

                                       15
<PAGE>
<TABLE>
<CAPTION>

                                                              Schedule II to the
                                                              Security Agreement

                           PATENTS/PATENT APPLICATIONS

-------------- --------------- ------------ --------------- ----------------- ---------------- --------------
Grantor        Patent          Country      Patent No.      Applic. No.       Filing Date      Issue Date
               Application
-------------- --------------- ------------ --------------- ----------------- ---------------- --------------
<S>            <C>             <C>          <C>             <C>               <C>              <C>
Smart Adds     System and      United                       11/202,859        August 11, 2005
Inc.           Method for      States
               Distributing
               Multimedia
               Content via
               Mobile
               Wireless
               Platforms
-------------- --------------- ------------ --------------- ----------------- ---------------- --------------
Smart Adds     Method for      United                       11/202,665        August 11, 2005
Inc.           Advertising     States
-------------- --------------- ------------ --------------- ----------------- ---------------- --------------
</TABLE>

                           SMART ADDS PLEDGE AGREEMENT

PLEDGE AGREEMENT dated as of December 21, 2005 between:

TIGER TELEMATICS INC., a Delaware corporation (the Pledgor); and

SIMON DAVIES and DAVID WARNOCK (the Secured Parties).

WHEREAS:

(1)      Gizmondo Europe Limited (Gizmondo), a wholly owned subsidiary of the
Pledgor, extended on the date hereof a promissory note with separate guarantees
in favor of the Secured Parties (the Promissory Note) under which Gizmondo has
agreed to pay the Secured Parties the principal sum of (pound)12,700,000
together with interest and certain fees as more fully described in the
Promissory Note.

(2)      For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by the Pledgor, the Pledgor has agreed to enter
into this Pledge Agreement in order to grant to the Secured Parties a security
interest in the Collateral (as defined below) as security for the Secured
Obligations (as defined below).

                                       16
<PAGE>

(3)      The  Pledgor is the owner of the equity  interests  (collectively,  the
Initial  Pledged  Equity) set  opposite the  Pledgor's  name on and as otherwise
described  in Schedule I and issued by Smart Adds Inc.,  a Delaware  Corporation
(the Issuer).

20.      INTERPRETATION

20.1     Certain Definitions

Capitalized terms used and not otherwise defined in this Pledge Agreement have
the respective meanings assigned to such terms in the Promissory Note. In
addition, the following terms have the meanings specified below:

NYUCC means the Uniform Commercial Code as in effect in the State of New York.

Secured Obligations means, all indebtedness, liabilities and obligations of
Gizmondo or Tiger or any subsidiary thereof now or hereafter at any time and
from time to time owing to the Secured Parties under the Promissory Note or
under any other document or agreement, whether absolute, fixed or liquidated,
contingent or unliquidated, and whether for principal, reimbursement
obligations, interest, fees, cost, expenses or otherwise.

21.      GRANT OF SECURITY

The Pledgor hereby grants to the Secured Parties a security interest in all of
the Pledgor's right, title and interest in, to and under the following property,
whether now owned or hereafter acquired by the Pledgor, wherever located, and
whether now or hereafter existing or arising (collectively, the Collateral):

(a)      the Initial Pledged Equity and the certificates, if any, representing
         such Initial Pledged Equity, together with any and all additional
         securities or other equity interests of the Issuer and the
         certificates, if any, representing the same (collectively, the Pledged
         Equity);

(b)      all cash, securities or other property representing a dividend or other
         distribution out of income or earned surplus on any of the Pledged
         Equity, or representing a return of capital upon or in respect of the
         Pledged Equity, or resulting from a split-up or recapitalization or
         otherwise received in exchange therefor, and any subscription rights,
         options or warrants issued to the Pledgor in respect of the Pledged
         Equity;

(c)      in the event of any merger or consolidation in which the Issuer is not
         the surviving entity, all shares or interests of each class of equity
         owned by the Pledgor of the successor entity resulting from or formed
         by such merger or consolidation; and

(d)      all proceeds of any and all of the foregoing (including proceeds that
         constitute property of the types described in clauses (a) through (c)
         of this Section 2 and proceeds of proceeds).

22.      SECURITY FOR SECURED OBLIGATIONS

The security interests created by this Pledge Agreement secure the Secured
Obligations.

                                       17
<PAGE>

23.      CONTROL OF COLLATERAL

Until the Secured Obligations are no longer outstanding, the Pledgor agrees that
all certificates or instruments representing or evidencing securities included
in the Collateral shall be delivered to and held by the Secured Parties pursuant
hereto and shall be in suitable form for transfer by delivery, or shall be
accompanied by duly executed undated instruments of transfer or assignment in
blank, all in form and substance satisfactory to the Secured Parties. Upon an
Event of Default, the Secured Parties shall have the right, at any time in its
discretion and without notice to the Pledgor, (a) to transfer to or to register
in the name of the Secured Parties or any of their nominees any or all of such
certificates and instruments, and (b) to exchange such certificates or
instruments for certificates or instruments of smaller or larger denominations.

24.      REPRESENTATIONS AND WARRANTIES

The Pledgor represents and warrants as follows:

24.1     Organization; Location

The Pledgor is incorporated under the law of the jurisdiction set opposite its
name in Schedule II, and the name of the Pledgor on the signature pages hereof
is the name of the Pledgor indicated on the public records of the jurisdiction
of incorporation, formation or organization of the Pledgor. The Pledgor's
Federal tax identification number and organizational number (if any) are set
opposite the Pledgor's name in Schedule II.

24.2     Ownership; Absence of other Liens

The Pledgor is the legal and beneficial owner of the Collateral, free and clear
of any security interest, lien, claim, option or right of others, except for the
security interest created under this Pledge Agreement. No effective financing
statement or other instrument similar in effect covering all or any part of the
Collateral or listing the Pledgor or any trade name of the Pledgor as debtor is
on file in any recording office, except such as may have been filed in favor of
the Secured Parties.

24.3     Issuance and Validity of Pledged Equity

The Initial Pledged Equity has been duly authorized and validly issued by the
Issuer and is fully paid and non-assessable.

24.4     Identification of Initial Pledged Equity and Initial Pledged Debt

The Initial Pledged Equity constitutes the percentage of the issued and
outstanding shares of stock of the Issuer thereof indicated in Schedule I as of
the date hereof.

24.5     Filings

All filings and other actions necessary to perfect the security interest in the
Collateral created under this Pledge Agreement have been duly made or taken and
are in full force and effect, and this Pledge Agreement creates in favor of the
Secured Parties a valid and, together with such filings and other actions,
perfected first priority security interest in the Collateral, subject to no
other security interest or other lien.

                                       18
<PAGE>

24.6     Approvals

No authorization or approval or other action by, and no notice to or filing
with, any governmental authority or regulatory body or any other third party is
required for (a) the grant by the Pledgor of the security interest granted
hereunder or for the execution, delivery or performance of this Pledge Agreement
by the Pledgor, (b) the perfection of the security interest created hereunder
(including the first priority nature of such security interest) or (c) for the
exercise by the Secured Parties of their voting or other rights provided for in
this Pledge Agreement or the remedies in respect of the Collateral pursuant to
this Pledge Agreement, except as may be required in connection with the
disposition of any securities by laws affecting the offering and sale of
securities generally.

25.      FURTHER ASSURANCES

25.1     Further Assurances

The Pledgor agrees that, from time to time at the expense of the Pledgor, the
Pledgor will promptly execute and deliver all further instruments and documents,
and take all further action, that the Secured Parties may request, in order to
perfect any security interest granted or purported to be granted hereunder or to
enable the Secured Parties to exercise and enforce their rights and remedies
hereunder with respect to any Collateral. Without limiting the generality of the
foregoing, the Pledgor will promptly: (a) deliver to the Secured Parties
certificates representing certificated securities, accompanied by undated stock
or bond powers executed in blank; and (b) deliver to the Secured Parties
evidence that all other action that the Secured Parties may deem reasonably
necessary in order to perfect the security interest created under this Pledge
Agreement has been taken.

25.2     Notice of Change of Organization, Name, Etc.

The Pledgor will not re-incorporate, re-form or re-organize itself under the law
of a different jurisdiction, or change its name as appears on the public records
of its jurisdiction of incorporation, without giving the Secured Parties not
less than 30-days prior written notice and, at the request of the Secured
Parties, promptly taking such reasonable action as the Secured Parties may
request to maintain the perfection of the security interests created by this
Pledge Agreement.

6.3      Authorization to File Financing Statements

The Pledgor hereby irrevocably authorizes the Secured Parties, at any time and
from time to time, to file such financing statements, continuation statements,
or amendments thereto, in order to perfect the security interest granted or
purported to be granted by the Pledgor hereunder.

26.      VOTING RIGHTS; DIVIDENDS; ETC.

26.1     Voting and Dividends Ordinarily

So long as no Event of Default shall have occurred:

(a)      The Pledgor shall be entitled to exercise any and all voting and other
         consensual rights pertaining to the Collateral or any part thereof;
         provided that the Pledgor will not exercise or refrain from exercising
         any such right if such action would have a material adverse effect on
         the value of the Collateral or any part thereof; and

                                       19
<PAGE>

(b)      The Pledgor shall be entitled to receive and retain any and all
         dividends and other distributions paid in respect of the securities
         included in the Collateral.

26.2     Remedies as to Voting and Dividends

Upon the occurrence of an Event of Default:

(a)      All rights of the Pledgor (i) to exercise or refrain from exercising
         the voting and other consensual rights that it would otherwise be
         entitled to exercise pursuant to Section 7.1 shall, upon notice to the
         Pledgor by the Secured Parties, cease and (ii) to receive the dividends
         and other distributions that it would otherwise be authorized to
         receive and retain pursuant to Section 26.1(b) shall automatically
         cease, and all such rights shall thereupon become vested in the Secured
         Parties, which shall thereupon have the sole right to exercise or
         refrain from exercising such voting and other consensual rights and to
         receive and hold as Collateral such dividends and other distributions.

(b)      All dividends and other distributions that are received by the Pledgor
         contrary to the provisions of paragraph (a) of this Section 7.2 shall
         be received in trust for the benefit of the Secured Parties, shall be
         segregated from other funds and property of the Pledgor and shall be
         forthwith paid over to the Secured Parties as Collateral in the same
         form as so received (with any necessary indorsement).

27.      TRANSFERS AND OTHER SECURITY INTERESTS; ADDITIONAL SHARES

27.1     Limitation on Transfers

The Pledgor agrees that it will not (a) sell, assign or otherwise dispose of, or
grant any option with respect to, any of the Collateral, or (b) create or suffer
to exist any Security Interest upon or with respect to any of the Collateral
except for the pledge created under this Pledge Agreement.

27.2     Additional Pledged Equity

The Pledgor agrees that it will cause the Issuer not to issue any securities or
other equity interests in addition to or in substitution for such Pledged
Equity, except to the Pledgor.

28.      SECURED PARTIES APPOINTED ATTORNEY-IN-FACT

The Pledgor hereby irrevocably appoints the Secured Parties the Pledgor's
attorneys-in-fact, with full authority in the place and stead of the Pledgor and
in the name of the Pledgor or otherwise, from time to time, in the Secured
Parties' discretion, to take any action and to execute any instrument that the
Secured Parties may deem necessary or advisable to accomplish the purposes of
this Pledge Agreement. If the Pledgor fails to perform any agreement contained
herein, the Secured Parties may, as the Secured Parties deem necessary to
protect the security interest granted hereunder in the Collateral or to protect
the value thereof, but without any obligation to do so and without notice,
themselves perform, or cause performance of, such agreement, and the expenses of
the Secured Parties incurred in connection therewith shall be payable by the
Pledgor under Section 11.2.

29.      REMEDIES

If any Event of Default shall have occurred and be continuing:

                                       20
<PAGE>

(a)      The Secured  Parties  may  exercise  in respect of the  Collateral,  in
         addition to other rights and remedies  provided for herein or otherwise
         available  to it, all the rights and  remedies of a secured  party upon
         default  under  the NYUCC  (whether  or not the  NYUCC  applies  to the
         affected  Collateral)  and also may without  notice except as specified
         below,  sell the  Collateral or any part thereof in one or more parcels
         at public or private sale, for cash, on credit or for future  delivery,
         and upon such other terms as the Secured Parties may deem  commercially
         reasonable. The Pledgor agrees that, to the extent notice of sale shall
         be  required  by law,  at least ten days'  notice to the Pledgor of the
         time and place of any public  sale or the time after  which any private
         sale  is to be  made  shall  constitute  reasonable  notification.  The
         Secured  Parties  shall not be obligated to make any sale of Collateral
         regardless of notice of sale having been given. The Secured Parties may
         adjourn any public or private sale from time to time by announcement at
         the time and place fixed therefor,  and such sale may,  without further
         notice, be made at the time and place to which it was so adjourned.

(b)      Any funds held by or on behalf of the Secured Parties and all cash
         proceeds received by or on behalf of the Secured Parties in respect of
         any sale of, collection from, or other realization upon all or any part
         of the Collateral may, in the discretion of the Secured Parties, be
         held by the Secured Parties as collateral for, and/or then or at any
         time thereafter applied in whole or in part by the Secured Parties
         against, all or any part of the Secured Obligations.

         Any surplus of such funds or cash proceeds held by or on the behalf of
         the Secured Parties and remaining after payment in full of all the
         Secured Obligations shall be paid over to the Pledgor or to whomsoever
         else may be lawfully entitled to receive such surplus.

30.      INDEMNITY AND EXPENSES

30.1     Indemnity

The Pledgor agrees to indemnify, defend and save and hold harmless each Secured
Party (each, an Indemnified Party) from and against, and shall pay on demand,
any and all claims, damages, losses, liabilities and expenses (including,
without limitation, reasonable fees and expenses of counsel) that may be
incurred by or asserted or awarded against any Indemnified Party, in each case
arising out of or in connection with or resulting from this Pledge Agreement
(including, without limitation, enforcement of this Pledge Agreement and this
Section 11.1), except to the extent such claim, damage, loss, liability or
expense is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct.

30.2     Expenses

The Pledgor will upon demand pay to the Secured Parties the amount of any and
all reasonable expenses, including, without limitation, the reasonable fees and
expenses of its counsel and of any experts and agents, that the Secured Parties
may incur in connection with (a) the administration of this Pledge Agreement and
any amendment to or waiver of the terms of this Pledge Agreement, (b) the
custody, preservation, use or operation of, or the sale of, collection from or
other realization upon, any of the Collateral, (c) the exercise or enforcement
of any of the rights of the Secured Parties hereunder with respect to the
Collateral (including the enforcement of this Section 11.2) or (d) the failure
by the Pledgor to perform or observe any of the provisions hereof.

                                       21
<PAGE>

31.      AMENDMENTS; WAIVERS; ETC.

31.1     Amendments and Waivers

No amendment or waiver of any provision of this Pledge Agreement, and no consent
to any departure by the Pledgor herefrom, shall in any event be effective unless
the same shall be in writing and signed by the Secured Parties, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given.

31.2     Limitation on Waivers

A failure or delay in exercising any right, power or privilege in respect of
this Pledge Agreement will not be presumed to operate as a waiver, and a single
or partial exercise of any right, power or privilege will not be presumed to
preclude any subsequent or further exercise, of that right, power or privilege
or of the exercise of any other right, power or privilege. The remedies provided
herein, in the Promissory Note and in any other agreement or instrument referred
to therein are cumulative, are not exclusive of any remedies provided by law and
may be exercised by the Secured Parties from time to time.

32.      NOTICES; ETC.

All notices and other communications provided for hereunder shall be in writing
(including e-mail or facsimile communication) and mailed, e-mailed, faxed or
delivered to the Secured Parties or each applicable Pledgor addressed to it at
its address set forth below its name on the signature pages hereto or at such
other address as shall be designated by such party in a written notice to the
other parties. All such notices and other communications shall, when mailed,
e-mailed or faxed, be effective when deposited in the mails, e-mailed or faxed,
respectively, addressed as aforesaid; except that notices and other
communications to the Secured Parties shall not be effective until received by
the Secured Parties.

33.      CONTINUING SECURITY INTEREST; SUCCESSORS AND ASSIGNS

33.1     Continuing Security Interest

This Pledge Agreement shall create a continuing security interest in the
Collateral and shall remain in full force and effect until the payment in full
in cash of all of the Secured Obligations.

33.2     Successors and Assigns

This Pledge Agreement shall be binding upon the Pledgor and its successors and
permitted transferees and shall inure to the benefit of the Secured Parties and
their successors and permitted transferees. Neither this Pledge Agreement nor
any interest or obligation in or under this Pledge Agreement may be transferred
(whether by way of security or otherwise) by the Pledgor or the Secured Parties
without the prior written consent of the others. Any purported transfer that is
not in compliance with this Section will be void.

                                       22
<PAGE>

34.      TERMINATION

Upon the payment in full in cash of the Secured Obligations the security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to the applicable Pledgor. Upon any such termination, the Secured Parties
will, at the applicable Pledgor's expense, execute and deliver to the Pledgor
such documents as the Pledgor shall reasonably request to evidence such
termination.

35.      COUNTERPARTS

This Pledge Agreement (and each amendment, modification and waiver in respect of
this Pledge Agreement) may be executed and delivered in counterparts (including
by facsimile transmission), each of which will be deemed an original.

36.      GOVERNING LAW; JURISDICTION; SERVICE OF PROCESS; WAIVER OF IMMUNITIES

36.1     Governing Law

This Pledge Agreement will be construed in accordance with, and this Pledge
Agreement and all matters arising out of or in connection with this Pledge
Agreement (whether in contract, tort or otherwise) shall be governed by, the law
of the State of New York.

36.2     Submission to Jurisdiction

With respect to any suit, action or proceedings relating to this Pledge
Agreement (Proceedings), The Pledgor irrevocably:

(a)      submits to the non-exclusive jurisdiction of the Supreme Court of the
         State of New York sitting in the Borough of Manhattan and of the United
         States District Court for the Southern District of New York, and any
         appellate court therefrom; and

(b)      waives any objection which it may have at any time to the laying of
         venue of any Proceedings brought in any such court, waives any claim
         that such Proceedings have been brought in an inconvenient forum and
         further waives the right to object, with respect to such Proceedings,
         that such court does not have any jurisdiction over the Pledgor.

Nothing in this Pledge Agreement precludes the Secured Parties from bringing
Proceedings in any other jurisdiction, nor will the bringing of Proceedings by
the Secured Parties in any one or more jurisdictions preclude the bringing of
Proceedings by the Secured Parties in any other jurisdiction. The Pledgor hereby
agrees that a final judgment in any such Proceedings shall be conclusive and may
be enforced in other jurisdictions otherwise having jurisdiction over the
Pledgor by suit on such final judgment or in any other manner provided by law.

36.3     Service of Process

The Pledgor hereby agrees that service of process in any Proceeding may be
effected by mailing a copy thereof by registered or certified mail or by
overnight courier service, postage prepaid, to it at its address specified
below. Nothing in this Pledge Agreement will affect the right of the Secured
Parties to serve process in any other manner permitted by law.

                                       23
<PAGE>

37.      WAIVER OF JURY TRIAL

EACH SIGNATORY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
PROCEEDING. Each signatory hereto or beneficiary hereof hereby (a) certifies
that no representative, agent or attorney of another party other has
represented, expressly or otherwise, that the other would not, in the event of a
Proceeding, seek to enforce the foregoing waiver and (b) acknowledges that it
has been induced to sign, or change its position in reliance upon the benefits
of, this Pledge Agreement by, among other things, the mutual waivers and
certifications in this Section.

38.      TERMS DEFINED IN THE NYUCC AND RULES OF CONSTRUCTION

Except as otherwise expressly provided herein, terms used but not otherwise
defined herein that are defined in the NYUCC shall have the respective meanings
given to such terms in the NYUCC.

Unless the context otherwise clearly requires:

(a)      the definitions of terms herein shall apply equally to the singular and
         plural forms of the terms defined;

(b)      whenever  the  context  may  require,  any  pronoun  shall  include the
         corresponding masculine, feminine and neuter forms;

(c)      the words "include",  "includes" and "including"  shall be deemed to be
         followed by the phrase "without limitation";

(d)      the word "will"  shall be construed to have the same meaning and effect
         as the word "shall";

(e)      any definition of or reference to any agreement, instrument or other
         document herein shall be construed as referring to such agreement,
         instrument or other document as from time to time amended,
         supplemented, restated or otherwise modified (subject to any
         restrictions on such amendments, supplements or modifications set forth
         herein);

(f)      the words "herein", "hereof" and "hereunder", and words of similar
         import, shall be construed to refer to this Pledge Agreement in its
         entirety and not to any particular provision hereof;

(g)      all references  herein to Sections and Schedules  shall be construed to
         refer to Sections of, and Schedules to, this Pledge Agreement; and

(h)      the headings used in this Pledge Agreement are for convenience of
         reference only and are not to affect the construction of or to be taken
         into consideration in interpreting this Pledge Agreement.

39.      SEVERABILITY

If any term, provision, covenant or condition of this Pledge Agreement, or the
application thereof to the Pledgor or the Secured Parties or any circumstance,
is held to be unenforceable, invalid or illegal (in whole or in part) for any
reason (in any relevant jurisdiction), the remaining terms, provisions,

                                       24
<PAGE>

covenants and conditions of this Pledge Agreement, modified by the deletion of
the unenforceable, invalid or illegal portion (in any relevant jurisdiction),
will continue in full force and effect, and such unenforceability, invalidity,
or illegality will not otherwise affect the enforceability, validity or legality
of the remaining terms, provisions, covenants and conditions of this Pledge
Agreement so long as this Pledge Agreement as so modified continues to express,
without material change, the original intentions of the Pledgor and the Secured
Parties as to the subject matter hereof and the deletion of such portion of this
Pledge Agreement will not substantially impair the respective expectations of
the Pledgor and the Secured Parties or the practical realization of the benefits
hereof that would otherwise be conferred upon the Secured Parties. The Pledgor
will endeavor in good faith negotiations with the Secured Parties to replace the
prohibited or unenforceable provision with a valid provision, the economic
effect of which comes as close as possible to that of the prohibited or
unenforceable provision.

                                       25
<PAGE>

                      [Signature Page to Pledge Agreement]

IN WITNESS WHEREOF, each of the parties hereto have caused this Pledge Agreement
to be duly executed and delivered duly authorized as of the date first above
written.

PLEDGOR:

TIGER TELEMATICS INC.

By: __________________________
    ame:
    itle:

Address for Notices:
-------------------

Tiger Telematics Inc.
550 Water Street, Suite 937
Jacksonville, Florida 32202

Attention:        Michael W. Carrender

                                       26
<PAGE>

SECURED PARTIES:

SIMON DAVIES

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

Address for Notices:
-------------------

Onston Hall
Onston Lane
Onston
Cheshire CW8 2RG
United Kingdom

DAVID WARNOCK

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

Address for Notices:
-------------------

Lammasfield
Chelford Road
Alderley Edge
Cheshire SK9 7TG
United Kingdom

                                       27
<PAGE>
<TABLE>
<CAPTION>

                                                                                            Schedule I to the
                                                                                             Pledge Agreement

----------------- ------------- -------------- -------------- --------------- -------------- ----------------
                                                                                              Percentage of
                                  Class of                                                     Outstanding
                                   Equity        Par Value     Certificate      Number of        Shares
    Pledgor          Issuer       Interest                        No(s)          Shares
----------------- ------------- -------------- -------------- --------------- -------------- ----------------
<S>               <C>           <C>            <C>            <C>             <C>            <C>
Tiger             Smart   Adds  Common              n/a             1         ________            100%
Telematics Inc.   Inc.
----------------- ------------- -------------- -------------- --------------- -------------- ----------------
</TABLE>

                                       28
<PAGE>
<TABLE>
<CAPTION>

                                                                           Schedule II to the
                                                                             Pledge Agreement

                            IDENTIFICATION OF PLEDGOR

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

                     Type of Entity       State of        Federal Tax    Organizational ID
       Name                             Organization        ID No.              No.
------------------- ----------------- ------------------ -------------- ---------------------
<S>                 <C>               <C>                <C>            <C>
Tiger Telematics       Corporation        Delaware         [________]       [________]
Inc.
------------------- ----------------- ------------------ -------------- ---------------------
</TABLE>

                             IRREVOCABLE STOCK POWER

FOR VALUE RECEIVED, Tiger Telematics Inc., a Delaware corporation, hereby sells,
assigns and transfers unto __________________________ all the Shares of Common
Stock issued by Smart Adds Inc., a Delaware corporation, standing in its name on
the books of said Corporation represented by Certificate No. 1 herewith, and
does hereby irrevocably constitute and appoint
__________________________________ attorney to transfer said stock on the books
of said Corporation with full power of substitution in the premises. This Stock
Power is coupled with an interest and is irrevocable.

Date ____________________________

In the presence of

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

                                       29

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