Document:

Unassociated Document

    February
      5, 2007

    VIA
      U.S. MAIL

    

    Brian
      Kistler

    Freedom
      Financial Holdings, Inc.

    6615
      Brotherhood Way, Suite A

    Fort
      Wayne, Indiana 46825

    

    
      	
            	Re:	
              Lock
                Up Agreement

            

    

    

    Dear
      Mr.
      Kistler:

    

    I
      am a
      shareholder of Freedom Financial
      Holdings, Inc., a Maryland corporation (the “Company”). I am the holder of
      ______ (___) shares of common stock of the Company (the “Shares”). I hereby
      agree that for a period of three hundred sixty (360) days after the effective
      date of the registration statement on Form SB-2 relating to the public offering
      of common stock of the Company contemplated to be filed within the next thirty
      (30) days (the “Effective Date”), I will not, directly or indirectly, offer,
      sell, grant any options to purchase, or otherwise dispose of any shares of
      Company Common Stock without your prior written consent, except I may transfer
      any number of such shares to my children, by gift or otherwise, provided that
      any such shares will continue to be subject to the restrictions set forth in
      this letter.

    

    I
      hereby
      consent to the Company informing the transfer agent of the Company of these
      restrictions and understand that a stop transfer order will be placed at the
      transfer agent to enforce the terms and conditions of this letter. Further,
      I
      consent to the placement of a legend on the certificate as set
      forth:

    

    “THESE
      SHARES ARE RESTRICTED BY A LETTER AGREEMENT DATED AS OF FEBRUARY 5, 2007, A
      COPY
      OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.” 

    

    This
      agreement shall be binding on the undersigned and its respective successors,
      heirs, personal representatives, and assigns.

    

    Very
      truly yours, 

     

     

    

    ___________________________________Unassociated Document

    

    February
      5, 2007

    

    VIA
      U.S. MAIL

    

    Brian
      Kistler

    Freedom
      Financial Holdings, Inc.

    6615
      Brotherhood Way, Suite A

    Fort
      Wayne, Indiana 46825

    

    
      	
            	Re:	
              Amended
                Lock-Up Agreement

            

    

    

    Dear
      Mr.
      Kistler:

    

    I
      am a
      shareholder of Freedom Financial
      Holdings, Inc., a Maryland corporation (the “Company”). I am the holder of
      ________ (______) shares of common stock of the Company (the “Shares”). In May
      2006 I agreed to the imposition of restrictions on the sale of the Shares for
      a
      period of one hundred twenty (120) days after the closing date of the
      registration statement on Form SB-2 relating to the public offering of common
      stock of the Company. I understand that the Company is preparing to file a
      Form
      SB-2 and that in connection with the filing the underwriter is requiring a
      lock-up of the Shares for 360 days after the effective date of the registration
      statement. I hereby agree that I will not, directly or indirectly, offer, sell,
      grant any options to purchase, or otherwise dispose of any shares of Company
      Common Stock without your prior written consent, except that I may transfer
      any
      number of such shares to my children, by gift or otherwise, provided that any
      such shares will continue to be subject to the restrictions set forth in this
      letter.

    

    I
      hereby
      consent to the Company informing the transfer agent of the Company of these
      restrictions and understand that a stop transfer order will be placed at the
      transfer agent to enforce the terms and conditions of this letter. Further,
      I
      consent to the placement of a legend on the certificate as set
      forth:

    

    “THESE
      SHARES ARE RESTRICTED BY A LETTER AGREEMENT DATED AS OF FEBRUARY 5, 2007, A
      COPY
      OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.” 

    

    This
      agreement shall be binding on the undersigned and its respective successors,
      heirs, personal representatives, and assigns.

    

    Very
      truly yours, 

     

     

    By:
      ___________________________1NEITHER
      THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THESE SECURITIES
      HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
      SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
      REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
      ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
      EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
      AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
      SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR
      TO
      SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
      COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON EXERCISE OF THESE
      SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED
      BY SUCH SECURITIES.

     

     

    FREEDOM
      FINANCIAL HOLDINGS, INC.

     

    WARRANT

     

    
      	
              Warrant
                No. [   ]

            	
              Original
                Issue Date: [•],
                2007

            

    

     

    Freedom
      Financial Holdings, Inc., a Maryland corporation (the "Company"),
      hereby
      certifies that, as partial compensation for placement agent services, Alaron
      Financial Services Inc. or its registered assigns (the "Holder"),
      is
      entitled to purchase from the Company up to a total of [•]
      shares
      of Common Stock (each such share, a "Warrant
      Share"
      and all
      such shares, the "Warrant
      Shares"),
      at any
      time and from time to time from and after one (1) year from the effective date
      of the Registration Statement (defined below) and through and including 5 years
      from the effective date of the Registration Statement (the "Expiration
      Date"),
      and
      subject to the following terms and conditions: 

     

    1. Definitions.
      As used
      in this Warrant, the following terms shall have the respective definitions
      set
      forth in this Section 1. 

     

    "Affiliate"
      means
      any Person that, directly or indirectly through one or more intermediaries,
      controls or is controlled by or is under common control with a Person, as such
      terms are used in and construed under Rule 144.

     

    "Business
      Day"
      means
      any day except Saturday, Sunday and any day that is a federal legal holiday
      in
      the United States or a day on which banking institutions in the State of
      Illinois are authorized or required by law or other government action to
      close.

     

    "Common
      Stock"
      means
      the common stock of the Company, $.001 par value per share, and any securities
      into which such common stock may hereafter be reclassified.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    "Exchange
      Act"
      means
      the Securities Exchange Act of 1934, as amended. 

     

    "Exercise
      Price" means
      $2.20, subject to adjustment in accordance with Section 10.

     

    "Fundamental
      Transaction"
      means
      any of the following: (1) the Company effects any merger or consolidation of
      the
      Company with or into another Person, (2) the Company effects any sale of all
      or
      substantially all of its assets in one or a series of related transactions,
      (3)
      any tender offer or exchange offer (whether by the Company or another Person)
      is
      completed pursuant to which holders of Common Stock are permitted to tender
      or
      exchange their shares for other securities, cash or property, or (4) the Company
      effects any reclassification of the Common Stock or any compulsory share
      exchange pursuant to which the Common Stock is effectively converted into or
      exchanged for other securities, cash or property.

     

    “Illinois
      Courts”
      means
      the state and federal courts sitting in the City of Chicago,
      Illinois.

     

    “Original
      Issue Date”
      means
      the Original Issue Date first set forth on the first page of this
      Warrant.

     

    "Person"
      means an
      individual or corporation, partnership, trust, incorporated or unincorporated
      association, joint venture, limited liability company, joint stock company,
      government (or an agency or subdivision thereof) or other entity of any
      kind.

     

    “Registration
      Expenses” means
      all
      registration filing fees, reasonable professional fees and other reasonable
      expenses of the Company’s compliance with federal, state and other securities
      laws (including fees and disbursements of counsel for the underwriters in
      connection with state or other securities law qualifications and registrations),
      printing expenses, messenger, telephone and delivery expenses; reasonable fees
      and disbursements of counsel for the Company and reasonable fees and
      disbursements for counsel for the Holder or any such holders of the Securities
      (as defined in section 4(a)(i)).

     

    “Registration
      Statement”
      means
      the Registration Statement on Form SB-2 initially filed with the Commission
      on
      February 8, 2007, including any and all amendments thereto.

     

    "Rule
      144"
      means
      Rule 144 promulgated by the Securities and Exchange Commission pursuant to
      the
      Securities Act, as such Rule may be amended from time to time, or any similar
      rule or regulation hereafter adopted by the Securities and Exchange Commission
      having substantially the same effect as such Rule.

     

    "Securities
      Act"
      means
      the Securities Act of 1933, as amended.

     

    "Trading
      Day"
      means
      (i) a day on which the Common Stock is traded on a Trading Market (other than
      the OTC Bulletin Board), or (ii) if the Common Stock is not listed on a Trading
      Market (other than the OTC Bulletin Board), a day on which the Common Stock
      is
      traded in the over-the-counter market, as reported by the OTC Bulletin Board,
      or
      (iii) if the Common Stock is not quoted on any Trading Market, a day on which
      the Common Stock is quoted in the over-the-counter market as reported by the
      Pink Sheets, LLC (or any similar organization or agency succeeding to its
      functions of reporting prices); provided, that in the event that the Common
      Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then
      Trading Day shall mean a Business Day.

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

    "Trading
      Market"
      means
      whichever of the New York Stock Exchange, the American Stock Exchange, the
      NASDAQ National Market, the NASDAQ SmallCap Market or OTC Bulletin Board on
      which the Common Stock is listed or quoted for trading on the date in
      question.

     

    "Warrant
      Shares" means
      the
      shares of Common Stock issuable upon exercise of this Warrant.

     

    2. Registration
      of Warrant.
      The
      Company shall register this Warrant upon records to be maintained by the Company
      for that purpose (the "Warrant
      Register"),
      in the
      name of the record Holder hereof from time to time. The Company may deem and
      treat the registered Holder of this Warrant as the absolute owner hereof for
      the
      purpose of any exercise hereof or any distribution to the Holder, and for all
      other purposes, absent actual notice to the contrary.

     

    3. Registration
      of Transfers.
      The
      Company shall register the transfer of any portion of this Warrant in the
      Warrant Register, upon surrender of this Warrant, with the Form of Assignment
      attached hereto duly completed and signed, to the Company at its address
      specified herein. Upon any such registration or transfer, a new Warrant to
      purchase Common Stock, in substantially the form of this Warrant (any such
      new
      Warrant, a "New
      Warrant"),
      evidencing the portion of this Warrant so transferred shall be issued to the
      transferee and a New Warrant evidencing the remaining portion of this Warrant
      not so transferred, if any, shall be issued to the transferring Holder. The
      acceptance of the New Warrant by the transferee thereof shall be deemed the
      acceptance by such transferee of all of the rights and obligations of a holder
      of a Warrant. 

     

    4. Registration
      Rights.
      

    (a)
      Following the Company’s initial public offering of securities registered
      pursuant to the Securities Act, to the extent the Warrant Shares have not
      already been registered in the Registration Statement and continue to be
      salable, whenever the Company proposes to register any of its securities under
      the Securities Act, whether for its own account or for the account of another
      stockholder (except for the registration of securities to be offered pursuant
      to
      an employee benefit plan on Form S-8, pursuant to a registration made on Form
      S-4 or any successor forms then in effect) at any time, and the registration
      form to be used may be used for the registration of the Securities (a
“Piggyback
      Registration”),
      it
      will so notify in writing the Holder and any such holders of the Securities
      no
      later than forty-five (45) days prior to the anticipated filing date. The
      Company will include in the Piggyback Registration all Securities with respect
      to which the Company has received written requests for inclusion within fifteen
      (15) business days after the applicable holder’s receipt of the Company’s
      notice. The Holder or any such holders of the Securities may withdraw all or
      any
      part of the Securities from a Piggyback Registration at any time before ten
      (10)
      business days prior to the effective date of the Piggyback Registration. In
      any
      Piggyback Registration, the Company, the Holder or any such holders of the
      Securities and any Person who hereafter becomes entitled to register its
      securities in a registration initiated by the Company must sell their securities
      on the same terms and conditions. The Company shall pay or reimburse to the
      Holder or any such holders of the Securities included in a Piggyback
      Registration all Registration Expenses of those holders in connection with
      any
      Piggyback Registration.

    

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    (b)
      In
      respect of the Registration Statement, or in the event of a registration
      pursuant to the provisions of this Section 4, the Company shall use its best
      efforts to cause the Warrant Shares so registered to be registered or qualified
      for sale under the securities or blue sky laws of such jurisdictions as the
      Holder or such holders may reasonably request; provided, however, that the
      Company shall not be required to qualify to do business in any state by reason
      of this Section 4(b) in which it is not otherwise required to qualify to do
      business and provided further, that the Company has no obligation to qualify
      the
      Warrant Shares where such qualification would cause any unreasonable delay
      or
      expenditure by the Company.

    

    (c)
      The
      Company shall keep effective the Registration Statement and any registration
      or
      qualification contemplated by this Section 4, and shall from time to time amend
      or supplement each applicable registration statement, preliminary prospectus,
      final prospectus, application, document and communication for such period of
      time as shall be required to permit the Holder or such holders to complete
      the
      offer and sale of the Warrant Shares covered thereby. 

    

    (d)
      In
      the event of a registration pursuant to the provisions of this Section 4, the
      Company shall furnish to the Holder and to each such holder such reasonable
      number of copies of the registration statement and of each amendment and
      supplement thereto (in each case, including all exhibits), such reasonable
      number of copies of each prospectus contained in such registration statement
      and
      each supplement or amendment thereto (including each preliminary prospectus),
      all of which shall conform to the requirements of the Securities Act and the
      rules and regulations thereunder, and such other documents as the Holder or
      such
      holders may reasonably request in order to facilitate the disposition of the
      Warrant Shares included in such registration.

    

    (e)
      In
      the event of a registration pursuant to the provisions of this Section 4, the
      Company shall furnish the Holder and each holder of any Warrant Shares so
      registered with an opinion of its counsel to the effect that (i) the
      registration statement has become effective under the Securities Act and no
      order suspending the effectiveness of the registration statement preventing
      or
      suspending the use of the registration statement, preventing or suspending
      the
      use of the registration statement, any preliminary prospectus, any final
      prospectus, or any amendment or supplement thereto has been issued, nor to
      such
      counsel’s actual knowledge has the Securities and Exchange Commission or any
      securities or blue sky authority of any jurisdiction instituted or threatened
      to
      institute any proceedings with respect to such an order and (ii) the
      registration statement and each prospectus forming a part thereof (including
      each preliminary prospectus), and any amendment or supplement thereto, complies
      as to form with the Act and the rules and regulations thereunder. Such counsel
      shall also provide a Blue Sky Memorandum setting forth the jurisdictions in
      which the Warrant Shares have been registered or qualified for
      sale.

    

    (f)
      The
      Company agrees that until all the Warrant Shares have been sold under a
      registration statement or pursuant to Rule 144 under the Securities Act, it
      shall keep current in filing all reports, statements and other materials
      required to be filed with the Commission to permit holders of the Warrant Shares
      to sell such securities under Rule 144.

    

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    (g)
      The
      Holder and any holders who propose to register their Warrant Shares under the
      Securities Act shall execute and deliver to the Company a selling stockholder
      questionnaire on a form to be provided by the Company.

    

    (h)
      The
      Company shall not be required by the terms hereof to file a registration
      statement if, in the opinion of counsel to the holders of the Warrant and
      Warrant Shares and counsel for the Company (or, should they not agree, in the
      opinion of another counsel experienced in securities law matters acceptable
      to
      counsel for the holders of the Warrants and Warrant Shares and the Company),
      the
      proposed public offering or other transfer as to which such registration
      statement is requested to be filed is exempt from applicable federal and state
      securities laws, rules, regulations and would result in unaffiliated purchasers
      or transferees obtaining securities that are not restricted securities as that
      term is defined in Rule 144 under the Securities Act. 

    

    5. Exercise
      and Duration of Warrants.
      This
      Warrant shall be exercisable by the registered Holder at any time and from
      time
      to time on or after one year from the effective date of the Registration
      Statement through and including the Expiration Date. At 6:30 p.m., Eastern
      Standard Time, on the Expiration Date, the portion of this Warrant not exercised
      prior thereto shall be and become void and of no value. The Company may not
      call
      or redeem any portion of this Warrant without the prior written consent of
      the
      affected Holder. 

     

    6. Delivery
      of Warrant Shares.

     

    (a) To
      effect
      exercises hereunder, the Holder shall not be required to physically surrender
      this Warrant unless the aggregate Warrant Shares represented by this Warrant
      is
      being exercised. Upon delivery of the Exercise Notice (in the form attached
      hereto) to the Company (with the attached Warrant Shares Exercise Log) at its
      address for notice set forth herein and upon payment of the Exercise Price
      multiplied by the number of Warrant Shares that the Holder intends to purchase
      hereunder, the Company shall promptly (but in no event later than three Trading
      Days after the Date of Exercise (as defined herein)) issue and deliver to the
      Holder, a certificate for the Warrant Shares issuable upon such exercise. The
      Company shall, upon request of the Holder and subsequent to the date on which
      a
      registration statement covering the resale of the Warrant Shares has been
      declared effective by the Securities and Exchange Commission, use its reasonable
      best efforts to deliver Warrant Shares hereunder electronically through the
      Depository Trust Corporation or another established clearing corporation
      performing similar functions, if available, provided,
      that,
      the Company may, but will not be required to change its transfer agent if its
      current transfer agent cannot deliver Warrant Shares electronically through
      the
      Depository Trust Corporation. A "Date
      of Exercise"
      means
      the date on which the Holder shall have delivered to the Company: (i) the
      Exercise Notice (with the Warrant Exercise Log attached to it), appropriately
      completed and duly signed and (ii) payment of the Exercise Price for the number
      of Warrant Shares so indicated by the Holder to be purchased.

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

    (b) If
      by the
      third Trading Day after a Date of Exercise the Company fails to deliver the
      required number of Warrant Shares in the manner required pursuant to Section
      6(a), then the Holder will have the right to rescind such exercise.

     

    (c) The
      Company's obligations to issue and deliver Warrant Shares in accordance with
      the
      terms hereof are absolute and unconditional, irrespective of any action or
      inaction by the Holder to enforce the same, any waiver or consent with respect
      to any provision hereof, the recovery of any judgment against any Person or
      any
      action to enforce the same, or any setoff, counterclaim, recoupment, limitation
      or termination, or any breach or alleged breach by the Holder or any other
      Person of any obligation to the Company or any violation or alleged violation
      of
      law by the Holder or any other Person, and irrespective of any other
      circumstance which might otherwise limit such obligation of the Company to
      the
      Holder in connection with the issuance of Warrant Shares. Nothing herein shall
      limit a Holder's right to pursue any other remedies available to it hereunder,
      at law or in equity including, without limitation, a decree of specific
      performance and/or injunctive relief with respect to the Company's failure
      to
      timely deliver certificates representing Warrant Shares upon exercise of the
      Warrant as required pursuant to the terms hereof.

     

    7. Charges,
      Taxes and Expenses.
      Issuance and delivery of Warrant Shares upon exercise of this Warrant shall
      be
      made without charge to the Holder for any issue or transfer tax, withholding
      tax, transfer agent fee or other incidental tax or expense in respect of the
      issuance of such certificates, all of which taxes and expenses shall be paid
      by
      the Company; provided, however, that the Company shall not be required to pay
      any tax which may be payable in respect of any transfer involved in the
      registration of any certificates for Warrant Shares or Warrants in a name other
      than that of the Holder. The Holder shall be responsible for all other tax
      liability that may arise as a result of holding or transferring this Warrant
      or
      receiving Warrant Shares upon exercise hereof.

     

    8. Replacement
      of Warrant.
      If this
      Warrant is mutilated, lost, stolen or destroyed, the Company shall issue or
      cause to be issued in exchange and substitution for and upon cancellation
      hereof, or in lieu of and substitution for this Warrant, a New Warrant, but
      only
      upon receipt of evidence reasonably satisfactory to the Company of such loss,
      theft or destruction and customary and reasonable indemnity (which shall not
      include a surety bond), if requested. Applicants for a New Warrant under such
      circumstances shall also comply with such other reasonable regulations and
      procedures and pay such other reasonable third-party costs as the Company may
      prescribe. If a New Warrant is requested as a result of a mutilation of this
      Warrant, then the Holder shall deliver such mutilated Warrant to the Company
      as
      a condition precedent to the Company’s obligation to issue the New
      Warrant.

     

    9. Reservation
      of Warrant Shares.
      The
      Company covenants that it will at all times reserve and keep available out
      of
      the aggregate of its authorized but unissued and otherwise unreserved Common
      Stock, solely for the purpose of enabling it to issue Warrant Shares upon
      exercise of this Warrant as herein provided, the number of Warrant Shares which
      are then issuable and deliverable upon the exercise of this entire Warrant,
      free
      from preemptive rights or any other contingent purchase rights of Persons other
      than the Holder (taking into account the adjustments and restrictions of Section
      10). The Company covenants that all Warrant Shares so issuable and deliverable
      shall, upon issuance and the payment of the applicable Exercise Price in
      accordance with the terms hereof, be duly and validly authorized, issued and
      fully paid and nonassessable.

     

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

    10. Certain
      Adjustments.
      The
      Exercise Price and number of Warrant Shares issuable upon exercise of this
      Warrant are subject to adjustment from time to time as set forth in this Section
      10.

     

    (a) Stock
      Dividends and Splits.
      If the
      Company, at any time while this Warrant is outstanding, (i) pays a stock
      dividend on its Common Stock or otherwise makes a distribution on any class
      of
      capital stock that is payable in shares of Common Stock, (ii) subdivides
      outstanding shares of Common Stock into a larger number of shares, or (iii)
      combines outstanding shares of Common Stock into a smaller number of shares,
      then in each such case the Exercise Price shall be multiplied by a fraction
      of
      which the numerator shall be the number of shares of Common Stock outstanding
      immediately before such event and of which the denominator shall be the number
      of shares of Common Stock outstanding immediately after such event. Any
      adjustment made pursuant to clause (i) of this paragraph shall become effective
      immediately after the record date for the determination of stockholders entitled
      to receive such dividend or distribution, and any adjustment pursuant to clause
      (ii) or (iii) of this paragraph shall become effective immediately after the
      effective date of such subdivision or combination.

     

    (b) Fundamental
      Transactions.
      If, at
      any time while this Warrant is outstanding there is a Fundamental Transaction,
      then the Holder shall have the right thereafter to receive, upon exercise of
      this Warrant, the same amount and kind of securities, cash or property as it
      would have been entitled to receive upon the occurrence of such Fundamental
      Transaction if it had been, immediately prior to such Fundamental Transaction,
      the holder of the number of Warrant Shares then issuable upon exercise in full
      of this Warrant (the "Alternate
      Consideration").
      For
      purposes of any such exercise, the determination of the Exercise Price shall
      be
      appropriately adjusted to apply to such Alternate Consideration based on the
      amount of Alternate Consideration issuable in respect of one share of Common
      Stock in such Fundamental Transaction, and the Company shall apportion the
      Exercise Price among the Alternate Consideration in a reasonable manner
      reflecting the relative value of any different components of the Alternate
      Consideration. If holders of Common Stock are given any choice as to the
      securities, cash or property to be received in a Fundamental Transaction, then
      the Holder shall be given the same choice as to the Alternate Consideration
      it
      receives upon any exercise of this Warrant following such Fundamental
      Transaction. At the Holder's option and request, any successor to the Company
      or
      surviving entity in such Fundamental Transaction shall, either (1) issue to
      the
      Holder a new warrant substantially in the form of this Warrant and consistent
      with the foregoing provisions and evidencing the Holder's right to purchase
      the
      Alternate Consideration for the aggregate Exercise Price upon exercise thereof,
      or (2) purchase the Warrant from the Holder for a purchase price, payable in
      cash within five Trading Days after such request (or, if later, on the effective
      date of the Fundamental Transaction), equal to the Black Scholes value of the
      remaining unexercised portion of this Warrant on the date of such request.
      The
      terms of any agreement pursuant to which a Fundamental Transaction is effected
      shall include terms requiring any such successor or surviving entity to comply
      with the provisions of this paragraph (b) and insuring that the Warrant (or
      any
      such replacement security) will be similarly adjusted upon any subsequent
      transaction analogous to a Fundamental Transaction. 

     

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

    (c) Number
      of Warrant Shares.
      Simultaneously with any adjustment to the Exercise Price pursuant to this
      Section 10, the number of Warrant Shares that may be purchased upon exercise
      of
      this Warrant shall be increased or decreased proportionately, so that after
      such
      adjustment the aggregate Exercise Price payable hereunder for the adjusted
      number of Warrant Shares shall be the same as the aggregate Exercise Price
      in
      effect immediately prior to such adjustment.

     

    (d) Calculations.
      All
      calculations under this Section 10 shall be made to the nearest cent or the
      nearest 1/100th
      of a
      share, as applicable. The number of shares of Common Stock outstanding at any
      given time shall not include shares owned or held by or for the account of
      the
      Company, and the disposition of any such shares shall be considered an issue
      or
      sale of Common Stock.

     

    (e) Notice
      of Adjustments.
      Upon
      the occurrence of each adjustment pursuant to this Section 10, the Company
      at
      its expense will promptly compute such adjustment in accordance with the terms
      of this Warrant and prepare a certificate setting forth such adjustment,
      including a statement of the adjusted Exercise Price and adjusted number or
      type
      of Warrant Shares or other securities issuable upon exercise of this Warrant
      (as
      applicable), describing the transactions giving rise to such adjustments and
      showing in detail the facts upon which such adjustment is based. Upon written
      request, the Company will promptly deliver a copy of each such certificate
      to
      the Holder and to the Company's Transfer Agent.

     

    (f) Notice
      of Corporate Events.
      If the
      Company (i) declares a dividend or any other distribution of cash, securities
      or
      other property in respect of its Common Stock, including without limitation
      any
      granting of rights or warrants to subscribe for or purchase any capital stock
      of
      the Company, (ii) authorizes or approves, enters into any agreement
      contemplating or solicits stockholder approval for any Fundamental Transaction
      or (iii) authorizes the voluntary dissolution, liquidation or winding up of
      the
      affairs of the Company, then the Company shall deliver to the Holder a notice
      describing the material terms and conditions of such transaction (but only
      to
      the extent such disclosure would not result in the dissemination of material,
      non-public information to the Holder) at least 10 calendar days prior to the
      applicable record or effective date on which a Person would need to hold Common
      Stock in order to participate in or vote with respect to such transaction,
      and
      the Company will take all steps reasonably necessary in order to insure that
      the
      Holder is given the practical opportunity to exercise this Warrant prior to
      such
      time so as to participate in or vote with respect to such transaction; provided,
      however, that the failure to deliver such notice or any defect therein shall
      not
      affect the validity of the corporate action required to be described in such
      notice.

     

    11. Payment
      of Exercise Price.
      The
      Holder shall pay the Exercise Price by delivery of the immediately available
      funds.

     

    12. Limitations
      on Exercise.
      Notwithstanding anything to the contrary contained herein, the number of Warrant
      Shares that may be acquired by the Holder upon any exercise of this Warrant
      (or
      otherwise in respect hereof) shall be limited to the extent necessary to insure
      that, following such exercise (or other issuance), the total number of shares
      of
      Common Stock then beneficially owned by such Holder and its Affiliates and
      any
      other Persons whose beneficial ownership of Common Stock would be aggregated
      with the Holder's for purposes of Section 13(d) of the Exchange Act, does not
      exceed 9.999% of the total number of issued and outstanding shares of Common
      Stock (including for such purpose the shares of Common Stock issuable upon
      such
      exercise). For such purposes, beneficial ownership shall be determined in
      accordance with Section 13(d) of the Exchange Act and the rules and regulations
      promulgated thereunder. This provision shall not restrict the number of shares
      of Common Stock which a Holder may receive or beneficially own in order to
      determine the amount of securities or other consideration that such Holder
      may
      receive in the event of a Fundamental Transaction as contemplated in Section
      10
      of this Warrant. This restriction may not be waived.

     

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

    13. No
      Fractional Shares.
      No
      fractional shares of Warrant Shares will be issued in connection with any
      exercise of this Warrant. In lieu of any fractional shares which would,
      otherwise be issuable, the Company shall pay cash equal to the product of such
      fraction multiplied by the closing price of one Warrant Share as reported by
      the
      applicable Trading Market on the date of exercise.

     

    14. Notices.
      Any and
      all notices or other communications or deliveries hereunder (including, without
      limitation, any Exercise Notice) shall be in writing and shall be deemed given
      and effective on the earliest of (i) the date of transmission, if such notice
      or
      communication is delivered via facsimile at the facsimile number specified
      in
      this Section prior to 6:30 p.m., (Eastern Standard Time, on a Trading Day),
      (ii)
      the next Trading Day after the date of transmission, if such notice or
      communication is delivered via facsimile at the facsimile number specified
      in
      this Section on a day that is not a Trading Day or later than 6:30 p.m., Eastern
      Standard Time, on any Trading Day, (iii) the Trading Day following the date
      of
      mailing, if sent by nationally recognized overnight courier service, or (iv)
      upon actual receipt by the party to whom such notice is required to be given.
      The addresses for such communications shall be: (i) if to the Company, 6615
      Brotherhood Way, Suite A, Fort Wayne, Indiana 46825, Attention: Brian Kistler,
      and to Weintraub Law Group PC at 10085 Carroll Canyon Road, Suite 210, San
      Diego, California 92131 (or such other address as the Company shall indicate
      in
      writing in accordance with this Section), or (ii) if to the Holder, to the
      addresses appearing on the Warrant Register or such other address as the Holder
      may provide to the Company in accordance with this Section.

     

    15. Warrant
      Agent.
      The
      Company shall serve as warrant agent under this Warrant. Upon 10 days' notice
      to
      the Holder, the Company may appoint a new warrant agent. Any corporation into
      which the Company or any new warrant agent may be merged or any corporation
      resulting from any consolidation to which the Company or any new warrant agent
      shall be a party or any corporation to which the Company or any new warrant
      agent transfers substantially all of its corporate trust or shareholders
      services business shall be a successor warrant agent under this Warrant without
      any further act. Any such successor warrant agent shall promptly cause notice
      of
      its succession as warrant agent to be mailed (by first class mail, postage
      prepaid) to the Holder at the Holder's last address as shown on the Warrant
      Register.

     

    16. Miscellaneous.

     

    (a) This
      Warrant shall be binding on and inure to the benefit of the parties hereto
      and
      their respective successors and assigns. Subject to the preceding sentence,
      nothing in this Warrant shall be construed to give to any Person other than
      the
      Company and the Holder any legal or equitable right, remedy or cause of action
      under this Warrant. This Warrant may be amended only in writing signed by the
      Company and the Holder and their successors and assigns.

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

    (b) All
      questions concerning the construction, validity, enforcement and interpretation
      of this Warrant shall be governed by and construed and enforced in accordance
      with the internal laws of the State of Illinois, without regard to the
      principles of conflicts of law thereof. Each party agrees that all legal
      proceedings concerning the interpretations, enforcement and defense of this
      Warrant and the transactions herein contemplated (“Proceedings”)
      (whether brought against a party hereto or its respective Affiliates, employees
      or agents) shall be commenced exclusively in the Illinois Courts. Each party
      hereto hereby irrevocably submits to the exclusive jurisdiction of the Illinois
      Courts 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 Proceeding, any claim that
      it is not personally subject to the jurisdiction of any Illinois Court, or
      that
      such Proceeding has been commenced in an improper or inconvenient forum. Each
      party hereto hereby irrevocably waives personal service of process and consents
      to process being served in any such Proceeding by mailing a copy thereof via
      registered or certified mail or overnight delivery (with evidence of delivery)
      to such party at the address in effect for notices to it under this Warrant
      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. Each party hereto
      hereby irrevocably waives, to the fullest extent permitted by applicable law,
      any and all right to trial by jury in any legal proceeding arising out of or
      relating to this Warrant or the transactions contemplated hereby. If either
      party shall commence a Proceeding to enforce any provisions of this Warrant,
      then the prevailing party in such Proceeding shall be reimbursed by the other
      party for its attorney’s fees and other costs and expenses incurred with the
      investigation, preparation and prosecution of such Proceeding.

     

    (c) The
      headings herein are for convenience only, do not constitute a part of this
      Warrant and shall not be deemed to limit or affect any of the provisions
      hereof.

     

    (d) In
      case
      any one or more of the provisions of this Warrant shall be invalid or
      unenforceable in any respect, the validity and enforceability of the remaining
      terms and provisions of this Warrant shall not in any way be affected or
      impaired thereby and the parties will attempt in good faith to agree upon a
      valid and enforceable provision which shall be a commercially reasonable
      substitute therefor, and upon so agreeing, shall incorporate such substitute
      provision in this Warrant.

     

    (e) Prior
      to
      exercise of this Warrant, the Holder hereof shall not, by reason of by being
      a
      Holder, be entitled to any rights of a stockholder with respect to the Warrant
      Shares.

     

    (f) This
      Warrant (together with the other agreements and documents being delivered
      pursuant to or in connection with this Warrant) constitutes the entire agreement
      of the parties hereto with respect to the subject matter hereof, and supersedes
      all prior agreements and understandings of the parties, oral and written, with
      respect to the subject matter hereof.

    

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

    (g) The
      failure of the Company or the Holder to at any time enforce any of the
      provisions of this Warrant shall not be deemed or construed to be a waiver
      of
      any such provision, nor to in any way affect the validity of this Warrant or
      any
      provision hereof or the right of the Company or any Holder to thereafter enforce
      each and every provision of this Warrant. No waiver of any breach,
      non-compliance or non-fulfillment of any of the provisions of this Warrant
      shall
      be effective unless set forth in a written instrument executed by the party
      or
      parties against whom or which enforcement of such waiver is sought; and no
      waiver of any such breach, non-compliance or non-fulfillment shall be construed
      or deemed to be a waiver of any other or subsequent breach, non-compliance
      or
      non-fulfillment. 

    

    

    

    [REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK,

    SIGNATURE
      PAGE FOLLOWS]

     

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by
      its
      authorized officer as of the date first indicated above.

     

     

    
      	 	FREEDOM
              FINANCIAL HOLDINGS, INC.
	 	 
	 	
              By:
                ______________________________________

              Name:

              Title:

            

    

     

     

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

    EXERCISE
      NOTICE

    FREEDOM
      FINANCIAL HOLDINGS, INC. 

    WARRANT
      DATED FEBRUARY __, 2007

    

     

    The
      undersigned Holder hereby irrevocably elects to purchase _____________ shares
      of
      Common Stock pursuant to the above referenced Warrant. Capitalized terms used
      herein and not otherwise defined have the respective meanings set forth in
      the
      Warrant.

     

    
      	
              (1)

            	
              The
                undersigned Holder hereby exercises its right to purchase
                _________________ Warrant Shares pursuant to the
                Warrant.

            

    

     

    
      	
              (2)

            	
              The
                holder shall pay the sum of $____________ to the Company in accordance
                with the terms of the Warrant.

            

    

     

    
      	
              (3)

            	
              Pursuant
                to this Exercise Notice, the Company shall deliver to the holder
                _______________ Warrant Shares in accordance with the terms of the
                Warrant.

            

    

     

    
      	
              (4)

            	
              By
                its delivery of this Exercise Notice, the undersigned represents
                and
                warrants to the Company that in giving effect to the exercise evidenced
                hereby the Holder will not beneficially own in excess of the number
                of
                shares of Common Stock (determined in accordance with Section 13(d)
                of the
                Securities Exchange Act of 1934) permitted to be owned under Section
                11 of
                this Warrant to which this notice
                relates.

            

    

    

    
      	 	 
	 	 
	
              Dated:
                __________, ____

            	
              Name
                of Holder:

            
	 	 
	 	
              (Print)
                _____________________________

            
	 	 
	 	
              By:
                _______________________________

            
	 	
              Name:
                _____________________________

            
	 	
              Title:
                ______________________________

            
	 	 
	 	
              (Signature
                must conform in all respects to name of holder as specified on the
                face of
                the Warrant)

            

    

     

    
      
         

      

      
        -13-

        
          

        

      

      
         

      

    

    Warrant
      Shares Exercise Log

     

     

    
      	
              Date

            	
              Number
                of Warrant Shares Available to be Exercised

            	
              Number
                of Warrant Shares Exercised

            	
              Number
                of Warrant Shares Remaining to be Exercised

            
	
               

               

               

               

               

               

               

               

               

               

               

               

               

               

            	 	 	 

    

     

    
      
         

      

      
        -14-

        
          

        

      

      
         

      

    

    

      FREEDOM
        FINANCIAL HOLDINGS, INC. 

      WARRANT
        DATED FEBRUARY __, 2007

      WARRANT
        NO. [ ]

       

    

    FORM
      OF
      ASSIGNMENT

     

    [To
      be
      completed and signed only upon transfer of Warrant]

     

    FOR
      VALUE
      RECEIVED, the undersigned hereby sells, assigns and transfers unto
      ________________________________ the right represented by the above-captioned
      Warrant to purchase ____________ shares of Common Stock to which such Warrant
      relates and appoints ________________ attorney to transfer said right on the
      books of the Company with full power of substitution in the
      premises.

     

    Dated: _______________,
      ____

     

    
      	 	
              _______________________________________

            
	 	
              (Signature
                must conform in all respects to name of holder as specified on the
                face of
                the Warrant)

            
	 	
               

               

              _______________________________________

            
	 	
              Address
                of Transferee

            
	 	
               

               

              _______________________________________

            
	 	
               

              _______________________________________

            

    

     

     

    In
      the
      presence of:

     

     

    _______________________________

     

    
      
         

      

      
        -15-

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