Document:

Unassociated Document

     

    ESCROW
      AGREEMENT

     

    between

     

    FREEDOM
      FINANCIAL HOLDINGS, INC.,

     

    ALARON
      FINANCIAL SERVICES, INC.

     

    and

     

    TOWER
      TRUST COMPANY

     

    Dated
      as of ________ ___, 2007

     

    ACCOUNT
      NUMBER(S) 00-0496

     

    SHORT
      TITLE OF ACCOUNT Freedom Financial Holdings, Inc. - Escrow

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    ESCROW
      AGREEMENT made
      this
      ____ day of____ , 2007 by and between Tower Trust Company (“Escrow Agent”),
      Freedom Financial Holdings, Inc. (the “Company”) and Alaron Financial Services,
      Inc. (the “Underwriter”) (collectively the “Depositors” and individually the
“Depositor”).

     

    Depositors
      and Escrow Agent hereby agree that, in consideration of the mutual promises
      and
      covenants contained herein, Escrow Agent shall hold in escrow and shall
      distribute Escrow Property (as defined herein) in accordance with and subject
      to
      the following Instructions and Terms and Conditions:

     

    WHEREAS,
      the Company proposes to offer for sale to investors through one or more
      registered broker-dealers a minimum of 375,000 shares of common stock
      (hereinafter referred to as the "Securities") (the “Minimum Offering Amount”) up
      to a maximum of 718,750 shares of common stock (the “Maximum Offering Amount”)
      at a price of $2.00 per share (the "Proceeds").

     

    WHEREAS,
      the Underwriter intends to sell the Securities as the Company's agent on a
      best-efforts basis for the Securities in a public offering (the
      "Offering").

     

    WHEREAS,
      the Company and the Underwriter desire to establish an escrow account in which
      funds received from subscribers will be deposited pending completion of the
      escrow period. Tower Trust Cpmpany agrees to serve as Escrow Agent in accordance
      with the terms and conditions set forth herein.

     

    WHEREAS,
      the term Selected Dealer as used herein shall include the Underwriter and other
      co-underwriters and/or other selected dealers as part of the selling group.
      All
      Selected Dealers shall be bound by this Agreement. However, for purposes of
      communications and directives, the Escrow Agent need only accept those signed
      by
      Alaron Financial Services, Inc.

     

    NOW
      THEREFORE, in consideration of the foregoing, it is hereby agreed as follows:
      

     

     

    I. 
      INSTRUCTIONS:

     

    1. 
      Establishment of Escrow Account. 

     

    On
      or
      prior to the date of the commencement of the offering, the parties shall
      establish an interest-bearing escrow account with the Escrow Agent, which escrow
      account shall be entitled Freedom Financial Holdings, Inc. - Escrow (the "Escrow
      Account"). The Selected Dealer will instruct subscribers to make checks for
      subscriptions payable to the order of the Escrow Agent. Any checks received
      that
      are made payable to a party other than the Escrow Agent shall be returned to
      the
      Selected Dealer who submitted the check.

     

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

    

     

    2. Escrow
      Property

     

    The
      property and/or funds deposited or to be deposited with Escrow Agent by
      Depositors shall be as follows:

     

    A. Documentation.
      Concurrently with the execution and delivery hereof, the Company and is
      delivering to the Escrow Agent one fully executed original copy of the
      Underwriting Agreement and a draft of the registration statement of the Company
      on Form SB-2 (the "Escrowed Documents"), which represents all of the documents
      required to be placed in escrow.

    

    B. Escrowed
      Items.
      Proceeds
      received
      from subscribers will be deposited into the Escrow Account, as defined below,
      (the
      Proceeds collectively with the Escrowed Documents hereinafter are referred
      to as
      "Escrowed Items"). 

    

     

    The
      foregoing property and/or funds, plus all interest, dividends and other
      distributions and payments thereon (collectively the “Distributions”) received
      by Escrow Agent, less any property and/or funds distributed or paid in
      accordance with this Escrow Agreement, are collectively referred to herein
      as
“Escrow Property.”

     

    3. Deposits
      into the Escrow Account. 

     

    The
      Selected Dealer agrees that it shall promptly deliver all monies received from
      subscribers for the payment of the Securities to the Escrow Agent for deposit
      in
      the Escrow Account together with a written account of each sale, which account
      shall set forth, among other things, the subscriber's name and address, the
      number of securities purchased, the amount paid therefor, and whether the
      consideration received was in the form of a check, draft, or money order. All
      monies so deposited in the Escrow Account are hereinafter referred to as the
      "Escrow Amount."

     

    4. Collection
      Procedure. 

     

    A. The
      Escrow Agent is hereby authorized to forward each check for collection and,
      upon
      collection of the proceeds of each check, deposit the collected proceeds in
      the
      Escrow Account. As an alternative, the Escrow Agent may telephone the bank
      on
      which the check is drawn to confirm that the check has been paid.

     

    B. Any
      check
      returned unpaid to the Escrow Agent shall be returned to the Selected Dealer
      that submitted the check. In such cases, the Escrow Agent will promptly notify
      the Company of such return.

     

    C. If
      the
      Company rejects any subscription for which the Escrow Agent has already
      collected funds, the Escrow Agent, as instructed by the Company, shall promptly
      issue a refund check to the rejected subscriber. If the Company rejects any
      subscription for which the Escrow Agent has not yet collected funds but has
      submitted the subscriber's check for collection, as instructed by the Company
      the Escrow Agent shall promptly issue a check in the amount of the subscriber's
      check to the rejected subscriber after the Escrow Agent has cleared such funds.
      If the Escrow Agent has not yet submitted a rejected subscriber's check for
      collection, as instructed by the Company the Escrow Agent shall promptly remit
      the subscriber's check directly to the subscriber. 

     

    
      
         

      

      
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    5. Escrow
      Period. 

     

    The
      Escrow Period shall begin with the commencement of the Offering and shall
      terminate (the “Termination Date”) upon the earlier to occur of the following
      dates: 

     

    A.
       The
      date
      upon which the Escrow Agent confirms that it has received in the Escrow Account
      gross proceeds of the Maximum Offering Amount;
      or

     

    B.
       The
      expiration of ninety (90) days from the effective date of the Offering if the
      Minimum Offering Amount is not reached (unless extended for an additional ____
      days by mutual written agreement between the Company and the Underwriter with
      a
      copy of such extension to the Escrow Agent); or

     

    C.
       The
      date
      upon which a determination is made by the Company and the Underwriter to
      terminate the offering prior to the sale of the Maximum Offering
      Amount.

     

    During
      the escrow period, the Company is aware and understands that it is not entitled
      to any funds received into escrow (except as otherwise provided in this
      agreement) and no amounts deposited in the Escrow Account shall become the
      property of the Company or any other entity, or be subject to the debts of the
      Company or any other entity.

     

    6. Investment
      of Escrow Property 

     

    Escrow
      Agent shall invest or reinvest Escrow Property, without distinction between
      principal and income, in taxable money market accounts. Escrow Agent shall
      have
      no liability for any loss arising from or related to any such investment other
      than in accordance with paragraph 4 of the Terms and Conditions in Part II
      of
      this Agreement.

     

    7. Distribution
      of Escrow Property

     

    Escrow
      Agent is directed to hold and distribute the Escrow Property in the following
      manner:

     

    A. Prior
      to Minimum Offering Amount Being Reached.
      In the
      event the Escrow Agent does not receive the Minimum Offering Amount deposits
      totaling $750,000 on or before the Termination Date, the Escrow Agent shall,
      as
      instructed by the Company, refund to each subscriber the amount received from
      the subscriber, without deduction, penalty, or expense to the subscriber, and
      the Escrow Agent shall notify the Company, the State
      of
      Indiana Securities Division,
      and the
      Selected Dealer in writing of its distribution of the funds. The Company shall
      pay the Escrow Agent a fee of two dollars ($2.00) per check that must be sent
      to
      each subscriber in the event the Minimum Offering Amount is not received. The
      purchase money returned to each subscriber shall be free and clear of any and
      all claims of the Company or any of its creditors and shall include a pro rata
      share of the interest earned based upon the amount invested and the number
      of
      days in escrow. In no event will the Escrow Amount be released to the Company
      until such amount is received by the Escrow Agent in collected funds. For
      purposes of this Agreement, the term "collected funds" shall mean all funds
      received by the Escrow Agent which have cleared normal banking channels and
      are
      in the form of cash. 

     

    
      
         

      

      
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    B. In
      the
      event that the Escrow Agent has received the Minimum Offering Amount of $750,000
      in collected funds prior to the Termination Date, the collected funds shall
      be
      promptly released to the Company.

     

    C.
       Subsequent
      Weekly Releases. 
      After
      the Minimum Offering Amount has been received and disbursed to the Company,
      the
      Escrow Agent shall release all subsequently collected funds to the Company
      on a
      weekly basis beginning the Wednesday after the Minimum Offering Amount has
      been
      reached and continuing every Wednesday thereafter until the Escrow Period has
      been terminated.

     

    8. Addresses

     

    Notices,
      instructions and other communications shall be sent to Escrow Agent, 116, East
      Berry Street Fort, Wayne, Indiana 46802, and to Depositors as
      follows:

     

    
      	
               

              Freedom
                Financial Holdings, Inc.

              Attn:
                Brian Kistler

              6615
                Brotherhood Way, Suite A

              Fort
                Wayne, IN 46825

               

              With
                a Copy to:

               

              Weintraub
                Law Group PC

              10085
                Carroll Canyon Road, Suite 230

              San
                Diego, California 92131

            	
               

              Alaron
                Financial Services, Inc.

              Attn:
                David Bonifield

              822
                West Washington Boulevard

              Chicago,
                Illinois 60607

            

    

    

     

    

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

    

     

    9. Compensation

     

    (a) At
      the
      time of execution of this Escrow Agreement, the Company shall pay Escrow Agent
      an acceptance fee of $1,200.

     

    (b) Depositors
      shall be responsible for and shall reimburse Escrow Agent upon demand for all
      expenses, disbursements and advances incurred or made by Escrow Agent in
      connection with this Agreement.

     

     

    II.
      TERMS
      AND CONDITIONS:

     

    1. The
      duties, responsibilities and obligations of Escrow Agent shall be limited to
      those expressly set forth herein and no duties, responsibilities or obligations
      shall be inferred or implied. Escrow Agent shall not be subject to, nor required
      to comply with, any other agreement between or among any or all of the
      Depositors or to which any Depositor is a party, even though reference thereto
      may be made herein, or to comply with any direction or instruction (other than
      those contained herein or delivered in accordance with this Escrow Agreement)
      from any Depositor or any entity acting on its behalf. Escrow Agent shall not
      be
      required to, and shall not, expend or risk any of its own funds or otherwise
      incur any financial liability in the performance of any of its duties
      hereunder.

     

    2. This
      Agreement is for the exclusive benefit of the parties hereto and their
      respective successors hereunder, and shall not be deemed to give, either express
      or implied, any legal or equitable right, remedy, or claim to any other entity
      or person whatsoever.

     

    3. If
      at any
      time Escrow Agent is served with any judicial or administrative order, judgment,
      decree, writ or other form of judicial or administrative process which in any
      way affects Escrow Property (including but not limited to orders of attachment
      or garnishment or other forms of levies or injunctions or stays relating to
      the
      transfer of Escrow Property), Escrow Agent is authorized to comply therewith
      in
      any manner as it or its legal counsel of its own choosing deems appropriate;
      and
      if Escrow Agent complies with any such judicial or administrative order,
      judgment, decree, writ or other form of judicial or administrative process,
      Escrow Agent shall not be liable to any of the parties hereto or to any other
      person or entity even though such order, judgment, decree, writ or process
      may
      be subsequently modified or vacated or otherwise determined to have been without
      legal force or effect.

     

    4. (a) Escrow
      Agent shall not be liable for any action taken or omitted or for any loss or
      injury resulting from its actions or its performance or lack of performance
      of
      its duties hereunder in the absence of gross negligence or willful misconduct
      on
      its part. In no event shall Escrow Agent be liable (i) for acting in accordance
      with or relying upon any instruction, notice, demand, certificate or document
      from any Depositor or any entity acting on behalf of any Depositor, (ii) for
      any
      consequential, punitive or special damages, (iii) for the acts or omissions
      of
      its nominees, correspondents, designees, subagents or subcustodians, or (iv)
      for
      an amount in excess of the value of the Escrow Property, valued as of the date
      of deposit.

     

    
      
         

      

      
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    (b) If
      any
      fees, expenses or costs incurred by, or any obligations owed to, Escrow Agent
      hereunder are not promptly paid when due, Escrow Agent may reimburse itself
      therefor from the Escrow Property and may sell, convey or otherwise dispose
      of
      any Escrow Property for such purpose.

     

    (c) As
      security for the due and punctual performance of any and all of Depositors,
      obligations to Escrow Agent hereunder, now or hereafter arising, Depositors,
      individually and collectively, hereby pledge, assign and grant to Escrow Agent
      a
      continuing security interest in, and a lien on, the Escrow Property and all
      Distributions thereon or additions thereto (whether such additions are the
      result of deposits by Depositors or the investment of Escrow Property). The
      security interest of Escrow Agent shall at all times be valid, perfected and
      enforceable by Escrow Agent against Depositors and all third parties in
      accordance with the terms of this Escrow Agreement.

     

    (d) Escrow
      Agent may consult with legal counsel at the expense of the Depositors as to
      any
      matter relating to this Escrow Agreement, and Escrow Agent shall not incur
      any
      liability in acting in good faith in accordance with any advice from such
      counsel.

     

    (e) Escrow
      Agent shall not incur any liability for not performing any act or fulfilling
      any
      duty, obligation or responsibility hereunder by reason of any occurrence beyond
      the control of Escrow Agent (including but not limited to any act or provision
      of any present or future law or regulation or governmental authority, any act
      of
      God or war, or the unavailability of the Federal Reserve Bank wire or telex
      or
      other wire or communication facility).

     

    5. Unless
      otherwise specifically set forth herein, Escrow Agent shall proceed as soon
      as
      practicable to collect any checks or other collection items at any time
      deposited hereunder. All such collections shall be subject to Escrow Agent’s
      usual collection practices or terms regarding items received by Escrow Agent
      for
      deposit or collection. Escrow Agent shall not be required, or have any duty,
      to
      notify anyone of any payment or maturity under the terms of any instrument
      deposited hereunder, nor to take any legal action to enforce payment of any
      check, note or security deposited hereunder or to exercise any right or
      privilege which may be afforded to the holder of any such security.

     

    6. Escrow
      Agent shall provide to Depositors monthly statements identifying transactions,
      transfers or holdings of Escrow Property and each such statement shall be deemed
      to be correct and final upon receipt thereof by the Depositors unless Escrow
      Agent is notified in writing to the contrary within thirty (30) business days
      of
      the date of such statement.

     

    
      
         

      

      
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    7. Escrow
      Agent shall not be responsible in any respect for the form, execution, validity,
      value or genuineness of documents or securities deposited hereunder, or for
      any
      description therein, or for the identity, authority or rights of persons
      executing or delivering or purporting to execute or deliver any such document,
      security or endorsement.

     

    8. Notices,
      instructions or other communications shall be in writing and shall be given
      to
      the address set forth in the “Addresses” provision herein (or to such other
      address as may be substituted therefor by written notification to Escrow Agent
      or Depositors). Notices to Escrow Agent shall be deemed to be given when
      actually received by Escrow Agent’s Corporate Trust Department. Escrow Agent is
      authorized to comply with and rely upon any notices, instructions or other
      communications believed by it to have been sent or given by Depositors or by
      a
      person or persons authorized by Depositors. Whenever under the terms hereof
      the
      time for giving a notice or performing an act falls upon a Saturday, Sunday,
      or
      banking holiday, such time shall be extended to the next day on which Escrow
      Agent is open for business.

     

    9. The
      Company shall be liable for and shall reimburse and indemnify Escrow Agent
      and
      hold Escrow Agent harmless from and against any and all claims, losses,
      liabilities, costs, damages or expenses (including reasonable attorneys’ fees
      and expenses) (collectively, “Losses”) arising from or in connection with or
      related to this Escrow Agreement or being Escrow Agent hereunder (including
      but
      not limited to Losses incurred by Escrow Agent in connection with its successful
      defense, in whole or in part, of any claim of gross negligence or willful
      misconduct on its part), provided, however, that nothing contained herein shall
      require Escrow Agent to be indemnified for Losses caused by its gross negligence
      or willful misconduct.

     

    10. The
      Proceeds will not be subject to claims by: (i) creditors of the Company; (ii)
      a
      person who, directly or indirectly, controls, is controlled by, or is under
      common control with the person specified herein, hereinafter referred to as
      an
“Affiliate”; (iii) “Associates” as defined by the North American Securities
      Administrators Association, Inc. (“NASAA”) Statement of Policy Regarding
      Corporate Securities Definitions; or (iv) Underwriters until the Proceeds have
      been released to the Company pursuant to the terms of the
      Agreement.

     

    11. The
      State
      of Indiana Securities Division shall have the right to inspect and make copies
      of the records of the Escrow Agent at any reasonable time wherever the records
      are located. 

     

    12. (a) Depositors
      may remove Escrow Agent at any time by giving to Escrow Agent thirty (30)
      calendar days’ prior notice in writing signed by all Depositors. Escrow Agent
      may resign at any time by giving to Depositors fifteen (15) calendar days’ prior
      written notice thereof.

     

    
      
         

      

      
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    (b) Within
      ten (10) calendar days after giving the foregoing notice of removal to Escrow
      Agent or receiving the foregoing notice of resignation from Escrow Agent, all
      Depositors shall jointly agree on and appoint a successor Escrow Agent. If
      a
      successor Escrow Agent has not accepted such appointment by the end of such
      10-day period, Escrow Agent may, in its sole discretion, deliver the Escrow
      Property to any of the Depositors at the address provided herein or may apply
      to
      a court of competent jurisdiction for the appointment of a successor Escrow
      Agent or for other appropriate relief. The costs and expenses (including
      reasonable attorneys’ fees and expenses) incurred by Escrow Agent in connection
      with such proceeding shall be paid by, and be deemed a joint and several
      obligation of, the Depositors.

     

    (c) Upon
      receipt of the identity of the successor Escrow Agent, Escrow Agent shall either
      deliver the Escrow Property then held hereunder to the successor Escrow Agent,
      less Escrow Agent’s fees, costs and expenses or other obligations owed to Escrow
      Agent, or hold such Escrow Property (or any portion thereof), pending
      distribution, until all such fees, costs and expenses or other obligations
      are
      paid.

     

    (d) Upon
      delivery of the Escrow Property to successor Escrow Agent, Escrow Agent shall
      have no further duties, responsibilities or obligations hereunder.

     

    13. (a) In
      the
      event of any ambiguity or uncertainty hereunder or in any notice, instruction
      or
      other communication received by Escrow Agent hereunder, Escrow Agent may, in
      its
      sole discretion, refrain from taking any action other than retain possession
      of
      the Escrow Property, unless Escrow Agent receives written instructions, signed
      by all Depositors, which eliminates such ambiguity or uncertainty.

     

    (b) In
      the
      event of any dispute between or conflicting claims by or among the Depositors
      and/or any other person or entity with respect to any Escrow Property, Escrow
      Agent shall be entitled, in its sole discretion, to refuse to comply with any
      and all claims, demands or instructions with respect to such Escrow Property
      so
      long as such dispute or conflict shall continue, and Escrow Agent shall not
      be
      or become liable in any way to the Depositors for failure or refusal to comply
      with such conflicting claims, demands or instructions. Escrow Agent shall be
      entitled to refuse to act until, in its sole discretion, either (i) such
      conflicting or adverse claims or demands shall have been determined by a final
      order, judgment or decree of a court of competent jurisdiction, which order,
      judgment or decree is not subject to appeal, or settled by agreement between
      the
      conflicting parties as evidenced in a writing satisfactory to Escrow Agent
      or
      (ii) Escrow Agent shall have received security or an indemnity satisfactory
      to
      it sufficient to hold it harmless from and against any and all Losses which
      it
      may incur by reason of so acting. Escrow Agent may, in addition, elect, in
      its
      sole discretion, to commence an interpleader action or seek other judicial
      relief or orders as it may deem, in its sole discretion, necessary. The costs
      and expenses (including reasonable attorneys’ fees and expenses) incurred in
      connection with such proceeding shall be paid by, and shall be deemed a joint
      and several obligation of, the Depositors.

     

    
      
         

      

      
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    14. This
      Agreement shall be interpreted, construed, enforced and administered in
      accordance with the internal substantive laws (and not the choice of law rules)
      of the State of Indiana. Each of the Depositors hereby submits to the personal
      jurisdiction of and each agrees that all proceedings relating hereto shall
      be
      brought in courts located within the City and State of Indiana or elsewhere
      as
      Escrow Agent may select. Each of the Depositors hereby waives the right to
      trial
      by jury and to assert counterclaims in any such proceedings. To the extent
      that
      in any jurisdiction any Depositor may be entitled to claim, for itself or its
      assets, immunity from suit, execution, attachment (whether before or after
      judgment) or other legal process, each hereby irrevocably agrees not to claim,
      and hereby waives, such immunity. Each Depositor waives personal service of
      process and consents to service of process by certified or registered mail,
      return receipt requested, directed to it at the address last specified for
      notices hereunder, and such service shall be deemed completed ten (10) calendar
      days after the same is so mailed.

     

    15. Except
      as
      otherwise permitted herein, this Escrow Agreement may be modified only by a
      written amendment signed by all the parties hereto, and no waiver of any
      provision hereof shall be effective unless expressed in a writing signed by
      the
      party to be charged.

     

    16. The
      rights and remedies conferred upon the parties hereto shall be cumulative,
      and
      the exercise or waiver of any such right or remedy shall not preclude or inhibit
      the exercise of any additional rights or remedies. The waiver of any right
      or
      remedy hereunder shall not preclude the subsequent exercise of such right or
      remedy.

     

    17. Each
      Depositor hereby represents and warrants (a) that this Escrow Agreement has
      been
      duly authorized, executed and delivered on its behalf and constitutes its legal,
      valid and binding obligation and (b) that the execution, delivery and
      performance of this Escrow Agreement by Depositor do not and will not violate
      any applicable law or regulation.

     

    18. The
      invalidity, illegality or unenforceability of any provision of this Agreement
      shall in no way affect the validity, legality or enforceability of any other
      provision; and if any provision is held to be enforceable as a matter of law,
      the other provisions shall not be affected thereby and shall remain in full
      force and effect.

     

    19. This
      Agreement shall constitute the entire agreement of the parties with respect
      to
      the subject matter and supersedes all prior oral or written agreements in regard
      thereto.

     

    20. This
      Agreement shall terminate upon the distribution of all Escrow Property from
      the
      Account. The provisions of these Terms and Conditions shall survive termination
      of this Escrow Agreement and/or the resignation or removal of the Escrow
      Agent.

     

    
      
         

      

      
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    21. No
      printed or other material in any language, including prospectuses, notices,
      reports, and promotional material which mentions “Tower Trust Company” by name
      or the rights, powers, or duties of the Escrow Agent under this Agreement shall
      be issued by any other parties hereto, or on such party’s behalf, without the
      prior written consent of Escrow Agent.

     

    22. The
      headings contained in this Agreement are for convenience of reference only
      and
      shall have no effect on the interpretation or operation hereof.

     

    23. This
      Escrow Agreement may be executed by each of the parties hereto in any number
      of
      counterparts, each of which counterpart, when so executed and delivered, shall
      be deemed to be an original and all such counterparts shall together constitute
      one and the same agreement.

     

    24. The
      Escrow Agent does not have any interest in the Escrowed Property Deposited
      hereunder but is serving as escrow holder only and having only possession
      thereof. The Company shall pay or reimburse the Escrow Agent upon request for
      any transfer taxes or other taxes relating to the Escrowed Property incurred
      in
      connection herewith and shall indemnify and hold harmless the Escrow Agent
      any
      amounts that it is obligated to pay in the way of such taxes. Any payments
      of
      income from this Escrow Account shall be subject to withholding regulations
      then
      in force with respect to United States taxes. The parties hereto will provide
      the Escrow Agent with appropriate W-9 forms for tax I.D., number certifications,
      or W-8 forms for non-resident alien certifications. 

     

    25. Tax
      Reporting. 

     

    (a) In
      the
      event the Minimum Offering Amount is reached the taxable income will be reported
      to the Company.

     

    (b) In
      the
      event the Minimum Offering Amount is not reached the taxable income will be
      reported to each investor who received a refund on their investment. The
      Underwriter shall forward to the Escrow Agent the W-9 of each investor. Further,
      the Underwriter shall provide the Escrow Agent with written instruction as
      to
      how to distribute the funds to be returned to investors, including amount to
      be
      returned to each investor and amount to be reported as taxable income by the
      Escrow Agent. The Company shall pay the Escrow Agent a fee of $1,200 in
      connection with federal and or state tax reporting on Form 1099- INT for
      interest to be returned to investors. 

     

    (c) It
      is
      understood that the Escrow Agent shall be responsible for income reporting
      only
      with respect to income earned on investment of funds which are a part of the
      Escrowed Property and is not responsible for any other reporting. 

     

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

    

     

    26. Each
      Depositor shall provide the Escrow Agent with a corporate resolution identifying
      the individual(s) who is(are) authorized to sign the Agreement and represent
      the
      Depositors in all dealings with the Escrow Agent. 

     

    27. The
      provisions of paragraphs I.6, II.9 and II.22 shall survive the termination
      of
      this Escrow Agreement or the resignation or removal of the Escrow
      Agent.

     

    IN
      WITNESS WHEREOF, each of the parties have caused this Escrow Agreement to be
      executed by a duly authorized officer as of the day and year first written
      above.

     

     

      
        	 	 	 	 	 
	 	 	 	 	 
	
                FREEDOM
                  FINANCIAL HOLDINGS, INC.

              	 	
                ALARON
                  FINANCIAL SERVICES, INC.

              
	 	 	 	 	 
	 	 	 	 	 
	
                By:

              	
                 

              	 	
                By:
                  

              	
                 

              
	 	
                Name:
                  David Bonifield

              	 	 	
                Name:
                  Brian Kistler

              
	 	
                Title:
                  President

              	 	 	
                Title:
                  Chief Executive Officer

              
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
                TOWER
                  TRUST COMPANY,

              
	 	 	 	
                as
                  Escrow Agent

              
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	
                By:

              	
                 

              
	 	 	 	 	
                Name:

              
	 	 	 	 	
                Title:

              

      

    

    

     

    
      
         

      

      
        -11-Unassociated Document

     

    FORM
      OF

     

    STOCK
      ESCROW AGREEMENT

     

    STOCK
      ESCROW AGREEMENT, dated as of ___________ ___, 2007 (“Agreement”) by and among
      Freedom Financial Holdings, Inc., a Maryland corporation (“Company”), the
      undersigned parties listed as Initial Stockholders on the signature page hereto
      (collectively, the “Initial Stockholders”) and _____________________ (“Escrow
      Agent”).

     

    WHEREAS,
      in order to raise capital and to register the shares of certain shareholders,
      the Company has filed a Registration Statement on Form SB-2 (File No.
      333-140350) under the Securities Act of 1933, as amended (“Registration
      Statement”). 

     

    WHEREAS,
      the Company has issued certain promotional shares to officers, directors, and
      persons who directly or indirectly took the initiative in founding or organizing
      the Company (the “Shares”).

     

    WHEREAS,
      the Company’s financial statements contain a going concern opinion and as such,
      the State of Indiana Securities Division requires that all promotional shares
      be
      deposited in escrow.

     

    WHEREAS,
      the Initial Stockholders have agreed to deposit their Shares of Common Stock
      of
      the Company, as set forth opposite their respective names in Exhibit A attached
      hereto (collectively “Escrow Shares”), in escrow as hereinafter
      provided.

     

    WHEREAS,
      the Company and the Initial Stockholders desire that the Escrow Agent accept
      the
      Escrow Shares, in escrow, to be held and disbursed as hereinafter
      provided.

     

    IT
      IS
      AGREED:

     

    1. Appointment
      of Escrow Agent.
      The
      Company and the Initial Stockholders hereby appoint the Escrow Agent to act
      in
      accordance with and subject to the terms of this Agreement and the Escrow Agent
      hereby accepts such appointment and agrees to act in accordance with and subject
      to such terms.

     

    2. Deposit
      of Escrow Shares.
      On or
      before the Effective Date, each of the Initial Stockholders shall deliver to
      the
      Escrow Agent certificates representing his or her respective Escrow Shares,
      to
      be held and disbursed subject to the terms and conditions of this Agreement.
      Each Initial Stockholder acknowledges that the certificate representing his
      or
      her Escrow Shares is legended to reflect the deposit of such Escrow Shares
      under
      this Agreement.

     

    3.
       The
      Escrow Period.
      For
      purposes of this Agreement the Escrow Period shall be defined as the period
      consisting of the date from which the Escrow Shares are deposited in escrow
      until the fourth anniversary of the date of the completion of the public
      offering. 

     

    4. Disbursement
      of the Escrow Shares.
      The
      Escrow Agent shall hold the Escrow Shares without disbursement until the second
      anniversary of the completion by the Company of the initial public offering
      of
      the Shares. There after the Escrow Agent shall disburse the Escrow Shares as
      follows:

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    

     

    (a) Beginning
      on the second anniversary of the date of the completion of the offering, two
      and
      one-half percent (21⁄2 %) of the shares held in escrow may be released each
      quarter pro rata among the Initial Stockholders, on which dates the Escrow
      Agent
      shall, upon written instructions from the Company, disburse the number of shares
      specified by the Company of the Initial Stockholder’s Escrow Shares to such
      Initial Stockholder; 

     

    (b) All
      remaining Shares shall be released from escrow on the fourth anniversary from
      the date of the completion of the offering;

     

    (c) In
      the
      event the public offering has been terminated and no securities were sold
      pursuant thereto, the Shares may be released as of the day of the termination
      of
      the offering;

     

    (d) In
      the
      event the public offering has been terminated and all of the gross proceeds
      that
      were derived therefrom have been returned to the public investors, the Shares
      may be released as of the date of the return of all proceeds;

     

    provided,
      however, that if the Escrow Agent is notified by the Company pursuant to Section
      7.7 hereof that the Company is being liquidated at any time during the Escrow
      Period, then the Escrow Agent shall promptly hold the certificates representing
      the Escrow Shares pursuant to applicable regulations promulgated by the
      Securities and Exchange Commission; provided further, that if, during the Escrow
      Period, the Company (or the surviving entity) consummates a liquidation, merger,
      stock exchange or other similar transaction which results in all of its
      stockholders of such entity having the right to exchange their shares of Common
      Stock for cash, securities or other property, then the Escrow Agent will, upon
      consummation of such transaction, release the Escrow Shares to the Initial
      Stockholders so that they can similarly participate. The Escrow Agent shall
      have
      no further duties hereunder after the disbursement or destruction of the Escrow
      Shares in accordance with this Section 4.

     

    5. Rights
      of Initial Stockholders in Escrow Shares.

     

    5.1. Voting
      Rights as a Stockholder.
      Except
      as herein provided, the Initial Stockholders shall retain all of their rights
      as
      stockholders of the Company during the Escrow Period, including, without
      limitation, the right to vote such shares.

     

    5.2. Dividends
      and Other Distributions in Respect of the Escrow Shares.
      During
      the Escrow Period, all dividends payable in cash with respect to the Escrow
      Shares shall be paid to the Initial Stockholders.

     

    5.3. Restrictions
      on Transfer.
      During
      the Escrow Period, no sale, transfer or other disposition may be made of any
      or
      all of the Escrow Shares except (i) by gift to a member of Initial Stockholder’s
      immediate family or to a trust or other entity, the beneficiary of which is
      an
      Initial Stockholder or a member of an Initial Stockholder’s immediate family,
      (ii) by virtue of the laws of descent and distribution upon death of any Initial
      Stockholder, or (iii) pursuant to a qualified domestic relations order;
      provided, however, that such permissive transfers may be implemented only upon
      the respective transferee’s written agreement to be bound by the terms and
      conditions of this Agreement. During the Escrow Period, the Initial Stockholders
      shall not pledge or grant a security interest in the Escrow Shares or grant
      a
      security interest in their rights under this Agreement. 

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

     

    

     

    6. Concerning
      the Escrow Agent.

     

    6.1. Good
      Faith Reliance.
      The
      Escrow Agent shall not be liable for any action taken or omitted by it in good
      faith and in the exercise of its own best judgment, and may rely conclusively
      and shall be protected in acting upon any order, notice, demand, certificate,
      opinion or advice of counsel (including counsel chosen by the Escrow Agent),
      statement, instrument, report or other paper or document (not only as to its
      due
      execution and the validity and effectiveness of its provisions, but also as
      to
      the truth and acceptability of any information therein contained) which is
      believed by the Escrow Agent to be genuine and to be signed or presented by
      the
      proper person or persons. The Escrow Agent shall not be bound by any notice
      or
      demand, or any waiver, modification, termination or rescission of this Agreement
      unless evidenced by a writing delivered to the Escrow Agent signed by the proper
      party or parties and, if the duties or rights of the Escrow Agent are affected,
      unless it shall have given its prior written consent thereto.

     

    6.2. Indemnification.
      The
      Escrow Agent shall be indemnified and held harmless by the Company from and
      against any expenses, including counsel fees and disbursements, or loss suffered
      by the Escrow Agent in connection with any action, suit or other proceeding
      involving any claim which in any way, directly or indirectly, arises out of
      or
      relates to this Agreement, the services of the Escrow Agent hereunder, or the
      Escrow Shares held by it hereunder, other than expenses or losses arising from
      the gross negligence or willful misconduct of the Escrow Agent. Promptly after
      the receipt by the Escrow Agent of notice of any demand or claim or the
      commencement of any action, suit or proceeding, the Escrow Agent shall notify
      the other parties hereto in writing. In the event of the receipt of such notice,
      the Escrow Agent, in its sole discretion, may commence an action in the nature
      of interpleader in an appropriate court to determine ownership or disposition
      of
      the Escrow Shares or it may deposit the Escrow Shares with the clerk of any
      appropriate court or it may retain the Escrow Shares pending receipt of a final,
      non appealable order of a court having jurisdiction over all of the parties
      hereto directing to whom and under what circumstances the Escrow Shares are
      to
      be disbursed and delivered. The provisions of this Section 6.2 shall survive
      in
      the event the Escrow Agent resigns or is discharged pursuant to Sections 6.5
      or
      6.6 below.

     

    6.3. Compensation.
      The
      Escrow Agent shall be entitled to reasonable compensation from the Company
      for
      all services rendered by it hereunder. The Escrow Agent shall also be entitled
      to reimbursement from the Company for all expenses paid or incurred by it in
      the
      administration of its duties hereunder including, but not limited to, all
      counsel, advisors’ and agents’ fees and disbursements and all taxes or other
      governmental charges.

     

    6.4. Further
      Assurances.
      From
      time to time on and after the date hereof, the Company and the Initial
      Stockholders shall deliver or cause to be delivered to the Escrow Agent such
      further documents and instruments and shall do or cause to be done such further
      acts as the Escrow Agent shall reasonably request to carry out more effectively
      the provisions and purposes of this Agreement, to evidence compliance herewith
      or to assure itself that it is protected in acting hereunder.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    

     

    6.5. Resignation.
      The
      Escrow Agent may resign at any time and be discharged from its duties as escrow
      agent hereunder by its giving the other parties hereto written notice and such
      resignation shall become effective as hereinafter provided. Such resignation
      shall become effective at such time that the Escrow Agent shall turn over to
      a
      successor escrow agent appointed by the Company, the Escrow Shares held
      hereunder. If no new escrow agent is so appointed within the 60 day period
      following the giving of such notice of resignation, the Escrow Agent may deposit
      the Escrow Shares with any court it deems appropriate.

     

    6.6. Discharge
      of Escrow Agent.
      The
      Escrow Agent shall resign and be discharged from its duties as escrow agent
      hereunder if so requested in writing at any time by the other parties hereto,
      jointly, provided, however, that such resignation shall become effective only
      upon acceptance of appointment by a successor escrow agent as provided in
      Section 6.5.

     

    6.7. Liability.
      Notwithstanding anything herein to the contrary, the Escrow Agent shall not
      be
      relieved from liability hereunder for its own gross negligence or its own
      willful misconduct.

     

    6.8 Maintenance
      of Records.
      The
      Escrow Agent shall maintain all records relating to the Agreement for a period
      of three (3) years following the termination of the Agreement.

     

    7. Miscellaneous.

     

    7.1. Governing
      Law.
      This
      Agreement shall for all purposes be deemed to be made under and shall be
      construed in accordance with the laws of the State of Utah. Each of the parties
      hereby agrees that any action, proceeding or claim against it arising out of
      or
      relating in any way to this Agreement shall be brought and enforced in the
      courts of the State of Utah, and irrevocably submits to such jurisdiction,
      which
      jurisdiction shall be exclusive. Each of the parties hereby waives any objection
      to such exclusive jurisdiction and that such courts represent an inconvenient
      forum.

     

    7.2. Entire
      Agreement.
      This
      Agreement contains the entire agreement of the parties hereto with respect
      to
      the subject matter hereof and, except as expressly provided herein, may not
      be
      changed or modified except by an instrument in writing signed by the party
      to
      the charged.

     

    7.3. Headings.
      The
      headings contained in this Agreement are for reference purposes only and shall
      not affect in any way the meaning or interpretation thereof.

     

    7.4. Binding
      Effect.
      This
      Agreement shall be binding upon and inure to the benefit of the respective
      parties hereto and their legal representatives, successors and
      assigns.

     

    7.5. Notices.
      Any
      notice or other communication required or which may be given hereunder shall
      be
      in writing and either be delivered personally or be mailed, certified or
      registered mail, or by private national courier service, return receipt
      requested, postage prepaid, and shall be deemed given when so delivered
      personally or, if mailed, two (2) days after the date of mailing, as
      follows:

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    

     

    If
      to the
      Company, to:

     

    

    Freedom
      Financial Holdings, Inc.

    6615
      Brotherhood Way, Suite A

    Fort
      Wayne, Indiana 46825

    Brian
      Kistler, Chief Executive Officer

     

    If
      to a
      Stockholder, to his address set forth in Exhibit A.

     

    and
      if to
      the Escrow Agent, to:

     

    

     

    

     

    

     

    A
      copy of
      any notice sent hereunder shall be sent to:

     

    Weintraub
      Law Group PC

    10085
      Carroll Canyon Road, Suite 230

    San
      Diego, California 92131 

    Attn:
      Kristin C. Lund, Esq.

     

    The
      parties may change the persons and addresses to which the notices or other
      communications are to be sent by giving written notice to any such change in
      the
      manner provided herein for giving notice.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    WITNESS
      the execution of this Agreement as of the date first above written.

     

      
        	 	
                Freedom
                  Financial Holdings, Inc.

              
	 	 	 
	 	
                By:
                  

              	
                 

              
	 	 	
                Brian
                  Kistler, Chief Executive
                  Officer

              

      

       

       

        
          	
                  INITIAL
                    STOCKHOLDERS:

                	 	 
	 	 	
                  R&D
                    Investments, LLC

                
	 	 	 
	
                   

                	 	
                   

                
	
                  Brian
                    K. Kistler

                	 	
                  By:
                    Ben Doherty

                
	 	 	
                  Its:
                    Managing Director

                
	 	 	 
	 	 	 
	 	 	
                  Strategic
                    Technology Advisors, LLC

                
	 	 	 
	
                   

                	 	
                   

                
	
                  Robin
                    W. Hunt

                	 	
                  By:
                    Jeffrey Friedland

                
	 	 	
                  Its:
                    Managing Member

                
	 	 	 
	 	 	 
	 	 	
                  JL
                    Penn Investments, LLC

                
	 	 	 
	
                   

                	 	
                   

                
	
                  Rodney
                    J. Sinn 

                	 	
                  By:
                    Jason Friedland

                
	 	 	
                  Its:
                    Manager

                
	 	 	 
	 	 	 
	 	 	 
	
                   

                	 	
                   

                
	
                  Stanley
                    P. Lipp

                	 	
                  Lorin
                    Cohen

                
	 	 	 
	 	 	 
	
                   

                	 	 
	
                  Robert
                    W. Carteaux

                	 	 
	 	 	 
	 	 	 
	 	 	 
	
                   

                	 	 
	
                  Gregory
                    Fields

                	 	 
	 	 	 
	 	 	 
	 	 	 
	
                   

                	 	 
	
                  Mark
                    Shaner

                	 	 
	 	 	 

        

      

       

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    

     

    ESCROW
      AGENT

     

    By:________________________________

    Name:
      

    Title:
      Chairman

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

     

    EXHIBIT
      A

     

    
      	
              Name
                and Address of 

              Initial
                Stockholder

            	
              Number

              of
                Shares

            	
              Stock

              Certificate
                Number

            	 

    

     

     

     

    

    
      
         

      

      
        8

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