NOVATION AGREEMENT

NOVATION AGREEMENT

Freedom Financial Holdings, Inc., a corporation organized and existing under the laws of the State of Maryland, with an address of 0000 Xxxxxxxxxxx Xxx, Xxxx Xxxxx, Xxxxxxx, 00000, hereinafter referred to as the Company, and Xxxxx X. Xxxxxxx, an individual residing at 0000 X 000 X, Xxxxxx, Xxxxxxx 00000 hereinafter referred to as Xxxxxxx, in consideration of the promises made herein, agree as follows:

1. Original Agreement. On December 1, 2007, Company owed Xxxxxxx an accrued and not paid salary per the employment agreement dated August 2006 a copy of which is attached hereto as Exhibit A.

2. Novation. Company and Xxxxxxx hereby agree to extinguish the accrued salary obligation referred to in Paragraph 1. Each party hereby relinquishes any claim that they had or may have had under that original agreement and stipulates that this agreement constitutes a novation with respect to the original agreement.

3. New Agreement. Company and Xxxxxxx agree to replace the original agreement with the following new agreement: Company shall issue to Xxxxxxx 52,500 shares of Class D Convertible Preferred Shares of stock pursuant to a new agreement dated December 21, 2007, a copy of which is attached as Exhibit B. Both parties agree that all contract rights between them will henceforth flow from the new agreement alone and that the new agreement is not merely a supplement to or alteration of the original agreement referred to in Paragraph 1 but is rather a complete replacement for it.

Executed this 31st day of December, 2007.

XXXXXXX

­­­­­­­_/s/Xxxxx X. Kistler______________________

Xxxxx X. Xxxxxxx

COMPANY

_/s/Xxxxx X. Kistler_______________________

Xxxxx Xxxxxxx, CEO

_/s/Xxxxx X. Hunt_________________________

Xxxxx X. Xxxx, CFO