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 Xxxxxx Xxxxxxxx, an individual residing at 0000 Xxxxxxxxx Xxxx, Xxxx Xxxxx, Xxxxxxx 00000, hereinafter referred to as Xxxxxxxx, in consideration of the promises made herein, agree as follows:
1. Agreement. On August 1, 2007, Company and Xxxxxxxx entered into an Amended Line of Credit Agreement under which the Company agreed to pay Xxxxxxxx the principal amount of the loan outstanding and interest at a flat rate of ten percent (10%) upon FFH raising $1,500,000 in its Initial Public Offering. In the event that FFH were to raise less than $1,500,000 in the IPO, the interest rate was to increase to twenty percent (20%) per year thereafter, with said principal and interest to be paid from operations, when available. The Amended Line of Credit Agreement is attached hereto as Exhibit A.
2. Novation. Company and Xxxxxxxx hereby agree to extinguish the agreement referred to in Paragraph 1. Each party hereby relinquishes any claim that they had or may have had under that agreement and stipulates that this agreement constitutes a novation with respect to the agreement.
3. New Agreement. Company and Xxxxxxxx agree to replace the agreement with the following new agreement: Company shall issue to Xxxxxxxx Three hundred thousand (300,000) shares of Class D Convertible Preferred Shares of stock pursuant to a new agreement dated December 4, 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 agreement referred to in Paragraph 1 but is rather a complete replacement for it.
Executed this 4th day of December, 2007.
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_/s/_Robert W. Carteaux______________________
Xxxxxx X. Xxxxxxxx
COMPANY
_/s/Xxxxx X. Kistler________________________
Xxxxx Xxxxxxx, CEO
