Escrow Agreement For Deposit of Subscription Payments Pending Closing

EXHIBIT 10.2


ESCROW AGREEMENT

Fremont Michigan InsuraCorp, Inc.

Stock Offering


THIS ESCROW AGREEMENT (" Agreement" ) is made and entered into as of June, , 2004, by and among Fremont Michigan InsuraCorp, Inc. , a Michigan corporation (" Company" ), Centennial Securities Company, Inc. (" Centennial" ) and The Huntington National Bank (" Bank" or " Escrow Agent" ).

RECITALS


All capitalized terms not defined in this Agreement shall have the meaning as defined in the Prospectus attached to the Registration Statement.


A. The Company, which is the proposed holding company for Fremont Mutual Insurance Company (" Insurance Company" ), proposes to sell, with the assistance of Centennial, up to 920,000 shares of its common stock (" Shares" ) pursuant to a surplus note exchange offering, subscription offering, and a community offering (collectively, " Offerings" ). The Offerings are being conducted in connection with the conversion of the Insurance Company from mutual to stock form and the simultaneous acquisition of the capital stock of the Insurance Company by the Company pursuant to a Plan of Conversion (" Plan" ) adopted by the Board of Directors of each of the Insurance Company and the Company on August 25, 2003 (" Conversion" ).

B. The Company intends to offer the Shares pursuant to a Registration Statement on Form S-1 filed with the Securities and Exchange Commission on February 2, 2004, as amended (" Registration Statement" ).


C. The Company desires to establish an escrow account in which Series B Surplus Note certificates (" Note Certificates" ) received from persons subscribing for Shares in the surplus note exchange offering and funds received from persons subscribing for or purchasing Shares in the Offerings will be deposited pending completion of the Offerings. The Bank agrees to serve as the Escrow Agent to hold such Note Certificates and funds from, or on behalf of, subscribers or purchasers in accordance with the terms and conditions of this Agreement. The Company and Centennial agree to assist the Escrow Agent in administering the Escrow Account (defined below) and distributing the Note Certificates and funds held in the Escrow Account.

D. The Offerings will be completed if, among other things, the Company receives Stock Order Forms for between 680,000 and 920,000 Shares.


E. All monies held in the Escrow Account are referred to as the " Escrow Amount."


F. The Note Certificates and monies held in the Escrow Account will be distributed as provided in this Agreement or returned to the subscribers or purchasers. In the event of an oversubscription to the Subscription Offering as described in the Plan and prospectus, the Escrow Agent will follow the instructions of the Company and Centennial in such event in making partial returns of funds to the subscribers.

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending legally to be bound, agree as follows:


1

I. ESCROW AGENT.


Subject to the terms and conditions hereof, the Company hereby appoints the Bank as Escrow Agent. The Bank hereby accepts such appointment and represents that:

(a) It is a state chartered bank or federally chartered bank or holding company, which is regulated by a state regulatory banking authority, the Federal Reserve, or the Office of the Comptroller of the Currency;

(b) Its domicile and principal place of business are in the United States;

(c) Its deposits are insured by the FDIC;

(d) It will hold and administer the Note Certificates and escrowed funds pursuant to the terms of this Agreement; and

(e) It is neither affiliated with, nor a major creditor of, the Company, though the Escrow Agent, not in its capacity as agent, but as a bank, may from time to time provide banking services to the Company and extend credit pursuant to a line of credit with the Company.

II. ESTABLISHMENT OF ESCROW ACCOUNT.

On or prior to the date of the commencement of the Offerings, the parties shall establish an escrow account with the Escrow Agent (" Escrow Account" ). The Company, through the prospectus or otherwise, will instruct subscribers or purchasers to make checks or money orders for subscriptions or purchases payable to the Escrow Agent, for deposit into the Escrow Account and shall return to subscribers for correction of any non-conforming instruments or reject the deposits and cause the return of funds to such subscribers or purchasers. Escrow Agent agrees to hold all Note Certificates and funds received by it in escrow for the subscriber or purchaser desiring to purchase Shares in the Offerings until such time as the conditions for release of the Note Certificates and funds are met. It is understood that all checks or money orders received by the Escrow Agent are subject to clearance time, and the funds represented thereby cannot be drawn upon or invested until such time as the same constitute good and collected funds. It is also understood that should any checks be returned to the Escrow Agent as uncollectible, the Escrow Agent is authorized and instructed to charge expenses incurred by the Escrow Agent on such uncollected checks to the Company, and the Company hereby agrees to pay to the Escrow Agent all such expenses. The Escrow Agent shall redeposit such checks(s) for collection only upon the verbal or written instruction of the Company; however, in no instance shall the checks(s) be presented for collection more than two (2) times. Should the check(s) be uncollectible after the second presentation, the Escrow Agent shall promptly notify the Company and hold said check(s) until the subscriber or purchaser has replaced the same with a cashier' s check or money order or such other form of draft that the Company and the Escrow Agent approve, at which time the Escrow Agent shall as soon as reasonably practicable return said uncollectible check(s) to the subscriber or purchaser. In lieu thereof, the Company may reject the tendered subscription or purchase. In the event the subscriber or purchaser does not promptly replace said check(s) with a cashier' s check or money order or such other form of draft acceptable to the Escrow Agent and the Company or the Company rejects the tender, the Escrow Agent, at the instruction of the Company, shall return the check(s) to such subscriber or purchaser, accompanied by correspondence approved by the Company.


2 III. ADMINISTRATION OF NOTE CERTIFICATES AND FUNDS HELD IN ESCROW.

Centennial shall receive all stock order forms, checks or money orders made payable to the Bank, and Note Certificates from subscribers or purchasers and shall keep such appropriate books and records as are required to perform its functions described herein. Centennial will deliver the Note Certificates, checks and money orders to the Escrow Agent before noon of the next business day following receipt at such office of the Escrow Agent as designated by the Escrow Agent for deposit into the Escrow Account together with a copy of the subscriber' s or purchaser' s Stock Order Form which sets forth, among other things, the subscriber' s or purchaser' s name, address, social security number, telephone number, number of Shares purchased and the amount paid therefor. The Escrow Agent is hereby authorized and instructed to forw ...