ESCROW AGREEMENT



     THIS ESCROW AGREEMENT, dated as of February 14, 2002 ("Escrow Agreement")

is by and among Phoenix Real Estate Development, Inc., a Colorado corporation

("Issuer"), and Horizon Bank of Boulder, N.A., as Escrow Agent ("Escrow Agent").



                                   BACKGROUND



     A. In a registered public offering, certain persons will purchase shares of

common stock, no par value per share (the "Shares") of the Issuer pursuant to a

subscription agreement, the form of which is attached as Exhibit A to this

Escrow Agreement (the "Subscription Agreement"); (such persons who purchase the

Shares pursuant to the Subscription Agreement are hereinafter referred to as the

"Subscribers").



     B. In accordance with the Subscription Agreement, the Subscribers will be

required to submit full payment for their investment at the time they return the

executed Subscription Agreement to the Issuer.



     C. All payments for subscriptions for Shares and Subscription Agreements

received and approved by the Issuer ("Subscription Funds") shall be promptly

forwarded to Escrow Agent and Escrow Agent has agreed to accept, deposit, hold

and disburse such Subscription Funds deposited with it in accordance with the

terms of this Escrow Agreement.



     D. Escrow Agent has agreed to deposit all Subscription Funds in a

non-interest bearing account.



     E. In order to establish the escrow of funds and to effect the consummation

of the transactions contemplated by the Subscription Agreement, the parties

hereto have entered into this Escrow Agreement.



     NOW THEREFORE, for good and valuable consideration, the receipt and

sufficiency of which are hereby acknowledged, the parties hereto, for

themselves, their successors and assigns, hereby agree as follows:



     1. Definitions: The following terms shall have the following meanings when

used herein:



     "Cash Investment" shall mean the number of Shares subscribed for by a

Subscriber multiplied by $0.10 per Share, as set forth in the Subscription

Agreement.



     "Escrow Funds" shall mean the Subscription Funds deposited by the Escrow

Agent pursuant to this Escrow Agreement.



     "Minimum Offering" shall mean the sale of 750,000 Shares for $75,000.



     "Maximum Offering" shall mean the sale of 1,500,000 Shares for $150,000.



<PAGE>





     "Offering Notice" shall mean a written notification, signed by the Issuer,

which shall specify that: (a) subscriptions for the Minimum Offering have been

received; and (b) such subscriptions have not been withdrawn, rejected or

otherwise terminated.



     "Subscription Accounting" shall mean an accounting of all subscriptions for

Shares received and accepted by the Issuer as of the date of such accounting,

indicating for each subscription the Subscriber's name, address and taxpayer

identification number, the number and total purchase price of subscribed Shares,

any withdrawal of such subscription by the Subscribers, any rejections of such

subscription by the Company, or other termination, for whatever reason, of such

subscription.



     "Subscription Funds", "Subscribers" and "Shares" shall have the meaning set

forth in the section of this Escrow Agreement titled "Background".



     2. Appointment of and Acceptance by Escrow Agent. Issuer hereby appoints

Escrow Agent to serve as escrow agent hereunder, and Escrow agent hereby accepts

such appointment in accordance with the terms of this Escrow Agreement.



     3. Deposits into Escrow. The Issuer shall forward to Escrow Agent the

Subscription Funds received by the Issuer for deposit into the following escrow

account:



     ALL FUNDS SO DEPOSITED SHALL REMAIN THE PROPERTY OF THE SUBSCRIBERS

     ACCORDING TO THEIR RESPECTIVE INTEREST AND SHALL NOT BE SUBJECT TO ANY LIEN

     OR CHARGE BY ESCROW AGENT OR BY JUDGMENT OR CREDITORS' CLAIMS AGAINST

     ISSUER UNTIL RELEASED TO ISSUER IN ACCORDANCE WITH SECTION 4(a) HEREOF.



     Upon receipt of any Subscription Funds which are not equal to the proper

Cash Investment for such subscription or if a notice of insufficient funds has

been received by the Escrow Agent for such Subscription Funds, Escrow Agent's

sole obligation shall be to notify Issuer of such fact and to return such

Subscription Funds to the Issuer for further delivery to the Subscriber.



     4. Disbursements of Escrow Funds.



          a.   Closing of Minimum Offering. Escrow Agent shall pay to the Issuer

     the value of the Escrow Funds, by wire transfer no later than three (3)

     business days following the presentment of the following documents:



               (i)   The Offering Notice;



               (ii)  Subscription Accounting, substantiating the sale of the

                     Minimum Offering;



               (iii) Subscription Agreements signed by all Subscribers;



               (iv)  Stock Certificates in the names of the Subscribers

                     representing the Shares purchased by the Subscription

                     Funds; and

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