EXCHANGE AGREEMENT
This Exchange Agreement ("Agreement") is entered into effective this ____
day of May 2008, by and between ABC Funding, Inc., a Nevada corporation (the
"Company") and ______________ (the "Holder").
WHEREAS, the Holder holds a certain Convertible Promissory Note made by
the Company in Holder's favor, in the original principal face amount of
$_________ (as amended, the "Note");
WHEREAS, the Note matures on October 31, 2008;
WHEREAS, the Company has requested that Holder surrender Holder's Note in
exchange for the issuance by the Company to the Holder, of such number of shares
of the Company's Series B Preferred Stock $0.001 par value per share (the
"Series B Preferred Stock"), as set forth below.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Holder hereby surrenders the Note and accepts in full satisfaction of all
obligations (monetary and otherwise) of the Company thereunder, including,
without limitation, the repayment of principal and accrued interest,
_______ shares of Series B Preferred Stock.
2. As further set forth in the Certificate of Designation governing the
Series B Preferred Stock, a copy of which has been furnished to the
Holder, each share of Series B Preferred Stock will automatically convert
into 28.58 shares of the Company's common stock $0.001 par value per share
("Common Stock"), upon the effectiveness of an amendment to the Company's
Articles of Incorporation, increasing the number of shares of Common Stock
that the Company is authorized to issue to 149,000,000 (the "Charter
Amendment").
3. The Company represents and warrants that the filing of the Charter
Amendment has been authorized by its Board of Directors and by the holders
of a majority of the Company's issued and outstanding Common Stock. The
Company covenants and agrees that it will file the Charter Amendment with
the Secretary of State of Nevada, as soon as reasonably practicable after
the date hereof.
4. Holder represents and warrants to the Company that Holder (i) has not
sold, transferred or pledged his interest in the Note to any third party,
(ii) is an "accredited investor" as such term is defined in Regulation D
under the Securities Act of 1933, as amended and (iii) understands that
the shares of Series B Preferred Stock and the shares of Common Stock
issuable upon conversion thereof, are restricted securities, and may not
be resold until such time as such securities have been registered under
the Securities Act or pursuant to an exemption from registration under
said Act.
IN WITNESS WHEREOF, the parties have executed this Agreement effective as
of the date first above written.
ABC FUNDING, INC.
By:
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Xxxxxx Xxxxxxxxxxx
Chief Executive Officer
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Holder
