fs1ex4i_ea3swap.htm


     

    Exhibit
4.1

     

    THE
SECURITIES EVIDENCED HAVE NOT BEEN REGISTERED UNDER
"FlIE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY
APPLICABLE STATE SECURITIES LAW AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE
DISPOSED OF 11\1 THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, ANY APPLICABLE STATE SECURITIES LAWS. OR AN OPINION OF COUNSEL
REASONABLY ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION STATEMENT IS NOT
REQUIRED UNDER THE SECURITIES ACT AND THE RULES AND REGULATIONS PROMULGATED
THEREUNDER OR UNDER ANY APPLICABLE STATE SECURITIES LAWS.

     

    SWAP-A-DEBT,
INC.

     

    12%
CONVERTIBLE PROMISSORY NOTE

    Amount                                   $250,000.00

     

    Issuance
Date                        August
29, 2008

     

    SWAP-A-DEBT.
INC., a Delaware corporation (the "Company") for value received, hereby promises
to pay to Robert S.
Pearson or its registered assigns (the "Holder"). on April 18,
2008_(the "Maturity Date") at the principal offices of the Company. the
principal sum
of $250,000.00  in such coin
or currency of the United States of America as at the time of payment shall  be
legal tender for the payment of public and private debts and to pay interest on
the
outstanding principal balance at the Maturity Date as hereinafter
provided.

     

    I) 
Interest

     

    
      	
               
      i)        

            	
               Interest
      accrued during the term of this
      Note in its entirety on or Within five (5) calendar days oldie Maturity
      Date. The Note will bear
      interest at the rate of twelve percent (12%) per annum on the
      principal balance until this Note shall be paid in
      full.

            


    

     

    2)  
Conversion

     

    
      	
              a)        

            	
              Conversion. The
      Holder shall have the right from time to time, and at
      any time on or prior to the Maturity Date to convert all or any part of
      the outstanding and unpaid principal amount of this Note into fully paid
      and non-assessable shares of Common Stock, $.00l par value per share. The
      number of shares of Common Stock to be issued upon each conversion of this
      Note shall be determined by dividing the amount of principal and accrued
      interest to
      be converted (Conversion Amount) by the
      applicable Conversion Price then in effect on the date specified in the
      notice of conversion, in the form attached hereto as Exhibit A (the
      "Notice-of Conversion"). The Conversion Price shall be equal to the
      average closing bid price of the Common Stock (as reported by Bloomberg
      L.P.) on the Pinksheets OTC market for the ten ( 10) trading days prior to
      the date of the Conversion Notice (the "Conversion Date") multiplied by
      .80 provided that the Notice of Conversion is submitted by facsimile (or
      by other means resulting in. or reasonably expected to result in. notice)
      to the Company before 6:00 p.m..
      New York, New York time on such Conversion
  Date.

            


    

     

    
      	
              b)        

            	
              Conversion Price
      Limit  . Notwithstanding
      the provisions in Section 2(a),
      the Conversion Price shall not exceed
  $.25,

            


    

     

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

     

    
       

      
        	
                c)        

              	
                Method of
      Conversion

              


      

       

      
        	i)  
       	
                Mechanics
      of Conversion  . This Note may
      be converted by
      the holder in whole
      or in part
      any
      time from time to time after the Note is issued to the Holder, by (A)
      submitting to the Company a Notice of Conversion (by facsimile or other
      reasonable means of communication dispatched on the Conversion Date prior
      to 6:00 p.m., New York, New York time) and (B) surrendering this Note at
      the principal office of the Company.

              
	 	 
	ii)  
       	
                Delivery
      of
      Common Stock Upon
      Conversion . Upon receipt by the Company from
      the Holder of a facsimile transmission (or other reasonable means of
      communication) of a Notice of Conversion, the Company shall issue and
      deliver or cause to be issued and delivered to or upon the order of the
      Holder certificates for the Common Stock issuable upon such conversion
      within five (5) business days after such receipt (and, solely in the case
      of conversion of the entire unpaid principal amount hereof, surrender of
      this Note).

              


      

       

      
        
          	
                  3)

                	
                  Concerning the
      Shares  . The shares of Common Stock issuable upon
      conversion of this Note may not be sold or transferred unless (i) such
      shares are sold pursuant to an effective registration statement under the
      Act or (ii) the Borrower or its transfer agent shall have been furnished
      with an opinion of
      counsel (which opinion shall be in form, substance and scope customary for
      opinions of counsel in comparable transactions) to the effect that the
      shares to be sold or transferred may be sold or transferred pursuant to an
      exemption from such registration or (iii) such shares are sold or
      transferred pursuant to Rule 144 under the Act (or a successor rule) ("
      Rule 144 "). Until such time as the shares of Common Stock issuable upon
      conversion of this Debenture have been registered under the Act or
      otherwise may be sold pursuant to Rule 144 without any restriction as to
      the number of securities as of a particular date that can then be
      immediately sold, each certificate for shares of Common Stock issuable
      upon conversion of this Debenture that has not been so included in an
      effective registration statement or that has not been sold pursuant to an
      effective registration statement or an exemption that permits removal of
      the legend, shall bear a legend substantially in the following form, as
      appropriate:

                   

                  
                    "THE
      SECURITIES REPRESENTED,BY THIS CERTIFICATE HAVENOT BEEN REGISTERED UNDER
      THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES MAY NOT BE SOLD,
      TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
      STATEMENT FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL IN
      FORM, SUBSTANCE AND SCOPE CUSTOMARY FOR OPINIONS OF COUNSEL IN COMPARABLE
      TRANSACTIONS, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT UNLESS SOLD
      PURSUANT TO RULE 144 OR REGULATION S UNDER SAID ACT."

                     

                    The
      legend set forth above shall be removed and the Borrower shall issue to
      the Holder a new certificate therefore free of any transfer legend if (i)
      the Borrower or its transfer agent shall have received an opinion of
      counsel, in form, substance and scope customary for opinions of counsel in
      comparable transactions, to 'the 'effect that a public sale or transfer of
      such Common 'Stock may be made without registration under the Act and the
      shares are so sold or transferred, (ii) such Holder provides the Borrower
      or its transfer agentmitivreasonableassurances,tivat the Common Stock
      issuable upon conversion of this Debenture (to the extent such securities
      are deemed to have been acquired on the same date) can be sold pursuant to
      Rule 144 or (iii) in the case of the Common Stock issuable upon conversion
      of this Debenture, such security is registered for sale by the Holder
      under an effective registration statement filed under the Act or otherwise
      may be sold pursuant to Rule 144 without any restriction as to the number
      of securities as of a particular date that can then be immediately sold.
      Nothing in this Debenture shall (i) limit the Borrower's obligation under
      the Registration Rights Agreement or (ii) affect in any way the Holder's
      obligations to comply with applicable prospectus delivery requirements
      upon the resale of the securities referred to
  herein.

                  

                
	 	 
	
                  4)

                	
                  Transfers of Note to Comply with the
      Securities Act of 1933. As Amended. The Holder agrees that the
      Note
      may not be sold, transferred, pledged. hypothecated or otherwise disposed
      of except as follows:

                
	 	 


        

         

         

        
          
            
            

          

          
            -2-

            
              

            

          

          
            
            

          

        

         

         

        
          	 	
                   (1)
      to a person who, in the opinion of counsel to the Company, is a person to
      whom the Note may legally be transferred without registration and without
      the delivery of a current prospectus under the Securities Act of 1933, as
      amended, and then only against receipt of any agreement of such person to
      comply with the provisions of this Section 3 with respect to any resale or
      other disposition of the Note; or (ii) to any person upon delivery of a
      prospectus then meeting the requirements of the Securities Act of 1933, as
      amended, relating to such Note and the offering thereof for such sale or
      disposition, and thereafter to all successive
      assignees.

                
	 	 
	
                  5)

                	
                  Prepayment, The
      principal amount of this Note with interest due thereon to the date of
      prepayment may be prepaid by the Company, in whole or in part, without
      premium or penalty, at any time.

                
	 	 
	
                  6) 

                	Events of
      Default.


        

         

      

    

    
      	
              a)  

            	
              This
      Note shall become and be due and payable upon written demand made by the
      Holder hereof if one or more of the following events, herein called
      "events of default", shall happen and be continuing and such default shall
      not be cured by the Company within 30 days of written notice of such
      default:

            
	 	 
	b)
       	
              Default
      in the payment of the principal and interest on this Note when and as the
      same shall become due and payable, whether by acceleration or
      otherwise;

            
	 	 
	c)
       	Application
      for, or consent to, the appointment of a receiver, trustee or liquidator
      of the Company or of its property;
	 	 
	d)
       	General
      assignment by the Company for the benefit of creditors;
	 	 
	e)
       	Filing
      by the Company of voluntary petition in bankruptcy or a petitiosvor•n
      an-seeking  reorganization
      or an arrangement with creditors; or
	 	 
	f)
       	
              Entering
      against the Company of a court order approving a petition filed against it
      under the Federal bankruptcy laws, which order shall not have been vacated
      or set aside or otherwise terminated within 120 days.

            
	 	 
	g)
       	
              Upon
      receipt by the Company of evidence reasonably satisfactory to it of the
      loss, theft, destruction or mutilation of this Note, and (in the case of
      loss, theft or destruction) of reasonably satisfactory indemnification,
      and upon surrender and cancellation of this Note, if mutilated, the
      Company shall execute and deliver a new Note of like tenor and date. Any
      such new Note executed and delivered shall constitute an additional
      contractual obligation on the part of the Company, whether or not this
      Note so lost, stolen, destroyed or mutilated shall be at anv time
      enforceable by anyone.

            
	 	 
	h)
       	The
      Common Stock shall cease to be quoted for trading or listed for trading on
      either the Over­The-Counter Pinksheets Market, Nasdaq OTC Bulletin
      Board (" OTC "), Nasdaq Capital Market, New York Stock Exchange, American
      Stock Exchange or the Nasdaq National Market (each, a " Subsequent Market
      ") and shall not again be quoted or listed for trading thereon
      within five (5) Trading Days of such delisting;
	 	 
	i)
       	The
      Company shall fail for any reason to deliver Common Stock certificates to
      a Holder prior to the
      fifth (5 th) Trading
      Day after a Conversion Date or the Company shall provide notice to the
      Holder,
      including by way of public announcement, at any time, of its intention not
      to comply with requests
      for conversions of this Note in accordance with the terms
      hereof;


    

     

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    7)  
Miscellaneous

     

    
      	
              a)  

            	
              The
      Company may consider and treat the person in whose name this Note shall be
      registered as the absolute owner thereof for all purposes whatsoever
      (whether or not this Note shall be overdue) and the Company shall not be
      affected by any notice to the contrary. The registered owner of this Note
      shall have the right to transfer it by assignment, subject to the
      provisions contained herein, and the transferee thereof shall, upon his
      registration as owner of this Note, become vested with all the powers and
      rights of the transferor. Registration of any new owner shall take place
      upon presentation of this Note to the Company at its principal offices. In
      case of transfer by operation of law, the transferee agrees to notify the
      Company of such transfer and of his address, and to submit appropriate
      evidence regarding the transfer so that this Note may be registered in the
      name of the transferee. This Note is transferable only on the books of the
      Company by the Holder hereof, in person or by his attorney, on the
      surrender hereof, duly endorsed. Communications sent to any registered
      owner shall be effective as against all holders or transferees of the Note
      not registered at the time of sending the
communication.

            
	 	 
	b)  	Upon
      receipt by the Company of evidence reasonably satisfactory to it of the
      loss, theft, destruction or mutilation of this Note, and (in the case of
      loss, theft or destruction) of reasonably satisfactory indemnification,
      and upon surrender and cancellation of this Note, if mutilated, the
      Company shall execute and deliver a new Note of like tenor and date. Any
      such new Note executed and delivered shall constitute an additional
      contractual obligation on the part of the Company, whether or not this
      Note so lost, stolen, destroyed or mutilated shall be at any time
      enforceable by anyone.
	 	 
	c)  	This
      Note shall be construed and enforced in accordance with the laws of the
      State of Florida.


    

     

     

    IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed as of the
Issuance Date set out above.

     

    
       

      
        	 	SWAP-A-DEBT,
      INC.
	 	 
	 	/s/
      Edward C. DeFeudis
	 	
                Name: 
      

                Title:
      CEO

              


      

       

    

     

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

     

    EXHIBIT A

     

     

    SWAP-A-DEBT,
INC.

     

    CONVERSION
NOTICE

     

     

    Reference
is made to the Convertible Note (the " Note ") issued to the undersigned by
SWAP-A-DEBT, INC. (the " Company "). In accordance with and pursuant to the
Note, the undersigned hereby elects to convert the Conversion Amount (as defined
in the Note) of the Note indicated below into shares of Common Stock par value
$0.001 per share (the " Common Stock ") of the Company, as of the date specified
below.

     

    
       

      
        
          	
                  Date
      of Conversion:

                	 
	
                  Aggregate
      Conversion Amount to be converted:

                	 
	
                  Please
      confirm the following information:

                
	
                  Conversion
      Price:

                	 
	
                  Number
      of shares of Common Stock to be issued:

                	 
	
                  Please
      issue the Common Stock into which the Note is being converted in the
      following name and to the following address:

                
	
                  Issue
      to:

                	 
	 
      	 
      
	 
      	 
      
	
                  Facsimile
      Number:

                	 
      
	
                  Authorization:

                	 
	
                  By:

                	 
	
                  Title:

                	 
	
                  Dated:

                	 
	
                  Account
      Number:

                	 
      
	
                    (if
      electronic book entry transfer)

                	 
      
	
                  Transaction
      Code Number:

                	 
      
	
                    (if
      electronic book entry transfer)