ABC FUNDING, INC. STOCK OPTION AGREEMENT

This Stock Option Agreement (this "Agreement") is effective as of October 1, 2008, (the "Option Grant Date") by and between ABC Funding Inc., a Nevada corporation having its principal place of business at 4606 FM 1960 West, Suite 400, Houston, Texas 77069 (the "Company"), and Jim B. Davis, an individual residing in the State of Texas (the "Optionee").  The Optionee and the Company hereby agree as follows:

1.  Grant.  The Company hereby grants to the Optionee, pursuant to the ABC Funding, Inc. 2008 Stock Incentive Plan, an option (the "Option") to purchase up to an aggregate of 333,334 shares (the "Optioned Shares") of the Company's common stock, par value $0.001 per share (the "Common Stock"), at an exercise price (the "Exercise Price") of $0.54 per Optioned Share.

2.  Term.  The Option granted hereby shall terminate no later than at the close of business on October 1, 2015 (the "Termination Date").

3.  Exercisability.  The Option shall vest and may be exercised in whole or in part, from and after the effectiveness of the Charter Amendment (defined below) until the Termination Date.  Charter Amendment means the filing by the Company of an Amendment to its Articles of Incorporation with the Secretary of State of Nevada, increasing the number of shares of common stock that the Company may issue to 149,000,000.

4.  Procedure for Exercise.

(a)  Notice.  The Optionee may exercise the Option at any time with respect to all or any part of the Optioned Shares by giving the Secretary of the Company written notice of intent to exercise.  The notice of exercise shall specify the number of Optioned Shares as to which the Option is to be exercised and the date of exercise thereof, which date shall be at least five days after the giving of such notice unless an earlier time shall have been mutually agreed upon.

(b)  Payment of Exercise Price.  Full payment (in U.S. Dollars) by the Optionee of the Exercise Price for the Optioned Shares purchased shall be made on or before the exercise date specified in the notice of exercise in cash, or, with the prior written consent of the Board, in whole or in part through the surrender of previously acquired shares of Common Stock (valued at their fair market value on the exercise date).  If the Optionee fails to pay for any of the Optioned Shares specified in such notice or fails to accept delivery thereof, the Optionee's right to purchase such Optioned Shares may be terminated by the Company.  The date specified in the Optionee's notice as the date of exercise shall be deemed the date of exercise of the Option, provided that payment in full for the Optioned Shares to be purchased upon such exercise shall have been received by such date.

            (c)  Cashless Exercise.  In addition to the method of payment set forth above, provided that the Common Stock is either registered on a national securities exchange or quoted on a national quotation system at the time of exercise, Optionee shall have the right to exercise this Option in full or in part by delivering written notice to the Company, and Optionee shall receive the number of shares equal to the product of (x) the number of Optioned Shares as to which this Option is being exercised, multiplied by (y) a fraction, the numerator of which is the Market Price (defined below) of the Common Stock minus the Exercise Price of the Optioned Shares and the denominator of which is the Market Price of the Common Stock.  As used in this Agreement, the