THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(“SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT
(I) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
(II) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, BUT
ONLY UPON THE PAYEE FIRST HAVING OBTAINED A WRITTEN OPINION OF MAKER’S COUNSEL,
OR OTHER COUNSEL ACCEPTABLE TO MAKER, THAT THE PROPOSED DISPOSITION IS
CONSISTENT WITH ALL APPLICABLE PROVISIONS OF THE SECURITIES ACT AND ANY
APPLICABLE “BLUE SKY” OR OTHER SIMILAR SECURITIES LAW.
 
SENIOR SECURED CONVERTIBLE PROMISSORY NOTE
 
$______,000
August 8, 2007

 
FOR VALUE RECEIVED, SMF Energy Corporation, a Delaware corporation (“Maker”),
promises to pay to the order of _________________ or his/ her/ its
assigns (“Payee”), at such place as the Payee may designate in writing, in
lawful money of the United States of America, the principal sum of
______________________ Thousand Dollars ($____,000). Capitalized terms used but
not otherwise defined herein shall have the meanings ascribed to them in the
Indenture (as defined below).

1. Principal Payments. The principal amount of this promissory note (the “Note”
and, collectively with substantially identical promissory notes of Maker, the
“Notes”) shall be due and payable on December 31, 2009 (the “Due Date”). The
outstanding principal balance of this Note may be prepaid by Maker prior to
maturity as provided in Section 5 of this Note.
 
2. Interest. The outstanding principal balance of this Note shall accrue
interest at a fixed rate of eleven and one-half percent (11½%); provided,
however, that following an Event of Default (as defined below), the outstanding
principal balance of this Note shall bear interest as provided in Section 8 of
this Note. Interest shall be calculated on the basis of a 360-day year. Accrued
interest on this Note shall be paid semi-annually, on each January 1 and July 1,
beginning January 1, 2008, until the outstanding principal balance of this Note
is paid in full.
 
3. Interest Method of Payment; Application. All payments (including any
prepayments) shall be made on the due date thereof by wire transfer of
immediately available funds to such bank account as Payee may from time to time
designate in writing. All cash payments of interest shall be made on the due
date thereof by check drawn on a United States bank. Payments (including all
prepayments) received by Payee on this Note shall be applied first to the
payment of accrued and unpaid interest and only thereafter to the outstanding
principal balance of this Note.
 
4. Subordination. Payee agrees that, except for the first priority security
interest in certain collateral (the “Collateral”) granted by Maker and its
subsidiaries H & W Petroleum

--------------------------------------------------------------------------------

 
Company, Inc. (“H & W”) and SMF Services, Inc. (“SSI”) (Maker, H & W and SSI are
referred to collectively as the “Companies”) to Payee and other holders of the
Notes (collectively, the “Payees”), pursuant to the Security Agreement of even
date herewith (the “Security Agreement”) between the Companies and the trustee
(“Trustee”) named in the Indenture Agreement for the Notes (the “Indenture”),
the payment of principal and interest on this Note are expressly subordinated to
the rights and interests of Wachovia Bank, National Association, successor by
merger to Congress Financial Corporation (Florida) (“Wachovia”) pursuant to and
in connection with, and the payment of all existing and future amounts owed to
Wachovia by the Companies under, the line of credit facility between Wachovia
and Companies pursuant to that certain Loan and Security Agreement dated
September 26, 2002, as now or hereafter amended (the “Line of Credit”), and to
any other institutional credit facility into which Maker may subsequently enter
to replace the Line of Credit requiring that the lender rank in a senior
position to other debt of Maker (the “Replacement Facility”) (the Line of Credit
and the Replacement Facility are collectively referred to as the “Loan
Agreements”). Payee and Maker agree that, except for Payee’s first priority
security interest in the Collateral under the Security Agreement, the terms and
conditions governing and applicable to the subordination of this Note and the
indebtedness evidenced hereby are and shall be, in all material respects
(conformed, as necessary, for this Note and the related indebtedness) identical
to the terms and conditions of that certain Subordination Agreement (the
“Subordination Agreement”) dated July 13, 2007, by, Wachovia, Maker, and a
creditor of Maker (“Loan Holder”), a copy of which is attached hereto as Exhibit
B and incorporated by reference herein. By Payee’s acceptance of this Note,
Payee shall be deemed to have joined as a party to the Subordination Agreement
and to be a Loan Holder thereunder and this Note shall be deemed to be part of
the “Notes” and “Subordinated Debt” referenced therein, except with respect to
the first priority security interest in the Collateral granted by the Companies
to Payees pursuant to the Security Agreement. Payee and Maker hereby expressly
ratify, approve and adopt the terms of the Subordination Agreement (conformed,
as necessary) with respect to this Note and the indebtedness represented hereby.
Payee and Maker further agree that this Note may not, without the prior written
consent of Wachovia (or the new lender if the Line of Credit has been fully
repaid and terminated and there is a Replacement Facility in place), be repaid
from the proceeds of Maker’s issuance or sale of new debt securities or other
indebtedness, provided, however, nothing herein restricts or limits Maker’s
ability to repay this Note with the proceeds of Maker’s issuance of equity
securities unless such repayment is prohibited by the Loan Agreements. Nothing
herein shall be deemed to restrict or limit the rights of Payees and Trustee
with respect to the Collateral under the Security Agreement, which rights are
not affected in any way by the Subordination Agreement. Upon request, Payee
agrees to execute and deliver such other documents and instruments as Wachovia
or any senior institutional lender may reasonably request to acknowledge and
effect the foregoing subordination.
 
5. Redemption and Prepayment.
 
(a) Optional Redemption. At any time after the date of this Note, Maker shall
have the option to redeem this Note, in whole or in part, without prepayment
penalty or premium, except that, if such pre-payment is proposed to be made
before the first anniversary of

--------------------------------------------------------------------------------

the issuance of the Note, then a prepayment penalty equal to three percent (3%)
of the principal amount being redeemed shall also be paid. In addition to the
principal amount being pre-paid and the pre-payment penalty, if any, Maker shall
also pay any accrued but unpaid interest on the entire outstanding principal
balance of this Note at the time of redemption.
 
(b) Notice to Wachovia. If Maker elects to redeem this Note in accordance with
the terms of this Section 5, it shall furnish to Wachovia, at least fifteen (15)
days (unless Wachovia agrees in writing to a shorter period) but not more than
sixty (60) days before a redemption date, notice in writing that includes the
redemption date, the amount of principal due on this Note to be redeemed.
Trustee must also approve a notice period shorter than fifteen (15) days.
 
(c) Notice to Payee. At least fifteen (15) days but not more than sixty (60)
days (the “Payee Notice Period”) before a redemption date, Maker shall mail or
cause to be mailed a notice of redemption to Payee. The notice shall state:
 
(i) the redemption date;
 
(ii) the redemption price;
 
(iii) that this Note called for redemption must be surrendered to Maker to
collect the redemption price; and
 
(iv) that, unless Maker defaults in making such redemption payment, interest on
this Note called for redemption ceases to accrue on the redemption date.
 
(d) Effect of Notice of Redemption. This Note will become irrevocably due and
payable on the redemption date at the redemption price. A notice of redemption
may not be conditional.
 
(e) Conversion Prior to Redemption or Merger. During the Payee Notice Period,
the Payee may elect to convert fifty percent (50%) of the original principal
amount of this Note into common stock of Maker in accordance with Section 6
hereof rather than permit the Note to be redeemed. If there is a partial
redemption and Payee elects to convert a portion of this Note instead of
permitting the redemption of this Note, Payee may apply all or any portion of
Payee’s fifty percent (50%) conversion right to the amount that would otherwise
be redeemed, as Payee so elects. If and to the extent that there is a partial
redemption and Payee elects not to exercise Payee’s conversion rights, Payee’s
conversion rights will remain at fifty percent (50%) of the original principal
amount or this Note, reduced by the amount, if any, that was converted at any
time prior to such redemption.
 
(f) Note Redeemed or Converted in Part. If less than the entire principal amount
of this Note is redeemed or converted, Maker will deliver to Payee, at Maker’s
expense, a new promissory note in the same form of this Note in an amount equal
in principal to the

--------------------------------------------------------------------------------

unredeemed and unconverted portion of this Note not more than thirty (30) days
after such partial conversion or redemption.
 
6. Conversion.
 
(a) Fifty percent (50%) of the original principal amount of this Note is
convertible by the holder hereof into shares (“Shares”) of Maker’s common stock
(“Common Stock”) at the official closing price of the Common Stock as reported
by the Nasdaq Stock Market on the date of issuance of this Note or the
immediately preceding trading day (the “Initial Conversion Price”).
 
(b) The remaining fifty percent (50%) of the principal amount of the Notes (the
“Balance Amount”) will be convertible into Shares only if Maker subsequently
determines, in its discretion, to grant additional conversion rights to Payee.
Any such grant of additional conversion rights by Maker shall be accompanied by
written notice of the terms and conditions of such grant to Payee. Any such
additional conversion rights will be granted at a price set by Maker, which
price will in no event be less than the official closing price of the Common
Stock as reported by the Nasdaq Stock Market on the day such additional
conversion rights are granted or on the immediately preceding trading day (the
“Balance Conversion Price”)(the Balance Conversion Price and the Initial
Conversion Price are referred to collectively herein as the “Note Price”).
 
(c) Upon conversion of this Note, certificates for the Shares so purchased shall
be delivered to Payee within three (3) business days of the Maker’s actual
receipt of this original Note and a completed Notice of Conversion in
substantially the same form attached hereto as Exhibit A.
 
(d) The number and kind of securities purchasable upon the conversion of this
Note and the Note Price shall be subject to adjustment from time to time upon
the occurrence of certain events, as follows:
 
(i) In case of any reclassification or change of outstanding securities of the
Common Stock (other than a change in par value, or from par value to no par
value, or from no par value to par value, or as a result of a subdivision or
combination), or in case of any merger of Maker with or into another corporation
(other than a merger with another corporation in which Maker is a continuing
corporation and which does not result in any reclassification or change of
outstanding securities issuable upon conversion of this Note), or in case of any
sale of all or substantially all of the assets of Maker, Payee shall have the
right upon conversion of this Note to receive, in lieu of Shares of Common Stock
theretofore issuable upon conversion of this Note, the kind and amount of shares
of stock, other securities, money and property receivable upon such
reclassification, change or merger by the holder of one share of Common Stock.
These provisions shall similarly apply to successive reclassifications, changes,
mergers and transfers.

--------------------------------------------------------------------------------

(ii) If Maker at any time while this Note remains outstanding and unexpired
shall subdivide or combine its Common Stock, the Note Price shall be
proportionately adjusted. In the case of a subdivision, the Note Price shall be
proportionately decreased and the number of Shares shall be proportionately
increased. In the case of a combination, the Note Price shall be proportionately
increased and the number of Shares shall be proportionately decreased.
 
(iii) If Maker at any time while this Note is outstanding and unexpired shall
pay a dividend or other distribution with respect to Common Stock or any other
equity interest in Maker which is payable in Common Stock (except any
distribution specifically provided for in the foregoing paragraph (i) or (ii))
then the Note Price and the number of Shares into which this Note may be
converted shall be adjusted, from and after the date of determination of
stockholders entitled to receive such dividend or distribution to that price
determined by multiplying the Note Price in effect immediately prior to such
date of determination by a fraction (a) the numerator of which shall be the
total number of shares of Common Stock outstanding immediately prior to such
dividend or distribution and (b) the denominator of which shall be the total
number of shares of Common Stock outstanding immediately after such dividend or
distribution.
 
(iv) When there is an adjustment in the Note Price and a corresponding increase
in the number of Shares of Common Stock that can be obtained by conversion, the
adjustment to the number of Shares shall be made by multiplying the number of
Shares purchasable immediately prior to such adjustment in the Note Price by a
fraction, the numerator of which shall be the Note Price immediately prior to
such adjustment and the denominator of which shall be the Note Price immediately
thereafter, with the adjustment being made to the nearest whole share.
 
(v) Whenever the Note Price shall be adjusted, Maker shall make a certificate
signed by its chief financial officer setting forth, in reasonable detail, the
event requiring the adjustment, the amount of the adjustment, the method by
which such adjustment was calculated, and the Note Price or Prices after giving
effect to such adjustment, and shall cause copies of such certificate to be
mailed (by first class mail, postage prepaid) to the Payee.
 
(vi) If Maker proposes (A) to declare any dividend or distribution upon any
class or series of its stock, whether in cash, property, stock or other
securities, whether or not a regular cash dividend and whether or not out of
earnings or earned surplus; (B) to effect any reclassification or
recapitalization of the Common Stock outstanding involving a change in the
Common Stock; or (C) to merge or consolidate with or into any other entity, or
sell, lease or convey all or substantially all its assets or property, or to
liquidate, dissolve or wind up, whether voluntary or involuntary, then Maker
shall send to the Payee at least ten (10) days’ prior written notice of the
record date for any such event and prompt notice of any material change in the
terms of any such transaction.

--------------------------------------------------------------------------------

(e) No fractional Shares of Common Stock will be issued in connection with any
conversion of this Note.
 
(f) Payee shall not be entitled to vote or receive dividends or be deemed the
holder of Common Stock or any other securities of Maker which may at any time be
issuable on the exercise hereof for any purpose, nor shall anything contained
herein be construed to confer upon Payee any of the rights of a stockholder of
Maker before this Note has been converted.
 
7. Notices.
 
(a) Maker shall give prompt written notice to Trustee and Payee under those
circumstances in which notice is required to be given by Maker pursuant to the
terms of the Indenture or this Note.
 
(b) Trustee and any successor Trustee shall (i) provide prompt written notices
to Payee under those circumstances in which notice is required to be given by
Trustee pursuant to the terms of the Indenture and as provided in Section 10
below and (ii) mail to all Payees any notice it receives from Payee pursuant to
Section 10 below.
 
(c) Except as otherwise provided herein, all notices, approvals, consents,
correspondence or other communications required or desired to be given hereunder
shall be given in writing and shall be delivered by overnight courier, hand
delivery or certified or registered mail, postage prepaid, (i) if to Trustee, to
the address set forth in Section 12.1 of the Indenture or to such other address
as shall be designated by Trustee to Maker and Payees in writing, (ii) if to
Payee, to the address noted under Payee’s name on the signature page attached to
the Securities Purchase Agreement or to such other address as shall be
designated by Payee to Maker and Trustee in writing and (iii) if to Wachovia, to
the address noted in Section 7(e) below or to such other address as shall be
designated by Wachovia to Payee, Maker and Trustee in writing. All such notices
and correspondence shall be effective when received.
 
(d) If Maker or Payee mail a notice to one another pursuant to the terms of this
Note, they shall also deliver or mail a copy to Trustee and Wachovia at the same
time. Any notice from Wachovia to Payees shall be sufficiently provided if
delivered to the Trustee pursuant to this Section 7.
 
(e) Any notice to be delivered to Wachovia shall be delivered to the following
address (unless otherwise amended in writing to the entity delivering such
notice):
 
Wachovia Bank, National Association
110 East Broward Blvd., Suite 2050
Ft. Lauderdale, FL 33301
Phone No.: (954) 467-2262
Facsimile No.: (954) 467-5520 Attention: Pat Cloninger

--------------------------------------------------------------------------------

8. Events of Default. The entire principal balance of this Note shall, at the
option of Payee and pursuant to the provisions set forth in Section 10,
immediately be due and payable upon the occurrence of one or more of the
following events (each, an “Event of Default”): (i) Maker shall default in any
payment of principal or interest on this Note when the same shall become due and
payable, whether by acceleration or otherwise, when such default is not cured
within thirty (30) days after Payee or Trustee provides written notice to Maker
of such default; (ii) Maker shall default in any payment of principal or
interest on any other senior indebtedness for borrowed money, including, but not
limited to the Line of Credit; (iii) Maker shall apply for, or consent to, the
appointment of a receiver, trustee or liquidator of Maker or of its property,
admit in writing its inability to pay its debts as they mature, or make a
general assignment for the benefit of creditors; or (iv) Maker shall file a
voluntary petition in bankruptcy or a petition or an answer seeking
reorganization, or an arrangement with creditors, or a court order approving a
petition filed against Maker under the federal bankruptcy laws shall be entered
against Maker, which order shall not have been vacated or set aside within
thirty (30) days. Upon the occurrence of any one or more Events of Default (i)
Payee or Trustee, at its option and without further notice, demand or
presentment for payment to Maker or others, may declare immediately due and
payable the entire unpaid principal amount hereof; (ii) thereafter interest
shall accrue on the outstanding principal balance at fifteen percent (15%) per
annum from the date of such Event of Default until the date the unpaid principal
balance hereof is paid in full; and (iii) Maker shall pay all costs, fees and
expenses, including, without limitation, reasonable trial and appellate
attorneys’ fees and expenses, paid or incurred by Payee or Trustee in connection
with collection of this Note, whether paid or incurred in connection with
collection by suit or otherwise. The waiver by Payee or Trustee of Maker’s
prompt and complete performance of, or default under, any provision of this Note
shall not operate nor be construed as a waiver of any subsequent breach or
default, and the failure by Payee or Trustee to exercise any right or remedy
which it may possess hereunder shall not operate nor be construed as a bar to
the exercise of any such right or remedy upon the occurrence of any subsequent
breach or default. No remedy conferred hereby shall be exclusive of any other
remedy referred to herein or therein or now or hereafter available at law, in
equity, by statute or otherwise.
 
9. SEC Reports. In the event Maker is no longer a reporting company with the
Securities and Exchange Commission (“SEC”), Maker will provide Payee with copies
of the information and financial statements that would be required to be filed
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, on Forms 10-K and 10-Q, at such times that any such form would be
required to be filed with the SEC if Maker were a reporting company. At such
time, Maker will also make available copies of any quarterly and annual reports
that Maker makes available to its stockholders. Any delivery of such reports,
information, documents, and other reports to Payee is for informational purposes
only and Payee’s receipt thereof will not constitute notice or constructive
notice of any information contained in such reports or determinable from
information contained in such reports.
 
10. Limitation on Suits.
 
(a) Other than as provided in Sections 10(c) and 10(d) below, upon an Event of
Default, Payee may pursue any available remedy, whether provided for in this
Note, the Indenture, the Security Agreement, or otherwise, only if:

--------------------------------------------------------------------------------

(i) Trustee has notice of such Event of Default;
 
(ii) Holders of at least twenty-five percent (25%) in principal amount of the
Notes make a written request to Trustee to pursue the remedy;
 
(iii) Trustee either (A) gives to such holders notice that Trustee will not
comply with such request, or (B) does not comply with such request within
fifteen (15) days after receipt of the request from such holders; and
 
(iv) Holders of more than sixty-six and 2/3 percent (662/3%) of the principal
amount of the Notes do not give Trustee written notice inconsistent with the
request delivered under Section 10(a)(ii) prior to the earlier of (A) the date
on which Trustee delivers a notice under Section 10(a)(iii)(A) or (B) the
expiration of the period described in Section 10(a)(iii)(B).
 
(b) Payee may not use this Note to prejudice the rights of another Payee or to
obtain a preference or priority over another Payee.
 
(c) Notwithstanding any other provision of this Note, Payee’s right to receive
payment of principal and interest on this Note on or after the respective due
dates expressed in this Note, or to bring suit for the enforcement of any such
payment on or after such respective dates, will not be impaired or affected
without the written consent of Payee.
 
(d) Except as otherwise provided in the Subordination Agreement, nothing in this
Note will limit or defer Payee’s right or ability to petition for commencement
of a case under federal bankruptcy laws pertaining to Maker.
 
11. Miscellaneous. This Note shall be construed in accordance with and be
governed by the internal laws of the State of Delaware. Maker hereby: (i) waives
demand, presentment, protest, notice of dishonor, suit against or joinder of any
other person, and all other requirements necessary to charge or hold Maker
liable with respect to this Note; (ii) waives any right to immunity from any
such action or proceeding and waives any immunity or exemption of any property,
wherever located, from garnishment, levy, execution, seizure or attachment prior
to or in execution of judgment, or sale under execution or other process for the
collection of debts; (iii) waives any right to interpose any set-off or
non-compulsory counterclaim or to plead laches or any statute of limitations as
a defense in any such action or proceeding. Notwithstanding anything to the
contrary contained herein, the interest rate payable hereon shall not exceed the
maximum rate of interest permissible under applicable law. To the extent any
payment to Payee, or to Trustee on Payee’s behalf, or any part thereof, is
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to Maker or its successors or assigns under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or repayment, the obligations, or part thereof, under
this Note that have been paid, reduced or satisfied by such amount shall be
reinstated and continued in full force and effect as of the time immediately
preceding such initial payment, reduction or satisfaction. Maker agrees to pay
any documentary stamp required with respect to the execution, delivery,
performance or

--------------------------------------------------------------------------------

enforcement of this Note. Maker’s obligations hereunder shall be absolute and
unconditional and shall not be affected by any circumstance, happening or event
whatsoever, including any setoff, counterclaim, recoupment, defense or other
right that Maker may have against Payee or any other person for any reason
whatsoever, whether arising out of or as a result of any contract, agreement or
transaction between Maker and Payee, or otherwise. This Note may not be
modified, amended or terminated, except in a writing executed by Maker and
Payee; provided that, Wachovia shall receive ten (10) days prior written notice
of any such modification, amendment or termination and provided further if and
to the extent that any modification, amendment or termination affects the rights
of Wachovia provided by the subordination provisions of this Note or the
Subordination Agreement, such modification, amendment or termination shall also
require Wachovia’ written consent. A consent to an amendment or a waiver by
Payee will bind Payee and every subsequent holder of this Note or portion of the
Note that evidences the same debt as the consenting Payee’s Note, even if a
notation of the consent or waiver is not made on the Note. Time is of the
essence with respect to Maker’s obligations and agreements under this Note.
 
IN WITNESS WHEREOF, the parties have caused this Note to be executed by their
duly respective officers or persons as of the date first set forth above.
 

SMF ENERGY CORPORATION
 
By:

--------------------------------------------------------------------------------

Richard E. Gathright
Chief Executive Officer and President

AGREED TO AND ACCEPTED:

________________________________

Name or Individual or Entity (Printed)

_____________________________________
Signature

_____________________________________
Title (if applicable)

--------------------------------------------------------------------------------

Exhibit A

NOTICE OF CONVERSION

TO: SMF ENERGY CORPORATION

1. The undersigned note holder (“Holder”) hereby elects to convert $____________
of the principal amount of the August 8, 2007 11½% Senior Secured Convertible
Promissory Note (the “Note”) of SMF Energy Corporation (“SMF”) payable to Holder
into ____________ shares of the Common Stock of SMF (the “Shares”) at the
$________per Share price prescribed by the Note (the “Note Price”). Enclosed
herewith is the original Note, tendered for such conversion. If and to the
extent that additional sums remain owed under the Note after such conversion,
SMF is directed to issue a new replacement Note to Holder representing the
unpaid balance of the Note after the conversion.

2. By this conversion, Holder does not waive any payment of unpaid interest on
the converted portion of the Note that accrued prior to the date of conversion.
Any such accrued but unpaid interest is not payable until the next regular date
set forth in the Note for payment of interest on the Note.

2. Please issue a certificate or certificates representing the Shares in the
name of Holder or in such other names as may be specified below:

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 

--------------------------------------------------------------------------------

 
3. [For use only in the absence of an effective registration statement covering
the Shares] Holder represents that the Shares are being acquired for the account
of Holder, for investment purposes, and not with a view to, or for resale in
connection with, the distribution thereof and that Holder has no present
intention of distributing or reselling such Shares. In support thereof, Holder
has executed an Investment Representation Statement attached to this Notice as
Attachment 1.

NAME OF HOLDER:  __________________________________

Date: 
___________________________________                                               
______________________________________
(Signature of Holder)

--------------------------------------------------------------------------------

Attachment 1
to Notice of Conversion

INVESTMENT REPRESENTATION STATEMENT
 

HOLDER:       ____________________________________

COMPANY:  SMF ENERGY CORPORATION

SECURITY:  SENIOR SECURED CONVERTIBLE PROMISSORY NOTE AND UNDERLYING COMMON
STOCK

AMOUNT:    ____________________________________

DATE:            ____________________________________

In connection with the purchase of the above-listed securities (the
“Securities”), the undersigned (“Holder”) represents to Company the following:

(a) Holder is aware of Company’s business affairs and financial condition, and
has acquired sufficient information about Company to reach an informed and
knowledgeable decision to acquire the Securities. Holder is purchasing these
Securities for Holder’s own account for investment purposes only and not with a
view to, or for the resale in connection with, any “distribution” thereof for
purposes of the Securities Act of 1933, as amended (the “Securities Act”).

(b) Holder understands that the Securities have not been registered under the
Securities Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of Holder’s investment
intent as expressed herein. In this connection, Holder understands that, in the
view of the Securities and Exchange Commission (“SEC”), the statutory basis for
such exemption may be unavailable if Holder’s representation was predicated
solely upon a present intention to hold these Securities for the minimum capital
gains period specified under tax statutes, for a deferred sale, for or until an
increase or decrease in the market price of the Securities, or for a period of
one year or any other fixed period in the future.

--------------------------------------------------------------------------------

(c) Holder further understands that the Securities must be held indefinitely
unless subsequently registered under the Securities Act or unless an exemption
from registration is otherwise available. Moreover, Holder understands that
Company is under no obligation to register the Securities except as set forth in
the Warrant. In addition, Holder understands that the certificate evidencing the
Securities will be imprinted with a legend which prohibits the transfer of the
Securities unless they are registered or such registration is not required in
the opinion of counsel for Company.

(d) Holder is aware of the provisions of Rule 144, promulgated under the
Securities Act, which, in substance, permits limited public resale of
“restricted securities” acquired, directly or indirectly, from the issuer
thereof (or from an affiliate of such issuer), in a non- public offering subject
to the satisfaction of certain conditions.

(e) Holder further understands that at the time Holder wishes to sell the
Securities there may be no public market upon which to make such a sale.

(f) Holder further understands that in the event all of the requirements of
Rule 144 are not satisfied, registration under the Securities Act, compliance
with Regulation A, or some other registration exemption will be required; and
that, notwithstanding the fact that Rule 144 is not exclusive, the Staff of the
SEC has expressed its opinion that persons proposing to sell private placement
securities other than in a registered offering and otherwise than pursuant to
Rule 144 will have a substantial burden of proof in establishing that an
exemption from registration is available for such offers or sales, and that such
persons and their respective brokers who participate in such transactions do so
at their own risk.

Signature of Holder:

Date:   
__________________________________                                              
______________________________________

--------------------------------------------------------------------------------