2008 UNSECURED NOTE – CASH AND SERIES D
 
PAYMENT AND EXCHANGE AGREEMENT
 
THIS PAYMENT AND EXCHANGE AGREEMENT (this “Agreement”) is between SMF Energy
Corporation, a Delaware corporation (“Company”), and the undersigned holder
(“Purchaser” and, together with Company, the “Parties”) of Company’s September
2008 12% unsecured convertible promissory note in the amount set forth on the
signature page hereto (the “Existing Unsecured Note”) and shall be effective on
the date accepted by Company as noted on such signature page (the “Effective
Date”).
 
WHEREAS, Company’s current revolving line of credit with Wachovia Bank expires
on July 1, 2009, and in order to replace or renew this line of credit and obtain
a new term loan, Company must restructure its current non-bank debt and
outstanding Preferred Stock (the “Recapitalization Plan”);
 
WHEREAS, in connection with the Recapitalization Plan, Company’s Board of
Directors has determined that it is in the best interests of Company to
restructure its existing debt and outstanding preferred stock;
 
WHEREAS, as part of the Recapitalization Plan, Company wishes to (a) use a
portion of the proceeds of the new term loan to pay down 50% of the principal
balance of the Existing Unsecured Note, (b) exchange the remaining principal
balance thereof for shares of a new dividend-bearing $0.01 par value Series D
Convertible Preferred Stock (“Series D Preferred”) and (c) exchange the accrued
but unpaid interest on the Existing Unsecured Note for shares of Company’s $0.01
par value Common Stock (“Common Stock”); and
 
WHEREAS, Purchaser is willing to tender the Existing Unsecured Note in
accordance with such terms (the “Transaction”).
 
NOW, THEREFORE, in consideration of the foregoing premises and covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Company and Purchaser agree as
follows.
 
1.           PAYMENT AND EXCHANGE.  Purchaser, by signing this Agreement,
offers, in full satisfaction of the Existing Unsecured Note (a) to accept a cash
payment in satisfaction of fifty percent (50%) of the principal amount
outstanding on the Existing Unsecured Note as of the Effective Date, which
amount is set forth on the signature page hereto (the “Cash Payment”); (b) to
exchange the remaining fifty percent (50%) of the principal amount outstanding
on the Existing Unsecured Note as of the Effective Date by exchanging such
remaining principal for shares of Series D Preferred in the amount set forth on
the signature page (the “Series D Preferred Shares”); and (c) to exchange all
accrued and unpaid interest on the Existing Unsecured Note as of the Effective
Date for shares of Company’s Common Stock (the “Interest Shares”), at the price
set forth on the signature page hereto (the Cash Payment, the Series D Preferred
Shares and the Interest Shares are collectively referred to as the
“Consideration”) (the “Offer”).  Upon execution, Purchaser shall deliver this
signed Agreement and the Existing Unsecured Note (collectively, the “Purchaser’s
Deliverables”) to Company.  On the Effective Date, Company shall countersign
this Agreement, and shall forward the Cash Payment, issue the Series D Preferred
Shares and issue the Interest Shares to Purchaser.  Company shall return a fully
executed copy of this Agreement and deliver the Series D Preferred Shares and
the Interest Shares to Purchaser promptly thereafter.  The Existing Unsecured
Note will be extinguished on the Effective Date.  Unless otherwise agreed by the
Parties, if Company has not countersigned this Agreement on or before July 1,
2009, Purchaser may, by written notice to Company, withdraw the Offer and
Company shall return the Purchaser’s Deliverables to Purchaser.

 
 

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2.           DESCRIPTION OF SERIES D PREFERRED SHARES.
 
(a)           Series D Preferred Shares are convertible into shares of Company’s
Common Stock, as further described in the Certificate of Designation.  A copy of
the Certificate of Designation in substantially the form that will be filed with
the State of Delaware is attached hereto as Attachment A.
 
(b)           Purchaser acknowledges that the Series D Preferred Shares
(including, without limitation, all additional Series D Preferred Shares issued
to Purchaser after the date hereof) and any dividends or other amounts payable
thereon or in connection therewith are subordinated to the Company’s senior
creditors and any other primary lenders, as further described in the Certificate
of Designation.
 
3.           RECEIPT OF DOCUMENTS.  Purchaser acknowledges receipt of a copy of:
(a) this Agreement; (b) the Certificate of Designation for the Series D
Preferred Shares, attached hereto as Attachment A; and, via Company’s website at
http://www.mobilefueling.com, access to: (c) Company’s Annual Report on Form
10-K for the year ended June 30, 2008 (the “10-K”); (d) Company’s Quarterly
Reports on Form 10-Q for the quarters ended September 30, 2008, December 31,
2008 and March 31, 2009 (the “10-Qs”); (e) Company’s proxy statement for its
November 20, 2008 shareholders meeting (the “Proxy Statement”) and (f) Company’s
subsequent reports on SEC Form 8-K, if any (the “8-Ks”) (collectively, the
“Documents”).
 
4.           PURCHASER’S DELIVERY OBLIGATIONS.  Company may elect to accept the
Offer even if it has not yet received all of the Purchaser’s Deliverables on the
Effective Date, provided, however, Company may in such a case delay the delivery
of the Cash Payment, the Series D Preferred Shares and the Interest Shares
issued to Purchaser until all of the Purchaser’s Deliverables have been
received.  Any such delay in delivering the Cash Payment, the Series D Preferred
Shares or the Interest Shares by Company shall not affect the validity or
binding effect of this Agreement or the extinguishment of the Existing Unsecured
Note on the Effective Date.
 
5.           REGISTRATION OF SHARES.  If any of the Interest Shares or the
shares of Common Stock into which the Series D Preferred Shares are convertible
(the “Conversion Shares”) (collectively, the “Common Shares”) are “restricted
securities” as defined by Rule 144 promulgated under the Securities Act of 1933,
as amended (the “Act”), then Company agrees to use reasonable commercial efforts
to cause a registration statement on Form S-3 or similar form (“Registration
Statement”) relating to the resale of such Common Shares to be filed with the
Securities and Exchange Commission (“SEC”) in accordance with the Registration
Rights Agreement attached hereto as Attachment B, the terms of which are
incorporated by reference and made a part of this Agreement.  Subject to the
terms in Attachment B, Company further agrees to make all reasonable commercial
efforts to cause the Registration Statement to be filed within one hundred and
five (105) days following the Effective Date and to cause such Registration
Statement to become effective as soon thereafter as practicable.

 
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6.           REPRESENTATIONS AND WARRANTIES OF PURCHASER.  Each Purchaser
represents and warrants to Company as follows:
 
(a)           If Purchaser is a business entity, such Purchaser (i) is duly
organized, validly existing and in good standing (if applicable) under the laws
of the jurisdiction of its organization, (ii) has the requisite power and
authority (and is permitted under its charter, operating agreement or other
governing documents) to enter into this Agreement and to consummate the
transactions contemplated herein to be performed by it and (iii) has duly
authorized the execution and delivery of this Agreement and the transactions
contemplated hereby.  This Agreement has been duly executed and delivered by an
authorized person on behalf of such Purchaser and constitutes such Purchaser’s
legal, valid and binding obligation, enforceable against it in accordance with
its terms, except to the extent that such validity, binding effect and
enforceability may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium and other laws affecting creditors’ rights generally from
time to time in effect and by general equitable principles.
 
(b)           If Purchaser is a natural person, such Purchaser (i) has the
requisite capacity to enter into and deliver this Agreement and to perform the
transactions contemplated hereby and (ii) has executed and delivered this
Agreement as his or her voluntary act.  This Agreement constitutes such
Purchaser’s legal, valid and binding obligation, enforceable against such
Purchaser in accordance with its terms, except to the extent that such validity,
binding effect and enforceability may be limited by applicable bankruptcy,
reorganization, insolvency, moratorium and other laws affecting creditors’
rights generally from time to time in effect and by general equitable
principles.
 
(c)           Purchaser, either alone or through Purchaser’s representative, as
that term is defined under Rule 501(h) of Regulation D (“Regulation D”) under
the Act (the “Purchaser’s Representative”), if any, has had an opportunity to
ask questions of, and receive answers from, duly designated representatives of
Company concerning the terms and conditions of this Agreement and has been
afforded an opportunity to examine such documents and other information which
Purchaser or Purchaser’s Representative, if any, has requested for the purpose
of answering any question Purchaser or Purchaser’s Representative, if any, may
have concerning the business and affairs of Company.
 
(d)           Purchaser’s principal residence or domicile is located in the
State or other jurisdiction set forth on the signature page hereto.  Purchaser
has received and reviewed this Agreement and the Documents and acknowledges that
Company made available to Purchaser and Purchaser’s Representative, if any, at a
reasonable time prior to the execution of this Agreement, the opportunity to ask
questions and receive answers concerning the business and affairs of Company and
the terms and conditions of the sale of the Series D Preferred Shares and the
Common Shares as contemplated by this Agreement and to obtain any additional
information (which Company possesses or can acquire without unreasonable effort
or expense) as may be necessary to verify the accuracy of information furnished
to Purchaser or Purchaser’s Representative, if any.  Purchaser (i) is able to
bear the loss of its entire investment without any material adverse effect on
its economic stability, and (ii) has, alone or together with Purchaser’s
Representative, such knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of the investment to be
made by Purchaser pursuant to this Agreement.

 
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(e)           Purchaser and Purchaser’s Representative, if any, understand that
the Series D Preferred Shares and the Common Shares are being offered and sold
only to “accredited investors” (as that term is defined under Rule 501(a) of
Regulation D), and Purchaser represents that Purchaser is an accredited
investor.  Purchaser and Purchaser’s Representative, if any, understand Company
is relying on Purchaser with respect to the accuracy of this
representation.  Purchaser has completed and returned a copy of Attachment C,
and Purchaser represents that the statements made therein are complete and
accurate.
 
(f)           Purchaser and Purchaser’s Representative, if any, acknowledge that
they were encouraged by Company to request all additional information that might
be material or important in order for Purchaser to make an informed investment
decision with respect to the purchase of the Series D Preferred Shares and the
Common Shares.
 
(g)           The Series D Preferred Shares and the Common Shares are being
acquired for investment purposes only for such Purchaser’s own account and not
with the view to, or for resale in connection with, any distribution or public
offering.  Purchaser and Purchaser’s Representative, if any, understand that the
Series D Preferred Shares and the Common Shares have not been registered under
the Act or any state securities laws by reason of their contemplated issuance in
transactions exempt from the registration requirements of the Act and applicable
state securities laws, and that the reliance of Company and others upon these
exemptions is predicated in part upon the representation by Purchaser.
 
(h)           Purchaser and Purchaser’s Representative, if any, have carefully
read this Agreement, the Documents and the other information furnished to
Purchaser by Company in connection with this Agreement.
 
(i)           Purchaser was not solicited to purchase the Series D Preferred
Shares or the Common Shares by any means of general solicitation, including, but
not limited to, the following: (i) any advertisement, article, notice or other
communication published in any newspaper, magazine, or similar media, or
broadcast over television or radio; or (ii) any meeting where attendees were
invited by any general solicitation or general advertising.
 
(j)           Purchaser and Purchaser’s Representative, if any, hereby
acknowledge that:
 
(i) the Common Shares, will be, when issued, “restricted securities,” as that
term is defined in Rule 144 of the rules and regulations promulgated under the
Act unless (A) Purchaser is not an “affiliate”, as defined by Rule 144, of
Company on the Effective Date, and (B) Purchaser has not been an “affiliate” of
Company for the ninety (90) days preceding the Effective Date and (C) Purchaser
has held the Existing Unsecured Note since at least one (1) year before the
Effective Date;

 
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(ii) if Purchaser is and has been for ninety (90) days a non-affiliate and has
held the Existing Unsecured Note for more than six (6) months but less than one
(1) year as of the Effective Date, then the Common Shares will be issued as
“restricted securities on the Effective Date but can be submitted for “free
trading” shares at any time thereafter so long as Company continues to file all
required reports with the SEC;
 
(iii) if the Existing Unsecured Note has been held by Purchaser for less than
six (6) months as of the Effective Date (including the time held by any
predecessor non-affiliate), then the Common Shares will be issued as “restricted
securities” on the Effective Date until Company is successful in causing the
Registration Statement to become effective or the Common Shares otherwise cease
to be “restricted securities” under Rule 144;
 
(iv) they are aware of these and other applicable limitations on the resale of
the Common Shares and the Series D Preferred Shares in the absence of a
successful registration of restricted securities, including but not limited to
Rule 144;
 
(v) while Company currently meets the public information requirements of Rule
144, there is no guarantee that it will do so at any time in the future; and
 
(vi) the trading market for the Common Shares on the Nasdaq Stock Market is
volatile, so that the trading volume and price of the Common Shares are subject
to substantial and unpredictable variations.
 
(k)           Purchaser and Purchaser’s Representative, if any, acknowledge and
warrant that, in making this investment decision, they have made their own
independent assessment of the merits and risks of an investment in the Series D
Preferred Shares and the Common Shares based on their examination and evaluation
of Company, its business, operations, financial condition, future prospects and
the skills and qualifications of its officers, directors and
employees.  Purchaser and Purchaser’s Representative, if any, have consulted
Purchaser’s own attorney, business or tax advisors for legal, business or tax
advice concerning an investment in the Series D Preferred Shares and the Common
Shares and have not relied on Company or its respective agents or
representatives.
 
(l)           Purchaser and Purchaser’s Representative, if any, represent and
warrant that, except as set forth in this Agreement and in the Documents, no
representations or warranties have been made to Purchaser or Purchaser’s
Representative, if any, by Company or any agent, employee, representative or
affiliate of Company and that, in entering into this transaction and subscribing
for Series D Shares and the Common Shares, neither Purchaser nor Purchaser’s
Representative, if any, is relying on any information other than that contained
in this Agreement, the Documents, and other written information obtained from
Company in the course of the independent investigation by Purchaser or
Purchaser’s Representative, if any.

 
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(m)           Purchaser and Purchaser’s Representative, if any, acknowledge that
an investment in Company involves substantial risks, including, without
limitation, those described in the Documents, including but not limited to the
Risk Factors listed in the 10-K and the 10-Qs.
 
7.           EXTINGUISHMENT OF NOTE.  Upon the Effective Date:
 
(a)           Purchaser irrevocably consents to the cancellation and
extinguishment of the Existing Unsecured Note in exchange for the Consideration.
 
(b)           Purchaser (i) waives any and all rights to receive any principal,
interest, prepayment penalty or other payments in respect of the Existing
Unsecured Note, and (ii) waives any and all claims in respect of or arising or
having arisen as a result of Purchaser’s status as a holder of the Existing
Unsecured Note, such that thereafter Purchaser shall have no contractual or
other rights or claims in law or equity against the Company or any fiduciary,
trustee or other person connected with the Note arising under, from or in
connection with the Existing Unsecured Note.
 
8.           INDEMNIFICATION.  Purchaser agrees that it shall indemnify and hold
harmless Company and its officers, directors, employees, agents and professional
advisors from and against any and all loss, damage, liability, or expense,
including costs and reasonable attorneys’ fees, that any one or more of the
foregoing may incur by reason of, or in connection with, any (i)
misrepresentation, inaccurate statement or material omission or (ii) breach of
any warranties or failure to fulfill any covenants, agreements or obligations,
by Purchaser or Purchaser’s Representative, if any, in this Agreement.  Company
agrees that it shall indemnify and hold harmless Purchaser and Purchaser’s
officers, directors, employees, agents and professional advisors from and
against any and all loss, damage, liability, or expense, including costs and
reasonable attorneys’ fees, that any one or more of the foregoing may incur by
reason of, or in connection with, any (i) misrepresentation, inaccurate
statement or material omission or (ii) breach of any warranties or failure to
fulfill any covenants, agreements or obligations, by Company in this Agreement.
 
9.           AUTHORIZATION.  To the extent reasonably required by Company to
satisfy any applicable law or regulation, including without limitation the
PATRIOT Act, Purchaser hereby authorizes (i) Company and its officers, employees
and agents to investigate Purchaser’s personal and business background
including, without limitation, communication with any employer, former employer,
business associate, government agency, bank or other credit reference, provided
that Company agrees to use any such information only to the extent required to
comply with applicable law or regulation, and otherwise maintains the
confidentiality of any such information not generally available to the public
with at least the same care as Company's own proprietary and confidential
information, and causes each of its officers, employees and agents to do the
same, and (ii) authorizes any person, organization or entity that may have any
knowledge or information concerning Purchaser’s personal or business background
to provide such information to Company as Company may reasonably request in
connection with the foregoing.

 
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10.           MISCELLANEOUS.
 
(a)           This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware.  The Parties submit to the exclusive
jurisdiction of the courts located in Broward County, Florida, with respect to
any dispute arising under this Agreement and the transactions contemplated
hereby.
 
(b)           This Agreement contains the entire agreement between Company and
Purchaser with regard to the subject matter hereof and may not be modified or
waived except in a writing signed by both Company and all parties to each such
agreement.
 
(c)           The headings of this Agreement are for convenience and reference
only, and shall not limit or otherwise affect the interpretation of any term or
provision hereof.
 
(d)           This Agreement and the rights, powers, and duties set forth herein
shall, except as otherwise expressly provided, be binding upon and inure to the
benefit of, the heirs, executors, administrators, legal representatives,
successors, and assigns of the Parties.
 
(e)           This Agreement and the rights and obligations hereunder shall not
be assignable or transferable by Purchaser or Company without the prior written
consent of the other Parties, except (i) in the case of Company, by operation of
law in connection with a merger, consolidation or sale of substantially all of
its assets or (ii) in the case of a Purchaser, (1) to any Affiliates (as defined
below) of Purchaser or (2) to partners, members, beneficiaries or other equity
interest holders of Purchaser; provided, that in each case referred to in
(1) and (2) above, the third party transferee would have been eligible to be an
original purchaser of the Series D Preferred Shares and the Common Shares
pursuant to this Agreement and executes a counterpart signature page hereto
becoming a “Purchaser” hereunder, subject to all of the rights and obligations
of this Agreement.  Subject to the preceding sentence, this Agreement shall be
binding upon, inure to the benefit of and be enforceable by the Parties and
their respective successors and assigns.  “Person” means an individual,
corporation, partnership, association, trust or other entity or organization,
including a government or political subdivision or agency or instrumentality
thereof. “Affiliate” means, with respect to any Person, any other Person who,
directly or indirectly, owns or controls, is under common ownership or control
with, or is owned or controlled by, such Person.
 
(f)           This Agreement is for the sole benefit of the Parties and their
permitted assigns and nothing expressed or implied in this Agreement shall give
or be construed to give to any Person, other than the Parties and such assigns,
any legal or equitable rights hereunder.
 
(g)           If any legal action or any arbitration or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged dispute,
breach, default, or misrepresentation in connection with any of the provisions
of this Agreement, the successful or prevailing party or parties shall be
entitled to recover reasonable attorneys’ fees and other costs incurred in that
action or proceeding, in addition to any other relief to which it may be
entitled.
 
(h)           This Agreement shall be construed in accordance with its intent
and without regard to any presumption or any other rule requiring construction
against the party causing the same to be drafted.

 
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(i)           If any provision of this Agreement, or any portion of any
provision, shall be deemed invalid or unenforceable for any reason whatsoever,
such invalidity or unenforceability shall not affect the enforceability and
validity of the remaining provisions.
 
(j)           This Agreement may be executed in counterparts, each of which
shall be deemed to be an original but which taken together shall constitute
one agreement.  Signatures to this Agreement may be transmitted by facsimile or
other electronic means and such transmission shall be deemed to be an original.
 
[Signature page follows.]

 
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SIGNATURE PAGE FOR ENTITY INVESTOR

[FOR INVESTOR THAT IS A CORPORATION, TRUST, CUSTODIANSHIP, PARTNERSHIP OR
LIMITED LIABILITY COMPANY]

THE UNDERSIGNED HEREBY SWEARS AND AFFIRMS THAT HE OR SHE IS DULY AUTHORIZED TO
EXECUTE THIS EXCHANGE AGREEMENT ON BEHALF OF THE ENTITY NAMED BELOW AND THAT HE
OR SHE HAS READ THAT AGREEMENT, UNDERSTANDS ITS CONTENTS, AND AFFIRMS THE
ACCURACY OF THE INVESTOR REPRESENTATIONS CONTAINED HEREIN.

Dated and signed as of the Effective Date.

Dollar Amount of Principal Amount Outstanding on Existing Unsecured Note:  $
_______________
Dollar Amount of Accrued and Unpaid Interest on Existing Unsecured Note:  $
_______________

Cash payment (equal to 50% of principal amount outstanding):  $
_____________________
Number of Series D Preferred Shares Exchanged for at $400 per Series D Preferred
Share (representing the remainder of the principal outstanding):
________________________
Number of Common Shares Exchanged for at $0.38 per Common Share (representing
all accrued and unpaid interest):   _____________________________

The signature(s) should be of the person(s) with the authority to make the
investment decision on behalf of the corporation, trust, custodianship,
partnership or limited liability company.

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 Name of Corporation, Trust, Custodianship, Partnership or Limited Liability
Company

     
Signature
 
Signature
           
Print Name
 
Print Name
           
Title
 
Title
           
Tax I.D. No. of Investor
 
Telephone #

State in which principal business office is located:
       
SMF ENERGY CORPORATION
     
Investor Mailing Address:
 
ACCEPTED THIS ________ DAY OF _______, 2009.
         
By: ______________________________________
   
Name:  Richard E. Gathright
   
Title:  Chief Executive Officer and President
           

 
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SIGNATURE PAGE FOR INDIVIDUAL INVESTOR(S)

THE UNDERSIGNED HEREBY SWEARS AND AFFIRMS THAT HE OR SHE HAS READ THIS EXCHANGE
AGREEMENT, UNDERSTANDS ITS CONTENTS, AND AFFIRMS THE ACCURACY OF THE INVESTOR
REPRESENTATIONS CONTAINED HEREIN.

Dated and signed as of the Effective Date.

Dollar Amount of Principal Amount Outstanding on Existing Unsecured Note:  $
_______________
Dollar Amount of Accrued and Unpaid Interest on Existing Unsecured Note:  $
_______________

Cash payment (equal to 50% of principal amount outstanding):  $ _______________
Number of Series D Preferred Shares Exchanged for at $400 per Series D Preferred
Share (representing the remainder of the principal outstanding):
__________________
Number of Common Shares Exchanged for at $0.38 per Common Share (representing
all accrued and unpaid interest):   __________________________
 
_________________________________

Signature
 

     
Subscriber Name (Please Print)
 
Tax ID or Social Security Number

Address:
         
Telephone No.:
 
Fax No.:
 

If Joint Ownership (Joint Tenants or Tenants in Common)

_________________________________

Signature

 
 
 
Second Subscriber Name (Please Print)
 
Second Subscriber Tax ID or Social Security No.

                                                      
Address:
         
Telephone No.:
 
Fax No.:
 

 
SMF ENERGY CORPORATION
 
ACCEPTED THIS _______ DAY OF ___________, 2009.
 
By: ________________________
Name:  Richard E. Gathright
Title:  Chief Executive Officer and President
 

 
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Manner in which Title is to be Held (Check One):

_______
 
 
Individual Ownership
_______
Company (include a copy of Partnership Agreement, and any amendments, as
applicable, and a resolution with authorization signature)
_______
 
 
 
Joint Tenants with Rights of Survivorship (both parties must sign)
_______
Trust (include name of the trust, name of trustee and date trust was formed)
_______
 
 
Tenants in Common (both parties must sign)
_______
Corporation (include certified corporate resolution with authorization
signature)
_______
 
 
 
 
 
Community
_______
Other (please specify)
 
_____________________________
 
_____________________________

 
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ATTACHMENT A
Certificate of Designation for Series D Preferred Stock

 
Attachment A to Exchange Agreement
Page 1 of 1

 
 

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ATTACHMENT B
TO
EXCHANGE AGREEMENT
 
Registration Rights Agreement
 
1.           Registration Rights.  This Registration Rights Agreement (the
“RRA”), is attached to and made a part of each Purchase and Exchange Agreement
(the “EA”) between SMF Energy Corporation, a Delaware corporation (the
“Company”) and the various Purchasers listed on Exhibit 1 to this RRA for the
purchase of Series D Preferred Shares and the Common Shares acquired under the
EA. This RRA provides the terms and conditions governing Company’s obligation
under the EA to use reasonable commercial efforts to register under the
Securities Act the Common Shares acquired under the EA and the Common Shares
issuable upon conversion of the Series D Preferred Shares which are “restricted
securities” as that term is defined by Rule 144 (collectively, the “Registrable
Securities”).  All capitalized terms used in the RRA that are not defined herein
have the same meaning as in the EA.
 
(a)           Demand Registration.  After the sale of all the Series D Preferred
Shares and the Common Shares pursuant to the EA has been effected, the holders
of the Series D Preferred Shares and the Common Shares shall be deemed to have
requested registration under the Act for all of the Registrable Securities upon
the terms and conditions set forth in this Section 1(a).  Promptly thereafter
Company shall notify each registered holder of the Series D Preferred Shares and
the Common Shares (a “Holder”) in writing of such request for
registration.  Company shall, as soon as practicable after the date on which
such notice is given, use reasonable commercial efforts to file a Registration
Statement with the SEC covering the Registrable Securities and will use
reasonable commercial efforts to cause the Registration Statement to become
effective.  No right to registration of Registrable Securities under this
Section 1(a) shall be construed to limit any registration required under
Section 1(b) hereof.  The obligations of Company under this Section 1(a) shall
expire after Company has afforded the Holders the opportunity to exercise
registration rights under this Section 1(a) for one registration.
 
(b)           Piggy-back Registration.  If at any time commencing on the date of
issuance of the Series D Preferred Shares and the Common Shares (the “Issue
Date”) and ending on the date that a registration statement covering the
Registrable Securities has been declared effective by the SEC Commission,
Company shall determine to prepare and file with the SEC a Registration
Statement relating to an offering for its own account or the account of others
under the Act of any securities of Company, other than on Form S-4 or Form S-8
or their then equivalents relating to equity securities to be issued solely in
connection with any acquisition of any entity or business or equity securities
issuable in connection with employee benefit plans, Company shall send to the
Holders written notice of such determination and if, within ten (10) days after
receipt of such notice, any Holder shall so request in writing, Company shall
include in such Registration Statement all or any part of the Registrable
Securities that such Holder requests to be registered, except that if, in
connection with any underwritten public offering for the account of Company, the
managing underwriter(s) thereof shall impose a limitation on the number of
Registrable Securities which may be included in the Registration Statement
because, in such underwriter(s)’ judgment, such limitation is necessary to
effect an orderly public distribution, then Company shall be obligated to
include in such Registration Statement only such limited portion of the
Registrable Securities with respect to which such Holder has requested
inclusion.  Any exclusion of Registrable Securities shall be made pro rata among
all Holders who have requested that Registrable Securities be included, in
proportion to the number of Registrable Securities specified in their respective
requests; provided, however, that Company shall not exclude any Registrable
Securities unless Company has first excluded all outstanding securities the
holders of which are not entitled by right to inclusion of securities in such
Registration Statement; and provided further, however, that, after giving effect
to the immediately preceding proviso, any exclusion of Registrable Securities
shall be made pro rata with holders of other securities having the right to
include such securities in the Registration Statement, based on the number of
securities for which registration is requested except to the extent such pro
rata exclusion of such other securities is prohibited under any written
agreement entered into by Company with the holder of such other securities prior
to the Issue Date in which case such other securities shall be excluded, if at
all, in accordance with the terms of such agreement.  No right to registration
of Registrable Securities under this Section 1(b) shall be construed to limit
any registration required under Section 1(a) hereof.  Holders of at least
sixty-six and two-thirds percent (66 2/3%) of the Series D Preferred Shares and
the Common Shares may waive the obligations of Company under this Section 1(b).
 
Attachment B to Exchange Agreement
Page 1 of 10

 
 

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(c)           Obligations of Company.  In connection with the registration of
the Registrable Securities, Company shall:
 
(i)           prepare promptly and file with the SEC the Registration Statement
provided in Section 1(a) with respect to the Registrable Securities and
thereafter to use reasonable commercial efforts to cause such Registration
Statement relating to the Registrable Securities to become effective as soon as
possible after such filing, and keep the Registration Statement effective at all
times until two (2) years from the effective date of the Registration Statement
(the “Registration Period”); submit to the SEC, within three (3) Business Days
after Company learns that no review of the Registration Statement will be made
by the staff of the SEC or the staff of the SEC has no further comments on the
Registration Statement, as the case may be, a request for acceleration of the
effectiveness of the Registration Statement to a time and date not later than
forty-eight (48) hours after the submission of such request; notify the Holders
of the effectiveness of the Registration Statement on the date the Registration
Statement is declared effective; and, Company represents and warrants to, and
covenants and agrees with the Holders that the Registration Statement (including
any amendments or supplements thereto and prospectuses contained therein, at the
time it is first filed with the SEC, at the time it is ordered effective by the
SEC and at all times during which it is required to be effective hereunder) and
each such amendment and supplement at the time it is filed with the SEC and all
times during which it is available for use in connection with the offer and sale
of Registrable Securities shall not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein, or
necessary to make the statements therein, in light of the circumstances in which
they were made, not misleading;
 
Attachment B to Exchange Agreement
Page 2 of 10

 
 

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(ii)           prepare and file with the SEC such amendments (including
post-effective amendments) and supplements to the Registration Statement and the
prospectus used in connection with the Registration Statement as may be
necessary to keep the Registration Statement effective at all times during the
Registration Period, and during the Registration Period, comply with the
provisions of the Act with respect to the disposition of all Registrable
Securities covered by the Registration Statement until such time as all of such
Registrable Securities have been disposed of in accordance with the intended
methods of disposition by the Holders as set forth in the Registration
Statement;
 
(iii)           furnish, upon request, to the Holders (A) promptly after the
same is prepared and publicly distributed, filed with the SEC or received by
Company, one copy of the Registration Statement and any amendment thereto, each
preliminary prospectus and prospectus and each amendment or supplement thereto,
each letter written by or on behalf of Company to the SEC or the staff of the
SEC and each item of correspondence from the SEC or the staff of the SEC
relating to such Registration Statement (other than any portion of any thereof
which contains information for which Company has sought confidential treatment)
and (B) such number of copies of a prospectus, including a preliminary
prospectus and all amendments and supplements thereto and such other documents,
as any Holder reasonably may request in order to facilitate the disposition of
the Registrable Securities;
 
(iv)           use reasonable commercial efforts to register and qualify the
Registrable Securities covered by the Registration Statement under such
securities or blue sky laws of such jurisdictions as the Holders of at least
sixty-six and two-thirds percent (662/3%) of the Series D Preferred Shares and
Common Shares reasonably request and use reasonable efforts to (A) prepare and
file in those jurisdictions such amendments (including post-effective
amendments) and supplements to such registrations and qualifications as may be
necessary to maintain the effectiveness thereof at all times until the end of
the Registration Period, (B) take such other actions as may be necessary to
maintain such registrations and qualifications in effect at all times during the
Registration Period and (C) take all other actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such jurisdictions;
provided, however, that Company shall not be required in connection therewith or
as a condition thereto (A) to qualify to do business in any jurisdiction where
it would not otherwise be required to qualify but for this Section 1(c)(iv),
(B) to subject itself to general taxation in any such jurisdiction, (C) to file
a general consent to service of process in any such jurisdiction or (D) to make
any change in its Articles of Incorporation or Bylaws which the Board of
Directors of Company determines to be contrary to the best interests of Company
and its stockholders;
 
(v)           as promptly as practicable after becoming aware of such event or
circumstance, notify the Holders of any event or circumstance of which Company
has knowledge, as a result of which the prospectus included in the Registration
Statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and use its reasonable commercial efforts promptly to
prepare a supplement or amendment to the Registration Statement to correct such
untrue statement or omission, file such supplement or amendment with the SEC at
such time as shall permit the Holders to sell Registrable Securities pursuant to
the Registration Statement as promptly as practicable, and deliver a number of
copies of such supplement or amendment to any Holder as such Holder may
reasonably request;
 
Attachment B to Exchange Agreement
Page 3 of 10

 
 

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(vi)           as promptly as practicable after becoming aware of such event,
notify the Holders (or, in the event of an underwritten offering the managing
underwriters) of the issuance by the SEC of any stop order or other suspension
of effectiveness of the Registration Statement at the earliest possible time;
 
(vii)           permit one legal counsel designated by the Holders of at least
sixty-six and two-thirds percent (662/3%) of the Series D Preferred Shares and
Common Shares being sold to review and comment on the Registration Statement and
all amendments and supplements thereto a reasonable period of time prior to
their filing with the SEC and to pay the reasonable fees and costs incurred by
such counsel;
 
(viii)                      make generally available to its security holders as
soon as practical, but not later than one hundred and five (105) days after the
close of the period covered thereby, an earnings statement (in form complying
with the provisions of Rule 158 under the Securities Act) covering a twelve (12)
month period beginning not later than the first day of Company’s fiscal quarter
next following the effective date of the Registration Statement;
 
(ix)           during the period Company is required to maintain effectiveness
of the Registration Statement pursuant to Section 1(c)(i), Company shall not bid
for or purchase any Common Stock or other securities or any right to purchase
Common Stock or other securities or attempt to induce any person to purchase any
such security or right if such bid, purchase or attempt would in any way limit
the right of the Holders to sell Registrable Securities by reason of the
limitations set forth in Regulation M under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”); and
 
(x)           take all other reasonable actions necessary to expedite and
facilitate disposition by the Holders of the Registrable Securities pursuant to
the Registration Statement.
 
(d)           Obligations of the Holders.  In connection with the registration
of the Registrable Securities, the Holders shall have the following obligations:
 
(i)           it shall be a condition precedent to the obligations of Company to
complete the registration pursuant hereto with respect to any Holder’s
Registrable Securities that the Holder shall furnish to Company such information
regarding Holder, the Registrable Securities held by Holder and the intended
method of disposition of the Registrable Securities held by Holder as shall be
reasonably required to effect the registration of such Registrable Securities
and shall execute such documents in connection with such registration as Company
may reasonably request.  At least ten (10) days prior to the first anticipated
filing date of the Registration Statement, Company shall notify the Holders of
the information Company requires from each Holder (the “Requested Information”)
if any of such Holder’s Registrable Securities are eligible for inclusion in the
Registration Statement.  If at least two (2) Business Days prior to the filing
date Company has not received the Requested Information from any such Holder (at
such time Holder becoming a “Non-Responsive Holder”), then Company may file the
Registration Statement without including the Non-Responsive Holder’s Registrable
Securities but shall not be relieved of its obligation to file a Registration
Statement with the SEC relating to the Registrable Securities of Non–Responsive
Holder promptly after Non-Responsive Holder provides the Requested Information;
 
Attachment B to Exchange Agreement
Page 4 of 10

 
 

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(ii)           by purchasing or accepting an assignment of the Registrable
Securities, each Holder agrees to cooperate with Company as reasonably requested
by Company in connection with the preparation and filing of the Registration
Statement for the Registrable Securities, unless such Holder has notified
Company in writing of such Holder’s election to exclude all of Holder’s
Registrable Securities from the Registration Statement;
 
(iii)           in the event Holders of at least sixty-six and two-thirds
percent (662/3%) of the Series D Preferred Shares and Common Shares being
registered determine to engage the services of an underwriter, each Holder
agrees to enter into and perform such Holder’s obligations under an underwriting
agreement, in usual and customary form, including, without limitation, customary
indemnification and contribution obligations, with the managing underwriter of
such offering and take such other actions as are reasonably required in order to
expedite or facilitate the disposition of Registrable Securities, unless such
Holder has notified Company in writing of the Holder’s election to exclude all
of Holder’s Registrable Securities from the Registration Statement;
 
(iv)           each Holder agrees that, upon receipt of any notice from Company
of the happening of any event of the kind described in Section 1(c)(v), Holder
will immediately discontinue disposition of Registrable Securities pursuant to
the Registration Statement covering such Registrable Securities until Holder’s
receipt of the copies of the supplemented or amended prospectus contemplated by
Section 1(c)(v) and, if so directed by Company, Holder shall deliver to Company
(at the expense of Company) or destroy (and deliver to Company a certificate of
destruction) all copies in such Holder’s possession of the prospectus covering
such Registrable Securities current at the time of receipt of such notice;
 
(v)           Holders may not participate in any underwritten registration
hereunder unless the Holder (A) agrees to sell Holder’s Registrable Securities
on the basis provided in any underwriting arrangements approved by the Holders
entitled hereunder to approve such arrangements, (B) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements and (C) agrees to pay its pro rata share of all underwriting
discounts and commissions and other fees and expenses of investment bankers and
any manager or managers of such underwriting and legal expenses to the
underwriters applicable with respect to its Registrable Securities, in each case
to the extent not payable by Company pursuant to the terms of this Agreement;
and
 
Attachment B to Exchange Agreement
Page 5 of 10

 
 

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(vi)           each Holder agrees to take all reasonable actions necessary to
comply with the prospectus delivery requirements of the Act applicable to its
sales of Registrable Securities.
 
(e)           Expenses of Registration.  All costs and expenses, other than
underwriting or brokerage discounts, commissions and other fees related to the
distribution of the Registrable Securities, incurred in connection with
registrations, filings or qualifications for sale of the Registrable Securities,
including, without limitation, all registration, listing and qualifications
fees, printers and accounting fees and the fees and disbursement of counsel for
Company shall be borne by Company, provided, however, that Company shall bear
the fees and out-of-pocket expenses of the one legal counsel selected by the
Holders pursuant to Section 1(c)(vii) hereof.
 
(f)           Indemnification.  In the event any Registrable Securities are
included in a Registration Statement under this Agreement:
 
(i)           To the extent permitted by law, Company will indemnify and hold
harmless the Holders, the directors, if any, of Holders, the officers, if any,
of Holders, each person, if any, who controls Holders within the meaning of the
Act or the Exchange Act, any underwriter (as defined in the Act) for Holders,
the directors, if any, of such underwriter and the officers, if any, of such
underwriter, and each person, if any, who controls any such underwriter within
the meaning of the Act or the Exchange Act (each, an “Indemnified Person”),
against any losses, claims, damages, liabilities or expenses (joint or several)
incurred (collectively, “Claims”) to which any of them may become subject under
the Act, the Exchange Act or otherwise, insofar as such Claims (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any of the following statements, omissions or violations in
the Registration Statement or any post-effective amendment thereof, or any
prospectus included therein: (A) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
post–effective amendment thereof or the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, (B) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospectus if used
prior to the effective date of such Registration Statement, or contained in the
final prospectus (as amended or supplemented, if Company files any amendment
thereof or supplement thereto with the SEC) or the omission or alleged omission
to state therein any material fact necessary to make the statements made
therein, in light of the circumstances under which the statements therein were
made, not misleading or (C) any violation or alleged violation by Company of the
Act, the Exchange Act, any state securities law or any rule or regulation under
the Act, the Exchange Act or any state securities law (the matters in the
foregoing clauses (A) through (C) being, collectively, “Violations.”)  Subject
to the restrictions set forth in Section 1(f)(v) with respect to the number of
legal counsel, Company shall reimburse Holders and the other Indemnified
Persons, promptly as such expenses are incurred and are due and payable, for any
legal fees or other reasonable expenses incurred by them in connection with
investigating or defending any such Claim.  Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 1(f)(i):  (A) shall not apply to a Claim arising out of or based upon a
Violation which occurs in reliance upon and in conformity with information
furnished in writing to Company by any Indemnified Person or underwriter for
such Indemnified Person expressly for use in connection with the preparation of
the Registration Statement, the prospectus or any such amendment thereof or
supplement thereto, if such prospectus was timely made available by Company
pursuant to Section 1(c)(iii) hereof; (B) with respect to any preliminary
prospectus shall not inure to the benefit of any Indemnified Person if the
untrue statement or omission of material fact contained in the preliminary
prospectus was corrected in the prospectus, as then amended or supplemented, if
such prospectus was timely made available by Company pursuant to
Section 1(c)(iii) hereof, and (C) shall not apply to amounts paid in settlement
of any Claim if such settlement is effected without the prior written consent of
Company, which consent shall not be unreasonably withheld.  Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Indemnified Person and shall survive the transfer of the
Registrable Securities by Holders.
 
Attachment B to Exchange Agreement
Page 6 of 10

 
 

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(ii)           In connection with any Registration Statement in which a Holder
is participating, each Holder agrees to indemnify and hold harmless, to the same
extent and in the same manner set forth in Section 1(f)(i), Company, each of its
directors, each of its officers who signs the Registration Statement, each
person on, if any, who controls Company within the meaning of the Act or the
Exchange Act, any underwriter and any other stockholder selling securities
pursuant to the Registration Statement or any of its directors or officers or
any person who controls such stockholder or underwriter within the meaning of
the Act or the Exchange Act (collectively and together with an Indemnified
Person, an “Indemnified Party”), against any Claim to which any of them may
become subject, under the Act, the Exchange Act or otherwise, insofar as such
Claim arises out of or is based upon any Violation, in each case to the extent
(and only to the extent) that such Violation occurs in reliance upon and in
conformity with written information furnished to Company by such Holder
expressly for use in connection with such Registration Statement, and such
Holder will reimburse any legal or other expenses reasonably incurred by any
Indemnified Party, promptly as such expenses are incurred and are due and
payable, in connection with investigating or defending any such Claim; provided,
however, that the indemnity agreement contained in this Section 1(f)(ii) shall
not apply to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of the Holder, which consent shall
not be unreasonably withheld; provided further, however, that the Holder shall
be liable under this Section 1(f)(ii) for only that amount of a Claim as does
not exceed the amount by which the net proceeds to the Holder from the sale of
Registrable Securities pursuant to such Registration Statement exceeds the cost
of such Registrable Securities to the Holder.  Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
such Indemnified Party and shall survive the transfer of the Registrable
Securities by the Holder.  Notwithstanding anything to the contrary contained
herein, the indemnification agreement contained in this Section 1(f)(ii) with
respect to any preliminary prospectus shall not inure to the benefit of any
Indemnified Party if the untrue statement or omission of material fact contained
in the preliminary prospectus was corrected on a timely basis in the prospectus,
as then amended or supplemented.
 
Attachment B to Exchange Agreement
Page 7 of 10

 
 

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(iii)           If the indemnification provided to any Indemnified Party by
Section 1(f)(i) is for any reason (other than the bad faith, willful misconduct
or gross negligence of such Indemnified Party) not available or insufficient to
hold an Indemnified Party harmless, Company will contribute to the Losses
involved in such proportion as is appropriate to reflect the relative benefits
received (or anticipated to be received) by Company, on the one hand, and by the
Indemnified Party, on the other hand, with respect to the transaction or, if
such allocation is determined by a court or arbitral tribunal to be unavailable,
in such proportion as is appropriate to reflect other equitable considerations
such as the relative fault of Company on the one hand and of the Indemnified
Party on the other hand; provided, however, that, to the extent permitted by
applicable law, the Indemnified Parties shall not be responsible for amounts
which in the aggregate are in excess of the amount of all benefits actually
received by the Indemnified Party from the ownership and sale of the Registrable
Securities.
 
(iv)           Company shall be entitled to receive indemnities from
underwriters, selling brokers, dealer managers and similar securities industry
professionals participating in any distribution, to the same extent as provided
above, with respect to information so furnished in writing by such persons
expressly for inclusion in the Registration Statement.
 
(v)           Promptly after receipt by an Indemnified Person or Indemnified
Party under this Section 1(f) of notice of the commencement of any action
(including any governmental action), such Indemnified Person or Indemnified
Party shall, if a Claim in respect thereof is to be made against any
indemnifying party under this Section 1(f), deliver to the indemnifying party a
written notice of the commencement thereof and the indemnifying party shall have
the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
control of the defense thereof with counsel selected by the indemnifying party
but reasonably acceptable to the Indemnified Person or the Indemnified Party, as
the case may be; provided, however, that an Indemnified Person or Indemnified
Party shall have the right to retain its own counsel with the fees and expenses
to be paid by the indemnifying party, if, in the reasonable opinion of counsel
retained by the indemnifying party, the representation by such counsel of the
Indemnified Person or Indemnified Party and the indemnifying party would be
inappropriate due to actual or potential differing interests between such
Indemnified Person or Indemnified Party and any other party represented by such
counsel in such proceeding.  In such event, Company shall pay for only one
separate legal counsel for the Holders; such legal counsel shall be selected by
the Holders of at least sixty-six and two-thirds percent (662/3%) of the Series
D Preferred Shares convertible into Registrable Securities included in the
Registration Statement to which the Claim relates.  The failure to deliver
written notice to the indemnifying party within a reasonable time of the
commencement of any such action shall not relieve such indemnifying party of any
liability to the Indemnified Person or Indemnified Party under this Section
1(f), except to the extent that the indemnifying party is prejudiced in its
ability to defend such action.  The indemnification required by Section 1(f)
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as such expense, loss, damage or liability is
incurred and is due and payable.
 
Attachment B to Exchange Agreement
Page 8 of 10

 
 

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2.           The agreements, representations and warranties of Company and the
Holders set forth or provided in Section 1 shall survive the execution and
delivery of the EA and payment for the Series D Preferred Shares and Common
Shares under the EA and shall remain in full force and effect, regardless of any
investigation made by or on behalf of Company and the Holder.
 
3.           In the EA, Company agrees to make all reasonable commercial efforts
to cause the Registration Statement to be filed within one hundred and five
(105) days following the Effective Date and to cause such Registration Statement
to become effective as soon thereafter as practicable.  Such obligation is
subject to the receipt of a demand for such registration from the requisite
number of Holders or from the Placement Agent as their agent hereunder.  The
Holders further agree that, so long as Company proceeds in good faith, it shall
not be liable for any financial penalty or monetary damages resulting from its
failure to cause such filing or effectiveness to occur by the times specified.
 
4.           This Attachment B is incorporated by reference into the EA and its
terms made a part thereof.
 
Attachment B to Exchange Agreement
Page 9 of 10

 
 

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Exhibit 1 to Registration Rights Agreement

LIST OF PURCHASERS

Attachment B to Exchange Agreement
Page 10 of 10

 
 

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ATTACHMENT C

Accredited Investor and FINRA Affiliation
Representations

 
As provided by Rule 501(a) of Regulation D, my representation that I am or
represent an accredited investor is based upon one of the following grounds that
I am or represent (please check one):
 
 
¨
A private business development Company as defined in Section 202(a)(22) of the
Investment Advisors Act of 1940;

 
 
¨
An organization described in Section 501(c)(3) of the Internal Revenue Code,
corporation, Massachusetts or similar business trust, or partnership, not formed
for the specific purpose of acquiring the securities offered, with total assets
in excess of Five Million Dollars ($5,000,000);

 
 
¨
A director or executive officer of Company;

 
 
¨
A natural person whose individual net worth, or joint net worth with that
person’s spouse, exceeds One Million Dollars ($1,000,000);

 
 
¨
A natural person who has an individual income in excess of Two Hundred Thousand
Dollars ($200,000) in each of the two (2) most recent years and has a reasonable
expectation of reaching the same income level in the current year;

 
 
¨
A natural person who has a joint income with that person’s spouse in excess of
Three Hundred Thousand Dollars ($300,000) in each of the two (2) most recent
years and has a reasonable expectation of reaching the same income level in the
current year;

 
 
¨
A trust, with total assets in excess of Five Million Dollars ($5,000,000), not
formed for the specific purpose of acquiring the securities offered, whose
purchase is directed by a sophisticated person as defined by Rule 506(b)(2)(ii)
of the Act; or

 
¨           An entity in which all of the equity owners are accredited
investors.
 
AFFILIATION WITH A U. S. REGISTERED BROKER-DEALER:
 
Are you associated with a FINRA member firm?  (Please check one)
 
YES _______________
 
NO _______________

 
Attachment C to Exchange Agreement
Page 1 of 2

 
 

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(1)  FINRA defines a “person associated with a member” or “associated person of
a member” as being every sole proprietor, general or limited partner, officer,
director or branch manager of any member, or any natural person occupying a
similar status or performing similar functions, or any natural person engaged in
the investment banking or securities business who is directly or indirectly
controlling or controlled by such member (for example, any employee), whether or
not any such person is registered or exempt from registration with FINRA.  Thus,
“person associated with a member” or “associated person of a member” includes a
sole proprietor, general or limited partner, officer, director or branch manager
of an organization of any kind (whether a corporation, partnership or other
business entity) which itself is either a “member” or a “person associated with
a member” or “associated person of a member.” In addition, an organization of
any kind is a “person associated with a member” or “associated person of a
member” if its sole proprietor or any one of its general or limited partners,
officers, directors or branch managers is a “member,” “person associated with a
member” or “associated person of a member.”
 
(2)  FINRA defines a “member” as being any individual, partnership, corporation
or other legal entity that is a broker or dealer admitted to membership in
FINRA.
 
IF PURCHASER IS ASSOCIATED WITH A FINRA MEMBER FIRM, THE FOLLOWING
ACKNOWLEDGMENT, OR A SUBSTANTIALLY IDENTICAL ACKNOWLEDGMENT, MUST BE SIGNED AND
SUBMITTED BEFORE PURCHASER’S OFFER TO PURCHASE UNITS WILL BE ACCEPTED BY
COMPANY:
 
The undersigned FINRA member firm acknowledges receipt of the notice required by
Rule 3050 of the FINRA Rules or any successor rules or regulations.
 
NAME OF FINRA MEMBER FIRM:
 
By:
 
Name:
 
Title:
 
Date:
 

I hereby declare that the foregoing representations concerning my qualifications
as an accredited investor and my affiliations, if any, with any FINRA member
firm, are accurate and complete.
 
INDIVIDUAL:
 
ENTITY:
     
Print Name:
   
By:
 
Date:
   
Name:
       
Title:
       
Date:
 

 
Attachment C to Exchange Agreement
Page 2 of 2

 
 

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