Exhibit
10.1

    PAYMENT
IN KIND AGREEMENT

    


    THIS PAYMENT IN KIND AGREEMENT (the
“Agreement”) is dated
and effective as of the 27th day of April, 2009, between SMF Energy Corporation
(the “Company”) and the
undersigned holder (the “Preferred Stockholder”) of the
Company’s Series A Convertible Preferred Stock (the “Series A Preferred Stock”),
Series B Convertible Preferred Stock (the “Series B Preferred Stock”) and
Series C Convertible Preferred Stock (the “Series C Preferred Stock”), as
applicable.

    


    RECITALS

    


    WHEREAS, on December 31, 2008, the
Board of Directors declared, but has not yet paid, dividends of (i) Sixteen
Dollars and Eighty-Two Cents ($16.82) per share on its outstanding shares of
Series A Preferred Stock, (ii) Twenty-Seven Dollars and Fifty-Two Cents ($27.52)
per share on its outstanding shares of Series B Preferred Stock and (iii)
Twenty-Six Dollars and Eighteen Cents ($26.18) per share on its outstanding
shares of Series C Preferred Stock, to be paid to the Preferred Stockholders of
record at the close of business on January 21, 2009, for the quarter ended
December 31, 2008 (the “December
Dividends”);

    


    WHEREAS, the Company acknowledges that,
at such time as it is declared by the Board of Directors, it will be obligated
to pay dividends of (i) Sixteen Dollars and Twenty-Seven Cents ($16.27) per
share on its outstanding shares of Series A Preferred Stock, (ii) Twenty-Six
Dollars and Sixty-Three Cents ($26.63) per share on its outstanding shares of
Series B Preferred Stock and (iii) Nineteen Dollars and Twenty-Three Cents
($19.23) per share on its outstanding shares of Series C Preferred Stock, to the
Preferred Stockholders of record as of a date to be determined by the Board of
Directors, for the quarter ended March 31, 2009 (the “March Dividends”);
and

    


    WHEREAS, the Company desires to pay the
December Dividends and the March Dividends with unregistered shares of the
Company’s common stock (“Common
Shares”) instead of cash and the Preferred Stockholder desires to accept
Common Shares as payment for the December Dividends and March
Dividends.

    


    NOW, THEREFORE, BE IT RESOLVED, that in
consideration of the mutual promises and other good and valuable consideration
set forth herein, the Company and the Preferred Stockholder agree as
follows:

    


    AGREEMENT

    


    1.           Payment in
Kind.  The Company agrees to issue, and the Preferred
Stockholder agrees to accept, as payment in kind for the amounts due for the
December Dividends and the March Dividends, Common Shares in the amounts set
forth on the signature page hereto.  The Common Shares shall be valued
at $0.23 per share, which was the Official Closing Price on the Nasdaq Stock
Market on April 24, 2009, the trading day immediately preceding the date of this
Agreement.  The Common Shares will be issued as soon as practicable
upon completion and execution of this Agreement and the Investment
Representation Statement attached hereto.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    2.           Registration of Common
Shares.  The Common Shares shall be deemed to be “Registrable
Securities” under the Registration Rights Agreement appended to the Securities
Purchase Agreements between the Preferred Stockholder and the Company relating
to the purchase of the Series A Preferred Stock, Series B Preferred Stock and
Series C Preferred Stock, except that the Preferred Stockholder shall be deemed
to have requested such registration immediately upon execution of this Agreement
and the Company agrees to use reasonable commercial efforts to file a new
registration statement with the SEC covering the Common Shares as soon as
practicable or, if an existing “shelf” registration can be used for such
registration, to take all necessary steps to include the Common Shares within
such shelf registration.  The Company further agrees that, if a new
registration statement is necessary, it will make reasonable commercial efforts
to file such registration statement within 60 days following the date hereof and
to cause such registration statement or amendment to become effective within 120
days of the date hereof.

     

    3.           Miscellaneous.  The
terms of this Agreement may not be amended except by a writing signed by the
parties; (b) no failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof; (c) this Agreement shall
be binding on and inure to the benefit of each party hereto and his or its legal
representatives, successors and assigns; (d) this Agreement shall be governed by
and construed in accordance with the law of the State of Delaware, without
regard to conflicts of law rules; (e) this Agreement may be signed in
counterparts, with the same effect as if the signatures were upon the same
instrument; (f) this Agreement constitutes the entire agreement of the parties
with respect to its subject matter and supersedes all prior agreements and
understandings relating thereto; (g) this Agreement does not confer any rights
or remedies upon any person other than the parties hereto; and (h) if any
provision of this Agreement shall be found to be invalid, illegal or
unenforceable, the remaining provisions shall not be affected or impaired
thereby.

     

    [Remainder
of page left blank; signature page follows.]

     

     

     

     

     

    
      
         

      

      
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    IN WITNESS WHEREOF, the parties have
executed and delivered this Agreement as of the date first above
written.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                	 	SMF
      ENERGY CORPORATION	 
	 	 	 
	Accepted:May
      5,
      2009	 	 
	 	 	 	 
	
                                                         

                                                      	
                                                        By:
      

                                                      	 	 
	 	 	Richard
      E. Gathright,	 
	 	 	Chief
      Executive Officer and President	 
	 	 	 	 
	 	PREFERRED
      STOCKHOLDER	 
	 	 	 
	 	      
                                                        Name
      of Preferred Stockholder (printed or typed)

                                                      	 
	 	 	 	 
	 	By:	 	 
	 	 	 	 
	 	(if
      entity) Name & title:	 
	 	 	 


                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    


     

    
      
        	
                Series
      A Convertible Preferred Stock—Number of Shares Held:

              
	
                Amount of December
      Dividends:

              	
                $

              
	
                Amount of March
      Dividends:

              	
                $

              
	
                Total Series A Dividends
      Due:

              	
                $

              
	
                Common Shares to be Issued for
      Series A:

              	 
      
	 
      	 
      
	
                Series
      B Convertible Preferred Stock—Number of Shares Held:

              
	
                Amount of December
      Dividends:

              	
                $

              
	
                Amount of March
      Dividends:

              	
                $

              
	
                Total Series B Dividends
      Due:

              	
                $

              
	
                Common Shares to be Issued for
      Series B:

              	 
      
	 
      	 
      
	
                Series
      C Convertible Preferred Stock—Number of Shares Held:

              
	
                Amount of December
      Dividends:

              	
                $

              
	
                Amount of March
      Dividends:

              	
                $

              
	
                Total Series C Dividends
      Due:

              	
                $

              
	
                Common Shares to be Issued for
      Series C:

              	 
      
	
                 

                TOTAL
      COMMON SHARES TO BE ISSUED:

              	 
      


      

    

     

    
      
         

      

      
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    Attachment

    to Payment in Kind
Agreement

    


    


    INVESTMENT
REPRESENTATION STATEMENT

    


    


    HOLDER:_____________________________________________

    


    COMPANY:   
SMF ENERGY CORPORATION

    


    SECURITY:    
COMMON STOCK

    


    NUMBER OF
COMMON SHARES:__________________________

    


    


    In connection with the purchase of the
Common Shares listed above (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.

    


    (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.  In addition, Holder understands
that the certificate evidencing the Securities will be imprinted with a legend
that 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.

     

    
      
         

      

      
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    (f)           Holder
further understands that in the event all of the requirements of Rule 144 are
not satisfied, registration under the Securities Act or compliance with another
registration exemption will be required, and no such exemption may be
available.

    


    


    Signature of Holder:

    


    


    Date:  April
27,
2009                             _________________________________________

     

    
      
         

      

      
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