EXCHANGE
      AGREEMENT

     

    THIS
      EXCHANGE
      AGREEMENT (this
      “Agreement”)
      is
      made and entered into as of the 10th
      day
      of March, 2008, between SMF Energy Corporation, a Delaware corporation
      (“Company”),
      and the
      undersigned (“Purchaser”
and,
      together with Company, the “Parties”).

     

    Subject
      to the terms and conditions set forth in this Agreement, Purchaser desires
      to
      purchase and hereby subscribes for the number and dollar amount of the Company’s
      Preferred Shares (defined below) as set forth on the signature page hereto
      (the
“Transaction”).

     

    1. DESCRIPTION
      OF PREFERRED SHARES.
      “Preferred
      Shares”
refers
      to shares of the Company’s $.01 par value Series B Convertible Preferred Stock
      (“Preferred
      Stock”)
      that
      are convertible into shares of Company’s $.01 par value common stock
      (“Common
      Stock”).
      The
      shares of Common Stock into which the Preferred Shares (and the accrued but
      unpaid dividends thereon) are convertible are referred to herein as the
“Common Shares”.

     

    2. OFFER. Purchaser,
      by signing this Agreement, Purchaser offers to exchange all
      or a
      portion of principal and accrued interest on the August 8, 2007 111⁄2% senior
      secured convertible promissory note held by Purchaser (the “Note”) for
      Preferred Shares in the amount and for the purchase price set forth on the
      signature page hereto (the “Investment
      Amount”).
      Company
      shall have the right, in its sole and absolute discretion, to reject or accept
      Purchaser’s offer to exchange the Note for the Preferred Shares pursuant to this
      Agreement. If Company accepts Purchaser’s offer, Company shall execute this
      Agreement and return a copy of the Agreement, and issue the Preferred Shares
      to
      Purchaser. If Company rejects Purchaser’s offer, Company shall return to
      Purchaser this Agreement, together with any payment of the Investment Amount
      made by Purchaser to Company together with the interest earned on such payment,
      if any.

     

    3. CLOSING.
      The
      purchases and sales of the Preferred Shares (the “Closing”)
      shall
      take place on March 10, 2008, or such later date as may be determined by
      Company, and from time to time thereafter (such date or dates referred to
      collectively herein as the “Closing
      Date”).
      

     

    4. RECEIPT
      OF DOCUMENTS. Purchaser
      acknowledges receipt of a copy of: (a) this Agreement; (b) the Certificate
      of
      Designation for the Preferred Stock, attached hereto as Attachment
      A;
      (c) the
      Company’s Annual Report on Form 10-K for the year ended June 30, 2007 (the
“10-K”);
      (d)
      the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31,
      2007 (the “10-Q”);
      and
      (e) the Company’s proxy statement for its December 7, 2007 shareholders meeting
      (the “Proxy
      Statement”)
      (collectively, the “Documents”).

     

    5. USE
      OF PROCEEDS; NO REFUNDS.
      The
      Investment Amounts shall be used by Company to provide additional working
      capital for general corporate purposes, as well as for evaluation and
      acquisition due diligence related to its current strategic acquisition program,
      and pay the costs of the Transaction. Upon execution of this Agreement by
      Company and delivery of it to Purchaser, the Investment Amount shall not, under
      any circumstances, be refunded to Purchaser.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    6. CONDITIONS
      PRECEDENT. Notwithstanding
      anything to the contrary contained in this Agreement, the obligations of Company
      to close the Transaction shall be contingent upon the following:

     

    (a) Company
      and Purchaser executing this Agreement; and

     

    (b) Purchaser
      completing, to Purchaser’s satisfaction, all business, legal, and accounting due
      diligence regarding Company and the Offering.

     

    7. COMPANY’S
      RIGHT TO CANCEL. Company,
      in its sole discretion, may cancel this Agreement with respect to Purchaser
      at
      any
      time prior to the Closing Date by delivery of written notice of cancellation
      to
      Purchaser and return of the Investment Amounts with accrued interest, if any,
      to
      Purchaser.

     

    8. REGISTRATION
      OF SHARES. 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 the Common Shares into which the Preferred Shares
      are
      or may be convertible to be filed with the Securities and Exchange Commission
      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 90 days following the Closing Date
      and
      to cause such Registration Statement to become effective as soon thereafter
      as
      practicable. 

     

    9. REPRESENTATIONS
      AND WARRANTIES OF PURCHASER.
      Each
      Purchaser represents and warrants to Company as follows:

     

    (a) Purchaser,
      either alone or through Purchaser’s representative, as that term is defined
      under Rule 501(h)
      of
      Regulation D
      (“Regulation
      D”)
      under
      the Securities 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. 

     

    (b) 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 Preferred
      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.
      

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    (c) Purchaser
      and Purchaser’s Representative, if any, understand that the Preferred 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.

     

    (d) 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 Preferred Shares.


     

    (e) The
      Preferred
      Shares are being purchased 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 Preferred Shares have not been registered under the
      Securities Act or any state securities
      laws
      by
      reason of their contemplated issuance in transactions exempt from the
      registration requirements of the Securities
      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. 

     

    (f) 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. 

     

    (g) Purchaser
      was not solicited to purchase the Preferred 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. 

     

    (h) Purchaser
      and Purchaser’s Representative, if any, hereby acknowledge that the Preferred
      Shares, are and will be, when issued, “restricted securities,”
      as that
      term is defined in Rule 144 of the rules and regulations promulgated under
      the
      Securities Act unless and until Company is successful in causing the
      Registration Statement to become effective. Purchaser and Purchaser’s
      Representative,
      if any, are aware of the applicable limitations on the resale of the Common
      Shares in the absence of a successful registration of those securities,
      including but not limited to Rule 144. Rule 144 only permits sales of
“restricted securities” held for at least six months and in transactions which
      otherwise comply with the requirements of such Rule. Purchaser and Purchaser’s
      Representative, if any, also acknowledge that (1) the trading market for the
      Common Stock on the Nasdaq Stock Market is volatile, so that the trading volume
      and price of Shares are subject to substantial and unpredictable variations
      and
      (2) 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.


     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    (i) 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 Preferred 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 Preferred Shares and have not
      relied on Company or its respective agents or representatives. 

     

    (j) 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 Preferred 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.

     

    (k) 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 10-K and the 10-Q.
      

     

    10. INDEMNIFICATION
      BY PURCHASER.
      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.

     

    11. 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.

     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    12. NO
      BROKERS OR FINDERS.
      No
      person, firm or corporation has or will have, as a result of any act or omission
      by such Purchaser, any right, interest or valid claim against Purchaser or
      Company for any commission, fee or other compensation as a finder
      or
      broker, or in any similar capacity, in connection with the transactions
      contemplated by this Agreement provided, however, that Purchaser acknowledges
      that Company intends to enter into an advisory agreement with Philadelphia
      Brokerage Corporation (“PBC”),
      a
      registered broker-dealer, for investment banking and advisory services (the
      “Advisory
      Agreement”)
      which
      services may relate to, among other things, the sale or exchange of shares
      of
      the Company’s Preferred Stock, such as the Preferred Shares, except that no
      commissions or other transaction dependent compensation will be paid to PBC
      on
      account of the Preferred Shares. A copy of the Advisory Agreement, if and as
      executed, will be provided to Purchaser upon request. 

     

    13. 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 Preferred 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.

     

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    (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. 

     

    (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.]

     

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    


    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
      this ___ of ____________, 2008. 

    


    Number
      of
      Preferred Shares Exchanged at $900 per Preferred Share: ___________

    Dollar
      Amount of Note (principal and interest) Converted $____________

    


    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.

    


    __________________________ ___________________________--------________________

    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

            
	 	 	 
	 	 	
              ACCEPTED
                THIS ___ DAY OF _______, 2008.

            
	
              Investor
                Mailing Address:

            	 	 
	 	 	
              By:

            
	 	 	
              Name:

            
	 	 	
              Title:

            
	 	 	 


    

     

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

     

    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
      this _____ of _____________, 2008.

    


    Number
      of
      Preferred Shares Exchanged at $900 per Preferred Share: ___________

    Dollar
      Amount of Note (principal and interest) Converted $____________

    


     

    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 _______, 2008.

            
	 
	
              By:__________________________________

            
	
              Name:

            
	
              Title:

            
	 


    

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    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)

               

              _____________________________

               

              _____________________________

            


    

    


    


    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    


    ATTACHMENT
      A

     

    Certificate
      of Designation

     

    


     

    


     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    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 Exchange Agreement dated March 10, 2008
      (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
      the
      shares of Series B Preferred Stock sold under the EA (the “Preferred
      Shares”).
      This
      RRA provides the terms and conditions governing Company’s obligation under the
      SPA to use reasonable commercial efforts to register under the Securities Act
      the shares of Company’s Common Stock that may be obtained upon conversion of the
      Series B Preferred Stock purchased pursuant to the SPA (collectively, the
“Shares”).
      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 Preferred Shares pursuant to the EA has been effected,
      the
      holders of the Common Shares into which the Preferred Shares are or may be
      convertible (the “Registrable
      Securities”)
      shall be
      deemed to have requested registration under the Securities 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
      Registrable Securities (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 Securities and Exchange Commission
      (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 Shares 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 Preferred Shares (the
“Issue
      Date”)
      and
      ending on the date that a registration statement covering the Registrable
      Securities has been declared effective by the Securities and Exchange
      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 Securities 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 Shares 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
      Shares 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
      Registrable Securities may waive the obligations of Company under this Section
      1(b).

    

      Attachment
        B to Exchange
        Agreement

      
        Page 1of
          10

      

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c) Obligations
      of Company.
      In
      connection with the registration of the Shares, Company shall:

     

    (i) prepare
      promptly and file with the SEC the Registration Statement provided in
Section 1(a)
      with
      respect to the Shares and thereafter to use reasonable commercial efforts to
      cause such Registration Statement relating to the Shares 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 Expiration Date (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
      Shares 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;

     

    (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 Securities Act with
      respect to the disposition of all Shares covered by the Registration Statement
      until such time as all of such Shares have been disposed of in accordance with
      the intended methods of disposition by the Holders as set forth in the
      Registration Statement;

     

    
      Attachment
        B to Exchange
        Agreement

      
        Page
          2
          of
          10

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    (iii) furnish
      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 Shares;

     

    (iv) use
      reasonable commercial efforts to register and qualify the Shares 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
      Registrable Securities being offered 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 Shares 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 Shares 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

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    (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
      Registrable Securities 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 ninety (90) 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 Shares 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 Shares pursuant to the Registration Statement.

     

    (d) Obligations
      of the Holders.
      In
      connection with the registration of the Shares, 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 Shares that the Holder
      shall furnish to Company such information regarding Holder, the Shares held
      by
      Holder and the intended method of disposition of the Shares held by Holder
      as
      shall be reasonably required to effect the registration of such Shares 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 Shares 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 Shares but shall not be relieved of its obligation to file a
      Registration Statement with the SEC relating to the Shares of Non-Responsive
      Holder promptly after Non-Responsive Holder provides the Requested
      Information;

     

     

    
      Attachment
        B to Exchange
        Agreement

      
        Page 4 of
          10

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    (ii) by
      purchasing or accepting an assignment of the Preferred
      Shares
      or
      Shares, 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 Shares
      from the Registration Statement;

     

    (iii) in
      the
      event Holders of at least sixty-six and two-thirds percent (662/3%)
      of the
      Registrable Securities 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 Shares, unless such Holder has notified Company in writing of
      the
      Holder’s election to exclude all of Holder’s Shares 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 Shares pursuant to the Registration
      Statement covering such Shares 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 Shares
      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 Shares 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 Shares, in each case to the extent not payable by Company pursuant to
      the
      terms of this Agreement; and

     

    (vi) each
      Holder agrees to take all reasonable actions necessary to comply with the
      prospectus delivery requirements of the Securities Act applicable to its sales
      of Shares.

     

    (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.

     

    
      Attachment
        B to Exchange
        Agreement

      
        Page 5 of
          10

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    (f) Indemnification.
      In the
      event any Shares 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 Securities Act
      or
      the Exchange Act, any underwriter (as defined in the Securities 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 Securities 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 Securities 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
      Securities Act, the Exchange Act, any state securities law or any rule or
      regulation under the Securities 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 Shares by
      Holders.

     

    
      Attachment
        B to Exchange
        Agreement

      
        Page 6 of
          10

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    (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 Securities 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 Securities 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 Securities
      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 Shares pursuant to such Registration Statement
      exceeds the cost of such Shares 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 Shares 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. 

     

    (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 Shares. 

     

    
      Attachment
        B to Exchange
        Agreement

      
        Page 7 of
          10

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    (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
      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.

     

    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 Registrable
      Securities 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.

     

    
      Attachment
        B to Exchange
        Agreement

      
        Page 8 of
          10

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    3. In
      the
      EA, Company agrees to make all reasonable commercial efforts to cause the
      Registration Statement to be filed within 90 days following the Closing 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

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    


    Exhibit
      1 to Registration Rights Agreement

    


    


    LIST
      OF PURCHASERS

    


     

     

     

     

     

     

    
      Attachment
        B to Exchange
        Agreement

      
        Page
          3 of
          10

      

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

         

      

    

    ATTACHMENT
      C

    


    Accredited
      Investor and NASD 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):

     

    
      	 	 o	
              A
                private business development Company as defined in Section 202(a)(22)
                of
                the Investment Advisors Act of
                1940;

            


    

     

    
      	 	 o	
              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);

            


    

     

    
      	 	 o	
              A
                director or executive officer of
                Company;

            


    

     

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

            


    

     

    
      	 	 o	
              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; 

            


    

     

    
      	 	 o	
              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; 

            


    

     

    
      	 	 o	
              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 Securities Act; or 

            


      	 	 	 


      	 	 o	An entity in which all of the equity owners are
              accredited investors.


    

     

    AFFILIATION
      WITH A U. S. REGISTERED BROKER-DEALER:

     

    Are
      you
      associated with an NASD member firm? (Please check one)

     

    YES
      _______  NO
      _______

     

    

      Attachment
        C to Exchange
        Agreement

      Page
        1 of
        2

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    (1)
      The
      NASD 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 the NASD.
      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)
      The
      NASD defines a “member” as being any individual, partnership, corporation or
      other legal entity that is a broker or dealer admitted to membership in the
      NASD.

     

    IF
      PURCHASER IS ASSOCIATED WITH AN NASD 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 NASD member firm acknowledges receipt of the notice required by
      Rule
      3050 of the NASD Conduct Rules or any successor rules or
      regulations.

     

    


    DATE:
           


    
      	
              NAME
                OF NASD MEMBER FIRM

            
	
              BY:
                _____________________________

            
	
              NAME:____________________________

            
	
              TITLE:_____________________________

            


    

    


     

    I
      hereby
      declare that the foregoing representations concerning my qualifications as
      an
      accredited investor and my affiliations, if any, with any NASD member firm,
      are
      accurate and complete.

     

    
      	
              INDIVIDUAL:

            	
               

            	
              ENTITY:

            	 
	
              _____________________________________________

            	
               

            	
              _____________________________________________

            	 
	
              Print
                Name: _______________________________

            	
               

            	
              By:_______________________________

            	
               

            
	
              Date:             
                _______________________________

            	
               

            	
              Name:_____________________________

            	
               

            
	
            	
               

            	
              Title:______________________________

            	 


    

     

     

    
      Attachment
        C to Exchange
        Agreement

      Page 2 of
        2