Document:

TENTH
      AMENDMENT TO LOAN AND SECURITY AGREEMENT

    

    THIS
      TENTH AMENDMENT TO LOAN AND SECURITY AGREEMENT (the "Tenth Amendment"), made
      and
      entered into as of the 8th day of August, 2007, by and among SMF Energy
      Corporation, a Delaware corporation (hereinafter referred to as "SMF"),
      successor by merger to Streicher Mobile Fueling, Inc., a Florida corporation,
      SMF Services, Inc., a Delaware corporation (hereinafter referred to as "SSI"),
      H
& W Petroleum Company, Inc., a Texas corporation (hereinafter referred to as
      "H & W" and, collectively with SMF and SSI, as "Borrower") and Wachovia
      Bank, National Association, successor by merger to Congress Financial
      Corporation (Florida) (hereinafter referred to as "Lender").

     

    R E C
I TA L 
S

     

    A. On
      September 26, 2002, Streicher Mobile Fueling, Inc. ("STR") and Lender entered
      into a Loan and Security Agreement (the "Loan Agreement"), which, among other
      things, established a revolving line of credit (the "Revolving Loans") by Lender
      in favor of STR.

    

    B. STR
      and
      Lender executed a Consent and First Amendment to Loan and Security Agreement
      dated as of March 31, 2003 (the "First Amendment"), which, among other things,
      consented to certain subordinated debt of STR and modified certain defined
      terms
      in the Loan Agreement.

    

    C. STR
      and
      Lender executed a Second Amendment to Loan and Security Agreement dated as
      of
      August 29, 2003 (the "Second Amendment"), which, among other things, (1)
      permitted STR to incur certain additional secured Indebtedness, and (2) released
      Lender's security interest in the patents (including the related trade names
      utilized in such patents) constituting a portion of the Collateral, subject
      to
      the terms and conditions stated therein.

    

    D. STR
      and
      Lender executed a Third Amendment to Loan and Security Agreement dated as of
      August 30, 2003 (the "Third Amendment"), which, among other things, modified
      certain terms of the Loan Agreement in order to reflect that the amount of
      the
      additional secured Indebtedness contemplated by the Second Amendment exceeded
      the actual amount thereof.

    

    E. STR,
      SSI
      and Lender executed a Fourth Amendment to Loan and Security Agreement dated
      as
      of February 18, 2005 (the "Fourth Amendment"), which, among other things, added
      SSI as an additional borrower under the Revolving Loans, extended the term
      of
      the Loan Agreement, and modified the applicable Interest Rate, the unused line
      fee and certain covenants of the Loan Agreement.

    

    F. STR,
      SSI,
      H & W and Lender executed a Fifth Amendment to Loan and Security Agreement
      dated as of October 1, 2005 (the "Fifth Amendment"), which, among other things,
      added H & W as an additional borrower under the Revolving Loans, extended
      the term of the Loan Agreement, increased the Maximum Credit amount for the
      Revolving Loans, added certain inventory to the Borrowing Base, decreased the
      applicable Interest Rate, and modified certain covenants and other terms of
      the
      Loan Agreement.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    G. STR,
      SSI,
      H & W and Lender executed a Sixth Amendment to Loan and Security Agreement
      effective as of March 31, 2006 (the "Sixth Amendment"), which, among other
      things, (1) added (a) an Interest Rate option based on the London interbank
      offered rate and (b) certain leased Vehicles and Equipment to the Excluded
      Assets from the Collateral, and (2) amended the capital expenditures covenant
      of
      the Loan Agreement.

    

    H. STR,
      SSI,
      H & W and Lender executed a Seventh Amendment to Loan and Security Agreement
      dated as of September 26, 2006 (the "Seventh Amendment"), which, among other
      things, amended Sections 1.4 and 9.10 of the Loan Agreement limiting Borrower's
      loans and advances to other persons and increasing the amount of the Maximum
      Credit for Revolving Loans.

    

    I. On
      February 14, 2007, STR merged with and into SMF, and, contemporaneously
      therewith, Borrower and Lender executed an Assumption Agreement and Eighth
      Amendment to Loan and Security Agreement, dated as of February 14, 2007 (the
      "Eighth Amendment"), pursuant to which, among other things, SMF assumed all
      of
      STR's obligations as a Borrower under the Loan Agreement and the other Financing
      Agreements (as defined in the Loan Agreement) to which STR is a
      party.

    

    J. Borrower
      and Lender executed a Ninth Amendment to Loan and Security Agreement dated
      as of
      February 15, 2007 (the "Ninth Amendment"), which, among other things, extended
      the maturity date of the Loan Agreement from September 25, 2007, to June 30,
      2008, and modified certain financial covenants.

     

    K. Borrower
      and Lender desire to amend the Loan Agreement to, among other things, (1) permit
      SMF to refinance the August 2003 Indebtedness, the January 2005 Indebtedness
      and
      the September 2005 Indebtedness (as such terms are defined in the Loan
      Agreement) (collectively, the "Prior Indebtedness"), and (2) modify certain
      financial covenants, and Lender is agreeable to same, subject to the terms
      and
      conditions hereinafter set forth.

     

    NOW
      THEREFORE, in consideration of the mutual covenants of the parties hereto,
      and
      for other good and valuable consideration, it is agreed as follows:

     

    1. The
      statements in the foregoing Recitals are true and correct and are incorporated
      herein as if set forth in full.

     

    2. Unless
      otherwise defined herein, all terms used herein shall have the definitions
      specified in the Loan Agreement, as modified by the First Amendment, the Second
      Amendment, the Third Amendment, the Fourth Amendment, the Fifth Amendment,
      the
      Sixth Amendment, the Seventh Amendment, the Eighth Amendment and the Ninth
      Amendment (collectively, the "Prior Amendments"); all references hereinafter
      made to the Loan Agreement shall include the modifications thereto effectuated
      pursuant to the Prior Amendments.

     

    3. Borrower
      confirms and acknowledges that the principal balance of Revolving Loans
      outstanding under the Loan Agreement as of the close of business on July
      26,
      2007,
      was
      $14,064,511.46, which amount, together with all accrued interest, fees and
      other
      charges under the Loan Agreement are due and payable without any defense,
      set-off or counterclaim (and to the

    
      
        
        

      

      
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    extent
      there exists any such defense, offset or counterclaim on the date hereof, the
      same is hereby waived by Borrower).

     

    4. The
      Loan
      Agreement is hereby modified as follows (all references to Sections and
      Subsections being the applicable Sections and Subsections of the Loan
      Agreement):

     

    
      	 	
              (a)

            	
              Section
                1.69 of the Loan Agreement is amended and restated in its entirety
                to read
                as follows:

            

    

     

    1.69 "Excluded
      Assets" shall mean (a) all Vehicles owned by Borrower, including but not limited
      to those listed on Schedule
      A,
      including future additions, parts, accessories, attachments, substitutions,
      repairs, related intangibles and improvements and replacements to or of any
      Vehicle; (b) all tanks, pumps, pans, totes, hoses, reels, gauges, filling
      machines, compressors, dollies, piston mounts, jug molds, flow meters, steam
      cleaners, fuel delivery control systems, filtration units, blending units,
      hydraulic lifts, hurricane generators, hurricane equipment, and any other
      similar Equipment (collectively, "Field Equipment"), owned by SSI, including
      future additions, parts, accessories, attachments, substitutions, repairs,
      related intangibles and improvements and replacements; (c) all Field Equipment
      owned by H & W, including future additions, parts, accessories, attachments,
      substitutions, repairs, related intangibles and improvements and replacements;
      (d) certain Field Equipment listed on Schedule
      A
      and
      shown on Schedule
      A
      as owned
      by SMF, including any future additions, parts, accessories, attachments,
      substitutions, repairs, related intangibles and improvements and replacements
      to
      such Field Equipment; (e) certain other Equipment (other than Field Equipment)
      listed on Schedule
      A
      and
      shown on Schedule
      A
      as owned
      by SMF, including any parts, repairs or improvements thereto, but excluding
      any
      future additions, accessories, attachments, substitutions, related intangibles
      or replacements to such other Equipment; (f) all of SMF's right, title and
      interest in and to certain patents listed on Schedule
      A
      and
      shown on Schedule
      A
      as owned
      by SMF; (g) certain Equipment (other than Field Equipment) listed on
Schedule
      A
      and
      shown on Schedule
      A
      as owned
      by SSI or H & W, including future additions, parts, accessories,
      attachments, substitutions, repairs, improvements and replacements thereof,
      (h)
      any proceeds from the sale, assignment, or other transfer of any of the assets
      listed in the preceding subclauses (a), (b), (c), (d), (e), (f) or (g)
      including, without limitation, proceeds of insurance; and (i) approximately
      $1,141,000 in cash proceeds from prior sales of Vehicles and Field Equipment
      being held in an interest bearing account as of the date of the Tenth Amendment
      to this Agreement, by the trustee for certain holders of subordinated
      Indebtedness, in order to be applied to the purchase of replacement Field
      Equipment and Vehicles by Borrower, that will also secure the August 2007
      Indebtedness. For the avoidance of doubt, the "Excluded Assets" shall not
      include any Accounts of any

     

    
      
        
        

      

      
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    Borrower
      or any other right to payment arising out of or derived from the sale of
      Inventory or the rendition of services by any Borrower. 

     

    
      	 	
              (b)

            	
              Section
                9.8(g) of the Loan Agreement, reading as follows, is added immediately
                after Section 9.9(f):

            

    

     

    and
      (g)
      liens on the Excluded Assets securing the August 2007 Indebtedness.

     

    
      	 	
              (c)

            	
              Section
                9.9(g) of the Loan Agreement is amended and restated in its entirety
                to
                read as follows:

            

    

     

    (i)
      Indebtedness of SMF evidenced by the 111⁄2% Senior Secured Convertible Promissory
      Notes due December 31, 2009, dated as of August 8, 2007, in the aggregate
      principal amount of $10,609,225 (the "August 2007 Indebtedness") and secured
      by
      a security interest in the Excluded Assets, pursuant to documentation on terms
      satisfactory to Lender (Lender hereby acknowledging that the terms contained
      in
      draft documentation delivered to Lender on July 12, 2007 was satisfactory to
      Lender) and provided that the August 2007 Indebtedness is subject at all times
      to the terms of that certain Subordination Agreement dated as of July 13, 2007,
      among 1041 Partners, L.P. (and such other loan holders as may join as a party
      to
      such subordination agreement as contemplated therein), Borrower and Lender,
      a
      copy of which subordination agreement is attached as Exhibit
      A
      to the
      Tenth Amendment to this Agreement.

     

    
      	 	
              (d)

            	
              Sections
                9.9(h) and 9.9(i) of the Loan Agreement are deleted in their entireties
                from the Loan Agreement.

            

    

     

    
      	 	
              (e)

            	
              Section
                9.22 of the Loan Agreement is amended and restated in its entirety
                to read
                as follows:

            

    

     

    9.22 Excess
      Availability.
      Borrower shall maintain at all times Excess Availability as determined by Lender
      in an amount not less than $750,000.

    

    
      	 	
              (f)

            	
              Schedule
                A
                to
                the Loan Agreement is deleted in its entirety and replaced with
                Schedule
                A
                attached hereto.

            

    

     

    5. Each
      and
      every reference to the Loan Agreement in the other Financing Agreements shall
      be
      deemed to refer to the Loan Agreement, as modified by this Tenth
      Amendment.

     

    6. The
      effectiveness of the amendments contained in Section 4 and Section 5 of this
      Tenth Amendment is subject to satisfactory compliance with conditions precedent
      requiring that Lender shall have received:

    
      
        
        

      

      
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            	(a)	
              copies
                of the final executed documents evidencing or securing the 111⁄2% Senior
                Secured Convertible Notes due December 31, 2009, made by SMF in favor
                of
                certain noteholders with American National Bank as the indenture
                trustee
                (the "2007 Offering"), all in form and substance satisfactory to
                Lender;

            

    

     

    
      	 	
              (b)

            	
              all
                requisite corporate action and proceedings in connection with this
                Tenth
                Amendment and the other Financing Agreements shall be satisfactory
                in form
                and substance to Lender, and Lender shall have received all information
                and copies of all documents, including records of requisite corporate
                action and proceedings which Lender or its counsel may have requested
                in
                connection therewith, such documents, where requested to be certified
                by
                appropriate corporate officers or governmental authorities;
                and

            

    

     

    
      	 	
              (c)

            	
              such
                additional documents, instruments and agreements as are required
                hereunder
                as well as those which Lender or its counsel may reasonably
                request.

            

    

     

    7. Notwithstanding
      any other provision of the Loan Agreement or the Prior Amendments, Lender agrees
      that the proceeds of the 2007 Offering shall be used first by Borrower to repay
      the Prior Indebtedness, including any unpaid principal, pre-payment penalties
      and accrued interest thereon. 

     

    8. Lender
      hereby waives any right under Article III of the Indenture for the January
      2005
      Indebtedness and under Article III of the Indenture for the September 2005
      Indebtedness to require the full forty five (45) days notice of the redemption
      of the January 2005 Indebtedness and the September 2005 Indebtedness,
      respectively, with the proceeds of the 2007 Offering.

     

    9. Borrower
      represents and warrants to Lender that, except as has been otherwise disclosed
      to Lender in writing, the representations and warranties contained in the Loan
      Agreement and all related loan documentation are true and correct on and as
      of
      the date hereof (with the same force and effect as if made on and as of the
      date
      hereof, other than representations and warranties made as of a specific date
      which shall be deemed made as of such date) and with respect to this Tenth
      Amendment and the related documentation referenced herein, and that no Default
      or Event of Default shall have occurred and be continuing. Specifically, (a)
      SMF
      represents and warrants that its Certificate of Incorporation and Bylaws,
      certified on February 14, 2007, were not amended on or subsequent to their
      aforesaid certification date, (b) SSI represents and warrants that its
      Certificate of Incorporation and Bylaws, certified on February 18, 2005,
      were not amended on or subsequent to their aforesaid certification date, and
      (c)
      H & W represents and warrants that its Articles of Incorporation and Bylaws,
      certified on October 1, 2005, were not amended on nor subsequent to their
      aforesaid certification date.

     

    10. Borrower
      acknowledges and confirms that all Collateral furnished in connection with
      the
      Loan Agreement, except the Excluded Assets, continues to secure the Obligations
      and indebtedness thereunder, and the security interests and liens granted by
      the
      Borrower in the Collateral other than the Excluded Assets to Lender to secure
      the Obligations are duly perfected, first priority security interests and
      liens.

    
      
        
        

      

      
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    11. Borrower
      shall pay all out-of-pocket expenses incurred by Lender in connection with
      the
      preparation for and closing of the transaction contemplated under this Tenth
      Amendment, including, without limitation, the reasonable fees and expenses
      of
      special counsel for Lender. In addition, Borrower shall pay any and all taxes
      (together with interest and penalties, if any, applicable thereto) and fees,
      including, without limitation, documentary stamp taxes, now or hereafter
      required in connection with the execution and delivery of the Loan Agreement,
      as
      hereby amended, and all related documents, instruments and
      agreements.

     

    12. Except
      as
      expressly modified herein, all terms and provisions of the Loan Agreement,
      and
      all other documents, instruments and agreements executed and/or delivered in
      connection with the Loan Agreement, shall remain unchanged and in full force
      and
      effect; no consent of Lender hereunder shall operate as a waiver or continuing
      consent with respect to any instance or event other than those specified herein.
      Neither this Tenth Amendment nor
      any
      earlier waiver or amendment of the Loan Agreement will constitute a novation
      or
      have the effect of discharging any liability or obligation evidenced by the
      Loan
      Agreement or any other Financing Agreements. This Tenth Amendment shall not
      be
      deemed to prejudice any rights or remedies which Lender may now have or may
      have
      in the future under or in connection with the Loan Agreement or the Financing
      Agreements or any of the instruments or agreements referred to therein, as
      the
      same may be amended, restated or otherwise modified. This Tenth Amendment is
      part of the Loan Agreement and constitutes a Financing Agreement
      thereunder.

     

    13. All
      covenants, agreements, representations and warranties contained herein shall
      be
      binding upon and inure to the benefit of the parties hereto, their respective
      successors and assigns, except that Borrower shall not have the right to assign
      its rights hereunder or any interest herein without the prior written consent
      of
      Lender.

     

    14. This
      Tenth Amendment may be executed in any number of counterparts and by different
      parties hereto in separate counterparts, each of which, when so executed, shall
      be deemed to be an original and shall be binding upon all parties, their
      successors and assigns, and all of which taken together shall constitute one
      and
      the same agreement. Any manually-executed signature page to this Tenth Amendment
      delivered by a party by facsimile or other electronic transmission shall be
      deemed to be an original signature hereto.

     

    15. Borrower
      agrees to take such further actions as Lender shall reasonably request from
      time
      to time in connection herewith to evidence or give effect to the amendments
      set
      forth herein or any of the transactions contemplated hereby.

     

    16. This
      Tenth Amendment shall be governed by, and construed and interpreted in
      accordance with, the laws of the State of Florida, without giving effect to
      its
      conflict of law principles.

     

    17. BORROWER
      HEREBY RELEASES AND FOREVER DISCHARGES LENDER AND EACH AND EVERY ONE OF ITS
      DIRECTORS, OFFICERS, EMPLOYEES, REPRESENTATIVES, LEGAL COUNSEL, AGENTS, PARENTS,
      SUBSIDIARIES AND AFFILIATES, AND PERSONS EMPLOYED OR ENGAGED BY THEM, WHETHER
      PAST OR PRESENT (HEREINAFTER COLLECTIVELY REFERRED TO AS THE "LENDER
      RELEASEES"), OF AND FROM ALL ACTIONS, AGREEMENTS, DAMAGES,

    
      
        
        

      

      
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    JUDGMENTS,
      CLAIMS, COUNTERCLAIMS, AND DEMANDS WHATSOEVER, LIQUIDATED OR UNLIQUIDATED,
      CONTINGENT OR FIXED, DETERMINED OR UNDETERMINED, AT LAW OR IN EQUITY, WHICH
      BORROWER, HAD, NOW HAS, OR MAY HAVE AGAINST THE LENDER RELEASEES, OR ANY OF
      THEM, FOR, UPON OR BY REASON OF ANY MATTER, CAUSE OR THING WHATSOEVER TO THE
      DATE OF THIS TENTH AMENDMENT, WHETHER ARISING OUT OF, RELATED TO OR PERTAINING
      TO THE OBLIGATIONS, THE FINANCING AGREEMENTS, OR OTHERWISE, INCLUDING, WITHOUT
      LIMITATION, THE NEGOTIATION, CLOSING, ADMINISTRATION, AND FUNDING OF THE
      OBLIGATIONS OR THE FINANCING AGREEMENTS. BORROWER ACKNOWLEDGES THAT THIS
      PROVISION IS A MATERIAL INDUCEMENT FOR LENDER ENTERING INTO THIS TENTH AMENDMENT
      AND THIS PROVISION SHALL SURVIVE PAYMENT IN FULL OF ALL OBLIGATIONS AND
      TERMINATION OF ALL FINANCING AGREEMENTS.

     

    18. LENDER
      AND BORROWER EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
      RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
      HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS TENTH AMENDMENT
      OR
      THE LOAN AGREEMENT AND ANY AGREEMENT, DOCUMENT OR INSTRUMENT EXECUTED IN
      CONJUNCTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
      (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO. THIS PROVISION IS
      A
      MATERIAL INDUCEMENT FOR LENDER ENTERING INTO THIS TENTH AMENDMENT.

     

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      begin on following page.]

     

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the parties hereto have executed this Tenth Amendment the
      day
      and year first above written.

     

    BORROWER:

     

    SMF
      ENERGY CORPORATION, a Delaware

    corporation,
      successor by merger to STREICHER 

    MOBILE
      FUELING, INC., a Florida corporation

     

    By: 
      /s/ Richard E. Gathright
      
        

      

    

    Name:
      Richard E. Gathright

    Title:
      President and Chief Executive Officer

     

     

    SMF
      SERVICES, INC., a Delaware corporation

     

    By: 
      /s/ Richard E. Gathright
      
        

      

    

    Name:
      Richard E. Gathright

    Title:
      President and Chief Executive Officer

     

     

    H
&
W
      PETROLEUM COMPANY, INC., a Texas corporation

     

    By: 
      /s/ Richard E. Gathright
      
        

      

    

    Name:
      Richard E. Gathright

    Title:
      Chief Executive Officer

     

     

    LENDER:

     

    WACHOVIA
      BANK, NATIONAL 

    ASSOCIATION,
      successor by merger to 

    CONGRESS
      FINANCIAL CORPORATION 

    (FLORIDA)

     

    By: 
      /s/ Pat Cloninger
      
        

      

    

    Name:
      Pat
      Cloninger

    Title:
      Director

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    JOINDER

    

    The
      undersigned: (1) acknowledges and confirms that Lender's loans, advances and
      credit to Borrower have been, are and will continue to be of direct economic
      benefit to the undersigned, (2) acknowledges that it has previously waived
      any
      right to consent to the foregoing or any future amendment to the Agreement
      but,
      nevertheless, consents to all terms and provisions of the foregoing Tenth
      Amendment which are applicable to it, and agrees to be bound by and comply
      with
      such terms and provisions, and (3) acknowledges and confirms that its guarantee
      in favor of Lender executed in connection with the Agreement is valid and
      binding and remains in full force and effect in accordance with its terms
      (without defense, setoff or counterclaim against enforcement thereof), which
      include, without limitation, its guarantee in connection with the Agreement,
      as
      modified by the Tenth Amendment.

    

    GUARANTOR:

     

    STREICHER
      REALTY, INC., a Florida corporation

     

    By: 
      /s/ Richard E. Gathright 
      
        

      

    

    Name:
      Richard E. Gathright

    Title:
      President and Chief Executive OfficerTHIS
      NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
      (“SECURITIES ACT”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED EXCEPT
      (I) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
      OR
      (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, BUT
      ONLY UPON THE PAYEE FIRST HAVING OBTAINED A WRITTEN OPINION OF MAKER’S COUNSEL,
      OR OTHER COUNSEL ACCEPTABLE TO MAKER, THAT THE PROPOSED DISPOSITION IS
      CONSISTENT WITH ALL APPLICABLE PROVISIONS OF THE SECURITIES ACT AND ANY
      APPLICABLE “BLUE SKY” OR OTHER SIMILAR SECURITIES LAW.

     

    SENIOR
      SECURED CONVERTIBLE PROMISSORY NOTE

     

    
      	
              $______,000

            	
              August
                8, 2007

            

    

    

     

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

    

    1. Principal
      Payments.
      The
      principal amount of this promissory note (the “Note”
and,
      collectively with substantially identical promissory notes of Maker, the
“Notes”)
      shall
      be due and payable on December 31, 2009 (the “Due
      Date”).
      The
      outstanding principal balance of this Note may be prepaid by Maker prior to
      maturity as provided in Section 5 of this Note.

     

    2. Interest.
      The
      outstanding principal balance of this Note shall accrue interest at a fixed
      rate
      of eleven and one-half percent (111⁄2%); provided, however, that following an
      Event of Default (as defined below), the outstanding principal balance of this
      Note shall bear interest as provided in Section 8 of this Note. Interest shall
      be calculated on the basis of a 360-day year. Accrued interest on this Note
      shall be paid semi-annually, on each January 1 and July 1, beginning January
      1,
      2008, until the outstanding principal balance of this Note is paid in full.
      

     

    3. Interest
      Method of Payment; Application. All
      payments (including any prepayments) shall be made on the due date thereof
      by
      wire transfer of immediately available funds to such bank account as Payee
      may
      from time to time designate in writing. All cash payments of interest shall
      be
      made on the due date thereof by check drawn on a United States bank. Payments
      (including all prepayments) received by Payee on this Note shall be applied
      first to the payment of accrued and unpaid interest and only thereafter to
      the
      outstanding principal balance of this Note.

     

    4. Subordination.
      Payee
      agrees that, except for the first priority security interest in certain
      collateral (the “Collateral”)
      granted by Maker and its subsidiaries H & W Petroleum

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

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

     

    5. Redemption
      and Prepayment.

     

    (a) Optional
      Redemption.
      At any
      time after the date of this Note, Maker shall have the option to redeem this
      Note, in whole or in part, without prepayment penalty or premium, except that,
      if such pre-payment is proposed to be made before the first anniversary
      of

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    the
      issuance of the Note, then a prepayment penalty equal to three percent (3%)
      of
      the principal amount being redeemed shall also be paid. In addition to the
      principal amount being pre-paid and the pre-payment penalty, if any, Maker
      shall
      also pay any accrued but unpaid interest on the entire outstanding principal
      balance of this Note at the time of redemption.

     

    (b) Notice
      to Wachovia.
      If
      Maker elects to redeem this Note in accordance with the terms of this
Section
      5,
      it
      shall furnish to Wachovia, at least fifteen (15) days (unless Wachovia agrees
      in
      writing to a shorter period) but not more than sixty (60) days before a
      redemption date, notice in writing that includes the redemption date, the amount
      of principal due on this Note to be redeemed. Trustee must also approve a notice
      period shorter than fifteen (15) days. 

     

    (c) Notice
      to Payee.
      At
      least fifteen (15) days but
      not
      more than sixty (60) days (the “Payee
      Notice Period”)
      before
      a redemption date, Maker shall mail or cause to be mailed a notice of redemption
      to Payee. The notice shall state:

     

    (i) the
      redemption date;

     

    (ii) the
      redemption price;

     

    (iii) that
      this
      Note called for redemption must be surrendered to Maker to collect the
      redemption price; and

     

    (iv) that,
      unless Maker defaults in making such redemption payment, interest on this Note
      called for redemption ceases to accrue on the redemption date.

     

    (d) Effect
      of Notice of Redemption.
      This
      Note will become irrevocably due and payable on the redemption date at the
      redemption price. A notice of redemption may not be conditional.

     

    (e) Conversion
      Prior to Redemption or Merger.
      During
      the Payee Notice Period, the Payee may elect to convert fifty percent (50%)
      of
      the original principal amount of this Note into common stock of Maker in
      accordance with Section 6 hereof rather than permit the Note to be redeemed.
      If
      there is a partial redemption and Payee elects to convert a portion of this
      Note
      instead of permitting the redemption of this Note, Payee may apply all or any
      portion of Payee’s fifty percent (50%) conversion right to the amount that would
      otherwise be redeemed, as Payee so elects. If and to the extent that there
      is a
      partial redemption and Payee elects not to exercise Payee’s conversion rights,
      Payee’s conversion rights will remain at fifty percent (50%) of the original
      principal amount or this Note, reduced by the amount, if any, that was converted
      at any time prior to such redemption. 

     

    (f) Note
      Redeemed or Converted in Part.
      If less
      than the entire principal amount of this Note is redeemed or converted, Maker
      will deliver to Payee, at Maker’s expense, a new promissory note in the same
      form of this Note in an amount equal in principal to the

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    unredeemed
      and unconverted portion of this Note not more than thirty (30) days after such
      partial conversion or redemption.

     

    6. Conversion.
      

     

    (a) Fifty
      percent (50%) of the original principal amount of this Note is convertible
      by
      the holder hereof into shares (“Shares”)
      of
      Maker’s common stock (“Common Stock”)
      at the
      official closing price of the Common Stock as reported by the Nasdaq Stock
      Market on the date of issuance of this Note or the immediately preceding trading
      day (the “Initial
      Conversion Price”).
      

     

    (b) The
      remaining fifty percent (50%) of the principal amount of the Notes (the
“Balance
      Amount”)
      will
      be convertible into Shares only if Maker subsequently determines, in its
      discretion, to grant additional conversion rights to Payee. Any such grant
      of
      additional conversion rights by Maker shall be accompanied by written notice
      of
      the terms and conditions of such grant to Payee. Any such additional conversion
      rights will be granted at a price set by Maker, which price will in no event
      be
      less than the official closing price of the Common Stock as reported by the
      Nasdaq Stock Market on the day such additional conversion rights are granted
      or
      on the immediately preceding trading day (the “Balance
      Conversion Price”)(the
      Balance Conversion Price and the Initial Conversion Price are referred to
      collectively herein as the “Note
      Price”).
      

     

    (c) Upon
      conversion of this Note, certificates for the Shares so purchased shall be
      delivered to Payee within three (3) business days of the Maker’s actual receipt
      of this original Note and a completed Notice of Conversion in substantially
      the
      same form attached hereto as Exhibit
      A.

     

    (d) The
      number and kind of securities purchasable upon the conversion of this Note
      and
      the Note Price shall be subject to adjustment from time to time upon the
      occurrence of certain events, as follows:

     

    (i) In
      case
      of any reclassification or change of outstanding securities of the Common Stock
      (other than a change in par value, or from par value to no par value, or from
      no
      par value to par value, or as a result of a subdivision or combination), or
      in
      case of any merger of Maker with or into another corporation (other than a
      merger with another corporation in which Maker is a continuing corporation
      and
      which does not result in any reclassification or change of outstanding
      securities issuable upon conversion of this Note), or in case of any sale of
      all
      or substantially all of the assets of Maker, Payee shall have the right upon
      conversion of this Note to receive, in lieu of Shares of Common Stock
      theretofore issuable upon conversion of this Note, the kind and amount of shares
      of stock, other securities, money and property receivable upon such
      reclassification, change or merger by the holder of one share of Common Stock.
      These provisions shall similarly apply to successive reclassifications, changes,
      mergers and transfers.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (ii) If
      Maker
      at any time while this Note remains outstanding and unexpired shall subdivide
      or
      combine its Common Stock, the Note Price shall be proportionately adjusted.
      In
      the case of a subdivision, the Note Price shall be proportionately decreased
      and
      the number of Shares shall be proportionately increased. In the case of a
      combination, the Note Price shall be proportionately increased and the number
      of
      Shares shall be proportionately decreased. 

     

    (iii) If
      Maker
      at any time while this Note is outstanding and unexpired shall pay a dividend
      or
      other distribution with respect to Common Stock or any other equity interest
      in
      Maker which is payable in Common Stock (except any distribution specifically
      provided for in the foregoing paragraph (i) or (ii)) then the Note Price and
      the
      number of Shares into which this Note may be converted shall be adjusted, from
      and after the date of determination of stockholders entitled to receive such
      dividend or distribution to that price determined by multiplying the Note Price
      in effect immediately prior to such date of determination by a fraction (a)
      the
      numerator of which shall be the total number of shares of Common Stock
      outstanding immediately prior to such dividend or distribution and (b) the
      denominator of which shall be the total number of shares of Common Stock
      outstanding immediately after such dividend or distribution.

     

    (iv) When
      there is an adjustment in the Note Price and a corresponding increase in the
      number of Shares of Common Stock that can be obtained by conversion, the
      adjustment to the number of Shares shall be made by multiplying the number
      of
      Shares purchasable immediately prior to such adjustment in the Note Price by
      a
      fraction, the numerator of which shall be the Note Price immediately prior
      to
      such adjustment and the denominator of which shall be the Note Price immediately
      thereafter, with the adjustment being made to the nearest whole
      share.

     

    (v) Whenever
      the Note Price shall be adjusted, Maker shall make a certificate signed by
      its
      chief financial officer setting forth, in reasonable detail, the event requiring
      the adjustment, the amount of the adjustment, the method by which such
      adjustment was calculated, and the Note Price or Prices after giving effect
      to
      such adjustment, and shall cause copies of such certificate to be mailed (by
      first class mail, postage prepaid) to the Payee.

     

    (vi) If
      Maker
      proposes (A) to declare any dividend or distribution upon any class or series
      of
      its stock, whether in cash, property, stock or other securities, whether or
      not
      a regular cash dividend and whether or not out of earnings or earned surplus;
      (B) to effect any reclassification or recapitalization of the Common Stock
      outstanding involving a change in the Common Stock; or (C) to merge or
      consolidate with or into any other entity, or sell, lease or convey all or
      substantially all its assets or property, or to liquidate, dissolve or wind
      up,
      whether voluntary or involuntary, then Maker shall send to the Payee at least
      ten (10) days’ prior written notice of the record date for any such event and
      prompt notice of any material change in the terms of any such
      transaction.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (e) No
      fractional Shares of Common Stock will be issued in connection with any
      conversion of this Note. 

     

    (f) Payee
      shall not be entitled to vote or receive dividends or be deemed the holder
      of
      Common Stock or any other securities of Maker which may at any time be issuable
      on the exercise hereof for any purpose, nor shall anything contained herein
      be
      construed to confer upon Payee any of the rights of a stockholder of Maker
      before this Note has been converted.

     

    7. Notices.
      

     

    (a) Maker
      shall give prompt written notice to Trustee and Payee under those circumstances
      in which notice is required to be given by Maker pursuant to the terms of the
      Indenture or this Note.

     

    (b) Trustee
      and any successor Trustee shall (i) provide prompt written notices to Payee
      under those circumstances in which notice is required to be given by Trustee
      pursuant to the terms of the Indenture and as provided in Section
      10
      below
      and (ii) mail
      to
      all Payees any notice it receives from Payee pursuant to Section
      10 below.

     

    (c) Except
      as
      otherwise provided herein, all notices, approvals, consents, correspondence
      or
      other communications required or desired to be given hereunder shall be given
      in
      writing and shall be delivered by overnight courier, hand delivery or certified
      or registered mail, postage prepaid, (i) if to Trustee, to the address set
      forth
      in Section
      12.1
      of the
      Indenture or to such other address as shall be designated by Trustee to Maker
      and Payees in writing, (ii) if to Payee, to the address noted under Payee’s name
      on the signature page attached to the Securities Purchase Agreement or to such
      other address as shall be designated by Payee to Maker and Trustee in writing
      and (iii) if to Wachovia, to the address noted in Section
      7(e)
      below or
      to such other address as shall be designated by Wachovia to Payee, Maker and
      Trustee in writing. All such notices and correspondence shall be effective
      when
      received.

     

    (d) If
      Maker
      or Payee mail a notice to one another pursuant to the terms of this Note, they
      shall also deliver or mail a copy to Trustee and Wachovia at the same time.
      Any
      notice from Wachovia to Payees shall be sufficiently provided if delivered
      to
      the Trustee pursuant to this Section 7. 

     

    (e) Any
      notice to be delivered to Wachovia shall be delivered to the following address
      (unless otherwise amended in writing to the entity delivering such
      notice):

     

    
      	
              Wachovia
                Bank, National Association

              110
                East Broward Blvd., Suite 2050

              Ft.
                Lauderdale, FL 33301

              Phone
                No.: (954) 467-2262

              Facsimile
                No.: (954) 467-5520 Attention:
                Pat Cloninger

            

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    8. Events
      of Default.
      The
      entire principal balance of this Note shall, at the option of Payee and pursuant
      to the provisions set forth in Section
      10,
      immediately be due and payable upon the occurrence of one or more of the
      following events (each, an “Event
      of Default”):
      (i)
      Maker shall default in any payment of principal or interest on this Note when
      the same shall become due and payable, whether by acceleration or otherwise,
      when such default is not cured within thirty (30) days after Payee or Trustee
      provides written notice to Maker of such default; (ii) Maker shall default
      in
      any payment of principal or interest on any other senior indebtedness for
      borrowed money, including, but not limited to the Line of Credit; (iii) Maker
      shall apply for, or consent to, the appointment of a receiver, trustee or
      liquidator of Maker or of its property, admit in writing its inability to pay
      its debts as they mature, or make a general assignment for the benefit of
      creditors; or (iv) Maker shall file a voluntary petition in bankruptcy or a
      petition or an answer seeking reorganization, or an arrangement with creditors,
      or a court order approving a petition filed against Maker under the federal
      bankruptcy laws shall be entered against Maker, which order shall not have
      been
      vacated or set aside within thirty (30) days. Upon the occurrence of any one
      or
      more Events of Default (i) Payee or Trustee, at its option and without further
      notice, demand or presentment for payment to Maker or others, may declare
      immediately due and payable the entire unpaid principal amount hereof; (ii)
      thereafter interest shall accrue on the outstanding principal balance at fifteen
      percent (15%) per annum from the date of such Event of Default until the date
      the unpaid principal balance hereof is paid in full; and (iii) Maker shall
      pay
      all costs, fees and expenses, including, without limitation, reasonable trial
      and appellate attorneys’ fees and expenses, paid or incurred by Payee or Trustee
      in connection with collection of this Note, whether paid or incurred in
      connection with collection by suit or otherwise. The waiver by Payee or Trustee
      of Maker’s prompt and complete performance of, or default under, any provision
      of this Note shall not operate nor be construed as a waiver of any subsequent
      breach or default, and the failure by Payee or Trustee to exercise any right
      or
      remedy which it may possess hereunder shall not operate nor be construed as
      a
      bar to the exercise of any such right or remedy upon the occurrence of any
      subsequent breach or default. No remedy conferred hereby shall be exclusive
      of
      any other remedy referred to herein or therein or now or hereafter available
      at
      law, in equity,
      by
      statute or otherwise.

     

    9. SEC
      Reports.
      In the
      event Maker is no longer a reporting company with the Securities and Exchange
      Commission (“SEC”),
      Maker
      will provide Payee with copies of the information and financial statements
      that
      would be required to be filed pursuant to Section 13 or 15(d) of the
      Securities Exchange Act of 1934, as amended, on Forms 10-K and 10-Q, at such
      times that any such form would be required to be filed with the SEC if Maker
      were a reporting company. At such time, Maker will also make available copies
      of
      any quarterly and annual reports that Maker makes available to its stockholders.
      Any delivery of such reports, information, documents, and other reports to
      Payee
      is for informational purposes only and Payee’s receipt thereof will not
      constitute notice or constructive notice of any information contained in such
      reports or determinable from information contained in such reports.

     

    10. Limitation
      on Suits.

     

    (a) Other
      than as provided in Sections
      10(c) and 10(d)
      below,
      upon an Event of Default, Payee may pursue any available remedy, whether
      provided for in this Note, the Indenture, the Security Agreement, or otherwise,
      only if:

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (i) Trustee
      has notice of such Event of Default;

     

    (ii) Holders
      of at least twenty-five
      percent (25%)
      in
      principal amount of the Notes make a written request to Trustee to pursue the
      remedy;

     

    (iii) Trustee
      either (A) gives to such holders notice that Trustee will not comply with
      such request, or (B) does not comply with such request within fifteen
      (15) days
      after receipt of the request from such holders; and

     

    (iv) Holders
      of more than sixty-six and 2/3 percent (662/3%)
      of the
      principal amount of the Notes do not give Trustee written notice inconsistent
      with the request delivered under Section
      10(a)(ii)
      prior to
      the earlier of (A) the date on which Trustee delivers a notice under
Section 10(a)(iii)(A)
      or (B)
      the expiration of the period described in Section 10(a)(iii)(B).

     

    (b) Payee
      may
      not use this Note to prejudice the rights of another Payee or to obtain a
      preference or priority over another Payee.

     

    (c) Notwithstanding
      any other provision of this Note, Payee’s right to receive payment of principal
      and interest on this Note on or after the respective due dates expressed in
      this
      Note, or to bring suit for the enforcement of any such payment on or after
      such
      respective dates, will not be impaired or affected without the written consent
      of Payee.

     

    (d) Except
      as
      otherwise provided in the Subordination Agreement, nothing in this Note will
      limit or defer Payee’s right or ability to petition for commencement of a case
      under federal bankruptcy laws pertaining to Maker.

     

    11. Miscellaneous.
      This
      Note shall be construed in accordance with and be governed by the internal
      laws
      of the State of Delaware. Maker hereby: (i) waives demand, presentment, protest,
      notice of dishonor, suit against or joinder of any other person, and all other
      requirements necessary to charge or hold Maker liable with respect to this
      Note;
      (ii) waives any right to immunity from any such action or proceeding and waives
      any immunity or exemption of any property, wherever located, from garnishment,
      levy, execution, seizure or attachment prior to or in execution of judgment,
      or
      sale under execution or other process for the collection of debts; (iii) waives
      any right to interpose any set-off or non-compulsory counterclaim or to plead
      laches or any statute of limitations as a defense in any such action or
      proceeding. Notwithstanding anything to the contrary contained herein, the
      interest rate payable hereon shall not exceed the maximum rate of interest
      permissible under applicable law. To
      the
      extent any payment to Payee, or to Trustee on Payee’s behalf, or any part
      thereof, is subsequently invalidated, declared to be fraudulent or preferential,
      set aside and/or required to be repaid to Maker or its successors or assigns
      under any bankruptcy law, state or federal law, common law or equitable cause,
      then, to the extent of such payment or repayment, the obligations, or part
      thereof, under this Note that have been paid, reduced or satisfied by such
      amount shall be reinstated and continued in full force and effect as of the
      time
      immediately preceding such initial payment, reduction or
      satisfaction.
      Maker
      agrees to pay any documentary stamp required with respect to the execution,
      delivery, performance or

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

     

    IN
      WITNESS WHEREOF, the parties have caused this Note to be executed by their
      duly
      respective officers or persons as of the date first set forth
      above.

     

    

    SMF
      ENERGY CORPORATION

     

    By:
      
      
        

      

    

    Richard
      E. Gathright

    Chief
      Executive Officer and President

    

    

    AGREED
      TO
      AND ACCEPTED:

    

    ________________________________

    Name
      or
      Individual or Entity (Printed)

    

    _____________________________________

    Signature

    

    _____________________________________

    Title
      (if
      applicable)

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Exhibit
      A

    

    NOTICE
      OF CONVERSION

    

    

    

    TO: SMF
      ENERGY CORPORATION

    

    1. The
      undersigned note holder (“Holder”) hereby elects to convert $____________ of the
      principal amount of the August 8, 2007 111⁄2% Senior Secured Convertible
      Promissory Note (the “Note”) of SMF Energy Corporation (“SMF”) payable to Holder
      into ____________ shares of the Common Stock of SMF (the “Shares”) at the
      $________per Share price prescribed by the Note (the “Note Price”). Enclosed
      herewith is the original Note, tendered for such conversion. If and to the
      extent that additional sums remain owed under the Note after such conversion,
      SMF is directed to issue a new replacement Note to Holder representing the
      unpaid balance of the Note after the conversion. 

    

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

    

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

    

     

      
        

      

       

        
          

        

         

          
            

          

           

        

      

    

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

    

    NAME
      OF
      HOLDER:  __________________________________

    

    

    Date: 
      ___________________________________                                               
______________________________________

    (Signature
      of Holder)

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    

    Attachment
      1 

    to
      Notice of Conversion

    

    

    INVESTMENT
      REPRESENTATION STATEMENT

     

    

    

    HOLDER:      
      ____________________________________

    

    COMPANY:  SMF
      ENERGY CORPORATION

    

    SECURITY:  SENIOR
      SECURED CONVERTIBLE PROMISSORY NOTE AND UNDERLYING COMMON
      STOCK

    

    AMOUNT:   
      ____________________________________

    

    DATE:           
      ____________________________________

    

    

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

    

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

    

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

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

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

    

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

    

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

    

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

    

    

    Signature
      of Holder:

    

    

    Date:   
      __________________________________                                              
______________________________________

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