EXHIBIT 10.2
 
SURGE GLOBAL ENERGY, INC.
NOTICE OF GRANT OF STOCK OPTION
Non-Plan Option
 
William Greene (the “Optionee”) has been granted an option (the “Option”) to
purchase certain shares of Stock of Surge Global Energy, Inc., a Delaware
corporation, pursuant to the Stock Option Agreement attached hereto (the
“Agreement”), as follows:
 
 
Date of Option Grant:
July 17, 2007

 
Number of Option Shares:
200,000

 
 
Exercise Price:
$0.34

 
 
Initial Exercise Date:
Date of Option Grant

 
 
Initial Vesting Date:
Date of Option Grant

 
Option Expiration Date:
The date ten (10) years after the Date of Option Grant.

 
 
Tax Status of Option:
Nonstatutory Stock Option.  (Enter “Incentive” or “Nonstatutory.”  If blank,
this Option will be a Nonstatutory Stock Option.)

 
Vested Shares:
Except as provided  in the Stock Option Agreement, the number  ofvested Shares
(disregarding any resulting fractional share) as of anydate as determined by
multiplying the Number of Option Shares by the “Vested Ratio” determined as of
such date as follows:

 

   
Vested Ratio
   
On Initial Vesting Date
200,000
 

 
Other Vesting Provisions:
None.

 
Exceptions to Provisions of
Stock Option Agreement:
None.

 
By their signatures below, the Company and the Optionee agree that the Option is
governed by this Notice and by the provisions of the Stock Option Agreement
(except as otherwise set forth opposite Exceptions to Provisions of Stock Option
Agreement), which is attached to and made a part of this document.  The Optionee
acknowledges receipt of a copy of the Stock Option Agreement, represents that
the Optionee has read and is familiar with its provisions, and hereby accepts
the Option subject to all of its terms and conditions.
 
SURGE GLOBAL ENERGY, INC.
OPTIONEE: William Greene
           
By:
Signature
   
Print Name:
       
Date
   
ATTACHMENTS:  Stock Option Agreement
   
Address
   

 
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THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN QUALIFIED
WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE
ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE
OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102, OR 25105 OF
THE CALIFORNIA CORPORATIONS CODE.  THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT
ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE
SALE IS SO EXEMPT.
 
THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF.  NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT OF 1933
 
SURGE GLOBAL ENERGY, INC.
STOCK OPTION AGREEMENT
 
Non-Plan Option
 
Surge Global Energy, Inc., a Delaware corporation, has granted to the individual
(the "Optionee") named in the Notice of Grant of Stock Option (the "Notice") to
which this Stock Option Agreement (the "Option Agreement") is attached an option
(the "Option") to purchase certain shares of Stock upon the terms and conditions
set forth in the Notice and this Option Agreement.  By signing the Notice, the
Optionee: (a) represents that the Optionee has read and is familiar with the
terms and conditions of the Notice and this Option Agreement, including the
Effect of Termination of Service set forth in Section 7, (b) accepts the Option
subject to all of the terms and conditions of the Notice and this Option
Agreement, (c) agrees to accept as binding, conclusive and final all decisions
or interpretations of the Board upon any questions arising under the Notice or
this Option Agreement, and (d) acknowledges receipt of a copy of the Notice and
this Option Agreement.
 
1.           Definitions and Construction.
 
1.1           Definitions.  Whenever used herein, the following terms shall have
their respective meanings set forth below:
 
(a)           "Board" means the Board of Directors of the Company, or a
committee of the Board duly appointed to administer this Option and having such
powers as shall be specified by the Board.
 
(b)           "Code" means the Internal Revenue Code of 1986, as amended, and
any applicable regulations promulgated thereunder.
 
(c)           "Company" means Surge Global Energy, Inc., a Delaware corporation,
or any successor corporation thereto.
 
(d)           "Consultant" means a person engaged to provide consulting or
advisory services (other than as an Employee or a Director) to a Participating
Company, provided that the identity of such person, the nature of such services
or the entity to which such services are provided would not preclude the Company
from offering or selling securities to such person pursuant to this Agreement in
reliance on either the exemption from registration provided by Rule 701 under
the Securities Act or, if the Company is required to file reports pursuant to
Section 13 or 15(d) of the Exchange Act, registration on a Form S-8 Registration
Statement under the Securities Act.
 
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(e)           "Director" means a member of the Board or of the board of
directors of any other Participating Company.
 
(f)           "Disability" means the inability of the Optionee, in the opinion
of a qualified physician acceptable to the Company, to perform the major duties
of the Optionee's position with the Participating Company Group because of the
sickness or injury of the Optionee.
 
(g)           "Employee" means any person treated as an employee (including an
officer or a Director who is also treated as an employee) in the records of a
Participating Company; provided, however, that neither service as a Director nor
payment of a director's fee shall be sufficient to constitute employment for
purposes of this Agreement.  The Company shall determine in good faith and in
the exercise of its discretion whether an individual has become or has ceased to
be an Employee and the effective date of such individual's employment or
termination of employment, as the case may be.
 
(h)           "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
 
(i)           "Fair Market Value" means, as of any date, the value of a share of
Stock or other property as determined by the Board, in its discretion, or by the
Company, in its discretion, if such determination is expressly allocated to the
Company herein, subject to the following:
 
(i)           If, on such date, the Stock is listed on a national or regional
securities exchange or market system, the Fair Market Value of a share of Stock
shall be the closing price of a share of Stock (or the mean of the closing bid
and asked prices of a share of Stock if the Stock is so quoted instead) as
quoted on the Nasdaq National Market, The Nasdaq SmallCap Market or such other
national or regional securities exchange or market system constituting the
primary market for the Stock, as reported in The Wall Street Journal or such
other source as the Company deems reliable.  If the relevant date does not fall
on a day on which the Stock has traded on such securities exchange or market
system, the date on which the Fair Market Value shall be established shall be
the last day on which the Stock was so traded prior to the relevant date, or
such other appropriate day as shall be determined by the Board, in its
discretion.
 
(ii)           If, on such date, the Stock is not listed on a national or
regional securities exchange or market system, the Fair Market Value of a share
of Stock shall be as determined by the Board in good faith without regard to any
restriction other than a restriction which, by its terms, will never lapse.
 
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(j)           "Incentive Stock Option" means an Option intended to be (as set
forth in the Option Agreement) and which qualifies as an incentive stock option
within the meaning of Section 422(b) of the Code.
 
(k)           "Insider" means an officer or a Director of the Company or any
other person whose transactions in Stock are subject to Section 16 of the
Exchange Act.
 
(l)           "Nonstatutory Stock Option" means an Option not intended to be (as
set forth in the Option Agreement) or which does not qualify as an Incentive
Stock Option.
 
(m)           "Parent Corporation" means any present or future "parent
corporation" of the Company, as defined in Section 424(e) of the Code.
 
(n)           "Participating Company" means the Company or any Parent
Corporation or Subsidiary Corporation.
 
(o)           "Participating Company Group" means, at any point in time, all
corporations collectively which are then Participating Companies.
 
(p)           "Securities Act" means the Securities Act of 1933, as amended.
 
(q)           "Service" means the Optionee's employment or service with the
Participating Company Group, whether in the capacity of an Employee, a Director
or a Consultant.  The Optionee's Service shall not be deemed to have terminated
merely because of a change in the capacity in which the Optionee renders Service
to the Participating Company Group or a change in the Participating Company for
which the Optionee renders such Service, provided that there is no interruption
or termination of the Optionee's Service.  Furthermore, the Optionee's Service
with the Participating Company Group shall not be deemed to have terminated if
the Optionee takes any military leave, sick leave, or other bona fide leave of
absence approved by the Company; provided, however, that if any such leave
exceeds ninety (90) days, on the ninety-first (91st) day of such leave the
Optionee's Service shall be deemed to have terminated unless the Optionee's
right to return to Service with the Participating Company Group is guaranteed by
statute or contract.  Notwithstanding the foregoing, unless otherwise designated
by the Company or required by law, a leave of absence shall not be treated as
Service for purposes of determining vesting under this Option Agreement.  The
Optionee's Service shall be deemed to have terminated either upon an actual
termination of Service or upon the corporation for which the Optionee performs
Service ceasing to be a Participating Company.  Subject to the foregoing, the
Company, in its discretion, shall determine whether the Optionee's Service has
terminated and the effective date of such termination.
 
(r)           "Stock" means the common stock of the Company, as adjusted from
time to time in accordance with Section 9.
 
(s)           "Subsidiary Corporation" means any present or future "subsidiary
corporation" of the Company, as defined in Section 424(f) of the Code.
 
1.2           Construction.  Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of this Option Agreement.  Except when otherwise indicated by the
context, the singular shall include the plural and the plural shall include the
singular.  Use of the term "or" is not intended to be exclusive, unless the
context clearly requires otherwise.
 
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2.           Tax Status of Option.  This Option is intended to be a Nonstatutory
Stock Option and shall not be treated as an Incentive Stock Option within the
meaning of Section 422(b) of the Code.
 
3.           Administration.
 
All questions of interpretation concerning this Option Agreement shall be
determined by the Board.  All determinations by the Board shall be final and
binding upon all persons having an interest in the Option.  Any officer of a
Participating Company shall have the authority to act on behalf of the Company
with respect to any matter, right, obligation, or election which is the
responsibility of or which is allocated to the Company herein, provided the
officer has apparent authority with respect to such matter, right, obligation,
or election.
 
4.           Exercise of the Option.
 
4.1           Right to Exercise.  Except as otherwise provided herein, the
Option shall be exercisable on and after the Initial Exercise Date and prior to
the termination of the Option (as provided in Section 6) in an amount not to
exceed the Number of Vested Shares (determined in accordance with the Notice)
less the number of shares previously acquired upon exercise of the Option.
 
4.2           Method of Exercise.  Exercise of the Option shall be by written
notice to the Company in the form of Exhibit A hereto (the "Exercise Notice")
which must state the election to exercise the Option, the number of whole shares
of Stock for which the Option is being exercised and such other representations
and agreements as to the Optionee's investment intent with respect to such
shares as may be required pursuant to the provisions of this Option
Agreement.  The written notice must be signed by the Optionee and must be
delivered in person, by certified or registered mail, return receipt requested,
by confirmed facsimile transmission, or by such other means as the Company may
permit, to the Chief Financial Officer of the Company, or other authorized
representative of the Participating Company Group, prior to the termination of
the Option as set forth in Section 6, accompanied by full payment of the
aggregate Exercise Price for the number of shares of Stock being purchased.  The
Option shall be deemed to be exercised upon receipt by the Company of such
written notice, the aggregate Exercise Price, and, if required by the Company,
such executed agreement.
 
4.3           Payment of Exercise Price.  Except as otherwise provided below,
payment of the aggregate Exercise Price for the number of shares of Stock for
which the Option is being exercised shall be made (i) in cash, by check, or cash
equivalent, (ii) by means of a Cashless Exercise, as defined below, or (iii) by
any combination of the foregoing.  Optionee shall be responsible for filing any
reports of remittance or other foreign exchange filings required in order to pay
the exercise price.  A "Cashless Exercise" means the delivery of a properly
executed notice together with irrevocable instructions to a broker in a form
acceptable to the Company providing for the assignment to the Company of the
proceeds of a sale or loan with respect to some or all of the shares of Stock
acquired upon the exercise of the Option pursuant to a program or procedure
approved by the Company (including, without limitation, through an exercise
complying with the provisions of Regulation T as promulgated from time to time
by the Board of Governors of the Federal Reserve System).  The Company reserves,
at any and all times, the right, in the Company's sole and absolute discretion,
to decline to approve or terminate any such program or procedure.
 
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4.4           Tax Withholding.  At the time the Option is exercised, in whole or
in part, or at any time thereafter as requested by the Company, the Optionee
hereby authorizes withholding from payroll and any other amounts payable to the
Optionee, and otherwise agrees to make adequate provision for (including by
means of a Cashless Exercise to the extent permitted by the Company), any sums
required to satisfy the federal, state, local and foreign tax withholding
obligations of the Participating Company Group, if any, which arise in
connection with the Option, including, without limitation, obligations arising
upon (i) the exercise, in whole or in part, of the Option, (ii) the transfer, in
whole or in part, of any shares acquired upon exercise of the Option, or
(iii) the operation of any law or regulation providing for the imputation of
interest.  The Option is not exercisable unless the tax withholding obligations
of the Participating Company Group are satisfied.  Accordingly, the Company
shall have no obligation to deliver shares of Stock until the tax withholding
obligations of the Participating Company Group have been satisfied by the
Optionee.
 
4.5           Certificate Registration.  Except in the event the Exercise Price
is paid by means of a Cashless Exercise, the certificate for the shares as to
which the Option is exercised shall be registered in the name of the Optionee,
or, if applicable, in the names of the heirs of the Optionee.
 
4.6           Restrictions on Grant of the Option and Issuance of Shares.  The
grant of the Option and the issuance of shares of Stock upon exercise of the
Option shall be subject to compliance with all applicable requirements of
federal, state or foreign law with respect to such securities.  The Option may
not be exercised if the issuance of shares of Stock upon exercise would
constitute a violation of any applicable federal, state or foreign securities
laws or other law or regulations or the requirements of any stock exchange or
market system upon which the Stock may then be listed.  In addition, the Option
may not be exercised unless (i) a registration statement under the Securities
Act shall at the time of exercise of the Option be in effect with respect to the
shares issuable upon exercise of the Option or (ii) in the opinion of legal
counsel to the Company, the shares issuable upon exercise of the Option may be
issued in accordance with the terms of an applicable exemption from the
registration requirements of the Securities Act.  THE OPTIONEE IS CAUTIONED THAT
THE OPTION MAY NOT BE EXERCISED UNLESS THE FOREGOING CONDITIONS ARE
SATISFIED.  ACCORDINGLY, THE OPTIONEE MAY NOT BE ABLE TO EXERCISE THE OPTION
WHEN DESIRED EVEN THOUGH THE OPTION IS VESTED.  The inability of the Company to
obtain from any regulatory body having jurisdiction the authority, if any,
deemed by the Company's legal counsel to be necessary to the lawful issuance and
sale of any shares subject to the Option shall relieve the Company of any
liability in respect of the failure to issue or sell such shares as to which
such requisite authority shall not have been obtained.  As a condition to the
exercise of the Option, the Company may require the Optionee to satisfy any
qualifications that may be necessary or appropriate, to evidence compliance with
any applicable law or regulation and to make any representation or warranty with
respect thereto as may be requested by the Company.  Any shares which are issued
will be "restricted securities" as that term is defined in Rule 144 under the
Securities Act, as further described in Section 7 of the Exercise Notice, unless
they are registered under the Securities Act.  The Company is under no
obligation to register the shares of Stock issuable upon exercise of this
Option.
 
4.7           Fractional Shares.  The Company shall not be required to issue
fractional shares upon the exercise of the Option.
 
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5.           Nontransferability of the Option.
 
The Option may be exercised during the lifetime of the Optionee only by the
Optionee or the Optionee's guardian or legal representative and may not be
assigned or transferred in any manner except by will or by the laws of descent
and distribution.  Following the death of the Optionee, the Option, to the
extent provided in Section 7, may be exercised by the Optionee's legal
representative or by any person empowered to do so under the deceased Optionee's
will or under the then applicable laws of descent and distribution.
 
6.           Termination of the Option.
 
The Option shall terminate and may no longer be exercised on the first to occur
of (a) the Option Expiration Date, (b) the last date for exercising the Option
following termination of the Optionee's Service as described in Section 7, or
(c) a Change in Control to the extent provided in Section 8.
 
7.           Effect of Termination of Service.
 
7.1           Option Exercisability.
 
(a)           Disability.  If the Optionee's Service with the Participating
Company Group terminates because of the Disability of the Optionee, the Option,
to the extent unexercised and exercisable on the date on which the Optionee's
Service terminated, may be exercised by the Optionee (or the Optionee's guardian
or legal representative) at any time prior to the expiration of six (6) months
after the date on which the Optionee's Service terminated, but in any event no
later than the Option Expiration Date.
 
(b)           Death.  If the Optionee's Service with the Participating Company
Group terminates because of the death of the Optionee, the Option, to the extent
unexercised and exercisable on the date on which the Optionee's Service
terminated, may be exercised by the Optionee's legal representative or other
person who acquired the right to exercise the Option by reason of the Optionee's
death at any time prior to the expiration of six (6) months after the date on
which the Optionee's Service terminated, but in any event no later than the
Option Expiration Date.  The Optionee's Service shall be deemed to have
terminated on account of death if the Optionee dies within three (3) months
after the Optionee's termination of Service.
 
(c)           Other Termination of Service.  If the Optionee's Service with the
Participating Company Group terminates for any reason, except Disability or
death, the Option, to the extent unexercised and exercisable by the Optionee on
the date on which the Optionee's Service terminated, may be exercised by the
Optionee at any time prior to the expiration of three (3) months (or such other
longer period of time as determined by the Board, in its discretion) after the
date on which the Optionee's Service terminated, but in any event no later than
the Option Expiration Date.
 
7.2           Extension if Exercise Prevented by Law.  Notwithstanding the
foregoing, if the exercise of the Option within the applicable time periods set
forth in Section 7.1 is prevented by the provisions of Section 4.6, the Option
shall remain exercisable until three (3) months after the date the Optionee is
notified by the Company that the Option is exercisable, but in any event no
later than the Option Expiration Date.
 
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7.3           Extension if Optionee Subject to Section 16(b).  Notwithstanding
the foregoing, if a sale within the applicable time periods set forth in
Section 7.1 of shares acquired upon the exercise of the Option would subject the
Optionee to suit under Section 16(b) of the Exchange Act, the Option shall
remain exercisable until the earliest to occur of (i) the tenth (10th) day
following the date on which a sale of such shares by the Optionee would no
longer be subject to such suit, (ii) the one hundred and ninetieth (190th) day
after the Optionee's termination of Service, or (iii) the Option Expiration
Date.
 
8.           Change In Control.
 
8.1           Definitions.
 
(a)           An "Ownership Change Event" shall be deemed to have occurred if
any of the following occurs with respect to the Company: (i) the direct or
indirect sale or exchange in a single or series of related transactions by the
shareholders of the Company of more than fifty percent (50%) of the voting stock
of the Company; (ii) a merger or consolidation in which the Company is a party;
(iii) the sale, exchange, or transfer of all or substantially all of the assets
of the Company; or (iv) a liquidation or dissolution of the Company.
 
(b)           A "Change in Control" shall mean an Ownership Change Event or a
series of related Ownership Change Events (collectively, a "Transaction")
wherein the shareholders of the Company immediately before the Transaction do
not retain immediately after the Transaction, in substantially the same
proportions as their ownership of shares of the Company's voting stock
immediately before the Transaction, direct or indirect beneficial ownership of
more than fifty percent (50%) of the total combined voting power of the
outstanding voting stock of the Company or the corporation or corporations to
which the assets of the Company were transferred (the "Transferee
Corporation(s)"), as the case may be.  For purposes of the preceding sentence,
indirect beneficial ownership shall include, without limitation, an interest
resulting from ownership of the voting stock of one or more corporations which,
as a result of the Transaction, own the Company or the Transferee
Corporation(s), as the case may be, either directly or through one or more
subsidiary corporations.  The Board shall have the right to determine whether
multiple sales or exchanges of the voting stock of the Company or multiple
Ownership Change Events are related, and its determination shall be final,
binding and conclusive.
 
8.2           Effect of Change in Control on Option.  In the event of a Change
in Control, the surviving, continuing, successor, or purchasing corporation or
parent corporation thereof, as the case may be (the "Acquiring Corporation"),
may either assume the Company's rights and obligations under the Option or
substitute for the Option a substantially equivalent option for the Acquiring
Corporation's stock.  In the event the Acquiring Corporation elects not to
assume the Company's rights and obligations under the Option or substitute for
the Option in connection with the Change in Control, and provided that the
Optionee's Service has not terminated prior to such date, the Vested Ratio shall
be deemed to be 1/1 as of the date ten (10) days prior to the date of the Change
in Control.  Any vesting of the Option that was permissible solely by reason of
this Section 8.2 shall be conditioned upon the consummation of the Change in
Control.  The Option shall terminate and cease to be outstanding effective as of
the date of the Change in Control to the extent that the Option is neither
assumed or substituted for by the Acquiring Corporation in connection with the
Change in Control nor exercised as of the date of the Change in
Control.  Notwithstanding the foregoing, shares acquired upon exercise of the
Option prior to the Change in Control and any consideration received pursuant to
the Change in Control with respect to such shares shall continue to be subject
to all applicable provisions of this Option Agreement except as otherwise
provided herein.  Furthermore, notwithstanding the foregoing, if the corporation
the stock of which is subject to the Option immediately prior to an Ownership
Change Event described in Section 8.1(a)(i) constituting a Change in Control is
the surviving or continuing corporation and immediately after such Ownership
Change Event less than fifty percent (50%) of the total combined voting power of
its voting stock is held by another corporation or by other corporations that
are members of an affiliated group within the meaning of Section 1504(a) of the
Code without regard to the provisions of Section 1504(b) of the Code, the Option
shall not terminate unless the Board otherwise provides in its discretion.
 
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9.           Adjustments For Changes In Capital Structure.
 
In the event of any stock dividend, stock split, reverse stock split,
recapitalization, combination, reclassification, or similar change in the
capital structure of the Company, appropriate adjustments shall be made in the
number, Exercise Price and class of shares of stock subject to the Option.  If a
majority of the shares which are of the same class as the shares that are
subject to the Option are exchanged for, converted into, or otherwise become
(whether or not pursuant to an Ownership Change Event) shares of another
corporation (the "New Shares"), the Board may unilaterally amend the Option to
provide that the Option is exercisable for New Shares.  In the event of any such
amendment, the Number of Option Shares and the Exercise Price shall be adjusted
in a fair and equitable manner, as determined by the Board, in its
discretion.  Notwithstanding the foregoing, any fractional share resulting from
an adjustment pursuant to this Section 9 shall be rounded down to the nearest
whole number, and in no event may the Exercise Price be decreased to an amount
less than the par value, if any, of the stock subject to the Option.  The
adjustments determined by the Board pursuant to this Section 9 shall be final,
binding and conclusive.
 
10.           Rights as a Shareholder, Employee or Consultant.
 
The Optionee shall have no rights as a shareholder with respect to any shares
covered by the Option until the date of the issuance of a certificate for the
shares for which the Option has been exercised (as evidenced by the appropriate
entry on the books of the Company or of a duly authorized transfer agent of the
Company).  No adjustment shall be made for dividends, distributions or other
rights for which the record date is prior to the date such certificate is
issued, except as provided in Section 9.  If the Optionee is an Employee, the
Optionee understands and acknowledges that, except as otherwise provided in a
separate, written employment agreement between a Participating Company and the
Optionee, the Optionee's employment is "at will" and is for no specified
term.  Nothing in this Option Agreement shall confer upon the Optionee any right
to continue in the Service of a Participating Company or interfere in any way
with any right of the Participating Company Group to terminate the Optionee's
Service as an Employee or Consultant, as the case may be, at any time.
 
11.           Lock-Up Agreement.
 
The Optionee hereby agrees that in the event of any underwritten public offering
of stock, including but not limited to an initial public offering of stock, made
by the Company pursuant to an effective registration statement filed under the
Securities Act, the Optionee shall not offer, sell, contract to sell, pledge,
hypothecate, grant any option to purchase or make any short sale of, or
otherwise dispose of any shares of stock of the Company or any rights to acquire
stock of the Company for such period of time from and after the effective date
of such registration statement as may be established by the underwriter for such
public offering; provided, however, that such period of time shall not exceed
one hundred eighty (180) days from the effective date of the registration
statement to be filed in connection with such public offering.  The foregoing
limitation shall not apply to shares registered in the public offering under the
Securities Act.
 
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12.           Legends.
 
The Company may at any time place legends referencing and any applicable
federal, state or foreign securities law restrictions on all certificates
representing shares of stock subject to the provisions of this Option
Agreement.  The Optionee shall, at the request of the Company, promptly present
to the Company any and all certificates representing shares acquired pursuant to
the Option in the possession of the Optionee in order to carry out the
provisions of this Section.  Unless otherwise specified by the Company, legends
placed on such certificates may include, but shall not be limited to, the
following:
 
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED
OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH
ACT COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER
THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY SATISFACTORY
TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS
EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT."
 
13.           Restrictions on Transfer of Shares.
 
No shares acquired upon exercise of the Option may be sold, exchanged,
transferred (including, without limitation, any transfer to a nominee or agent
of the Optionee), assigned, pledged, hypothecated or otherwise disposed of,
including by operation of law, in any manner which violates any of the
provisions of this Option Agreement and any such attempted disposition shall be
void.  The Company shall not be required (a) to transfer on its books any shares
which will have been transferred in violation of any of the provisions set forth
in this Option Agreement or (b) to treat as owner of such shares or to accord
the right to vote as such owner or to pay dividends to any transferee to whom
such shares will have been so transferred.
 
14.           Miscellaneous Provisions.
 
14.1           Binding Effect.  Subject to the restrictions on transfer set
forth herein, this Option Agreement shall inure to the benefit of and be binding
upon the parties hereto and their respective heirs, executors, administrators,
successors and assigns.
 
14.2           Termination or Amendment.  The Board may terminate or amend the
Option at any time; provided, however, that except as provided in Section 8.2 in
connection with a Change in Control, no such termination or amendment may
adversely affect the Option or any unexercised portion hereof without the
consent of the Optionee unless such termination or amendment is necessary to
comply with any applicable law or government regulation.  No amendment or
addition to this Option Agreement shall be effective unless in writing.
 
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14.3           Notices.  Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given (except to the extent
that this Option Agreement provides for effectiveness only upon actual receipt
of such notice) upon personal delivery or upon deposit in the United States Post
Office, by registered or certified mail, with postage and fees prepaid,
addressed to the other party at the address shown below that party's signature
or at such other address as such party may designate in writing from time to
time to the other party.
 
14.4           Integrated Agreement.  The Notice and this Option Agreement
constitute the entire understanding and agreement of the Optionee and the
Participating Company Group with respect to the subject matter contained herein
or therein and supersedes any prior agreements, understandings, restrictions,
representations, or warranties among the Optionee and the Participating Company
Group with respect to such subject matter other than those as set forth or
provided for herein or therein.  To the extent contemplated herein or therein,
the provisions of the Notice and the Option Agreement shall survive any exercise
of the Option and shall remain in full force and effect.
 
14.5           Applicable Law.  This Option Agreement shall be governed by the
laws of the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within the State
of California.
 
14.6           Counterparts.  The Notice may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
 
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EXHIBIT A
 

 
Optionee: William Greene

 
Date: July 17, 2007
 
STOCK OPTION EXERCISE NOTICE
Non-Plan Option
 
Surge Global Energy, Inc.
Attention: Chief Financial Officer
12220 El Camino Real
Suite 410
San Diego, CA 92103

 
Ladies and Gentlemen:
 
1.           Option.  I was granted an option (the "Option") to purchase shares
of the common stock (the "Shares") of Surge Global Energy, Inc., a Delaware
corporation (the "Company"), pursuant to my Notice of Grant of Stock Option (the
"Notice") and my Stock Option Agreement (the "Option Agreement") as follows:
 

 
Grant Number:
         
Date of Option Grant:
July 17, 2007
       
Number of Option Shares:
200,000
 
Vest immediately
       
Exercise Price per Share:
$ 0.34

 
2.           Exercise of Option.  I hereby elect to exercise the Option to
purchase the following number of Shares:
 

 
Total Shares Purchased:
____________
       
Total Exercise Price (Total Shares  X  Price per Share)
$ __________

 
3.           Payments.  I enclose payment in full of the total exercise price
for the Shares in the following form(s), as authorized by my Option Agreement:
 

 
o  Cash:
$ ____________
       
o  Check:
$ ____________

 
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4.           Tax Withholding.  I enclose payment in full of my withholding
taxes, if any, as follows:
 
(Contact Chief Financial Officer for amount of tax due.)
 

 
o  Cash:
$ ____________
       
o  Check:
$ ____________

 
5.           Optionee Information.
 

 
My address is:  
         
My Social Security Number is: 
 

 
6.           Binding Effect.  I agree that the Shares are being acquired in
accordance with and subject to the terms, provisions and conditions of the
Option Agreement, to all of which I hereby expressly assent.  This Agreement
shall inure to the benefit of and be binding upon the my heirs, executors,
administrators, successors and assigns.
 
7.           Transfer.  I understand and acknowledge that the Shares have not
been registered under the Securities Act of 1933, as amended (the "Securities
Act"), and that consequently the Shares must be held indefinitely unless they
are subsequently registered under the Securities Act, an exemption from such
registration is available, or they are sold in accordance with Rule 144 under
the Securities Act.  I further understand and acknowledge that the Company is
under no obligation to register the Shares.  I understand that the certificate
or certificates evidencing the Shares will be imprinted with legends which
prohibit the transfer of the Shares unless they are registered or such
registration is not required in the opinion of legal counsel satisfactory to the
Company.
 
I am aware that Rule 144 under the Securities Act, which permits limited public
resale of securities acquired in a nonpublic offering, is not currently
available with respect to the Shares and, in any event, is available only if
certain conditions are satisfied.  I understand that any sale of the Shares that
might be made in reliance upon Rule 144 may only be made in limited amounts in
accordance with the terms and conditions of such rule and that a copy of
Rule 144 will be delivered to me upon request.
 
I understand that I am purchasing the Shares pursuant to the terms of the Notice
and my Option Agreement, copies of which I have received and carefully read and
understand.
 

 
Very truly yours,
 
___________________________________
(Signature)
   
Receipt of the above is hereby acknowledged.
 
Surge Global Energy, Inc.
 
 
By:         _______________________________
Title:      _______________________________
Dated:   _______________________________
 

 
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