EX-10.4


    Exhibit
      10.11

    


    THIS
      WARRANT AND THE SECURITIES TO BE ISSUED UPON ITS EXERCISE HAVE NOT BEEN
      REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”),
      AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXCLUSION FROM THE REGISTRATION
      REQUIREMENTS OF THE SECURITIES ACT PROVIDED BY REGULATION S (“REGULATION S”)
      PROMULGATED UNDER THE SECURITIES ACT. THIS WARRANT AND THE UNDERLYING SECURITIES
      MAY NOT BE REOFFERED FOR SALE OR RESOLD OR OTHERWISE TRANSFERRED EXCEPT IN
      ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO AN EFFECTIVE
      REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION
      FROM REGISTRATION UNDER THE SECURITIES ACT. THIS WARRANT MAY NOT BE EXERCISED
      IN
      THE UNITED STATES OR BY OR ON BEHALF OF ANY PERSON IN THE UNITED STATES OR
      BY OR
      ON BEHALF OF ANY U.S. PERSON UNLESS THIS WARRANT AND THE UNDERLYING SECURITIES
      HAVE BEEN REGISTERED UNDER THE SECURITIES ACT AND THE APPLICABLE SECURITIES
      LEGISLATION OF ANY SUCH STATE OR AN EXEMPTION FROM SUCH REGISTRATION
      REQUIREMENTS IS AVAILABLE. HEDGING TRANSACTIONS INVOLVING THIS WARRANT AND
      THE
      UNDERLYING SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
      SECURITIES ACT. “UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S
      UNDER THE SECURITIES ACT.

    


     

    Void
      after

    March
      2,
      2010

     

    SURGE
      GLOBAL ENERGY, INC.

    WARRANT
      TO PURCHASE SHARES

     

    This
      Warrant is issued to 1304146 Alberta Ltd, a corporation organized under the
      law
      of Alberta, Canada (the “Holder”),
      by
      Surge Global Energy, Inc., a Delaware corporation (the “Company”),
      in
      connection with that certain promissory note made by the Company in favor of
      the
      Holder, on even date herewith, in the principal amount of CDN$1.5 Million due
      and payable on August 30, 2007 (“Note
      #3”).
      Notwithstanding anything to the contrary in this Warrant, this Warrant shall
      become effective only on that date upon which the Company has paid the entire
      outstanding balance of Note #3 in full pursuant to the provisions of Note #3
      (the “Effective
      Date”).
      If
      the Company fails to pay the Note in full, this Warrant shall be void
ab
      initio
      and be
      of no force or effect.

    


    1. Purchase
      of Shares.
      Subject
      to the terms and conditions hereinafter set forth, the Holder is entitled,
      upon
      surrender of this Warrant at the principal office of the Company (or at such
      other place as the Company shall notify the Holder in writing), to purchase
      from
      the Company up to the number of fully paid and nonassessable Warrant Shares
      (as
      defined below), that equals the quotient obtained by dividing (a) 1,000,000
      by (b) the Exercise Price (as defined below).

     

    2. Definitions.

     

    (a) CDN.
      The
      term “CDN” means dollars in lawful currency of Canada.

     

    (b) Change
      of Control.
      The
      term “Change
      of Control”
shall
      mean (i) any consolidation or merger involving the Company pursuant to
      which the Company’s stockholders own less than fifty percent (50%) of the voting
      securities of the surviving entity or (ii) the sale of all or substantially
      all of the assets of the Company.

     

    
      
         

      

      
        -1-

        
          

        

      

      
         

      

    

     

    


    (c) Exercise
      Price.
      The
      exercise price for the Warrant Shares shall be USD$1.00 per share (such price,
      as adjusted from time to time, is herein referred to as the “Exercise
      Price”).

     

    (d) Exercise
      Period.
      This
      Warrant shall be exercisable, in whole or in part, during the term commencing
      the Effective Date and ending on the expiration of this Warrant pursuant to
      Section 14 hereof.

     

    (e) Regulation S.
      The
      term “Regulation
      S”
means
      Regulation S under the Securities Act.

     

    (f) Securities
      Act.
      The
      term “Securities
      Act”
means
      the United States Securities Act of 1933, as amended.

     

    (g) Shares.
      The
      term “Shares”
means
      shares of the Company’s Common Stock.

     

    (h) USD.
      The
      term “USD” means dollars in lawful currency of the United States.

     

    (i) U.S.
      Person.
      The
      term “U.S.
      Person”
means
      a
“U.S. person” as such term is defined in Rule 902(k) of Regulation S promulgated
      under the Securities Act, as presently in effect.

     

    (j) United
      States.
      The
      term “United
      States”
means
      United States of America, its territories and possessions, any state of the
      United States and the District of Columbia.

     

    (k) Warrant
      Shares.
      The
      term “Warrant
      Shares”
means
      the Shares issuable upon exercise of the Warrants.

     

    3. Method
      of Exercise.
      While
      this Warrant remains outstanding and exercisable in accordance with
      Section 2 above, the Holder may exercise, in whole or in part, the purchase
      rights evidenced hereby. Such exercise shall be effected by:

     

    (i) the
      surrender of the Warrant, together with a notice of exercise to the Secretary
      of
      the Company (provided, however, the Warrant may not be exercised within the
      United States or by a U.S. Person, and the Warrant Shares may not be delivered
      within the United States upon exercise, unless registered under the Securities
      Act or an exemption from such registration is available); and

     

    (ii) the
      payment to the Company of an amount equal to the aggregate Exercise Price for
      the number of Warrant Shares being purchased.

     

    4. Net
      Exercise.
      In lieu
      of cash exercising this Warrant, the Holder may elect to receive shares equal
      to
      the value of this Warrant (or the portion thereof being canceled) by surrender
      of this Warrant to the Secretary of the Company together with notice of such
      election (subject, however, to the limitations set forth in the parenthetical
      language in Section 3(i) above), in which event the Company shall issue to
      the
      Holder a number of Warrant Shares computed using the following
      formula:

     

    
      	 	
              Y
                (A-B)

            
	
              X
                =

            	
              A

            


    

    Where

     

    X
      — The
      number of Shares to be issued to the Holder.

     

     

    
      
         

      

      
        -2-

        
          

        

      

      
         

      

    

     

    Y
      — The
      number of Shares purchasable under this Warrant.

     

    A
      — The
      fair
      market value of one Share.

     

    B
      — The
      Exercise Price (as adjusted to the date of such calculations).

     

    For
      purposes of this Section 4, the fair market value of a Share shall mean the
      average of the closing bid and asked prices of Shares quoted in the
      over-the-counter market in which the Shares are traded or the closing price
      quoted on any exchange on which the Shares are listed, whichever is applicable,
      as published in the Western Edition of The
      Wall Street Journal
      for the
      ten (10) trading days prior to the date of determination of fair market
      value (or such shorter period of time during which such stock was traded
      over-the-counter or on such exchange). If the Shares are not traded on the
      over-the-counter market or on an exchange, the fair market value shall be the
      price per Share that the Company could obtain from a willing buyer for Shares
      sold by the Company from authorized but unissued Shares, as such prices shall
      be
      determined in good faith by the Company’s Board of Directors.

     

    5. Certificates
      for Warrant Shares.
      Upon
      the exercise of the purchase rights evidenced by this Warrant, one or more
      certificates for the number of Warrant Shares so purchased shall be issued
      as
      soon as practicable thereafter, and in any event within ten (10) days of the
      delivery of the subscription notice.

     

    6. Issuance
      of Warrant Shares.
      The
      Company covenants that the Warrant Shares, when issued pursuant to the exercise
      of this Warrant, will be duly and validly issued, fully paid and nonassessable
      and free from all taxes, liens, and charges with respect to the issuance
      thereof.

     

    7. Adjustment
      of Exercise Price and Number of Shares.
      The
      number of and kind of securities purchasable upon exercise of this Warrant
      and
      the Exercise Price shall be subject to adjustment from time to time as
      follows:

     

    (a) Subdivisions,
      Combinations and Other Issuances.
      If the
      Company shall at any time prior to the expiration of this Warrant subdivide
      the
      Shares, by split up or otherwise, or combine its Shares, or issue additional
      shares of its Shares as a dividend, the number of Warrant Shares shall forthwith
      be proportionately increased in the case of a subdivision or stock dividend,
      or
      proportionately decreased in the case of a combination. Appropriate adjustments
      shall also be made to the purchase price payable per share, but the aggregate
      purchase price payable for the total number of Warrant Shares (as adjusted)
      shall remain the same. Any adjustment under this Section 7(a) shall
      become effective at the close of business on the date the subdivision or
      combination becomes effective, or as of the record date of such dividend, or
      in
      the event that no record date is fixed, upon the making of such
      dividend.

     

    (b) Reclassification,
      Reorganization and Consolidation.
      In case
      of any reclassification, capital reorganization, or change in the capital stock
      of the Company (other than as a result of a subdivision, combination, or stock
      dividend provided for in Section 7(a) above), then the Company shall
      make appropriate provision so that the Holder shall have the right at any time
      prior to the expiration of this Warrant to purchase, at a total price equal
      to
      that payable upon the exercise of this Warrant, the kind and amount of shares
      of
      stock and other securities and property receivable in connection with such
      reclassification, reorganization, or change by a Holder of the same number
      of
      Shares as were purchasable by the Holder immediately prior to such
      reclassification, reorganization, or change. In any such case appropriate
      provisions shall be made with respect to the rights and interest of the Holder
      so that the provisions hereof shall thereafter be applicable with respect to
      any
      shares of stock or other securities and property deliverable upon exercise
      hereof, and appropriate adjustments shall be made to the purchase price per
      share payable hereunder, provided the aggregate purchase price shall remain
      the
      same.

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

     

    (c) Notice
      of Adjustment.
      When
      any adjustment is required to be made in the number or kind of shares
      purchasable upon exercise of the Warrant, or in the Exercise Price, the Company
      shall promptly notify the Holder of such event and of the number of Shares
      or
      other securities or property thereafter purchasable upon exercise of this
      Warrant.

     

    8. No
      Fractional Shares or Scrip.
      No
      fractional shares or scrip representing fractional shares shall be issued upon
      the exercise of this Warrant, but in lieu of such fractional shares the Company
      shall make a cash payment therefor on the basis of the Exercise Price then
      in
      effect. 

     

    9. Representations
      of the Company.
      The
      Company represents and warrants to the Holder that all corporate actions on
      the
      part of the Company, its officers, directors and stockholders necessary for
      the
      sale and issuance of this Warrant have been taken.

     

    10. Representations
      and Warranties of the Holder.
      The
      Holder represents, warrants, acknowledges and agrees that:

     

    (a) Holder
      (i) is not located in the United States, (ii) is not a U.S. Person,
      (iii) is not acquiring the Warrant and will not acquire the Warrant Shares
      for the account or benefit of a U.S. Person or a person in the United States,
      (iv) did not execute or deliver this Warrant in the United States; and (v)
      will not engage in any hedging transactions with regard to this Warrant or
      the
      Warrant Shares unless in compliance with the Securities Act;

     

    (b) If
      Holder
      decides to offer, sell, pledge or otherwise transfer any of the Warrants or
      Warrant Shares, the Holder will not offer, sell, pledge or otherwise transfer
      any of such securities, directly or indirectly, unless such securities are
      registered for resale under the Securities Act and under any applicable state
      securities laws, if required, or: (i) the transfer is to the Company;
      (ii) the transfer is made outside the United States in accordance with the
      provisions of Regulation S and in compliance with applicable local laws and
      regulations; (iii) the transfer is made in compliance with an exemption
      from registration under the Securities Act provided by Rule 144 thereunder,
      if available, and in accordance with applicable state securities laws; or
      (iv) the transfer is made in another transaction that does not require
      registration under the Securities Act or any applicable state securities laws
      after the seller furnishes to the Company an opinion of outside counsel in
      form
      and substance reasonably satisfactory to the Company or other evidence
      reasonably satisfactory to the Company to such effect;

     

    (c) This
      Warrant and the Warrant Shares have not been registered under the Securities
      Act
      or the securities laws of any state of the United States and that the issuance
      of this Warrant and the Warrant Shares will be made in reliance upon an
      exclusion from such registration requirements availaible under Regulation S,
      and
      this Warrant and the Warrant Shares will be “restricted securities” within the
      meaning of Rule 144 under the Securities Act. Holder is familiar with Rule
      144
      promulgated under the Securities Act, as presently in effect, and understands
      the resale limitations imposed thereby and by the Securities Act. ADDITIONALLY,
      HOLDER UNDERSTANDS AND ACKNOWLEDGES THAT AN INVESTMENT IN THIS WARRANT AND
      THE
      WARRANT SHARES INVOLVES AN EXTREMELY HIGH DEGREE OF RISK AND MAY RESULT IN
      A
      COMPLETE LOSS OF HOLDER’S INVESTMENT. Holder has no immediate need for liquidity
      in connection with this investment, and does not anticipate that such Holder
      will be required to sell this Warrant or Warrant Shares in the foreseeable
      future;

     

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

     

    (d) This
      Warrant and the Warrant Shares are being acquired for the Holder’s own account,
      for investment and not with a view to, or for resale in connection with, any
      distribution or public offering thereof within the meaning of the Securities
      Act;

     

    (e) The
      Warrant and the Warrant Shares have not been registered under the Securities
      Act
      by reason of their issuance in a transaction excluded from the registration
      and
      prospectus delivery requirements of the Securities Act pursuant to Regulation
      S
      and that they must be held by the Holder indefinitely, and that the Holder
      must
      therefore bear the economic risk of such investment indefinitely, unless a
      subsequent disposition thereof is registered under the Securities Act or is
      exempted from such registration;

     

    (f) Holder
      has such knowledge and experience in financial and business matters that Holder
      is capable of evaluating the merits and risks of the purchase of this Warrant
      and the Warrant Shares and of protecting Holder’s interests in connection
      therewith;

     

    (g) Holder
      is
      able to bear the economic risk of the purchase of the Warrant Shares pursuant
      to
      the terms of this Warrant;

     

    (h) Holder
      will sell the Warrants and the Warrant Shares only in accordance with the
      provisions of Regulation S, pursuant to registration under the Securities Act,
      or pursuant to an available exemption from registration pursuant to the
      Securities Act;

     

    (i) Company
      will refuse to register any transfer of the Warrants and the Warrant Shares
      not
      made in accordance with the provisions of Regulation S, pursuant to registration
      under the Securities Act, or pursuant to an available exemption from
      registration; and

     

    (j) Holder
      acknowledges that the Warrants are being issued pursuant to certain prospectus
      and registration exemptions under Canadian securities laws and that each of
      the
      Warrants and the Warrant Shares may be subject to a statutory hold period which
      may be of indefinite duration.

     

    11. Restrictive
      Legend.

     

    (a) All
      certificates representing the Warrant Shares will be endorsed with the following
      legend:

     

    “THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND HAVE BEEN ISSUED
      IN RELIANCE UPON AN EXCLUSION FROM THE REGISTRATION REQUIREMENTS OF THE
      SECURITIES ACT PROVIDED BY REGULATION S (“REGULATION S”) PROMULGATED UNDER THE
      SECURITIES ACT. SUCH SECURITIES MAY NOT BE REOFFERED FOR SALE OR RESOLD OR
      OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION
      S,
      PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT
      TO
      AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT. HEDGING
      TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS IN
      COMPLIANCE WITH THE SECURITIES ACT.”

     

    
      
         

      

      
        -5-

        
          

        

      

      
         

      

    

    
 

    (b) Holder
      will comply with all other applicable securities legislation in addition to
      the
      Securities Act to which the Holder is subject in selling or transferring any
      Warrants or Warrant Shares and the Company may refuse to register any sale
      or
      transfer not in compliance with such other securities legislation.

     

    12. Payment
      of Taxes.
      The
      Company shall not be required to pay any tax or other charge imposed in
      connection with the exercise of this Warrant or a permissible transfer involved
      in the issuance of any certificate for shares issuable under this Warrant in
      the
      name other than that of the Holder, and in any such case, the Company shall
      not
      be required to issue or deliver any stock certificate until such tax or other
      charge has been paid or it has been established to the Company’s satisfaction
      that no such tax or other charge is due.

     

    13. Rights
      of Stockholders.
      No
      Holder shall be entitled, as a Warrant holder, to vote or receive dividends
      or
      be deemed the Holder of the Warrant Shares or any other securities of the
      Company which may at any time be issuable on the exercise hereof for any
      purpose, nor shall anything contained herein be construed to confer upon the
      Holder, as such, any of the rights of a stockholder of the Company or any right
      to vote for the election of directors or upon any matter submitted to
      stockholders at any meeting thereof, or to give or withhold consent to any
      corporate action (whether upon any recapitalization, issuance of stock,
      reclassification of stock, change of par value, consolidation, merger,
      conveyance, or otherwise) or to receive notice of meetings, or to receive
      dividends or subscription rights or otherwise until the Warrant shall have
      been
      exercised and the Warrant Shares purchasable upon the exercise hereof shall
      have
      become deliverable, as provided herein.

     

    14. Expiration
      of Warrant; Notice of Certain Events Terminating This Warrant.
      

     

    (a) This
      Warrant shall expire and shall no longer be exercisable upon the earlier to
      occur of:

     

    (i) 5:00
      p.m., California local time, on March 2, 2010; or

     

    (ii) Any
      Change of Control.

     

    (b) The
      Company shall provide at least ten (10) calendar days prior written notice
      of
      any Change of Control).

     

    15. Notices.
      All
      notices and other communications required or permitted hereunder shall be in
      writing, shall be effective when given, and shall in any event be deemed to
      be
      given upon receipt or, if earlier, (a) five (5) days after deposit
      with the U.S. Postal Service or other applicable postal service, if delivered
      by
      first class mail, postage prepaid, (b) upon delivery, if delivered by hand,
      (c) one business day after the business day of deposit with Federal Express
      or similar overnight courier, freight prepaid or (d) one business day after
      the business day of facsimile transmission, if delivered by facsimile
      transmission with copy by first class mail, postage prepaid, and shall be
      addressed (i) if to the Holder, at the Holder’s address as set forth on the
      Schedule of Warrant Shareholders to the Purchase Agreement, and (ii) if to
      the Company, at the address of its principal corporate offices (attention:
      President), with a copy to Steven T. Anapoell, Esq., Greenberg Traurig, LLP,
      650
      Town Center Drive, Suite 1700, Costa Mesa, California 92626 or at such other
      address as a party may designate by ten days advance written notice to the
      other
      party pursuant to the provisions above.

     

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

     

    16. Registration
      Statement.

     

    (a) Within
      45
      days following March 2, 2007, the Company covenants to prepare and file with
      the
      Securities and Exchange Commission (the “SEC”)
      a
      registration statement on Form SB-2 (“SB-2
      Registration Statement”)
      registering the Warrant Shares with any other securities of the Holder for
      resale by the Holder. The Company covenants to keep the SB-2 Registration
      Statement effective for up to two years following the date the SB-2 Registration
      Statement becomes effective or, if earlier, until the Holder has completed
      the
      distribution related thereto. Holder shall prepare and file with the SEC such
      amendments and supplements to the SB-2 Registration Statement and the prospectus
      used in connection with such SB-2 Registration Statement as may be necessary
      to
      comply with the provisions of the Securities Act with respect to the disposition
      of all securities covered by the SB-2 Registration Statement. The Company shall
      furnish to the Holder such number of copies of a prospectus in conformity with
      the requirements of the Securities Act, and such other documents as they may
      reasonably request in order to facilitate the disposition of the Warrant Shares
      owned by them. The Company shall notify the Holder by written notice to the
      address set forth on the books of the Company (unless the Company is notified
      in
      writing of a different address for the Holder) at any time when a prospectus
      relating thereto is required to be delivered under the of the happening of
      any
      event as a result of which the prospectus included in the SB-2 Registration
      Statement as then in effect, includes an untrue statement of a material fact
      or
      omits to state a material fact required to be stated therein or necessary to
      make the statements therein not misleading in the light of the circumstances
      then existing.

     

    (b) Notwithstanding
      anything to the contrary in Section 16(a) above, if the Company becomes
      eligible to register the Warrant Shares on Form S-3, Company will
      (i) prepare and file with the SEC a registration statement on Form S-3
      (“S-3
      Registration Statement”)
      registering the Warrant Shares for resale by the Holder; and (ii) the
      Company shall keep the S-3 Registration Statement effective for a period of
      up
      to three years following the date the SB-2 Registration Statement (as opposed
      to
      the S-3 Registration Statement) became effective or, if earlier, until the
      Holder has completed the distribution related thereto. At such time as the
      SEC
      declares the S-3 Registration Statement effective, the Company shall no longer
      have any obligations under Section 16(a) above. The Company shall furnish
      to the Holder such number of copies of a prospectus in conformity with the
      requirements of the Securities Act, and such other documents as they may
      reasonably request in order to facilitate the disposition of the Warrant Shares
      owned by Holder. The Company shall notify the Holder by written notice to the
      address set forth on the books of the Company (unless the Company is notified
      in
      writing of a different address for the Holder) at any time when a prospectus
      relating thereto is required to be delivered under the Securities Act of the
      happening of any event as a result of which the prospectus included in the
      S-3
      Registration Statement as then in effect, includes an untrue statement of a
      material fact or omits to state a material fact required to be stated therein
      or
      necessary to make the statements therein not misleading in the light of the
      circumstances then existing.

     

    (c) It
      shall
      be a condition precedent to the obligations of Surge to take any action under
      this Section 16 that the Holder shall furnish to the Company such
      information regarding Holder, the Warrant Shares held by Holder and the intended
      method of disposition of such securities as may be reasonably requested by
      the
      Company and as shall be required to effect the registration of the Warrant
      Shares.

     

    17. Restrictions
      on Transfer.
      The
      Holder shall refuse to register any sale or transfer of the Warrant or Warrant
      Shares not made in accordance with the provisions of Regulation S, pursuant
      to
      registration under the Securities Act, or pursuant to an available exemption
      from registration; provided, however, if foreign law prevents the Company from
      refusing to register such securities transfers, the Company shall implement
      procedures to prevent any transfer not made in accordance with the provisions
      of
      Regulation S.

     

    
      
         

      

      
        -7-

        
          

        

      

      
         

      

    

     

    18. Governing
      Law.
      This
      Warrant and all actions arising out of or in connection with this Agreement
      shall be governed by and construed in accordance with the laws of the State
      of
      California, without regard to the conflicts of law provisions of the State
      of
      California or of any other state.



    19. Rights
      and Obligations Survive Exercise of Warrant.
      Unless
      otherwise provided herein, the rights and obligations of the Company, of the
      Holder and of the holder of the Warrant Shares issued upon exercise of this
      Warrant, shall survive the exercise of this Warrant.

     

    Issued
      this March 2, 2007.

     

    
      	 	 	 
	 	COMPANY
	 	 
	 	
              Surge
                Global Energy, Inc.,

              a Delaware corporation

            
	 
 	 
 	 
 
	 	By:  	
               
                

              
                

              

               

            
	 	Title:	  

              

            




    



    
      
        
        

         

      

      
        -8-

        
          

        

      

      
         

        
        

      

    



    


    EXHIBIT A

     

    NOTICE
      OF EXERCISE

    

      
        	
                TO:

              	
                Surge
                  Global Energy, Inc.

              
	 	
                12220
                  El Camino Real

              
	 	
                Suite
                  410

              
	 	
                San
                  Diego, CA 92130

              
	 	
                Attention:
                  President

              


      

    

     

    1. The
      undersigned hereby elects to purchase __________ shares of Common Stock (the
      “Shares”) Surge Global Energy, Inc., a Delaware corporation (the “Company”),
      pursuant to the terms of the attached Warrant.

     

    2. Method
      of
      Exercise (Please initial the applicable blank):

     

    
      	 	
              ___

            	
              The
                undersigned elects to exercise the attached Warrant by means of a
                cash
                payment, and tenders herewith payment in full for the purchase price
                of
                the shares being purchased, together with all applicable transfer
                taxes,
                if any.

            


    

     

    
      	 	
              ___

            	
              The
                undersigned elects to exercise the attached Warrant by means of the
                net
                exercise provisions of Section 4 of the
                Warrant.

            


    

     

    3. Please
      issue a certificate or certificates representing such Shares in the name of
      the
      undersigned or in such other name as is specified below:

     

    _________________________________

     

    (Name)

     

    


     

    _________________________________


     

    _________________________________

     

    (Address)

     

    


    4. The
      undersigned represents, warrants, certifies and agrees as follows (only one
      of
      the following must be checked):

     

    
      	 	
              A.
                 ̈

            	
              The
                undersigned holder (a) at the time of exercise of these Warrants
                is not in
                the United States, (b) is not a “U.S. person” (a “U.S. Person”), as such
                term is defined in Regulation S under the United States Securities
                Act of
                1933, as amended (the “U.S. Securities Act”), and is not exercising such
                securities on behalf of a U.S. Person or a person in the United States,
                (c) did not execute or deliver this Notice of Exercise in the United
                States, and (d) agrees not to engage in any hedging transactions
                related
                to the Shares unless in compliance with the U.S. Securities Act;
                or

            


    

     

     

    
      
         

      

      
        -9-

        
          

        

      

      
         

      

    

     

    
      	 	
              B.
                 ̈

            	
              The
                undersigned holder has delivered to the Company a written opinion
                of
                counsel reasonably satisfactory to the Company to the effect that
                an
                exemption from the registration requirements of the U.S. Securities
                Act
                and applicable state securities laws is available for the issuance
                of the
                Shares.

            


    

     

     

    The
      undersigned holder understands that the certificate representing the Shares
      will
      bear a legend restricting transfer without registration under the U.S.
      Securities Act and applicable state securities laws unless an exclusion or
      exemption from registration is available. Unless Box B above is checked,
      certificates representing Warrant Shares will not be registered or delivered
      to
      an address in the United States.

     

    If
      Box B
      is checked, any opinion tendered must be reasonably satisfactory to the Company.
      Holders planning to deliver an opinion of counsel in connection with the
      exercise of Warrants should contact the Company in advance to determine whether
      any opinions to be tendered will be satisfactory to the Company.

     

     

    
       

      
        	 	 

                
(Signature)
	 	
                 

              
	 	
                
                  
 (Name)

                 

              
	 	
                
                  
 (Title)

                 

              
	 	
                
                  
 (Date)

                 

              


      

      
 

       

      -10-