Exhibit 10.12


 


THIS
WARRANT AND THE UNDERLYING SHARES OF COMMON STOCK HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY
STATE SECURITIES LAWS.  THIS WARRANT AND,
IF EXERCISED, THE UNDERLYING SHARES OF COMMON STOCK, HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO THEIR DISTRIBUTION OR RESALE, AND MAY NOT BE
SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION
STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION THAT
SUCH REGISTRATION IS NOT REQUIRED.


 


SURGE
GLOBAL ENERGY, INC.


WARRANT TO
PURCHASE COMMON STOCK


 


	
  No.

  	
   

  	
                  ,
  2005

  



Void After July 17, 2010


 


This Certifies That, for value received                                HAVING
AN ADDRESS AT                                or
his assigns (the “Holder”), is entitled to
subscribe for and purchase at the Exercise Price (defined below) from Surge Global Energy, Inc.,
a Delaware corporation (the “Corporation”)
an amount of common stock equal to                    
shares.


 


1.             Definitions.  As used herein, the
following terms shall have the following respective meanings:


 


(a)           “Exercise
Period” shall mean the period commencing with the date hereof and ending three
years from the date hereof, unless sooner terminated as provided below.


 


(b)           “Exercise
Price” shall mean $1.60 per share, subject to adjustment pursuant to Section 5
below.


 


(c)           “Exercise
Shares” shall mean the shares of Common Stock issuable upon exercise of this
Warrant.


 


2.             Exercise of
Warrant.  The rights represented by this
Warrant may be exercised in whole or in part at any time during the Exercise
Period, by delivery of the following to the Corporation at its address set
forth above (or at such other address as it may designate by notice in writing
to the Holder):


 


(a)           An
executed Notice of Exercise in the form attached hereto;


 


(b)           Payment
of the Exercise Price either in cash or by check; and


 


(c)           This
Warrant.


 


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Upon the exercise of the rights represented by this Warrant, a
certificate or certificates for the Exercise Shares so purchased, registered in
the name of the Holder or persons affiliated with the Holder, if the Holder so
designates, shall be issued and delivered to the Holder within a reasonable
time after the rights represented by this Warrant shall have been so exercised.


 


The person in whose name any certificate or certificates for Exercise
Shares are to be issued upon exercise of this Warrant shall be deemed to have
become the holder of record of such shares on the date on which this Warrant
was surrendered and payment of the Exercise Price was made, irrespective of the
date of delivery of such certificate or certificates, except that, if the date
of such surrender and payment is a date when the stock transfer books of the
Corporation are closed, such person shall be deemed to have become the holder
of such shares at the close of business on the next succeeding date on which
the stock transfer books are open.


 


3.             Covenants
of the Corporation.


 


3.1           Covenants as to Exercise Shares.  The Corporation covenants and agrees that all Exercise Shares that may be
issued upon the exercise of the rights represented by this Warrant will, upon
issuance, be validly issued and outstanding, fully paid and nonassessable, and
free from all taxes, liens and charges with respect to the issuance
thereof.  Subject to the immediately
preceding paragraph, the Corporation further covenants and agrees that the
Corporation will at all times during the Exercise Period, have authorized and
reserved, free from preemptive rights, a sufficient number of shares of its
Common Stock to provide for the exercise of the rights represented by this Warrant.  If at any time during the Exercise Period the
number of authorized but unissued shares of Common Stock shall not be
sufficient to permit exercise of this Warrant, the Corporation will take such
corporate action as may, in the opinion of its counsel, be necessary to
increase its authorized but unissued shares of Common Stock to such number of
shares as shall be sufficient for such purposes.


 


3.2           No Impairment.  Except and to the extent as waived or
consented to by the Holder, the Corporation will not, by amendment of its
Articles of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms to be observed or performed hereunder by the Corporation, but will
at all times in good faith assist in the carrying out of all the provisions of
this Warrant and in the taking of all such action as may be necessary or
appropriate in order to protect the exercise rights of the Holder against
impairment.


 


3.3           Notices of Record
Date.  In the event of any taking by the
Corporation of a record of the holders of any class of securities for the
purpose of determining the holders thereof who are entitled to receive any
dividend (other than a cash dividend which is the same as cash dividends paid
in previous quarters) or other distribution, the Corporation shall mail to the
Holder, at least ten (10) days prior to the date specified herein, a notice
specifying the date on which any such record is to be taken for the purpose of
such dividend or distribution.


 


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4.             Representations
of Holder.


 


4.1           Acquisition of Warrant for
Personal Account.  The Holder represents
and warrants that it is acquiring the Warrant solely for its account for
investment and not with a view to or for sale or distribution of said Warrant
or any part thereof.  The Holder also
represents that the entire legal and beneficial interests of the Warrant and
Exercise Shares the Holder is acquiring is being acquired for, and will be held
for, its account only.


 


4.2           Securities
Are Not Registered.


 


(a)           The
Holder understands that the Warrant and the Exercise Shares have not been
registered under the Securities Act of 1933, as amended (the “Act”) on the basis that no
distribution or public offering of the stock of the Corporation is to be
effected.  The Holder realizes that the
basis for the exemption may not be present if, notwithstanding its representations,
the Holder has a present intention of acquiring the securities for a fixed or
determinable period in the future, selling (in connection with a distribution
or otherwise), granting any participation in, or otherwise distributing the
securities.  The Holder has no such
present intention.


 


(b)           The
Holder recognizes that the Warrant and the Exercise Shares must be held
indefinitely unless they are subsequently registered under the Act or an
exemption from such registration is available. 
The Holder recognizes that the Corporation has no obligation to register
the Warrant or the Exercise Shares of the Corporation (except as provided in
Section 11 hereof), or to comply with any exemption from such registration.


 


(c)           The
Holder is aware that neither the Warrant nor the Exercise Shares may be sold
pursuant to Rule 144 adopted under the Act unless certain conditions are met,
including, among other things, the existence of a public market for the shares,
the availability of certain current public information about the Corporation,
the resale following the required holding period under Rule 144 and the number
of shares being sold during any three month period not exceeding specified
limitations.  Holder is aware that the
conditions for resale set forth in Rule 144 have not been satisfied and that
the Corporation presently has no plans to satisfy these conditions in the
foreseeable future.


 


4.3           Disposition
of Warrant and Exercise Shares.  The
Holder understands and agrees that all certificates evidencing the shares to be
issued to the Holder may bear the following legend:


 


THESE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”).  THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
AS TO THE SECURITIES UNDER THE ACT, UNLESS AN EXEMPTION FROM REGISTRATION IS
AVAILABLE.


 


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5.             Adjustment of
Exercise Price.  In the event of changes in the outstanding
Common Stock of the Corporation by reason of stock dividends, split-ups,
recapitalizations, reclassifications, combinations or exchanges of shares,
separations, reorganizations, liquidations, or the like prior to the exercise
of this Warrant (or portion thereof), the number and class of shares available
under the Warrant (or portion thereof) in the aggregate and the Exercise Price
shall be correspondingly adjusted to give the Holder of the Warrant (or portion
thereof), on exercise for the same aggregate Exercise Price, the total number,
class, and kind of shares as the Holder would have owned had the Warrant (or
portion thereof) been exercised immediately prior to the event and had the
Holder continued to hold such shares until after the event requiring
adjustment.  The form of this Warrant
need not be changed because of any adjustment in the number of Exercise Shares
subject to this Warrant.


 


6.             Fractional
Shares.  No
fractional shares shall be issued upon the exercise of this Warrant as a
consequence of any adjustment pursuant hereto. 
All Exercise Shares (including fractions) issuable upon exercise of this
Warrant may be aggregated for purposes of determining whether the exercise
would result in the issuance of any fractional share.  If, after aggregation, the exercise would
result in the issuance of a fractional share, the Corporation shall, in lieu of
issuance of any fractional share, pay the Holder otherwise entitled to such
fraction a sum in cash equal to the product resulting from multiplying the then
current fair market value of an Exercise Share by such fraction.


 


7.             No
Stockholder Rights.  This
Warrant in and of itself shall not entitle the Holder to any voting rights or
other rights as a stockholder of the Corporation.


 


8.             Transfer
of Warrant.  Subject
to applicable laws, the restriction on transfer set forth on the first page of
this Warrant, this Warrant and all rights hereunder are transferable, by the
Holder in person or by duly authorized attorney, upon delivery of this Warrant
and the form of assignment attached hereto to any transferee designated by
Holder.  The transferee shall sign an
investment letter in form and substance satisfactory to the Corporation.


 


9.             Lost,
Stolen, Mutilated or Destroyed Warrant.  If this Warrant is lost, stolen, mutilated or
destroyed, the Corporation may, on such terms as to indemnity or otherwise as
it may reasonably impose (which shall, in the case of a mutilated Warrant,
include the surrender thereof), issue a new Warrant of like denomination and
tenor as the Warrant so lost, stolen, mutilated or destroyed.  Any such new Warrant shall constitute an
original contractual obligation of the Corporation, whether or not the
allegedly lost, stolen, mutilated or destroyed Warrant shall be at any time
enforceable by anyone.


 


10.          Notices,
etc.  All
notices and other communications required or permitted hereunder shall be in
writing and shall be sent by telex, telegram, express mail or other form of
rapid communications, if possible, and if not then such notice or communication
shall be mailed by first-class mail, postage prepaid, addressed in each case to
the party entitled thereto at the following addresses: (a) if to the
Corporation, to Surge Global Energy, Inc., Attention: Secretary, at 12220 El
Camino Real, Suite 410, San Diego, California USA 92130 Facsimile: (858)
704-5011 and (b) if to the Holder, 


 


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Attention
                             ,
or at such other address as one party may furnish to the other in writing.  Notice shall be deemed effective on the date
dispatched if by personal delivery, telecopy, telex or telegram, two days after
mailing if by express mail, or three days after mailing if by first-class mail.


 


11.          Acceptance.  Receipt
of this Warrant by the Holder shall constitute acceptance of and agreement to
all of the terms and conditions contained herein.


 


12.          Governing
Law.  This
Warrant and all rights, obligations and liabilities hereunder shall be governed
by the laws of the State of New York.


 


In Witness Whereof,
the Corporation has caused this Warrant to be executed by its duly authorized
officer as of the date first set forth above.


 


 


	
   

  	
  Surge Global Energy, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Fred W.
  Kelly

  
	
   

  	
  Title:

  	
  Chief
  Executive Officer

  
					



 


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NOTICE OF EXERCISE


 


TO: Surge Global Energy, Inc.


 


(1)           The undersigned hereby
elects to purchase                            shares
of the Common Stock of Surge
Global Energy, Inc. (the “Corporation”)
pursuant to the terms of the attached Warrant, and tenders herewith payment of
the exercise price in full, together with all applicable transfer taxes, if
any.


 


(2)           Please issue a
certificate or certificates representing said shares of Common Stock in the
name of the undersigned or in such other name as is specified below:


 


	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Name)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (Address)

  	
   

  	
   

  



 


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(3)           The
undersigned represents that (i) the aforesaid shares of Common Stock are being
acquired for the account of the undersigned for investment and not with a view
to, or for resale in connection with, the distribution thereof and that the
undersigned has no present intention of distributing or reselling such shares;
(ii) the undersigned is aware of the Corporation’s business affairs and
financial condition and has acquired sufficient information about the
Corporation to reach an informed and knowledgeable decision regarding its
investment in the Corporation; (iii) the undersigned is experienced in making
investments of this type and has such knowledge and background in financial and
business matters that the undersigned is capable of evaluating the merits and
risks of this investment and protecting the undersigned’s own interests; (iv)
the undersigned understands that the shares of Common Stock issuable upon
exercise of this Warrant have not been registered under the Securities Act of
1933, as amended (the “Securities Act”),
by reason of a specific exemption from the registration provisions of the
Securities Act, which exemption depends upon, among other things, the bona fide
nature of the investment intent as expressed herein, and, because such
securities have not been registered under the Securities Act, they must be held
indefinitely unless subsequently registered under the Securities Act or an
exemption from such registration is available; (v) the undersigned is aware
that the aforesaid shares of Common Stock may not be sold pursuant to Rule 144
adopted under the Securities Act unless certain conditions are met and until
the undersigned has held the shares for the number of years prescribed by Rule
144, that among the conditions for use of the Rule is the availability of
current information to the public about the Corporation; and (vi) the
undersigned agrees not to make any disposition of all or any part of the
aforesaid shares of Common Stock unless and until there is then in effect a
registration statement under the Securities Act covering such proposed
disposition and such disposition is made in accordance with said registration
statement, or the undersigned has provided the Corporation with an opinion of
counsel satisfactory to the Corporation, stating that such registration is not
required.


 


	
   

  	
   

  	
   

  
	
  (Print Name)

  	
   

  	
  (Signature)

  
	
   

  	
   

  	
   

  
	
  Date: 

  	
   

  	
   

  	
   

  
				



 


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ASSIGNMENT FORM


 


(To assign the foregoing Warrant,

execute this form and supply

required information. Do not use

this form to purchase shares.)


 


For Value Received,
the foregoing Warrant and all rights evidenced thereby are hereby assigned to


 


	
  Name:

  	
   

  
	
  (Please Print)

  
	
   

  
	
  Address:

  	
   

  
	
  (Please Print)

  
	
   

  
	
  Dated:

  	
   

  	
   

  
	
   

  
	
  Holder’s Signature: 

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Holder’s Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
						



 


NOTE:  The signature to this Assignment Form must
correspond with the name as it appears on the face of the Warrant, without alteration
or enlargement or any change whatever. 
Officers of corporations and those acting in a fiduciary or other
representative capacity should file proper evidence of authority to assign the
foregoing Warrant.


 


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