Exhibit 10.15


 


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. 2005-17

  	
   

  	
  October 24, 2005

  



 


Void After October 24, 2010


 


THIS
CERTIFIES THAT, for
value received Pawnee Holding Corporation
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 400,000 shares – [Four
Hundred Thousand] 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 $1.45 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,
received


 


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ATT:                                 
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:

  	
  /s/ Fred W. Kelly

  	
   

  
	
   

  	
  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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