Exhibit 10.27


 


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.
  2005-21

  	
   

  	
  November 30, 2005

  



Void After November 30, 2010


 


 


 


THIS
CERTIFIES THAT, for value received Benjamin
Financial Limited Partnership 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 Two Hundred Thousand (200,000)
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 five 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 and subject to
adjustment pursuant to Section 2(b) of the Registration Rights Agreement of
even date herewith between the Holder and the Corporation.


 


                (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.


 


 





















 


                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 “Securities  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 the Registration Rights Agreement of even
date herewith between the Holder and the Corporation).


 


                (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 certain of the
conditions for resale set forth in Rule 144 have not been satisfied.


 


                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 WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN 


 


2





















 


AVAILABLE
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS.


 


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 


 


3





















 


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, to: 


BENJAMIN FINANCIAL LIMITED PARTNERSHIP


2775 VIA DE LA VALLE, SUITE 205, DECMAR CA 92014, 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:

  	
  CEO

  






 


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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)

  
	
   

  






 


 


5





















 


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 and 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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