Document:

Exhibit 10.13

 

REGISTRATION RIGHTS AGREEMENT

 

This
Registration Rights Agreement (this “Agreement”) is made and entered
into as of                 ,
2005, among Surge Global Energy, Inc., a Delaware corporation (the “Company”),
and each of the purchasers signatory hereto (each such purchaser is a “Purchaser”
and all such purchasers are, collectively, the “Purchasers”).

 

The Company
and each Purchaser hereby agrees as follows:

 

1. Definitions

 

As used in this Agreement, the
following terms shall have the following meanings:

 

“Effectiveness Date” means, with respect to the Registration
Statement registering for resale the Registrable Securities, the 120th
calendar day following the Closing Date.

 

“Effectiveness Period” shall have the meaning set forth in Section
2(a).

 

“Filing Date” means, with respect to the Registration Statement
registering for resale the Registrable Securities, the 45th day
following the Closing Date.

 

“Holder” or “Holders” means the holder or holders, as the
case may be, from time to time of Registrable Securities.

 

“Indemnified Party” shall have the meaning set forth in Section
5(c).

 

“Indemnifying Party” shall have the meaning set forth in Section
5(c).

 

“Proceeding” means an action, claim, suit, investigation or
proceeding (including, without limitation, an investigation or partial
proceeding, such as a deposition), whether commenced or threatened.

 

“Prospectus” means the prospectus included in the Registration
Statement (including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any prospectus supplement, with respect to the terms
of the offering of any portion of the Registrable Securities covered by the
Registration Statement, and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all

 

 

material
incorporated by reference or deemed to be incorporated by reference in such
Prospectus.

 

“Registrable Securities” means all of the shares of common stock
underlying the Warrants.

 

“Registration Statement” means the registration statements
required to be filed hereunder, including (in each case) the Prospectus,
amendments and supplements to the Registration Statement or Prospectus,
including pre- and post-effective amendments, all exhibits thereto, and all
material incorporated by reference or deemed to be incorporated by reference in
the registration statement.

 

“Rule 415” means Rule 415 promulgated by the Commission pursuant
to the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.

 

“Warrants” shall mean the Common Stock purchase warrants issued
to the Purchasers.

 

2. Registration

 

(a)  On
or prior to the Filing Date, the Company shall prepare and file with the
Commission the Registration Statement covering the resale of all of the
Registrable Securities (and including, for purposes of this number, any
securities which may be issuable upon any stock split, dividend or other
distribution or recapitalization provision in the Warrants or in connection
with any anti-dilution provisions in the Warrants) for an offering to be made
on a continuous basis pursuant to Rule 415. The Registration Statement shall be
on Form SB-2 (unless the Company is not then eligible to register for resale
the Registrable Securities on Form SB-2, in which case such registration shall
be on another appropriate form in accordance herewith).  Subject to the terms of this Agreement, the
Company shall use its best efforts to cause the Registration Statement to be
declared effective under the Securities Act as promptly as possible after the
filing thereof, but in any event prior to the Effectiveness Date. 

 

3. Registration
Procedures

 

In connection
with the Company’s registration obligations hereunder, the Company shall:

 

(a) Promptly
deliver to each Holder, without charge, as many copies of the Prospectus or
Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Persons may reasonably request. Subject to the terms
of this Agreement, the Company hereby consents to the use of such Prospectus
and each amendment or supplement thereto by each of the selling Holders in
connection with the 

 

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offering and sale of the
Registrable Securities covered by such Prospectus and any amendment or
supplement thereto.

 

(b)  Comply with all applicable rules and
regulations of the Commission.

 

(c)  Use
its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal
of (i) any order suspending the effectiveness of the Registration Statement, or
(ii) any suspension of the qualification (or exemption from qualification) of
any of the Registrable Securities for sale in any jurisdiction, at the earliest
practicable moment.

 

4. Registration
Expenses. All fees and expenses incident to the performance of or
compliance with this Agreement by the Company shall be borne by the Company
whether or not any Registrable Securities are sold pursuant to the Registration
Statement.

 

5. Indemnification

 

(a) Indemnification by Holders. Each Holder
shall, severally and not jointly, indemnify and hold harmless the Company, its
directors, officers, agents and employees, each Person who controls the Company
(within the meaning of Section 15 of the Securities Act and Section 20 of the
Exchange Act), and the directors, officers, agents or employees of such
controlling Persons, to the fullest extent permitted by applicable law, from
and against all Losses (as determined by a court of competent jurisdiction in a
final judgment not subject to appeal or review) arising out of or based upon
any untrue statement of a material fact contained in any Registration
Statement, any Prospectus, or any form of prospectus, or in any amendment or
supplement thereto, or arising solely out of or based solely upon: (i) such
Holder’s failure to comply with the prospectus delivery requirements of the
Securities Act or (ii) any omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading to the
extent, but only to the extent, such untrue statement or omission is contained
in any information so furnished in writing by such Holder to the Company
specifically for inclusion in the Registration Statement or such Prospectus or
to the extent that (1) such untrue statements or omissions are based upon
information regarding such Holder furnished in writing to the Company by such
Holder expressly for use therein, or to the extent such information relates to
such Holder or such Holder’s proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Holder
expressly for use in the Registration Statement, such Prospectus or such form
of Prospectus or in any amendment or supplement thereto, the use by such Holder
of an outdated or defective Prospectus after the Company has notified such
Holder in writing that the Prospectus is outdated or defective.

 

(c) Conduct of Indemnification
Proceedings. If any Proceeding shall be brought or asserted against
any Person entitled to indemnity hereunder (an “Indemnified Party”),
such Indemnified Party shall promptly notify the Person from whom indemnity is
sought (the “Indemnifying Party”) in writing, and the Indemnifying Party
shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to the Indemnified Party and the payment of all fees
and expenses incurred in connection with 

 

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defense
thereof; provided, that the failure of any Indemnified Party to give such
notice shall not relieve the Indemnifying Party of its obligations or
liabilities pursuant to this Agreement, except (and only) to the extent that
such failure shall have prejudiced the Indemnifying Party.

 

An Indemnified Party shall have the right to
employ separate counsel in any such Proceeding and to participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party
has agreed in writing to pay such fees and expenses; or (2) the Indemnifying
Party shall have failed promptly to assume the defense of such Proceeding and
to employ counsel reasonably satisfactory to such Indemnified Party in any such
Proceeding; or (3) the named parties to any such Proceeding (including any
impleaded parties) include both such Indemnified Party and the Indemnifying
Party, and such Indemnified Party shall have been advised by counsel that a
material conflict of interest is likely to exist if the same counsel were to represent
such Indemnified Party and the Indemnifying Party (in which case, if such
Indemnified Party notifies the Indemnifying Party in writing that it elects to
employ separate counsel at the expense of the Indemnifying Party, the
Indemnifying Party shall not have the right to assume the defense thereof and
the expense of one such counsel for each Holder shall be at the expense of the
Indemnifying Party). The Indemnifying Party shall not be liable for any
settlement of any such Proceeding affected without its written consent, which
consent shall not be unreasonably withheld. No Indemnifying Party shall,
without the prior written consent of the Indemnified Party, effect any
settlement of any pending Proceeding in respect of which any Indemnified Party
is a party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of
such Proceeding.

 

Subject to the
terms of this Agreement, all fees and expenses of the Indemnified Party (including
reasonable fees and expenses to the extent incurred in connection with
investigating or preparing to defend such Proceeding in a manner not
inconsistent with this Section) shall be paid to the Indemnified Party, as
incurred, within ten Trading Days of written notice thereof to the Indemnifying
Party (regardless of whether it is ultimately determined that an Indemnified
Party is not entitled to indemnification hereunder; provided, that the
Indemnifying Party may require such Indemnified Party to undertake to reimburse
all such fees and expenses to the extent it is finally judicially determined
that such Indemnified Party is not entitled to indemnification hereunder).

 

6. Miscellaneous

 

(a) Amendments and Waivers. The provisions of
this Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the same shall be in writing and
signed by the Company and all of the Holders of the then outstanding
Registrable Securities. Notwithstanding the foregoing, a waiver or consent to
depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders and that does not directly or indirectly
affect the rights of other Holders 

 

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may be given by Holders of all
of the Registrable Securities to which such waiver or consent relates; provided,
however, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence.

 

(b) No Inconsistent Agreements. Neither the
Company nor any of its subsidiaries has entered, as of the date hereof, nor
shall the Company or any of its subsidiaries, on or after the date of this
Agreement, enter into any agreement with respect to its securities, that would
have the effect of impairing the rights granted to the Holders in this
Agreement or otherwise conflicts with the provisions hereof.

 

(c) Compliance. Each Holder covenants and
agrees that it will comply with the prospectus delivery requirements of the
Securities Act as applicable to it in connection with sales of Registrable
Securities pursuant to the Registration Statement.

 

(d) Notices. Any and all notices or other
communications or deliveries required or permitted to be provided hereunder
shall be delivered as set forth in the Master Amendment Agreement.

 

(e) Successors and Assigns. This Agreement
shall inure to the benefit of and be binding upon the successors and permitted
assigns of each of the parties and shall inure to the benefit of each Holder.

 

(f) Counterparts. This Agreement may be
executed in any number of counterparts, each of which when so executed shall be
deemed to be an original and, all of which taken together shall constitute one
and the same Agreement. In the event that any signature is delivered by
facsimile transmission, such signature shall create a valid binding obligation
of the party executing (or on whose behalf such signature is executed) the same
with the same force and effect as if such facsimile signature were the original
thereof.

 

(g) Governing Law. All questions concerning
the construction, validity, enforcement and interpretation of this Agreement
shall be governed by and construed and enforced in accordance with the internal
laws of the State of New York, without regard to the principles of conflicts of
law thereof. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of New York,
Borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is
improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof to such party at the address in effect for notices to it
under this Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law.  Each party hereto
hereby 

 

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irrevocably waives, to the
fullest extent permitted by applicable law, any and all right to trial by jury
in any legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby. If either party shall commence a Proceeding
to enforce any provisions of this Agreement, then the prevailing party in such
Proceeding shall be reimbursed by the other party for its attorney’s fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such Proceeding.

 

(h) Severability. If any term, provision,
covenant or restriction of this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions set forth herein shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated, and the parties hereto shall use their reasonable efforts to find
and employ an alternative means to achieve the same or substantially the same
result as that contemplated by such term, provision, covenant or restriction.
It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and
restrictions without including any of such that may be hereafter declared invalid,
illegal, void or unenforceable.

 

(i) Headings. The headings in this Agreement
are for convenience of reference only and shall not limit or otherwise affect
the meaning hereof.

 

********************

 

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IN WITNESS
WHEREOF, the parties have executed this Registration Rights Agreement as of the
date first written above.

 

 

	
   

  	
  Surge
  Global Energy, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name: Fred
  W. Kelly

  
	
   

  	
  Title: Chief
  Executive Officer

  

 

[SIGNATURE PAGE OF HOLDERS FOLLOWS]

 

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[SIGNATURE PAGE OF HOLDERS TO SRGG RRA]

 

 

	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  

 

8Exhibit 10.14

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”)
is dated as 24 October 2005, between
Surge Global Energy, Inc., a Delaware corporation (the “Company”), and
each purchaser identified on the signature pages hereto (each, including its
successors and assigns, a “Purchaser” and collectively the “Purchasers”);
and

WHEREAS, subject to the terms and conditions set forth
in this Agreement and pursuant to Section 4(2) of the Securities Act of 1933,
as amended (the “Securities Act”) and Rule 506 promulgated thereunder,
the Company desires to issue and sell to each Purchaser, and each Purchaser,
severally and not jointly, desires to purchase from the Company, securities of
the Company as more fully described in this Agreement.

NOW, THEREFORE, IN CONSIDERATION of the mutual
covenants contained in this Agreement, and for other good and valuable
consideration the receipt and adequacy of which are hereby acknowledged, the
Company and each Purchaser agrees as follows:

ARTICLE I.

DEFINITIONS

1.1           Definitions.  In addition to the terms defined elsewhere in
this Agreement, for all purposes of this Agreement, the following terms have
the meanings indicated in this Section 1.1:

“Affiliate” means any Person that, directly or indirectly
through one or more intermediaries, controls or is controlled by or is under
common control with a Person as such terms are used in and construed under Rule
144.  With respect to a Purchaser, any
investment fund or managed account that is managed on a discretionary basis by
the same investment manager as such Purchaser will be deemed to be an Affiliate
of such Purchaser.

“Business Day” means any day except Saturday, Sunday and any day
which shall be a federal legal holiday or a day on which banking institutions
in the State of New York are authorized or required by law or other
governmental action to close.

“Closing” means the closing of the purchase and sale of the
Common Stock and the Warrants pursuant to Section 2.1.

“Closing Date” means the Trading Day when all of the Transaction
Documents have been executed and delivered by the applicable parties thereto,
and all conditions precedent to the Purchasers’ obligations to pay the
Subscription Amount have been satisfied or waived.

“Closing Price” means on any particular date
(a) the last reported closing bid price per share of Common Stock on such
date on the Trading Market (as reported by Bloomberg L.P. at 4:15 PM (New York
time), or (b) if there is no such price on such date, then the closing bid price
on the Trading Market on the date nearest preceding such date (as reported by
Bloomberg L.P. at 4:15 PM (New York time) for the closing bid price for regular
session trading on such day), or (c) if the Common Stock is not then

 

 

listed or quoted on a Trading Market and if prices for the Common Stock
are then quoted on the OTC Bulletin Board, the closing bid price of the Common
Stock for such date (or the nearest preceding date) on the OTC Bulletin Board
(as reported by Bloomberg L.P. at 4:15 PM (New York time), (d) if the Common
Stock is not then listed or quoted on the Trading Market and if prices for the
Common Stock are then reported in the “pink sheets” published by the Pink
Sheets LLC (formerly the National Quotation Bureau Incorporated (or a similar organization
or agency succeeding to its functions of reporting prices), the most recent bid
price per share of the Common Stock so reported, or (e) if the shares of
Common Stock are not then publicly traded the fair market value of a share of
Common Stock as determined by a qualified independent appraiser selected in
good faith by the Purchasers of a majority in interest of the Shares then
outstanding.

“Commission”
means the Securities and Exchange Commission.

“Common Stock”
means the common stock of the Company, $0.01 par value per share, and any
securities into which such common stock may hereafter be reclassified.

“Company
Counsel” means Sichenzia Ross Friedman Ference LLP.

“Effective Date” means the date that the Registration Statement
is first declared effective by the Commission.

“Exchange Act” means the Securities Exchange Act of 1934, as
amended.

 “Per Share Purchase Price”
equals $1.00 USD, subject to adjustment for
reverse and forward stock splits, stock dividends, stock combinations and other
similar transactions of the Common Stock that occur after the date of this
Agreement.

“Person” means an individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof)
or other entity of any kind.

“Registration Statement” means the registration statement to be
filed by the Company pursuant to the Registration Rights Agreement.

“Registration Rights Agreement” means the Registration Rights
Agreement, dated as of the date of this Agreement, among the Company and each
Purchaser, in the form of Exhibit A hereto.

“Rule 144” means Rule 144 promulgated by the Commission pursuant
to the Securities Act, as such Rule may be amended from time to time, or any
similar rule or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.

“SEC Reports” shall have the meaning ascribed to such term in
Section 3.1(h).

“Securities” means
the Shares, the Warrants and the Warrant Shares.

“Securities Act” means the Securities Act of 1933, as amended.

 

2

 

“Shares” means the shares of Common Stock issued or issuable to
each Purchaser pursuant to this Agreement.

“Subscription Amount” means, as to each Purchaser, the amounts
set forth below such Purchaser’s signature block on the signature page hereto,
in United States dollars and in immediately available funds.

“Trading Day” means (i) a day on which the Common Stock is traded
on a Trading Market, or (ii) if the Common Stock is not listed on a Trading
Market, a day on which the Common Stock is traded on the over-the-counter
market, as reported by the OTC Bulletin Board, or (iii) if the Common Stock is
not quoted on the OTC Bulletin Board, a day on which the Common Stock is quoted
in the over-the-counter market as reported by the National
Quotation Bureau Incorporated (or any similar organization or agency succeeding
its functions of reporting prices); provided, that in the event that the Common
Stock is not listed or quoted as set forth in (i), (ii) and (iii) hereof, then
Trading Day shall mean a Business Day.

“Trading Market” means the following markets or exchanges on
which the Common Stock is listed or quoted for trading on the date in question:
the American Stock Exchange, the New York Stock Exchange, the Nasdaq National
Market or the Nasdaq SmallCap Market.

“Transaction Documents” means this Agreement,
the Warrants and the Registration Rights Agreement and any other documents or
agreements executed in connection with the transactions contemplated hereunder.

“Warrants” means the Common Stock purchase warrants, in the
forms of Exhibit C, issuable to the Purchasers at the Closing, as defined in
Section 2(a) herein.

“Warrant Shares”
means the shares of Common Stock issuable upon exercise of the Warrants.

 

ARTICLE II.

PURCHASE AND SALE

2.1           Closing.  At the Closing, each Purchaser shall purchase
from the Company, severally and not jointly with the other Purchasers, and the
Company shall issue and sell to each Purchaser, (a) a number of Shares equal to
such Purchaser’s Subscription Amount divided by the Per Share Purchase Price
and (b) the Warrants as determined pursuant to Section 2.2(a)(iii) — (v).  The maximum aggregate Subscription Amounts
shall not exceed $10,000,000 USD. Upon satisfaction
of the conditions set forth in Section 2.2, the Closing shall occur at the
offices of the Company Counsel, or such other location as the parties shall
mutually agree.

2.2           Closing Conditions.

(a)           At the Closing the Company shall
deliver or cause to be delivered to each Purchaser the following:

 

3

 

(i)            this Agreement duly executed by the
Company;

(ii)           within 5 Trading Days of the Closing
Date, a certificate evidencing a number of Shares equal to such Purchaser’s
Subscription Amount divided by the Per Share Purchase Price, registered in the
name of such Purchaser;

(iii)          a Warrant, registered in the name of
such Purchaser, pursuant to which such Purchaser shall have the right to
purchase up to the number of shares of Common Stock equal to 200% ( 2 warrants
for each share purchased) of the Shares to be issued to such Purchaser at the
Closing, which shall be exercisable immediately and have an exercise price
equal to $1.45 and be exercisable for a period
of two years from the Closing Date (the “Series C Warrant”);

(iv)          the Registration Rights Agreement duly
executed by the Company; and

(b)           At the Closing each Purchaser shall
deliver or cause to be delivered to the Company the following:

(i)            this Agreement duly executed by such
Purchaser;

(ii)           such Purchaser’s Subscription Amount
by wire transfer to an account as specified in writing by the Company; and

(iii)          the Registration Rights Agreement duly
executed by such Purchaser.

(c)           All representations and warranties of
the other party contained herein shall remain true and correct as of the
Closing Date and all covenants of the other party shall have been performed if
due prior to such date.

(d)           From the date hereof to the Closing
Date, trading in the Common Stock shall not have been suspended by the
Commission (except for any suspension of trading of limited duration agreed to
by the Company, which suspension shall be terminated prior to the Closing),
and, at any time prior to the Closing Date, trading in securities generally as
reported by Bloomberg Financial Markets shall not have been suspended or
limited, or minimum prices shall not have been established on securities whose
trades are reported by such service, or on any Trading  Market, nor shall a banking moratorium have
been declared either by the United States or New York State authorities nor
shall there have occurred any material outbreak or escalation of hostilities or
other national or international calamity of such magnitude in its effect on, or
any material adverse change in, any financial market which, in each case, in
the reasonable judgment of each Purchaser, makes it impracticable or
inadvisable to purchase the Shares at the such Closing.

 

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ARTICLE III.

REPRESENTATIONS AND WARRANTIES

3.1           Representations and Warranties of
the Company.  Except as set forth
under the corresponding section of the disclosure schedules delivered to the
Purchasers concurrently herewith (the “Disclosure Schedules”) which Disclosure
Schedules shall be deemed a part hereof, the Company hereby makes the
representations and warranties set forth below to each Purchaser:

(a)           Issuance of the Securities.  The Shares and Warrants are duly authorized
and, when issued and paid for in accordance with the Transaction Documents,
will be duly and validly issued, fully paid and nonassessable, free and clear
of all Liens imposed by the Company other than restrictions on transfer
provided for in the Transaction Documents. 
The Warrant Shares, when issued in accordance with the terms of the
Transaction Documents, will be validly issued, fully paid and nonassessable,
free and clear of all Liens imposed by the Company.  The Company has reserved from its duly
authorized capital stock the maximum number of shares of Common Stock issuable
pursuant to this Agreement and the Warrants.

(b)           Capitalization.  The capitalization of the Company is as
described in the Company’s most recent periodic report filed with the
Commission.  The Company has not issued
any capital stock since such filing other than pursuant to the exercise of
employee stock options under the Company’s stock option plans, the issuance of
shares of Common Stock to employees pursuant to the Company’s employee stock
purchase plan and pursuant to the conversion or exercise of outstanding Common
Stock Equivalents.

(c)           SEC Reports; Financial Statements.  The Company has filed all reports required to
be filed by it under the Securities Act and the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the
date hereof (or such shorter period as the Company was required by law to file
such material) (the foregoing materials being collectively referred to herein
as the “SEC Reports”) on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports prior to
the expiration of any such extension.

(d)           Private Placement. Assuming
the accuracy of the Purchasers representations and warranties set forth in
Section 3.2, no registration under the Securities Act is required for the offer
and sale of the Securities by the Company to the Purchasers as contemplated
hereby in accordance with the terms of the Transaction Documents. The issuance
and sale of the Securities hereunder does not contravene the rules and
regulations of the Trading Market.

(e)           Investment Company. The
Company is not, and is not an Affiliate of, an “investment company” within the
meaning of the Investment Company Act of 1940, as amended.

3.2           Representations and Warranties of
the Purchasers.  Each Purchaser
hereby, for itself and for no other Purchaser, represents and warrants as of
the date hereof and as of the Closing Date to the Company as follows:

 

5

 

(a)           Organization; Authority.  Such Purchaser is an entity duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization with full right, corporate or partnership power and authority to
enter into and to consummate the transactions contemplated by the Transaction
Documents and otherwise to carry out its obligations thereunder. The execution,
delivery and performance by such Purchaser of the transactions contemplated by this
Agreement have been duly authorized by all necessary corporate action on the
part of such Purchaser.  Each Transaction
Document to which it is party has been duly executed by such Purchaser, and
when delivered by such Purchaser in accordance with the terms hereof, will
constitute the valid and legally binding obligation of such Purchaser,
enforceable against it in accordance with its terms except (i) as limited by
general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may
be limited by applicable law.

(b)           Investment Intent.  Such Purchaser understands that the
Securities are “restricted securities” and have not been registered under the
Securities Act or any applicable state securities law and is acquiring the
Securities as principal for its own account for investment purposes only and
not with a view to or for distributing or reselling such Securities or any part
thereof, has no present intention of distributing any of such Securities and has
no arrangement or understanding with any other persons regarding the
distribution of such Securities (this representation and warranty not limiting
such Purchaser’s right to sell the Securities pursuant to the Registration
Statement or otherwise in compliance with applicable federal and state
securities laws).  Such Purchaser is
acquiring the Securities hereunder in the ordinary course of its business. Such
Purchaser does not have any agreement or understanding, directly or indirectly,
with any Person to distribute any of the Securities.

(c)           Purchaser Status.  At the time such Purchaser was offered the
Securities, it was, and at the date hereof it is, and on each date on which it
exercises any Warrants, it will be either: (i) an “accredited investor” as defined
in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or
(ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the
Securities Act.  Such Purchaser is not
required to be registered as a broker-dealer under Section 15 of the Exchange
Act.

(d)           Experience of such Purchaser.  Such Purchaser, both alone or together with
its representatives, has such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the merits and
risks of the prospective investment in the Securities, and has so evaluated the
merits and risks of such investment. 
Such Purchaser is able to bear the economic risk of an investment in the
Securities and, at the present time, is able to afford a complete loss of such
investment.

(e)           General Solicitation.  Such Purchaser is not purchasing the
Securities as a result of any advertisement, article, notice or other
communication regarding the Securities published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar
or any other general solicitation or general advertisement.

 

6

 

(f)            Residence.  If such Purchaser is an individual, then such
Purchaser resides in the state or province identified in the address of such
Purchaser set forth on the signature page hereto; if such Purchaser is a
partnership, corporation, limited liability company or other entity, then the
office or offices of such Purchaser in which its investment decision was made
is located at the address or addresses of such Purchaser set forth on the
signature page hereto.

(g)           Rule 144.  Subject to Section 4.1(a), such Purchaser
acknowledges and agrees that the Securities are “restricted securities” as
defined in Rule 144 promulgated under the Securities Act as in effect from time
to time and must be held indefinitely unless they are subsequently registered
under the Securities Act or an exemption from such registration is available.  Such Purchaser has been advised or is aware
of the provisions of Rule 144, which permits limited resale of shares purchased
in a private placement subject to the satisfaction of certain conditions,
including, among other things: the availability of certain current public
information about the Company, the resale occurring following the required
holding period under Rule 144 and the number of shares being sold during any
three-month period not exceeding specified limitations.

 

ARTICLE IV.

OTHER AGREEMENTS OF THE PARTIES

4.1           Restriction
on Sales, Short Sales and Hedging Transactions.

 

(a)           The Securities may only be disposed
of in compliance with state and federal securities laws.  In connection with any transfer of Securities
other than pursuant to an effective registration statement or Rule 144, to the
Company or to an Affiliate of a Purchaser, the Company may require the
transferor thereof to provide to the Company an opinion of counsel selected by
the transferor and reasonably acceptable to the Company, the form and substance
of which opinion and shall be reasonably satisfactory to the Company, to the
effect that such transfer does not require registration of such transferred
Securities under the Securities Act.  As
a condition of transfer, any such transferee shall agree in writing to be bound
by the terms of this Agreement and shall have the rights of a Purchaser under
this Agreement and the Registration Rights Agreement.

(b)           Each Purchaser agrees to the
imprinting, so long as is required by this Section 4.1(b), of the following
legend on any certificate evidencing Securities:

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 AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION

 

7

 

REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS.

4.2           Reservation
of Common Stock.  As of the date
hereof, the Company has reserved and the Company shall continue to reserve and
keep available at all times, free of preemptive rights, a sufficient number of
shares of Common Stock for the purpose of enabling the Company to issue Shares
pursuant to this Agreement and Warrant Shares pursuant to any exercise of the
Warrants.

 

ARTICLE V.

MISCELLANEOUS

 

5.1           Entire
Agreement.  The Transaction
Documents, together with the exhibits and schedules thereto, contain the entire
understanding of the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, oral or written, with
respect to such matters, which the parties acknowledge have been merged into
such documents, exhibits and schedules.

 

5.3           Notices.  Any and all notices or other communications
or deliveries required or permitted to be provided hereunder shall be in
writing and shall be deemed given and effective on the earliest of (a) the date
of transmission, if such notice or communication is delivered via facsimile at
the facsimile number set forth on the signature pages attached hereto prior to
6:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after
the date of transmission, if such notice or communication is delivered via
facsimile at the facsimile number set forth on the signature pages attached
hereto on a day that is not a Trading Day or later than 6:30 p.m. (New York
City time) on any Trading Day, (c) the second Trading Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service, or
(d) upon actual receipt by the party to whom such notice is required to be
given.  The address for such notices and
communications shall be as set forth on the signature pages attached hereto.

 

5.2           Amendments;
Waivers.  No provision of this
Agreement may be waived or amended except in a written instrument signed, in
the case of an amendment, by the Company and each of the Purchaser or, in the
case of a waiver, by the party against whom enforcement of any such waiver is
sought.  No waiver of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof,
nor shall any delay or omission of either party to exercise any right hereunder
in any manner impair the exercise of any such right.

 

5.3           Construction.  The headings herein are for convenience only,
do not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.  The
language used in this Agreement will be deemed to be the language chosen by the
parties to express their mutual intent, and no rules of strict construction
will be applied against any party.

 

5.4           Governing
Law; Venue; Waiver of Jury Trial. 
All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York, without
regard to the principles of conflicts of law thereof.  Each party hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in the City of
New

 

8

 

York, borough of Manhattan for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, that such suit, action or proceeding is
improper or inconvenient venue for such proceeding.  Each party hereby irrevocably waives personal
service of process and consents to process being served in any such suit,
action or proceeding by mailing a copy thereof via registered or certified mail
or overnight delivery (with evidence of delivery) to such party at the address
in effect for notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner
permitted by law.  The parties hereby
waive all rights to a trial by jury.  If
either party shall commence an action or proceeding to enforce any provisions
of this Agreement, then the prevailing party in such action or proceeding shall
be reimbursed by the other party for its attorney’s fees and other costs and
expenses incurred with the investigation, preparation and prosecution of such
action or proceeding.

 

5.5           Survival.  The representations, warranties and covenants
contained herein shall survive the Closing and delivery and/or exercise of the
Securities, as applicable.

 

5.6           Execution.  This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart. 
In the event that any signature is delivered by facsimile transmission,
such signature shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the same force
and effect as if such facsimile signature page were an original thereof.

 

5.7           Severability.  If any provision of this Agreement is held to
be invalid or unenforceable in any respect, the validity and enforceability of
the remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

 

(Signature
Page Follows)

 

9

 

                IN
WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

	
   

  	
  Surge Global Energy, Inc.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Fred W. Kelly

  	
   

  
	
   

  	
  Name:

  	
  Fred W. Kelly

  	
   

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  	
   

  
	
   

  	
   

  
	 
	
  Address for Notice:

  	 
	 
	 

	 
	12220 El Camino Real
	 
	 
	 

	 
	Suite 400
	 
	 
	 

	 
	San Diego, CA 92130
	 
	 
	 

	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  With a copy to:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Darrin M. Ocasio, Esq.

  
	
   

  	
  Sichenzia Ross Friedman Ference LLP

  
	
   

  	
  1065 Avenue of Americas

  
	
   

  	
  New York, NY 10018

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
								

 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR
PURCHASER FOLLOWS]

 

10

 

[PURCHASERS
SIGNATURE PAGE — SRGG]

 

 

 

IN WITNESS WHEREOF, the
undersigned have caused this Securities Purchase Agreement to be duly executed
by their respective authorized signatories as of the date first indicated
above.

Name of Purchaser:  Pawnee Holding Corporation

 

	
  Signature
  of Authorized Signatory of Purchaser:

  	
  /s/ Carl H. Almond

  	
   

  

Name of Authorized Signatory: Carl H.
Almond

Title of Authorized Signatory: President

Email Address of Purchaser:
doc@almond.net

Facsimile of Purchaser: 1-803-434-6104                                          Mobile: 1-803-238-5387

 

Address for Notice of Purchaser:

1829 Senate Street

Unit 4E

Columbia, SC 29201

 

Address for Delivery of
Securities for Purchaser (if not same as above):

 

 

Subscription Amount in
USD: $200,000  —
[Two Hundred Thousand US Dollars]

 

Shares: 200,000 shares — [Two Hundred Thousand Shares]

 

Warrant Shares: 400,000 shares — [Four Hundred Thousand Shares]

 

EIN# or SS# Number:                  

 

[MUST PROVIDE THIS UNDER SEPARATE
COVER]

 

11

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