Document:

Unassociated Document

    
      Exhibit
        10.2

      

      REGISTRATION
        RIGHTS AGREEMENT

      

      This
        Registration Rights Agreement (this “Agreement”)
        is
        made and entered into as of November 28, 2006 among Surge Global Energy,
        Inc., a
        Delaware corporation (the “Company”),
        and
        the purchaser signatory hereto (such purchaser is the “Purchaser”
and,
        including such Purchaser’s successors and assigns, the “Purchasers”).

       

      This
        Agreement is made pursuant to the Securities Purchase Agreement, dated as
        of the
        date hereof between the Company and the Purchasers (the “Purchase
        Agreement”).

       

      The
        Company and the Purchaser hereby agree as follows:

      

      
        	 	1.	Definitions	 

      

       

      Capitalized
        terms used and not otherwise defined herein that are defined in the Purchase
        Agreement shall have the meanings given such terms in the Purchase
        Agreement.
        As used
        in this Agreement, the following terms shall have the following
        meanings:

       

      “Advice”
shall
        have the meaning set forth in Section 6(d).

       

      “Effectiveness
        Date”
means,
        with respect to the initial Registration Statement required to be filed
        hereunder, the 120th
        calendar
        day following the date hereof and, with respect to any additional Registration
        Statements which may be required pursuant to Section 3(c), the 120th
        calendar
        day following the date on which the Company first knows, or reasonably should
        have known, that such additional Registration Statement is required hereunder;
        provided,
        however,
        in the
        event the Company is notified by the Commission that one of the above
        Registration Statements will not be reviewed or is no longer subject to further
        review and comments, the Effectiveness Date as to such Registration Statement
        shall be the fifth Trading Day following the date on which the Company is
        so
        notified if such date precedes the dates required above.

       

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

       

      “Event”
shall
        have the meaning set forth in Section 2(b).

       

      “Event
        Date”
shall
        have the meaning set forth in Section 2(b).

       

      “Filing
        Date”
means,
        with respect to the initial Registration Statement required hereunder, the
        30th
        calendar
        day following the date hereof and, with respect to any additional Registration
        Statements which may be required pursuant to Section 3(c), the 30th
        day
        following the date on which the Company first knows, or reasonably should
        have
        known that such additional Registration Statement is required hereunder.
        In the
        event that the holders of a majority of the Registrable Securities timely
        object
        to the filing of a Registration Statement pursuant to Section 3(a) hereof,
        the
“Filing Date” will be extended until 5 Trading Days after the Company receives
        notice from all of the objecting Purchasers that such Purchasers no longer
        object to the Registration Statement being filed. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      “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).

      

      “Losses”
shall
        have the meaning set forth in Section 5(a).

      

      “Plan
        of Distribution”
shall
        have the meaning set forth in Section 2(a).

       

      “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 a 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 a 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,
        as of the date in question, (i) all of the Shares, (ii) all Warrant Shares,
        (iii) any securities issued or issuable upon any stock split, dividend or
        other
        distribution, recapitalization or similar event with respect to the foregoing,
        and (iv) any additional shares issuable in connection with any anti-dilution
        provisions associated with Warrants and the Greenshoe Warrants (in each case,
        without giving effect to any limitations on exercise set forth in the Warrants
        and the Greenshoe Warrants). Notwithstanding the foregoing, the term
“Registrable Securities” excludes any securities of the Company which are
        saleable by the holder of such securities pursuant to the provisions of
        paragraph (k) of Rule 144 promulgated under the Securities Act (as defined
        below).

       

      “Registration
        Statement”
means
        the registration statements required to be filed hereunder and any additional
        registration statements contemplated by Section 3(c), including (in each
        case)
        the Prospectus, amendments and supplements to such 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 such registration statement. 

       

      
        
          
          

        

        
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      “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.

       

      “Rule
        424”
means
        Rule 424 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.

       

      “Selling
        Shareholder Questionnaire”
shall
        have the meaning set forth in Section 3(a).

      
        

        
          	 	2.	Shelf Registration	 

        

         

      

      (a)    On
        or
        prior to each Filing Date, the Company shall prepare and file with the
        Commission a “Shelf” Registration Statement covering the resale of 120% of the
        Registrable Securities on such Filing Date for an offering to be made on
        a
        continuous basis pursuant to Rule 415. The Registration Statement shall be
        on
        Form SB-2 (except if the Company is then eligible to register for resale
        the
        Registrable Securities on Form S-3, such registration shall be made on Form
        S-3)
        and shall contain (unless otherwise directed by the Holders) substantially
        the
“Plan
        of Distribution”
        attached hereto as Annex
        A.
        Subject
        to the terms of this Agreement, the Company shall use its best efforts to
        cause
        a 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
        applicable Effectiveness Date, and shall use its best efforts to keep such
        Registration Statement continuously effective under the Securities Act for
        a
        period of two years from the Effectiveness Date (the “Effectiveness
        Period”).
        The
        Company shall telephonically request effectiveness of a Registration Statement
        as of 5:00 pm Eastern Time on a Trading Day. The Company shall immediately
        notify the Holders via facsimile of the effectiveness of a Registration
        Statement on the same Trading Day that the Company telephonically confirms
        effectiveness with the Commission, which shall be the date requested for
        effectiveness of a Registration Statement. The Company shall, by 9:30 am
        Eastern
        Time on the Trading Day after the Effective Date (as defined in the Purchase
        Agreement), file a Form 424(b)(5) with the Commission. Failure to so notify
        the
        Holder within 1 Trading Day of such notification shall be deemed an Event
        under
        Section 2(b).

      

      (b)    If:
        (i) a
        Registration Statement is not filed on or prior to its Filing Date (if the
        Company files a Registration Statement without affording the Holders the
        opportunity to review and comment on the same as required by Section 3(a),
        the
        Company shall not be deemed to have satisfied this clause (i)), or (ii) the
        Company fails to file with the Commission a request for acceleration in
        accordance with Rule 461 promulgated under the Securities Act, within five
        Trading Days of the date that the Company is notified (orally or in writing,
        whichever is earlier) by the Commission that a Registration Statement will
        not
        be “reviewed,” or not subject to further review, or (iii) prior to its
        Effectiveness Date, the Company fails to file a pre-effective amendment and
        otherwise respond in writing to comments made by the Commission in respect
        of
        such Registration Statement within 10 calendar days after the receipt of
        comments by or 

       

      
        
          
          

        

        
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      notice
        from the Commission that such amendment is required in order for a Registration
        Statement to be declared effective, or (iv) a Registration Statement filed
        or
        required to be filed hereunder is not declared effective by the Commission
        by
        its Effectiveness Date, or (v) after the Effectiveness Date, (A) a Registration
        Statement ceases for any reason to remain continuously effective as to all
        Registrable Securities for which it is required to be effective, or (B) the
        Holders are not permitted to utilize the Prospectus therein to resell such
        Registrable Securities, in either case, for 10 consecutive business days
        but no
        more than an aggregate of 30 business days during any 12-month period (which
        need not be consecutive Trading Days) (any such failure or breach being referred
        to as an “Event”,
        and
        for purposes of clause (i) or (iv) the date on which such Event occurs, or
        for
        purposes of clause (ii) the date on which such five Trading Day period is
        exceeded, or for purposes of clause (iii) the date which such 10 calendar
        day
        period is exceeded, or for purposes of clause (v) the date on which such
        10 or
        30 business day period, as applicable, is exceeded being referred to as
“Event
        Date”),
        then
        in addition to any other rights the Holders may have hereunder or under
        applicable law, on each such Event Date and on each monthly anniversary of
        each
        such Event Date (if the applicable Event shall not have been cured by such
        date)
        until the applicable Event is cured, the Company shall pay to each Holder
        an
        amount in cash, as partial liquidated damages and not as a penalty, equal
        to
        2.0% of the aggregate purchase price paid by such Holder pursuant to the
        Purchase Agreement for any Registrable Securities then held by such Holder.
        If
        the Company fails to pay any partial liquidated damages pursuant to this
        Section
        in full within seven days after the date payable, the Company will pay interest
        thereon at a rate of 18% per annum (or such lesser maximum amount that is
        permitted to be paid by applicable law) to the Holder, accruing daily from
        the
        date such partial liquidated damages are due until such amounts, plus all
        such
        interest thereon, are paid in full. The partial liquidated damages pursuant
        to
        the terms hereof shall apply on a daily pro-rata basis for any portion of
        a
        month prior to the cure of an Event.

      

      (c)    Notwithstanding
        anything else herein to the contrary, upon the happening of any corporate
        development, public filing with the Commission or similar event, that, in
        the
        judgment of Company’s Board of Directors, renders it advisable to suspend use of
        the Registration Statement or upon the request by an underwriter in connection
        with an underwritten public offering of the Company’s securities, the Company
        may, on not more than one (1) non-consecutive occasion for not more than
        sixty
        (60) days, suspend use of the Registration Statement on written notice to
        the
        Purchasers (which notice will not disclose the content of any material
        non-public information and will indicate the date of the beginning and end
        of
        the intended period of suspension, if known), in which case the Purchaser
        shall
        discontinue disposition of the securities covered by the Registration Statement
        until copies of a supplemented or amended Prospectus are distributed to the
        Purchaser or until the Purchaser is advised in writing by the Company that
        sales
        of Registrable Securities under the applicable Prospectus may be resumed
        and has
        received copies of any additional or supplemental filings that are incorporated
        or deemed incorporated by reference in any such Prospectus. The suspension
        and
        notice thereof described in this Section 2(c) shall be held in strictest
        confidence and shall not be disclosed by the Purchasers. Any suspension by
        the
        Company pursuant to this Section 2(c) will not be considered an “Event” for
        purposes of Section 2(b) of this Agreement.

      
         

        
          
            
            

          

          
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          	 	3.	Registration Procedures.

        

         

      

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

      

      (a)    Not
        less
        than five Trading Days prior to the filing of each Registration Statement
        or any
        related Prospectus or any amendment or supplement thereto (including any
        document that would be incorporated or deemed to be incorporated therein
        by
        reference), the Company shall, (i) furnish to each Holder copies of all such
        documents proposed to be filed, which documents (other than those incorporated
        or deemed to be incorporated by reference) will be subject to the review
        of such
        Holders, and (ii) cause its officers and directors to respond to such inquiries
        as shall be necessary, in the reasonable opinion of respective counsel to
        conduct a reasonable investigation within the meaning of the Securities Act.
        The
        Company shall not file a Registration Statement or any such Prospectus or
        any
        amendments or supplements thereto to which the Holders of a majority of the
        Registrable Securities shall reasonably object in good faith, provided that,
        the
        Company is notified of such objection in writing no later than 5 Trading
        Days
        after the Holders have been so furnished copies of such documents. Each Holder
        agrees to furnish to the Company a completed Questionnaire in the form attached
        to this Agreement as Annex B (a “Selling
        Shareholder Questionnaire”)
        not
        less than five Trading Days prior to the Filing Date or by the end of the
        fifth
        Trading Day following the date on which such Holder receives draft materials
        in
        accordance with this Section.

       

      (b)    (i)
        Prepare and file with the Commission such amendments, including post-effective
        amendments, to a Registration Statement and the Prospectus used in connection
        therewith as may be necessary to keep a Registration Statement continuously
        effective as to the applicable Registrable Securities for the Effectiveness
        Period and prepare and file with the Commission such additional Registration
        Statements in order to register for resale under the Securities Act all of
        the
        Registrable Securities; (ii) cause the related Prospectus to be amended or
        supplemented as promptly as possible by any required Prospectus supplement
        (subject to the terms of this Agreement), and as so supplemented or amended
        to
        be filed pursuant to Rule 424 provided, however, that the filing of any required
        amendment within three (3) business days of the occurrence of the vent that
        necessitated such filing shall be deemed to be timely for purposes of this
        Section 3(b); (iii) respond as promptly as reasonably possible to any comments
        received from the Commission with respect to a Registration Statement or
        any
        amendment thereto and as promptly as reasonably possible provide the Holders
        true and complete copies of all correspondence from and to the Commission
        relating to a Registration Statement, provided, however, that a response
        by the
        Company to comments from the Commission with respect to any amendment to
        a
        Registration Statement within three (3) business days of the receipt thereof
        shall be deemed to be timely for purposes of this Section 3(b); and (iv)
        comply
        in all material respects with the provisions of the Securities Act and the
        Exchange Act with respect to the disposition of all Registrable Securities
        covered by a Registration Statement during the applicable period in accordance
        (subject to the terms of this Agreement) with the intended methods of
        disposition by the Holders thereof set forth in such Registration Statement
        as
        so amended or in such Prospectus as so supplemented.

       

      (c)    If
        during
        the Effectiveness Period, the number of Registrable Securities at any time
        exceeds 90% of the number of shares of Common Stock then registered in a
        Registration Statement, then the Company shall file as soon as reasonably
        practicable but in any case prior to the applicable Filing Date, an additional
        Registration Statement covering the resale by the Holders of not less than
        120%
        of the number of such Registrable Securities.

       

      
        
          
          

        

        
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      (d)    Notify
        the Holders of Registrable Securities to be sold (which notice shall, pursuant
        to clauses (ii) through (vi) hereof, be accompanied by an instruction to
        suspend
        the use of the Prospectus until the requisite changes have been made) as
        promptly as reasonably possible (and, in the case of (i)(A) below, not less
        than
        five Trading Days prior to such filing) and (if requested by any such Person)
        confirm such notice in writing no later than one Trading Day following the
        day
        (i)(A) when a Prospectus or any Prospectus supplement or post-effective
        amendment to a Registration Statement is proposed to be filed; (B) when the
        Commission notifies the Company whether there will be a “review” of such
        Registration Statement and whenever the Commission comments in writing on
        such
        Registration Statement (the Company shall provide true and complete copies
        thereof and all written responses thereto to each of the Holders, which copies
        may be provided via e-mail); and (C) with respect to a Registration Statement
        or
        any post-effective amendment, when the same has become effective; (ii) of
        any
        request by the Commission or any other Federal or state governmental authority
        for amendments or supplements to a Registration Statement or Prospectus or
        for
        additional information; (iii) of the issuance by the Commission or any other
        federal or state governmental authority of any stop order suspending the
        effectiveness of a Registration Statement covering any or all of the Registrable
        Securities or the initiation of any Proceedings for that purpose; (iv) of
        the
        receipt by the Company of any notification with respect to the suspension
        of the
        qualification or exemption from qualification of any of the Registrable
        Securities for sale in any jurisdiction, or the initiation or threatening
        of any
        Proceeding for such purpose; (v) of the occurrence of any event or passage
        of
        time that makes the financial statements included in a Registration Statement
        ineligible for inclusion therein or any statement made in a Registration
        Statement or Prospectus or any document incorporated or deemed to be
        incorporated therein by reference untrue in any material respect or that
        requires any revisions to a Registration Statement, Prospectus or other
        documents so that, in the case of a Registration Statement or the Prospectus,
        as
        the case may be, it will not contain any untrue statement of a material fact
        or
        omit to state any material fact required to be stated therein or necessary
        to
        make the statements therein, in light of the circumstances under which they
        were
        made, not misleading; and (vi) the occurrence or existence of any pending
        corporate development with respect to the Company that the Company believes
        may
        be material and that, in the determination of the Company, makes it not in
        the
        best interest of the Company to allow continued availability of a Registration
        Statement or Prospectus; provided that any and all of such information shall
        remain confidential to each Holder until such information otherwise becomes
        public, unless disclosure by a Holder is required by law; provided,
        further,
        notwithstanding each Holder’s agreement to keep such information confidential,
        the Holders make no acknowledgement that any such information is material,
        non-public information.

       

      (e)    Use
        its
        best efforts to avoid the issuance of, or, if issued, obtain the withdrawal
        of
        (i) any order suspending the effectiveness of a 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.

       

      (f)    Furnish
        to each Holder, without charge, at least one conformed copy of each such
        Registration Statement and each amendment thereto, including financial
        statements and schedules, all documents incorporated or deemed to be
        incorporated therein by reference to the extent requested by such Person,
        and
        all exhibits to the extent requested by such Person (including those
        incorporated by reference) promptly after the filing of such documents with
        the
        Commission. The Holders agree that copies of such documents may be provided
        to
        the Holders by e-mail and through links to the Commission’s
        website.

       

      
        
          
          

        

        
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      (g)    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 in connection with
        resales by the Holder of Registrable Securities. 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 offering and sale of the Registrable Securities covered by such
        Prospectus and any amendment or supplement thereto, except after the giving
        on
        any notice pursuant to Section 3(d).

       

      (h)    If
        NASDR
        Rule 2710 requires any broker-dealer to make a filing prior to executing
        a sale
        by a Holder, the Company will (i) make an Issuer Filing with the NASDR, Inc.
        Corporate Financing Department pursuant to NASDR Rule 2710(b)(10)(A)(i),
        (ii)
        respond within five Trading Days to any comments received from NASDR in
        connection therewith, and (iii) pay the filing fee required in connection
        therewith.

       

      (i)    
Prior
        to
        any resale of Registrable Securities by a Holder, use its commercially
        reasonable efforts to register or qualify or cooperate with the selling Holders
        in connection with the registration or qualification (or exemption from the
        Registration or qualification) of such Registrable Securities for the resale
        by
        the Holder under the securities or Blue Sky laws of such jurisdictions within
        the United States as any Holder reasonably requests in writing, to keep each
        registration or qualification (or exemption therefrom) effective during the
        Effectiveness Period and to do any and all other acts or things reasonably
        necessary to enable the disposition in such jurisdictions of the Registrable
        Securities covered by each Registration Statement; provided, that the Company
        shall not be required to qualify generally to do business in any jurisdiction
        where it is not then so qualified, subject the Company to any material tax
        in
        any such jurisdiction where it is not then so subject or file a general consent
        to service of process in any such jurisdiction.

       

      (j)    
If
        requested by the Holders, cooperate with the Holders to facilitate the timely
        preparation and delivery of certificates representing Registrable Securities
        to
        be delivered to a transferee pursuant to a Registration Statement, which
        certificates shall be free, to the extent permitted by the Purchase Agreement,
        of all restrictive legends, and to enable such Registrable Securities to
        be in
        such denominations and registered in such names as any such Holders may
        request.

       

      (k)    Upon
        the
        occurrence of any event contemplated by this Section 3, as promptly as
        reasonably possible under the circumstances taking into account the Company’s
        good faith assessment of any adverse consequences to the Company and its
        stockholders of the premature disclosure of such event, prepare a supplement
        or
        amendment, including a post-effective amendment, to a Registration Statement
        or
        a supplement to the related Prospectus or any document incorporated or deemed
        to
        be incorporated therein by reference, and file any other required document
        so
        that, as thereafter delivered, neither a Registration Statement nor such
        Prospectus will contain an untrue statement of a material fact or omit to
        state
        a material fact required to be stated therein or necessary to make the
        statements therein, in light of the circumstances under which they were made,
        not misleading. If
        the
        Company notifies the Holders in accordance with clauses (ii) through (vi)
        of
        Section 3(d) above to suspend the use of any Prospectus until the requisite
        changes to such Prospectus have been made, then the Holders shall suspend
        use of
        such Prospectus. The Company will use its best efforts to ensure that the
        use of
        the Prospectus may be resumed as promptly as is practicable. 

       

      
        
          
          

        

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

       

      (m)    The
        Company may require each selling Holder to furnish to the Company a certified
        statement as to the number of shares of Common Stock beneficially owned by
        such
        Holder and, if required by the Commission, the person thereof that has voting
        and dispositive control over the Shares. During any periods that the Company
        is
        unable to meet its obligations hereunder with respect to the registration
        of the
        Registrable Securities solely because any Holder fails to furnish such
        information within three Trading Days of the Company’s request, any liquidated
        damages that are accruing at such time as to such Holder only shall be tolled
        and any Event that may otherwise occur solely because of such delay shall
        be
        suspended as to such Holder only, until such information is delivered to
        the
        Company.

       

      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 a Registration Statement. The
        fees
        and expenses referred to in the foregoing sentence shall include, without
        limitation, (i) all registration and filing fees (including, without limitation,
        fees and expenses (A) with respect to filings required to be made with the
        Trading Market on which the Common Stock is then listed for trading, (B)
        in
        compliance with applicable state securities or Blue Sky laws reasonably agreed
        to by the Company in writing (including, without limitation, fees and
        disbursements of counsel for the Company in connection with Blue Sky
        qualifications or exemptions of the Registrable Securities and determination
        of
        the eligibility of the Registrable Securities for investment under the laws
        of
        such jurisdictions as requested by the Holders) and (C) if not previously
        paid
        by the Company in connection with an Issuer Filing, with respect to any filing
        that may be required to be made by any broker through which a Holder intends
        to
        make sales of Registrable Securities with NASD Regulation, Inc. pursuant
        to the
        NASD Rule 2710, so long as the broker is receiving no more than a customary
        brokerage commission in connection with such sale, (ii) printing expenses
        (including, without limitation, expenses of printing certificates for
        Registrable Securities and of printing prospectuses if the printing of
        prospectuses is reasonably requested by the holders of a majority of the
        Registrable Securities included in a Registration Statement), (iii) messenger,
        telephone and delivery expenses, (iv) fees and disbursements of counsel for
        the
        Company, (v) Securities Act liability insurance, if the Company so desires
        such
        insurance, and (vi) fees and expenses of all other Persons retained by the
        Company in connection with the consummation of the transactions contemplated
        by
        this Agreement. In addition, the Company shall be responsible for all of
        its
        internal expenses incurred in connection with the consummation of the
        transactions contemplated by this Agreement (including, without limitation,
        all
        salaries and expenses of its officers and employees performing legal or
        accounting duties), the expense of any annual audit and the fees and expenses
        incurred in connection with the listing of the Registrable Securities on
        any
        securities exchange as required hereunder. In no event shall the Company
        be
        responsible for any broker or similar commissions or, except to the extent
        provided for in the Transaction Documents, any legal fees or other costs
        of the
        Holders.

       

      
        
          
          

        

        
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        	 	5.	Indemnification

      

      
(a)    Indemnification
        by the Company.
        The
        Company shall, notwithstanding any termination of this Agreement, indemnify
        and
        hold harmless each Holder, the officers, directors, agents, brokers (including
        brokers who offer and sell Registrable Securities as principal as a result
        of a
        pledge or any failure to perform under a margin call of Common Stock),
        investment advisors and employees of each of them, each Person who controls
        any
        such Holder (within the meaning of Section 15 of the Securities Act or Section
        20 of the Exchange Act) and the officers, directors, agents and employees
        of
        each such controlling Person, to the fullest extent permitted by applicable
        law,
        from and against any and all losses, claims, damages, liabilities, costs
        (including, without limitation, reasonable attorneys’ fees) and expenses
        (collectively, “Losses”),
        as
        incurred, arising out of or relating to any untrue or alleged untrue statement
        of a material fact contained in a Registration Statement, any Prospectus
        or any
        form of prospectus or in any amendment or supplement thereto or in any
        preliminary prospectus, or arising out of or relating to any omission or
        alleged
        omission of a material fact required to be stated therein or necessary to
        make
        the statements therein (in the case of any Prospectus or form of prospectus
        or
        supplement thereto, in light of the circumstances under which they were made)
        not misleading, except to the extent, but only to the extent, that (i) such
        untrue statements or omissions are based solely upon information regarding
        such
        Holder furnished in writing to the Company by such Holder expressly for use
        therein, or to the extent that 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 a
        Registration Statement, such Prospectus or such form of Prospectus or in
        any
        amendment or supplement thereto (it being understood that the Holder has
        approved Annex A hereto for this purpose) or (ii) in the case of an occurrence
        of an event of the type specified in Section 3(d)(ii)-(vi), 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 and prior
        to
        the receipt by such Holder of the Advice contemplated in Section 6(d). The
        Company shall notify the Holders promptly of the institution, threat or
        assertion of any Proceeding arising from or in connection with the transactions
        contemplated by this Agreement of which the Company is aware.

       

      (b)    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 incurred, to the extent arising out of or
        based
        solely upon: (x) such Holder’s failure to comply with the prospectus delivery
        requirements of the Securities Act or (y) any untrue or alleged 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 in any
        preliminary prospectus, or arising out of or relating to any omission or
        alleged

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      omission
        of a material fact required to be stated
        therein or necessary to make the statements therein not misleading (i) to
        the
        extent, but only to the extent, that such untrue statement or omission is
        contained in any information so furnished in writing by such Holder to the
        Company specifically for inclusion in such Registration Statement or such
        Prospectus or (ii) to the extent that (1) such untrue statements or omissions
        are based solely upon information regarding such Holder furnished in writing
        to
        the Company by such Holder expressly for use therein, or to the extent that
        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 a Registration Statement (it
        being understood that the Holder has approved Annex A hereto for this purpose),
        such Prospectus or such form of Prospectus or in any amendment or supplement
        thereto or (2) in the case of an occurrence of an event of the type specified
        in
        Section 3(d)(ii)-(vi), 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 and prior to the receipt by such Holder
        of
        the Advice contemplated in Section 6(d). In no event shall the liability
        of any
        selling Holder hereunder be greater in amount than the dollar amount of the
        net
        proceeds received by such Holder upon the sale of the Registrable Securities
        giving rise to such indemnification obligation.

       

      (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 have the right to 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 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 it shall be finally determined by a court of competent jurisdiction
        (which determination is not subject to appeal or further review) 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; (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 reasonably believe
        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 reasonable fees and expenses of one separate counsel shall be at the
        expense
        of the Indemnifying Party). The Indemnifying Party shall not be liable for
        any
        settlement of any such Proceeding effected 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.

      

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      Subject
        to the terms of this Agreement, all reasonable 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; provided, that the Indemnified Party shall promptly
        reimburse the Indemnifying Party for that portion of such fees and expenses
        applicable to such actions for which such Indemnified Party is not entitled
        to
        indemnification hereunder, determined based upon the relative faults of the
        parties.

      

      (d)    Contribution.
        If the
        indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified
        Party or insufficient to hold an Indemnified Party harmless for any Losses,
        then
        each Indemnifying Party shall contribute to the amount paid or payable by
        such
        Indemnified Party, in such proportion as is appropriate to reflect the relative
        fault of the Indemnifying Party and Indemnified Party in connection with
        the
        actions, statements or omissions that resulted in such Losses as well as
        any
        other relevant equitable considerations. The relative fault of such Indemnifying
        Party and Indemnified Party shall be determined by reference to, among other
        things, whether any action in question, including any untrue or alleged untrue
        statement of a material fact or omission or alleged omission of a material
        fact,
        has been taken or made by, or relates to information supplied by, such
        Indemnifying Party or Indemnified Party, and the parties’ relative intent,
        knowledge, access to information and opportunity to correct or prevent such
        action, statement or omission. The amount paid or payable by a party as a
        result
        of any Losses shall be deemed to include, subject to the limitations set
        forth
        in this Agreement, any reasonable attorneys’ or other reasonable fees or
        expenses incurred by such party in connection with any Proceeding to the
        extent
        such party would have been indemnified for such fees or expenses if the
        indemnification provided for in this Section was available to such party
        in
        accordance with its terms.

      

      The
        parties hereto agree that it would not be just and equitable if contribution
        pursuant to this Section 5(d) were determined by pro rata allocation or by
        any
        other method of allocation that does not take into account the equitable
        considerations referred to in the immediately preceding paragraph.
        Notwithstanding the provisions of this Section 5(d), no Holder shall be required
        to contribute, in the aggregate, any amount in excess of the amount by which
        the
        proceeds actually received by such Holder from the sale of the Registrable
        Securities subject to the Proceeding exceeds the amount of any damages that
        such
        Holder has otherwise been required to pay by reason of such untrue or alleged
        untrue statement or omission or alleged omission, except in the case of fraud
        by
        such Holder.

      

      The
        indemnity and contribution agreements contained in this Section are in addition
        to any liability that the Indemnifying Parties may have to the Indemnified
        Parties.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      
         

        
          	 	6.	Miscellaneous

        

         

        (a)    Remedies.
          In the
          event of a breach by the Company or by a Holder, of any of their obligations
          under this Agreement, each Holder or the Company, as the case may be, in
          addition to being entitled to exercise all rights granted by law and under
          this
          Agreement, including recovery of damages, will be entitled to specific
          performance of its rights under this Agreement. The Company and each Holder
          agree that monetary damages would not provide adequate compensation for
          any
          losses incurred by reason of a breach by it of any of the provisions of
          this
          Agreement and hereby further agrees that, in the event of any action for
          specific performance in respect of such breach, it shall waive the defense
          that
          a remedy at law would be adequate.

         

        (b)    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 a Registration Statement.

         

        (c)    Discontinued
          Disposition.
          Each
          Holder agrees by its acquisition of such Registrable Securities that, upon
          receipt of a notice from the Company of the occurrence of any event of
          the kind
          described in Section 3(d), such Holder will forthwith discontinue disposition
          of
          such Registrable Securities under a Registration Statement until such Holder’s
          receipt of the copies of the supplemented Prospectus and/or amended Registration
          Statement, or until it is advised in writing (the “Advice”)
          by the
          Company that the use of the applicable Prospectus may be resumed, and,
          in either
          case, has received copies of any additional or supplemental filings that
          are
          incorporated or deemed to be incorporated by reference in such Prospectus
          or
          Registration Statement. The Company will use its best efforts to ensure
          that the
          use of the Prospectus may be resumed as promptly as it practicable. The
          Company
          agrees and acknowledges that any periods during which the Holder is required
          to
          discontinue the disposition of the Registrable Securities hereunder shall
          be
          subject to the provisions of Section 2(b).

         

        (d)    Piggy-Back
          Registrations.
          If at
          any time during the Effectiveness Period there is not an effective Registration
          Statement covering all of the Registrable Securities and the Company shall
          determine to prepare and file with the Commission a registration statement
          relating to an offering for its own account or the account of others under
          the
          Securities Act of any of its equity securities, other than on Form S-4
          or Form
          S-8 (each as promulgated under the Securities Act) or their then equivalents
          relating to equity securities to be issued solely in connection with any
          acquisition of any entity or business or equity securities issuable in
          connection with the stock option or other employee benefit plans, then
          the
          Company shall send to each Holder a written notice of such determination
          and, if
          within fifteen days after the date of such notice, any such Holder shall
          so
          request in writing, the Company shall include in such registration statement
          all
          or any part of such Registrable Securities such Holder requests to be
          registered; provided,
          however,
          that,
          the Company shall not be required to register any Registrable Securities
          pursuant to this Section 6(e) that are eligible for resale pursuant to
          Rule
          144(k) promulgated under the Securities Act or that are the subject of
          a then
          effective Registration Statement.

         

        
          
            
            

          

          
            12

            
              

            

          

          
            
            

          

        

         

        (e)    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 each Holder 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 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.

         

        (f)    Notices.
          Except
          as otherwise set forth herein, any and all notices or other communications
          or
          deliveries required or permitted to be provided hereunder shall be delivered
          as
          set forth in the Purchase Agreement.

         

        (g)    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. The Company may not assign its rights or obligations hereunder
          without
          the prior written consent of all of the Holders of the then-outstanding
          Registrable Securities. Each Holder may assign their respective rights
          hereunder
          in the manner and to the Persons as permitted under the Purchase
          Agreement.

         

        (h)    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. Except as set forth
          on
Schedule
          6(i),
          neither
          the Company nor any of its subsidiaries has previously entered into any
          agreement granting any registration rights with respect to any of its securities
          to any Person that have not been satisfied in full.

         

        (i)    Execution
          and 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.

         

        (j)    Governing
          Law.
          All
          questions concerning the construction, validity, enforcement and interpretation
          of this Agreement shall be determined with the provisions of the Purchase
          Agreement.

         

        (k)    Cumulative
          Remedies.
          The
          remedies provided herein are cumulative and not exclusive of any remedies
          provided by law.

         

        
          
            
            

          

          
            13

            
              

            

          

          
            
            

          

        

         

        (l)    
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 commercially 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.

         

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

         

        (n)    Independent
          Nature of Holders’ Obligations and Rights.
          The
          obligations of each Holder hereunder are several and not joint with the
          obligations of any other Holder hereunder, and no Holder shall be responsible
          in
          any way for the performance of the obligations of any other Holder hereunder.
          Nothing contained herein or in any other agreement or document delivered
          at any
          closing, and no action taken by any Holder pursuant hereto or thereto,
          shall be
          deemed to constitute the Holders as a partnership, an association, a joint
          venture or any other kind of entity, or create a presumption that the Holders
          are in any way acting in concert with respect to such obligations or the
          transactions contemplated by this Agreement. Each Holder shall be entitled
          to
          protect and enforce its rights, including without limitation the rights
          arising
          out of this Agreement, and it shall not be necessary for any other Holder
          to be
          joined as an additional party in any proceeding for such
          purpose.

      

      

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

      

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

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

      

      

      
        	 	
                SURGE
                  GLOBAL ENERGY, INC.

                 

              
	 	
                By:__________________________________________

                Name:

                Title:

              

      

      

      

      

      

      

      

      

      

      

      [SIGNATURE
        PAGE OF HOLDERS FOLLOWS]

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

      
 

      [SIGNATURE
        PAGE OF HOLDERS TO REGISTRATION RIGHTS AGREEMENT WITH SURGE GLOBAL ENERGY,
        INC.]

      

      Name
        of
        Holder: Gemini Master Fund Limited

      Signature
        of Authorized Signatory of Holder:
        __________________________

      Name
        of
        Authorized Signatory: _____________________________

      Title
        of
        Authorized Signatory: __________________________

      

      

      

      [SIGNATURE
        PAGES CONTINUE]

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

      ANNEX
        A

      

      Plan
        of Distribution

       

      Each
        Selling Stockholder (the “Selling
        Stockholders”)
        of the
        Common Stock (“Common
        Stock”)
        of
        Surge Global Energy, Inc., a Delaware corporation (the “Company”)
        and
        any of their pledgees, assignees and successors-in-interest may, from time
        to
        time, sell any or all of their shares of Common Stock on the Trading Market
        or
        any other stock exchange, market or trading facility on which the shares
        are
        traded or in private transactions. These sales may be at fixed or negotiated
        prices. A Selling Stockholder may use any one or more of the following methods
        when selling shares:

       

      
        	·  	
                ordinary
                  brokerage transactions and transactions in which the broker-dealer
                  solicits purchasers;

              

      

       

      
        	·  	
                block
                  trades in which the broker-dealer will attempt to sell the shares
                  as agent
                  but may position and resell a portion of the block as principal
                  to
                  facilitate the transaction;

              

      

       

      
        	·  	
                purchases
                  by a broker-dealer as principal and resale by the broker-dealer
                  for its
                  account;

              

      

       

      
        	·  	
                an
                  exchange distribution in accordance with the rules of the applicable
                  exchange;

              

      

       

      
        	·  	
                privately
                  negotiated transactions;

              

      

       

      
        	·  	
                settlement
                  of short sales entered into after the effective date of the registration
                  statement of which this prospectus is a
                  part;

              

      

       

      
        	·  	
                broker-dealers
                  may agree with the Selling Stockholders to sell a specified number
                  of such
                  shares at a stipulated price per
                  share;

              

      

       

      
        	·  	
                a
                  combination of any such methods of
                  sale;

              

      

       

      
        	·  	
                through
                  the writing or settlement of options or other hedging transactions,
                  whether through an options exchange or otherwise;
                  or

              

      

       

      
        	·  	
                any
                  other method permitted pursuant to applicable
                  law.

              

      

       

      The
        Selling Stockholders may also sell shares under Rule 144 under the Securities
        Act of 1933, as amended (the “Securities
        Act”),
        if
        available, rather than under this prospectus.

       

      Broker-dealers
        engaged by the Selling Stockholders may arrange for other brokers-dealers
        to
        participate in sales. Broker-dealers may receive commissions or discounts
        from
        the Selling Stockholders (or, if any broker-dealer acts as agent for the
        purchaser of shares, from the purchaser) in amounts to be negotiated, but,
        except as set forth in a supplement to this Prospectus, in the case of an
        agency
        transaction not in excess of a customary brokerage commission in compliance
        with
        NASDR Rule 2440; and in the case of a principal transaction a markup or markdown
        in compliance with NASDR IM-2440. 

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      In
        connection with the sale of the Common Stock or interests therein, the Selling
        Stockholders may enter into hedging transactions with broker-dealers or other
        financial institutions, which may in turn engage in short sales of the Common
        Stock in the course of hedging the positions they assume. The Selling
        Stockholders may also sell shares of the Common Stock short and deliver these
        securities to close out their short positions, or loan or pledge the Common
        Stock to broker-dealers that in turn may sell these securities. The Selling
        Stockholders may also enter into option or other transactions with
        broker-dealers or other financial institutions or the creation of one or
        more
        derivative securities which require the delivery to such broker-dealer or
        other
        financial institution of shares offered by this prospectus, which shares
        such
        broker-dealer or other financial institution may resell pursuant to this
        prospectus (as supplemented or amended to reflect such
        transaction).

       

      The
        Selling Stockholders and any broker-dealers or agents that are involved in
        selling the shares may be deemed to be “underwriters” within the meaning of the
        Securities Act in connection with such sales. In such event, any commissions
        received by such broker-dealers or agents and any profit on the resale of
        the
        shares purchased by them may be deemed to be underwriting commissions or
        discounts under the Securities Act. Each Selling Stockholder has informed
        the
        Company that it does not have any written or oral agreement or understanding,
        directly or indirectly, with any person to distribute the Common Stock. In
        no
        event shall any broker-dealer receive fees, commissions and markups which,
        in
        the aggregate, would exceed eight percent (8%).

       

      The
        Company is required to pay certain fees and expenses incurred by the Company
        incident to the registration of the shares. The Company has agreed to indemnify
        the Selling Stockholders against certain losses, claims, damages and
        liabilities, including liabilities under the Securities Act. 

       

      Because
        Selling Stockholders may be deemed to be “underwriters” within the meaning of
        the Securities Act, they will be subject to the prospectus delivery requirements
        of the Securities Act. In addition, any securities covered by this prospectus
        which qualify for sale pursuant to Rule 144 under the Securities Act may
        be sold
        under Rule 144 rather than under this prospectus. Each Selling Stockholder
        has
        advised us that they have not entered into any written or oral agreements,
        understandings or arrangements with any underwriter or broker-dealer regarding
        the sale of the resale shares. There is no underwriter or coordinating broker
        acting in connection with the proposed sale of the resale shares by the Selling
        Stockholders.

       

      We
        agreed
        to keep this prospectus effective until the earlier of (i) the date on which
        the
        shares may be resold by the Selling Stockholders without registration and
        without regard to any volume limitations by reason of Rule 144(e) under the
        Securities Act or any other rule of similar effect or (ii) all of the shares
        have been sold pursuant to the prospectus or Rule 144 under the Securities
        Act
        or any other rule of similar effect. The resale shares will be sold only
        through
        registered or licensed brokers or dealers if required under applicable state
        securities laws. In addition, in certain states, the resale shares may not
        be
        sold unless they have been registered or qualified for sale in the applicable
        state or an exemption from the registration or qualification requirement
        is
        available and is complied with.

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

      Under
        applicable rules and regulations under the Exchange Act, any person engaged
        in
        the distribution of the resale shares may not simultaneously engage in market
        making activities with respect to the Common Stock for a period of two business
        days prior to the commencement of the distribution. In addition, the Selling
        Stockholders will be subject to applicable provisions of the Exchange Act
        and
        the rules and regulations thereunder, including Regulation M, which may limit
        the timing of purchases and sales of shares of the Common Stock by the Selling
        Stockholders or any other person. We will make copies of this prospectus
        available to the Selling Stockholders and have informed them of the need
        to
        deliver a copy of this prospectus to each purchaser at or prior to the time
        of
        the sale.

       

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

      Annex
        B

       

      SURGE
        GLOBAL ENERGY, INC.

       

      Selling
        Securityholder Notice and Questionnaire

       

      The
        undersigned beneficial owner of Common Stock, par value $0.001 per share
        (the
“Common
        Stock”),
        of
        Surge Global Energy, Inc., a Delaware corporation (the “Company”),
        (the
“Registrable
        Securities”)
        understands that the Company has filed or intends to file with the Securities
        and Exchange Commission (the “Commission”)
        a
        registration statement on Form SB-2 (the “Registration
        Statement”)
        for
        the registration and resale under Rule 415 of the Securities Act of 1933,
        as
        amended (the “Securities
        Act”),
        of
        the Registrable Securities, in accordance with the terms of the Registration
        Rights Agreement, dated as of November 28, 2006 (the “Registration
        Rights Agreement”),
        among
        the Company and the Purchasers named therein. A copy of the Registration
        Rights
        Agreement is available from the Company upon request at the address set forth
        below. All capitalized terms not otherwise defined herein shall have the
        meanings ascribed thereto in the Registration Rights Agreement.

       

      Certain
        legal consequences arise from being named as a selling securityholder in
        the
        Registration Statement and the related prospectus. Accordingly, holders and
        beneficial owners of Registrable Securities are advised to consult their
        own
        securities law counsel regarding the consequences of being named or not being
        named as a selling securityholder in the Registration Statement and the related
        prospectus.

       

      NOTICE

       

      The
        undersigned beneficial owner (the “Selling
        Securityholder”)
        of
        Registrable Securities hereby elects to include the Registrable Securities
        owned
        by it and listed below in Item 3 (unless otherwise specified under such Item
        3)
        in the Registration Statement.

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

       

      The
        undersigned hereby provides the following information to the Company and
        represents and warrants that such information is accurate:

       

      QUESTIONNAIRE

       

      
        
          	1. 	
                  Name.

                	
                   

                

        

      

       

      
        	 	
                (a)

              	
                Full
                  Legal Name of Selling
                  Securityholder

              

      

       

      
        	 	 
	 	 

      

      

      
        	 	
                (b)

              	
                Full
                  Legal Name of Registered Holder (if not the same as (a) above)
                  through
                  which Registrable Securities Listed in Item 3 below are
                  held:

              

      

      
         

        
          	 	 
	 	 

        

      

      
         

        
          	 	
                  (c)

                	
                  Full
                    Legal Name of Natural Control Person (which means a natural person
                    who
                    directly or indirectly alone or with others has power to vote
                    or dispose
                    of the securities covered by the
                    questionnaire):

                

        

         

      

      
        
          	 	 
	 	 

        

      

      
         

      

      
        
          
            	2.	Address for Notices to
                    Selling
                    Securityholder:

          

           

        

      

      
        	 
	 
	 

      

       

      
        	Telephone:	
                 

              
	Fax:	
                 

              
	
                Contact
                  Person: 

              	
                 

              

      

       

      
        	3.	Beneficial Ownership of Registrable
                Securities:

      

       

      
        	 	
                (a)

              	
                Type
                  and Number of Registrable Securities beneficially
                  owned:

              

      

       

      
        	 	 
	 	 
	 	 
	 	 

      

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

       

      
        
          	4.	Broker-Dealer
                  Status:

        

         

      

      
        	 	
                (a)

              	
                Are
                  you a broker-dealer?

              

      

       

      Yes o 
No
o

       

      
        	 	
                (b)

              	
                If
                  “yes” to Section 4(a), did you receive your Registrable Securities as
                  compensation for investment banking services to the
                  Company.

              

      

       

      Yes o 
No
o

       

      
        	 	
                Note:

              	
                If
                  no, the Commission’s staff has indicated that you should be identified as
                  an underwriter in the Registration
                  Statement.

              

      

       

      
        	 	
                (c)

              	
                Are
                  you an affiliate of a
                  broker-dealer?

              

      

       

      Yes o 
No
o

       

      
        	 	
                (d)

              	
                If
                  you are an affiliate of a broker-dealer, do you certify that you
                  bought
                  the Registrable Securities in the ordinary course of business,
                  and at the
                  time of the purchase of the Registrable Securities to be resold,
                  you had
                  no agreements or understandings, directly or indirectly, with any
                  person
                  to distribute the Registrable
                  Securities?

              

      

       

      Yes o 
No
o

       

      
        	 	
                Note:

              	
                If
                  no, the Commission’s staff has indicated that you should be identified as
                  an underwriter in the Registration
                  Statement.

              

      

       

      
        
          
            	5.	Beneficial Ownership
                    of Other
                    Securities of the Company Owned by the Selling
                    Securityholder.

          

        

      

       

      Except
        as set forth below in this Item 5, the undersigned is not the beneficial
        or
        registered owner of any securities of the Company other than the Registrable
        Securities listed above in Item 3.

       

      
        	 	
                (a)

              	
                Type
                  and Amount of Other Securities beneficially owned by the Selling
                  Securityholder:

              

      

       

      
        	 	 
	 	 
	 	 

      

      

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

       

      
        
          
            
              	6.	Relationships with
                      the
                      Company:

            

             

          

        

      

      Except
        as set forth below, neither the undersigned nor any of its affiliates, officers,
        directors or principal equity holders (owners of 5% of more of the equity
        securities of the undersigned) has held any position or office or has had
        any
        other material relationship with the Company (or its predecessors or affiliates)
        during the past three years.

       

      State
        any
        exceptions here:

       

      
        	 	 
	 	 
	 	 

      

       

      The
        undersigned agrees to promptly notify the Company of any inaccuracies or
        changes
        in the information provided herein that may occur subsequent to the date
        hereof
        at any time while the Registration Statement remains effective.

       

      By
        signing below, the undersigned consents to the disclosure of the information
        contained herein in its answers to Items 1 through 6 and the inclusion of
        such
        information in the Registration Statement and the related prospectus
and
        any
        amendments or supplements thereto.
        The
        undersigned understands that such information will be relied upon by the
        Company
        in connection with the preparation or amendment of the Registration Statement
        and the related prospectus.

       

      IN
        WITNESS WHEREOF the undersigned, by authority duly given, has caused this
        Notice
        and Questionnaire to be executed and delivered either in person or by its
        duly
        authorized agent.

       

      
        	
                Dated:____________________________________

                 

                 

                 

                 

              	
                Beneficial
                  Owner:______________________________________

                 

                By:_________________________________________________

                Name:

                Title:

              

      

      

      PLEASE
        FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
        THE ORIGINAL BY OVERNIGHT MAIL, TO:

    

     

    
       

       

      
        
           

        

        
          23

          
            

          

        

        
           

        

      

    

    
      
 

      REGISTRATION
        RIGHTS AGREEMENT

      

      This
        Registration Rights Agreement (this “Agreement”)
        is
        made and entered into as of November 28, 2006 among Surge Global Energy,
        Inc., a
        Delaware corporation (the “Company”),
        and
        the purchaser signatory hereto (such purchaser is the “Purchaser”
and,
        including such Purchaser’s successors and assigns, the “Purchasers”).

       

      This
        Agreement is made pursuant to the Securities Purchase Agreement, dated as
        of the
        date hereof between the Company and the Purchasers (the “Purchase
        Agreement”).

       

      The
        Company and the Purchaser hereby agree as follows:

      

      
        	 	1.	Definitions	 

      

       

      Capitalized
        terms used and not otherwise defined herein that are defined in the Purchase
        Agreement shall have the meanings given such terms in the Purchase
        Agreement.
        As used
        in this Agreement, the following terms shall have the following
        meanings:

       

      “Advice”
shall
        have the meaning set forth in Section 6(d).

       

      “Effectiveness
        Date”
means,
        with respect to the initial Registration Statement required to be filed
        hereunder, the 120th
        calendar
        day following the date hereof and, with respect to any additional Registration
        Statements which may be required pursuant to Section 3(c), the 120th
        calendar
        day following the date on which the Company first knows, or reasonably should
        have known, that such additional Registration Statement is required hereunder;
        provided,
        however,
        in the
        event the Company is notified by the Commission that one of the above
        Registration Statements will not be reviewed or is no longer subject to further
        review and comments, the Effectiveness Date as to such Registration Statement
        shall be the fifth Trading Day following the date on which the Company is
        so
        notified if such date precedes the dates required above.

       

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

       

      “Event”
shall
        have the meaning set forth in Section 2(b).

       

      “Event
        Date”
shall
        have the meaning set forth in Section 2(b).

       

      “Filing
        Date”
means,
        with respect to the initial Registration Statement required hereunder, the
        30th
        calendar
        day following the date hereof and, with respect to any additional Registration
        Statements which may be required pursuant to Section 3(c), the 30th
        day
        following the date on which the Company first knows, or reasonably should
        have
        known that such additional Registration Statement is required hereunder.
        In the
        event that the holders of a majority of the Registrable Securities timely
        object
        to the filing of a Registration Statement pursuant to Section 3(a) hereof,
        the
“Filing Date” will be extended until 5 Trading Days after the Company receives
        notice from all of the objecting Purchasers that such Purchasers no longer
        object to the Registration Statement being filed. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      “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).

      

      “Losses”
shall
        have the meaning set forth in Section 5(a).

      

      “Plan
        of Distribution”
shall
        have the meaning set forth in Section 2(a).

       

      “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 a 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 a 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,
        as of the date in question, (i) all of the Shares, (ii) all Warrant Shares,
        (iii) any securities issued or issuable upon any stock split, dividend or
        other
        distribution, recapitalization or similar event with respect to the foregoing,
        and (iv) any additional shares issuable in connection with any anti-dilution
        provisions associated with Warrants and the Greenshoe Warrants (in each case,
        without giving effect to any limitations on exercise set forth in the Warrants
        and the Greenshoe Warrants). Notwithstanding the foregoing, the term
“Registrable Securities” excludes any securities of the Company which are
        saleable by the holder of such securities pursuant to the provisions of
        paragraph (k) of Rule 144 promulgated under the Securities Act (as defined
        below).

       

      “Registration
        Statement”
means
        the registration statements required to be filed hereunder and any additional
        registration statements contemplated by Section 3(c), including (in each
        case)
        the Prospectus, amendments and supplements to such 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 such registration statement. 

       

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

       

      “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.

       

      “Rule
        424”
means
        Rule 424 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.

       

      “Selling
        Shareholder Questionnaire”
shall
        have the meaning set forth in Section 3(a).

      
        

        
          	 	2.	Shelf Registration	 

        

         

      

      (a)    On
        or
        prior to each Filing Date, the Company shall prepare and file with the
        Commission a “Shelf” Registration Statement covering the resale of 120% of the
        Registrable Securities on such Filing Date for an offering to be made on
        a
        continuous basis pursuant to Rule 415. The Registration Statement shall be
        on
        Form SB-2 (except if the Company is then eligible to register for resale
        the
        Registrable Securities on Form S-3, such registration shall be made on Form
        S-3)
        and shall contain (unless otherwise directed by the Holders) substantially
        the
“Plan
        of Distribution”
        attached hereto as Annex
        A.
        Subject
        to the terms of this Agreement, the Company shall use its best efforts to
        cause
        a 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
        applicable Effectiveness Date, and shall use its best efforts to keep such
        Registration Statement continuously effective under the Securities Act for
        a
        period of two years from the Effectiveness Date (the “Effectiveness
        Period”).
        The
        Company shall telephonically request effectiveness of a Registration Statement
        as of 5:00 pm Eastern Time on a Trading Day. The Company shall immediately
        notify the Holders via facsimile of the effectiveness of a Registration
        Statement on the same Trading Day that the Company telephonically confirms
        effectiveness with the Commission, which shall be the date requested for
        effectiveness of a Registration Statement. The Company shall, by 9:30 am
        Eastern
        Time on the Trading Day after the Effective Date (as defined in the Purchase
        Agreement), file a Form 424(b)(5) with the Commission. Failure to so notify
        the
        Holder within 1 Trading Day of such notification shall be deemed an Event
        under
        Section 2(b).

      

      (b)    If:
        (i) a
        Registration Statement is not filed on or prior to its Filing Date (if the
        Company files a Registration Statement without affording the Holders the
        opportunity to review and comment on the same as required by Section 3(a),
        the
        Company shall not be deemed to have satisfied this clause (i)), or (ii) the
        Company fails to file with the Commission a request for acceleration in
        accordance with Rule 461 promulgated under the Securities Act, within five
        Trading Days of the date that the Company is notified (orally or in writing,
        whichever is earlier) by the Commission that a Registration Statement will
        not
        be “reviewed,” or not subject to further review, or (iii) prior to its
        Effectiveness Date, the Company fails to file a pre-effective amendment and
        otherwise respond in writing to comments made by the Commission in respect
        of
        such Registration Statement within 10 calendar days after the receipt of
        comments by or 

       

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

       

      notice
        from the Commission that such amendment is required in order for a Registration
        Statement to be declared effective, or (iv) a Registration Statement filed
        or
        required to be filed hereunder is not declared effective by the Commission
        by
        its Effectiveness Date, or (v) after the Effectiveness Date, (A) a Registration
        Statement ceases for any reason to remain continuously effective as to all
        Registrable Securities for which it is required to be effective, or (B) the
        Holders are not permitted to utilize the Prospectus therein to resell such
        Registrable Securities, in either case, for 10 consecutive business days
        but no
        more than an aggregate of 30 business days during any 12-month period (which
        need not be consecutive Trading Days) (any such failure or breach being referred
        to as an “Event”,
        and
        for purposes of clause (i) or (iv) the date on which such Event occurs, or
        for
        purposes of clause (ii) the date on which such five Trading Day period is
        exceeded, or for purposes of clause (iii) the date which such 10 calendar
        day
        period is exceeded, or for purposes of clause (v) the date on which such
        10 or
        30 business day period, as applicable, is exceeded being referred to as
“Event
        Date”),
        then
        in addition to any other rights the Holders may have hereunder or under
        applicable law, on each such Event Date and on each monthly anniversary of
        each
        such Event Date (if the applicable Event shall not have been cured by such
        date)
        until the applicable Event is cured, the Company shall pay to each Holder
        an
        amount in cash, as partial liquidated damages and not as a penalty, equal
        to
        2.0% of the aggregate purchase price paid by such Holder pursuant to the
        Purchase Agreement for any Registrable Securities then held by such Holder.
        If
        the Company fails to pay any partial liquidated damages pursuant to this
        Section
        in full within seven days after the date payable, the Company will pay interest
        thereon at a rate of 18% per annum (or such lesser maximum amount that is
        permitted to be paid by applicable law) to the Holder, accruing daily from
        the
        date such partial liquidated damages are due until such amounts, plus all
        such
        interest thereon, are paid in full. The partial liquidated damages pursuant
        to
        the terms hereof shall apply on a daily pro-rata basis for any portion of
        a
        month prior to the cure of an Event.

      

      (c)    Notwithstanding
        anything else herein to the contrary, upon the happening of any corporate
        development, public filing with the Commission or similar event, that, in
        the
        judgment of Company’s Board of Directors, renders it advisable to suspend use of
        the Registration Statement or upon the request by an underwriter in connection
        with an underwritten public offering of the Company’s securities, the Company
        may, on not more than one (1) non-consecutive occasion for not more than
        sixty
        (60) days, suspend use of the Registration Statement on written notice to
        the
        Purchasers (which notice will not disclose the content of any material
        non-public information and will indicate the date of the beginning and end
        of
        the intended period of suspension, if known), in which case the Purchaser
        shall
        discontinue disposition of the securities covered by the Registration Statement
        until copies of a supplemented or amended Prospectus are distributed to the
        Purchaser or until the Purchaser is advised in writing by the Company that
        sales
        of Registrable Securities under the applicable Prospectus may be resumed
        and has
        received copies of any additional or supplemental filings that are incorporated
        or deemed incorporated by reference in any such Prospectus. The suspension
        and
        notice thereof described in this Section 2(c) shall be held in strictest
        confidence and shall not be disclosed by the Purchasers. Any suspension by
        the
        Company pursuant to this Section 2(c) will not be considered an “Event” for
        purposes of Section 2(b) of this Agreement.

      
         

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

         

        
          	 	3.	Registration Procedures.

        

         

      

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

      

      (a)    Not
        less
        than five Trading Days prior to the filing of each Registration Statement
        or any
        related Prospectus or any amendment or supplement thereto (including any
        document that would be incorporated or deemed to be incorporated therein
        by
        reference), the Company shall, (i) furnish to each Holder copies of all such
        documents proposed to be filed, which documents (other than those incorporated
        or deemed to be incorporated by reference) will be subject to the review
        of such
        Holders, and (ii) cause its officers and directors to respond to such inquiries
        as shall be necessary, in the reasonable opinion of respective counsel to
        conduct a reasonable investigation within the meaning of the Securities Act.
        The
        Company shall not file a Registration Statement or any such Prospectus or
        any
        amendments or supplements thereto to which the Holders of a majority of the
        Registrable Securities shall reasonably object in good faith, provided that,
        the
        Company is notified of such objection in writing no later than 5 Trading
        Days
        after the Holders have been so furnished copies of such documents. Each Holder
        agrees to furnish to the Company a completed Questionnaire in the form attached
        to this Agreement as Annex B (a “Selling
        Shareholder Questionnaire”)
        not
        less than five Trading Days prior to the Filing Date or by the end of the
        fifth
        Trading Day following the date on which such Holder receives draft materials
        in
        accordance with this Section.

       

      (b)    (i)
        Prepare and file with the Commission such amendments, including post-effective
        amendments, to a Registration Statement and the Prospectus used in connection
        therewith as may be necessary to keep a Registration Statement continuously
        effective as to the applicable Registrable Securities for the Effectiveness
        Period and prepare and file with the Commission such additional Registration
        Statements in order to register for resale under the Securities Act all of
        the
        Registrable Securities; (ii) cause the related Prospectus to be amended or
        supplemented as promptly as possible by any required Prospectus supplement
        (subject to the terms of this Agreement), and as so supplemented or amended
        to
        be filed pursuant to Rule 424 provided, however, that the filing of any required
        amendment within three (3) business days of the occurrence of the vent that
        necessitated such filing shall be deemed to be timely for purposes of this
        Section 3(b); (iii) respond as promptly as reasonably possible to any comments
        received from the Commission with respect to a Registration Statement or
        any
        amendment thereto and as promptly as reasonably possible provide the Holders
        true and complete copies of all correspondence from and to the Commission
        relating to a Registration Statement, provided, however, that a response
        by the
        Company to comments from the Commission with respect to any amendment to
        a
        Registration Statement within three (3) business days of the receipt thereof
        shall be deemed to be timely for purposes of this Section 3(b); and (iv)
        comply
        in all material respects with the provisions of the Securities Act and the
        Exchange Act with respect to the disposition of all Registrable Securities
        covered by a Registration Statement during the applicable period in accordance
        (subject to the terms of this Agreement) with the intended methods of
        disposition by the Holders thereof set forth in such Registration Statement
        as
        so amended or in such Prospectus as so supplemented.

       

      (c)    If
        during
        the Effectiveness Period, the number of Registrable Securities at any time
        exceeds 90% of the number of shares of Common Stock then registered in a
        Registration Statement, then the Company shall file as soon as reasonably
        practicable but in any case prior to the applicable Filing Date, an additional
        Registration Statement covering the resale by the Holders of not less than
        120%
        of the number of such Registrable Securities.

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

       

      (d)    Notify
        the Holders of Registrable Securities to be sold (which notice shall, pursuant
        to clauses (ii) through (vi) hereof, be accompanied by an instruction to
        suspend
        the use of the Prospectus until the requisite changes have been made) as
        promptly as reasonably possible (and, in the case of (i)(A) below, not less
        than
        five Trading Days prior to such filing) and (if requested by any such Person)
        confirm such notice in writing no later than one Trading Day following the
        day
        (i)(A) when a Prospectus or any Prospectus supplement or post-effective
        amendment to a Registration Statement is proposed to be filed; (B) when the
        Commission notifies the Company whether there will be a “review” of such
        Registration Statement and whenever the Commission comments in writing on
        such
        Registration Statement (the Company shall provide true and complete copies
        thereof and all written responses thereto to each of the Holders, which copies
        may be provided via e-mail); and (C) with respect to a Registration Statement
        or
        any post-effective amendment, when the same has become effective; (ii) of
        any
        request by the Commission or any other Federal or state governmental authority
        for amendments or supplements to a Registration Statement or Prospectus or
        for
        additional information; (iii) of the issuance by the Commission or any other
        federal or state governmental authority of any stop order suspending the
        effectiveness of a Registration Statement covering any or all of the Registrable
        Securities or the initiation of any Proceedings for that purpose; (iv) of
        the
        receipt by the Company of any notification with respect to the suspension
        of the
        qualification or exemption from qualification of any of the Registrable
        Securities for sale in any jurisdiction, or the initiation or threatening
        of any
        Proceeding for such purpose; (v) of the occurrence of any event or passage
        of
        time that makes the financial statements included in a Registration Statement
        ineligible for inclusion therein or any statement made in a Registration
        Statement or Prospectus or any document incorporated or deemed to be
        incorporated therein by reference untrue in any material respect or that
        requires any revisions to a Registration Statement, Prospectus or other
        documents so that, in the case of a Registration Statement or the Prospectus,
        as
        the case may be, it will not contain any untrue statement of a material fact
        or
        omit to state any material fact required to be stated therein or necessary
        to
        make the statements therein, in light of the circumstances under which they
        were
        made, not misleading; and (vi) the occurrence or existence of any pending
        corporate development with respect to the Company that the Company believes
        may
        be material and that, in the determination of the Company, makes it not in
        the
        best interest of the Company to allow continued availability of a Registration
        Statement or Prospectus; provided that any and all of such information shall
        remain confidential to each Holder until such information otherwise becomes
        public, unless disclosure by a Holder is required by law; provided,
        further,
        notwithstanding each Holder’s agreement to keep such information confidential,
        the Holders make no acknowledgement that any such information is material,
        non-public information.

       

      (e)    Use
        its
        best efforts to avoid the issuance of, or, if issued, obtain the withdrawal
        of
        (i) any order suspending the effectiveness of a 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.

       

      (f)    Furnish
        to each Holder, without charge, at least one conformed copy of each such
        Registration Statement and each amendment thereto, including financial
        statements and schedules, all documents incorporated or deemed to be
        incorporated therein by reference to the extent requested by such Person,
        and
        all exhibits to the extent requested by such Person (including those
        incorporated by reference) promptly after the filing of such documents with
        the
        Commission. The Holders agree that copies of such documents may be provided
        to
        the Holders by e-mail and through links to the Commission’s
        website.

       

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

       

      (g)    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 in connection with
        resales by the Holder of Registrable Securities. 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 offering and sale of the Registrable Securities covered by such
        Prospectus and any amendment or supplement thereto, except after the giving
        on
        any notice pursuant to Section 3(d).

       

      (h)    If
        NASDR
        Rule 2710 requires any broker-dealer to make a filing prior to executing
        a sale
        by a Holder, the Company will (i) make an Issuer Filing with the NASDR, Inc.
        Corporate Financing Department pursuant to NASDR Rule 2710(b)(10)(A)(i),
        (ii)
        respond within five Trading Days to any comments received from NASDR in
        connection therewith, and (iii) pay the filing fee required in connection
        therewith.

       

      (i)    
Prior
        to
        any resale of Registrable Securities by a Holder, use its commercially
        reasonable efforts to register or qualify or cooperate with the selling Holders
        in connection with the registration or qualification (or exemption from the
        Registration or qualification) of such Registrable Securities for the resale
        by
        the Holder under the securities or Blue Sky laws of such jurisdictions within
        the United States as any Holder reasonably requests in writing, to keep each
        registration or qualification (or exemption therefrom) effective during the
        Effectiveness Period and to do any and all other acts or things reasonably
        necessary to enable the disposition in such jurisdictions of the Registrable
        Securities covered by each Registration Statement; provided, that the Company
        shall not be required to qualify generally to do business in any jurisdiction
        where it is not then so qualified, subject the Company to any material tax
        in
        any such jurisdiction where it is not then so subject or file a general consent
        to service of process in any such jurisdiction.

       

      (j)    
If
        requested by the Holders, cooperate with the Holders to facilitate the timely
        preparation and delivery of certificates representing Registrable Securities
        to
        be delivered to a transferee pursuant to a Registration Statement, which
        certificates shall be free, to the extent permitted by the Purchase Agreement,
        of all restrictive legends, and to enable such Registrable Securities to
        be in
        such denominations and registered in such names as any such Holders may
        request.

       

      (k)    Upon
        the
        occurrence of any event contemplated by this Section 3, as promptly as
        reasonably possible under the circumstances taking into account the Company’s
        good faith assessment of any adverse consequences to the Company and its
        stockholders of the premature disclosure of such event, prepare a supplement
        or
        amendment, including a post-effective amendment, to a Registration Statement
        or
        a supplement to the related Prospectus or any document incorporated or deemed
        to
        be incorporated therein by reference, and file any other required document
        so
        that, as thereafter delivered, neither a Registration Statement nor such
        Prospectus will contain an untrue statement of a material fact or omit to
        state
        a material fact required to be stated therein or necessary to make the
        statements therein, in light of the circumstances under which they were made,
        not misleading. If
        the
        Company notifies the Holders in accordance with clauses (ii) through (vi)
        of
        Section 3(d) above to suspend the use of any Prospectus until the requisite
        changes to such Prospectus have been made, then the Holders shall suspend
        use of
        such Prospectus. The Company will use its best efforts to ensure that the
        use of
        the Prospectus may be resumed as promptly as is practicable. 

       

      
        
          
          

        

        
          7

          
            

          

        

        
          
          

        

      

       

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

       

      (m)    The
        Company may require each selling Holder to furnish to the Company a certified
        statement as to the number of shares of Common Stock beneficially owned by
        such
        Holder and, if required by the Commission, the person thereof that has voting
        and dispositive control over the Shares. During any periods that the Company
        is
        unable to meet its obligations hereunder with respect to the registration
        of the
        Registrable Securities solely because any Holder fails to furnish such
        information within three Trading Days of the Company’s request, any liquidated
        damages that are accruing at such time as to such Holder only shall be tolled
        and any Event that may otherwise occur solely because of such delay shall
        be
        suspended as to such Holder only, until such information is delivered to
        the
        Company.

       

      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 a Registration Statement. The
        fees
        and expenses referred to in the foregoing sentence shall include, without
        limitation, (i) all registration and filing fees (including, without limitation,
        fees and expenses (A) with respect to filings required to be made with the
        Trading Market on which the Common Stock is then listed for trading, (B)
        in
        compliance with applicable state securities or Blue Sky laws reasonably agreed
        to by the Company in writing (including, without limitation, fees and
        disbursements of counsel for the Company in connection with Blue Sky
        qualifications or exemptions of the Registrable Securities and determination
        of
        the eligibility of the Registrable Securities for investment under the laws
        of
        such jurisdictions as requested by the Holders) and (C) if not previously
        paid
        by the Company in connection with an Issuer Filing, with respect to any filing
        that may be required to be made by any broker through which a Holder intends
        to
        make sales of Registrable Securities with NASD Regulation, Inc. pursuant
        to the
        NASD Rule 2710, so long as the broker is receiving no more than a customary
        brokerage commission in connection with such sale, (ii) printing expenses
        (including, without limitation, expenses of printing certificates for
        Registrable Securities and of printing prospectuses if the printing of
        prospectuses is reasonably requested by the holders of a majority of the
        Registrable Securities included in a Registration Statement), (iii) messenger,
        telephone and delivery expenses, (iv) fees and disbursements of counsel for
        the
        Company, (v) Securities Act liability insurance, if the Company so desires
        such
        insurance, and (vi) fees and expenses of all other Persons retained by the
        Company in connection with the consummation of the transactions contemplated
        by
        this Agreement. In addition, the Company shall be responsible for all of
        its
        internal expenses incurred in connection with the consummation of the
        transactions contemplated by this Agreement (including, without limitation,
        all
        salaries and expenses of its officers and employees performing legal or
        accounting duties), the expense of any annual audit and the fees and expenses
        incurred in connection with the listing of the Registrable Securities on
        any
        securities exchange as required hereunder. In no event shall the Company
        be
        responsible for any broker or similar commissions or, except to the extent
        provided for in the Transaction Documents, any legal fees or other costs
        of the
        Holders.

       

      
        
          
          

        

        
          8

          
            

          

        

        
          
          

        

      

       

      
        	 	5.	Indemnification

      

      
(a)    Indemnification
        by the Company.
        The
        Company shall, notwithstanding any termination of this Agreement, indemnify
        and
        hold harmless each Holder, the officers, directors, agents, brokers (including
        brokers who offer and sell Registrable Securities as principal as a result
        of a
        pledge or any failure to perform under a margin call of Common Stock),
        investment advisors and employees of each of them, each Person who controls
        any
        such Holder (within the meaning of Section 15 of the Securities Act or Section
        20 of the Exchange Act) and the officers, directors, agents and employees
        of
        each such controlling Person, to the fullest extent permitted by applicable
        law,
        from and against any and all losses, claims, damages, liabilities, costs
        (including, without limitation, reasonable attorneys’ fees) and expenses
        (collectively, “Losses”),
        as
        incurred, arising out of or relating to any untrue or alleged untrue statement
        of a material fact contained in a Registration Statement, any Prospectus
        or any
        form of prospectus or in any amendment or supplement thereto or in any
        preliminary prospectus, or arising out of or relating to any omission or
        alleged
        omission of a material fact required to be stated therein or necessary to
        make
        the statements therein (in the case of any Prospectus or form of prospectus
        or
        supplement thereto, in light of the circumstances under which they were made)
        not misleading, except to the extent, but only to the extent, that (i) such
        untrue statements or omissions are based solely upon information regarding
        such
        Holder furnished in writing to the Company by such Holder expressly for use
        therein, or to the extent that 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 a
        Registration Statement, such Prospectus or such form of Prospectus or in
        any
        amendment or supplement thereto (it being understood that the Holder has
        approved Annex A hereto for this purpose) or (ii) in the case of an occurrence
        of an event of the type specified in Section 3(d)(ii)-(vi), 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 and prior
        to
        the receipt by such Holder of the Advice contemplated in Section 6(d). The
        Company shall notify the Holders promptly of the institution, threat or
        assertion of any Proceeding arising from or in connection with the transactions
        contemplated by this Agreement of which the Company is aware.

       

      (b)    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 incurred, to the extent arising out of or
        based
        solely upon: (x) such Holder’s failure to comply with the prospectus delivery
        requirements of the Securities Act or (y) any untrue or alleged 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 in any
        preliminary prospectus, or arising out of or relating to any omission or
        alleged

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

       

      omission
        of a material fact required to be stated
        therein or necessary to make the statements therein not misleading (i) to
        the
        extent, but only to the extent, that such untrue statement or omission is
        contained in any information so furnished in writing by such Holder to the
        Company specifically for inclusion in such Registration Statement or such
        Prospectus or (ii) to the extent that (1) such untrue statements or omissions
        are based solely upon information regarding such Holder furnished in writing
        to
        the Company by such Holder expressly for use therein, or to the extent that
        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 a Registration Statement (it
        being understood that the Holder has approved Annex A hereto for this purpose),
        such Prospectus or such form of Prospectus or in any amendment or supplement
        thereto or (2) in the case of an occurrence of an event of the type specified
        in
        Section 3(d)(ii)-(vi), 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 and prior to the receipt by such Holder
        of
        the Advice contemplated in Section 6(d). In no event shall the liability
        of any
        selling Holder hereunder be greater in amount than the dollar amount of the
        net
        proceeds received by such Holder upon the sale of the Registrable Securities
        giving rise to such indemnification obligation.

       

      (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 have the right to 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 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 it shall be finally determined by a court of competent jurisdiction
        (which determination is not subject to appeal or further review) 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; (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 reasonably believe
        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 reasonable fees and expenses of one separate counsel shall be at the
        expense
        of the Indemnifying Party). The Indemnifying Party shall not be liable for
        any
        settlement of any such Proceeding effected 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.

      

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

      Subject
        to the terms of this Agreement, all reasonable 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; provided, that the Indemnified Party shall promptly
        reimburse the Indemnifying Party for that portion of such fees and expenses
        applicable to such actions for which such Indemnified Party is not entitled
        to
        indemnification hereunder, determined based upon the relative faults of the
        parties.

      

      (d)    Contribution.
        If the
        indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified
        Party or insufficient to hold an Indemnified Party harmless for any Losses,
        then
        each Indemnifying Party shall contribute to the amount paid or payable by
        such
        Indemnified Party, in such proportion as is appropriate to reflect the relative
        fault of the Indemnifying Party and Indemnified Party in connection with
        the
        actions, statements or omissions that resulted in such Losses as well as
        any
        other relevant equitable considerations. The relative fault of such Indemnifying
        Party and Indemnified Party shall be determined by reference to, among other
        things, whether any action in question, including any untrue or alleged untrue
        statement of a material fact or omission or alleged omission of a material
        fact,
        has been taken or made by, or relates to information supplied by, such
        Indemnifying Party or Indemnified Party, and the parties’ relative intent,
        knowledge, access to information and opportunity to correct or prevent such
        action, statement or omission. The amount paid or payable by a party as a
        result
        of any Losses shall be deemed to include, subject to the limitations set
        forth
        in this Agreement, any reasonable attorneys’ or other reasonable fees or
        expenses incurred by such party in connection with any Proceeding to the
        extent
        such party would have been indemnified for such fees or expenses if the
        indemnification provided for in this Section was available to such party
        in
        accordance with its terms.

      

      The
        parties hereto agree that it would not be just and equitable if contribution
        pursuant to this Section 5(d) were determined by pro rata allocation or by
        any
        other method of allocation that does not take into account the equitable
        considerations referred to in the immediately preceding paragraph.
        Notwithstanding the provisions of this Section 5(d), no Holder shall be required
        to contribute, in the aggregate, any amount in excess of the amount by which
        the
        proceeds actually received by such Holder from the sale of the Registrable
        Securities subject to the Proceeding exceeds the amount of any damages that
        such
        Holder has otherwise been required to pay by reason of such untrue or alleged
        untrue statement or omission or alleged omission, except in the case of fraud
        by
        such Holder.

      

      The
        indemnity and contribution agreements contained in this Section are in addition
        to any liability that the Indemnifying Parties may have to the Indemnified
        Parties.

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

      
         

        
          	 	6.	Miscellaneous

        

         

        (a)    Remedies.
          In the
          event of a breach by the Company or by a Holder, of any of their obligations
          under this Agreement, each Holder or the Company, as the case may be, in
          addition to being entitled to exercise all rights granted by law and under
          this
          Agreement, including recovery of damages, will be entitled to specific
          performance of its rights under this Agreement. The Company and each Holder
          agree that monetary damages would not provide adequate compensation for
          any
          losses incurred by reason of a breach by it of any of the provisions of
          this
          Agreement and hereby further agrees that, in the event of any action for
          specific performance in respect of such breach, it shall waive the defense
          that
          a remedy at law would be adequate.

         

        (b)    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 a Registration Statement.

         

        (c)    Discontinued
          Disposition.
          Each
          Holder agrees by its acquisition of such Registrable Securities that, upon
          receipt of a notice from the Company of the occurrence of any event of
          the kind
          described in Section 3(d), such Holder will forthwith discontinue disposition
          of
          such Registrable Securities under a Registration Statement until such Holder’s
          receipt of the copies of the supplemented Prospectus and/or amended Registration
          Statement, or until it is advised in writing (the “Advice”)
          by the
          Company that the use of the applicable Prospectus may be resumed, and,
          in either
          case, has received copies of any additional or supplemental filings that
          are
          incorporated or deemed to be incorporated by reference in such Prospectus
          or
          Registration Statement. The Company will use its best efforts to ensure
          that the
          use of the Prospectus may be resumed as promptly as it practicable. The
          Company
          agrees and acknowledges that any periods during which the Holder is required
          to
          discontinue the disposition of the Registrable Securities hereunder shall
          be
          subject to the provisions of Section 2(b).

         

        (d)    Piggy-Back
          Registrations.
          If at
          any time during the Effectiveness Period there is not an effective Registration
          Statement covering all of the Registrable Securities and the Company shall
          determine to prepare and file with the Commission a registration statement
          relating to an offering for its own account or the account of others under
          the
          Securities Act of any of its equity securities, other than on Form S-4
          or Form
          S-8 (each as promulgated under the Securities Act) or their then equivalents
          relating to equity securities to be issued solely in connection with any
          acquisition of any entity or business or equity securities issuable in
          connection with the stock option or other employee benefit plans, then
          the
          Company shall send to each Holder a written notice of such determination
          and, if
          within fifteen days after the date of such notice, any such Holder shall
          so
          request in writing, the Company shall include in such registration statement
          all
          or any part of such Registrable Securities such Holder requests to be
          registered; provided,
          however,
          that,
          the Company shall not be required to register any Registrable Securities
          pursuant to this Section 6(e) that are eligible for resale pursuant to
          Rule
          144(k) promulgated under the Securities Act or that are the subject of
          a then
          effective Registration Statement.

         

        
          
            
            

          

          
            12

            
              

            

          

          
            
            

          

        

         

        (e)    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 each Holder 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 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.

         

        (f)    Notices.
          Except
          as otherwise set forth herein, any and all notices or other communications
          or
          deliveries required or permitted to be provided hereunder shall be delivered
          as
          set forth in the Purchase Agreement.

         

        (g)    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. The Company may not assign its rights or obligations hereunder
          without
          the prior written consent of all of the Holders of the then-outstanding
          Registrable Securities. Each Holder may assign their respective rights
          hereunder
          in the manner and to the Persons as permitted under the Purchase
          Agreement.

         

        (h)    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. Except as set forth
          on
Schedule
          6(i),
          neither
          the Company nor any of its subsidiaries has previously entered into any
          agreement granting any registration rights with respect to any of its securities
          to any Person that have not been satisfied in full.

         

        (i)    Execution
          and 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.

         

        (j)    Governing
          Law.
          All
          questions concerning the construction, validity, enforcement and interpretation
          of this Agreement shall be determined with the provisions of the Purchase
          Agreement.

         

        (k)    Cumulative
          Remedies.
          The
          remedies provided herein are cumulative and not exclusive of any remedies
          provided by law.

         

        
          
            
            

          

          
            13

            
              

            

          

          
            
            

          

        

         

        (l)    
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 commercially 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.

         

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

         

        (n)    Independent
          Nature of Holders’ Obligations and Rights.
          The
          obligations of each Holder hereunder are several and not joint with the
          obligations of any other Holder hereunder, and no Holder shall be responsible
          in
          any way for the performance of the obligations of any other Holder hereunder.
          Nothing contained herein or in any other agreement or document delivered
          at any
          closing, and no action taken by any Holder pursuant hereto or thereto,
          shall be
          deemed to constitute the Holders as a partnership, an association, a joint
          venture or any other kind of entity, or create a presumption that the Holders
          are in any way acting in concert with respect to such obligations or the
          transactions contemplated by this Agreement. Each Holder shall be entitled
          to
          protect and enforce its rights, including without limitation the rights
          arising
          out of this Agreement, and it shall not be necessary for any other Holder
          to be
          joined as an additional party in any proceeding for such
          purpose.

      

      

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

      

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

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

      

      

      
        	 	
                SURGE
                  GLOBAL ENERGY, INC.

                 

              
	 	
                By:__________________________________________

                Name:

                Title:

              

      

      

      

      

      

      

      

      

      

      

      [SIGNATURE
        PAGE OF HOLDERS FOLLOWS]

       

      
        
          
          

        

        
          15

          
            

          

        

        
          
          

        

      

      
 

      [SIGNATURE
        PAGE OF HOLDERS TO REGISTRATION RIGHTS AGREEMENT WITH SURGE GLOBAL ENERGY,
        INC.]

      

      Name
        of
        Holder: Mark C. Fritz

      Signature
        of Authorized Signatory of Holder:
        __________________________

      Name
        of
        Authorized Signatory: _____________________________

      Title
        of
        Authorized Signatory: __________________________

      

      

      

      [SIGNATURE
        PAGES CONTINUE]

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

      ANNEX
        A

      

      Plan
        of Distribution

       

      Each
        Selling Stockholder (the “Selling
        Stockholders”)
        of the
        Common Stock (“Common
        Stock”)
        of
        Surge Global Energy, Inc., a Delaware corporation (the “Company”)
        and
        any of their pledgees, assignees and successors-in-interest may, from time
        to
        time, sell any or all of their shares of Common Stock on the Trading Market
        or
        any other stock exchange, market or trading facility on which the shares
        are
        traded or in private transactions. These sales may be at fixed or negotiated
        prices. A Selling Stockholder may use any one or more of the following methods
        when selling shares:

       

      
        	·  	
                ordinary
                  brokerage transactions and transactions in which the broker-dealer
                  solicits purchasers;

              

      

       

      
        	·  	
                block
                  trades in which the broker-dealer will attempt to sell the shares
                  as agent
                  but may position and resell a portion of the block as principal
                  to
                  facilitate the transaction;

              

      

       

      
        	·  	
                purchases
                  by a broker-dealer as principal and resale by the broker-dealer
                  for its
                  account;

              

      

       

      
        	·  	
                an
                  exchange distribution in accordance with the rules of the applicable
                  exchange;

              

      

       

      
        	·  	
                privately
                  negotiated transactions;

              

      

       

      
        	·  	
                settlement
                  of short sales entered into after the effective date of the registration
                  statement of which this prospectus is a
                  part;

              

      

       

      
        	·  	
                broker-dealers
                  may agree with the Selling Stockholders to sell a specified number
                  of such
                  shares at a stipulated price per
                  share;

              

      

       

      
        	·  	
                a
                  combination of any such methods of
                  sale;

              

      

       

      
        	·  	
                through
                  the writing or settlement of options or other hedging transactions,
                  whether through an options exchange or otherwise;
                  or

              

      

       

      
        	·  	
                any
                  other method permitted pursuant to applicable
                  law.

              

      

       

      The
        Selling Stockholders may also sell shares under Rule 144 under the Securities
        Act of 1933, as amended (the “Securities
        Act”),
        if
        available, rather than under this prospectus.

       

      Broker-dealers
        engaged by the Selling Stockholders may arrange for other brokers-dealers
        to
        participate in sales. Broker-dealers may receive commissions or discounts
        from
        the Selling Stockholders (or, if any broker-dealer acts as agent for the
        purchaser of shares, from the purchaser) in amounts to be negotiated, but,
        except as set forth in a supplement to this Prospectus, in the case of an
        agency
        transaction not in excess of a customary brokerage commission in compliance
        with
        NASDR Rule 2440; and in the case of a principal transaction a markup or markdown
        in compliance with NASDR IM-2440. 

       

      
        
          
          

        

        
          17

          
            

          

        

        
          
          

        

      

       

      In
        connection with the sale of the Common Stock or interests therein, the Selling
        Stockholders may enter into hedging transactions with broker-dealers or other
        financial institutions, which may in turn engage in short sales of the Common
        Stock in the course of hedging the positions they assume. The Selling
        Stockholders may also sell shares of the Common Stock short and deliver these
        securities to close out their short positions, or loan or pledge the Common
        Stock to broker-dealers that in turn may sell these securities. The Selling
        Stockholders may also enter into option or other transactions with
        broker-dealers or other financial institutions or the creation of one or
        more
        derivative securities which require the delivery to such broker-dealer or
        other
        financial institution of shares offered by this prospectus, which shares
        such
        broker-dealer or other financial institution may resell pursuant to this
        prospectus (as supplemented or amended to reflect such
        transaction).

       

      The
        Selling Stockholders and any broker-dealers or agents that are involved in
        selling the shares may be deemed to be “underwriters” within the meaning of the
        Securities Act in connection with such sales. In such event, any commissions
        received by such broker-dealers or agents and any profit on the resale of
        the
        shares purchased by them may be deemed to be underwriting commissions or
        discounts under the Securities Act. Each Selling Stockholder has informed
        the
        Company that it does not have any written or oral agreement or understanding,
        directly or indirectly, with any person to distribute the Common Stock. In
        no
        event shall any broker-dealer receive fees, commissions and markups which,
        in
        the aggregate, would exceed eight percent (8%).

       

      The
        Company is required to pay certain fees and expenses incurred by the Company
        incident to the registration of the shares. The Company has agreed to indemnify
        the Selling Stockholders against certain losses, claims, damages and
        liabilities, including liabilities under the Securities Act. 

       

      Because
        Selling Stockholders may be deemed to be “underwriters” within the meaning of
        the Securities Act, they will be subject to the prospectus delivery requirements
        of the Securities Act. In addition, any securities covered by this prospectus
        which qualify for sale pursuant to Rule 144 under the Securities Act may
        be sold
        under Rule 144 rather than under this prospectus. Each Selling Stockholder
        has
        advised us that they have not entered into any written or oral agreements,
        understandings or arrangements with any underwriter or broker-dealer regarding
        the sale of the resale shares. There is no underwriter or coordinating broker
        acting in connection with the proposed sale of the resale shares by the Selling
        Stockholders.

       

      We
        agreed
        to keep this prospectus effective until the earlier of (i) the date on which
        the
        shares may be resold by the Selling Stockholders without registration and
        without regard to any volume limitations by reason of Rule 144(e) under the
        Securities Act or any other rule of similar effect or (ii) all of the shares
        have been sold pursuant to the prospectus or Rule 144 under the Securities
        Act
        or any other rule of similar effect. The resale shares will be sold only
        through
        registered or licensed brokers or dealers if required under applicable state
        securities laws. In addition, in certain states, the resale shares may not
        be
        sold unless they have been registered or qualified for sale in the applicable
        state or an exemption from the registration or qualification requirement
        is
        available and is complied with.

       

      
        
          
          

        

        
          18

          
            

          

        

        
          
          

        

      

       

      Under
        applicable rules and regulations under the Exchange Act, any person engaged
        in
        the distribution of the resale shares may not simultaneously engage in market
        making activities with respect to the Common Stock for a period of two business
        days prior to the commencement of the distribution. In addition, the Selling
        Stockholders will be subject to applicable provisions of the Exchange Act
        and
        the rules and regulations thereunder, including Regulation M, which may limit
        the timing of purchases and sales of shares of the Common Stock by the Selling
        Stockholders or any other person. We will make copies of this prospectus
        available to the Selling Stockholders and have informed them of the need
        to
        deliver a copy of this prospectus to each purchaser at or prior to the time
        of
        the sale.

       

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

       

      Annex
        B

       

      SURGE
        GLOBAL ENERGY, INC.

       

      SELLING
        SECURITYHOLDER NOTICE AND QUESTIONNAIRE

       

      The
        undersigned beneficial owner of Common Stock, par value $0.001 per share
        (the
“Common
        Stock”),
        of
        Surge Global Energy, Inc., a Delaware corporation (the “Company”),
        (the
“Registrable
        Securities”)
        understands that the Company has filed or intends to file with the Securities
        and Exchange Commission (the “Commission”)
        a
        registration statement on Form SB-2 (the “Registration
        Statement”)
        for
        the registration and resale under Rule 415 of the Securities Act of 1933,
        as
        amended (the “Securities
        Act”),
        of
        the Registrable Securities, in accordance with the terms of the Registration
        Rights Agreement, dated as of November 28, 2006 (the “Registration
        Rights Agreement”),
        among
        the Company and the Purchasers named therein. A copy of the Registration
        Rights
        Agreement is available from the Company upon request at the address set forth
        below. All capitalized terms not otherwise defined herein shall have the
        meanings ascribed thereto in the Registration Rights Agreement.

       

      Certain
        legal consequences arise from being named as a selling securityholder in
        the
        Registration Statement and the related prospectus. Accordingly, holders and
        beneficial owners of Registrable Securities are advised to consult their
        own
        securities law counsel regarding the consequences of being named or not being
        named as a selling securityholder in the Registration Statement and the related
        prospectus.

       

      NOTICE

       

      The
        undersigned beneficial owner (the “Selling
        Securityholder”)
        of
        Registrable Securities hereby elects to include the Registrable Securities
        owned
        by it and listed below in Item 3 (unless otherwise specified under such Item
        3)
        in the Registration Statement.

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

       

      The
        undersigned hereby provides the following information to the Company and
        represents and warrants that such information is accurate:

       

      QUESTIONNAIRE

       

      
        
          	1. 	
                  Name.

                	
                   

                

        

      

       

      
        	 	
                (a)

              	
                Full
                  Legal Name of Selling
                  Securityholder

              

      

       

      
        	 	 
	 	 

      

      

      
        	 	
                (b)

              	
                Full
                  Legal Name of Registered Holder (if not the same as (a) above)
                  through
                  which Registrable Securities Listed in Item 3 below are
                  held:

              

      

      
         

        
          	 	 
	 	 

        

      

      
         

        
          	 	
                  (c)

                	
                  Full
                    Legal Name of Natural Control Person (which means a natural person
                    who
                    directly or indirectly alone or with others has power to vote
                    or dispose
                    of the securities covered by the
                    questionnaire):

                

        

         

      

      
        
          	 	 
	 	 

        

      

      
         

      

      
        
          
            	2.	Address for Notices to
                    Selling
                    Securityholder:

          

           

        

      

      
        	 
	 
	 

      

       

      
        	Telephone:	
                 

              
	Fax:	
                 

              
	
                Contact
                  Person: 

              	
                 

              

      

       

      
        	3.	Beneficial Ownership of Registrable
                Securities:

      

       

      
        	 	
                (a)

              	
                Type
                  and Number of Registrable Securities beneficially
                  owned:

              

      

       

      
        	 	 
	 	 
	 	 
	 	 

      

       

      
        
          
          

        

        
          21

          
            

          

        

        
          
          

        

      

       

      
        
          	4.	Broker-Dealer
                  Status:

        

         

      

      
        	 	
                (a)

              	
                Are
                  you a broker-dealer?

              

      

       

      Yes o 
No
o

       

      
        	 	
                (b)

              	
                If
                  “yes” to Section 4(a), did you receive your Registrable Securities as
                  compensation for investment banking services to the
                  Company.

              

      

       

      Yes o 
No
o

       

      
        	 	
                Note:

              	
                If
                  no, the Commission’s staff has indicated that you should be identified as
                  an underwriter in the Registration
                  Statement.

              

      

       

      
        	 	
                (c)

              	
                Are
                  you an affiliate of a
                  broker-dealer?

              

      

       

      Yes o 
No
o

       

      
        	 	
                (d)

              	
                If
                  you are an affiliate of a broker-dealer, do you certify that you
                  bought
                  the Registrable Securities in the ordinary course of business,
                  and at the
                  time of the purchase of the Registrable Securities to be resold,
                  you had
                  no agreements or understandings, directly or indirectly, with any
                  person
                  to distribute the Registrable
                  Securities?

              

      

       

      Yes o 
No
o

       

      
        	 	
                Note:

              	
                If
                  no, the Commission’s staff has indicated that you should be identified as
                  an underwriter in the Registration
                  Statement.

              

      

       

      
        
          
            	5.	Beneficial Ownership
                    of Other
                    Securities of the Company Owned by the Selling
                    Securityholder.

          

        

      

       

      Except
        as set forth below in this Item 5, the undersigned is not the beneficial
        or
        registered owner of any securities of the Company other than the Registrable
        Securities listed above in Item 3.

       

      
        	 	
                (a)

              	
                Type
                  and Amount of Other Securities beneficially owned by the Selling
                  Securityholder:

              

      

       

      
        	 	 
	 	 
	 	 

      

      

      
        
          
          

        

        
          22

          
            

          

        

        
          
          

        

      

       

      
        
          
            
              	6.	Relationships with
                      the
                      Company:

            

             

          

        

      

      Except
        as set forth below, neither the undersigned nor any of its affiliates, officers,
        directors or principal equity holders (owners of 5% of more of the equity
        securities of the undersigned) has held any position or office or has had
        any
        other material relationship with the Company (or its predecessors or affiliates)
        during the past three years.

       

      State
        any
        exceptions here:

       

      
        	 	 
	 	 
	 	 

      

       

      The
        undersigned agrees to promptly notify the Company of any inaccuracies or
        changes
        in the information provided herein that may occur subsequent to the date
        hereof
        at any time while the Registration Statement remains effective.

       

      By
        signing below, the undersigned consents to the disclosure of the information
        contained herein in its answers to Items 1 through 6 and the inclusion of
        such
        information in the Registration Statement and the related prospectus
and
        any
        amendments or supplements thereto.
        The
        undersigned understands that such information will be relied upon by the
        Company
        in connection with the preparation or amendment of the Registration Statement
        and the related prospectus.

       

      IN
        WITNESS WHEREOF the undersigned, by authority duly given, has caused this
        Notice
        and Questionnaire to be executed and delivered either in person or by its
        duly
        authorized agent.

       

      
        	
                Dated:____________________________________

                 

                 

                 

                 

              	
                Beneficial
                  Owner:______________________________________

                 

                By:_________________________________________________

                Name:

                Title:

              

      

      

      PLEASE
        FAX A COPY OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN
        THE ORIGINAL BY OVERNIGHT MAIL, TO:

    

     

    
       

      23Common Stock Purchase Warrants

    Exhibit
      10.3

     

    NEITHER
      THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE
      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 REQUIREMENTS OF THE
      SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
      EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
      SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY
      AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN
      CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH
      SECURITIES.

    

    COMMON
      STOCK PURCHASE WARRANT

    

    To
      Purchase 2,000,000 Shares of Common Stock of

     

    SURGE
      GLOBAL ENERGY, INC.

     

    THIS
      COMMON STOCK PURCHASE WARRANT (the “Warrant”)
      certifies that, for value received, Gemini Master Fund Limited (the
“Holder”),
      is
      entitled, upon the terms and subject to the limitations on exercise and the
      conditions hereinafter set forth, at any time on or after the date hereof (the
      “Initial
      Exercise Date”)
      and on
      or prior to the close of business on the five (5) year anniversary of the
      Initial Exercise Date (the “Termination
      Date”)
      but
      not thereafter, to subscribe for and purchase from Surge Global Energy, Inc.,
      a
      Delaware corporation (the “Company”),
      up to
      2,000,000 shares (the “Warrant
      Shares”)
      of
      Common Stock, par value $0.001 per share, of the Company (the “Common
      Stock”).
      The
      purchase price of one share of Common Stock under this Warrant shall be equal
      to
      the Exercise Price, as defined in Section 2(b). 

     

    Section
      1. Definitions.
      Capitalized terms used and not otherwise defined herein shall have the meanings
      set forth in that certain Securities Purchase Agreement (the “Purchase
      Agreement”),
      dated
      as of November 28, 2006, between the Company and the purchaser signatory
      thereto.

     

    Section
      2. Exercise.

     

    a) Exercise
      of Warrant.
      Exercise of the purchase rights represented by this Warrant may be made, in
      whole or in part, at any time or times on or after the Initial Exercise Date
      and
      on or before the Termination Date by delivery to the Company of a duly executed
      facsimile copy of the Notice of Exercise Form annexed hereto (or such other
      office or agency of the Company as it may designate by notice in writing to
      the
      registered Holder at the address of such Holder appearing on the books of the
      Company); provided,
      however,
      within
      5 Trading Days of the date said Notice of Exercise is delivered to the Company,
      the Holder shall have surrendered this Warrant to the Company and the Company
      shall have received payment of the aggregate Exercise Price of the shares
      thereby purchased by wire transfer or cashier’s check drawn on a United States
      bank.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    b) Exercise
      Price.
      The
      exercise price of the Common Stock under this Warrant shall be $0.60 subject
      to
      adjustment hereunder (the “Exercise
      Price”).

     

    c) Cashless
      Exercise.
      If at
      any time after one year from the date of issuance of this Warrant there is
      no
      effective Registration Statement registering, or no current prospectus available
      for, the resale of the Warrant Shares by the Holder, then this Warrant may
      also
      be exercised at such time by means of a “cashless exercise” in which the Holder
      shall be entitled to receive a certificate for the number of Warrant Shares
      equal to the quotient obtained by dividing [(A-B) (X)] by (A),
      where:

     

     

    
      	 	
              (A) 

            	
              = 

            	the VWAP on the Trading Day immediately
              preceding the date of such election; 
	 	
              (B) 

            	
              = 

            	the Exercise Price of this Warrant,
              as
              adjusted; and 
	 	
              (X) 

            	
              = 

            	the number of Warrant Shares issuable
              upon
              exercise of this Warrant in accordance with the terms of this Warrant
              by
              means of a cash exercise rather than a cashless
              exercise. 

    

    

    Notwithstanding
      anything herein to the contrary, on the Termination Date, this Warrant shall
      be
      automatically exercised via cashless exercise pursuant to this Section
      2(c).

    

    d) Exercise
      Limitations.
      

     

    Holder’s
      Restrictions.
      The
      Company shall not effect any exercise of this Warrant, and a Holder shall not
      have the right to exercise any portion of this Warrant, pursuant to Section
      2(c)
      or otherwise, to the extent that after giving effect to such issuance after
      exercise, such Holder (together with such Holder’s affiliates, and any other
      person or entity acting as a group together with such Holder or any of such
      Holder’s affiliates), as set forth on the applicable Notice of Exercise, would
      beneficially own in excess of the Beneficial Ownership Limitation (as defined
      below).  For purposes of the foregoing sentence, the number of shares of
      Common Stock beneficially owned by such Holder and its affiliates shall include
      the number of shares of Common Stock issuable upon exercise of this Warrant
      with
      respect to which the determination of such sentence is being made, but shall
      exclude the number of shares of Common Stock which would be issuable upon (A)
      exercise of the remaining, nonexercised portion of this Warrant beneficially
      owned by such Holder or any of its affiliates and (B) exercise or conversion
      of
      the unexercised or nonconverted portion of any other securities of the Company
      (including, without limitation, any Greenshoe Warrants or any other Warrants)
      subject to a limitation on conversion or exercise analogous to the limitation
      contained herein beneficially owned by such Holder or any of its
      affiliates.  Except as set forth in the preceding sentence, for purposes of
      this Section 2(d), beneficial ownership shall be calculated in accordance with
      Section 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

    13(d)
      of
      the Exchange Act and the rules and regulations promulgated thereunder, it being
      acknowledged by a Holder that the Company is not representing to such Holder
      that such calculation is in compliance with Section 13(d) of the Exchange Act
      and such Holder is solely responsible for any schedules required to be filed
      in
      accordance therewith. To the extent that the limitation contained in this
      Section 2(d) applies, the determination of whether this Warrant is exercisable
      (in relation to other securities owned by such Holder) and of which a portion
      of
      this Warrant is exercisable shall be in the sole discretion of a Holder, and
      the
      submission of a Notice of Exercise shall be deemed to be each Holder’s
      determination of whether this Warrant is exercisable (in relation to other
      securities owned by such Holder) and of which portion of this Warrant is
      exercisable, in each case subject to such aggregate percentage limitation,
      and
      the Company shall have no obligation to verify or confirm the accuracy of such
      determination. In addition, a determination as to any group status as
      contemplated above shall be determined in accordance with Section 13(d) of
      the
      Exchange Act and the rules and regulations promulgated thereunder. For purposes
      of this Section 2(d), in determining the number of outstanding shares of Common
      Stock, a Holder may rely on the number of outstanding shares of Common Stock
      as
      reflected in (x) the Company’s most recent Form 10-Q or Form 10-K, as the case
      may be, (y) a more recent public announcement by the Company or (z) any other
      notice by the Company or the Company’s Transfer Agent setting forth the number
      of shares of Common Stock outstanding.  Upon the written or oral request of
      a Holder, the Company shall within two Trading Days confirm orally and in
      writing to such Holder the number of shares of Common Stock then
      outstanding.  In any case, the number of outstanding shares of Common Stock
      shall be determined after giving effect to the conversion or exercise of
      securities of the Company, including this Warrant, by such Holder or its
      affiliates since the date as of which such number of outstanding shares of
      Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99%
      of the number of shares of the Common Stock outstanding immediately after giving
      effect to the issuance of shares of Common Stock issuable upon exercise of
      this
      Warrant. The Beneficial Ownership Limitation provisions of this Section 2(d)
      may
      be waived by such Holder, at the election of such Holder, upon not less than
      61
      days’ prior notice to the Company to change the Beneficial Ownership Limitation
      to 9.99% of the number of shares of the Common Stock outstanding immediately
      after giving effect to the issuance of shares of Common Stock upon exercise
      of
      this Warrant, and the provisions of this Section 2(d) shall continue to apply.
      Upon such a change by a Holder of the Beneficial Ownership Limitation from
      such
      4.99% limitation to such 9.99% limitation, the Beneficial Ownership Limitation
      may not be waived by such Holder. The provisions of this paragraph shall be
      implemented in a manner otherwise than in strict conformity with the terms
      of
      this Section 2(d) to correct this paragraph (or any portion hereof) which may
      be
      defective or inconsistent with the intended Beneficial Ownership Limitation
      herein contained or to make changes or supplements necessary or desirable to
      properly give effect to such limitation. The limitations contained in this
      paragraph shall apply to a successor holder of this Warrant.

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    e) Mechanics
      of Exercise.
      

     

    i. Authorization
      of Warrant Shares.
      The
      Company covenants that all Warrant Shares which may be issued upon the exercise
      of the purchase rights represented by this Warrant will, upon exercise of the
      purchase rights represented by this Warrant, be duly authorized, validly issued,
      fully paid and nonassessable and free from all taxes, liens and charges in
      respect of the issue thereof (other than taxes in respect of any transfer
      occurring contemporaneously with such issue). 

     

    ii. Delivery
      of Certificates Upon Exercise.
      Certificates for shares purchased hereunder shall be transmitted by the transfer
      agent of the Company to the Holder by crediting the account of the Holder’s
      prime broker with the Depository Trust Company through its Deposit and
      Withdrawals at Custodian (“DWAC”)
      system
      if the Company is a participant in such system, and otherwise by physical
      delivery to the address specified by the Holder in the Notice of Exercise within
      three (3) Trading Days from the delivery to the Company of the Notice of
      Exercise Form, surrender of this Warrant and payment of the aggregate Exercise
      Price as set forth above (“Warrant
      Share Delivery Date”).
      This
      Warrant shall be deemed to have been exercised on the date the Exercise Price
      is
      received by the Company. The Warrant Shares shall be deemed to have been issued,
      and Holder or any other person so designated to be named therein shall be deemed
      to have become a holder of record of such shares for all purposes, as of the
      date the Warrant has been exercised by payment to the Company of the Exercise
      Price and all taxes required to be paid by the Holder, if any, pursuant to
      Section 2(e)(vii) prior to the issuance of such shares, have been paid.

     

    iii. Delivery
      of New Warrants Upon Exercise.
      If this
      Warrant shall have been exercised in part, the Company shall, at the time of
      delivery of the certificate or certificates representing Warrant Shares, deliver
      to Holder a new Warrant evidencing the rights of Holder to purchase the
      unpurchased Warrant Shares called for by this Warrant, which new Warrant shall
      in all other respects be identical with this Warrant.

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    iv. Rescission
      Rights.
      If the
      Company fails to cause its transfer agent to transmit to the Holder a
      certificate or certificates representing the Warrant Shares pursuant to this
      Section 2(e)(iv) by the Warrant Share Delivery Date, then the Holder will have
      the right to rescind such exercise.

     

    v. Compensation
      for Buy-In on Failure to Timely Deliver Certificates Upon
      Exercise.
      In
      addition to any other rights available to the Holder, if the Company fails
      to
      cause its transfer agent to transmit to the Holder a certificate or certificates
      representing the Warrant Shares pursuant to an exercise on or before the Warrant
      Share Delivery Date, and if after such date the Holder is required by its broker
      to purchase (in an open market transaction or otherwise) shares of Common Stock
      to deliver in satisfaction of a sale by the Holder of the Warrant Shares which
      the Holder anticipated receiving upon such exercise (a “Buy-In”),
      then
      the Company shall (1) pay in cash to the Holder the amount by which (x) the
      Holder’s total purchase price (including brokerage commissions, if any) for the
      shares of Common Stock so purchased exceeds (y) the amount obtained by
      multiplying (A) the number of Warrant Shares that the Company was required
      to
      deliver to the Holder in connection with the exercise at issue times (B) the
      price at which the sell order giving rise to such purchase obligation was
      executed, and (2) at the option of the Holder, either reinstate the portion
      of
      the Warrant and equivalent number of Warrant Shares for which such exercise
      was
      not honored or deliver to the Holder the number of shares of Common Stock that
      would have been issued had the Company timely complied with its exercise and
      delivery obligations hereunder. For example, if the Holder purchases Common
      Stock having a total purchase price of $11,000 to cover a Buy-In with respect
      to
      an attempted exercise of shares of Common Stock with an aggregate sale price
      giving rise to such purchase obligation of $10,000, under clause (1) of the
      immediately preceding sentence the Company shall be required to pay the Holder
      $1,000. The Holder shall provide the Company written notice indicating the
      amounts payable to the Holder in respect of the Buy-In, together with applicable
      confirmations and other evidence reasonably requested by the Company. Nothing
      herein shall limit a Holder’s right to pursue any other remedies available to it
      hereunder, at law or in equity including, without limitation, a decree of
      specific performance and/or injunctive relief with respect to the Company’s
      failure to timely deliver certificates representing shares of Common Stock
      upon
      exercise of the Warrant as required pursuant to the terms hereof.

     

    vi. No
      Fractional Shares or Scrip.
      No
      fractional shares or scrip representing fractional shares shall be issued upon
      the exercise of this Warrant. As to any fraction of a share which Holder would
      otherwise be entitled to purchase upon such exercise, the Company shall pay
      a
      cash adjustment in respect of such final fraction in an amount equal to such
      fraction multiplied by the Exercise Price.

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    vii. Charges,
      Taxes and Expenses.
      Issuance of certificates for Warrant Shares shall be made without charge to
      the
      Holder for any issue or transfer tax or other incidental expense in respect
      of
      the issuance of such certificate, all of which taxes and expenses shall be
      paid
      by the Company, and such certificates shall be issued in the name of the Holder
      or in such name or names as may be directed by the Holder; provided,
      however,
      that in
      the event certificates for Warrant Shares are to be issued in a name other
      than
      the name of the Holder, this Warrant when surrendered for exercise shall be
      accompanied by the Assignment Form attached hereto duly executed by the Holder;
      and the Company may require, as a condition thereto, the payment of a sum
      sufficient to reimburse it for any transfer tax incidental thereto.

     

    viii. Closing
      of Books.
      The
      Company will not close its stockholder books or records in any manner which
      prevents the timely exercise of this Warrant, pursuant to the terms
      hereof.

     

    Section
      3. Certain Adjustments.

     

    a) Stock
      Dividends and Splits.
      If the
      Company, at any time while this Warrant is outstanding: (A) pays a stock
      dividend or otherwise make a distribution or distributions on shares of its
      Common Stock or any other equity or equity equivalent securities payable in
      shares of Common Stock (which, for avoidance of doubt, shall not include any
      shares of Common Stock issued by the Company pursuant to this Warrant), (B)
      subdivides outstanding shares of Common Stock into a larger number of shares,
      (C) combines (including by way of reverse stock split) outstanding shares of
      Common Stock into a smaller number of shares, or (D) issues by reclassification
      of shares of the Common Stock any shares of capital stock of the Company, then
      in each case the Exercise Price shall be multiplied by a fraction of which
      the
      numerator shall be the number of shares of Common Stock (excluding treasury
      shares, if any) outstanding immediately before such event and of which the
      denominator shall be the number of shares of Common Stock outstanding
      immediately after such event and the number of shares issuable upon exercise
      of
      this Warrant shall be proportionately adjusted. Any adjustment made pursuant
      to
      this Section 3(a) shall become effective immediately after the record date
      for
      the determination of stockholders entitled to receive such dividend or
      distribution and shall become effective immediately after the effective date
      in
      the case of a subdivision, combination or re-classification.

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    b) Subsequent
      Equity Sales.
      If the
      Company or any Subsidiary thereof, as applicable, at any time while this Warrant
      is outstanding, shall offer, sell, grant any option to purchase or offer, sell
      or grant any right to reprice its securities, or otherwise dispose of or issue
      any Common Stock or Common Stock Equivalents entitling any Person to acquire
      shares of Common Stock, at an effective price per share less than the then
      Exercise Price such issuances collectively, a “Dilutive
      Issuance”),
      as
      adjusted hereunder (if the holder of the Common Stock or Common Stock
      Equivalents so issued shall at any time, whether by operation of purchase price
      adjustments, reset provisions, floating conversion, exercise or exchange prices
      or otherwise, or due to warrants, options or rights per share which is issued
      in
      connection with such issuance, be entitled to receive shares of Common Stock
      at
      an effective price per share which is less than the Exercise Price, such
      issuance shall be deemed to have occurred for less than the Exercise Price
      on
      such date of the adjustment of the Dilutive Issuance), the then-existing
      Exercise Price shall be reduced by multiplying the Exercise Price in effect
      immediately prior to such Dilutive Issuance by a fraction, the numerator of
      which is the number of shares of Common Stock outstanding immediately prior
      to
      such Dilutive Issuance plus the number of shares of Common Stock which could
      be
      purchased at the current Exercise Price on the date of such Dilutive Issuance
      with the aggregate consideration received or receivable by the Company in
      connection with such Dilutive Issuance and the denominator of which is the
      number of shares of Common Stock outstanding immediately prior to such Dilutive
      Issuance plus the number of shares of Common Stock to be so issued or sold.
      Such
      adjustment shall be made whenever such Common Stock or Common Stock Equivalents
      are issued. Notwithstanding the foregoing, no adjustments shall be made, paid
      or
      issued under this Section 3(b) in respect of an Exempt Issuance. The Company
      shall notify the Holder in writing, no later than the Trading Day following
      the
      issuance of any Common Stock or Common Stock Equivalents subject to this
      section, indicating therein the applicable issuance price, or of applicable
      reset price, exchange price, conversion price and other pricing terms (such
      notice the “Dilutive
      Issuance Notice”).
      For
      purposes of clarification, whether or not the Company provides a Dilutive
      Issuance Notice pursuant to this Section 3(b), upon the occurrence of any
      Dilutive Issuance, after the date of such Dilutive Issuance the Holder is
      entitled to receive a number of Warrant Shares based upon the Base Share Price
      regardless of whether the Holder accurately refers to the Base Share Price
      in
      the Notice of Exercise. 

     

    c) Pro
      Rata Distributions.
      If the
      Company, at any time prior to the Termination Date, shall distribute to all
      holders of Common Stock (and not to Holders of the Warrants) evidences of its
      indebtedness or assets (including cash and cash dividends) or rights or warrants
      to subscribe for or purchase any security other than the Common Stock (which
      shall be subject to Section 3(b)), then in each such case the Exercise Price
      shall be adjusted by multiplying the Exercise Price in effect immediately prior
      to the record date fixed for determination of stockholders entitled to receive
      such distribution by a fraction of which the denominator shall be the VWAP
      determined as of the record date mentioned above, and of which the numerator
      shall be such VWAP on such record date less the then per share fair market
      value
      at such record date of the portion of such assets or evidence of indebtedness
      so
      distributed applicable to one outstanding share of the Common Stock as
      determined by the Board of Directors in good faith. In either case the
      adjustments shall be described in a statement provided to the Holder of the
      portion of assets or evidences of indebtedness so distributed or such
      subscription rights applicable to one share of Common Stock. Such adjustment
      shall be made whenever any such distribution is made and shall become effective
      immediately after the record date mentioned above.

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    d) Fundamental
      Transaction.
      If, at
      any time while this Warrant is outstanding, (A) the Company effects any merger
      or consolidation of the Company with or into another Person, (B) the Company
      effects any sale of all or substantially all of its assets in one or a series
      of
      related transactions, (C) any tender offer or exchange offer (whether by the
      Company or another Person) is completed pursuant to which holders of Common
      Stock are permitted to tender or exchange their shares for other securities,
      cash or property, or (D) the Company effects any reclassification of the Common
      Stock or any compulsory share exchange pursuant to which the Common Stock is
      effectively converted into or exchanged for other securities, cash or property
      (in any such case, a “Fundamental
      Transaction”),
      then,
      upon any subsequent exercise of this Warrant, the Holder shall have the right
      to
      receive, for each Warrant Share that would have been issuable upon such exercise
      immediately prior to the occurrence of such Fundamental Transaction, at the
      option of the Holder, (a) upon exercise of this Warrant, the number of shares
      of
      Common Stock of the successor or acquiring corporation or of the Company, if
      it
      is the surviving corporation, and any additional consideration (the
“Alternate
      Consideration”)
      receivable upon or as a result of such reorganization, reclassification, merger,
      consolidation or disposition of assets by a Holder of the number of shares
      of
      Common Stock for which this Warrant is exercisable immediately prior to such
      event or (b) if the Company is acquired in an all cash transaction, cash equal
      to the value of this Warrant as determined in accordance with the Black-Scholes
      option pricing formula. For purposes of any such exercise, the determination
      of
      the Exercise Price shall be appropriately adjusted to apply to such Alternate
      Consideration based on the amount of Alternate Consideration issuable in respect
      of one share of Common Stock in such Fundamental Transaction, and the Company
      shall apportion the Exercise Price among the Alternate Consideration in a
      reasonable manner reflecting the relative value of any different components
      of
      the Alternate Consideration. If holders of Common Stock are given any choice
      as
      to the securities, cash or property to be received in a Fundamental Transaction,
      then the Holder shall be given the same choice as to the Alternate Consideration
      it receives upon any exercise of this Warrant following such Fundamental
      Transaction. To the extent necessary to effectuate the foregoing provisions,
      any
      successor to the Company or surviving entity in such Fundamental Transaction
      shall issue to the Holder a new warrant consistent with the foregoing provisions
      and evidencing the Holder’s right to exercise such warrant into Alternate
      Consideration. The terms of any agreement pursuant to which a Fundamental
      Transaction is effected shall include terms requiring any such successor or
      surviving entity to comply with the provisions of this Section 3(d) and insuring
      that this Warrant (or any such replacement security) will be similarly adjusted
      upon any subsequent transaction analogous to a Fundamental
      Transaction.

     

    e) Calculations.
      All
      calculations under this Section 3 shall be made to the nearest cent or the
      nearest 1/100th of a share, as the case may be. For purposes of this Section
      3,
      the number of shares of Common Stock deemed to be issued and outstanding as
      of a
      given date shall be the sum of the number of shares of Common Stock (excluding
      treasury shares, if any) issued and outstanding.

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    f) Voluntary
      Adjustment By Company.
      The
      Company may at any time during the term of this Warrant reduce the then current
      Exercise Price to any amount and for any period of time deemed appropriate
      by
      the Board of Directors of the Company.

     

    g) Notice
      to Holders.
      

     

    i. Adjustment
      to Exercise Price.
      Whenever the Exercise Price is adjusted pursuant to this Section 3, the Company
      shall promptly mail to each Holder a notice setting forth the Exercise Price
      after such adjustment and setting forth a brief statement of the facts requiring
      such adjustment. If the Company issues a variable rate security, despite the
      prohibition thereon in the Purchase Agreement, the Company shall be deemed
      to
      have issued Common Stock or Common Stock Equivalents at the lowest possible
      conversion or exercise price at which such securities may be converted or
      exercised in the case of a Variable Rate Transaction (as defined in the Purchase
      Agreement), to the extent ascertainable at the time of issuance. 

     

    ii. Notice
      to Allow Exercise by Holder.
      If (A)
      the Company shall declare a dividend (or any other distribution) on the Common
      Stock; (B) the Company shall declare a special nonrecurring cash dividend on
      or
      a redemption of the Common Stock; (C) the Company shall authorize the granting
      to all holders of the Common Stock rights or warrants to subscribe for or
      purchase any shares of capital stock of any class or of any rights; (D) the
      approval of any stockholders of the Company shall be required in connection
      with
      any reclassification of the Common Stock, any consolidation or merger to which
      the Company is a party, any sale or transfer of all or substantially all of
      the
      assets of the Company, of any compulsory share exchange whereby the Common
      Stock
      is converted into other securities, cash or property; (E) the Company shall
      authorize the voluntary or involuntary dissolution, liquidation or winding
      up of
      the affairs of the Company; then, in each case, the Company shall cause to
      be
      mailed to the Holder at its last address as it shall appear upon the Warrant
      Register of the Company, at least 20 calendar days prior to the applicable
      record or effective date hereinafter specified, a notice stating (x) the date
      on
      which a record is to be taken for the purpose of such dividend, distribution,
      redemption, rights or warrants, or if a record is not to be taken, the date
      as
      of which the holders of the Common Stock of record to be entitled to such
      dividend, distributions, redemption, rights or warrants are to be determined
      or
      (y) the date on which such reclassification, consolidation, merger, sale,
      transfer or share exchange is expected to become effective or close, and the
      date as of which it is expected that holders of the Common Stock of record
      shall
      be entitled to exchange their shares of the Common Stock for securities, cash
      or
      other property deliverable upon such reclassification, consolidation, merger,
      sale, transfer or share exchange; provided,
      that
      the failure to mail such notice or any defect therein or in the mailing thereof
      shall not affect the validity of the corporate action required to be specified
      in such notice. The Holder is entitled to exercise this Warrant during the
      20-day period commencing on the date of such notice to the effective date of
      the
      event triggering such notice.

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    Section
      4. Transfer
      of Warrant.

     

    a) Transferability.
      Subject
      to compliance with any applicable securities laws and the conditions set forth
      in Sections 5(a) and 4(d) hereof and to the provisions of Section 4.1 of the
      Purchase Agreement, this Warrant and all rights hereunder are transferable,
      in
      whole or in part, upon surrender of this Warrant at the principal office of
      the
      Company, together with a written assignment of this Warrant substantially in
      the
      form attached hereto duly executed by the Holder or its agent or attorney and
      funds sufficient to pay any transfer taxes payable upon the making of such
      transfer. Upon such surrender and, if required, such payment, the Company shall
      execute and deliver a new Warrant or Warrants in the name of the assignee or
      assignees and in the denomination or denominations specified in such instrument
      of assignment, and shall issue to the assignor a new Warrant evidencing the
      portion of this Warrant not so assigned, and this Warrant shall promptly be
      cancelled. A Warrant, if properly assigned, may be exercised by a new holder
      for
      the purchase of Warrant Shares without having a new Warrant issued.

     

    b) New
      Warrants.
      This
      Warrant may be divided or combined with other Warrants upon presentation hereof
      at the aforesaid office of the Company, together with a written notice
      specifying the names and denominations in which new Warrants are to be issued,
      signed by the Holder or its agent or attorney. Subject to compliance with
      Section 4(a), as to any transfer which may be involved in such division or
      combination, the Company shall execute and deliver a new Warrant or Warrants
      in
      exchange for the Warrant or Warrants to be divided or combined in accordance
      with such notice.

     

    c) Warrant
      Register.
      The
      Company shall register this Warrant, upon records to be maintained by the
      Company for that purpose (the “Warrant
      Register”),
      in
      the name of the record Holder hereof from time to time. The Company may deem
      and
      treat the registered Holder of this Warrant as the absolute owner hereof for
      the
      purpose of any exercise hereof or any distribution to the Holder, and for all
      other purposes, absent actual notice to the contrary.

     

    d) Transfer
      Restrictions.
      If,
      at the
time
      of
      the surrender of this Warrant in connection with any transfer of this Warrant,
      the transfer of this Warrant shall not be registered pursuant to an effective
      registration
      statement under the Securities Act
      and
under
      applicable state securities or blue sky laws, the Company may require, as a
      condition of allowing such transfer (i) that the Holder or transferee of this
      Warrant, as the case may be, furnish to the Company a written opinion of counsel
      (which opinion shall be in form, substance and scope customary for opinions
      of
      counsel in comparable transactions) to the effect that such transfer may be
      made
      without
      registration under
      the
      Securities Act and under applicable state securities or blue sky laws, (ii)
      that
      the holder or transferee execute and deliver to the Company an investment letter
      in form and substance acceptable to the Company and (iii) that the transferee
      be
      an “accredited
      investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8)
      promulgated under the Securities Act or a qualified institutional buyer as
      defined in Rule 144A(a) under the Securities Act.

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    Section
      5. Miscellaneous.

     

    a) Title
      to Warrant.
      Prior
      to the Termination Date and subject to compliance with applicable laws and
      Section 4 of this Warrant, this Warrant and all rights hereunder are
      transferable, in whole or in part, at the office or agency of the Company by
      the
      Holder in person or by duly authorized attorney, upon surrender of this Warrant
      together with the Assignment Form annexed hereto properly endorsed. The
      transferee shall sign an investment letter in form and substance reasonably
      satisfactory to the Company.

     

    b) No
      Rights as Shareholder Until Exercise.
      This
      Warrant does not entitle the Holder to any voting rights or other rights as
      a
      shareholder of the Company prior to the exercise hereof. Upon the surrender
      of
      this Warrant and the payment of the aggregate Exercise Price (or by means of
      a
      cashless exercise), the Warrant Shares so purchased shall be and be deemed
      to be
      issued to such Holder as the record owner of such shares as of the close of
      business on the later of the date of such surrender or payment.

     

    c) Loss,
      Theft, Destruction or Mutilation of Warrant.
      The
      Company covenants that upon receipt by the Company of evidence reasonably
      satisfactory to it of the loss, theft, destruction or mutilation of this Warrant
      or any stock certificate relating to the Warrant Shares, and in case of loss,
      theft or destruction, of indemnity or security reasonably satisfactory to it
      (which, in the case of the Warrant, shall not include the posting of any bond),
      and upon surrender and cancellation of such Warrant or stock certificate, if
      mutilated, the Company will make and deliver a new Warrant or stock certificate
      of like tenor and dated as of such cancellation, in lieu of such Warrant or
      stock certificate.

     

    d) Saturdays,
      Sundays, Holidays, etc.
      If the
      last or appointed day for the taking of any action or the expiration of any
      right required or granted herein shall be a Saturday, Sunday or a legal holiday,
      then such action may be taken or such right may be exercised on the next
      succeeding day not a Saturday, Sunday or legal holiday.

     

    e) Authorized
      Shares.
      

     

    The
      Company covenants that during the period the Warrant is outstanding, it will
      reserve from its authorized and unissued Common Stock a sufficient number of
      shares to provide for the issuance of the Warrant Shares upon the exercise
      of
      any purchase rights under this Warrant. The Company further covenants that
      its
      issuance of this Warrant shall constitute full authority to its officers who
      are
      charged with the duty of executing stock certificates to execute and issue
      the
      necessary certificates for the Warrant Shares upon the exercise of the purchase
      rights under this Warrant. The Company will take all such reasonable action
      as
      may be necessary to assure that such Warrant Shares may be issued as provided
      herein without violation of any applicable law or regulation, or of any
      requirements of the Trading Market upon which the Common Stock may be listed.
      

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    Except
      and to the extent as waived or consented to by the Holder, the Company shall
      not
      by any action, including, without limitation, amending its certificate 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 of
      this
      Warrant, but will at all times in good faith assist in the carrying out of
      all
      such terms and in the taking of all such actions as may be necessary or
      appropriate to protect the rights of Holder as set forth in this Warrant against
      impairment. Without limiting the generality of the foregoing, the Company will
      (a) not increase the par value of any Warrant Shares above the amount payable
      therefor upon such exercise immediately prior to such increase in par value,
      (b)
      take all such action as may be necessary or appropriate in order that the
      Company may validly and legally issue fully paid and nonassessable Warrant
      Shares upon the exercise of this Warrant, and (c) use commercially reasonable
      efforts to obtain all such authorizations, exemptions or consents from any
      public regulatory body having jurisdiction thereof as may be necessary to enable
      the Company to perform its obligations under this Warrant.

     

    Before
      taking any action which would result in an adjustment in the number of Warrant
      Shares for which this Warrant is exercisable or in the Exercise Price, the
      Company shall obtain all such authorizations or exemptions thereof, or consents
      thereto, as may be necessary from any public regulatory body or bodies having
      jurisdiction thereof.

     

    f) Jurisdiction.
      All
      questions concerning the construction, validity, enforcement and interpretation
      of this Warrant shall be determined in accordance with the provisions of the
      Purchase Agreement.

     

    g) Restrictions.
      The
      Holder acknowledges that the Warrant Shares acquired upon the exercise of this
      Warrant, if not registered, will have restrictions upon resale imposed by state
      and federal securities laws.

     

    h) Nonwaiver
      and Expenses.
      No
      course of dealing or any delay or failure to exercise any right hereunder on
      the
      part of Holder shall operate as a waiver of such right or otherwise prejudice
      Holder’s rights, powers or remedies, notwithstanding the fact that all rights
      hereunder terminate on the Termination Date. If the Company willfully and
      knowingly fails to comply with any provision of this Warrant, which results
      in
      any material damages to the Holder, the Company shall pay to Holder such amounts
      as shall be sufficient to cover any costs and expenses including, but not
      limited to, reasonable attorneys’ fees, including those of appellate
      proceedings, incurred by Holder in collecting any amounts due pursuant hereto
      or
      in otherwise enforcing any of its rights, powers or remedies
      hereunder.

     

    i) Notices.
      Any
      notice, request or other document required or permitted to be given or delivered
      to the Holder by the Company shall be delivered in accordance with the notice
      provisions of the Purchase Agreement.

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

    j) Limitation
      of Liability.
      No
      provision hereof, in the absence of any affirmative action by Holder to exercise
      this Warrant or purchase Warrant Shares, and no enumeration herein of the rights
      or privileges of Holder, shall give rise to any liability of Holder for the
      purchase price of any Common Stock or as a stockholder of the Company, whether
      such liability is asserted by the Company or by creditors of the
      Company.

     

    k) Remedies.
      Holder,
      in addition to being entitled to exercise all rights granted by law, including
      recovery of damages, will be entitled to specific performance of its rights
      under this Warrant. The Company agrees that monetary damages would not be
      adequate compensation for any loss incurred by reason of a breach by it of
      the
      provisions of this Warrant and hereby agrees to waive the defense in any action
      for specific performance that a remedy at law would be adequate.

     

    l) Successors
      and Assigns.
      Subject
      to applicable securities laws, this Warrant and the rights and obligations
      evidenced hereby shall inure to the benefit of and be binding upon the
      successors of the Company and the successors and permitted assigns of Holder.
      The provisions of this Warrant are intended to be for the benefit of all Holders
      from time to time of this Warrant and shall be enforceable by any such Holder
      or
      holder of Warrant Shares.

     

    m) Amendment.
      This
      Warrant may be modified or amended or the provisions hereof waived with the
      written consent of the Company and the Holder.

     

    n) Severability.
      Wherever possible, each provision of this Warrant shall be interpreted in such
      manner as to be effective and valid under applicable law, but if any provision
      of this Warrant shall be prohibited by or invalid under applicable law, such
      provision shall be ineffective to the extent of such prohibition or invalidity,
      without invalidating the remainder of such provisions or the remaining
      provisions of this Warrant.

     

    o) Headings.
      The
      headings used in this Warrant are for the convenience of reference only and
      shall not, for any purpose, be deemed a part of this Warrant.

    

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

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
      officer thereunto duly authorized.

    

    Dated:
      November 28, 2006

    

    
      	
              SURGE
                GLOBAL ENERGY, INC.

               

            
	
              By:________________________________________________

            
	Name:  
	
              Title:
                
 

    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

    

    NOTICE
      OF EXERCISE

    

    TO: SURGE
      GLOBAL ENERGY, INC.

    

    (1) The
      undersigned hereby elects to purchase ________ Warrant Shares of the Company
      pursuant to the terms of the attached Warrant (only if exercised in full),
      and
      tenders herewith payment of the exercise price in full, together with all
      applicable transfer taxes, if any.

     

    (2) Payment
      shall take the form of (check applicable box):

     

    [
      ] in
      lawful money of the United States; or

     

    [
      ] the
      cancellation of such number of Warrant Shares as is necessary, in accordance
      with the formula set forth in subsection 2(c), to exercise this Warrant with
      respect to the maximum number of Warrant Shares purchasable pursuant to the
      cashless exercise procedure set forth in subsection 2(c).

     

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

     

    _______________________________

     

    

    The
      Warrant Shares shall be delivered to the following:

    

    _______________________________

     

    _______________________________

     

    _______________________________

    

    (4)
      Accredited
      Investor.
      The
      undersigned is an “accredited investor” as defined in Regulation D promulgated
      under the Securities Act of 1933, as amended.

    

    [SIGNATURE
      OF HOLDER]

     

    Name
      of
      Investing Entity:
      _______________________________________________________________________

    Signature
      of Authorized Signatory of Investing Entity:
      _________________________________________________

    Name
      of
      Authorized Signatory:
      ___________________________________________________________________

    Title
      of
      Authorized Signatory:
      ____________________________________________________________________

    Date:
      _______________________________________________________________________________________

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

     

    ASSIGNMENT
      FORM

    

    (To
      assign the foregoing warrant, execute

    this
      form
      and supply required information. 

    Do
      not
      use this form to exercise the warrant.)

    

    

    FOR
      VALUE
      RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby
      assigned to

     

    

    ___________________________________________________________________________________________________________
      whose address is

    

    _________________________________________________________________________________________________________________________.

    

     

    _________________________________________________________________________________________________________________________

    

    Dated:
      _____________________, _________

    

    

    Holder’s
      Signature: _________________________________________

    

    Holder’s
      Address: __________________________________________

     

    ____________________________________

    

    

    

    Signature
      Guaranteed:
      ____________________________________________________________

    

    

    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
      whatsoever, and must be guaranteed by a bank or trust company. Officers of
      corporations and those acting in a fiduciary or other representative capacity
      should file proper evidence of authority to assign the foregoing
      Warrant.

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      
         

        NEITHER
          THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
          HAVE
          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 REQUIREMENTS OF THE
          SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS
          AS
          EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT,
          THE
          SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS
          SECURITY
          AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED
          IN
          CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH
          SECURITIES.

        

        COMMON
          STOCK PURCHASE WARRANT

        

        To
          Purchase 1,000,000 Shares of Common Stock of

         

        SURGE
          GLOBAL ENERGY, INC.

         

        THIS
          COMMON STOCK PURCHASE WARRANT (the “Warrant”)
          certifies that, for value received, Mark C. Fritz (the “Holder”),
          is
          entitled, upon the terms and subject to the limitations on exercise and
          the
          conditions hereinafter set forth, at any time on or after the date hereof
          (the
“Initial
          Exercise Date”)
          and on
          or prior to the close of business on the five (5) year anniversary of the
          Initial Exercise Date (the “Termination
          Date”)
          but
          not thereafter, to subscribe for and purchase from Surge Global Energy,
          Inc., a
          Delaware corporation (the “Company”),
          up to
          1,000,000 shares (the “Warrant
          Shares”)
          of
          Common Stock, par value $0.001 per share, of the Company (the “Common
          Stock”).
          The
          purchase price of one share of Common Stock under this Warrant shall be
          equal to
          the Exercise Price, as defined in Section 2(b). 

         

        Section
          1. Definitions.
          Capitalized terms used and not otherwise defined herein shall have the
          meanings
          set forth in that certain Securities Purchase Agreement (the “Purchase
          Agreement”),
          dated
          as of November 28, 2006, between the Company and the purchaser signatory
          thereto.

         

        Section
          2. Exercise.

         

        a) Exercise
          of Warrant.
          Exercise of the purchase rights represented by this Warrant may be made,
          in
          whole or in part, at any time or times on or after the Initial Exercise
          Date and
          on or before the Termination Date by delivery to the Company of a duly
          executed
          facsimile copy of the Notice of Exercise Form annexed hereto (or such other
          office or agency of the Company as it may designate by notice in writing
          to the
          registered Holder at the address of such Holder appearing on the books
          of the
          Company); provided,
          however,
          within
          5 Trading Days of the date said Notice of Exercise is delivered to the
          Company,
          the Holder shall have surrendered this Warrant to the Company and the Company
          shall have received payment of the aggregate Exercise Price of the shares
          thereby purchased by wire transfer or cashier’s check drawn on a United States
          bank.

         

        
          
            
            

          

          
            1

            
              

            

          

          
            
            

          

        

        b) Exercise
          Price.
          The
          exercise price of the Common Stock under this Warrant shall be $0.60 subject
          to
          adjustment hereunder (the “Exercise
          Price”).

         

        c) Cashless
          Exercise.
          If at
          any time after one year from the date of issuance of this Warrant there
          is no
          effective Registration Statement registering, or no current prospectus
          available
          for, the resale of the Warrant Shares by the Holder, then this Warrant
          may also
          be exercised at such time by means of a “cashless exercise” in which the Holder
          shall be entitled to receive a certificate for the number of Warrant Shares
          equal to the quotient obtained by dividing [(A-B) (X)] by (A),
          where:

         

         

        
          	 	
                  (A) 

                	
                  = 

                	the VWAP on the Trading Day immediately
                  preceding the date of such election; 
	 	
                  (B) 

                	
                  = 

                	the Exercise Price of this Warrant,
                  as
                  adjusted; and 
	 	
                  (X) 

                	
                  = 

                	the number of Warrant Shares issuable
                  upon
                  exercise of this Warrant in accordance with the terms of this Warrant
                  by
                  means of a cash exercise rather than a cashless
                  exercise. 

        

        

        Notwithstanding
          anything herein to the contrary, on the Termination Date, this Warrant
          shall be
          automatically exercised via cashless exercise pursuant to this Section
          2(c).

        

        d) Exercise
          Limitations.
          

         

        Holder’s
          Restrictions.
          The
          Company shall not effect any exercise of this Warrant, and a Holder shall
          not
          have the right to exercise any portion of this Warrant, pursuant to Section
          2(c)
          or otherwise, to the extent that after giving effect to such issuance after
          exercise, such Holder (together with such Holder’s affiliates, and any other
          person or entity acting as a group together with such Holder or any of
          such
          Holder’s affiliates), as set forth on the applicable Notice of Exercise, would
          beneficially own in excess of the Beneficial Ownership Limitation (as defined
          below).  For purposes of the foregoing sentence, the number of shares of
          Common Stock beneficially owned by such Holder and its affiliates shall
          include
          the number of shares of Common Stock issuable upon exercise of this Warrant
          with
          respect to which the determination of such sentence is being made, but
          shall
          exclude the number of shares of Common Stock which would be issuable upon
          (A)
          exercise of the remaining, nonexercised portion of this Warrant beneficially
          owned by such Holder or any of its affiliates and (B) exercise or conversion
          of
          the unexercised or nonconverted portion of any other securities of the
          Company
          (including, without limitation, any Greenshoe Warrants or any other Warrants)
          subject to a limitation on conversion or exercise analogous to the limitation
          contained herein beneficially owned by such Holder or any of its
          affiliates.  Except as set forth in the preceding sentence, for purposes of
          this Section 2(d), beneficial ownership shall be calculated in accordance
          with
          Section 

         

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

        

        13(d)
          of
          the Exchange Act and the rules and regulations promulgated thereunder,
          it being
          acknowledged by a Holder that the Company is not representing to such Holder
          that such calculation is in compliance with Section 13(d) of the Exchange
          Act
          and such Holder is solely responsible for any schedules required to be
          filed in
          accordance therewith. To the extent that the limitation contained in this
          Section 2(d) applies, the determination of whether this Warrant is exercisable
          (in relation to other securities owned by such Holder) and of which a portion
          of
          this Warrant is exercisable shall be in the sole discretion of a Holder,
          and the
          submission of a Notice of Exercise shall be deemed to be each Holder’s
          determination of whether this Warrant is exercisable (in relation to other
          securities owned by such Holder) and of which portion of this Warrant is
          exercisable, in each case subject to such aggregate percentage limitation,
          and
          the Company shall have no obligation to verify or confirm the accuracy
          of such
          determination. In addition, a determination as to any group status as
          contemplated above shall be determined in accordance with Section 13(d)
          of the
          Exchange Act and the rules and regulations promulgated thereunder. For
          purposes
          of this Section 2(d), in determining the number of outstanding shares of
          Common
          Stock, a Holder may rely on the number of outstanding shares of Common
          Stock as
          reflected in (x) the Company’s most recent Form 10-Q or Form 10-K, as the case
          may be, (y) a more recent public announcement by the Company or (z) any
          other
          notice by the Company or the Company’s Transfer Agent setting forth the number
          of shares of Common Stock outstanding.  Upon the written or oral request of
          a Holder, the Company shall within two Trading Days confirm orally and
          in
          writing to such Holder the number of shares of Common Stock then
          outstanding.  In any case, the number of outstanding shares of Common Stock
          shall be determined after giving effect to the conversion or exercise of
          securities of the Company, including this Warrant, by such Holder or its
          affiliates since the date as of which such number of outstanding shares
          of
          Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99%
          of the number of shares of the Common Stock outstanding immediately after
          giving
          effect to the issuance of shares of Common Stock issuable upon exercise
          of this
          Warrant. The Beneficial Ownership Limitation provisions of this Section
          2(d) may
          be waived by such Holder, at the election of such Holder, upon not less
          than 61
          days’ prior notice to the Company to change the Beneficial Ownership Limitation
          to 9.99% of the number of shares of the Common Stock outstanding immediately
          after giving effect to the issuance of shares of Common Stock upon exercise
          of
          this Warrant, and the provisions of this Section 2(d) shall continue to
          apply.
          Upon such a change by a Holder of the Beneficial Ownership Limitation from
          such
          4.99% limitation to such 9.99% limitation, the Beneficial Ownership Limitation
          may not be waived by such Holder. The provisions of this paragraph shall
          be
          implemented in a manner otherwise than in strict conformity with the terms
          of
          this Section 2(d) to correct this paragraph (or any portion hereof) which
          may be
          defective or inconsistent with the intended Beneficial Ownership Limitation
          herein contained or to make changes or supplements necessary or desirable
          to
          properly give effect to such limitation. The limitations contained in this
          paragraph shall apply to a successor holder of this Warrant.

        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

        

        e) Mechanics
          of Exercise.
          

         

        i. Authorization
          of Warrant Shares.
          The
          Company covenants that all Warrant Shares which may be issued upon the
          exercise
          of the purchase rights represented by this Warrant will, upon exercise
          of the
          purchase rights represented by this Warrant, be duly authorized, validly
          issued,
          fully paid and nonassessable and free from all taxes, liens and charges
          in
          respect of the issue thereof (other than taxes in respect of any transfer
          occurring contemporaneously with such issue). 

         

        ii. Delivery
          of Certificates Upon Exercise.
          Certificates for shares purchased hereunder shall be transmitted by the
          transfer
          agent of the Company to the Holder by crediting the account of the Holder’s
          prime broker with the Depository Trust Company through its Deposit and
          Withdrawals at Custodian (“DWAC”)
          system
          if the Company is a participant in such system, and otherwise by physical
          delivery to the address specified by the Holder in the Notice of Exercise
          within
          three (3) Trading Days from the delivery to the Company of the Notice of
          Exercise Form, surrender of this Warrant and payment of the aggregate Exercise
          Price as set forth above (“Warrant
          Share Delivery Date”).
          This
          Warrant shall be deemed to have been exercised on the date the Exercise
          Price is
          received by the Company. The Warrant Shares shall be deemed to have been
          issued,
          and Holder or any other person so designated to be named therein shall
          be deemed
          to have become a holder of record of such shares for all purposes, as of
          the
          date the Warrant has been exercised by payment to the Company of the Exercise
          Price and all taxes required to be paid by the Holder, if any, pursuant
          to
          Section 2(e)(vii) prior to the issuance of such shares, have been paid.
          

         

        iii. Delivery
          of New Warrants Upon Exercise.
          If this
          Warrant shall have been exercised in part, the Company shall, at the time
          of
          delivery of the certificate or certificates representing Warrant Shares,
          deliver
          to Holder a new Warrant evidencing the rights of Holder to purchase the
          unpurchased Warrant Shares called for by this Warrant, which new Warrant
          shall
          in all other respects be identical with this Warrant.

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

        iv. Rescission
          Rights.
          If the
          Company fails to cause its transfer agent to transmit to the Holder a
          certificate or certificates representing the Warrant Shares pursuant to
          this
          Section 2(e)(iv) by the Warrant Share Delivery Date, then the Holder will
          have
          the right to rescind such exercise.

         

        v. Compensation
          for Buy-In on Failure to Timely Deliver Certificates Upon
          Exercise.
          In
          addition to any other rights available to the Holder, if the Company fails
          to
          cause its transfer agent to transmit to the Holder a certificate or certificates
          representing the Warrant Shares pursuant to an exercise on or before the
          Warrant
          Share Delivery Date, and if after such date the Holder is required by its
          broker
          to purchase (in an open market transaction or otherwise) shares of Common
          Stock
          to deliver in satisfaction of a sale by the Holder of the Warrant Shares
          which
          the Holder anticipated receiving upon such exercise (a “Buy-In”),
          then
          the Company shall (1) pay in cash to the Holder the amount by which (x)
          the
          Holder’s total purchase price (including brokerage commissions, if any) for the
          shares of Common Stock so purchased exceeds (y) the amount obtained by
          multiplying (A) the number of Warrant Shares that the Company was required
          to
          deliver to the Holder in connection with the exercise at issue times (B)
          the
          price at which the sell order giving rise to such purchase obligation was
          executed, and (2) at the option of the Holder, either reinstate the portion
          of
          the Warrant and equivalent number of Warrant Shares for which such exercise
          was
          not honored or deliver to the Holder the number of shares of Common Stock
          that
          would have been issued had the Company timely complied with its exercise
          and
          delivery obligations hereunder. For example, if the Holder purchases Common
          Stock having a total purchase price of $11,000 to cover a Buy-In with respect
          to
          an attempted exercise of shares of Common Stock with an aggregate sale
          price
          giving rise to such purchase obligation of $10,000, under clause (1) of
          the
          immediately preceding sentence the Company shall be required to pay the
          Holder
          $1,000. The Holder shall provide the Company written notice indicating
          the
          amounts payable to the Holder in respect of the Buy-In, together with applicable
          confirmations and other evidence reasonably requested by the Company. Nothing
          herein shall limit a Holder’s right to pursue any other remedies available to it
          hereunder, at law or in equity including, without limitation, a decree
          of
          specific performance and/or injunctive relief with respect to the Company’s
          failure to timely deliver certificates representing shares of Common Stock
          upon
          exercise of the Warrant as required pursuant to the terms hereof.

         

        vi. No
          Fractional Shares or Scrip.
          No
          fractional shares or scrip representing fractional shares shall be issued
          upon
          the exercise of this Warrant. As to any fraction of a share which Holder
          would
          otherwise be entitled to purchase upon such exercise, the Company shall
          pay a
          cash adjustment in respect of such final fraction in an amount equal to
          such
          fraction multiplied by the Exercise Price.

        
          
            
            

          

          
            5

            
              

            

          

          
            
            

          

        

        vii. Charges,
          Taxes and Expenses.
          Issuance of certificates for Warrant Shares shall be made without charge
          to the
          Holder for any issue or transfer tax or other incidental expense in respect
          of
          the issuance of such certificate, all of which taxes and expenses shall
          be paid
          by the Company, and such certificates shall be issued in the name of the
          Holder
          or in such name or names as may be directed by the Holder; provided,
          however,
          that in
          the event certificates for Warrant Shares are to be issued in a name other
          than
          the name of the Holder, this Warrant when surrendered for exercise shall
          be
          accompanied by the Assignment Form attached hereto duly executed by the
          Holder;
          and the Company may require, as a condition thereto, the payment of a sum
          sufficient to reimburse it for any transfer tax incidental thereto.

         

        viii. Closing
          of Books.
          The
          Company will not close its stockholder books or records in any manner which
          prevents the timely exercise of this Warrant, pursuant to the terms
          hereof.

         

        Section
          3. Certain Adjustments.

         

        a) Stock
          Dividends and Splits.
          If the
          Company, at any time while this Warrant is outstanding: (A) pays a stock
          dividend or otherwise make a distribution or distributions on shares of
          its
          Common Stock or any other equity or equity equivalent securities payable
          in
          shares of Common Stock (which, for avoidance of doubt, shall not include
          any
          shares of Common Stock issued by the Company pursuant to this Warrant),
          (B)
          subdivides outstanding shares of Common Stock into a larger number of shares,
          (C) combines (including by way of reverse stock split) outstanding shares
          of
          Common Stock into a smaller number of shares, or (D) issues by reclassification
          of shares of the Common Stock any shares of capital stock of the Company,
          then
          in each case the Exercise Price shall be multiplied by a fraction of which
          the
          numerator shall be the number of shares of Common Stock (excluding treasury
          shares, if any) outstanding immediately before such event and of which
          the
          denominator shall be the number of shares of Common Stock outstanding
          immediately after such event and the number of shares issuable upon exercise
          of
          this Warrant shall be proportionately adjusted. Any adjustment made pursuant
          to
          this Section 3(a) shall become effective immediately after the record date
          for
          the determination of stockholders entitled to receive such dividend or
          distribution and shall become effective immediately after the effective
          date in
          the case of a subdivision, combination or re-classification.

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        

        b) Subsequent
          Equity Sales.
          If the
          Company or any Subsidiary thereof, as applicable, at any time while this
          Warrant
          is outstanding, shall offer, sell, grant any option to purchase or offer,
          sell
          or grant any right to reprice its securities, or otherwise dispose of or
          issue
          any Common Stock or Common Stock Equivalents entitling any Person to acquire
          shares of Common Stock, at an effective price per share less than the then
          Exercise Price such issuances collectively, a “Dilutive
          Issuance”),
          as
          adjusted hereunder (if the holder of the Common Stock or Common Stock
          Equivalents so issued shall at any time, whether by operation of purchase
          price
          adjustments, reset provisions, floating conversion, exercise or exchange
          prices
          or otherwise, or due to warrants, options or rights per share which is
          issued in
          connection with such issuance, be entitled to receive shares of Common
          Stock at
          an effective price per share which is less than the Exercise Price, such
          issuance shall be deemed to have occurred for less than the Exercise Price
          on
          such date of the adjustment of the Dilutive Issuance), the then-existing
          Exercise Price shall be reduced by multiplying the Exercise Price in effect
          immediately prior to such Dilutive Issuance by a fraction, the numerator
          of
          which is the number of shares of Common Stock outstanding immediately prior
          to
          such Dilutive Issuance plus the number of shares of Common Stock which
          could be
          purchased at the current Exercise Price on the date of such Dilutive Issuance
          with the aggregate consideration received or receivable by the Company
          in
          connection with such Dilutive Issuance and the denominator of which is
          the
          number of shares of Common Stock outstanding immediately prior to such
          Dilutive
          Issuance plus the number of shares of Common Stock to be so issued or sold.
          Such
          adjustment shall be made whenever such Common Stock or Common Stock Equivalents
          are issued. Notwithstanding the foregoing, no adjustments shall be made,
          paid or
          issued under this Section 3(b) in respect of an Exempt Issuance. The Company
          shall notify the Holder in writing, no later than the Trading Day following the
          issuance of any Common Stock or Common Stock Equivalents subject to this
          section, indicating therein the applicable issuance price, or of applicable
          reset price, exchange price, conversion price and other pricing terms (such
          notice the “Dilutive
          Issuance Notice”).
          For
          purposes of clarification, whether or not the Company provides a Dilutive
          Issuance Notice pursuant to this Section 3(b), upon the occurrence of any
          Dilutive Issuance, after the date of such Dilutive Issuance the Holder
          is
          entitled to receive a number of Warrant Shares based upon the Base Share
          Price
          regardless of whether the Holder accurately refers to the Base Share Price
          in
          the Notice of Exercise. 

         

        c) Pro
          Rata Distributions.
          If the
          Company, at any time prior to the Termination Date, shall distribute to
          all
          holders of Common Stock (and not to Holders of the Warrants) evidences
          of its
          indebtedness or assets (including cash and cash dividends) or rights or
          warrants
          to subscribe for or purchase any security other than the Common Stock (which
          shall be subject to Section 3(b)), then in each such case the Exercise
          Price
          shall be adjusted by multiplying the Exercise Price in effect immediately
          prior
          to the record date fixed for determination of stockholders entitled to
          receive
          such distribution by a fraction of which the denominator shall be the VWAP
          determined as of the record date mentioned above, and of which the numerator
          shall be such VWAP on such record date less the then per share fair market
          value
          at such record date of the portion of such assets or evidence of indebtedness
          so
          distributed applicable to one outstanding share of the Common Stock as
          determined by the Board of Directors in good faith. In either case the
          adjustments shall be described in a statement provided to the Holder of
          the
          portion of assets or evidences of indebtedness so distributed or such
          subscription rights applicable to one share of Common Stock. Such adjustment
          shall be made whenever any such distribution is made and shall become effective
          immediately after the record date mentioned above.

        
          
            
            

          

          
            7

            
              

            

          

          
            
            

          

        

        d) Fundamental
          Transaction.
          If, at
          any time while this Warrant is outstanding, (A) the Company effects any
          merger
          or consolidation of the Company with or into another Person, (B) the Company
          effects any sale of all or substantially all of its assets in one or a
          series of
          related transactions, (C) any tender offer or exchange offer (whether by
          the
          Company or another Person) is completed pursuant to which holders of Common
          Stock are permitted to tender or exchange their shares for other securities,
          cash or property, or (D) the Company effects any reclassification of the
          Common
          Stock or any compulsory share exchange pursuant to which the Common Stock
          is
          effectively converted into or exchanged for other securities, cash or property
          (in any such case, a “Fundamental
          Transaction”),
          then,
          upon any subsequent exercise of this Warrant, the Holder shall have the
          right to
          receive, for each Warrant Share that would have been issuable upon such
          exercise
          immediately prior to the occurrence of such Fundamental Transaction, at
          the
          option of the Holder, (a) upon exercise of this Warrant, the number of
          shares of
          Common Stock of the successor or acquiring corporation or of the Company,
          if it
          is the surviving corporation, and any additional consideration (the
“Alternate
          Consideration”)
          receivable upon or as a result of such reorganization, reclassification,
          merger,
          consolidation or disposition of assets by a Holder of the number of shares
          of
          Common Stock for which this Warrant is exercisable immediately prior to
          such
          event or (b) if the Company is acquired in an all cash transaction, cash
          equal
          to the value of this Warrant as determined in accordance with the Black-Scholes
          option pricing formula. For purposes of any such exercise, the determination
          of
          the Exercise Price shall be appropriately adjusted to apply to such Alternate
          Consideration based on the amount of Alternate Consideration issuable in
          respect
          of one share of Common Stock in such Fundamental Transaction, and the Company
          shall apportion the Exercise Price among the Alternate Consideration in
          a
          reasonable manner reflecting the relative value of any different components
          of
          the Alternate Consideration. If holders of Common Stock are given any choice
          as
          to the securities, cash or property to be received in a Fundamental Transaction,
          then the Holder shall be given the same choice as to the Alternate Consideration
          it receives upon any exercise of this Warrant following such Fundamental
          Transaction. To the extent necessary to effectuate the foregoing provisions,
          any
          successor to the Company or surviving entity in such Fundamental Transaction
          shall issue to the Holder a new warrant consistent with the foregoing provisions
          and evidencing the Holder’s right to exercise such warrant into Alternate
          Consideration. The terms of any agreement pursuant to which a Fundamental
          Transaction is effected shall include terms requiring any such successor
          or
          surviving entity to comply with the provisions of this Section 3(d) and
          insuring
          that this Warrant (or any such replacement security) will be similarly
          adjusted
          upon any subsequent transaction analogous to a Fundamental
          Transaction.

         

        e) Calculations.
          All
          calculations under this Section 3 shall be made to the nearest cent or
          the
          nearest 1/100th of a share, as the case may be. For purposes of this Section
          3,
          the number of shares of Common Stock deemed to be issued and outstanding
          as of a
          given date shall be the sum of the number of shares of Common Stock (excluding
          treasury shares, if any) issued and outstanding.

        
          
            
            

          

          
            8

            
              

            

          

          
            
            

          

        

        f) Voluntary
          Adjustment By Company.
          The
          Company may at any time during the term of this Warrant reduce the then
          current
          Exercise Price to any amount and for any period of time deemed appropriate
          by
          the Board of Directors of the Company.

         

        g) Notice
          to Holders.
          

         

        i. Adjustment
          to Exercise Price.
          Whenever the Exercise Price is adjusted pursuant to this Section 3, the
          Company
          shall promptly mail to each Holder a notice setting forth the Exercise
          Price
          after such adjustment and setting forth a brief statement of the facts
          requiring
          such adjustment. If the Company issues a variable rate security, despite
          the
          prohibition thereon in the Purchase Agreement, the Company shall be deemed
          to
          have issued Common Stock or Common Stock Equivalents at the lowest possible
          conversion or exercise price at which such securities may be converted
          or
          exercised in the case of a Variable Rate Transaction (as defined in the
          Purchase
          Agreement), to the extent ascertainable at the time of issuance. 

         

        ii. Notice
          to Allow Exercise by Holder.
          If (A)
          the Company shall declare a dividend (or any other distribution) on the
          Common
          Stock; (B) the Company shall declare a special nonrecurring cash dividend
          on or
          a redemption of the Common Stock; (C) the Company shall authorize the granting
          to all holders of the Common Stock rights or warrants to subscribe for
          or
          purchase any shares of capital stock of any class or of any rights; (D)
          the
          approval of any stockholders of the Company shall be required in connection
          with
          any reclassification of the Common Stock, any consolidation or merger to
          which
          the Company is a party, any sale or transfer of all or substantially all
          of the
          assets of the Company, of any compulsory share exchange whereby the Common
          Stock
          is converted into other securities, cash or property; (E) the Company shall
          authorize the voluntary or involuntary dissolution, liquidation or winding
          up of
          the affairs of the Company; then, in each case, the Company shall cause
          to be
          mailed to the Holder at its last address as it shall appear upon the Warrant
          Register of the Company, at least 20 calendar days prior to the applicable
          record or effective date hereinafter specified, a notice stating (x) the
          date on
          which a record is to be taken for the purpose of such dividend, distribution,
          redemption, rights or warrants, or if a record is not to be taken, the
          date as
          of which the holders of the Common Stock of record to be entitled to such
          dividend, distributions, redemption, rights or warrants are to be determined
          or
          (y) the date on which such reclassification, consolidation, merger, sale,
          transfer or share exchange is expected to become effective or close, and
          the
          date as of which it is expected that holders of the Common Stock of record
          shall
          be entitled to exchange their shares of the Common Stock for securities,
          cash or
          other property deliverable upon such reclassification, consolidation, merger,
          sale, transfer or share exchange; provided,
          that
          the failure to mail such notice or any defect therein or in the mailing
          thereof
          shall not affect the validity of the corporate action required to be specified
          in such notice. The Holder is entitled to exercise this Warrant during
          the
          20-day period commencing on the date of such notice to the effective date
          of the
          event triggering such notice.

        
          
            
            

          

          
            9

            
              

            

          

          
            
            

          

        

        Section
          4. Transfer
          of Warrant.

         

        a) Transferability.
          Subject
          to compliance with any applicable securities laws and the conditions set
          forth
          in Sections 5(a) and 4(d) hereof and to the provisions of Section 4.1 of
          the
          Purchase Agreement, this Warrant and all rights hereunder are transferable,
          in
          whole or in part, upon surrender of this Warrant at the principal office
          of the
          Company, together with a written assignment of this Warrant substantially
          in the
          form attached hereto duly executed by the Holder or its agent or attorney
          and
          funds sufficient to pay any transfer taxes payable upon the making of such
          transfer. Upon such surrender and, if required, such payment, the Company
          shall
          execute and deliver a new Warrant or Warrants in the name of the assignee
          or
          assignees and in the denomination or denominations specified in such instrument
          of assignment, and shall issue to the assignor a new Warrant evidencing
          the
          portion of this Warrant not so assigned, and this Warrant shall promptly
          be
          cancelled. A Warrant, if properly assigned, may be exercised by a new holder
          for
          the purchase of Warrant Shares without having a new Warrant issued.

         

        b) New
          Warrants.
          This
          Warrant may be divided or combined with other Warrants upon presentation
          hereof
          at the aforesaid office of the Company, together with a written notice
          specifying the names and denominations in which new Warrants are to be
          issued,
          signed by the Holder or its agent or attorney. Subject to compliance with
          Section 4(a), as to any transfer which may be involved in such division
          or
          combination, the Company shall execute and deliver a new Warrant or Warrants
          in
          exchange for the Warrant or Warrants to be divided or combined in accordance
          with such notice.

         

        c) Warrant
          Register.
          The
          Company shall register this Warrant, upon records to be maintained by the
          Company for that purpose (the “Warrant
          Register”),
          in
          the name of the record Holder hereof from time to time. The Company may
          deem and
          treat the registered Holder of this Warrant as the absolute owner hereof
          for the
          purpose of any exercise hereof or any distribution to the Holder, and for
          all
          other purposes, absent actual notice to the contrary.

         

        d) Transfer
          Restrictions.
          If,
          at the
time
          of
          the surrender of this Warrant in connection with any transfer of this Warrant,
          the transfer of this Warrant shall not be registered pursuant to an effective
          registration
          statement under the Securities Act
          and
under
          applicable state securities or blue sky laws, the Company may require,
          as a
          condition of allowing such transfer (i) that the Holder or transferee of
          this
          Warrant, as the case may be, furnish to the Company a written opinion of
          counsel
          (which opinion shall be in form, substance and scope customary for opinions
          of
          counsel in comparable transactions) to the effect that such transfer may
          be made
          without
          registration under
          the
          Securities Act and under applicable state securities or blue sky laws,
          (ii) that
          the holder or transferee execute and deliver to the Company an investment
          letter
          in form and substance acceptable to the Company and (iii) that the transferee
          be
          an “accredited
          investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8)
          promulgated under the Securities Act or a qualified institutional buyer
          as
          defined in Rule 144A(a) under the Securities Act.

        
          
            
            

          

          
            10

            
              

            

          

          
            
            

          

        

        Section
          5. Miscellaneous.

         

        a) Title
          to Warrant.
          Prior
          to the Termination Date and subject to compliance with applicable laws
          and
          Section 4 of this Warrant, this Warrant and all rights hereunder are
          transferable, in whole or in part, at the office or agency of the Company
          by the
          Holder in person or by duly authorized attorney, upon surrender of this
          Warrant
          together with the Assignment Form annexed hereto properly endorsed. The
          transferee shall sign an investment letter in form and substance reasonably
          satisfactory to the Company.

         

        b) No
          Rights as Shareholder Until Exercise.
          This
          Warrant does not entitle the Holder to any voting rights or other rights
          as a
          shareholder of the Company prior to the exercise hereof. Upon the surrender
          of
          this Warrant and the payment of the aggregate Exercise Price (or by means
          of a
          cashless exercise), the Warrant Shares so purchased shall be and be deemed
          to be
          issued to such Holder as the record owner of such shares as of the close
          of
          business on the later of the date of such surrender or payment.

         

        c) Loss,
          Theft, Destruction or Mutilation of Warrant.
          The
          Company covenants that upon receipt by the Company of evidence reasonably
          satisfactory to it of the loss, theft, destruction or mutilation of this
          Warrant
          or any stock certificate relating to the Warrant Shares, and in case of
          loss,
          theft or destruction, of indemnity or security reasonably satisfactory
          to it
          (which, in the case of the Warrant, shall not include the posting of any
          bond),
          and upon surrender and cancellation of such Warrant or stock certificate,
          if
          mutilated, the Company will make and deliver a new Warrant or stock certificate
          of like tenor and dated as of such cancellation, in lieu of such Warrant
          or
          stock certificate.

         

        d) Saturdays,
          Sundays, Holidays, etc.
          If the
          last or appointed day for the taking of any action or the expiration of
          any
          right required or granted herein shall be a Saturday, Sunday or a legal
          holiday,
          then such action may be taken or such right may be exercised on the next
          succeeding day not a Saturday, Sunday or legal holiday.

         

        e) Authorized
          Shares.
          

         

        The
          Company covenants that during the period the Warrant is outstanding, it
          will
          reserve from its authorized and unissued Common Stock a sufficient number
          of
          shares to provide for the issuance of the Warrant Shares upon the exercise
          of
          any purchase rights under this Warrant. The Company further covenants that
          its
          issuance of this Warrant shall constitute full authority to its officers
          who are
          charged with the duty of executing stock certificates to execute and issue
          the
          necessary certificates for the Warrant Shares upon the exercise of the
          purchase
          rights under this Warrant. The Company will take all such reasonable action
          as
          may be necessary to assure that such Warrant Shares may be issued as provided
          herein without violation of any applicable law or regulation, or of any
          requirements of the Trading Market upon which the Common Stock may be listed.
          

        
          
            
            

          

          
            11

            
              

            

          

          
            
            

          

        

        Except
          and to the extent as waived or consented to by the Holder, the Company
          shall not
          by any action, including, without limitation, amending its certificate
          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
          of this
          Warrant, but will at all times in good faith assist in the carrying out
          of all
          such terms and in the taking of all such actions as may be necessary or
          appropriate to protect the rights of Holder as set forth in this Warrant
          against
          impairment. Without limiting the generality of the foregoing, the Company
          will
          (a) not increase the par value of any Warrant Shares above the amount payable
          therefor upon such exercise immediately prior to such increase in par value,
          (b)
          take all such action as may be necessary or appropriate in order that the
          Company may validly and legally issue fully paid and nonassessable Warrant
          Shares upon the exercise of this Warrant, and (c) use commercially reasonable
          efforts to obtain all such authorizations, exemptions or consents from
          any
          public regulatory body having jurisdiction thereof as may be necessary
          to enable
          the Company to perform its obligations under this Warrant.

         

        Before
          taking any action which would result in an adjustment in the number of
          Warrant
          Shares for which this Warrant is exercisable or in the Exercise Price,
          the
          Company shall obtain all such authorizations or exemptions thereof, or
          consents
          thereto, as may be necessary from any public regulatory body or bodies
          having
          jurisdiction thereof.

         

        f) Jurisdiction.
          All
          questions concerning the construction, validity, enforcement and interpretation
          of this Warrant shall be determined in accordance with the provisions of
          the
          Purchase Agreement.

         

        g) Restrictions.
          The
          Holder acknowledges that the Warrant Shares acquired upon the exercise
          of this
          Warrant, if not registered, will have restrictions upon resale imposed
          by state
          and federal securities laws.

         

        h) Nonwaiver
          and Expenses.
          No
          course of dealing or any delay or failure to exercise any right hereunder
          on the
          part of Holder shall operate as a waiver of such right or otherwise prejudice
          Holder’s rights, powers or remedies, notwithstanding the fact that all rights
          hereunder terminate on the Termination Date. If the Company willfully and
          knowingly fails to comply with any provision of this Warrant, which results
          in
          any material damages to the Holder, the Company shall pay to Holder such
          amounts
          as shall be sufficient to cover any costs and expenses including, but not
          limited to, reasonable attorneys’ fees, including those of appellate
          proceedings, incurred by Holder in collecting any amounts due pursuant
          hereto or
          in otherwise enforcing any of its rights, powers or remedies
          hereunder.

         

        i) Notices.
          Any
          notice, request or other document required or permitted to be given or
          delivered
          to the Holder by the Company shall be delivered in accordance with the
          notice
          provisions of the Purchase Agreement.

        
          
            
            

          

          
            12

            
              

            

          

          
            
            

          

        

        j) Limitation
          of Liability.
          No
          provision hereof, in the absence of any affirmative action by Holder to
          exercise
          this Warrant or purchase Warrant Shares, and no enumeration herein of the
          rights
          or privileges of Holder, shall give rise to any liability of Holder for
          the
          purchase price of any Common Stock or as a stockholder of the Company,
          whether
          such liability is asserted by the Company or by creditors of the
          Company.

         

        k) Remedies.
          Holder,
          in addition to being entitled to exercise all rights granted by law, including
          recovery of damages, will be entitled to specific performance of its rights
          under this Warrant. The Company agrees that monetary damages would not
          be
          adequate compensation for any loss incurred by reason of a breach by it
          of the
          provisions of this Warrant and hereby agrees to waive the defense in any
          action
          for specific performance that a remedy at law would be adequate.

         

        l) Successors
          and Assigns.
          Subject
          to applicable securities laws, this Warrant and the rights and obligations
          evidenced hereby shall inure to the benefit of and be binding upon the
          successors of the Company and the successors and permitted assigns of Holder.
          The provisions of this Warrant are intended to be for the benefit of all
          Holders
          from time to time of this Warrant and shall be enforceable by any such
          Holder or
          holder of Warrant Shares.

         

        m) Amendment.
          This
          Warrant may be modified or amended or the provisions hereof waived with
          the
          written consent of the Company and the Holder.

         

        n) Severability.
          Wherever possible, each provision of this Warrant shall be interpreted
          in such
          manner as to be effective and valid under applicable law, but if any provision
          of this Warrant shall be prohibited by or invalid under applicable law,
          such
          provision shall be ineffective to the extent of such prohibition or invalidity,
          without invalidating the remainder of such provisions or the remaining
          provisions of this Warrant.

         

        o) Headings.
          The
          headings used in this Warrant are for the convenience of reference only
          and
          shall not, for any purpose, be deemed a part of this Warrant.

        

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

        
          
            
            

          

          
            13

            
              

            

          

          
            
            

          

        

        

        IN
          WITNESS WHEREOF, the Company has caused this Warrant to be executed by
          its
          officer thereunto duly authorized.

        

        Dated:
          November 28, 2006

        

        
          	
                  SURGE
                    GLOBAL ENERGY, INC.

                   

                
	
                  By:________________________________________________

                
	Name:  
	
                  Title:
                    
 

        

         

        
          
            
            

          

          
            14

            
              

            

          

          
            
            

          

        

        

        NOTICE
          OF EXERCISE

        

        TO: SURGE
          GLOBAL ENERGY, INC.

        

        (1) The
          undersigned hereby elects to purchase ________ Warrant Shares of the Company
          pursuant to the terms of the attached Warrant (only if exercised in full),
          and
          tenders herewith payment of the exercise price in full, together with all
          applicable transfer taxes, if any.

         

        (2) Payment
          shall take the form of (check applicable box):

         

        [
          ] in
          lawful money of the United States; or

         

        [
          ] the
          cancellation of such number of Warrant Shares as is necessary, in accordance
          with the formula set forth in subsection 2(c), to exercise this Warrant
          with
          respect to the maximum number of Warrant Shares purchasable pursuant to
          the
          cashless exercise procedure set forth in subsection 2(c).

         

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

         

        _______________________________

         

        

        The
          Warrant Shares shall be delivered to the following:

        

        _______________________________

         

        _______________________________

         

        _______________________________

        

        (4)
          Accredited
          Investor.
          The
          undersigned is an “accredited investor” as defined in Regulation D promulgated
          under the Securities Act of 1933, as amended.

        

        [SIGNATURE
          OF HOLDER]

         

        Name
          of
          Investing Entity:
          _______________________________________________________________________

        Signature
          of Authorized Signatory of Investing Entity:
          _________________________________________________

        Name
          of
          Authorized Signatory:
          ___________________________________________________________________

        Title
          of
          Authorized Signatory:
          ____________________________________________________________________

        Date:
          _______________________________________________________________________________________

         

        
          
            
            

          

          
            15

            
              

            

          

          
            
            

          

        

         

        ASSIGNMENT
          FORM

        

        (To
          assign the foregoing warrant, execute

        this
          form
          and supply required information. 

        Do
          not
          use this form to exercise the warrant.)

        

        

        FOR
          VALUE
          RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby
          assigned to

         

        

        ___________________________________________________________________________________________________________
          whose address is

        

        _________________________________________________________________________________________________________________________.

        

         

        _________________________________________________________________________________________________________________________

        

        Dated:
          _____________________, _________

        

        

        Holder’s
          Signature: _________________________________________

        

        Holder’s
          Address: __________________________________________

         

        ____________________________________

        

        

        

        Signature
          Guaranteed:
          ____________________________________________________________

        

        

        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
          whatsoever, and must be guaranteed by a bank or trust company. 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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