Document:

Exhibit
10.25

 

REGISTRATION
RIGHTS AGREEMENT

 

This Registration Rights
Agreement (this “Agreement”) is made and entered into as of
November 16, 2005, among Surge Global Energy, Inc., a Delaware corporation
(the “Company”), and each of the purchasers signatory hereto (each such
purchaser is a “Purchaser” and all such purchasers are, collectively,
the “Purchasers”).

 

WHEREAS:

A.            In connection with the Securities
Purchase Agreement by and among the parties hereto of even date herewith (the “Securities Purchase Agreement”), the Company has agreed,
upon the terms and subject to the conditions of the Securities Purchase
Agreement, to issue and sell on the date hereof to each Buyer (i) shares
(the “Common Shares”) of the Company’s common
stock, par value $0.01 per share (the “Common Stock”),
and (ii) certain Warrants (the “Warrants”)
which will be exercisable to purchase additional shares of Common Stock (as
exercised, the “Warrant Shares”) in accordance
with the terms of the Warrants.

B.            To induce the Buyers to execute and
deliver the Securities Purchase Agreement, the Company has agreed to provide
certain registration rights under the Securities Act of 1933, as amended, and
the rules and regulations thereunder, or any similar successor statute
(collectively, the “Securities Act”),
and applicable state securities laws.

NOW, THEREFORE, in consideration of the premises and the
mutual covenants contained herein and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Company and
each of the Purchasers hereby agree as follows:

1. Definitions

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

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

“Effectiveness
Date” means, with respect to the Registration Statement registering for
resale the Registrable Securities, the 180th calendar day following the Closing
Date.

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

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

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

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

 

 

 

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

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

“Registrable
Securities” means (i) the Common Shares, (ii) the Warrant Shares issued or
issuable upon exercise of the Warrants and (iii) any shares of capital
stock issued or issuable with respect to the Common Shares, the Warrant Shares
or the Warrants as a result of any stock split, stock dividend,
recapitalization, exchange or similar event or otherwise, without regard to any
limitations on exercise of the Warrants.

“Registration
Period” shall have the meaning set forth in Section 3(d).

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

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

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

2. Registration

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

 

2

 

(b)      Effect of Failure to File and Obtain
and Maintain Effectiveness of Registration Statement. If (i) a
Registration Statement covering all the Registrable Securities required to be
covered thereby and required to be filed by the Company pursuant to this
Agreement is (A) not filed with the SEC on or before the Filing Date (a “Filing Failure”), or (B) not declared effective by the
SEC on or before the Effectiveness Date (an “Effectiveness
Failure”) or (ii) on any day after the Effective Date sales of
all the Registrable Securities required to be included on such Registration
Statement cannot be made pursuant to such Registration Statement (including,
without limitation, because of a failure to keep such Registration Statement
effective, to disclose such information as is necessary for sales to be made
pursuant to such Registration Statement or to register sufficient shares of
Common Stock (a “Maintenance Failure”), then, as
partial relief for the damages to any holder by reason of any such delay in or
reduction of its ability to sell the underlying shares of Common Stock (which
remedy shall not be exclusive of any other remedies available at law or in
equity), the Company shall reduce the exercise price of the Warrants by $0.005
for each day of a Filing Failure, an Effectiveness Failure and a Maintenance
Failure; provided, however, the exercise price shall not be reduced below
$0.50.

(c)      Sufficient Number of Shares Registered.
In the event the number of shares available under a Registration Statement
filed pursuant to Section 2(a) is insufficient to cover all of the Registrable
Securities required to be covered by such Registration Statement, the Company
shall amend the applicable Registration Statement, or file a new Registration
Statement, or both, so as to cover at least 100% of the number of such
Registrable Securities as of the trading day immediately preceding the date of
the filing of such amendment or new Registration Statement, in each case, as
soon as practicable, but in any event not later than fifteen (15) days after
the Company becomes aware of the necessity therefor. The Company shall use its
best efforts to cause such amendment and/or new Registration Statement to
become effective as soon as practicable following the filing thereof. For
purposes of the foregoing provision, the number of shares available under a
Registration Statement shall be deemed “insufficient to cover all of the
Registrable Securities” if at any time the number of shares of Common Stock
available for resale under such Registration Statement is less than the number
of Registrable Securities.

3. Registration
Procedures

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

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

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

 

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

 

(d)      The Company shall submit to the SEC,
within three (3) business days after the Company learns that no review of
a particular Registration Statement will be made by the staff of the SEC or
that the staff of the SEC has no further comments on a particular Registration
Statement, as the case may be, a request for acceleration of effectiveness of
such Registration Statement to a time and date not later than 48 hours
after the submission of such request. The Company shall keep each Registration
Statement effective pursuant to Rule 415 at all times until the earlier of
(i) the date as of which the Purchaser may sell all of the Registrable Securities
covered by such Registration Statement without restriction pursuant to
Rule 144(k) (or successor thereto) promulgated under the Securities Act or
(ii) the date on which the Purchasers shall have sold all the Registrable
Securities covered by such Registration Statement (the “Registration
Period”). The Company shall ensure that each Registration Statement
(including any amendments or supplements thereto and prospectuses contained
therein) shall not contain any 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 the case of prospectuses, in the light of the
circumstances in which they were made) not misleading.

 

(e)      The Company shall prepare and file with
the SEC such amendments (including post-effective amendments) and supplements
to a Registration Statement and the prospectus used in connection with such
Registration Statement, which prospectus is to be filed pursuant to
Rule 424 promulgated under the Securities Act, as may be necessary to keep
such Registration Statement effective at all times during the Registration
Period, and, during such period, comply with the provisions of the Securities
Act with respect to the disposition of all Registrable Securities of the
Company covered by such  Registration
Statement until such time as all of such Registrable Securities shall have been
disposed of in accordance with the intended methods of disposition by the
seller or sellers thereof as set forth in such Registration Statement.

 

(f)       The Company shall (A) permit
Purchaser’s legal counsel (“Legal Counsel”) to review and comment upon
(i) a Registration Statement at least five (5) Business Days prior to
its filing with the SEC and (ii) all amendments and supplements to all
Registration Statements within a reasonable number of days prior to their
filing with the SEC, and (B) not file any Registration Statement or
amendment or supplement thereto in a form to which Legal Counsel reasonably
objects. The Company shall not submit a request for acceleration of the
effectiveness of a Registration Statement or any amendment or supplement
thereto without the prior approval of Legal Counsel, which consent shall not be
unreasonably withheld. The Company shall furnish to Legal Counsel, without
charge, (i) copies of any correspondence from the SEC or the staff of the
SEC to the Company or its representatives relating to any Registration
Statement, (ii) promptly after the same is prepared and filed with the
SEC, one copy of any Registration Statement and any amendment(s) thereto,
including financial statements and schedules, all documents incorporated
therein by reference, if requested by an Purchaser and not otherwise available
on the EDGAR system, and all exhibits and (iii) upon the effectiveness of
any Registration Statement, one copy of the prospectus included in such
Registration Statement and all amendments and supplements thereto. The Company
shall reasonably cooperate with Legal Counsel in performing the Company’s
obligations pursuant to this Section 3.

 

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(g)      The Company shall use its reasonable best
efforts to (i) register and qualify, unless an exemption from registration
and qualification applies, the resale by Purchasers of the Registrable
Securities covered by a Registration Statement under such other securities or “blue
sky” laws of all applicable jurisdiction in the Unites States,
(ii) prepare and file in those jurisdictions such amendments (including
post-effective amendments) and supplements to such registrations and
qualifications as may be necessary to maintain the effectiveness thereof during
the Registration Period, (iii) take such other actions as may be necessary
to maintain such registrations and qualifications in effect at all times during
the Registration Period, and (iv) take all other actions reasonably
necessary or advisable to qualify the Registrable Securities for sale in such
jurisdictions; provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to (x) qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3(g), (y) subject itself to general taxation in any such
jurisdiction, or (z) file a general consent to service of process in any
such jurisdiction. The Company shall promptly notify each Purchaser who holds
Registrable Securities of the receipt by the Company of any notification with
respect to the suspension of the registration or qualification of any of the
Registrable Securities for sale under the securities or “blue sky” laws or any
jurisdiction in the United States or its receipt of actual notice of the
initiation or threatening of any proceeding for such purpose.

 

4.
Registration Expenses

 

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

 

5.
Indemnification

 

In
the event any Registrable Securities are included in a Registration Statement
under this Agreement:

 

(a)      To the fullest extent permitted by law,
the Company will, and hereby does, indemnify, hold harmless and defend each
Purchaser, the directors, officers, partners, members, employees, agents,
representatives of, and each Person, if any, who controls any Purchaser within
the meaning of the Securities Act or the Exchange Act (each, an “Indemnified Person”), against any losses, claims, damages,
liabilities, judgments, fines, penalties, charges, costs, reasonable attorneys’
fees, amounts paid in settlement or expenses, joint or several (collectively, “Claims”), incurred in investigating, preparing or defending
any action, claim, suit, inquiry, proceeding, investigation or appeal taken
from the foregoing by or before any court or governmental, administrative or
other regulatory agency, body or the SEC, whether pending or threatened,
whether or not an indemnified party is or may be a party thereto (“Indemnified Damages”), to which any of them may become
subject insofar as such Claims (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon: (i) any
untrue statement or alleged untrue statement of a material fact in a Registration
Statement or any post-effective amendment thereto or in any filing made in
connection with the qualification of the offering under the securities or other
“blue sky” laws of any jurisdiction in which Registrable Securities are offered
(“Blue Sky Filing”), or the omission or
alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a

 

5

 

material fact contained in any preliminary
prospectus if used prior to the effective date of such Registration Statement,
or contained in the final prospectus (as amended or supplemented, if the
Company files any amendment thereof or supplement thereto with the SEC) or the
omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in the light of the circumstances under which
the statements therein were made, not misleading, (iii) any violation or
alleged violation by the Company of the Securities Act, the Exchange Act, any
other law, including, without limitation, any state securities law, or any rule
or regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement or (iv) any material
violation of this Agreement (the matters in the foregoing clauses
(i) through (iv) being, collectively, “Violations”).
Subject to Section 5(c), the Company shall reimburse the Indemnified
Persons, promptly as such expenses are incurred and are due and payable, for
any legal fees or other reasonable expenses incurred by them in connection with
investigating or defending any such Claim. Notwithstanding anything to the
contrary contained herein, the indemnification agreement contained in this
Section 5(a): (i) shall not apply to a Claim by an Indemnified Person
arising out of or based upon a Violation which occurs in reliance upon and in
conformity with information furnished in writing to the Company by such Indemnified
Person or such Indemnified Person expressly for use in connection with the
preparation of the Registration Statement or any such amendment thereof or
supplement thereto, if such prospectus was timely made available by the Company
pursuant to Section 3(a); (ii) with respect to any preliminary
prospectus, shall not inure to the benefit of any such Person from whom the
Person asserting any such Claim purchased the Registrable Securities that are
the subject thereof (or to the benefit of any Person controlling such Person)
if the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected in the prospectus, as then amended or
supplemented, if such prospectus was timely made available by the Company
pursuant to Section 3(a), and the Indemnified Person was promptly advised
in writing not to use the incorrect prospectus prior to the use giving rise to
a violation and such Indemnified Person, notwithstanding such advise, used it
or failed to deliver the correct prospectus as required by the Securities Act
and such correct prospectus was timely made available pursuant to
Section 3(a); (iii) shall not be available to the extent such Claim
is based on a failure of the Purchaser to deliver or to cause to be delivered
the prospectus made available by the Company, including a corrected prospectus,
if such prospectus or corrected prospectus was timely made available by the
Company pursuant to Section 3(a); and (iv) shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the
prior written consent of the Company, which consent shall not be unreasonably
withheld or delayed. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the Indemnified Person
and shall survive the transfer of the Registrable Securities by the Purchasers
pursuant to Section 7.

 

(b)      In connection with any Registration
Statement in which an Purchaser is participating, each such Purchaser agrees
to  severally and not jointly indemnify,
hold harmless and defend, to the same extent and in the same manner as is set
forth in Section 5(a), the Company, each of its directors, each of its
officers who signs the Registration Statement and each Person, if any, who controls
the Company within the meaning of the Securities Act or the Exchange Act (each,
an “Indemnified Party”), against any Claim
or Indemnified Damages to which any of them may become subject, under the
Securities Act, the Exchange Act or otherwise, insofar as such Claim or
Indemnified Damages arise out of or are based upon any Violation, in each case
to the extent, and only to the extent, that such Violation occurs in reliance
upon and in conformity with written information furnished to the Company by
such Purchaser expressly for use in connection with such Registration
Statement; and, subject to Section 5(c), such Purchaser will reimburse any
legal or other

 

6

 

expenses reasonably incurred by an
Indemnified Party in connection with investigating or defending any such Claim;
provided, however, that the indemnity agreement contained in this
Section 5(b) and the agreement with respect to contribution contained in
Section 6 shall not apply to amounts paid in settlement of any Claim if
such settlement is effected without the prior written consent of such
Purchaser, which consent shall not be unreasonably withheld or delayed;
provided, further, however, that a Purchaser shall be liable under this
Section 5(b) for only that amount of a Claim or Indemnified Damages as
does not exceed the net proceeds to such Purchaser as a result of the sale of
Registrable Securities pursuant to such Registration Statement. Such indemnity
shall remain in full force and effect regardless of any investigation made by
or on behalf of such Indemnified Party and shall survive the transfer of the
Registrable Securities by the Purchasers pursuant to Section 7.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 5(b) with respect to any preliminary
prospectus shall not inure to the benefit of any Indemnified Party if the
untrue statement or omission of material fact contained in the preliminary
prospectus was corrected on a timely basis in the prospectus, as then amended
or supplemented.

 

(c)      Promptly after receipt by an Indemnified
Person or Indemnified Party under this Section 5 of notice of the
commencement of any action or proceeding (including any governmental action or
proceeding) involving a Claim, such Indemnified Person or Indemnified Party
shall, if a Claim in respect thereof is to be made against any indemnifying
party under this Section 5, deliver to the indemnifying party a written
notice of the commencement thereof, and the indemnifying party shall have the
right to participate in, and, to the extent the indemnifying party so desires,
jointly with any other indemnifying party similarly noticed, to assume control
of the defense thereof with counsel mutually satisfactory to the indemnifying
party and the Indemnified Person or the Indemnified Party, as the case may be;
provided, however, that an Indemnified Person or Indemnified Party shall have
the right to retain its own counsel with the fees and expenses of not more than
one counsel for such Indemnified Person or Indemnified Party to be paid by the
indemnifying party, if, in the reasonable opinion of the Indemnified Person or
the Indemnified Party, as the case may be, the representation by such counsel
of the Indemnified Person or Indemnified Party and the indemnifying party would
be inappropriate due to actual or potential differing interests between such
Indemnified Person or Indemnified Party and any other party represented by such
counsel in such proceeding. In the case of an Indemnified Person, legal counsel
referred to in the immediately preceding sentence shall be selected by the
Purchasers holding at least a majority in interest of the Registrable
Securities included in the Registration Statement to which the Claim relates. The
Indemnified Party or Indemnified Person shall cooperate fully with the
indemnifying party in connection with any negotiation or defense of any such
action or Claim by the indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the Indemnified Party or
Indemnified Person which relates to such action or Claim. The indemnifying
party shall keep the Indemnified Party or Indemnified Person fully apprised at
all times as to the status of the defense or any settlement negotiations with
respect thereto. No indemnifying party shall be liable for any settlement of
any action, claim or proceeding effected without its prior written consent,
provided, however, that the indemnifying party shall not unreasonably withhold,
delay or condition its consent. No indemnifying party shall, without the prior
written consent of the settlement or other compromises which does not include
as an unconditional term thereof the giving by the claimant or plaintiff to
such Indemnified Party or Indemnified Person of a release form all liability in
respect to such Claim or litigation. Following indemnification as provided for
hereunder, the indemnifying party shall be subrogated to all rights of the
Indemnified Party or Indemnified

 

7

 

Person with respect to all third parties,
firms or corporations relating to the matter for which indemnification has been
made. The failure to deliver written notice to the indemnifying party within a
reasonable time of the commencement of any such action shall not relieve such
indemnifying party of any liability to the Indemnified Person or Indemnified
Party under this Section 5, except to the extent that the indemnifying party is
prejudiced in its ability to defend such action.

 

(d)      The indemnification required by this
Section 5 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or
Indemnified Damages are incurred.

 

(e)      The indemnity agreements contained herein
shall be in addition to (i) any cause of action or similar right of the
Indemnified Party or Indemnified Person against the indemnifying party or
others, and (ii) any liabilities the indemnifying party may be subject to
pursuant to the law.

 

6.
Contribution

 

To
the extent any indemnification by an indemnifying party is prohibited or
limited by law, the indemnifying party agrees to make the maximum contribution
with respect to any amounts for which it would otherwise be liable under
Section 5 to the fullest extent permitted by law; provided, however, that: (i)
no Person involved in the sale of Registrable Securities which Person is guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) in connection with such sale shall be entitled to contribution
from any Person involved in such sale of Registrable Securities shall be
limited in amount to the net amount of proceeds received by such seller from
the sale of such Registrable Securities pursuant to such Registration
Statement.

 

7.
Assignment of Registration Rights.

 

The
rights under this Agreement shall be automatically assignable by the Purchasers
to any transferee of all or any portion of such Purchaser’s Registrable
Securities if: (i) the Purchaser agrees in writing with the transferee or
assignee to assign such right, and a copy of such agreement is furnished to the
Company within a reasonable time after such assignment; (ii) the Company is,
within a reasonable time after such transfer or assignment, furnished with
written notice of (a) the name and address of such transferee or assignee, and
(b) the securities with respect to which such registration right are being
transferred or assigned; (iii) immediately following such transfer or assignment
the further disposition of such securities by the transferee or assignee is
restricted under the Securities Act and applicable state securities laws; (iv)
at or before the time the Company receives the written notice contemplated by
clause (ii) of this sentence the transferee or assignee agrees in writing with
the Company to be bound by all of the provisions contained herein; and (v) such
transfer shall have been made in accordance with the applicable requirements of
the Securities Purchase Agreement.

 

8.
Miscellaneous

 

(a) Amendments
and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be give,
unless the same shall be in writing and

 

8

 

signed by the Company and all of the Holders
of the then outstanding Registrable Securities. Notwithstanding the foregoing,
a waiver or consent to depart from the provisions hereof with respect to a
matter that relates exclusively to the rights of Holders and that does not
directly or indirectly affect the rights of other Holders may be giver by
Holders of all of the Registrable Securities to which such waiver or consent
related; provided,  however, that the provisions of this sentence
may not be amended, modified, or supplemented except in accordance with the
provisions of the immediately preceding sentence.

 

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

 

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

 

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

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

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

 

	
  Surge Global Energy, Inc.

  
	
   

  
	
  By:

  	
  /s/ Fred W. Kelly

  
	
   

  	
  Name: Fred W. Kelly

  
	
   

  	
  Title: Chief Executive Officer

  

 

 

[SIGNATURE
PAGE OF HOLDERS FOLLOWS]

 

 

10

 

[SIGNATURE
PAGE OF HOLDERS TO SRGG RRA]

 

Name of Purchaser: Jack
& Sandy Zemer TTEE UADTD 12-21-1993 by Zemer Family Trust

 

Signature of Authorized Signatory
of Purchaser:   /s/ Jack Zemer

 

Name of Authorized Signatory: Jack Zemer

 

Title of Authorized Signatory:                                                                                     

 

Email Address of Purchaster: jdz@zemer.us

 

Facsimile of Purchaser: 1-858-454-9944

 

Telephone: 1-858-454-0011
x 821                                  Mobile: 1-858-945-3775

 

Address for Notice of Purchaser:

 

                Jack Zemer

                Alor
Int’l

                1227
Prospect Avenure

                La
Jolla, CA 92037

                United
States of America

                (858)
454-9944

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

 

 

Subscription Amount in USD: $500,000 - [Five Hundred Thousand US Dollars]

 

Shares: 500,000 shares - [Five
Hundred Thousand Shares]

 

Warrant Shares: 1,000,000
shares - [Seven Hundred Thousand Shares]

 

EIN# or SS# Number:                        

 

[MUST PROVIDE THIS UNDER SEPARATE
COVER]

 

 

 

[SIGNATURE
PAGE OF HOLDERS TO SRGG RRA]

 

Name of Purchaser: Jack
& Sandy Zemer TTEE UADTD 12-21-1993 by Zemer Family Trust

 

Signature of Authorized Signatory
of Purchaser:   /s/Jack Zemer

 

Name of Authorized Signatory: Jack Zemer

 

Title of Authorized Signatory:                                                                                     

 

Email Address of Purchaster: jdz@zemer.us

 

Facsimile of Purchaser: 1-858-454-9944

 

Telephone: 1-858-454-0011
x 821                                  Mobile: 1-858-945-3775

 

Address for Notice of Purchaser:

 

                Jack Zemer

                Alor
Int’l

                1227
Prospect Avenure

                La
Jolla, CA 92037

                United
States of America

                (858)
454-9944

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

 

 

Subscription Amount in USD: $500,000 - [Five Hundred Thousand US Dollars]

 

Shares: 500,000 shares - [Five
Hundred Thousand Shares]

 

Warrant Shares: 1,000,000
shares - [Seven Hundred Thousand Shares]

 

EIN# or SS# Number:                        

 

[MUST PROVIDE THIS UNDER SEPARATE
COVER]

 

 

 

[SIGNATURE
PAGE OF HOLDERS TO SRGG RRA]

 

Name of Purchaser: Jack
& Sandy Zemer TTEE UADTD 12-21-1993 by Zemer Family Trust

 

Signature of Authorized Signatory
of Purchaser:   /s/ Jack Zemer

 

Name of Authorized Signatory: Jack Zemer

 

Title of Authorized Signatory:                                                                                     

 

Email Address of Purchaster: jdz@zemer.us

 

Facsimile of Purchaser: 1-858-454-9944

 

Telephone: 1-858-454-0011
x 821                                  Mobile: 1-858-945-3775

 

Address for Notice of Purchaser:

 

                Jack Zemer

                Alor
Int’l

                1227
Prospect Avenure

                La
Jolla, CA 92037

                United
States of America

                (858)
454-9944

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

 

 

Subscription Amount in USD: $500,000 - [Five Hundred Thousand US Dollars]

 

Shares: 500,000 shares - [Five
Hundred Thousand Shares]

 

Warrant Shares: 1,000,000
shares - [Seven Hundred Thousand Shares]

 

EIN# or SS# Number:                        

 

[MUST PROVIDE THIS UNDER SEPARATE
COVER]Exhibit 10.26

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”)
is dated as November 30, 2005 between Surge Global Energy, Inc., a Delaware
corporation (the “Company”), and each purchaser identified on the
signature pages hereto (each, including its successors and assigns, a “Purchaser”
and collectively the “Purchasers”); and

 

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

 

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

 

ARTICLE
I.

DEFINITIONS

 

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

 

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

 

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

 

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

 

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

 

“Closing Price” means on any particular date
(a) the last reported closing bid price per share of Common Stock on such
date on the Trading Market (as reported by Bloomberg L.P. at 4:00 PM (New York
time), or (b) if there is no such price on such date, then the closing bid
price on the Trading Market on the date nearest preceding such date (as
reported by Bloomberg L.P. at 4:00 PM (New York time) for the closing bid price
for regular session trading on such day), or (c) if the Common Stock is
not then 

 

1

 

listed or quoted on a
Trading Market and if prices for the Common Stock are then quoted on the OTC
Bulletin Board, the closing bid price of the Common Stock for such date (or the
nearest preceding date) on the OTC Bulletin Board (as reported by Bloomberg
L.P. at 4:00 PM (New York time), (d) if the Common Stock is not then listed or
quoted on the Trading Market and if prices for the Common Stock are then
reported in the “pink sheets” published by the Pink Sheets LLC (formerly the
National Quotation Bureau Incorporated (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent bid price per
share of the Common Stock so reported, or (e) if the shares of Common
Stock are not then publicly traded the fair market value of a share of Common
Stock as determined by a qualified independent appraiser selected in good faith
by the Purchasers of a majority in interest of the Shares then outstanding.

 

“Commission” means the Securities and Exchange
Commission.

 

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

 

“Company Counsel” means Sichenzia Ross Friedman
Ference LLP.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

 

ARTICLE
II.

PURCHASE AND SALE

 

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

 

2.2   Closing
Conditions.

 

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

 

3

 

(i)            this Agreement duly executed by the
Company;

 

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

 

(iii)          a Warrant, registered in the name of
such Purchaser, pursuant to which such Purchaser shall have the right to
purchase up to the number of shares of Common Stock equal to 200% (2 warrants
for each share purchased) of the Shares to be issued to such Purchaser at the
Closing, which shall be exercisable immediately and have an exercise price
equal to $1.45 and be exercisable for a period
of five (5) years from the Closing Date (the “Warrant”);

 

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

 

(v)           a certificate evidencing the
incorporation and good standing of the Company and each of its operating
subsidiaries in such corporation’s jurisdiction of incorporation issued by the
Secretary of State or applicable official of such jurisdiction of incorporation
as of a date within 10 days of the Closing Date;

 

(vi)          a certified copy of the Certificate of
Incorporation as certified by the Secretary of State or applicable official
within 10 days of the Closing Date;

 

(vii)         a certificate, executed by the
Secretary of the Company and dated as of the Closing Date, as to (i) the
resolutions consistent with Section 3.1(a) as adopted by the Company’s Board of
Directors in a form reasonably acceptable to each Purchaser, (ii) the
Certificate of Incorporation and (iii) the Bylaws, each as in effect at the
Closing;

 

(viii)        such other documents relating to the
transactions contemplated by this Agreement as each Purchaser or its counsel
may reasonably request.

 

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

 

(i)            this Agreement duly executed by such
Purchaser;

 

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

 

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

 

(c)   All representations and warranties of the
other party contained herein shall remain true and correct as of the Closing
Date and all covenants of the other party shall have been performed if due
prior to such date.  Each Purchaser shall
have received a certificate, executed by the Chief Executive Officer of the
Company, dated as of the Closing Date, to the foregoing effect and as to such
other matters as may be reasonably requested by such Purchaser.

 

4

 

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

 

(e)   At the Closing Date, the Company shall have
obtained all governmental, regulatory or third party consents and approvals, if
any, necessary for the sale of the Common Shares and the Warrants.

 

ARTICLE
III.

REPRESENTATIONS AND WARRANTIES

 

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

 

(a)   Organization and Qualification.  Each of the Company and its “Subsidiaries” (which for purposes of this
Agreement means any entity (i) in which the Company, directly or indirectly,
owns capital stock or holds an equity or similar interest and (ii) which has
operations and material assets) are corporations duly organized and validly
existing in good standing under the laws of the jurisdiction in which they are
incorporated, and have the requisite corporate power and authorization to own
their properties and to carry on their business as now being conducted.  Each of the Company and its Subsidiaries is
duly qualified as a foreign corporation to do business and is in good standing
in every jurisdiction in which its ownership of property or the nature of the
business conducted by it makes such qualification necessary, except to the
extent that the failure to be so qualified or be in good standing would not
have a Material Adverse Effect.  As used
in this Agreement, “Material Adverse Effect”
means any material adverse effect on the business, properties, assets,
operations, results of operations, condition (financial or otherwise) or
prospects of the Company and its Subsidiaries, taken as a whole, or on the
transactions contemplated hereby and the other Transaction Documents or by the
agreements and instruments to be entered into in connection herewith or therewith,
or on the authority or ability of the Company to perform its obligations under
the Transaction Documents (as defined below). 
The Company has no Subsidiaries except as set forth on Schedule
3.1(a) .

 

5

 

(b)   Authorization; Enforcement; Validity.  The Company has the requisite corporate power
and authority to enter into and perform its obligations under the Transaction Documents and to issue the
Securities in accordance with the terms hereof and thereof.  The execution and delivery of the Transaction
Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby, including, without limitation,
the issuance of the Common Shares and the Warrants and the reservation for
issuance and the issuance of the Warrant Shares issuable upon exercise of the
Warrant have been duly authorized by the Company’s Board of Directors and no
further consent or authorization is required by the Company, its Board of
Directors or its stockholders.  This
Agreement and the other Transaction Documents have been duly executed and
delivered by the Company, and constitute the legal, valid and binding
obligations of the Company, enforceable against the Company in accordance with
their respective terms, except as such enforceability may be limited by general
principles of equity or applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation or similar laws relating to, or affecting generally,
the enforcement of applicable creditors’ rights and remedies.

 

(c)   Issuance of the Securities.  The Shares and Warrants are duly authorized
and, when issued and paid for in accordance with the Transaction Documents,
will be duly and validly issued, fully paid and nonassessable, free and clear of
all taxes, liens and charges with respect to the issue thereof (“Liens”).  The Warrant Shares, when issued in accordance
with the terms of the Transaction Documents, will be validly issued, fully paid
and nonassessable, free and clear of all Liens with respect to the issuance
thereof.  The Company has reserved from
its duly authorized capital stock the maximum number of shares of Common Stock
issuable pursuant to this Agreement and the Warrants.

 

(d)   No Conflicts.  The execution, delivery and performance of
the Transaction Documents by the Company and the consummation by the Company of
the transactions contemplated hereby and thereby (including, without
limitation, the issuance of the Common Shares and Warrants and reservation for
issuance and issuance of the Warrant Shares) will not (i) result in a violation
of the Certificate of Incorporation (as defined below) or Bylaws (as defined
below) of the Company or any of its Subsidiaries or (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any material agreement, indenture
or instrument to which the Company or any of its Subsidiaries is a party, or
(iii) result in a violation of any law, rule, regulation, order, judgment or
decree (including federal and state securities laws and regulations and the
rules and regulations of the Trading Market) applicable to the Company or any
of its Subsidiaries or by which any property or asset of the Company or any of
its Subsidiaries is bound or affected.

 

(e)   Consents.  The Company is not required to obtain any
consent, authorization or order of, or make any filing or registration with,
any court, governmental agency or any regulatory or self-regulatory agency or
any other Person in order for it to execute, deliver or perform any of its
obligations under or contemplated by the Transaction Documents, in each case in
accordance with the terms hereof or thereof. 
All consents, authorizations, orders, filings and registrations which
the Company is required to obtain pursuant to the preceding sentence have been
obtained or effected on or prior to the 

 

6

 

Closing Date.  The
Company and its Subsidiaries are unaware of any facts or circumstances that
might prevent the Company from obtaining or effecting any of the registration,
application or filings pursuant to the preceding sentence.  The Company is not in violation of the
listing requirements of a Trading Market and has no knowledge of any facts that
would reasonably lead to delisting or suspension of the Common Stock in the
foreseeable future.

 

(f)    No General Solicitation; Placement
Agent’s Fees.  Neither the Company,
nor any of its affiliates, nor any Person acting on its or their behalf, has
engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with the offer or sale of the
Securities.  The Company shall be responsible
for the payment of any placement agent’s fees, financial advisory fees, or
brokers’ commissions (other than for persons engaged by any Purchaser or its
investment advisor) relating to or arising out of the transactions contemplated
hereby.  The Company shall pay, and hold
each Purchaser harmless against, any liability, loss or expense (including,
without limitation, attorney’s fees and out-of-pocket expenses) arising in
connection with any such claim.  The
Company has not engaged any placement agent or other agent in connection with
the sale of the Securities.

 

(g)   Capitalization.  As of the date hereof, the authorized capital
stock of the Company consists of (x) 75,000,000 shares of Common Stock, of
which as of the date hereof, 25,442,097 shares are issued and outstanding,  6,706,406 shares are reserved for issuance
pursuant to the Company’s employee stock option plan, 1,105,000 shares are
reserved for issuance pursuant to warrants (other than the Warrants)
exercisable into shares of Common Stock and 200,000 shares reserved for
issuance under other outstanding commitments, and (y) 10,000,000 shares of
preferred stock, of which as of the date hereof, no shares of preferred stock
are issued and outstanding.  An
additional 7,822,366 shares of Common Stock are issued in escrow to Deep Well
Oil & Gas (the “Deep Well Shares”). 
Except for the Deep Well Shares (the terms of the issuance of which is
described on Schedule 3.1(g)), all of such outstanding shares have been,
or upon issuance will be, validly issued and are fully paid and
nonassessable.  Except as set forth above
in this Section 3.1(g) or on Schedule 3.1(g): (i) no shares of the
Company’s capital stock are subject to preemptive rights or any other similar
rights or any liens or encumbrances suffered or permitted by the Company; (ii)
there are no outstanding options, warrants, scrip, rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities or
rights convertible into, or exercisable or exchangeable for, any shares of
capital stock of the Company or any of its Subsidiaries, or contracts,
commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to issue additional shares of capital stock
of the Company or any of its Subsidiaries or options, warrants, scrip, rights
to subscribe to, calls or commitments of any character whatsoever relating to,
or securities or rights convertible into, or exercisable or exchangeable for,
any shares of capital stock of the Company or any of its Subsidiaries; (iii)
there are no outstanding debt securities, notes, credit agreements, credit
facilities or other agreements, documents or instruments evidencing
Indebtedness (as defined in Section 3.1(i)) of the Company or any of its
Subsidiaries or by which the Company or any of its Subsidiaries is or may
become bound; (iv) there are no financing statements securing obligations in
any material amounts, either singly or in the aggregate, filed in connection
with the Company; (v) 

 

7

 

there are no agreements or arrangements under which
the Company or any of its Subsidiaries is obligated to register the sale of any
of their securities under the Securities Act (except the Registration Rights
Agreement); (vi) there are no outstanding securities or instruments of the
Company or any of its Subsidiaries which contain any redemption or similar
provisions, and there are no contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to redeem a security of the Company or any of its Subsidiaries; (vii)
there are no securities or instruments containing anti-dilution or similar
provisions that will be triggered by the issuance of the Securities; (viii) the
Company does not have any stock appreciation rights or “phantom stock” plans or
agreements or any similar plan or agreement; and (ix) the Company and its
Subsidiaries have no liabilities or obligations required to be disclosed in the
SEC Reports (as defined herein) but not so disclosed in the SEC Reports, other
than those incurred in the ordinary course of the Company’s or any Subsidiary’s
respective businesses and which, individually or in the aggregate, do not or
would not have a Material Adverse Effect. 
The Company has furnished or made available to the Purchaser upon such
Purchaser’s request, true, correct and complete copies of the Company’s
Certificate of Incorporation, as amended and as in effect on the date hereof
(the “Certificate of Incorporation”),
and the Company’s Bylaws, as amended and as in effect on the date hereof (the “Bylaws”), and the terms of all securities
convertible into, or exercisable or exchangeable for, Common Stock and the
material rights of the holders thereof in respect thereto.  Schedule 3.1(g) sets forth the shares
of Common Stock owned beneficially or of record and Common Stock equivalents
held by each director and executive officer.

 

(h)   SEC Reports; Financial Statements.  The Company has filed all reports required to
be filed by it under the Securities Act and the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the
date hereof (or such shorter period as the Company was required by law to file
such material) (the foregoing materials being collectively referred to herein
as the “SEC Reports”) on a timely basis or has received a valid
extension of such time of filing and has filed any such SEC Reports prior to
the expiration of any such extension.   
As of their respective dates, the SEC Reports complied in all material
respects with the requirements of the Exchange Act and the rules and
regulations of the SEC promulgated thereunder applicable to the SEC Reports,
and none of the SEC Reports, at the time they were filed with the SEC,
contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.  As of their
respective dates, the financial statements of the Company included in the SEC
Reports complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto.  Such financial statements have
been prepared in accordance with generally accepted accounting principles,
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).  No other information
provided by or on behalf of the 

 

8

 

Company to each Purchaser which is not included in the
SEC Reports contains any untrue statement of a material fact or omits to state
any material fact necessary in order to make the statements therein, in the
light of the circumstance under which they are or were made, not misleading.

 

(i)    Indebtedness and Other Contracts.  Except as disclosed in Schedule 3.1(i),
neither the Company nor any of its Subsidiaries (i) has any outstanding
Indebtedness (as defined below), (ii) is a party to any contract, agreement or
instrument, the violation of which, or default under which, by the other
party(ies) to such contract, agreement or instrument would result in a Material
Adverse Effect, (iii) is in violation of any term of or in default under any
contract, agreement or instrument relating to any Indebtedness, except where
such violations and defaults would not result, individually or in the
aggregate, in a Material Adverse Effect, or (iv) is a party to any contract,
agreement or instrument relating to any Indebtedness, the performance of which,
in the judgment of the Company’s officers, has or is expected to have a
Material Adverse Effect.  No outstanding
Indebtedness is secured.  For purposes of
this Agreement:  (x) “Indebtedness” of any Person means, without duplication
(A) all indebtedness for borrowed money, (B) all obligations issued, undertaken
or assumed as the deferred purchase price of property or services (other than
trade payables entered into in the ordinary course of business), (C) all
reimbursement or payment obligations with respect to letters of credit, surety
bonds and other similar instruments, (D) all obligations evidenced by notes,
bonds, debentures or similar instruments, including obligations so evidenced
incurred in connection with the acquisition of property, assets or businesses,
(E) all indebtedness created or arising under any conditional sale or other
title retention agreement, or incurred as financing, in either case with
respect to any property or assets acquired with the proceeds of such
indebtedness (even though the rights and remedies of the seller or bank under
such agreement in the event of default are limited to repossession or sale of
such property), (F) all monetary obligations under any leasing or similar
arrangement which, in connection with generally accepted accounting principles,
consistently applied for the periods covered thereby, is classified as a
capital lease, (G) all indebtedness referred to in clauses (A) through (F)
above secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any mortgage, lien, pledge,
charge, security interest or other encumbrance upon or in any property or
assets (including accounts and contract rights) owned by any Person, even though
the Person which owns such assets or property has not assumed or become liable
for the payment of such indebtedness, and (H) all Contingent Obligations in
respect of indebtedness or obligations of others of the kinds referred to in
clauses (A) through (G) above; and (y) “Contingent
Obligation” means, as to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to any
indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the
primary effect thereof, is to provide assurance to the obligee of such
liability that such liability will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
liability will be protected (in whole or in part) against loss with respect
thereto.

 

(j)    [Intentionally Omitted].

 

9

 

(k)   Absence of Litigation.  Except for the lawsuit filed against the
Company and  Surge Global Energy (Canada)
Ltd. in the Alberta Court of Queen’s Bench by Deep Well Oil & Gas, Inc.
(“DWOG”), a Nevada corporation and Northern Alberta Oil Ltd. (“Northern”), an
Alberta corporation (the “Deep Well Lawsuit”), there is no action, suit,
proceeding, inquiry or investigation before or by a Trading Market, any court,
public board, government agency, self-regulatory organization or body pending
or, to the knowledge of the Company, threatened against or affecting the
Company, the Common Stock or any of its Subsidiaries or any of the Company’s or
the Company’s Subsidiary’s officers or directors, whether of a civil or
criminal nature or otherwise.  The
Company represents and warrants that it has entered into a settlement agreement
with DWOG and Northern providing for the complete dismissal of the Deep Well
Lawsuit upon the completion of the financing described in Section 3.1(j).

 

(l)    Environmental Laws.  The Company and its Subsidiaries (i) are in
compliance with any and all Environmental Laws (as hereinafter defined), (ii)
have received all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses and (iii)
are in compliance with all terms and conditions of any such permit, license or
approval where, in each of the foregoing clauses (i), (ii) and (iii), the
failure to so comply could be reasonably expected to have, individually or in
the aggregate, a Material Adverse Effect. 
The term “Environmental Laws”
means all federal, state, local or foreign laws relating to pollution or
protection of human health or the environment (including, without limitation,
ambient air, surface water, groundwater, land surface or subsurface strata),
including, without limitation, laws relating to emissions, discharges, releases
or threatened releases of chemicals, pollutants, contaminants, or toxic or
hazardous substances or wastes (collectively, “Hazardous Materials”) into
the environment, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials, as well as all authorizations, codes, decrees, demands or
demand letters, injunctions, judgments, licenses, notices or notice letters,
orders, permits, plans or regulations issued, entered, promulgated or approved
thereunder.

 

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

 

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

 

(o)   Manipulation of Price.  The Company has not, and to its knowledge no
one acting on its behalf has, (i) taken, directly or indirectly, any action
designed to cause or to result in the stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of any of
the Securities, (ii) sold, bid for, purchased, or paid any compensation for
soliciting purchases of, any of the Securities, or (iii) paid or agreed 

 

10

 

to pay to any person any compensation for soliciting
another to purchase any other securities of the Company.

 

(p)   Disclosure.  All disclosure provided to the Purchasers
regarding the Company, its business and the transactions contemplated hereby,
including the Schedules to this Agreement, furnished by or on behalf of the
Company are true and correct and do not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they
were made, not misleading.  Each press
release issued by the Company during the twelve (12) months preceding the date
of this Agreement did not at the time of release contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they are made, not misleading.  No event or circumstance has occurred or
information exists with respect to the Company or any Subsidiary or either of
its or their respective business, properties, prospects, operations or
financial conditions, which, under applicable law, rule or regulation, requires
public disclosure or announcement by the Company but which has not been so
publicly announced or disclosed (assuming for this purpose that the Company’s
reports filed under the Exchange Act are being incorporated into an effective
registration statement filed by the Company under the Securities Act).

 

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

 

(a)   Organization; Authority.  The execution, delivery and performance by
each Purchaser of the transactions contemplated by this Agreement have been
duly authorized by all necessary corporate action on the part of such
Purchaser.  Each Transaction Document to
which it is party has been duly executed by such Purchaser, and when delivered
by such Purchaser in accordance with the terms hereof, will constitute the
valid and legally binding obligation of such Purchaser, enforceable against it
in accordance with its terms except (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’
rights generally, (ii) as limited by laws relating to the availability of
specific performance, injunctive relief or other equitable remedies and (iii)
insofar as indemnification and contribution provisions may be limited by
applicable law.

 

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

 

11

 

Such Purchaser does not have any agreement or understanding,
directly or indirectly, with any Person to distribute any of the Securities.

 

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

 

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

 

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

 

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

 

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

 

 

ARTICLE
IV.

OTHER AGREEMENTS OF THE PARTIES

 

4.1     Restriction
on Sales, Short Sales and Hedging Transactions.

 

(a)   The Securities may only be disposed of in
compliance with state and federal securities laws.  In connection with any transfer of Securities
other than pursuant to an 

 

12

 

effective registration statement or Rule 144, to the
Company or to an Affiliate of a Purchaser, the Company may require the
transferor thereof to provide to the Company an opinion of counsel selected by
the transferor and reasonably acceptable to the Company, the form and substance
of which opinion and shall be reasonably satisfactory to the Company, to the
effect that such transfer does not require registration of such transferred
Securities under the Securities Act.  As
a condition of transfer, any such transferee shall agree in writing to be bound
by the terms of this Agreement and shall have the rights of a Purchaser under
this Agreement and the Registration Rights Agreement.

 

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

 

THESE SECURITIES
HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS.

 

(c)   The legend set forth in Section 4.1(b) shall
be removed and the Company shall issue a certificate without such legend or any
other legend to the holder of the applicable Securities upon which it is
stamped, if (i) such Securities are registered for resale under the Securities
Act, (ii) in connection with a sale, assignment or other transfer, such holder
provides the Company with an opinion of counsel, in a generally acceptable
form, to the effect that such sale, assignment or transfer of such Securities
may be made without registration under the applicable requirements of the Securities
Act, or (iii) such holder provides the Company with reasonable assurance that
such Securities can be sold, assigned or transferred pursuant to Rule 144.  Following the Effective Date or at such
earlier time as a legend is no longer required for certain Securities, the
Company will no later than three Business Days following the delivery by a
Purchaser to the Company or the Company’s transfer agent of a legended
certificate representing such Securities, deliver or cause to be delivered to
such Purchaser a certificate representing such Securities that is free from all
restrictive and other legends.  Following
the Effective Date and upon the delivery to any Purchaser of any certificate
representing Securities that is free from all restrictive and other legends,
such Purchaser agrees that any sale of such Securities shall be made pursuant
to the Registration Statement and in accordance with the plan of distribution
described therein or pursuant to an available exemption from the registration
requirements of the Securities Act.  The
Company may not make any notation on its records or give instructions to any
transfer agent of the Company that enlarge the restrictions on transfer set
forth in Section 4.1(a).  The Company
will not effect or publicly announce its intention to effect any exchange,
recapitalization or other transaction that effectively requires or rewards
physical delivery of certificates evidencing the Common Stock.

 

13

 

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

 

4.3   Form D
and Blue Sky.  The Company agrees to
file a Form D with respect to the Securities as required under Regulation D and
to provide a copy thereof to each Purchaser promptly after such filing.  The Company, on or before the Closing Date,
shall take such action as the Company shall reasonably determine is necessary
in order to obtain an exemption for or to qualify the Securities for sale to
the Purchasers at the Closing pursuant to this Agreement under applicable
securities or “Blue Sky” laws of the states of the United States (or to obtain
an exemption from such qualification), and shall provide evidence of any such
action so taken to the Purchasers on or prior to the Closing Date.  The Company shall make all filings and
reports relating to the offer and sale of the Securities required under
applicable securities or “Blue Sky” laws of the states of the United States
following the Closing Date.

 

4.4   Reporting
Status.  Until the date on which the
Purchasers shall have sold all the Common Shares and Warrant Shares and none of the Warrants is outstanding
(the “Reporting Period”), the
Company shall timely file all reports required to be filed with the SEC
pursuant to the Exchange Act, and the Company shall not terminate its status as
an issuer required to file reports under the Exchange Act even if the Exchange
Act or the rules and regulations thereunder would otherwise permit such
termination.

 

4.5   Fees.
The Company shall be responsible for the payment of any placement agent’s fees,
financial advisory fees, or broker’s commissions (other than for Persons
engaged by any Purchaser) relating to or arising out of the transactions
contemplated hereby, including, without limitation, any fees or commissions
payable to the Agents.  The Company shall
pay, and hold each Purchaser harmless against, any liability, loss or expense
(including, without limitation, reasonable attorney’s fees and out-of-pocket
expenses) arising in connection with any claim relating to any such
payment.  Except as otherwise set forth
in the Transaction Documents, each party to this Agreement shall bear its own
expenses in connection with the sale of the Securities to the Purchaser.

 

4.6   Additional
Registration Statements.  Until the Effective Date, the Company will not
file a registration statement under the Securities Act relating to securities
that are not the Securities.

 

4.7   Breach.  The Company acknowledges that a breach by it
of its obligations hereunder will cause irreparable harm to a Purchaser.  Accordingly, the Company acknowledges that
the remedy at law for a breach of its obligations under this Agreement will be
inadequate and agrees, in the event of a breach or threatened breach by the
Company of the provisions of this Agreement, that a Purchaser shall be
entitled, in addition to all other available remedies, to an order and/or
injunction restraining any breach and requiring immediate issuance and
transfer, without the necessity of showing economic loss and without any bond
or other security being required.

 

 

14

 

ARTICLE
V.

MISCELLANEOUS

 

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

 

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

 

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

 

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

 

5.5   Governing
Law; Venue; Waiver of Jury Trial. 
All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of New York, without
regard to the principles of conflicts of law thereof.  Each party hereby irrevocably submits to the
exclusive jurisdiction of the state and federal courts sitting in the City of
New York, borough of Manhattan for the adjudication of any dispute hereunder or
in connection herewith or with any transaction contemplated hereby or discussed
herein (including with respect to the enforcement of any of the Transaction
Documents), and hereby irrevocably waives, and 

 

15

 

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

 

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

 

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

 

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

 

5.9   Indemnification.  In consideration of each Purchaser’s
execution and delivery of the Transaction Documents and acquiring the
Securities thereunder and in addition to all of the Company’s other obligations
under the Transaction Documents, the Company shall defend, protect, indemnify
and hold harmless each Purchaser and each other holder of the Securities and
all of their stockholders, partners, members, officers, directors, employees
and direct or indirect investors and any of the foregoing Persons’ agents or
other representatives (including, without limitation, those retained in
connection with the transactions contemplated by this Agreement) (collectively,
the “Indemnitees”) from and
against any and all actions, causes of action, suits, claims, losses, costs,
penalties, fees, liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable attorneys’ fees
and disbursements (the “Indemnified
Liabilities”), incurred by any Indemnitee as a result of, or arising
out of, or relating to (a) any misrepresentation or breach of any
representation or warranty made by the Company in the Transaction Documents or
any other certificate, instrument or document contemplated hereby or thereby,
(b) any breach of any covenant, agreement or obligation of the Company
contained in the Transaction Documents or any other certificate, instrument or
document contemplated hereby or thereby or (c) any cause of action, suit or
claim brought or

 

16

 

made against such Indemnitee by a third party (including for
these purposes a derivative action brought on behalf of the Company) and
arising out of or resulting from (i) the execution, delivery, performance or
enforcement of the Transaction Documents or any other certificate, instrument
or document contemplated hereby or thereby, (ii) any transaction financed or to
be financed in whole or in part, directly or indirectly, with the proceeds of
the issuance of the Securities, or (iii) the status of such Purchaser or holder
of the Securities as an investor in the Company.  To the extent that the foregoing undertaking
by the Company may be unenforceable for any reason, the Company shall make the
maximum contribution to the payment and satisfaction of each of the Indemnified
Liabilities which is permissible under applicable law.  Except as otherwise set forth herein, the
mechanics and procedures with respect to the rights and obligations under this
Section 5.9 shall be the same as those set forth in Section 5 of the
Registration Rights Agreement.

 

(Signature
Page Follows)

 

17

 

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

 

	
  Surge Global Energy, Inc.

  
	
   

  	
   

  
	
  By:

  	
  /s/ Fred W. Kelly

  
	
  Name:

  	
  Fred W. Kelly

  
	
  Title:

  	
  CEO

  
	
   

  	
   

  
	
  Address for Notice:

  
	12220 El Camino Real

	Suite 400

	San Diego, CA 92130

	 

	
  With a copy to:

  
	
   

  
	
  Darrin M. Ocasio, Esq.

  
	
  Sichenzia Ross Friedman Ference LLP

  
	
  1065 Avenue of Americas

  
	
  New York, NY 10018

  
	
   

  

 

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK

 

SIGNATURE PAGE FOR
PURCHASER FOLLOWS]

 

 

18

 

[PURCHASERS SIGNATURE
PAGE – SRGG]

 

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

 

	
  Name of Purchaser:

  	
  BENJAMIN FINANCIAL 
  LIMITED PARTNERSHIP, A CALIFORNIA LIMITED PARTNERSHIP

  

 

Signature of Authorized Signatory of Purchaser:  /s/ [ILLEGIBLE]

 

Email Address of Purchaser:  c/o
BN100@AOL.COM

 

Facsimile of Purchaser:  858 481
3373

 

Telephone:  858 481 3000                    Mobile:  619 994 9991

 

Address for Notice of Purchaser: 
2775 VIA DE LA VALLE #205, DEL MAR, CA 92014

 

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

 

 

Subscription Amount in USD:  $100,000 — [One Hundred Thousand US Dollars]

 

Shares:  100,000
shares — [One Hundred Thousand Shares]

 

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

 

EIN# or SS# Number:  20-2722977

 

[MUST PROVIDE THIS UNDER SEPARATE COVER]

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