Document:

Exhibit 10.27

 

THIS WARRANT AND THE UNDERLYING SHARES OF COMMON
STOCK HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS.  THIS WARRANT AND, IF EXERCISED, THE UNDERLYING
SHARES OF COMMON STOCK, HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW
TO THEIR DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE
TRANSFERRED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES
UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF
COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.

 

SURGE GLOBAL ENERGY, INC.

WARRANT TO PURCHASE COMMON STOCK

 

 

	
  No.
  2005-21

  	
   

  	
  November 30, 2005

  

Void After November 30, 2010

 

 

 

THIS
CERTIFIES THAT, for value received Benjamin
Financial Limited Partnership or his assigns (the “Holder”), is entitled to subscribe
for and purchase at the Exercise Price (defined below) from SURGE GLOBAL ENERGY, INC.,
a Delaware corporation  (the “Corporation”) an amount of common
stock equal to Two Hundred Thousand (200,000)
shares.

 

 

 

1.             Definitions.  AS
USED HEREIN, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING RESPECTIVE MEANINGS:

 

                (a)           “Exercise Period” shall mean the
period commencing with the date hereof and ending five years from the date
hereof, unless sooner terminated as provided below.

 

                (b)           “Exercise Price” shall mean $1.45 per
share, subject to adjustment pursuant to Section 5 below and subject to
adjustment pursuant to Section 2(b) of the Registration Rights Agreement of
even date herewith between the Holder and the Corporation.

 

                (c)           “Exercise Shares” shall mean the
shares of Common Stock issuable upon exercise of this Warrant.

 

                2.             Exercise of
Warrant.  The rights
represented by this Warrant may be exercised in whole or in part at any time
during the Exercise Period, by delivery of the following to the Corporation at
its address set forth above (or at such other address as it may designate by
notice in writing to the Holder):

 

                (a)           An executed Notice of
Exercise in the form attached hereto;

 

                (b)           Payment of the Exercise
Price either in cash or by check; and

 

                (c)           This Warrant.

 

 

 

                Upon
the exercise of the rights represented by this Warrant, a certificate or
certificates for the Exercise Shares so purchased, registered in the name of
the Holder or persons affiliated with the Holder, if the Holder so designates,
shall be issued and delivered to the Holder within a reasonable time after the
rights represented by this Warrant shall have been so exercised.

 

                The person in whose name any
certificate or certificates for Exercise Shares are to be issued upon exercise
of this Warrant shall be deemed to have become the holder of record of such
shares on the date on which this Warrant was surrendered and payment of the
Exercise Price was made, irrespective of the date of delivery of such
certificate or certificates, except that, if the date of such surrender and
payment is a date when the stock transfer books of the Corporation are closed,
such person shall be deemed to have become the holder of such shares at the
close of business on the next succeeding date on which the stock transfer books
are open.

 

3.             Covenants of the Corporation.

 

                3.1           Covenants as to Exercise Shares.  The Corporation covenants and agrees that all Exercise Shares that may be
issued upon the exercise of the rights represented by this Warrant will, upon
issuance, be validly issued and outstanding, fully paid and nonassessable, and
free from all taxes, liens and charges with respect to the issuance
thereof.  Subject to the immediately
preceding paragraph, the Corporation further covenants and agrees that the
Corporation will at all times during the Exercise Period, have authorized and
reserved, free from preemptive rights, a sufficient number of shares of its
Common Stock to provide for the exercise of the rights represented by this
Warrant.  If at any time during the
Exercise Period the number of authorized but unissued shares of Common Stock
shall not be sufficient to permit exercise of this Warrant, the Corporation
will take such corporate action as may, in the opinion of its counsel, be
necessary to increase its authorized but unissued shares of Common Stock to
such number of shares as shall be sufficient for such purposes.

 

                3.2           No Impairment.  Except and to the extent as waived or
consented to by the Holder, the Corporation will not, by amendment of its
Articles of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any
of the terms to be observed or performed hereunder by the Corporation, but will
at all times in good faith assist in the carrying out of all the provisions of
this Warrant and in the taking of all such action as may be necessary or
appropriate in order to protect the exercise rights of the Holder against
impairment.

 

                3.3           Notices of Record Date.  In the event of any taking by the Corporation
of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend (other
than a cash dividend which is the same as cash dividends paid in previous
quarters) or other distribution, the Corporation shall mail to the Holder, at
least ten (10) days prior to the date specified herein, a notice specifying the
date on which any such record is to be taken for the purpose of such dividend
or distribution.

 

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4.             Representations of Holder.

 

                4.1           Acquisition of Warrant for Personal
Account.  The Holder represents and
warrants that it is acquiring the Warrant solely for its account for investment
and not with a view to or for sale or distribution of said Warrant or any part
thereof.  The Holder also represents that
the entire legal and beneficial interests of the Warrant and Exercise Shares
the Holder is acquiring is being acquired for, and will be held for, its
account only.

 

                4.2           Securities Are Not Registered.

 

                (a)           The Holder understands that the Warrant and the Exercise
Shares have not been registered under the Securities Act of 1933, as amended
(the “Securities  Act”) on the basis that no
distribution or public offering of the stock of the Corporation is to be
effected.  The Holder realizes that the
basis for the exemption may not be present if, notwithstanding its
representations, the Holder has a present intention of acquiring the securities
for a fixed or determinable period in the future, selling (in connection with a
distribution or otherwise), granting any participation in, or otherwise
distributing the securities.  The Holder
has no such present intention.

 

                (b)           The Holder recognizes that the Warrant and the Exercise
Shares must be held indefinitely unless they are subsequently registered under
the Act or an exemption from such registration is available.  The Holder recognizes that the Corporation
has no obligation to register the Warrant or the Exercise Shares of the
Corporation (except as provided in the Registration Rights Agreement of even
date herewith between the Holder and the Corporation).

 

                (c)           The Holder is aware that neither the Warrant nor the
Exercise Shares may be sold pursuant to Rule 144 adopted under the Act unless
certain conditions are met, including, among other things, the existence of a
public market for the shares, the availability of certain current public
information about the Corporation, the resale following the required holding
period under Rule 144 and the number of shares being sold during any three
month period not exceeding specified limitations.  Holder is aware that certain of the
conditions for resale set forth in Rule 144 have not been satisfied.

 

                4.3           Disposition of Warrant and Exercise
Shares.  The Holder understands and
agrees that all certificates evidencing the shares to be issued to the Holder
may bear the following legend:

 

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

 

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

 

5.             Adjustment of Exercise Price.  In the event of changes in the
outstanding Common Stock of the Corporation by reason of stock dividends,
split-ups, recapitalizations, reclassifications, combinations or exchanges of
shares, separations, reorganizations, liquidations, or the like prior to the
exercise of this Warrant (or portion thereof), the number and class of shares
available under the Warrant (or portion thereof) in the aggregate and the
Exercise Price shall be correspondingly adjusted to give the Holder of the
Warrant (or portion thereof), on exercise for the same aggregate Exercise
Price, the total number, class, and kind of shares as the Holder would have
owned had the Warrant (or portion thereof) been exercised immediately prior to
the event and had the Holder continued to hold such shares until after the
event requiring adjustment.  The form of
this Warrant need not be changed because of any adjustment in the number of
Exercise Shares subject to this Warrant.

 

6.             Fractional Shares.  No fractional shares shall be
issued upon the exercise of this Warrant as a consequence of any adjustment
pursuant hereto.  All Exercise Shares
(including fractions) issuable upon exercise of this Warrant may be aggregated
for purposes of determining whether the exercise would result in the issuance
of any fractional share.  If, after
aggregation, the exercise would result in the issuance of a fractional share,
the Corporation shall, in lieu of issuance of any fractional share, pay the
Holder otherwise entitled to such fraction a sum in cash equal to the product
resulting from multiplying the then current fair market value of an Exercise
Share by such fraction.

 

7.             No Stockholder Rights.  This Warrant in and of itself shall
not entitle the Holder to any voting rights or other rights as a stockholder of
the Corporation.

 

8.             Transfer of Warrant.  Subject to applicable laws, the
restriction on transfer set forth on the first page of this Warrant, this
Warrant and all rights hereunder are transferable, by the Holder in person or
by duly authorized attorney, upon delivery of this Warrant and the form of
assignment attached hereto to any transferee designated by Holder.  The transferee shall sign an investment
letter in form and substance satisfactory to the Corporation.

 

9.             Lost, Stolen, Mutilated or
Destroyed Warrant. 
If this Warrant is lost, stolen, mutilated or destroyed, the
Corporation may, on such terms as to indemnity or otherwise as it may
reasonably impose (which shall, in the case of a mutilated Warrant, include the
surrender thereof), issue a new Warrant of like denomination and tenor as the
Warrant so lost, stolen, mutilated or destroyed.  Any such new Warrant shall constitute an
original contractual obligation of the Corporation, whether or not the
allegedly lost, stolen, mutilated or destroyed Warrant shall be at any time enforceable
by anyone.

 

10.          Notices, etc.  All notices and other
communications required or permitted hereunder shall be in writing and shall be
sent by telex, telegram, express mail or other 

 

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form of rapid communications, if possible, and if not then
such notice or communication shall be mailed by first-class mail, postage
prepaid, addressed in each case to the party entitled thereto at the following
addresses: (a) if to the Corporation, to Surge Global Energy, Inc., Attention:
Secretary, at 12220 El Camino Real, Suite 410, San Diego, California USA 92130
Facsimile: (858) 704-5011 and (b) if to the
Holder, to: 

BENJAMIN FINANCIAL LIMITED PARTNERSHIP

2775 VIA DE LA VALLE, SUITE 205, DECMAR CA 92014, or at such other
address as one party may furnish to the other in writing.  Notice shall be deemed effective on the date
dispatched if by personal delivery, telecopy, telex or telegram, two days after
mailing if by express mail, or three days after mailing if by first-class mail.

 

11.          Acceptance.  Receipt of this Warrant by the
Holder shall constitute acceptance of and agreement to all of the terms and
conditions contained herein.

 

12.          Governing Law.  This Warrant and all rights,
obligations and liabilities hereunder shall be governed by the laws of the
State of New York.

 

                IN
WITNESS WHEREOF, the Corporation has caused this Warrant to be
executed by its duly authorized officer as of the date first set forth above.

 

 

 

	
  SURGE GLOBAL ENERGY, INC.

  
	
   

  	
   

  
	
  By:

  	
  /s/ Fred W. Kelly

  
	
  Name:

  	
  Fred W. Kelly

  
	
  Title:

  	
  CEO

  

 

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NOTICE OF EXERCISE

 

 

 

TO: SURGE GLOBAL ENERGY, INC.

 

 

 

(1)           The undersigned hereby elects to
purchase                             
shares of the  Common Stock of SURGE GLOBAL ENERGY, INC.
(the “Corporation”) pursuant to the
terms of the attached Warrant, and tenders herewith payment of the exercise
price in full, together with all applicable transfer taxes, if any.

 

(2)           Please issue a certificate or
certificates representing said shares of Common Stock in the name of the
undersigned or in such other name as is specified below:

 

 

	
   

  
	
   

  
	
  (Name)

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  (Address)

  
	
   

  

 

 

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The undersigned represents that (i) the
aforesaid shares of  Common Stock are
being acquired for the account of the undersigned for investment and not with a
view to, or for resale in connection with, the distribution thereof and that
the undersigned has no present intention of distributing or reselling such shares;
(ii) the undersigned is aware of the Corporation’s business affairs and
financial condition and has acquired sufficient information about the
Corporation to reach an informed and knowledgeable decision regarding its
investment in the Corporation; (iii) the undersigned is experienced in making
investments of this type and has such knowledge and background in financial and
business matters that the undersigned is capable of evaluating the merits and
risks of this investment and protecting the undersigned’s own interests; (iv)
the undersigned understands that the shares of 
Common Stock issuable upon exercise of this Warrant have not been
registered under the Securities Act of 1933, as amended (the “Securities Act”), by reason of a
specific exemption from the registration provisions of the Securities Act,
which exemption depends upon, among other things, the bona fide nature of the
investment intent as expressed herein, and, because such securities have not
been registered under the Securities Act, they must be held indefinitely unless
subsequently registered under the Securities Act or an exemption from such
registration is available; (v) the undersigned is aware that the aforesaid
shares of  Common Stock may not be sold
pursuant to Rule 144 adopted under the Securities Act unless certain conditions
are met and until the undersigned has held the shares for the number of years
prescribed by Rule 144 and that among the conditions for use of the Rule is the
availability of current information to the public about the Corporation; and
(vi) the undersigned agrees not to make any disposition of all or any part of
the aforesaid shares of  Common Stock
unless and until there is then in effect a registration statement under the Securities
Act covering such proposed disposition and such disposition is made in
accordance with said registration statement, or the undersigned has provided
the Corporation with an opinion of counsel satisfactory to the Corporation,
stating that such registration is not required.

 

 

 

	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (Print Name)

  	
  (Signature)

  
	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
					

 

 

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ASSIGNMENT FORM

 

(To
assign the foregoing Warrant, execute this form and supply required
information.  Do not use this form to
purchase shares.)

 

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

 

 

 

	
  Name:

  	
   

  
	
  (Please Print)

  
	
   

  
	
  Address:

  	
   

  
	
  (Please Print)

  
	
   

  
	
  Dated:

  	
   

  	
   

  
				

 

 

 

	
  Holder’s
  Signature:

  	
   

  	
   

  
	
   

  
	
  Holder’s Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  

 

 

 

NOTE:  The signature to this Assignment Form must
correspond with the name as it appears on the face of the Warrant, without
alteration or enlargement or any change whatever.  Officers of corporations and those acting in
a fiduciary or other representative capacity should file proper evidence of
authority to assign the foregoing Warrant.

 

 

 

 

 

7Exhibit 10.28

 

REGISTRATION RIGHTS AGREEMENT

 

                This
Registration Rights Agreement (this “Agreement”) is made and entered
into as of November 30, 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 day following the
Closing Date.

 

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

 

“Indemnified
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.

 

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(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 jurisdictions in the United 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 of 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

5

 

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 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 for 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 advice,
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 Indemnified Party or Indemnified Person, consent
to entry of any judgment or enter into any settlement or other compromise 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 from 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 who was not guilty of fraudulent
misrepresentation; and (ii) contribution by any seller 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 rights, 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 rights
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 given, 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 given by
Holders of all of the Registrable Securities to which such waiver or consent
relates; provided, however, that the provisions of this sentence
may not be amended, modified, or supplemented except in accordance with the
provisions of the immediately preceding sentence.

 

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

 

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

 

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

 

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

 

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

 

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

 

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:

  	
  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, SUITE 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 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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