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  Exhibit 10.127    
    

THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR COMMERCE ENERGY
GROUP, INC. SHALL HAVE RECEIVED AN OPINION OF COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED.

WARRANT
TO PURCHASE 

SHARES
OF COMMON STOCK 

OF

 
 

  COMMERCE ENERGY GROUP, INC.    
    

Expires
August 21, 2013 

			
	 No.: W-4
	 	 Number of Shares: 250,000

	 Date of Issuance: August 21, 2008
	 	 

        FOR
VALUE RECEIVED, subject to the provisions hereinafter set forth, the undersigned, Commerce Energy Group, Inc., a Delaware corporation (together with its successors and
assigns, the "Issuer"), hereby certifies that the Lee E. Mikles Revocable Trust Dated March 26, 1996 or its registered affiliates is entitled to subscribe for and purchase, during the period
specified in this Warrant, up to Two Hundred Fifty Thousand (250,000) shares (subject to adjustment as hereinafter provided) of the duly authorized, validly issued, fully paid and
non-assessable Common Stock of the Issuer, at an exercise price per share equal to the Warrant Price then in effect, subject, however, to the provisions and upon the terms and conditions
hereinafter set forth. Capitalized terms used in this Warrant and not otherwise defined herein shall have the respective meanings specified in Section 9 hereof. 

        1.    Term.    The right to subscribe for and purchase shares of Warrant Stock represented hereby shall commence on
August 21, 2008 and shall expire at 5:00 p.m., eastern time, on August 21, 2013 (such period being the "Term"). 

        2.    Method of Exercise Payment: Issuance of New Warrant: Transfer and Exchange.    

        (a)    Time of Exercise.    The purchase rights represented by this Warrant may be exercised in whole or in part at
any time and from time to time during the Term commencing on August 21, 2008. 

        (b)    Method of Exercise.    The Holder hereof may exercise this Warrant, in whole or in part, by the surrender of
this Warrant (with the exercise form attached hereto duly executed) at the principal office of the Issuer, and by the payment to the Issuer of an amount of consideration therefor equal to the Warrant
Price in effect on the date of such exercise multiplied by the number of shares of Warrant Stock with respect to which this Warrant is then being exercised, payable at such Holder's election
(i) by certified or official bank check or by wire transfer to an account designated by the Issuer, (ii) by "cashless exercise" in accordance with the provisions of subsection (c)
of this Section 2, or (iii) by a combination of the foregoing methods of payment selected by the Holder of this Warrant. 

        (c)    Cashless Exercise.    Notwithstanding any provisions herein to the contrary, if the Per Share Market Value of
one share of Common Stock is greater than the Warrant Price (at the date of calculation as set forth below), in lieu of exercising this Warrant by payment of cash, the Holder 

 

may
exercise this Warrant by a cashless exercise and shall receive the number of shares of Common Stock equal to an amount (as determined below) by surrender of this Warrant at the principal office of
the Issuer together with the properly endorsed Notice of Exercise in which event the Issuer shall issue to the Holder a number of shares of Common Stock computed using the following formula: 

X =
Y - (A)(Y)

                  B 

					
	Where	 	X =	 	the number of shares of Common Stock to be issued to the Holder.
	

 	
 	
Y =	
 	
the number of shares of Common Stock purchasable upon exercise of all of the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being exercised.
	

 	
 	
A =	
 	
the Warrant Price.
	

 	
 	
B =	
 	
the Per Share Market Value of one share of Common Stock.

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

        (d)    Issuance of Stock Certificates.    In the event of any exercise of the rights represented by this Warrant in
accordance with and subject to the terms and conditions hereof, (i) certificates for the shares of Warrant Stock so purchased shall be dated the date of such exercise and delivered to the
Holder hereof within a reasonable time, not exceeding three (3) Trading Days after such exercise (the "Delivery Date") or, if the Issuer's
Securities are eligible for such manner of delivery, then at the request of the Holder, issued and delivered to the Depository Trust Company ("DTC") account on the Holder's behalf via the Deposit
Withdrawal Agent Commission System ("DWAC"), within a reasonable time, not exceeding three (3) Trading Days after such exercise, and the Holder hereof shall be deemed for all purposes to be the
Holder of the shares of Warrant Stock so purchased as of the date of such exercise and (ii) unless this Warrant has expired, a new Warrant representing the number of shares of Warrant Stock, if
any, with respect to which this Warrant shall not then have been exercised (less any amount thereof which shall have been canceled in payment or partial payment of the Warrant Price as hereinabove
provided) shall also be issued to the Holder hereof at the Issuer's expense within such time. 

        (e)    Transferability of Warrant.    Subject to Section 2(g), this Warrant may be transferred, in whole or in
part, by a Holder without the consent of the Issuer. If transferred pursuant to this paragraph, this Warrant may be transferred on the books of the Issuer by the Holder hereof in person or by the
Holder's duly authorized attorney, upon surrender of this Warrant at the principal office of the Issuer, properly endorsed (by the Holder executing an assignment in the form attached hereto) and upon
payment of any necessary transfer tax or other governmental charge imposed upon such transfer. This Warrant is exchangeable at the principal office of the Issuer for Warrants for the purchase of the
same aggregate number of shares of Warrant Stock, each new Warrant to represent the right to purchase such number of shares of Warrant Stock as the Holder hereof shall designate at the time of such
exchange. All Warrants issued on transfers or exchanges shall be dated the Original Issue Date and shall be identical with this Warrant except as to the
number of shares of Warrant Stock issuable pursuant thereto. 

        (f)    Continuing Rights of Holder.    The Issuer will, at the time of or at any time after each exercise of this
Warrant, upon the request of the Holder hereof, acknowledge in writing the extent, if any, of its continuing obligation to afford to such Holder all rights to which such Holder shall continue to be
entitled after such exercise in accordance with the terms of this Warrant, provided

2

 

that
if any such Holder shall fail to make any such request, the failure shall not affect the continuing obligation of the Issuer to afford such rights to such Holder. 

        (g)    Compliance with Securities Laws.    

        (i)    The
Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant and the shares of Warrant Stock to be issued upon exercise hereof are being acquired
solely for the Holder's own account and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell or otherwise dispose of this Warrant or any shares of Warrant
Stock to be issued upon
exercise hereof except pursuant to an effective registration statement, or an exemption from registration, under the Securities Act and any applicable state securities laws. 

        (ii)   Except
as provided in paragraph (iii) below, this Warrant and all certificates representing shares of Warrant Stock issued upon exercise hereof shall be stamped
or imprinted with a legend in substantially the following form: 

THIS
WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES
LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR COMMERCE ENERGY GROUP, INC. SHALL HAVE
RECEIVED AN OPINION OF COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED. 

        (iii)  The
restrictions imposed by this subsection (g) upon the transfer of this Warrant or the shares of Warrant Stock to be purchased upon exercise hereof shall
terminate (A) when such securities shall have been resold pursuant to an effective registration statement under the Securities Act, (B) upon the Issuer's receipt of an opinion of
counsel, in form and substance reasonably satisfactory to the Issuer, addressed to the Issuer to the effect that such restrictions are no longer required to ensure compliance with the Securities Act
and state securities laws, or (C) upon the Issuer's receipt of other evidence reasonably satisfactory to the Issuer that such registration and qualification under the Securities Act and state
securities laws are not required. Whenever such restrictions shall cease and terminate as to any such securities, the Holder thereof shall be entitled to receive from the Issuer (or its transfer agent
and registrar), without expense (other than applicable transfer taxes, if any), new Warrants (or, in the case of shares of Warrant Stock, new stock certificates) of like tenor not bearing the
applicable legend required by paragraph (ii) above relating to the Securities Act and state securities laws. 

        (h)    Buy In.    In addition to any other rights available to the Holder, if the Issuer fails to cause its transfer
agent to transmit to the Holder a certificate or certificates representing the Warrant Stock pursuant to an exercise on or before the Delivery Date (or, in the case of any exercise of this Warrant
after the six month anniversary of the Original Issue Date, any such certificate representing Warrant Stock contains any legend restricting transfer (including any legend set forth in
Section 2(g)(ii) above)), and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) shares of Common Stock to deliver in satisfaction
of a sale by the Holder of the Warrant Stock which the Holder anticipated receiving upon such exercise (a "Buy-In"), then the Issuer shall
(1) pay in cash to the Holder the amount by which (x) the Holder's total purchase price (including brokerage commissions, if any) for the shares of Common Stock so purchased exceeds
(y) the amount obtained by multiplying (A) the number of shares of Warrant. Stock that the Issuer was required to deliver to the Holder in 

3

 

connection
with the exercise at issue times, (B) the price at which the sell order giving rise to such purchase obligation was executed, and (2) at the option of the Holder, either
reinstate the portion of the Warrant and equivalent number of shares of Warrant Stock for which such exercise was not honored or deliver to the Holder the number of shares of Common Stock that would
have been issued had the Issuer timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to
cover a Buy-In with respect to an attempted exercise of shares of Common Stock with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (1) of
the immediately preceding sentence the Issuer shall be required to pay the Holder $1,000. The Holder shall provide the Issuer written notice indicating the amounts payable to the Holder in respect of
the Buy-In, together with applicable confirmations and other evidence reasonably requested by the Issuer. Nothing herein shall limit a Holder's right to pursue any other remedies available
to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Issuer's failure to timely deliver certificates
representing shares of Common Stock upon exercise of this Warrant as required pursuant to the terms hereof. 

        3.    Stock Fully Paid; Reservation and Listing of Shares; Covenants.    

        (a)    Stock Fully Paid.    The Issuer represents, warrants, covenants and agrees that all shares of Warrant Stock
which may be issued upon the exercise of this Warrant or otherwise hereunder will, upon issuance, be duly authorized, validly issued, fully paid and non-assessable and free from all taxes,
liens and charges created by or through Issuer. The Issuer further covenants and agrees that during the period within which this Warrant may be exercised, the Issuer will at all times have authorized
and reserved for the purpose of the issue upon exercise of this Warrant a number of shares of Common Stock equal to at least 150% of the aggregate number of shares of Common Stock exercisable
hereunder to provide for the exercise of this Warrant (without regard to limitations on exercisability set forth in Section 8). 

        (b)    Reservation.    If any shares of Common Stock required to be reserved for issuance upon exercise of this
Warrant or as otherwise provided hereunder require registration or qualification with any governmental authority under any federal or state law before such shares may be so issued, the Issuer
will in good faith use its best efforts as expeditiously as possible at its expense to cause such shares to be duly registered or qualified. If the Issuer shall list any shares of Common Stock on any
securities exchange or market it will, at its expense, list thereon, maintain and increase when necessary such listing, of, all shares of Warrant Stock from time to time issued upon exercise of this
Warrant or as otherwise provided hereunder, and, to the extent permissible under the applicable securities exchange's rules, all unissued shares of Warrant Stock which are at any time issuable
hereunder, so long as any shares of Common Stock shall be so listed. The Issuer will also so list on each securities exchange or market, and will maintain such listing of, any other securities which
the Holder of this Warrant shall be entitled to receive upon the exercise of this Warrant if at the time any securities of the same class shall be listed on such securities exchange or market by the
Issuer. 

        (c)    Covenants.    

        (i)    The
Issuer shall not by any action including, without limitation, amending the Certificate of Incorporation or the by-laws of the Issuer, or through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other action, avoid or seek to avoid the observance or performance of any of the terms of
this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary
or appropriate to protect the rights of the Holder hereof against dilution (to the extent specifically provided herein) or impairment. Without limiting the generality of the foregoing, the Issuer will
(i) not permit the par value, if 

4

 

any,
of its Common Stock to exceed the then effective Warrant Price, (ii) not amend or modify any provision of the Certificate of Incorporation or by-laws of the Issuer in any
manner that would adversely affect the rights of the Holders of the Warrants, (iii) take all such action as may be reasonably necessary in order that the Issuer may validly and legally issue
fully paid and nonassessable shares of Common Stock, free and clear of any liens, claims, encumbrances and restrictions (other than as provided herein) upon the exercise of this Warrant, and
(iv) use its best efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be reasonably necessary to enable the
Issuer to perform its obligations under this Warrant. 

        (ii)   To
the extent that amendments to this Warrant are required in connection    •    with the filing of a listing application with the
American Stock Exchange in connection with the transactions contemplated hereby, the Issuer and the Holder shall cooperate in good faith to reach mutually acceptable resolutions with regard to such
amendments, without penalty; provided that the Holder has, in its sole discretion, determined such amendments to be advisable. 

        (d)    Loss, Theft. Destruction of Warrants.    Upon receipt of evidence satisfactory to the Issuer of the ownership
of and the loss, theft, destruction or mutilation of any Warrant and, in the case of any such loss, theft or destruction, upon receipt of indemnity or security satisfactory to the Issuer or, in the
case of any such mutilation, upon surrender and cancellation of such Warrant, the Issuer will make and
deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the right to purchase the same number of shares of Common Stock. 

        4.    Adjustment of Warrant Price and Warrant Share Number.    The number of shares of Common Stock for which this
Warrant is exercisable, and the price at which such shares may be purchased upon exercise of this Warrant, shall be subject to adjustment from time to time as set forth in this Section 4. The
Issuer shall give the Holder notice of any event described below which requires an adjustment pursuant to this Section 4 in accordance with Section 5. 

        (a)    Recapitalization, Reorganization, Reclassification. Consolidation, Merger or Sale.    

        (i)    In
case the Issuer after the Original Issue Date shall do any of the following (each, a "Triggering Event"):
(a) consolidate with or merge into any other Person and the Issuer shall not be the continuing or surviving corporation of such consolidation or merger, or (b) permit any other Person to
consolidate with or merge into the Issuer and the Issuer shall be the continuing or surviving Person but, in connection with such consolidation or merger, any Capital Stock of the Issuer shall be
changed into or exchanged for Securities of any other Person or cash or any other property, or (c) transfer all or substantially all of its properties or assets to any other Person, or
(d) effect a capital reorganization or reclassification of its Capital Stock, then, and in the case of each such Triggering Event, proper provision shall be made so that, upon the basis and the
terms and in the manner provided in this Warrant, the Holder of this Warrant shall be entitled upon the exercise hereof at any time after the consummation of such Triggering Event, to the extent this
Warrant is not exercised prior to such Triggering Event, to receive at the Warrant Price in effect at the time immediately prior to the consummation of such Triggering Event in lieu of the Common
Stock issuable upon such exercise of this Warrant prior to such Triggering Event, the Securities, cash and property to which such Holder would have been entitled upon the consummation of such
Triggering Event if such Holder had exercised the rights represented by this Warrant (without giving effect to the limitations on exercise set forth in Section 8 hereof) immediately prior
thereto (including the right to elect the type of consideration, if applicable), subject to adjustments (subsequent to such corporate action) as nearly equivalent as possible to the adjustments 

5

 

provided
for elsewhere in this Section 4. Unless the surviving entity in any such Triggering Event is a public company under the Securities Exchange Act of 1934, the common equity securities of
which are traded or quoted on a national securities exchange or the OTC Bulletin Board (a "Qualifying Entity"), the Holder, at its option, shall be
permitted to require that the Issuer pay to the Holder an amount equal to the Black-Scholes value of this Warrant. 

        (ii)   Notwithstanding
anything contained in this Warrant to the contrary and so long as the surviving entity is a Qualifying Entity, the Issuer will not be deemed to have
effected any Triggering Event if, prior to the consummation thereof, each Person (other than the Issuer) which may be required to deliver any Securities, cash or property upon the exercise of this
Warrant as provided herein shall assume, by written instrument delivered to the Holder of this Warrant and reasonably satisfactory to
the Holder, (A) the obligations of the Issuer under this Warrant (and if the Issuer shall survive the consummation of such Triggering Event, such assumption shall be in addition to, and shall
not release the Issuer from, any continuing obligations of the Issuer under this Warrant) and (B) the obligation to deliver to such Holder such shares of Securities, cash or property  as, in
accordance with the foregoing provisions of this subsection (a), such Holder shall be entitled to receive, and such Person shall have
similarly delivered to such Holder, an opinion of counsel for such Person, which shall be reasonably satisfactory to the Holder, stating that this Warrant shall thereafter continue in full force and
effect and the terms hereof (including, without limitation, all of the provisions of this subsection (a)) shall be applicable to the Securities, cash or property which such Person may be
required to deliver upon any exercise of this Warrant or the exercise of any rights pursuant hereto. 

        (b)    Stock Dividends, Subdivisions and Combinations.    If at any time the Issuer shall: 

        (i)    set
a record date or take a record of the holders of its Common Stock for the purpose of entitling them to receive a dividend payable in, or other distribution of,
shares of Common Stock, 

        (ii)   subdivide
its outstanding shares of Common Stock into a larger number of shares of Common Stock, or 

        (iii)  combine
its outstanding shares of Common Stock into a smaller number of shares of Common Stock, 

then
(1) the number of shares of Common Stock for which this Warrant is exercisable immediately after the occurrence of any such event shall be adjusted to equal the number of shares of Common
Stock which a record holder of the same number of shares of Common Stock for which this Warrant is exercisable immediately prior to the occurrence of such event would own or be entitled to receive
after the happening of such event (without giving effect to the limitations on exercise set forth in Section 8 hereof), and (2) the Warrant Price then in effect shall be adjusted to
equal (A) the Warrant Price then in effect multiplied by the number of shares of Common Stock for which this Warrant is exercisable immediately prior to the adjustment (without giving effect to
the limitations on exercise set forth in Section 8 hereof) divided by (B) the number of shares of Common Stock for which this Warrant is exercisable immediately after such adjustment
(without giving effect to the limitations on exercise set forth in Section 8 hereof). 

        (c)    Certain Other Distributions.    If at any time the Issuer shall set a record date or take a record of the
holders of its Common Stock for the purpose of entitling them to receive any dividend or other distribution of: 

        (i)    cash
(other than a cash dividend payable out of earnings or earned surplus legally available for the payment of dividends under the laws of the jurisdiction of
incorporation of the Issuer), 

6

 

        (ii)   any
evidences of its indebtedness, any shares of stock of any class or any other securities or property of any nature whatsoever (other than cash or Common Stock), or 

        (iii)  any
warrants or other rights to subscribe for or purchase any evidences of its indebtedness, any shares of stock of any class or any other securities or property of
any nature whatsoever (other than cash or Common Stock), 

then
(1) the number of shares of Common Stock for which this Warrant is exercisable shall be adjusted to equal the product of the number of shares of Common Stock for which this Warrant is
exercisable immediately prior to such adjustment (without giving effect to the limitations on exercise set forth in Section 8 hereof) multiplied by a fraction (A) the numerator of which
shall be the Per Share Market Value of Common Stock at the date of taking such record and (B) the denominator of which shall be such Per Share Market Value minus the amount allocable to one
share of Common Stock of any such cash so distributable and of the fair value (as determined in good faith by the Board of Directors of the Issuer and supported by an opinion from an investment
banking firm reasonably acceptable to the Holder) of any and all such evidences of indebtedness, shares of stock, other securities or property or warrants or other subscription or purchase rights so
distributable, and (2) the Warrant Price then in effect shall be adjusted to equal (A) the Warrant Price then in effect multiplied by the number of shares of Common Stock for which this
Warrant is exercisable immediately prior to the adjustment (without giving effect to the limitations on exercise set forth in Section 8 hereof) divided by (B) the number of shares of
Common Stock for which this Warrant is exercisable immediately after such adjustment (without giving effect to the limitations on exercise set forth in Section 8 hereof). A reclassification of
the Common Stock (other than a change in par value, or from par value to no par value or from no par value to par value) into shares of Common Stock and shares of any other class of stock shall be
deemed a distribution by the Issuer to the holders of its Common Stock of such shares of such other class of stock within the meaning of this Section 4(c) and, if the outstanding shares of
Common Stock shall be changed into a larger or smaller number of shares of Common Stock as a part of such reclassification, such change shall be deemed a subdivision or combination, as the case may
be, of the outstanding shares of Common Stock within the meaning of Section 4(b). 

        (d)    Other Provisions applicable to Adjustments under this Section.    The following provisions shall be applicable
to the making of adjustments of the number of shares of Common Stock for which this Warrant is exercisable and the Warrant Price then in effect provided for in this Section 4: 

        (i)    Fractional Interests.    In computing adjustments under this Section 4, fractional interests in Common
Stock shall be taken into account to the nearest one one-hundredth (1/100th) of a share. 

        (ii)    When Adjustment Not Required.    If the Issuer shall take a record of the holders of its Common Stock for the
purpose of entitling them to receive a dividend or distribution or subscription or purchase rights and shall, thereafter and before the distribution to stockholders thereof, legally abandon its plan
to pay or deliver such dividend, distribution, subscription or purchase rights, then thereafter no adjustment shall be required by reason of the taking of such record and any such adjustment
previously made in respect thereof shall be rescinded and annulled. 

        (e)    Form of Warrant after Adjustments.    The form of this Warrant need not be changed because of any adjustments
in the Warrant Price or the number and kind of securities purchasable upon exercise of this Warrant. 

        (f)    Escrow of Property.    If after any property becomes distributable pursuant to this Section 4 by reason
of the taking of any record of the holders of Common Stock, but prior to the occurrence 

7

 

of
the event for which such record is taken, and the Holder exercises this Warrant, such property shall be held in escrow for the Holder by the Issuer to be distributed to the Holder upon and to the
extent that the event actually takes place, upon payment of the then current Warrant Price. Notwithstanding any other provision to the contrary herein, if the event for which such record was taken
fails to occur or is rescinded, then such escrowed property shall be returned to the Issuer. 

        5.    Notice of Adjustments.    Whenever the Warrant Price or Warrant Share Number shall be adjusted pursuant to
Section 4 hereof (for purposes of this Section 5, each an "adjustment"), the Issuer shall cause its Chief Financial Officer to prepare and execute a certificate setting forth, in
reasonable detail, the event requiring the adjustment, the amount of the adjustment, the method by which such adjustment was calculated (including a description of the basis on which the Board made
any determination hereunder), and the Warrant Price and Warrant Share Number after giving effect to such adjustment, and shall cause copies of such certificate to be delivered to the Holder of this
Warrant promptly after each adjustment. Any dispute between the Issuer and the Holder of this Warrant with respect to the matters set forth in such certificate may at the option of the Holder of this
Warrant be submitted to one of the national accounting firms currently known as the "big four" selected by the Holder, provided that the Issuer shall
have ten (10) days after receipt of notice from such Holder of its selection of such firm to object thereto, in which case such Holder shall select another such firm and the Issuer shall have
no such right of objection. The firm selected by the Holder of this Warrant as provided in the preceding sentence shall be instructed to deliver a written opinion as to such matters to the Issuer and
such Holder within thirty (30) days after submission to it of such dispute. Such opinion shall be final and binding on the parties hereto. 

        6.    Fractional Shares.    No fractional shares of Warrant Stock will be issued in connection with any exercise
hereof, but in lieu of such fractional shares, the Issuer shall at its option either (a) make a cash payment therefor equal in amount to the product of the applicable fraction multiplied by the
Per Share Market Value then in effect or (b) issue one whole share in lieu of such fractional share. 

        7.    Put Right.    At any time commencing on February 20, 2009, the Holder shall have the right, upon delivery
of not less than five (5) Business Days' prior written notice to the Issuer, to cause the Issuer to purchase this Warrant for cash at a redemption price equal to product obtained by multiplying
(i) the number of Warrant Shares for which this Warrant is then exercisable (without giving effect to any splits, combinations and the like occurring after the date hereof) by (ii) $0.30
(the "Redemption Price"). Payment of the Redemption Price shall be made on the date set forth for redemption in the notice delivered by the Holder in
accordance with this Section 7. To the extent the Redemption Price is not paid when due, such amount shall bear interest at the rate equal to the lesser of 18% per annum or the maximum rate
permitted by applicable law. The Issuer acknowledges and agrees that its obligation to pay the Redemption Price is secured by the collateral pledged to the Holder pursuant to the Security Agreement
(as defined in the Purchase Agreement). 

        8.    Certain Exercise Restrictions.    

        (a)   Notwithstanding
anything to the contrary set forth in this Warrant, at no time may a holder of this Warrant exercise this Warrant if the number of shares of Common Stock
to be issued pursuant to such exercise would exceed, when aggregated with all other shares of Common Stock owned by such holder at such time, the number of shares of Common Stock which would result in
such holder beneficially owning (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended; and the rules thereunder) in excess of 4.99% of all of the
Common Stock outstanding at such time; provided, however, that upon a holder of this Warrant providing the Issuer with sixty-one (61) days notice (pursuant to Section 13
hereof) that such holder would like to waive this Section 8(a) with regard to any or all shares of Common Stock issuable upon exercise of this Warrant, this Section 8(a) will be of no
force or effect with regard to all or a portion of the Warrant referenced in such notice; provided, further, that this 

8

 

Section 8(b)
shall be of no further force or effect during the sixty-one (61) days immediately preceding the expiration of the term of this Warrant. 

        (b)   Notwithstanding
anything to the contrary set forth in this Warrant, at no time may a holder of this Warrant exercise this Warrant if the number of shares of Common Stock
to be issued pursuant to such exercise would exceed, when aggregated with all other shares of Common Stock owned by such holder at such time, the number of shares of Common Stock which would result in
such holder beneficially owning (as determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended, and the rules
thereunder) in excess of 9.99% of all of the Common Stock outstanding at such time; provided, however, that upon a holder of this Warrant providing the Issuer with sixty-one
(61) days notice (pursuant to Section 13 hereof) that such holder would like to waive this Section 8(b) with regard to any or all shares of Common Stock issuable upon exercise of
this Warrant, this Section 8(b) will be of no force or effect with regard to all or a portion of the Warrant referenced in such notice; provided, further, that this Section 8(b) shall be
of no further force or effect during the sixty-one (61) days immediately preceding the expiration of the term of this Warrant. 

        9.    Definitions.    For the purposes of this Warrant, the following terms have the following meanings: 

        "Board" means the Board of Directors of the Issuer. 

        "Business Day" means, even if not capitalized, any day banking transactions can be conducted in New York City, New York, and does not
include any day which is a federal or state holiday in New York City, New York. 

        "Capital Stock" means and includes (i) any and all shares, interests, participations or other equivalents of or interests in
(however designated) corporate stock, including, without limitation, shares of preferred or preference stock, (ii) all partnership interests (whether general or limited) in any Person which is
a partnership, (iii) all membership interests or limited liability company interests in any limited liability company, and (iv) all equity or ownership interests in any Persdn of any
other type. 

        "Certificate of Incorporation" means the Certificate of Incorporation of the Issuer, as amended, as in
effect on the Original Issue Date, and as hereafter from time to time amended, modified, supplemented or restated in accordance with the terms hereof and thereof and pursuant
to applicable law. 

        "Common Stock" means the Common Stock, par value $0.001 per share, of the Issuer and any other Capital Stock into which such stock may
hereafter be changed. 

        "Governmental Authority" means any governmental, regulatory or self-regulatory entity, department, body, official, authority,
commission, board, agency or instrumentality, whether federal, state or local, and whether domestic or foreign. 

        "Holders" mean the Persons who shall from time to time own any Warrant. The term "Holder" means one of the Holders. 

        "Independent Appraiser" means a nationally recognized or major regional investment banking firm or firm of independent certified public
accountants of recognized standing (which may be the firm that regularly examines the financial statements of the Issuer) that is regularly engaged in the business of appraising the Capital Stock or
assets of corporations or other entities as going concerns, and which is not affiliated with either the Issuer or the Holder of any Warrant. 

        "Issuer" means Commerce Energy Group, Inc., a Delaware corporation, and its successors. 

9

 

        "Notes" shall have the meaning set forth in the Purchase Agreement. 

        "Original Issue Date" means August 21, 2008. 

        "OTC Bulletin Board" means the over-the-counter electronic bulletin board. 

        "Other Common" means any other Capital Stock of the Issuer of any class which shall be authorized at any time after the date of this
Warrant (other than Common Stock) and which shall have the right to participate in the distribution of earnings and assets of the Issuer without limitation as to amount. 

        "Person" means an individual, corporation, limited liability company, partnership, joint stock company, trust, unincorporated
organization, joint venture, Governmental Authority or other entity of whatever nature. 

        "Per Share Market Value" means on any particular date (a) the last trading price on any national securities exchange on which the
Common Stock is listed, or, if there is no such price, the closing bid price for a share of Common Stock, either in the over-the-counter market, as reported by the OTC Bulletin
Board or in the National Quotation Bureau Incorporated or similar organization or agency succeeding to its functions of reporting prices) at the close of business on such date, or (b) if the
Common Stock is not then reported by the OTC Bulletin Board or the National Quotation Bureau Incorporated (or similar organization or agency succeeding to its functions of reporting prices), then the
average of the "Pink Sheet" quotes for the Common Stock on such date, or (c) if the Common Stock is not then publicly traded the fair market value of a share of Common Stock on such date  as
determined by the Board in good faith; provided, however, that the Holder, after receipt of the
determination by the Board, shall have the right to select, jointly with the Issuer, an
Independent Appraiser, in which case, the fair market value shall be the determination by such Independent Appraiser; and provided, further that all
determinations of the Per Share Market Value shall be appropriately adjusted for any stock dividends, stock splits or other similar transactions during the period between the date as of which such
market value was required to be determined and the date it is finally determined. The determination of fair market value shall be based upon the fair market value of the Issuer determined on a going
concern basis as between a willing buyer and a willing seller and taking into account all relevant factors determinative of value, and shall be final and binding on all parties. In determining the
fair market value of any shares of Common Stock, no consideration shall be given to any restrictions on transfer of the Common Stock imposed by agreement or by federal or state securities laws, or to
the existence or absence of, or any limitations on, voting rights. 

        "Purchase Agreement" means the Note and Warrant Purchase Agreement dated as of August 21, 2008 among the Issuer and the Holder. 

        "Redemption Price" has the meaning as provided in Section 7 hereof. 

        "Securities" means any debt or equity securities of the Issuer, whether now or hereafter authorized, any instrument convertible into or
exchangeable for Securities or a Security, and any option, warrant or other right to purchase or acquire any Security. "Security" means one of the Securities. 

        "Securities Act" means the Securities Act of 1933, as amended, or any similar federal statute then in effect. 

        "Subsidiary" means any corporation at least 50% of whose outstanding Voting Stock, and a limited liability company at least 50% of whose
membership interests, shall at the time be owned directly or indirectly by the Issuer or by one or more of its Subsidiaries. 

        "Term" has the meaning specified in Section 1 hereof. 

10

 

        "Trading Day" means (a) a day on which the Common Stock is traded on the OTC Bulletin Board, or (b) if the Common Stock is
not traded 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, however, that in the event that the Common Stock is not listed or quoted as set forth in (a) or (b) hereof,
then Trading Day shall mean any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions in the State of New York are authorized or required by law
or other government action to close. 

        "Voting Stock" means, as applied to the Capital Stock of any corporation, Capital Stock of any class or classes (however designated)
having ordinary voting power for the election of a majority of the members of the Board of Directors (or other governing body) of such corporation, other than Capital Stock having such power only by
reason of the happening of a contingency. 

        "Warrants" means the Warrants issued and sold pursuant to the Purchase Agreement, including, without limitation, this Warrant, and any
other warrants of like tenor issued in substitution or exchange for any thereof pursuant to the provisions of Section 2(c), 2(d) or 2(e) hereof or of any of such other Warrants. 

        "Warrant Consideration" has the meaning specified in Section 4(i)(i) hereof. 

        "Warrant Price" initially means U.S. $1.15, as such price may be adjusted from time to time as shall result from the adjustments specified
in this Warrant, including Section 4 hereto. 

        "Warrant Share Number" means at any time the aggregate number of shares of Warrant Stock which may at such time be purchased upon exercise
of this Warrant, after giving effect to all prior adjustments and increases to such number made or required to be made under the terms hereof. 

        "Warrant Stock" means Common Stock issuable upon exercise of any Warrant or Warrants or otherwise issuable pursuant to any Warrant or
Warrants. 

        10.    Other Notices.    In case at any time: 

	(A)
	the
Issuer shall make any distributions to the holders of Common Stock; or

	(B)
	the
Issuer shall authorize the granting to all holders of its Common Stock of rights to subscribe for or purchase any shares of Capital Stock of any class
or other rights; or

	(C)
	there
shall be any reclassification of the Capital Stock of the Issuer; or

	(D)
	there
shall be any capital reorganization by the Issuer; or

	(E)
	there
shall be any (i) consolidation or merger involving the Issuer or (ii) sale, transfer or other disposition of all or substantially all of
the Issuer's property, assets or business (except a merger or other reorganization in which the Issuer shall be the surviving corporation and its shares of Capital Stock shall continue to be
outstanding and unchanged and except a consolidation, merger, sale, transfer or other disposition involving a wholly-owned Subsidiary); or

	(F)
	there
shall be a voluntary or involuntary dissolution, liquidation or winding-up of the Issuer or any partial liquidation of the Issuer or
distribution to holders of Common Stock; 

then,
in each of such cases, the Issuer shall give written notice to the Holder of the date on which (i) the books of the Issuer shall close or a record shall be taken for such dividend,
distribution or subscription rights or (ii) such reorganization, reclassification, consolidation, merger, disposition, dissolution, liquidation or winding-up, as the case may be,
shall take place. Such notice also shall specify the date as of which the holders of Common Stock of record shall participate in such dividend, distribution or subscription rights, or shall be
entitled to exchange their certificates for Common Stock 

11

 

for
securities or other property deliverable upon such reorganization, reclassification, consolidation, merger, disposition, dissolution, liquidation or winding-up, as the case may be.
Such notice shall be given at least twenty (20) days prior to the action in question and not less than twenty (20) days prior to the record date or the date on which the Issuer's
transfer books are closed in respect thereto. The Holder shall have the right to send two (2) representatives selected by it to each meeting, who shall be permitted to attend, but not vote at,
such meeting and any adjournments thereof. This Warrant entitles the Holder to receive copies of all financial and other information distributed or required to be distributed to the holders of the
Common Stock. 

        11.    Amendment and Waiver.    Any term, covenant, agreement or condition in this Warrant may be amended, or
compliance therewith may be waived (either generally or in a particular instance and either retroactively or prospectively), by a written instrument or written instruments executed by the Issuer and
the Holder. 

        12.    Governing Law.    THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.

        13.    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 earlier of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile
telephone number specified for notice prior to 5:00 p.m., eastern time, on a Trading Day, (ii) the Trading Day after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile telephone number specified for notice later than 5:00 p.m., eastern time, on any date and earlier than 11:59 p.m., eastern time, on such date,
(iii) the Trading Day following the date of mailing, if sent by nationally recognized overnight courier service or (iv) actual receipt by the party to whom such notice is required to be
given. The addresses for such communications shall be with respect to the Holder of this Warrant or of Warrant Stock issued pursuant hereto, addressed to such Holder at its last known address or
facsimile number appearing on the books of the Issuer maintained for such purposes, or with respect to the Issuer, addressed to: 

Commerce
Energy Group, Inc.

600 Anton Boulevard, Suite 2000

Costa Mesa, CA 92626

Attn: Chief Financial Officer

Fax: 714-259-2500 

with
a copy to: 

John
F. Della Grotta, Esq.

Paul, Hastings, Janofsky & Walker LLP

695 Town Center Drive, 17th Floor

Costa Mesa, CA 92626

Tel: (714) 668-6210

Fax: (714) 668-6310 

Copies
of notices to the Holder shall be sent to it at 1486 E. Valley Road, Santa Barbara, CA 93108, Attention: Lee E. Mikles, Tel
No.:                                        , Fax
No.:                                        . Any
party hereto may
from time to time change its address for notices by giving at least ten (10) days written notice of such changed address to the other party hereto. 

        14.    Warrant Agent.    The Issuer's transfer agent shall, unless changed by written notice to each Holder of this
Warrant, be the agent for the purpose of issuing shares of Warrant Stock on the exercise of this Warrant pursuant to subsection (b) of Section 2 hereof, exchanging this Warrant pursuant
to subsection (d) of Section 2 hereof or replacing this Warrant pursuant to subsection (d) of Section 3 

12

 

hereof,
or any of the foregoing, and thereafter any such issuance, exchange or replacement, as the case may be, shall be made at such office by such agent. 

        15.    Remedies.    The Issuer stipulates that the remedies at law of the Holder of this Warrant in the event of any
default or threatened default by the Issuer in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate and that, to the fullest extent permitted by law,
such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise. 

        16.    Successors and Assigns.    This Warrant and the rights evidenced hereby shall inure to the benefit of and be
binding upon the successors and assigns of the Issuer, the Holder hereof and (to the extent provided herein) the Holders of Warrant Stock issued pursuant hereto, and shall be enforceable by any such
Holder or Holder of Warrant Stock. 

        17.    Modification and Severability.    If, in any action before any court or agency legally empowered to enforce any
provision contained herein, any provision hereof is found to be unenforceable, then such provision shall be deemed modified to the extent necessary to make it enforceable by such court or agency. If
any such provision is not enforceable as set forth in the preceding sentence, the unenforceability of such provision shall not affect the other provisions of this Warrant, but this Warrant shall be
construed as if such unenforceable provision had never been contained herein. 

        18.    Headings.    The headings of the Sections of this Warrant are for convenience of reference only and shall not,
for any purpose, be deemed a part of this Warrant. 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

13

 

 
        IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and year first above written. 

					
	 
	 	 COMMERCE ENERGY GROUP, INC.
	 
	 	 By:
	 	 /s/ Gregory L. Craig

 
	 
	 	Name:	 	Gregory L. Craig
	 
	 	Title:	 	Chief Executive Officer

[SIGNATURE PAGE TO WARRANT]

S-1

 

 
 

WARRANT
  EXERCISE FORM    

 COMMERCE ENERGY GROUP, INC.  

The
undersigned                        , pursuant to the provisions of the within Warrant, hereby elects to
purchase            shares of Common Stock of Commerce Energy Group, Inc. covered by the
within Warrant. 

							
	Dated:	 	 	 	Signature	 	 
	 	 	

  	 	 	 	

  
	 	 	 	 	Address	 	

 
	

 	
 	
 	
 	
 	
 	

  

Number
of shares of Common Stock beneficially owned or deemed beneficially owned by the Holder on the date of Exercise: 

The
undersigned is an "accredited investor" as defined in Regulation D under the Securities Act of 1933, as amended. 

The
undersigned intends that payment of the Warrant Price shall be made as (check one): 

Cash
Exercise                          

Cashless
Exercise                          

If
the Holder has elected a Cash Exercise, the Holder shall pay the sum of $                        by certified or official bank
check (or via wire transfer) to the Issuer in accordance with the terms of the
Warrant. 

If
the Holder has elected a Cashless Exercise, a certificate shall be issued to the Holder for the number of shares equal to the whole number portion of the product of the calculation set forth below,
which is                        . 

X
= Y - (A)(Y)

                  B 

Where:

The
number of shares of Common Stock to be issued to the Holder                        ("X"). 

The
number of shares of Common Stock purchasable upon exercise of all of the Warrant or, if only a portion of the Warrant is being exercised, the portion of the Warrant being
exercised                        
("Y"). 

The
Warrant Price                        ("A"). 

The
Per Share Market Value of one share of Common Stock                        . 

 
 

ASSIGNMENT    

FOR
VALUE RECEIVED,                        hereby sells, assigns and transfers
unto                        the within Warrant and all rights evidenced thereby and does irrevocably constitute and appoint
                        , attorney, to transfer the said Warrant on the books of the within named corporation. 

							
	Dated:	 	 	 	Signature	 	 
	 	 	

  	 	 	 	

  
	 	 	 	 	Address	 	

 
	

 	
 	
 	
 	
 	
 	

  

 
 

PARTIAL ASSIGNMENT    

FOR
VALUE RECEIVED,                        hereby sells, assigns and transfers
unto                        the right to purchase            shares of
Warrant Stock evidenced by the within Warrant together with
all rights therein, and does irrevocably constitute and appoint                        , attorney, to transfer that part of the
said Warrant on the books of the within named corporation. 

							
	Dated:	 	 	 	Signature	 	 
	 	 	

  	 	 	 	

  
	 	 	 	 	Address	 	

 
	

 	
 	
 	
 	
 	
 	

  

 
 

FOR USE BY THE ISSUER ONLY:    

This
Warrant No. W-        canceled (or transferred or exchanged) this            day
of                        ,            , shares of Common Stock issued
therefor in the
name of                        , Warrant No. W-            issued
for            shares of Common Stock in the name
of                        .
 

QuickLinks

Exhibit 10.127

COMMERCE ENERGY GROUP, INC.

WARRANT EXERCISE FORM

ASSIGNMENT

PARTIAL ASSIGNMENT

FOR USE BY THE ISSUER ONLYFiled by sedaredgar.com - Chancery Resources Inc. - Exhibit 10.5

MINING PROPERTY ACQUISITION AGREEMENT

THIS AGREEMENT is dated for reference November 6, 2008.

BETWEEN:

CHANCERY RESOURCES INC., a
company having an address 
at 4400 Westgrove Drive, Suite 104, Dallas, Texas
75001

(the “Purchaser” or the “Company”)

AND:

CB RESOURCES LTD. (formerly Copper
Belt Resources
Ltd.) a company having an address at 575-1111 West
Hastings 
Street, Vancouver, British Columbia V6E 2J3

(the “Vendor”)

AND:

BNP RESOURCES LLC, a limited
liability company having an 
address at 4020 N. McArthur Boulevard, Suite
122, Irving, Texas 
75038

(“BNP”)

AND:

RAFAEL PINEDO, a businessman
having an address at 890 West 
Pender Street, sixth floor, Vancouver, British
Columbia V6C 1J9

(the “RP”)

WHEREAS:

A.          
The Vendor is the registered beneficial owner of an undivided one hundred
percent (100%) interest in and to those certain mineral interests which are more
particularly described in Schedule "A" attached hereto (the “Property”); and

B.           
The Vendor wishes to sell to the Purchaser an undivided one hundred percent
(100%) interest in and to the Property and any deposits of minerals on the
Property, and the Purchaser wishes to acquire the same on the terms and subject
to the conditions as are more particularly set forth herein.

THEREFORE in consideration of the mutual covenants and
agreements in this Agreement, the parties agree as follows:

	1. 	
      DEFINITIONS AND INTERPRETATION

	 	 
	1.1 	
      For the purposes of this
Agreement:

	 	(a) 	
      "Affiliate" means any person, partnership, joint venture,
      corporation or other form of enterprise which directly or indirectly
      controls, is controlled by, or is under common control with, a party to
      this Agreement. For purposes of the preceding sentence, "control" means
      possession, directly or indirectly, of the power to direct or cause
      direction of management and policies through ownership of voting
      securities, contract, voting trust or otherwise;

	 	 	 
	 	(b) 	
      "Effective Date" means, November 6, 2008;

	 	 	 
	 	(c) 	
      "Ore" shall mean any minerals of commercial economic
      value mined from the Property;

	 	 	 
	 	(d) 	
      "Payment" means the payments contemplated in paragraph
      3.2;

	 	 	 
	 	(e) 	
      "Preferred Shares" means a class of preferred shares of
      the Company to be created and designated the “Series A Preferred Shares”,
      which shall be convertible on the basis of one Preferred Share for one
      fifth (1/5) of one common share, and which shall contain such additional
      rights and restrictions as may be agreed upon by the Purchaser and the
      Vendor, which shall be issued as fully paid and non-assessable preferred
      shares in the capital of the Purchaser, shall be issued pursuant to
      exemptions from registration and prospectus requirements contained in the
      United States Securities Act of 1933 and the rules and regulations
      promulgated hereunder, and which Preferred Shares shall contain such
      restrictive legends regarding applicable hold periods as required by such
      securities laws;

	 	 	 
	 	(f) 	
      "Product" shall mean Ore mined from the Property and any
      concentrates or other materials or products derived therefrom, but if any
      such Ore, concentrates or other materials or products are further treated
      as part of the mining operation in respect of the Property, such Ore,
      concentrates or other materials or products shall not be considered to be
      "Product" until after they have been so treated.

	 	 	 
	 	(g) 	
      "Property" means properties in British Columbia, more
      particularly described in Schedule "A" of this Agreement;

	 	 	 
	 	(h) 	
      "Property Rights" means all licences, permits, easements,
      rights-of-way, certificates and other approvals obtained by either of the
      parties, either before or after the date of this Agreement, and necessary
      for the development of the Property or for the purpose of placing the
      Property into production or of continuing production on the Property;
      and

	 	(i) 	
      "Shares" means fully paid and non-assessable common
      shares in the capital of the Purchaser, issued pursuant to exemptions from
      registration and prospectus requirements contained in the United States
      Securities Act of 1933 and the rules and regulations promulgated
      thereunder, which Shares shall contain such restrictive legends regarding
      applicable hold periods as required by such securities
  laws.

1.2                    
For the purposes of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires:

	 	(a) 	
      "this Agreement" means this mining acquisition agreement
      and all Schedules attached hereto;

	 	 	 
	 	(b) 	
      any reference in this Agreement to a designated
      "Section", "Schedule", "paragraph" or other subdivision refers to the
      designated section, schedule, paragraph or other subdivision of this
      Agreement;

	 	 	 
	 	(c) 	
      the words "herein" and "hereunder" and other words of
      similar import refer to this Agreement as a whole and not to any
      particular Section or other subdivision of this Agreement;

	 	 	 
	 	(d) 	
      any reference to a statute includes and, unless otherwise
      specified herein, is a reference to such statute and to the regulations
      made pursuant thereto, with all amendments made thereto and in force from
      time to time, and to any statute or regulations that may be passed which
      has the effect of supplementing or superseding such statute or such
      regulation;

	 	 	 
	 	(e) 	
      any reference to "party" or "parties" means the Vendor,
      the Purchaser, BNP, RP or all, as the context requires;

	 	 	 
	 	(f) 	
      the headings in this Agreement are for convenience of
      reference only and do not affect the interpretation of this Agreement;
      and

	 	 	 
	 	(g) 	
      all references to currency refer to United States
      dollars.

1.3                    
The following are the Schedules to this Agreement, and are incorporated into
this Agreement by reference:

Schedule "A": Property-Legal Description and Location

	2. 	
      REPRESENTATIONS AND WARRANTIES OF THE VENDOR AND THE
      PURCHASER

	 	 
	2.1 	
      The Vendor represents and warrants to the Purchaser
      that:

	 	(a) 	
      the Vendor is the beneficial owner of it’s interest in
      the Property and the Vendor has the full right, power, capacity and
      authority to enter into, execute and deliver this Agreement;

	 	 	 
	 	(b) 	
      the Property is free and clear of, and from, all liens,
      charges and encumbrances with all assessment work therein having been duly
      completed through the year ended December 31, 2008;

	 	 	 
	 	(c) 	
      the Vendor holds all permits, licences, consents and
      authorities issued by any government or governmental authority which are
      necessary in connection with the ownership and operation of its business
      and the ownership of the Property;

	 	 	 
	 	(d) 	
      the Property has been properly staked, located and
      recorded pursuant to the applicable laws and regulations of British
      Columbia and all mining claims comprising the Property are in good
      standing;

	 	 	 
	 	(e) 	
      to the best of the Vendor's knowledge, there are no
      outstanding orders or directions relating to environmental matters
      requiring any work, repairs, construction or capital expenditures with
      respect to the Property and the conduct of the operations related thereto,
      and the Vendor has not received any notice of the same and is not aware of
      any basis on which any such orders or direction could be made;

	 	 	 
	 	(f) 	
      there is no adverse claim or challenge against or to the
      ownership of or title to any part of the Property and, to the best of the
      Vendor’s knowledge there is no basis for such adverse claim or challenge
      which may affect the Property; and

	 	 	 
	 	(g) 	
      the consummation of the transactions contemplated by this
      Agreement does not and will not conflict with, constitute a default under,
      result in a breach of, entitle any person or company to a right of
      termination under, or result in the creation or imposition of any lien,
      encumbrance or restriction of any nature whatsoever upon or against the
      property or assets of the Vendor, under its constating documents, any
      contract, agreement, indenture or other instrument to which the Vendor is
      a party or by which it is bound, any law, judgment, order, writ,
      injunction or decree of any court, administrative agency or other tribunal
      or any regulation of any governmental authority.

2.2                    
The representations and warranties contained in paragraph 2.1 are provided for
the exclusive benefit of the Purchaser, and a breach of any one or more
representations or warranties may be waived by the Purchaser in whole or in part
at any time without prejudice to its rights in respect of any other breach of
the same or any other representation or warranty, and the representations and
warranties contained in paragraph 2.1 will survive the execution and delivery of
this Agreement.

2.3                    
The Purchaser represents and warrants to the Vendor that:

	 	(a) 	
      the Purchaser is a valid and subsisting corporation duly
      incorporated and in good standing under the laws of the State of
      Nevada;

	 	(b) 	
      the Purchaser has the full right, power, capacity and
      authority to enter into, execute and deliver this Agreement and to be
      bound by its terms;

	 	 	 
	 	(c) 	
      the consummation of this Agreement will not conflict with
      nor result in any breach of its constating documents or any covenants or
      agreements contained in or constitute a default under any agreement or
      other instrument whatever to which the Purchaser is a party or by which
      the Purchaser is bound or to which the Purchaser may be subject;

	 	 	 
	 	(d) 	
      no proceedings are pending for, and the Purchaser is
      unaware of any basis for, the institution of any proceedings leading to
      the placing of the Purchaser in bankruptcy or subject to any other laws
      governing the affairs of insolvent partie; and

	 	 	 
	 	(e) 	
      the Purchaser has completed such due diligence on the
      property as they have deemed necessary.

2.4                    
The representations and warranties contained in paragraph 2.3 are provided for
the exclusive benefit of the Vendor, and a breach of any one or more
representations or warranties may be waived by the Vendor in whole or in part at
any time without prejudice to its rights in respect of any other breach of the
same or any other representation or warranty, and the representations and
warranties contained in paragraph 2.3 will survive the execution and delivery of
this Agreement.

2.5                    
The Vendor and the Purchaser acknowledge that the Vendor will maintain control
of the Property, subject to this Agreement, and subject to all appropriate local
and national governmental approvals and environmental considerations.

	3. 	PURCHASE 

3.1                    
The Vendor hereby sells to the Purchaser a one hundred percent (100%) undivided
interest in and to the Property and all minerals on the Property, free and clear
of all claims, taxes, liens or encumbrances, on the terms and conditions set out
herein.

3.2                    
The consideration payable by the Purchaser to the Vendor pursuant to this
Agreement shall consist of:

	 	(a) 	
      The Purchaser shall issue to the Vendor 1,000,000 Shares
      which the Parties acknowledge will, upon issuance together with the
      Preferred Share issuances referred to herein, represent 0.56% of the
      Purchaser’s fully diluted share capital. For a period of six months from
      the Effective Date, in the event that the Purchaser issues any additional
      Shares, then such number of further Shares shall be issued to the Vendor
      to maintain the 0.56% percentage interest of the Vendor on a fully diluted
      basis.

	 	 	 
	 	(b) 	
      The Purchaser issuing 25,000,000 Preferred Shares to
      RP.

	 	(c) 	
      The Purchaser issuing 6,000,000 Preferred Shares to
      BNP

3.3                    
If the Purchaser verifies that he has initiated and completed his due diligence
on the Property and is satisfied that there are presently no material defect in
the Vendor’s title to the Property. If the Purchaser identifies subsequently ant
material defects he shall give the Vendor notice of such defect. If the defect
has not been cured within 60 days of receipt of such notice, the Purchaser shall
be entitled to take such curative action as is reasonably necessary, and shall
be entitled to deduct the costs and expenses incurred in taking such action from
Payments then otherwise due or accruing due to the Vendor. If there are no such
Payments, the Purchaser shall be entitled to a refund in the amount of said
costs and expenses.

	4. 	PROPERTY TO BE HELD IN TRUST
  

4.1                    
The parties acknowledge that the Purchaser, being a Nevada corporation cannot,
under British Columbia laws, hold registered title to the Claims directly.

4.2                    
The Purchaser and the Vendor agree to enter into the trust agreement attached
hereto as Schedule “B” whereby the Vendor would hold registered ownership of the
Property in trust for the Purchaser if legally allowed under the laws of British
Columbia and on the terms and conditions set forth therein.

	5. 	PROPERTY EXPLORATION AND MAINTENANCE
  

5.1                    
The Purchaser shall be the operator in connection with the Property. 

5.2                    
The Purchaser agrees that when acting as operator it will submit reports of its
exploration activities on the Property to the appropriate government or
regulatory authorities as may be required to maintain the Property in good
standing and will further provide copies of such information to the Vendor.

	6. 	RIGHT OF ENTRY 

6.1                    
The Purchaser and its employees, agents, directors, officers and independent
contractors will have the exclusive right in respect of the Property to:

	 	(a) 	
      enter the Property without disturbance;

	 	 	 
	 	(b) 	
      do such prospecting, exploration, development and/or
      other mining work on and under the Property to carry out exploration
      expenditures as the Purchaser may determine necessary or
  desirable;

	 	 	 
	 	(c) 	
      bring and erect upon the Property such buildings, plant,
      machinery and equipment as the Purchaser may deem necessary or desirable
      in its sole discretion; and

	 	 	 
	 	(d) 	
      remove from the Property all metals and minerals derived
      from its operations on the Property as may be deemed necessary by the
      Purchaser for testing.

	7. 	RECORDING OF AGREEMENT

7.1                    
The Vendor and the Purchaser will execute and deliver such additional
documentation as legal counsel for the Vendor and the Purchaser determine is
necessary in order to duly register and record in the appropriate registration
and recording offices notice that the Vendor’s interest in and to the Property
is subject to and bound by the terms of this Agreement at the cost of the
Purchaser.

	8. 	CONDITIONS PRECEDENT

8.1                    
The obligation of the Purchaser to consummate the transactions contemplated
under this Agreement is subject to the Purchaser being satisfied with the title
to the Property held by the Vendor which is for the Purchaser’s sole benefit and
may be waived in writing by the Purchaser.

	9. 	JOINT OBLIGATIONS 

9.1                    
Unless this Agreement is terminated in accordance with paragraph 13.1, the
Purchaser, RP and BNP covenant and agree with each other that they will
co-operate in good faith to:

	 	(a) 	
      maintain the Property in good standing by doing and
      filing all assessment work or making payments in lieu thereof and by
      performing all other acts which may be necessary in order to keep the
      Property in good standing and free and clear of all liens and other
      charges arising from or out of the Purchaser's activities on the
      Property;

	 	 	 
	 	(b) 	
      do all work on the Property in accordance with sound
      mining, exploration and engineering practices and in compliance with all
      applicable laws, bylaws, regulations, orders, and lawful requirements of
      any governmental or regulatory authority and comply with all laws
      governing the possession of the Property, including, without limitation,
      those governing safety, pollution and environmental matters;
and,

	 	 	 
	 	(c) 	
      maintain true and correct books, accounts and records of
      operations thereunder, such records to be open at all reasonable times
      upon reasonable notice for inspection by the other party or its duly
      authorized representative.

	10. 	RIGHTS AND OBLIGATIONS AFTER TERMINATION
    

10.1                    
If this Agreement terminates pursuant to the provisions of paragraph 13.1, then
the Purchaser will deliver a deed of quit claim or other appropriate instrument
to the Vendor in recordable form whereby the Purchaser will acknowledge and
agree that it has no interest either legal or equitable in and to the
Property.

	11. 	FORCE MAJEURE 

11.1                    
If either party is at any time during the Payment Period is prevented or delayed
in complying with any of the provisions of this Agreement (the "Affected Party")
by reason of strikes, lockouts, land claims and blockages, NGO activities,
forest or highway closures, earthquakes, subsidence, general collapse or
landslides, interference or the inability to secure on reasonable terms any
private or public permits or authorizations, labour, power or fuel shortages,
fires, wars, acts of God, civil disturbances, governmental regulations
restricting normal operations, shipping delays or any other reason or reasons
beyond the reasonable control of the Affected Party whether or not foreseeable
(provided that lack of sufficient funds to carry out exploration on the Property
will be deemed not to be beyond the reasonable control of the Affected Party),
then the time limited for the performance by the Affected Party of its
obligations hereunder will be extended by a period of time equal in length to
the period of each such prevention or delay. Nothing in this paragraph 11.1 or
this Agreement will relieve either Party from its obligation to maintain the
claims comprising the Property in good standing and to comply with all
applicable laws and regulations including, without limitation, those governing
safety, pollution and environmental matters.

11.2                    
The Affected Party will promptly give notice to the other party of each event of
force majeure under paragraph 11.1 within 7 days of such event commencing and
upon cessation of such event will furnish the other party with written notice to
that effect together with particulars of the number of days by which the time
for performing the obligations of the Affected Party under this Agreement has
been extended by virtue of such event of force majeure and all preceding events
of force majeure.

	12. 	CONFIDENTIAL INFORMATION

12.1                    
The terms of this Agreement and all information obtained in connection with the
performance of this Agreement will be the exclusive property of the parties
hereto and except as provided in paragraph 12.2, will not be disclosed to any
third party or the public without the prior written consent of the other party,
which consent will not be unreasonably withheld.

12.2                    
The consent required by paragraph 12.1 will not apply to a disclosure:

	 	(a) 	
      to an Affiliate, consultant, contractor or subcontractor
      that has a bona fide need to be informed;

	 	 	 
	 	(b) 	
      to any third party to whom the disclosing party
      contemplates a transfer of all or any part of its interest in this
      Agreement;

	 	 	 
	 	(c) 	
      to a governmental agency or to the public which such
      party believes in good faith is required by pertinent laws or regulation
      or the rules of any applicable stock exchange;

	 	 	 
	 	(d) 	
      to an investment dealer, broker, bank or similar
      financial institution, in confidence if required as part of a due
      diligence investigation by such financial institution in connection with a
      financing required by such party or its shareholders or affiliates to
      meet, in part, its obligations under this Agreement;
or

	 	(e) 	
      in a prospectus or other offering document pursuant to
      which such party proposes to raise financing to meet, in part, its
      obligations under this Agreement.

	13. 	DEFAULT AND TERMINATION

13.1                    
Subject to section 11, if at any time during the Payment Period, a party is in
default of any requirement of this Agreement or is in breach of any provision
contained in this Agreement, the party affected by the default (the
"Non-Defaulting Party") may terminate this Agreement by giving written notice of
termination to the other party but only if:

	 	(a) 	
      it will have given to the other party written notice of
      the particular failure, default, or breach on the part of the other party;
      and

	 	 	 
	 	(b) 	
      the other party has not, within 30 days following
      delivery of such written notice of default, cured such default or
      commenced to cure such default, it being agreed by each party that should
      it so commence to cure any default it will prosecute such cure to
      completion without undue delay.

13.2                    
Notwithstanding any termination of this Agreement, the Purchaser will remain
liable for those obligations specified in Sections 10, 12 and 14 and the Vendor
will remain liable for its obligations under Sections 12 and 14.

	14. 	INDEPENDENT ACTIVITIES

14.1                    
Except as expressly provided herein, each party shall have the free and
unrestricted right to independently engage in and receive the full benefit of
any and all business endeavours of any sort whatsoever, whether or not
competitive with the endeavours contemplated herein without consulting the other
or inviting or allowing the other to participate therein. No party shall be
under any fiduciary or other duty to the other which will prevent it from
engaging in or enjoying the benefits of competing endeavours within the general
scope of the endeavours contemplated herein. The legal doctrines of "corporate
opportunity" sometimes applied to persons engaged in a joint venture or having
fiduciary status shall not apply in the case of any party. In particular,
without limiting the foregoing, no party shall have any obligation to any other
party as to:

	 	(a) 	
      any opportunity to acquire, explore and develop any
      mining property, interest or right presently owned by it or offered to it
      outside of the Property at any time; and

	 	 	 
	 	(b) 	
      the erection of any mining plant, mill, smelter or
      refinery, whether or not such mining plant, mill, smelter or refinery
      treats ores or concentrates from the Property.

	15. 	INDEMNITY 

15.1                    
RP and BNP jointly covenant and agree with the Purchaser (which covenant and
agreement will survive the execution, delivery and termination of this
Agreement) to indemnify and save harmless the Purchaser against all liabilities,
claims, demands, actions, causes of action, damages, losses, costs, expenses or
legal fees suffered or incurred by the Purchaser, directly or 

indirectly, by reason of or arising out of any warranties or
representations on the part of the Vendor herein being untrue or arising out of
work done by the Vendor on or with respect to the Property.

15.2                    
The Purchaser covenants and agrees with the Vendor (which covenant and agreement
will survive the execution, delivery and termination of this Agreement) to
indemnify and save harmless the Vendor against all liabilities, claims, demands,
actions, causes of action, damages, losses, costs, expenses or legal fees
suffered or incurred by reason of or arising out of any warranties or
representations on the part of the Purchaser herein being untrue or arising out
of the Purchaser and its duly authorized representatives accessing the
Property.

	16. 	GOVERNING LAW 

16.1                    
This Agreement will be construed and in all respects governed by the laws of the
Province of British Columbia.

	17. 	NOTICES 

17.1                    
All notices, payments and other required communications and deliveries to the
parties hereto will be in writing, and will be addressed to the parties as
follows or at such other address as the parties may specify from time to
time:

	 	(a) 	to the Purchaser: 
	 	 	 
	 	  	CHANCERY RESOURCES INC.
  
	 	  	4400 Westgrove Drive 
	 	  	Suite 104 
	 	  	Dallas, Texas 75001 
	 	 	 
	 	  	(the “Purchaser”) 
	 	 	 
	and: 		 
	 	 	 
	 	 (b) 	to the Vendor: 
	 	 	 
	 	 	CB RESOURCES
      LTD. 
	 	  	(formerly Copper Belt
      Resources Ltd.) 
	 	  	575-1111 West Hastings Street
  
	 	  	Vancouver, British Columbia V6E
      2J3 
	 	 	 
	 	  	(the “Vendor”) 
	 	 	 
	and: 		 

	 	(c) 	to BNP: 
	 	 	 
	 	  	BNP Resources LLC 
	 	  	4020 N. McArthur Boulevard, Suite 122 
	 	  	Irving, Texas 75038 
	 	 	 
	 	  	(“BNP”) 
	 	 	 
	and: 		  
	 	 	 
	 	(d) 	to RP: 
	 	 	 
	 	  	Rafael Pinedo 
	 	  	890 West Pender Street, sixth floor, 
	 	  	Vancouver, British Columbia V6C 1J9 
	 	 	 
	 	  	(“RP”) 

Notices must be delivered, sent by telex, telegram, telecopier
or mailed by pre-paid post and addressed to the party to which notice is to be
given. If notice is sent by telex, telegram or telecopier or is delivered, it
will be deemed to have been given and received at the time of transmission or
delivery. If notice is mailed, it will be deemed to have been received five
business days following the date of the mailing of the notice. If there is an
interruption in normal mail service due to strike, labour unrest or other cause
at or prior to the time a notice is mailed the notice will be sent by telex,
telegram or telecopier or will be delivered.

17.2                    
Either party hereto at any time or from time to time notify the other party in
writing of a change of address and the new address to which a notice will be
given thereafter until further change.

	18. 	ASSIGNMENT 

18.1                    
Each party has the right to assign all or any part of its interest in the
Property and this Agreement. It shall be a condition to any such assignment that
the assignee of the interest being transferred agrees in writing to be bound by
the terms of this Agreement, as if it had been an original party hereto.

	19. 	ARBITRATION 

19.1                    
If there is any disagreement, dispute or controversy (hereinafter collectively
called a "dispute") between the parties with respect to any matter arising under
this Agreement or the construction hereof, then the dispute shall be determined
by arbitration in accordance with the following procedures:

	 	(a) 	
      the parties to the dispute shall appoint a single
      mutually acceptable arbitrator. If the parties cannot agree upon a single
      arbitrator, then the party on one side of the dispute shall name an
      arbitrator, and give notice thereof to the party on the other side of the
      dispute;

	 	 	 
	 	(b) 	
      the party on the other side of the dispute shall within
      14 days of the receipt of notice, name an arbitrator; and

	 	 	 
	 	(c) 	
      the two arbitrators so named shall, within seven days of
      the naming of the later of them, name a third arbitrator. If the party on
      either side of the dispute fails to name its arbitrator within the
      allotted time, then the arbitrator named may make a determination of the
      dispute. Except as expressly provided in this paragraph, the arbitration
      shall be in accordance with the Commercial Arbitration Act (British
      Columbia) and conducted in Vancouver BC. The decision shall be made within
      30 days following the naming of the latest of them, shall be based
      exclusively on the advancement of exploration, development and production
      work on the Property and not on the financial circumstances of the
      parties, and shall be conclusive and binding upon the parties. The costs
      of arbitration shall be borne equally by the parties to the dispute unless
      otherwise determined by the arbitrator(s) in the
award.

	20. 	ENTIRE AGREEMENT 

20.1                    
This Agreement constitutes the entire agreement between the Vendor and the
Purchaser and will supersede and replace any other agreement or arrangement,
whether oral or in writing, previously existing between the parties with respect
to the subject matter of this Agreement.

	21. 	CONSENT OR WAIVER 

21.1                    
No consent or waiver, express or implied, by either party hereto in respect of
any breach or default by the other party in the performance by such other party
of its obligations under this Agreement will be deemed or construed to be
consent to or waiver or any other breach or default.

	22. 	FURTHER ASSURANCES 

22.1                    
The parties will promptly execute, or cause to be executed, all bills of sale,
transfers, documents, conveyances and other instruments of further assurance
which may be reasonably necessary or advisable to carry out fully the intent and
purpose of this Agreement or to record wherever appropriate the respective
interests from time to time of the parties hereto in and to the Property.

	23. 	SEVERABILITY 

23.1                    
If any provision of this Agreement is or will become illegal, unenforceable or
invalid for any reason whatsoever, such illegal, unenforceable or invalid
provisions will be severable from the remainder of this Agreement and will not
affect the legality, enforceability or validity of the remaining provisions of
this Agreement.

	24. 	ENUREMENT 

24.1                    
This Agreement will enure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns.

	25. 	AMENDMENTS 

25.1                    
This Agreement may only be amended in writing with the mutual consent of all
parties.

	26. 	COUNTERPARTS 

	
      26.1                    
      This Agreement may be executed in any number of counterparts and by
      facsimile transmission with the same effect as if all parties hereto had
      signed the same document. All counterparts will be construed together and
      constitute one and the same agreement. IN WITNESS WHEREOF the parties
      hereto have executed this Agreement the day of November, 2008
  

	CHANCERY
      RESOURCES INC. 	BNP RESOURCES LLC 
	Per:
                             /s/ signed                           	Per:                        /s/ signed                           
	                         
      Authorized Signatory 	                     
      Authorized Signatory 
	  	  
	CB
      RESOURCES LTD. 	  
	Per:                        /s/ signed                           	  /s/ Rafael Pinedo                                           
	                        
      Authorized Signatory 	  RAFAEL PINEDO 

SCHEDULE "A"

Claim Description 
Tenure No. 592560

Claim Name/Property: HCL

Cell(s) ID:

	092I01C032C 	092I01C033C 	092I01C033D 	092I01C034C 
	091I01C034D 	092I01C042B 	092I01C042C 	092I01C043A 
	092I01C043B 	092I01C043C 	092I01C043D 	092I01C044A 
	092I01C044B 	092I01C044C 	092I01C044D 	092I01C052B 
	092I01C053A 	092I01C053B 	092I01C054A 	092I01C054B

SCHEDULE "B"

Form of Trust Agreement

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