Document:

Cardero Resource Corp. - Exhibit 4.7 - Filed by newsfilecorp.com

GENERAL SECURITY AGREEMENT 

            THIS
SECURITY AGREEMENT (as amended, modified, renewed, supplemented, replaced or
extended from time to time, this “Agreement”) dated this 8th
day of August, 2013, is made by and between CARDERO RESOURCE CORP., a
corporation existing under the laws of the Province of British Columbia (the
“Borrower”), and E.L. II Properties Trust and Kopple Family Partnership,
L.P. (collectively, the “Lenders”). 

WHEREAS: 

	A. 	
      The Borrower is indebted to the Lenders pursuant to
      Senior Secured Notes (the “Notes”).

	 	 
	B. 	
      As a condition precedent to the Lenders extending certain
      credit to the Borrower, the Borrower is required to execute and deliver
      this Agreement, and to grant to the Lenders and to create a security
      interest in all personal property of the Borrower, as hereinafter provided
      as security for the payment and performance of the obligations and
      liabilities of the Borrower to the Lenders.

NOW THEREFORE, to induce the Lenders to extend credit to
the Borrower, and in consideration thereof, and for other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, the
Borrower and the Lenders agree as follows: 

	1. 	
      DEFINITIONS; INTERPRETATION

	 	 	 
		1.1 	
      Defined Terms. Except as otherwise expressly
      provided herein, capitalized terms used in this Agreement (including in
      the Recitals hereof) but not defined herein shall have the meanings
      assigned to such terms in the Notes.

	 	 	 
		1.2 	
      Terms Defined in British Columbia Personal Property
      Security Act. Where applicable and except as defined herein, terms
      used herein shall have the meanings assigned to them in the Personal
      Property Security Act as the same may, from time to time, be in effect
      in the Province of British Columbia (the “PPSA”). Such terms
      include: “accounts”, “chattel paper”, “documents of
      title”, “equipment”, “intangibles”,
      “instruments”, “inventory”, “investment property”,
      “proceeds” and “security”.

	2. 	
      GRANT OF SECURITY INTEREST; COLLATERAL

	 	 	 	 
		2.1 	
      Grant of Security Interest. As security for the
      payment and performance of the Secured Obligations (as defined in Section
      3), the Borrower hereby grants to the Lenders a security interest in, to
      and under all of its present and after acquired personal property,
      wherever located and whether now existing or hereafter acquired or
      arising, including, without limitation, the following property
      (collectively and severally, the “Borrower Collateral”):

	 	 	 	 
			(a) 	
      all of the issued and outstanding shares of the capital
      stock of the Subsidiaries, whether certificated or uncertificated, now or
      hereafter owned by the Borrower (the “Pledged
  Shares”);

	 	(b) 	
      all (i) additional shares or other securities now or
      hereafter acquired by the Borrower, (ii) warrants, options or other rights
      now or hereafter acquired by the Borrower entitling the Borrower to
      acquire any interest in shares or other equity securities of or other
      equity interests, (iii) securities, property, interest, dividends and
      other payments and distributions issued as an addition to, in redemption
      of, in renewal or exchange for, in substitution or upon conversion of, or
      otherwise on account of, the Pledged Shares or such additional shares or
      other equity securities or other interests in the Borrower, and (iv) cash
      and non-cash proceeds and supporting obligations of or with respect to the
      Pledged Shares and any such Additional Pledged Share Collateral, in each
      case from time to time received or receivable by, or otherwise paid or
      distributed to or acquired by, the Borrower (the “Additional Pledged
      Share Collateral” and, together with the Pledged Shares, the
      “Pledged Collateral”);

	 	 	 
	 	(c) 	
      all accounts and book debts of the Borrower, chattel
      paper, documents of title, instruments, and intangibles of the Borrower,
      including all debts, dues, claims choses in action and demands of every
      nature and kind, howsoever arising or secured, including letters of
      credit, guarantees and advices of credit which are now due, owing or
      accruing or growing due to or owned by or which may hereafter become due,
      owing or accruing or growing due to or owned by the Borrower, whether or
      not arising out of or in connection with the sale or lease of goods or the
      rendering of services, and all supporting obligations of any or all of the
      forgoing (“Accounts”);

	 	 	 
	 	(d) 	
      all inventory of the Borrower, including all merchandise,
      goods and other personal property which are held for sale or lease or
      leased by the Borrower or to be furnished under a contract of service, all
      raw materials, work in process, materials used or consumed in the
      Borrower’s business and finished goods, all goods in which the Borrower
      has an interest in mass or a joint or other interest or gifts of any kind
      (including goods in which the Borrower has an interest or right as
      consignee), and all goods which are returned to or repossessed by the
      Borrower, together with all additions and accessions thereto and
      replacements therefor and products thereof and documents therefor
      (“Inventory”);

	 	 	 
	 	(e) 	
      all goods and equipment of the Borrower and all parts
      thereof and all accessions, additions, attachments, improvements,
      substitutions and replacements thereto and therefor, including, all
      machinery, tools, dies, blueprints, catalogues, computer hardware and
      software, furniture, furnishings, vehicles and fixtures
      (“Equipment”);

	 	 	 
	 	(f) 	
      Borrower does hereby charge as and by way of a floating
      charge, and grant to the Lenders a security interest in and to all the
      Borrower's right, title and interest in and to all its presently owned or
      held and after acquired or held real, immovable and leasehold property and
      all interests therein, and all easements, rights-of-way, privileges,
      benefits, licences, improvements and rights whether
connected therewith or appurtenant thereto or separately owned or held,
including all structures, plant and other fixtures (all which is hereinafter
collectively called the “Real Property”). 

For the purposes of Section 203 of the
Land Title Act (British Columbia), the floating charge created by this Security
Agreement over Real Property shall become a fixed charge thereon upon the
earliest of: 

	 	(i) 	
      the occurrence of an event of default; or

	 	 	 
	 	(ii) 	
      the Lenders taking any action to enforce and realize on
      the Security Interests created by this Security
  Agreement,

	 	(g) 	
      all money maintained in a deposit account in the
      Borrower’s name with any financial institution, and all certificates,
      instruments and other writings, if any, from time to time representing,
      evidencing or deposited into such accounts, and all interest, dividends,
      cash, instruments and other property from time to time received,
      receivable or otherwise distributed in respect of or in exchange for any
      or all of the foregoing;

	 	 	 
	 	(h) 	
      all now existing and hereafter arising contracts and
      agreements to which the Borrower is party (each, an “Assigned
      Agreement”), including, without limitation, all rights of the Borrower
      to receive moneys due and to become due under or pursuant to the Assigned
      Agreements, all rights of the Borrower to receive proceeds of any
      insurance, indemnity, warranty or guaranty with respect to the Assigned
      Agreements, all claims of the Borrower for damages arising out of or for
      breach of or default under the Assigned Agreements, and all rights of the
      Borrower to terminate, amend, supplement or modify the Assigned
      Agreements, to perform thereunder and to compel performance and otherwise
      exercise all remedies thereunder; provided, however, that with
      respect to any such contract or agreement where the grant of a security
      interest in the Borrower’s right, title and interest therein is prohibited
      by the terms thereof, or would give any other party the right to terminate
      its obligations thereunder, or is not permitted because any necessary
      consent to such grant has not been obtained, the Borrower Collateral shall
      include only the rights of the Borrower to receive moneys due and to
      become due, if any, under or pursuant to such contract or
  agreement;

	 	 	 
	 	(i) 	
      all books, records, writings, data bases, information and
      other property relating to, used or useful in connection with, embodying,
      incorporating or referring to, any of the foregoing Borrower
      Collateral;

	 	 	 
	 	(j) 	
      all cash and cash equivalents held by the Borrower not
      otherwise included in the foregoing Borrower Collateral;
  and

	 	(k) 	
      all products and proceeds of the foregoing Borrower
      Collateral (with the term “proceeds” having the meaning provided in
      the PPSA and also including any voluntary or involuntary disposition, and
      all rights to payment, including return premiums, with respect to any
      insurance).

	 	2.2 	
      Excluded Collateral. Notwithstanding Section 2.1,
      the Borrower Collateral shall not include: (a) any property held in trust
      by the Borrower and/or lawfully belonging to others, (b) the last day of
      the term of any lease of real property, provided that the Borrower shall
      stand possessed of such last day and shall assign and transfer such
      interest as instructed by the Lenders; (c) the interests described in the
      proviso to Section 2.1(h); or (d) any consumer goods used as such by the
      Borrower.

	 	 	 
	 	2.3 	
      Borrower Remains Liable. Anything herein to the
      contrary notwithstanding, (a) the Borrower shall remain liable under all
      Assigned Agreements, to the extent set forth therein, to perform all of
      its duties and obligations thereunder to the same extent as if this
      Agreement had not been executed, (b) the exercise by the Lenders of any of
      the rights hereunder shall not release the Borrower from any of its duties
      or obligations under such Assigned Agreements, and (c) the Lenders shall
      not have any obligation or liability under any Assigned Agreements by
      reason of this Agreement, nor shall the Lenders be obligated to perform
      any of the obligations or duties of the Borrower thereunder or to take any
      action to collect or enforce any such contract, agreement or other
      document included in the Borrower Collateral hereunder.

	 	 	 
	 	2.4 	
      Continuing Security Interest. The Borrower agrees
      that this Agreement shall create a general collateral continuing security
      interest in the Borrower Collateral which shall remain in effect until
      terminated in accordance with Section 9.13.

	 	 	 
	 	2.5 	
      Attachment. The Borrower and the Lenders intend
      that the security interest created hereby attaches to existing Borrower
      Collateral upon the execution of this Agreement and that the security
      interest will attach to Borrower Collateral acquired after the effective
      time of this Agreement at the time that the Borrower acquires rights in
      that Borrower Collateral. The Borrower and the Lenders agree that value
      has been given. The Borrower represents and warrants that it has rights in
      the existing Borrower Collateral.

3.        
SECURED OBLIGATIONS 

            The
obligations secured by this Agreement shall consist of all indebtedness,
obligations and liabilities of the Borrower to the Lenders, including, without
limitation, those arising under the Transaction Documents, whether now existing
or hereafter arising, as principal or surety, voluntary or involuntary, whether
or not jointly owed with others, direct or indirect, absolute or contingent,
liquidated or unliquidated, and whether or not from time to time decreased or
extinguished and later increased, created or incurred, together with all
expenses (including legal fees on a solicitor and client basis) incurred by the
Lenders, their receiver, receiver-manager or agent in the preparation,
perfection and enforcement of security and other agreements held by the Lenders in respect of such obligations and liabilities and
interest thereon (all of which obligations, liabilities, expenses and interest
are referred to collectively as the “Secured Obligations”). 

4.       
REPRESENTATIONS AND WARRANTIES 

            In
addition to all representations and warranties of the Borrower and all schedules
related thereto or referenced therein, as the case may be, set forth in the
Transaction Documents and any other document executed and delivered by the
Borrower in connection therewith (collectively, the “Documents”), which
are incorporated herein by this reference, the Borrower hereby represents and
warrants that: 

	 	4.1 	
      Sole Owner. The Borrower is the sole owner of and
      has good and marketable title to the Borrower Collateral (or will be the
      sole owner of and will have good and marketable title to, in the case of
      after-acquired Borrower Collateral).

	 	 	 
	 	4.2 	
      No Adverse Claim. Except as disclosed to the
      Lenders in writing, no Person has (or, in the case of after-acquired
      Borrower Collateral, at the time the Borrower acquires rights therein,
      will have) any right, title, claim or interest (by way of security
      interest or other Lien) in, against or to the Borrower Collateral other
      than Permitted Encumbrances.

	 	 	 
	 	4.3 	
      Full Disclosure. All information heretofore,
      herein or hereafter supplied to the Lenders by or on behalf of the
      Borrower with respect to the Borrower Collateral is accurate and complete
      in all material respects.

	 	 	 
	 	4.4 	
      Delivery of Borrower Collateral. The Borrower has
      delivered to the Lenders all instruments and chattel paper and other items
      of Borrower Collateral in which a security interest is or may be perfected
      by possession, together with such additional writings, including
      assignments, with respect thereto as the Lenders shall request.

	 	 	 
	 	4.5 	
      Chief Executive Office; Trade Names; Collateral
      Location; Records Location. The Borrower’s chief executive office is
      set forth on Schedule 1; the only trade name(s) or style(s) used by
      the Borrower are set forth on Schedule 1; and, except as otherwise
      disclosed on Schedule 1, the Borrower Collateral and the Borrower’s
      records concerning the Borrower Collateral are located at its chief
      executive office. Except as set forth in Schedule 1, the Borrower
      has not, at any time in the past: (a) been known as or used any other
      corporate, trade or fictitious name; (b) changed its name; (c) been the
      surviving or resulting corporation in a merger or consolidation; or (d)
      acquired through asset purchase or otherwise any business of any
      Person.

	 	 	 
	 	4.6 	
      Enforceability; Priority of Security Interest. (a)
      This Agreement creates a security interest which is enforceable against
      the Borrower Collateral in which the Borrower now has rights and will
      create a security interest which is enforceable against the Borrower
      Collateral in which the Borrower hereafter acquires rights at the time the
      Borrower acquires any such rights; and (b) other than
  Permitted Encumbrances, the Lenders have a perfected and first
      priority security interest in the Borrower Collateral, in which the
      Borrower now has rights, and, subject to Permitted Encumbrances, will have
      a perfected and first priority security interest in the Borrower
      Collateral in which the Borrower hereafter acquires rights at the time the
      Borrower acquires any such rights, in each case securing the payment and
  performance of the Secured Obligations.

	 	4.7 	
      Other Financing Statements. Other than (a)
      financing statements disclosed to, and searches conducted by, the Lenders
      and (b) financing statements in favor of the Lenders, no effective
      financing statement naming the Borrower as debtor, assignor, grantor,
      mortgagor, pledgor or the like and covering all or any part of the
      Borrower Collateral is on file in any filing or recording office in any
      jurisdiction.

	 	 	 
	 	4.8 	
      Rights to Payment.

	 	(a) 	
      The Accounts and any and all of the Borrower’s rights and
      claims to the payment or receipt of money or other forms of consideration
      of any kind in, to and under or with respect to its chattel paper,
      documents of title, intangibles, instruments, proceeds and supporting
      obligations (collectively, “Rights to Payment”) represent valid,
      binding and enforceable obligations of the account debtors or other
      Persons obligated thereon, representing undisputed, bona fide
      transactions completed in accordance with the terms and provisions
      contained in any documents related thereto, and are and will be genuine,
      free from any Lien (other than Permitted Encumbrances) and not subject to
      any adverse claims, counterclaims, setoffs, defaults, disputes, defenses,
      discounts, retainages, holdbacks or conditions precedent of any kind of
      character, except to the extent reflected by the Borrower’s reserves for
      uncollectible Rights to Payment or to the extent, if any, that such
      account debtors or other Persons may be entitled to normal and ordinary
      course trade discounts, returns, adjustments and allowances in accordance
      with Section 5.13, or as otherwise disclosed to the Lenders in
    writing;

	 	 	 
	 	(b) 	
      to the best of the Borrower’s knowledge, all account
      debtors and other obligors on the Rights to Payment are solvent and
      generally paying their debts as they come due;

	 	 	 
	 	(c) 	
      all Rights to Payment comply with all applicable laws
      concerning form, content and manner of preparation and execution,
      including where applicable any federal or state consumer credit
    laws;

	 	 	 
	 	(d) 	
      the Borrower has not assigned any of its rights under the
      Rights to Payment other than Permitted Encumbrances as provided in this
      Agreement or as set forth in the other Transaction
  Documents;

	 	(e) 	
      all statements made, all unpaid balances and all other
      information in the Borrower’s books and other documentation relating to
      the Rights to Payment are true and correct and in all material respects
      what they purport to be; and

	 	 	 
	 	(f) 	
      the Borrower has no knowledge of any material fact or
      circumstance which would impair the validity or collectibility of any of
      the Rights to Payment.

	 	4.9 	
      Inventory. No inventory is stored with any bailee,
      warehouseman or similar Person or on any premises leased to the Borrower,
      nor has any inventory been consigned to the Borrower or consigned by the
      Borrower to any Person or is held by the Borrower for any Person under any
      “bill and hold” or other arrangement, except as set forth in
      Schedule 1.

	 	 	 
	 	4.10 	
      Equipment.

	 	(a) 	
      none of the Equipment or other Borrower Collateral is
      affixed to real property except Borrower Collateral with respect to which
      the Borrower has supplied the Lenders with all information and
      documentation necessary to make all fixture filings required to perfect
      and protect the priority of the Lenders’ security interest in all such
      Borrower Collateral which may be fixtures as against all Persons having an
      interest in the premises to which such property may be affixed;
  and

	 	 	 
	 	(b) 	
      none of the Equipment is leased from or to any Person,
      except as otherwise disclosed to the Lenders in writing or revealed in
      public searches.

	 	4.11 	
      Valid Issuance of Pledged Collateral. All the
      Pledged Shares have been, and upon issuance any Additional Pledged Share
      Collateral will be, duly and validly issued, and are and will be fully
      paid and non assessable.

	 	 	 
	 	4.12 	
      Capitalization of the Pledged Subsidiary. The
      Pledged Shares constitute 100% of the issued and outstanding shares of
      capital stock and other ownership interests of the various issuers owned
      by the Borrower (which, as of the date hereof, constitutes 100% of the
      issued and outstanding shares of capital stock and other ownership
      interests of each issuer).

	 	 	 
	 	4.13 	
      Options, Warrants, Etc. Other than as set out in
      the Disclosure Record, no securities convertible into or exchangeable for
      any shares of capital stock or other ownership interests of any issuer, or
      any options, warrants or other commitments entitling any Person to
      purchase or otherwise acquire any shares of capital stock or other
      ownership interests of any issuer, are issued and outstanding. For the
      purposes of this Section 4.13 “Disclosure Record” means all
      information circulars, prospectuses (including preliminary prospectuses),
      annual information forms, offering memoranda, financial statements,
      management’s discussion and analysis, technical reports, material change
      reports and news releases filed with the Exchanges and/or the securities regulatory
      authorities in British Columbia, Alberta and Ontario on or during the 12
  months preceding the date hereof.

	 	4.14 	
      Transfer Restrictions. Other than pursuant to or
      disclosed by or in the Transaction Documents, there are no restrictions on
      the transferability of the Pledged Shares to the Lenders or with respect
      to the foreclosure, transfer or disposition thereof by the
  Lenders.

	 	 	 
	 	4.15 	
      Shareholders Agreements. There are no
      shareholders, partners or members agreements, voting trusts, proxy
      agreements or other agreements or understandings which affect or relate to
      the voting or giving of written consents with respect to any of the
      Pledged Shares.

	 	 	 
	 	4.16 	
      No Violation of Securities Laws. None of the
      shares in the capital of the Borrower or the Pledged Shares has been
      issued, converted or transferred in violation of the securities
      registration, securities disclosure or similar laws of any jurisdiction to
      which they may be subject.

	 	 	 
	 	4.17 	
      Control Agreements. No control agreements exist
      with respect to any Borrower Collateral other than any control agreements
      in favor of the Lenders.

	 	 	 
	 	4.18 	
      Leases. The Borrower is not and will not become a
      lessee under any real property lease or enter into any customer agreement
      or other agreement governing the location of Borrower Collateral at the
      premises of another Person pursuant to which the lessor or such other
      Person may obtain any rights in any of the Borrower Collateral, and no
      such lease or other such agreement now prohibits, restrains, impairs or
      will prohibit, restrain or impair such Borrower’s right to remove any
      Borrower Collateral from the premises at which such Borrower Collateral is
      situated, except for the usual and customary restrictions contained in
      such leases of real property and those disclosed to the Lenders prior to
      the date of this Agreement.

5.       
COVENANTS AND AGREEMENTS 

            In
addition to all covenants and agreements of the Borrower set forth in the other
Documents, which are incorporated herein by this reference, the Borrower hereby
agrees, at no cost or expense to the Lenders: 

	 	5.1 	
      Preservation of Security Interest. To do all acts
      (other than acts which are required to be done by the Lenders) that may be
      necessary to maintain, preserve and protect the Borrower Collateral and
      the first (subject to Permitted Encumbrances) priority, perfected security
      interest of the Lenders therein.

	 	 	 
	 	5.2 	
      Actions and Proceedings. To appear in and defend
      any action or proceeding which may affect its title to or the Lenders’
      interest in the Borrower Collateral as reasonably requested by the Lenders
      or as is reasonable and appropriate in accordance with prudent business
      practice.

	 	5.3 	
      Use of Collateral. Not to use any Borrower
      Collateral, or permit any Borrower Collateral to be used, unlawfully or in
      violation of any provision of this Agreement, any other agreement with the
      Lenders related hereto, or any law, rule, regulation, order, writ,
      judgment, injunction, decree or award binding on the Borrower or affecting
      any of the Borrower Collateral or any contractual obligation affecting any
      of the Borrower Collateral.

	 	 	 
	 	5.4 	
      Shareholders Agreements. Other than as permitted
      in any of the other Transaction Documents, the Borrower will not amend the
      any existing shareholder agreement or enter into any other partners or
      members agreement, voting trust, proxy agreement or other agreement or
      understanding which affects or relates to the voting or giving of written
      consents with respect to any of the shares in the capital of the Borrower
      or the Pledged Shares without the prior written consent of the
    Lenders.

	 	 	 
	 	5.5 	
      Issuance of Additional Shares. The Borrower will
      not consent to or approve, or allow Cardero Coal Ltd. (the
      “Guarantor”) to consent to or approve, the issuance to any person
      or entity of any additional shares of any class of capital stock or other
      ownership interests of the Guarantor, or of any securities convertible
      into or exchangeable for any such shares or other ownership interests, or
      any warrants, options or other rights to purchase or otherwise acquire any
      such shares or other ownership interests, except as approved in writing by
      the Lenders or to another subsidiary of the Borrower provided they remain
      as Pledged Shares.

	 	 	 
	 	5.6 	
      Transfer of Collateral; Liens. Not to surrender or
      lose possession of (other than to the Lenders), sell, encumber, lease,
      rent, or otherwise dispose of or transfer any Borrower Collateral or right
      or interest therein except as expressly provided herein or in the other
      Transaction Documents, and to keep the Borrower Collateral free of all
      Liens except Permitted Encumbrances and as expressly permitted by the
      Transaction Documents or otherwise approved in writing by the Lenders;
      provided, however, that, unless an Event of Default shall have
      occurred under the Notes and has not been waived in writing (each an
      “Event of Default”), the Borrower may, in the ordinary course of
      business, sell or lease (provided it registers and perfects any financing
      lease or conditional sale agreement in accordance with applicable law) any
      Borrower Collateral consisting of inventory and consisting of equipment in
      accordance with the provisions of the Notes.

	 	 	 
	 	5.7 	
      Delivery of Collateral. To account fully for and
      promptly deliver to the Lenders, in the form received, all documents,
      chattel paper, all certificated securities with respect to investment
      property, instruments and agreements constituting Borrower Collateral
      hereunder, and all proceeds of the Borrower Collateral received, all
      endorsed to the Lenders or in blank, as requested by the Lenders, and
      accompanied by such stock powers as appropriate and until so delivered all
      such documents, instruments, agreements and proceeds shall be held by the
      Borrower in trust for the Lenders, separate from all other property of the
      Borrower.

	 	5.8 	
      Records. To keep separate, accurate and complete
      records of the Borrower Collateral and to provide the Lenders with such
      records and such other reports and information relating to the Borrower
      Collateral as the Lenders may reasonably request from time to time. To
      keep the records concerning the Borrower Collateral at the location(s)
      referred to in Section 4.5 and not to remove such records from such
      location(s) without the prior written consent of the Lenders.

	 	 	 	 
	 	5.9 	
      Chief Executive Office; Names. To give the Lenders
      30 days prior written notice of any change in the Borrower’s chief
      executive office or legal name or trade name(s) or style(s) referred to in
      Section 4.5.

	 	 	 	 
	 	5.10 	
      Location of Collateral. To keep the Borrower
      Collateral at the location(s) described in Section 4.5 and not to remove
      the Borrower Collateral from such locations (other than disposals of
      Borrower Collateral expressly permitted by the Transaction Documents or
      hereunder).

	 	 	 	 
	 	5.11 	
      Maintenance of Collateral. To keep the Borrower
      Collateral in good condition and repair and not to cause or permit any
      waste or unusual or unreasonable depreciation of the Borrower
      Collateral.

	 	 	 	 
	 	5.12 	
      Leased Premises. At the Lenders’ request, to use
      commercially reasonable efforts to obtain from each Person from whom the
      Borrower leases any premises or supplies any goods to at which any
      Borrower Collateral is at any time present such collateral access,
      subordination, waiver, consent and estoppel agreements as the Lenders may
      require, in form and substance satisfactory to the Lenders.

	 	 	 	 
	 	5.13 	
      Rights to Payment. To:

	 	 	 	 
	 		(a) 	
      with such frequency as the Lenders may reasonably
      require, furnish to the Lenders full and complete reports, in form and
      substance satisfactory to the Lenders, with respect to the Accounts,
      including information as to concentration, aging, identity of account
      debtors, letters of credit securing Accounts, disputed Accounts and other
      matters, as the Lenders shall request;

	 	 	 	 
	 		(b) 	
      give only normal discounts, allowances and credits as to
      Accounts and other Rights to Payment, in the ordinary course of business,
      according to normal trade practices utilized by the Borrower in the past,
      and enforce all Accounts and other Rights to Payment strictly in
      accordance with their terms, and take all such action to such end as may
      from time to time be reasonably requested by the Lenders, except that the
      Borrower may grant any extension of the time for payment or enter into any
      agreement to make a rebate or otherwise to reduce the amount owing on or
      with respect to, or compromise or settle for less than the full amount
      thereof, any Account or other Right to Payment, in the ordinary course of
      business, according to normal trade practices utilized by the Borrower in
      the past;

	 	(c) 	
      if any discount, allowance, credit, extension of time for
      payment, agreement to make a rebate or otherwise to reduce the amount
      owing on, or compromise or settle, an Account or other Right to Payment
      exists or occurs, or if, to the knowledge of the Borrower, any dispute,
      setoff, claim, counterclaim or defense exists or has been asserted or
      threatened with respect to an Account or other Right to Payment, disclose
      such fact fully to the Lenders in the books relating to such Account or
      other Right to Payment and in connection with any invoice or report
      furnished by the Borrower to the Lenders relating to such Account or other
      Right to Payment;

	 	 	 
	 	(d) 	
      if any Accounts arise from contracts with the government
      of the United States or any department, agency or instrumentality thereof,
      or the government of Canada, immediately notify the Lenders thereof and
      execute any documents and instruments and take any other steps requested
      by the Lenders in order that all monies due and to become due thereunder
      shall be assigned to the Lenders and notice thereof given to the
      appropriate authorities under the Federal Assignment of Claims Act
      of the United States or the Financial Administration Act of
      Canada;

	 	 	 
	 	(e) 	
      in accordance with its sound business judgment perform
      and comply in all material respects with its obligations in respect of the
      Accounts and other Rights to Payment;

	 	 	 
	 	(f) 	
      upon the request of the Lenders (i) at any time, notify
      all or any designated portion of the account debtors and other obligors on
      the Rights to Payment of the security interest hereunder, and (ii) upon
      the occurrence of an Event of Default that is not waived in writing by the
      Lenders, notify the account debtors and other obligors on the Rights to
      Payment or any designated portion thereof that payment shall be made
      directly to the Lenders or to such other Person or location as the Lenders
      shall specify; and

	 	 	 
	 	(g) 	
      upon the occurrence and during the continuance of any
      Event of Default, at the option of the Lenders, establish such lockbox or
      similar arrangements for the payment of the Accounts and other Rights to
      Payment as the Lenders shall require.

	 	5.14 	
      Inventory. To:

	 	 	 	 
	 		(a) 	
      at such times as the Lenders shall request or as may be
      required under the Transaction Documents, prepare and deliver to the
      Lenders a report of all Inventory, in form and substance satisfactory to
      the Lenders;

	 	 	 	 
	 		(b) 	
      upon the request of the Lenders, take a physical listing
      of the Inventory and promptly deliver a copy of such physical listing to
      the Lenders; and

	 	 	 	 
	 		(c) 	
      not store any Inventory with a bailee, warehouseman or
      similar Person or on premises leased to the Borrower, nor dispose of any
      Inventory on a bill-and-hold, guaranteed sale, sale and
return, sale on approval, consignment or similar basis, nor acquire any
Inventory from any Person on any such basis, without in each case giving the
Lenders prior written notice thereof. 

	 	5.15 	
      License Agreement and Other Assigned Agreements.
      To:

	 	 	 	 
	 		(a) 	
      deliver to the Lenders promptly upon request therefrom
      (i) copies of the Assigned Agreements and (ii) all material notices,
      requests and other documents received by the Lenders in respect of the
      Assigned Agreements; and

	 	 	 	 
	 		(b) 	
      perform and observe in all material respects all terms
      and provisions of the Assigned Agreements to be performed or observed by
      it and enforce the Assigned Agreements in accordance with their
    terms.

	6. 	
      AUTHORIZED ACTION BY THE LENDERS; RIGHTS TO
      PAYMENT

	 	 	 	 
		6.1 	
      Authorized Action by the Lenders. The Borrower
      hereby agrees that following the occurrence and during the continuance of
      an Event of Default, without presentment, notice or demand, and without
      affecting or impairing in any way the rights of the Lenders with respect
      to the Borrower Collateral, the obligations of the Borrower hereunder or
      the Secured Obligations, the Lenders may, but shall not be obligated to
      and shall incur no liability to the Borrower or any third party for
      failure to, take any action that the Borrower is obligated by this
      Agreement to do and to exercise such rights and powers as the Borrower
      might exercise with respect to the Borrower Collateral, and the Borrower
      hereby irrevocably appoints the Lenders as its attorney-in-fact to
      exercise such rights and powers, including, without limitation, the power
      and authority to:

	 	 	 	 
			(a) 	
      collect by legal proceedings or otherwise and endorse,
      receive and receipt for all dividends, interest, payments, proceeds and
      other sums and property now or hereafter payable on or on account of the
      Borrower Collateral;

	 	 	 	 
			(b) 	
      enter into any extension, reorganization, deposit,
      merger, consolidation or other agreement pertaining to, or deposit,
      surrender, accept, hold or apply other property in exchange for the
      Borrower Collateral;

	 	 	 	 
			(c) 	
      insure, process and preserve the Borrower
    Collateral;

	 	 	 	 
			(d) 	
      transfer the Borrower Collateral to its own or its
      nominee’s name;

	 	 	 	 
			(e) 	
      make any compromise or settlement, and take any action it
      deems advisable, with respect to the Borrower Collateral; and

	 	 	 	 
			(f) 	
      notify any obligor on any Borrower Collateral to make
      payment directly to the Lenders.

The foregoing power of attorney is coupled with an interest and
irrevocable so long as the Lenders have any obligation to make any credit
facility available or the Secured Obligations have not been indefeasibly paid
and performed in full. The Borrower hereby ratifies, to the extent permitted by
law, all that the Lenders shall lawfully and in good faith do or cause to be
done by virtue of and in compliance with this Section 6.1. The Borrower agrees
to reimburse the Lenders upon demand for any costs and expenses, including
reasonable attorneys’ fees, the Lenders may incur while acting as the Borrower’s
attorney-in-fact hereunder, all of which costs and expenses are included in the
Secured Obligations. 

	 	6.2 	
      Collection of Rights to Payment. Until the Lenders
      exercise their rights hereunder to collect Rights to Payment, the Borrower
      shall endeavor in the first instance diligently to collect all amounts due
      or to become due on or with respect to the Rights to Payment. At the
      request of the Lenders, upon and after the occurrence of any Event of
      Default which has not been waived in writing, all remittances received by
      the Borrower shall be held in trust for the Lenders and, in accordance
      with the Lenders’ instructions, remitted to the Lenders in the form
      received (with any necessary endorsements or instruments of assignment or
      transfer).

	 	 	 
	 	6.3 	
      Investment Property and Instruments. Upon and
      after the occurrence of any Event of Default, the Lenders shall be
      entitled to receive all distributions and payments of any nature with
      respect to any investment property or instruments, and all such
      distributions or payments received by the Borrower shall be held in trust
      for the Lenders and, in accordance with the Lenders’ instructions,
      remitted to the Lenders in the form received (with any necessary
      endorsements or instruments of assignment or transfer). Following the
      occurrence of an Event of Default which has not been waived in writing,
      any such distributions and payments with respect to any investment
      property held in any securities account shall be held and retained in such
      securities account, in each case as part of the Borrower Collateral
      hereunder. Additionally, the Lenders shall have the right, upon the
      occurrence of an Event of Default which has not been waived in writing,
      following prior written notice to the Borrower, to vote and to give
      consents, ratifications and waivers with respect to any investment
      property and instruments of the Borrower, and to exercise all rights of
      conversion, exchange, subscription or any other rights, privileges or
      options pertaining thereto, as if the Lenders were the absolute owner
      thereof; provided that the Lenders shall have no duty to exercise
      any of the foregoing rights afforded to it and shall not be responsible to
      the Borrower or any other Person for any failure to do so or delay in
      doing so.

	7. 	
      REMEDIES; NOTICE OF SALE; RECEIVERS

	 	 	 
		7.1 	
      Remedies. Upon the occurrence of an Event of
      Default, and if such Event of Default is not cured within 10 days after
      the Borrower receives the Lender’s Default Notice, the Lenders may, at
      their option, provide written notice to the Borrower and do any one or
      more of the following:

	 	(a) 	
      foreclose or otherwise enforce the Lenders’ security
      interest in any manner permitted by law or provided for in this
      Agreement;

	 	 	 
	 	(b) 	
      sell, lease or otherwise dispose of any Borrower
      Collateral at one or more public or private sales at the Lenders’ place of
      business or any other place or places, including any broker’s board or
      securities exchange, whether or not such Borrower Collateral is present at
      the place of sale, for cash or credit or future delivery, on such terms
      and in such manner as the Lenders may determine;

	 	 	 
	 	(c) 	
      recover from the Borrower all costs and expenses,
      including reasonable attorneys’ fees and disbursements, incurred or paid
      by the Lenders in exercising any right, power or remedy provided by this
      Agreement;

	 	 	 
	 	(d) 	
      require the Borrower to assemble the Borrower Collateral
      and make it available to the Lenders at a place to be designated by the
      Lenders;

	 	 	 
	 	(e) 	
      enter onto property where any Borrower Collateral is
      located and take possession thereof with or without judicial process;
      and

	 	 	 
	 	(f) 	
      prior to the disposition of the Borrower Collateral,
      store, process, repair or recondition it or otherwise prepare it for
      disposition in any manner and to the extent the Lenders deems appropriate
      and in connection with such preparation and disposition, without charge,
      use any trade-mark, tradename, copyright, patent or technical process used
      by the Borrower.

	 	7.2 	
      Notice of Sale. The Borrower shall be given 20
      calendar days’ prior notice of the time and place of any public sale or of
      the time after which any private sale or other intended disposition of
      Borrower Collateral is to be made, which notice the Borrower hereby agrees
      shall be deemed reasonable notice thereof. Upon any sale or other
      disposition pursuant to this Agreement, the Lenders shall have the right
      to deliver, assign and transfer to the purchaser thereof the Borrower
      Collateral or portion thereof so sold or disposed of. The Lenders shall
      have the right upon any public sale, and, to the extent permitted by law,
      upon any private sale, to purchase the whole or any part of the Borrower
      Collateral so sold. Each purchaser at any such sale or other disposition
      (including the Lenders) shall hold the Borrower Collateral free from any
      claim or right of whatever kind, including any equity or right of
      redemption of the Borrower and the Borrower specifically waives (to the
      extent permitted by law) all rights of redemption, stay or appraisal which
      it has or may have under any rule of law or statute now existing or
      hereafter adopted.

	 	 	 
	 	7.3 	
      License. For the purpose of enabling the Lenders
      to exercise their rights and remedies under this Section 7.3 or otherwise
      in connection with this Agreement, the Borrower hereby grants to the
      Lenders an irrevocable, non-exclusive and assignable license (exercisable
      without payment or royalty or other compensation to the Borrower) or (to
      the extent permitted by the applicable license)
  sublicense to use, license or sublicense any Intellectual Property
      Collateral, subject with respect to trade-marks to reasonable and
  appropriate quality control provisions.

	 	7.4 	
      Appointment of Receiver. Upon the occurrence of an
      Event of Default which has not been waived in writing, the Lenders may, in
      addition to any other rights it may have, appoint by instrument in writing
      a receiver or receiver and manager (both of which are herein called a
      “Receiver”) of all or any part of the Borrower Collateral or may
      institute proceedings in any court of competent jurisdiction for the
      appointment of such a Receiver. Any such Receiver is hereby given and
      shall have the same powers and rights and exclusions and limitations of
      liability as the Lenders have under this Agreement, at law or in equity.
      In exercising any such powers, any such Receiver shall, to the extent
      permitted by law, act as and for all purposes shall be deemed to be the
      agent of the Borrower and the Lenders shall not be responsible for any act
      or default of any such Receiver. The Lenders may appoint one or more
      Receivers hereunder and may remove any such Receiver or Receivers and
      appoint another or others in his or their stead from time to time. Any
      Receiver so appointed may be an officer or employee of the Lenders. A
      court need not appoint, ratify the appointment by the Lenders of or
      otherwise supervise in any manner the actions of any Receiver. Upon the
      Borrower receiving notice from the Lenders of the taking of possession of
      the Borrower Collateral or the appointment of a Receiver, all powers,
      functions, rights and privileges of the Borrower and, to the extent
      permitted by law, its directors and officers with respect to the Borrower
      Collateral shall cease, unless specifically continued by the written
      consent of the Lenders.

	 	 	 
	 	7.5 	
      Carrying on Business Upon the occurrence of an
      Event of Default which has not been waived in writing, the Lenders may
      carry on, or concur in the carrying on of, all or any part of the business
      or undertaking of the Borrower, may, subject to the rights and liens of
      third parties but to the exclusion of the Borrower, enter upon, occupy and
      use all or any of the premises, buildings, plant and undertakings of or
      occupied or used by the Borrower and may use all or any of the tools,
      machinery, equipment and intangibles of the Borrower for such time as the
      Lenders sees fit, free of charge, to carry on the business of the Borrower
      and, if applicable, to manufacture or complete the manufacture of any
      Inventory and to pack and ship the finished product.

	 	 	 
	 	7.6 	
      Dealing with Borrower Collateral Upon the
      occurrence of an Event of Default which has not been waived in writing,
      the Lenders may seize, collect, realize, dispose of, enforce, release to
      third parties or otherwise deal with the Borrower Collateral or any part
      thereof in such manner, upon such terms and conditions and at such time or
      times as may seem to it advisable, all without notice to the Borrower
      except as otherwise required by any applicable law. The Lenders may
      demand, sue for and receive any Accounts with or without notice to the
      Borrower, give such receipts, discharges and extensions of time and make
      such compromises in respect of any Accounts which may, in the Lenders’
      absolute discretion, seem bad or doubtful. The Lenders may charge on their
      own behalf and pay to others, sums for costs and expenses incurred
      including, without limitation, legal fees and expenses on a solicitor and his own client scale and
      Receivers’ and accounting fees, in or in connection with seizing,
      collecting, realizing, disposing, enforcing or otherwise dealing with the
      Borrower Collateral and in connection with the protection and enforcement
      of the rights of the Lenders hereunder including, without limitation, in
      connection with advice with respect to any of the foregoing. The amount of
      such sums shall be deemed advanced to the Borrower by the Lenders, shall
      become part of the Secured Obligations, shall bear interest at the highest
      rate per annum charged by the Lenders on the Secured Obligations or any
      part thereof and shall be secured by this Agreement.

	 	7.7 	
      Right to Use The Borrower hereby grants to the
      Lenders a license or other right, upon the occurrence of an Event of
      Default which has not been waived in writing, to use, without charge, all
      of the Borrower’s present and future property, whether real or personal,
      including, without limitation, labels, patents, copyrights, rights of use
      of any name, trade secrets, trade names, trade-marks, services marks, and
      advertising matter, or any other property of any nature or of a similar
      nature, as it pertains to the Borrower Collateral, in completing
      production of, advertising for sale, and selling of any Borrower
      Collateral and the Borrower’s rights under all licenses and all franchise
      agreements shall inure to the Lenders.

	 	 	 
	 	7.8 	
      Retention of Borrower Collateral Upon notice to
      the Borrower and subject to any obligation to dispose of any of the
      Borrower Collateral, as provided in the PPSA, the Lenders may elect to
      retain all or any part of the Borrower Collateral in satisfaction of the
      Secured Obligations or any of them.

	 	 	 
	 	7.9 	
      Pay Liens. The Lenders may pay any Liens that may
      exist or be threatened against the Borrower Collateral. In addition, the
      Lenders may borrow money required for the maintenance, preservation or
      protection of the Borrower Collateral or for the carrying on of the
      business or undertaking of the Borrower and may grant further security
      interests in the Borrower Collateral in priority to the security interest
      created hereby as security for the money so borrowed. In every such case
      the amounts so paid or borrowed together with costs, charges and expenses
      incurred in connection therewith shall be deemed to have been advanced to
      the Borrower by the Lenders, shall become part of the Secured Obligations,
      shall bear interest at the highest rate per annum charged by the Lenders
      on the Secured Obligations or any part thereof and shall be secured by
      this Agreement.

	 	 	 
	 	7.10 	
      Application of Payments. Any and all payments made
      in respect of the Secured Obligations from time to time and moneys
      realized on the Borrower Collateral may be applied to such part or parts
      of the Secured Obligations as the Lenders may see fit. The Lenders shall,
      at all times and from time to time, have the right to change any
      appropriation as it may see fit. Any insurance moneys received by the
      Lenders pursuant to this Agreement may, at the option of the Lenders, be
      applied against the Secured Obligations as the Lenders thinks
  fit.

	 	 	 
	 	7.11 	
      Set-off. The Secured Obligations will be paid by
      the Borrower without regard to any equities between the Borrower and the
      Lenders or any right of set-off or cross-claim. If an Event of Default exists, any
      indebtedness owing by the Lenders to the Borrower may be set off and
      applied by the Lenders against the Secured Obligations either before or
      after maturity, without demand upon or notice to anyone and regardless of
      the currency in which the indebtedness is denominated.

	 	7.12 	
      Deficiency. If the proceeds of the realization of
      the Borrower Collateral are insufficient to repay the Lenders all amounts
      owing to it, the Borrower shall forthwith pay such deficiency or cause
      such deficiency to be paid to the Lenders.

	 	 	 
	 	7.13 	
      Lenders Not Liable The Lenders shall not be liable
      or accountable for any failure to seize, collect, realize, dispose of,
      enforce or otherwise deal with the Borrower Collateral, shall not be bound
      to institute proceedings for any such purposes or for the purpose of
      preserving any rights of the Lenders, the Borrower or any other person,
      firm or corporation in respect of the Borrower Collateral and shall not be
      liable or responsible for any loss, cost or damage whatsoever which may
      arise in respect of any such failure including, without limitation,
      resulting from the negligence of the Lenders or any of their officers,
      servants, agents, solicitors, attorneys, Receivers or otherwise unless
      arising from gross negligence or wilful misconduct. Neither the Lenders
      nor their officers, servants, agents, or Receivers shall be liable by
      reason of any entry into possession of the Borrower Collateral or any part
      thereof, to account as a mortgagee in possession, for anything except
      actual receipts, for any loss on realization, for any act or omission for
      which a mortgagee in possession might be liable, for any negligence in the
      carrying on or occupation of the business or undertaking of the Borrower
      or for any loss, cost, damage or expense whatsoever which may arise in
      respect of any such actions, omissions or negligence unless arising from
      gross negligence or wilful misconduct.

	 	 	 
	 	7.14 	
      Extensions of Time The Lenders may grant renewals,
      extensions of time and other indulgences, take and give up securities,
      accept compositions, grant releases and discharges, perfect or fail to
      perfect any securities, release any part of the Borrower Collateral to
      third parties and otherwise deal or fail to deal with the Borrower,
      subsidiaries of the Borrower, guarantors, sureties and others and with the
      Borrower Collateral and other securities as the Lenders may see fit, all
      without prejudice to the liability of the Borrower to the Lenders or the
      Lenders’ rights and powers under this Security Agreement.

	 	 	 
	 	7.15 	
      Rights in Addition The rights and powers conferred
      by this Section are in supplement of and in addition to and not in
      substitution for any other rights or powers the Lenders may have from time
      to time under this Agreement or under applicable law. The Lenders may
      proceed by way of any action, suit, remedy or other proceeding at law or
      in equity and no such remedy for the enforcement of the rights of the
      Lenders shall be exclusive of or dependent on any other such remedy. Any
      one or more of such remedies may from time to time be exercised separately
      or in combination.

	
8. 		
PERFECTION AND PRIORITY

	
	 	 	 
		
8.1 		
Financing Statements, Etc. The Borrower hereby authorizes the Lenders to file at any time and from time to time any financing statements describing the Borrower Collateral, and the Borrower shall execute and deliver to the
Lenders, and the Borrower hereby authorizes the Lenders to file (with or without the Borrower’s signature), at any time and from time to time, all amendments to financing statements, continuation financing statements, discharge statements,
security agreements relating to the Intellectual Property Collateral, assignments, fixture filings, affidavits, reports, notices and all other documents and instruments, in form satisfactory to the Lenders, as the Lenders may request, to perfect and
continue perfected, maintain the priority of or provide notice of the Lenders’ security interest in the Borrower Collateral and to accomplish the purposes of this Agreement. Without limiting the generality of the foregoing, the Borrower
ratifies and authorizes the filing by the Lenders of any financing statements filed prior to the date hereof.

	
	 	 	 
		
8.2 		
Bailees. Any Person (other than the Lenders) at any time and from time to time holding all or any portion of the Borrower Collateral shall be deemed to, and shall, hold the Borrower Collateral as the agent of, and as pledge
holder for, the Lenders. At any time and from time to time, the Lenders may give notice to any such Person holding all or any portion of the Borrower Collateral that such Person is holding the Borrower Collateral as the agent and bailee of, and as
pledge holder for, the Lenders, and obtain such Person’s written acknowledgment thereof. Without limiting the generality of the foregoing, the Borrower will join with the Lenders in notifying any Person who has possession of any Borrower
Collateral of the Lenders’ security interest therein and obtaining an acknowledgment from such Person that it is holding the Borrower Collateral for the benefit of the Lenders.

	
	 	 	 
		
8.3 		
Control. The Borrower will cooperate with the Lenders in obtaining control (as defined in the PPSA) of any Borrower Collateral consisting of deposit accounts, electronic chattel paper, investment property or rights in
respect of letters of credit.

	

	
9. 		
MISCELLANEOUS

	
	 	 	 
		
9.1 		
Amendments and Waivers. Except to the extent otherwise provided herein or in any other Document, (a) no amendment to any provision of this Agreement shall in any event be effective unless the same shall be in writing and
signed by the Borrower and the Lenders and (b) no waiver of any provision of this Agreement, or consent to any departure by the Borrower or other party therefrom, shall in any event be effective unless the same shall be in writing and signed by the
Lenders. Any such amendment, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.

	

	 	9.2 	
      Notices. All notices required or permitted under
      this Agreement shall be given in the manner and to the addresses specified
      in the Notes.

	 	 	 
	 	9.3 	
      No Waiver; Cumulative Remedies. No failure on the
      part of the Lenders to exercise, and no delay in exercising, any right,
      remedy, power or privilege under this Agreement shall operate as a waiver
      thereof, nor shall any single or partial exercise of any such right,
      remedy, power or privilege preclude any other or further exercise thereof
      or the exercise of any other right, remedy, power or privilege. The rights
      and remedies under this Agreement are cumulative and not exclusive of any
      rights, remedies, powers and privileges that may otherwise be available to
      the Lenders.

	 	 	 
	 	9.4 	
      Binding Effect. This Agreement shall be binding
      upon the Borrower and its successors and assigns, including any successor
      by reason of amalgamation, and inure to the benefit of and be enforceable
      by the Lenders and their successors, endorsees, transferees and
      assigns.

	 	 	 
	 	9.5 	
      Assignment. The Borrower may not assign or
      otherwise transfer any of its rights or obligations hereunder without the
      prior written consent of the Lenders, and any attempted assignment in
      violation of this provision shall be null and void. The Lenders may,
      without notice to or the further consent of the Borrower, assign this
      Agreement in whole or in part to any Person acquiring an interest in the
      Secured Obligations in accordance with the provisions of the other
      Transaction Documents.

	 	 	 
	 	9.6 	
      Costs and Expenses. The Borrower agrees to pay on
      demand all reasonable costs and expenses of the Lenders, any Receiver, or
      the agents of the Lenders or any Receiver, and reasonable fees and
      disbursements of counsel in connection with the perfection, enforcement,
      or preservation of any rights under, this Agreement and the other
      Documents.

	 	 	 
	 	9.7 	
      Severability. Whenever possible, each provision of
      this Agreement shall be interpreted in such manner as to be effective and
      valid under all applicable laws and regulations. If, however, any
      provision of this Agreement shall be prohibited by or invalid under any
      such law or regulation, it shall be deemed modified to conform to the
      minimum requirements of such law or regulation, or, if for any reason it
      is not deemed so modified, it shall be ineffective and invalid only to the
      extent of such prohibition or invalidity without affecting the remaining
      provisions of this Agreement.

	 	 	 
	 	9.8 	
      Governing Law. This Agreement is to be construed
      in accordance with and governed by the internal laws of the Province of
      British Columbia and the federal laws of Canada applicable therein without
      giving effect to any choice of law rule that would cause the application
      of the laws of any jurisdiction other than the internal laws of the
      Province of British Columbia and the federal laws of Canada applicable
      therein to the rights and duties of the Borrower and the
  Lenders.

	 	9.9 	
      Submission to Jurisdiction. The Borrower hereby
      (a) submits to the non- exclusive jurisdiction of the courts of the
      Province of British Columbia sitting in Vancouver for the purpose of any
      action or proceeding arising out of or relating to this Agreement and the
      other Documents, (b) agrees that all claims in respect of any such action
      or proceeding may be heard and determined in such courts, (c) irrevocably
      waives (to the extent permitted by applicable law) any objection which it
      now or hereafter may have to the laying of venue of any such action or
      proceeding brought in any of the foregoing courts, and any objection on
      the ground that any such action or proceeding in any such court has been
      brought in an inconvenient forum and (d) agrees that a final judgment in
      any such action or proceeding shall be conclusive and may be enforced in
      other jurisdictions by suit on the judgment or in any other manner
      permitted by law.

	 	 	 
	 	9.10 	
      Judgment Currency If, for the purposes of
      obtaining judgment in any court, it is necessary to convert a sum due
      hereunder or any other Document in one currency into another currency, the
      rate of exchange used shall be that at which in accordance with practices
      of the Lenders could purchase the first currency with such other currency
      on the Business Day preceding that on which final judgment is given. The
      obligation of the Borrower in respect of any such sum due from it to the
      Lenders hereunder or under the other Documents shall, notwithstanding any
      judgment in a currency (the “Judgment Currency”) other than that in
      which such sum is denominated in accordance with the applicable provisions
      of the Transaction Documents or other relevant document (the “Agreement
      Currency”), be discharged only to the extent that on the Business Day
      following receipt by the Lenders of any sum adjudged to be so due in the
      Judgment Currency, the Lenders may in accordance with normal practices
      purchase the Agreement Currency with the Judgment Currency. If the amount
      of the Agreement Currency so purchased is less than the sum originally due
      to the Lenders from the Borrower in the Agreement Currency, the Borrower
      agrees, as a separate obligation and notwithstanding any such judgment, to
      indemnify the Lenders against such loss. If the amount of the Agreement
      Currency so purchased is greater than the sum originally due to the
      Lenders in such currency, the Lenders agree to return the amount of any
      excess to the Borrower (or to any other Person who may be entitled thereto
      under applicable law). The agreements in this Section 10.11 shall survive
      the repayment of all Secured Obligations.

	 	 	 
	 	9.11 	
      Entire Agreement. This Agreement and the other
      Transaction Documents constitute the entire agreement of the parties
      hereto with respect to the matters set forth herein and supersede any
      prior agreements, commitments, drafts, communications, discussions and
      understandings, oral or written, with respect thereto.

	 	 	 
	 	9.12 	
      Counterparts. This Agreement may be executed in
      several counterparts, each of which shall be deemed an original and all of
      which shall together constitute one and the same instrument. Signatures
      delivered by facsimile (or similar electronic method) shall have the
      effect of originals.

	 	9.13 	
      Termination. Upon indefeasible payment and
      performance in full of all Secured Obligations, the security interests
      created by this Agreement shall terminate and the Lenders shall execute
      and deliver to the Borrower such documents and instruments reasonably
      requested by the Borrower as shall be necessary to evidence termination of
      all security interests given by the Borrower to the Lenders
    hereunder.

	 	 	 
	 	9.14 	
      Indemnity. The Borrower hereby agrees to indemnify
      the Lenders, and their successors, assigns, agents and employees, from and
      against any and all liabilities, damages, penalties, suits, costs, and
      expenses of any kind and nature (including, without limitation, all
      expenses of litigation or preparation therefor whether or not the Lenders
      are a party thereto) imposed on, incurred by or asserted against the
      Lenders, or their successors, assigns, agents and employees, in any way
      relating to or arising out of this Agreement, or the manufacture,
      purchase, acceptance, rejection, ownership, delivery, lease, possession,
      use, operation, condition, sale, return or other disposition of any
      Borrower Collateral (including, without limitation, latent and other
      defects, whether or not discoverable by the Lenders or the Borrower, and
      any claim for patent, trade-mark or copyright infringement), except for
      the gross negligence or willful misconduct of the Lenders.

	 	 	 
	 	9.15 	
      Acknowledgement of Receipt. The Borrower
      acknowledges receipt of a copy of this Agreement.

	 	 	 
	 	9.16 	
      Paramountcy. In the event of any conflict or
      inconsistency with the provisions hereof and the provisions of the Notes
      between the Borrower and the Lenders, the provisions of the Notes shall
      prevail and govern but only to the extent of such conflict or
      inconsistency.

[The remainder of this page has been intentionally left
blank.] 

	10. 	
      EFFECTIVE TIME

	 	 	 
		10.1 	
      This Agreement shall only become effective upon the
      Borrower having repaid in full all obligations owing by it to Luxor under
      the Luxor Notes, and the security granted hereunder shall become first
      ranking upon Luxor having fully complied with Section 10.6 of the Luxor
      Notes.

      
     IN WITNESS WHEREOF, the parties hereto have
executed and delivered this Agreement under seal by their duly authorized
signing officers as of the date first above written. 

 

CARDERO RESOURCE CORP. 

 

	 	By: 	(signed) Lawrence Talbot 
	 	  	Name: Lawrence Talbot 
	 	  	Title: Vice-President & General Counsel
  
	 	  	Authorized Signing Officer 

 

E.L. II PROPERTIES TRUST 

 

	 	By: 	(signed) Robert Kopple 
	 	  	Name: Robert C. Kopple, Trustee 
	 	 	Authorized Signing Officer 

 

KOPPLE FAMILY PARTNERSHIP, L.P.

By its General Partner, E.L. II Properties Trust 

	 	By: 	(signed) Robert Kopple 
	 	  	Name: Robert C. Kopple, Trustee 
	 	 	Authorized Signing Officer

SCHEDULE 1 
TO SECURITY AGREEMENT 

LOCATIONS OF EQUIPMENT, INVENTORY, 
CHIEF
EXECUTIVE OFFICE AND BOOKS AND RECORDS:

 

Suite 2300 - 1177 West Hastings Street 
Vancouver, British
Columbia 
CANADA V6E 2K3Cardero Resource Corp. - Exhibit 4.8 - Filed by newsfilecorp.com

SECURITIES PLEDGE AGREEMENT 

            This
SECURITIES PLEDGE AGREEMENT (as amended, modified, renewed,
supplemented, replaced or extended from time to time, this “Agreement”)
dated this 8th day of August, 2013 by CARDERO RESOURCE CORP.,
a corporation existing under the laws of the Province of British Columbia
(hereinafter referred to as the “Pledgor”) to and in favour of E.L. II
Properties Trust and Kopple Family Partnership, L.P. (collectively, the
“Lenders”). 

WHEREAS: 

	A. 	
      The Pledgor is indebted or liable or may become indebted
      or liable to the Lenders in connection with Senior Secured Notes dated the
      date hereof (amended, modified, renewed, supplemented, replaced or
      extended from time to time, the “Notes”).

	 	 
	B. 	
      The Pledgor has agreed to grant a security interest in
      and pledge the Collateral (as defined below) to the Lenders in order to
      secure the payment and performance of the Obligations (as defined
      below).

NOW THEREFORE, to induce the Lenders to extend credit to
the Pledgor, and in consideration thereof, and for other good and valuable
consideration, the receipt and sufficiency of which are acknowledged, the
Pledgor and the Lenders agree as follows: 

ARTICLE 1 
INTERPRETATION 

1.1       
Definitions. 

In this Agreement, unless the context expressly or by necessary
implication otherwise requires, the following words and phrases will have the
meaning set forth below: 

“Adverse Claim” has the meaning ascribed thereto in the
Securities Transfer Act, 2006 (Ontario); 

“Agreement” means this securities pledge agreement and
all amendments made hereto by written agreement between the Pledgor and the
Lenders; 

“Collateral” means the property and assets subject to
the Security Interest constituted by Section 2.1 hereof, including, without
limitation, the Pledged Securities; 

“Event of Default” has the meaning ascribed thereto in
the Notes; 

“Guarantor” has the meaning ascribed thereto in the
Notes; 

“Law” shall mean all statutes, codes, ordinances,
decrees, rules, regulations, customs, treaties, municipal by-laws, judicial or
arbitral or administrative or ministerial or departmental or regulatory
judgments, orders, decisions, rulings or awards, directives, customs, policies
or guidelines whether or not having the force of law, or any provisions of the
foregoing; 

2 

“Lender’s Default Notice” has the meaning ascribed
thereto in the Notes; 

“Luxor” means collectively, Luxor Capital Partners, LP,
Luxor Capital Partners Offshore Master Fund, LP, Luxor Wavefront, LP and OC 19
Master Fund, L.P. – LCG; 

“Luxor Notes” means the senior secured notes of the
Corporation dated April 22, 2013 issued to Luxor having an aggregate principal
amount of $5,500,000; 

“Subsidiaries” has the meaning ascribed thereto in the
Notes; 

“Notes” has the meaning ascribed thereto in the recitals
to this Agreement;

“Obligations” means any and all indebtedness,
liabilities and obligations of the Pledgor to the Lenders under and in
connection with the Notes; 

“Permitted Encumbrances” has the meaning ascribed
thereto in the Notes; 

“Person” has the meaning ascribed thereto in the Notes;

“Pledged Securities” means all of the shares in the
capital of the Guarantor now owned or hereafter acquired by the Pledgor,
including, without limitation, the common shares, represented by share
certificate nos. 79-C, 96-C, 125-C, 133-C, 147-C, 148-C and 149-C; and 

“Security Interest” means a mortgage, hypothec, title
retention, pledge, lien, right of set-off, charge, security interest, Adverse
Claim or other encumbrance whatsoever, whether fixed or floating and howsoever
created or arising. 

1.2       
Sections and Headings. 

The division of this Agreement into Articles and Sections and
the insertion of headings are for convenience of reference only and will not
affect the construction or interpretation of this Agreement. The terms “this
Agreement”, “hereof”, “hereunder” and similar expressions
refer to this Agreement and not to any particular Article, Section or other
portion hereof and include any agreement supplemental hereto. Unless something
in the subject matter or context is inconsistent therewith, references herein to
Articles and Sections are to Articles and Sections of this Agreement. 

1.3       
Extended Meanings. 

In this Agreement words importing the singular number only
include the plural and vice versa, words importing any gender include all
genders and words importing persons include individuals, partnerships,
associations, trusts, unincorporated organisations and corporations. 

3 

ARTICLE 2 
GRANT OF SECURITY INTEREST AND PLEDGE

2.1       
Grant and Pledge of Collateral. 

As general and continuing collateral security for the payment
and performance of all Obligations, the Pledgor hereby, subject to Permitted
Encumbrances, mortgages, charges, assigns, transfers, delivers, pledges,
hypothecates and creates a Security Interest in, to and in favour of the
Lenders, all right, title and interest which the Pledgor now has or may
hereafter acquire in and to the following: 

	 	(a) 	
      all Pledged Securities, together with any renewals
      thereof, substitutions thereof or additions thereto and all certificates
      and instruments evidencing or representing the Pledged
  Securities;

	 	 	 
	 	(b) 	
      any and all dividends, as and where declared, whether in
      shares, money or property, received or receivable upon or in respect of
      any Pledged Securities and all interest payments and money or other
      property paid or payable on account of any return on, or repayment of,
      capital in respect of any Pledged Securities or that will in any way be
      charged to, or be payable out of, the capital of the Guarantor in respect
      thereof;

	 	 	 
	 	(c) 	
      any and all other property that may at any time be
      received or receivable by or otherwise distributed to the Pledgor in
      respect of, or in substitution for, or in addition to, or in exchange for,
      or on account of, any of the foregoing, including, without limitation, any
      shares or other securities resulting from the subdivision, consolidation,
      change, conversion or reclassification of any of the Pledged Securities,
      or the reorganization or amalgamation of Guarantor with any other body
      corporate, or the occurrence of any event which results in the
      substitution or exchange of the Pledged Securities; and

	 	 	 
	 	(d) 	
      any and all cash, securities and other proceeds in
      respect of the foregoing and all rights and interest of the Pledgor in
      respect thereof or evidenced thereby including, without limiting the
      generality of the foregoing, all money received or receivable from time to
      time by the Pledgor in connection with the sale of any of the Pledged
      Securities.

2.2       
Delivery of Collateral. 

All certificates, instruments or other documents representing
the Pledged Securities, duly endorsed for transfer or accompanied by powers of
attorney satisfactory to the Lenders, shall forthwith be delivered immediately
except share certificates 79-C, 96-C, 125-C, 133-C, 147-C, 148-C and 149-C which
shall be delivered forthwith upon their return to the Corporation from Luxor in
accordance with Luxor’s obligations under Section 10.6 of the Luxor Notes, to
and remain in the custody of the Lenders or their nominee. All certificates,
instruments or other documents representing or evidencing any additional Pledged
Securities hereinafter acquired by the Pledgor shall forthwith after issuance be
delivered to and remain in the custody of the Lenders or their nominee. All
Pledged Securities may, at the option of the Lenders, be registered in the name of the Lenders or their nominee. If requested by
the Lenders, the Pledgor will execute and deliver to the Lenders a stock
transfer direction to the transfer agent of the Pledged Securities. 

4 

2.3       
Attachment.

The Pledgor and the Lenders hereby acknowledge that value has
been given, the Pledgor has rights in the Collateral and the Pledgor and the
Lenders have not agreed to postpone the time for attachment. 

ARTICLE 3 
REPRESENTATIONS, WARRANTIES AND
COVENANTS 

3.1       
Representations and Warranties of the Pledgor. 

The Pledgor hereby represents and warrants to the Lenders, upon
each of which representations and warranties the Lenders specifically relies, as
follows: 

	 	(a) 	
      the Pledgor is and will be the sole registered and
      beneficial owner of the Collateral now in existence or acquired hereafter,
      free of any Security Interest other than Security Interests in favour of
      the Lenders and Permitted Encumbrances with full right to mortgage,
      charge, assign, transfer, deliver, pledge and hypothecate the Pledged
      Securities to the Lenders pursuant hereto;

	 	 	 
	 	(b) 	
      any shares of Guarantor forming part of the Pledged
      Securities will be validly issued, fully paid and non-assessable and shall
      not be subject to any lien in favour of the Guarantor;

	 	 	 
	 	(c) 	
      there is no existing agreement, option, right or
      privilege capable of becoming an agreement or option pursuant to which the
      Pledgor would be required to sell or otherwise dispose of any of the
      Pledged Securities; and

	 	 	 
	 	(d) 	
      the Security Interest created hereby will constitute a
      valid perfected Security Interest in the Pledged Securities upon delivery
      of the share certificates representing the Pledged Securities to the
      Lenders or upon registration of notice thereof in prescribed form under
      applicable personal property security legislation, if such registration is
      required in order to perfect a Security Interest in the Pledged
      Securities.

3.2       
Covenants of Pledgor. 

The Pledgor covenants to and in favour of the Lenders that
until all the Obligations are indefeasibly performed and paid in full, it shall:

	 	(a) 	
      defend the Lenders’ right, title and Security Interest in
      and to the Collateral;

	 	 	 
	 	(b) 	
      except to the extent permitted by Section 4.2, not (and
      shall not purport to) sell or dispose of, transfer, relinquish or
      otherwise deal with, any of its interest in
the Pledged Securities or other Collateral or incur or permit
      to exist any Security Interest other than Permitted Encumbrances or any
      Security Interest that is in favour of the Lenders in or with respect to
  any of the Pledged Securities or other Collateral;

5 

	 	(c) 	
      ensure that at the request of the Lenders all Pledged
      Securities shall be registered in the name of the Lenders or their
      nominee, that any certificates representing the Pledged Securities shall
      be forthwith delivered to and remain in the custody of the Lenders or
      their nominee, and that all certificates, instruments or other documents
      representing or evidencing any Pledged Securities shall forthwith after
      issuance be delivered to, and remain in the custody of, the Lenders or
      their nominee;

	 	 	 
	 	(d) 	
      ensure that such stock powers of attorney and similar
      documents with respect to the Pledged Securities as the Lenders may
      reasonably request, satisfactory in the form and substance to the Lenders,
      shall be delivered to the Lenders or their nominee from time to time upon
      request; and

	 	 	 
	 	(e) 	
      not, with respect to the Pledge Securities, enter into,
      amend, or waive any right or obligation under, any shareholder agreement,
      voting agreement, voting trust, trust deed, irrevocable proxy or other
      similar agreements or instruments.

ARTICLE 4 
DEALING WITH COLLATERAL 

	4.1 	
      Rights and Duties of the Lenders.

	 	 	 
		(a) 	
      The Lenders shall have and be entitled to exercise all
      such powers hereunder as are specifically delegated to the Lenders by the
      terms hereof, together with such powers as are incidental thereto. The
      Lenders may execute any of their duties hereunder by or through agents or
      employees and shall be entitled to retain counsel and to act in reliance
      upon the advice of such counsel concerning all matters pertaining to their
      duties hereunder.

	 	 	 
		(b) 	
      The Lenders and any nominee on their behalf shall be
      bound to exercise in the holding of the Pledged Securities and other
      Collateral the same degree of care as it would exercise with respect to
      similar property of their own of similar value held in the same place. The
      Lenders and any other nominee on their behalf shall be deemed to have
      exercised reasonable care with respect to the custody and preservation of
      the Collateral if they take such action for this purpose as the Pledgor
      shall reasonably request in writing, but failure of the Lenders or their
      nominee to comply with any such request shall not in and of itself be
      deemed a failure to exercise reasonable care, and no failure of the
      Lenders or their nominee to preserve or protect any rights with respect to
      the Collateral, or to do any act with respect to preservation of the
      Collateral not so requested by the Pledgor, shall in and of itself be
      deemed a failure to exercise reasonable care in the custody or
      preservation of the Collateral. Neither the Lenders nor any nominee acting
      on their behalf, nor any director, officer or employee of the Lenders
      shall be liable for any action taken or omitted to be
taken by them hereunder or in connection herewith except for their own gross
negligence or wilful misconduct. The Lenders are hereby released from all
responsibilities for any depreciation in or loss of value of any part of the
Collateral except for such depreciation or loss of value that is the result of
the Lenders’ (or their authorized agents’ or nominee’s or that or their
officers, directors or employees) gross negligence or wilful misconduct. 

6 

	4.2 	
      Voting Rights.

	 	 	 
		(a) 	
      Unless an Event of Default has occurred and has not been
      waived in writing by the Lenders, the Pledgor is entitled to exercise all
      the rights and powers of a holder of such securities including, without
      limitation, the right to vote from time to time exercisable in respect of
      the Collateral and to give proxies, consents and waivers in respect
      thereof. No such action may be taken if it would violate or be
      inconsistent with the Notes, any other document to which the Pledgor is a
      party, or this Agreement or any other agreements relating thereto or
      hereto or would have the effect of reducing the value of the Collateral as
      security for the Obligations or imposing any restriction on the
      transferability of any of the Collateral.

	 	 	 
		(b) 	
      Upon the occurrence of an Event of Default which has not
      been waived in writing by the Lenders, the rights and powers of the
      Pledgor as a holder of such securities including, without limitation, the
      right to vote the Collateral, will cease immediately and the Lenders will
      have the right to exercise the rights and powers related to such
      Collateral, including, without limitation, the right to vote unless the
      Lenders shall have given a notice to the Pledgor permitting the Pledgor to
      continue to exercise such rights and powers subject to any limitations set
      forth in such notice.

	 	 	 
	4.3 	
      Dividends and Interest
Payments.

Subject to Section 2.1: 

	 	(a) 	
      Unless an Event of Default has occurred and has not been
      waived in writing by the Lenders, the Pledgor is entitled to receive all
      dividend payments or other distributions or interest payments, whether any
      such amount are paid in cash, securities or otherwise in respect of the
      Collateral.

	 	 	 
	 	(b) 	
      Upon the occurrence of an Event of Default which has not
      been waived in writing by the Lenders, all rights of the Pledgor pursuant
      to Section 4.3(a) shall cease and the Lenders will have the sole and
      exclusive right and authority to receive and retain all payments that the
      Pledgor would otherwise be authorised to retain pursuant to Section
      4.3(a). All money and other property received by the Lenders pursuant to
      the provisions of this Section 4.3(b) may be applied on account of the
      Obligations or may be retained by the Lenders as additional Collateral
      hereunder and be applied in accordance with the provisions of this
      Agreement.

7 

	4.4 	
      Restricted Securities

	 	 	 
		(a) 	
      The Lenders acknowledge that the Pledged Securities, upon
      transfer to the Lenders, if applicable, will be “restricted securities”
      within the meaning of Rule 144 under the U.S. Securities Act of 1933, as
      amended, and may not be offered, sold or otherwise transferred by the
      Lenders except in accordance with the terms of the Transaction Documents
      (as defined in the Notes) and pursuant to registration or available
      exemptions therefrom under the laws of such act and applicable state
      securities laws.

ARTICLE 5 
REMEDIES 

	5.1 	
      Remedies

	 	 	 	 
		(a) 	
      Upon the occurrence of an Event of Default, and if such
      Event of Default not cured within 10 days after the Corporation receives
      the Lender’s Default Notice, the Lenders may, at their option, provide
      written notice to the Pledgor and (i) any or all of the Obligations will
      at the option of the Lenders become immediately due and payable or be
      subject to immediate performance, as the case may be, without presentment,
      protest or notice of dishonour, all of which are expressly waived, (ii)
      the obligation, if any, of the Lenders to extend further credit to the
      Pledgor will cease, (iii) any or all security granted hereby will, at the
      option of the Lenders, become immediately enforceable, and (iv) in
      addition to any right or remedy provided by Law, the Lenders will have the
      rights and remedies set out below, all of which rights and remedies will
      be enforceable successively, concurrently or both:

	 	 	 	 
			(i) 	
      transfer any part of the Collateral into the name of the
      Lenders or their nominee;

	 	 	 	 
			(ii) 	
      vote any of the Collateral (whether or not registered in
      the name of the Lenders or their nominee) and give or withhold all
      consents and waivers in respect thereof;

	 	 	 	 
			(iii) 	
      exercise all rights of conversion, exchange or
      subscription, or any other rights, privileges or options pertaining to any
      of the Collateral, including, without limitation, the right to exchange at
      their discretion any of the Collateral upon the amalgamation, arrangement,
      merger, consolidation or other reorganization of the issuer of the
      Collateral, all without liability except to account for property actually
      received by the Lenders;

	 	 	 	 
			(iv) 	
      from time to time realise upon, collect, sell, transfer,
      assign, give options to purchase or otherwise dispose of and deliver any
      Collateral in such manner as may seem advisable to the Lenders. For such
      purposes each requirement relating thereto and prescribed by law or
      otherwise is hereby waived by the Pledgor to the extent permitted by law
      and in any offer or sale of any of the Collateral the Lenders are
      authorized to comply with any limitation or restriction in connection with such offer
      or sale as the Lenders may be advised by counsel is necessary in order to
      avoid any violation of applicable Law, or in order to obtain any required
      approval of the sale or of the purchase by any governmental or regulatory
      authority or official. Such compliance will not result in such sale being
      considered (or deemed) not to have been made in a commercially reasonable
      manner nor will the Lenders be liable or accountable to the Pledgor for
      any discount allowed by reason of the fact that such Collateral is sold in
  compliance with any such limitation or restriction;

8 

	 	(v) 	
      purchase any of the Collateral, whether in connection
      with a sale made under the power of sale herein contained or pursuant to
      judicial proceedings or otherwise; and

	 	 	 
	 	(vi) 	
      accept the Collateral in satisfaction of the Obligations
      upon notice to the Pledgor of their intention to do so in the manner
      required by law.

	 	(b) 	
      The Lenders may (i) grant extensions of time, (ii) take
      and perfect or abstain from taking and perfecting security, (iii) give up
      securities, (iv) accept compositions or compromises, (v) grant releases
      and discharges, and (vi) release any part of the Collateral or otherwise
      deal with the Pledgor, debtors of the Pledgor, sureties and others and
      with the Collateral and other security as the Lenders sees fit without
      prejudice to the liability of the Pledgor to the Lenders or the Lenders’
      rights hereunder.

	 	 	 
	 	(c) 	
      The Lenders will not be liable or responsible for any
      failure to seize, collect, realise, or obtain payment with respect to the
      Collateral and is not bound to institute proceedings or to take other
      steps for the purpose of seizing, collecting, realising or obtaining
      possession or payment with respect to the Collateral or for the purpose of
      preserving any rights of the Lenders, the Pledgor or any other person, in
      respect of the Collateral.

	 	 	 
	 	(d) 	
      The Lenders may apply any proceeds of realisation of the
      Collateral to payment of reasonable expenses in connection with the
      preservation and realisation of the Collateral as above described and the
      Lenders may apply any balance of such proceeds to payment of the
      Obligations in such order as the Lenders see fit. If there is any surplus
      remaining, the Lenders may pay it to any Person having a claim thereto in
      priority to the Pledgor of whom the Lenders have knowledge and any balance
      remaining must be paid to the Pledgor. If the disposition of the
      Collateral fails to satisfy the Obligations secured by this Agreement and
      the aforesaid expenses, the Pledgor will be liable to pay any deficiency
      to the Lenders forthwith on demand.

5.2       
Payment of Expenses. 

The Lenders may charge on their own behalf and also pay to
others all reasonable out-of-pocket expenses of the Lenders and others,
including the fees and disbursements of any experts or advisers (including, without limitation, reasonable legal fees)
retained by the Lenders, incurred in connection with realising, collecting,
selling, transferring, delivering or obtaining payment for the Collateral, or in
connection with the administration of any amendment of this Agreement or
incidental to the care, safekeeping or otherwise of any Collateral. The Lenders
may deduct the amount of such expenses from any proceeds of disposition of the
Lenders. 

9 

ARTICLE 6 
GENERAL 

6.1       
Benefit of the Agreement. 

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

6.2       
Amendments and Waivers. 

No amendments to this Agreement will be valid or binding unless
set forth in writing and duly executed by all of the parties hereto. No waiver
of any breach of any provision of this Agreement will be effective or binding
unless made in writing and signed by the party purporting to give the same and,
unless otherwise provided in the written waiver, will be limited to the specific
breach waived. 

6.3       
Assignment. 

The rights, title and interest of the Lenders under this
Agreement may only be assigned by the Lenders in accordance with the provisions
of the Notes. The Pledgor may not assign its obligations under this Agreement
without the prior written consent of the Lenders. 

6.4       
Severability. 

If any provision of this Agreement is determined to be invalid
or unenforceable in whole or in part, such invalidity or unenforceability will
attach only to such provision or part thereof and the remaining part of such
provision and all other provisions hereof will continue in full force and
effect. 

6.5       
Notices. 

Any demand, notice or other communication to be given in
connection with this Agreement shall be given in accordance with the provisions
of the Notes. 

6.6       
Additional Continuing Security. 

This Agreement and the Security Interest granted hereby are in
addition to and not in substitution for any other security now or hereafter held
by the Lenders and this Agreement is a continuing agreement and security that
will remain in full force and effect until discharged by the Lenders. 

10 

6.7       
Further Assurances. 

The Pledgor must at its expense from time to time do, execute
and deliver, or cause to be done, executed and delivered, all such financing
statements, further assignments, documents, acts, matters and things as may be
reasonably requested by the Lenders for the purpose of giving effect to this
Agreement or for the purpose of establishing compliance with the
representations, warranties and covenants herein contained. 

6.8       
Power of Attorney. 

Upon the occurrence of an Event of Default which has not been
waived in writing by the Lenders, the Pledgor hereby irrevocably constitutes and
appoints any duly appointed officer for the time being of the Lenders the true
and lawful attorney of the Pledgor, with full power of substitution, to do, make
and execute all such statements, assignments, documents, acts, matters or things
with the right to use the name of the Pledgor whenever and wherever the officer
may deem necessary or expedient and from time to time to exercise all rights and
powers and to perform all acts of ownership in respect of the Collateral in
accordance with this Agreement. 

6.9       
Discharge. 

The Pledgor will not be released or discharged from any of the
Obligations or from this Agreement except by a release or discharge signed in
writing by the Lenders which shall not be unreasonably withheld or delayed. The
Lenders shall, upon indefeasible satisfaction of all of the Obligations of the
Pledgor to the Lenders, execute such releases and discharges as the Pledgor may
reasonably require, all at the request and sole cost and expense of the Pledgor
and return to the Pledgor all Pledged Securities together with all other
Collateral in the possession of the Lenders and their nominee. 

6.10      Governing
Law and Attornment. 

This Agreement shall be exclusively (without regard to rules or
principals relating to conflicts of laws) governed by and construed in
accordance with the laws of the Province of British Columbia and the federal
laws of Canada applicable therein. The Pledgor and the Lenders hereby
irrevocably and unconditionally attorn to the non-exclusive jurisdiction of the
courts of the Province of British Columbia and all courts competent to hear
appeals therefrom. 

6.11      Entire
Agreement. 

This Agreement has been entered into pursuant to the provisions
of the Notes and is subject to all the terms and conditions thereof and, if
there is any conflict or inconsistency between the provisions of this Agreement
and the provisions of the Notes, the rights and obligations of the parties will
be governed by the provisions of the Notes, provided, however, that the
existence of remedies in this Agreement which are not contained in the Notes
shall not constitute a conflict or inconsistency with the Notes. There are no
representations, warranties, terms, conditions, undertakings or collateral
agreements, express, implied or statutory, between the Lenders and the Pledgor
with respect to the subject matter hereof except as expressly set forth herein
or in the Notes and the other documents delivered in connection with the Notes.

11 

6.12      Executed
Copy. 

The Pledgor acknowledges receipt of a fully-executed copy of
this Agreement. 

ARTICLE 7 
EFFECTIVE TIME 

	7.1 	
      This Agreement shall only become effective upon the
      Pledgor having repaid in full all obligations owing by it to Luxor under
      the Luxor Notes, and the security granted hereunder shall become first
      ranking upon Luxor having fully complied with Section 10.6 of the Luxor
      Notes.

[Remainder of this page intentionally left blank] 

12 

      
     IN WITNESS WHEREOF the parties have
executed and delivered this Agreement under their respective seals by their duly
authorized signing officers as of the date first referred to above. 

	 	  	CARDERO RESOURCE CORP. 
	 	  	  
	 	  	  
	 	By: 	(signed) Lawrence Talbot 
	 	  	Name: Lawrence Talbot 
	 	  	Title: Vice-President & General Counsel
  
	 	  	Authorized Signing Officer 
	 	  	  
	 	  	  
	 	  	E.L. II PROPERTIES TRUST 
	 	  	  
	 	  	  
	 	By: 	(signed) Robert Kopple 
	 	  	Name: Robert C. Kopple, Trustee 
	 	  	Authorized Signing Officer 
	 	  	  
	 	  	  
	 	 	KOPPLE FAMILY PARTNERSHIP,
      L.P. 
	 	  	By its General Partner, E.L. II Properties
      Trust 
	 	  	  
	 	  	  
	 	By: 	(signed) Robert Kopple 
	 	  	Name: Robert C. Kopple, Trustee 
	 	  	Authorized Signing Officer

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00230-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00230-of-00352.parquet"}]]