Document:

Cardero Resource Corp. - Exhibit 4.5 - Filed by newsfilecorp.com

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR APPLICABLE
STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES
FOR THE BENEFIT OF CARDERO RESOURCE CORP. (THE “COMPANY”) THAT SUCH SECURITIES
MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT; (B) TO THE COMPANY, (C) OUTSIDE THE
UNITED STATES IN ACCORDANCE WITH REGULATION S UNDER THE 1933 ACT AND IN
COMPLIANCE WITH APPLICABLE LOCAL LAWS OR (D) WITHIN THE UNITED STATES (1) IN
ACCORDANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT PROVIDED BY
RULE 144 OR RULE 144A THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY
APPLICABLE STATE SECURITIES LAWS OR (2) IN A TRANSACTION THAT DOES NOT REQUIRE
REGISTRATION UNDER THE 1933 ACT OR APPLICABLE STATE SECURITIES LAWS, AND THE
HOLDER HAS PROVIDED THE COMPANY, PRIOR TO SUCH OFFER, SALE OR TRANSFER WITH AN
OPINION OF COUNSEL, IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY OR OTHER
EVIDENCE SATISFACTORY TO THE COMPANY THAT SUCH SECURITIES ARE REGISTERED UNDER
THE 1933 ACT OR MAY BE SO OFFERED, SOLD OR TRANSFERRED WITHOUT REGISTRATION
UNDER THE 1933 ACT OR APPLICABLE STATE SECURITIES LAWS. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

UNLESS PERMITTED UNDER APPLICABLE SECURITIES LEGISLATION,
THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE DECEMBER 9, 2013.

CARDERO RESOURCE CORP. 
Senior Secured Note 

	Issued to: 	KOPPLE FAMILY PARTNERSHIP, L.P. 
	 	 
	Issued by: 	CARDERO RESOURCE CORP.

Aggregate Principal Amount: $2,000,000 

Issue Date:     
August 8, 2013 

ARTICLE 1 
PROMISE TO PAY 

1.1      Promise
to Pay 

            CARDERO
RESOURCE CORP. (the “Corporation”), a company existing under the laws
of the Province of British Columbia and having its chief executive office at
Suite 2300 – 1177 West Hastings Street, Vancouver, British Columbia, V6E 2K3,
for value received, hereby promises to pay to or to the order of Kopple
Family Partnership, L.P., its successors and permitted assigns (the
“Holder”), at [Redacted] or at such other place as the Holder may direct
at any time and from time to time, the amount of $2,000,000 on the Maturity
Date (as hereinafter defined) (or such other date as amounts owing
hereunder may become due and payable in accordance with the terms hereof) and to
pay interest, payable in cash quarterly (in arrears), on the last Business Day
of March, June, September and December of each calendar year on the principal
amount outstanding and on all other amounts now or hereafter owing hereunder
(including accrued and unpaid interest), at the rate of 10% per
annum (calculated annually and not in advance) until and including the Maturity
Date (or such other date as amounts owing hereunder may become due and payable
in accordance with the terms hereof). Upon the occurrence of any Event of
Default and thereafter, interest shall be calculated on the principal amount
outstanding and all other amounts now and hereafter payable hereunder (including
accrued and unpaid interest) at the rate of 10% per annum until indefeasible
repayment and performance of all Obligations in full or a waiver of the Event of
Default by the Holder in writing, as a reasonable and genuine pre-estimate of
damages and not as a penalty. The principal amount owing from time to time, any
interest payable thereon and all other amounts now or hereafter payable
hereunder, and at any time outstanding hereunder, 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 any and all
reasonable costs, fees and expenses incurred by the Holder in respect of any and
all of the obligations and liabilities owing hereunder shall be referred to
herein as the “Obligations”. 

- 2 - 

1.2      Transfer
and Assignment 

            The
Holder may transfer and assign this Note and all other Transaction Documents to
any Person without the consent of the Corporation; provided that: (a) the Holder
notifies the Corporation of such transferee’s name and address; and (b) the
Holder complies with the terms of any legends included on the first page of this
Note. The terms and conditions of this Note shall enure to the benefit of and be
binding upon the Holder’s successors and permitted assigns. 

ARTICLE 2 
INTERPRETATION 

	2.1 	
      Definitions

	 	 	 
		
      In this Note:

	 	 	 
		(a) 	
      “Affiliate” has the meaning attributed to that
      term in the TSX Company Manual;

	 	 	 
		(b) 	
      “Associate” has the meaning attributed to that
      term in the TSX Company Manual;

	 	 	 
		(c) 	
      “Business Day” means a day other than a Saturday,
      Sunday or any other day on which Canadian chartered banks located in the
      City of Vancouver, Province of British Columbia are not open for
      business;

	 	 	 
		(d) 	
      “Coal Licenses” means the coal licenses originally
      granted to Alan A. Johnson by the Ministry of Energy, Mines and Petroleum
      Resources on June 14, 2012 under nos. 418174 (as amended August 21, 2012),
      418175 (as amended September 11, 2012), 418176 and 418177 and any licenses
      that may hereafter be issued by the Ministry of Energy, Mines and
      Petroleum Resources from any coal licence applications, now legally and
      beneficially owned by the Guarantor;

- 3 - 

	 	(e) 	
      “Change of Control” means the occurrence of any of
      the following events:

	 	 	 	 
	 		(i) 	
      any Offeror, other than the Holder or an Associate or
      Affiliate thereof, has acquired beneficial ownership (within the meaning
      of the Securities Act (British Columbia)) of, or the power to
      exercise control or direction over, or securities convertible into, any
      Voting Shares of the Corporation, that together with the offeror’s
      securities in relation to the Voting Shares of the Corporation, would
      constitute Voting Shares of the Corporation representing more than 30% of
      the total voting power attached to all Voting Shares of the Corporation
      then outstanding;

	 	 	 	 
	 		(ii) 	
      there is consummated any amalgamation, consolidation,
      statutory arrangement (involving a business combination) or merger of the
      Corporation (1) in which the Corporation is not the continuing or
      surviving corporation, or (2) pursuant to which any Voting Shares of the
      Corporation would be reclassified, changed or converted into or exchanged
      for cash, securities or other property, other than (in each case) an
      amalgamation, consolidation, statutory arrangement or merger of the
      Corporation in which the holders of the Voting Shares of the Corporation
      immediately prior to the amalgamation, consolidation, statutory
      arrangement or merger have, directly or indirectly, more than 50% of the
      Voting Shares of the continuing or surviving corporation immediately after
      such transaction;

	 	 	 	 
	 		(iii) 	
      any Person or group of Persons shall succeed in having a
      sufficient number of its nominees elected as directors of the Corporation
      such that such nominees, when added to any existing directors after such
      election who was a nominee of or is an Affiliate or related Person of such
      Person or group of Persons, will constitute a majority of the directors;
      or

	 	 	 	 
	 		(iv) 	
      the Guarantor ceases to be a direct or indirect
      wholly-owned Subsidiary of the Corporation;

	 	(f) 	
      “Closing Date” means the date of issuance of this
      Note to the Holder;

	 	 	 	 
	 	(g) 	
      “Corporation” has the meaning attributed thereto
      in Section 1.1;

	 	 	 	 
	 	(h) 	
      “Date of Prepayment” means a date specified in a
      written notice given by the Corporation to the Holder pursuant to Section
      3.2;

	 	 	 	 
	 	(i) 	
      “Debt” of the Corporation or the Guarantor, as the
      case may be, means, without duplication:

	 	 	 	 
	 		(i) 	
      all of its indebtedness for or in respect of borrowed
      money, credit or other financial accommodation, including liabilities and
      obligations with respect to letters of credit, letters of guarantee,
      bankers’ acceptances or similar instruments issued or accepted by banks
      and other financial institutions for the account of the Corporation or the
      Guarantor;

- 4 - 

	 	(ii) 	
      all of its indebtedness for or in respect of the purchase
      or acquisition price of property or services, whether or not recourse is
      limited to the repossession and sale of any such property;

	 	 	 
	 	(iii) 	
      all obligations under any lease entered into as lessee
      which would be classified as a capital lease in accordance with
    IFRS;

	 	 	 
	 	(iv) 	
      all obligations of it to purchase, redeem, retract or
      otherwise acquire any securities issued by the Corporation or the
      Guarantor where such obligation has been exercised or otherwise become
      payable;

	 	 	 
	 	(v) 	
      all Debt (as hereinbefore defined) or any other debt
      which is directly or indirectly guaranteed by the Corporation or the
      Guarantor or which the Corporation or the Guarantor has agreed to purchase
      or otherwise acquire or in respect of which the Corporation or the
      Guarantor has otherwise assured a creditor against
loss;

but for greater certainty, “Debt” shall not include
unsecured trade debt incurred in the ordinary course of business consistent with
past practice, nor any contingent liabilities in connection with contracts
entered into in the ordinary course of business; 

	 	(vi) 	
      the market value of all derivatives in respect of which
      the market value is negative/“out of the money” from the Corporation’s or
      the Guarantor’s perspective;

	 	(j) 	
      “Event of Default” has the meaning attributed
      thereto in Section 8.1;

	 	 	 
	 	(k) 	
      “Exchanges” has the meaning ascribed thereto in
      the Subscription Agreement;

	 	 	 
	 	(l) 	
      “Guarantor” means Cardero Coal Ltd., a wholly
      owned subsidiary of the Corporation;

	 	 	 
	 	(m) 	
      “Holder” has the meaning attributed thereto in
      Section 1.1;

	 	 	 
	 	(n) 	
      “IFRS” means international financial reporting
      standards, approved by the International Accounting Standards Board or
      each successor thereto (“IASB”), adopted by the Guarantor, as
      applicable, as at the date on which any calculation or determination is
      required to be made, provided that, in accordance with the international
      financial reporting standards, where the IASB includes a recommendation
      concerning the treatment of any accounting matter, such recommendation
      shall be regarded as the only international financing reporting
      standard;

	 	 	 
	 	(o) 	
      “John Deere Lease” means the John Deere Commercial
      Lease Agreement (with Purchase Option) dated July 30, 2012 between Brandt
      Tractor Ltd. and the Guarantor pursuant to which Brandt Tractor Ltd.
      leases to the Guarantor a John Deere motor
grader;

- 5 - 

	 	(p) 	
      “Lender’s Default Notice” has the meaning
      attributed thereto in Section 9.1;

	 	 	 	 
	 	(q) 	
      “Lien” means any lien, mortgage, charge, hypothec,
      pledge, security interest, assignment as security, option, warrant, lease,
      sublease, right to possession, right of distress, encumbrance, claim,
      title retention, trust claim, right or restriction which affects, by way
      of a conflicting ownership interest or otherwise, the right, title or
      interest in or to any particular property;

	 	 	 	 
	 	(r) 	
      “Luxor” has the meaning ascribed thereto in the
      Subscription Agreement;

	 	 	 	 
	 	(s) 	
      “Luxor Guarantee” has the meaning ascribed thereto
      in the Subscription Agreement;

	 	 	 	 
	 	(t) 	
      “Luxor Notes” has the meaning ascribed thereto in
      the Subscription Agreement;

	 	 	 	 
	 	(u) 	
      “Material Adverse Effect” has the meaning ascribed
      thereto in the Subscription Agreement;

	 	 	 	 
	 	(v) 	
      “Maturity Date” means, subject to Section 3.3, the
      earlier of:

	 	 	 	 
	 		(i) 	
      such date which is 24 months following the Closing Date;
      and

	 	 	 	 
	 		(ii) 	
      the date on which the Holder accelerates repayment of the
      Debt owing to it upon the occurrence of an Event of Default;

	 	 	 	 
	 	(w) 	
      “Note”, “hereto”, “herein”,
      “hereof”, “hereby”, “hereunder”, and any
      similar expressions refer to this Note and the schedules attached hereto
      and not to any particular article, section or other portion hereof, and
      include any and every instrument supplemental hereto or amending or
      replacing any part hereof;

	 	 	 	 
	 	(x) 	
      “Obligations” has the meaning attributed thereto
      in Section 1.1;

	 	 	 	 
	 	(y) 	
      “Permitted Debt” means the Senior Secured Notes,
      the Luxor Notes, the Guarantee, the Luxor Guarantee, the John Deere Lease,
      the other indebtedness secured by Permitted Encumbrances and secured Debt
      or unsecured Debt that is subordinate to that of the Holders, subject to
      the provisions hereof, indebtedness owing by the Guarantor or the
      Corporation to the other, accounts payable incurred in the ordinary course
      of business and consistent with past practice, accrued liabilities, income
      tax, deferred revenues, operating leases incurred in the ordinary course
      of business and consistent with past practice, and capital lease
      obligations incurred in the ordinary course of business (subject to any
      limits established hereunder) and consistent with past practice, and
      includes, without limitation, the Corporation’s and the Guarantor’s
      obligations under its real property leases or subleases (including under
      or in connection with any municipal bonds in respect of the purchase of
      such real property) and any other debt the Holder may declare in writing
      to be Permitted Debt;

- 6 - 

	 	(z) 	
      “Permitted Encumbrances” has the meaning
      attributed thereto in Schedule “A” hereto;

	 	 	 
	 	(aa) 	
      “Person” is to be interpreted broadly and includes
      any individual, partnership, limited partnership, joint venture,
      syndicate, sole proprietorship, company or corporation with or without
      share capital, unincorporated association, trust, trustee, executor,
      administrator or other legal personal representative, regulatory body or
      agency, government or governmental agency, authority or entity however
      designated or constituted;

	 	 	 
	 	(bb) 	
      “Priority Payables” means the aggregate of any
      amounts accrued or payable (including interest and penalties) which arise
      by the operation of any applicable law and rank prior to or pari passu
      with any Lien held by the Holder, including in respect of wages,
      salaries, commissions or other remuneration, vacation pay, pension plan
      contributions and/or obligations, amounts required to be withheld from
      payments to employees or other persons for federal and provincial income
      taxes, employee Canada Pension Plan contributions or similar amounts
      payable under similar applicable legislation in other applicable
      jurisdictions and employee employment insurance premiums and additional
      amounts payable on account of employer Canada Pension Plan contributions
      or similar amounts payable under similar applicable legislation in other
      applicable jurisdictions and employer employment insurance premiums,
      federal or provincial goods and services or excise tax or similar amounts
      payable under similar applicable legislation in other applicable
      jurisdictions, or other sales or consumption taxes, employer health tax,
      amounts payable under the Workers Compensation Act (British
      Columbia) or similar legislation in other applicable jurisdictions,
      arrears of rent, utilities or other amounts payable in respect of the use
      of real property, amounts payable for repair, storage, transportation or
      construction or other services which may give rise to a possessory or
      registerable Lien and claims which unpaid trade suppliers could assert
      pursuant to Section 81.1 or Section 81.2 of the Bankruptcy and
      Insolvency Act (Canada) or similar claims/rights under similar
      applicable legislation in other applicable jurisdictions;

	 	 	 
	 	(cc) 	
      “Project” means the Carbon Creek metallurgical
      coal deposit located in northeastern British Columbia;

	 	 	 
	 	(dd) 	
      “Secured Parties” means, collectively, the Holder
      and the holders of the other Senior Secured Notes;

	 	 	 
	 	(ee) 	
      “Secured Property” has the meaning attributed
      thereto in Section 4.1;

	 	 	 
	 	(ff) 	
      “Security Documents” has the meaning attributed
      thereto in Section 4.1;

	 	 	 
	 	(gg) 	
      “Senior Secured Notes” has the meaning attributed
      thereto in Section 6.1(a);

	 	 	 
	 	(hh) 	
      “Subscription Agreement” means the subscription
      agreement dated as of the date hereof pursuant to which, inter
      alia, the Holder subscribes for this Note;

- 7 - 

	 	(ii) 	
      “Subsidiaries” means any subsidiaries of the
      Corporation as such term is defined in Section 2(2) of the Business
      Corporations Act (British Columbia), including the Guarantor, and
      “Subsidiary” means any of the foregoing;

	 	 	 
	 	(jj) 	
      “Tax Credit” means a tax credit payable to the
      Corporation arising from work done by it on the Carbon Creek project in
      2012;

	 	 	 
	 	(kk) 	
      “Transaction Documents” has the meaning ascribed
      thereto in Section 7.1; and

	 	 	 
	 	(ll) 	
      “Voting Shares” means shares of capital stock of
      any class of any corporation carrying voting rights under all
      circumstances, provided that for the purposes of such definition, shares
      which only carry the right to vote conditionally on the happening of any
      event shall not be considered Voting Shares, whether or not such event
      shall have occurred, nor shall any shares be deemed to cease to be Voting
      Shares solely by reason of a right to vote accruing to shares of another
      class or classes by reason of the happening of such
  event.

2.2      Other
Defined Terms 

            Other
capitalized terms used herein which are not defined herein have the meanings
attributed thereto in the Subscription Agreement and the use of the term
“including” shall mean “including, without limitation”. 

2.3      Headings

            The
inclusion of headings in this Note is for convenience of reference only and
shall not affect the construction or interpretation hereof. 

2.4      References
to Sections 

            Whenever
in this Note a particular article, section or other portion thereof is referred
to, such reference pertains to the particular article, section or portion
thereof contained herein, unless otherwise indicated. 

2.5      Currency

            Except
where otherwise expressly provided, all amounts in this Note are stated and
shall be paid in lawful currency of the United States of America. 

2.6     
Gender and Number 

            In
this Note, unless the context otherwise requires, words importing the singular
include the plural and vice versa and words importing gender include all
genders. 

- 8 - 

2.7      Invalidity
of Provisions 

      
     Each of the provisions contained in this
Note is distinct and severable and a declaration of invalidity or
unenforceability of any such provision or part thereof by a court of competent
jurisdiction shall not affect the validity or enforceability of any other
provision hereof. 

2.8      Amendment or
Waiver 

       
    No amendment or waiver of this Note shall be
binding unless executed in writing by the party to be bound thereby. No waiver
of any provision of this Note shall constitute a waiver of any other provision
nor shall any waiver of any provision of this Note constitute a continuing
waiver unless otherwise expressly provided. 

2.9      Governing
Law; Attornment 

        
   This Note shall be exclusively (without regard to any
rules or principals relating to conflicts of laws) governed by, enforced and
construed in accordance with the laws of the Province of British Columbia and
the laws of Canada applicable therein. Each of the Corporation, and, by its
acceptance hereof, the Holder hereby irrevocably attorns to the non-exclusive
jurisdiction of the courts of the Province of British Columbia with respect to
any matter arising under or relating to this Note. 

2.10    Non-Business Days

      
     If any date on which any payment is due
or any action is required to be taken is not a Business Day, the date for
payment or taking such action shall be the next Business Day following the date
specified for such payment or action. 

2.11    Interest 

      
     The annual rates of interests or fees to
which the rates calculated in accordance herewith are equivalent, are the rates
as calculated and multiplied by the actual number of days in the calendar year
in which that calculation is made and divided by 365 or 366, as the case may be.

      
     The Corporation shall not be obligated to
pay any interest hereunder to the extent such interest exceeds the effective
annual rate of interest on the credit made available hereunder that would be
lawfully permitted under the Criminal Code (Canada), each interest rate and fee
being distinct and severable obligations and it is the intention of the parties
hereto that any interest and fees shall be, and shall be deemed to be, reduced
by the parties hereto in accordance with the maximum rate of interest lawfully
permitted under the Criminal Code (Canada) without effecting the remaining terms
and conditions hereof. 

- 9 - 

ARTICLE 3 
PAYMENT, PREPAYMENT AND CHANGE OF
CONTROL PAYMENT 

3.1      Prepayment

        
   At any time and from time to time, the Corporation
may prepay the outstanding Obligations under this Note in full or in part,
without notice, penalty or payment of any additional fee. Any prepayment shall
be applied first to reduce any outstanding interest, costs and fees, second to
reduce the principal amount due on the Maturity Date. 

3.2      Change of
Control Payment 

        
   At any time prior to the Maturity Date, in the event
of the occurrence of a Change of Control, the Holder shall have the right, but
not the obligation, in its sole and absolute discretion, to require the
Corporation to purchase, either in whole or in part, this Note, at a price
payable in cash equal to 110% of the principal amount of the Note being
purchased under this Section 3.2 plus accrued and unpaid interest up to and
including the date set forth for the closing of the Change of Control
transaction (the “Change of Control Price”). 

3.3      Notice of
Change of Control 

      
     Immediately on becoming aware of Change
of Control having occurred or being contemplated, the Corporation shall notify
the Holder and, subject to Section 3.2, the Holder shall have 10 Business Days
to elect to exercise its right to require the Corporation to purchase, either in
whole or in part, this Note under Section 3.2, by providing written notice of
such exercise to the Corporation and surrendering the Note to the Corporation.

3.4      Method of
Payment of Change of Control Price 

      
     The Corporation shall pay and satisfy the
Change of Control Price on the date of closing of the Change of Control
transaction by sending by prepaid ordinary mail a certified cheque or other
transfer of funds to the Holder for such Change of Control Price payable to the
order of the Holder or as the Holder may otherwise in writing direct. In the
event of non-receipt of any certified cheque or other transfer of funds for the
Change of Control Price by the Holder, the Corporation will cause to be issued
to the Holder a replacement certified cheque or replacement transfer of funds
for like amount upon the Corporation being furnished with such evidence of
non-receipt as the Corporation shall reasonably require and upon being
indemnified to its satisfaction, acting reasonably. 

3.5      Failure to
Surrender Note in Change of Control 

      
     In case the Holder for repurchase of the
Note in a Change of Control transaction fails to surrender this Note on or
before the closing of the Change of Control transaction, the Change of Control
Price shall be set aside in trust, in a chartered bank or with counsel to the
Corporation in a bank account with interest accruing thereon and shall be deemed
to be payment in full to the Holder. To that extent the Note shall thereafter
not be considered as outstanding hereunder, the Holder shall have no other right
except to receive payment out of the Change of Control Price so paid and
deposited together with any accrued interest thereon, which amount the
Corporation shall request to be paid upon surrender and delivery of such
Holder's Note. In the event that any money required to be deposited hereunder
shall remain so deposited for a period of five years less one day from the
Closing of the Change of Control transaction, then such monies shall at the end
of such period be paid over to the Corporation on its written demand. 

- 10 - 

3.6      Cancellation
of Note Redeemed 

       
    If the Holder requires the Corporation to
purchase less than all of the aggregate outstanding principal amount of the Note
under this Article 3, upon surrender of the Note for payment of the Change of
Control Price, the Note shall be cancelled and the Corporation shall execute one
or more new Notes for the remaining part of the principal amount of the Note so
surrendered. If the Holder requires the Corporation to purchase all of the
aggregate outstanding principal amount of the Note under this Article 3, upon
surrender of the Note for payment of the Change of Control Price, the Note shall
be cancelled and no Notes shall be issued in substitution therefor. 

ARTICLE 4 
SECURITY 

	4.1 	
      Security in favour of the Secured
Parties

	 	 	 
		(a) 	
      As general continuing collateral security for the payment
      of the Obligations, the Corporation shall execute and deliver in favour of
      the Secured Parties, inter alia, a general security agreement (the
      “General Security Agreement”), granting the Secured Parties a first
      ranking security interest (subject to Permitted Encumbrances) in and to
      all undertakings, property and assets (including any Liens in its favour)
      of the Corporation (the “Secured Property”), in form and substance
      satisfactory to the Secured Parties and its counsel.

	 	 	 
		(b) 	
      As additional security for the payment of the Obligations
      all of the shares in the Guarantor held by the Corporation shall be
      pledged to the Secured Parties pursuant to a share pledge agreement to be
      executed and delivered by the Corporation, in favour of the Secured
      Parties (such share pledge agreement, together with the General Security
      Agreement, the “Security Documents”).

	 	 	 
		(c) 	
      The priority of the security under the Security Documents
      shall only become first ranking upon Luxor having fully complied with
      Section 10.6 of the Luxor Notes.

ARTICLE 5 
GUARANTEE 

5.1      Guarantee

       
    As it is in the interests of the Guarantor that
the Luxor Demand be satisfied, the Corporation shall cause the Guarantor to
execute and deliver in favour of the Secured Parties, a guarantee (the
“Guarantee”) pursuant to which the Guarantor irrevocably and
unconditionally guarantees to the Secured Parties the due and punctual payment,
and due performance of the Obligations hereunder. 

- 11 - 

ARTICLE 6 
PARI PASSU ARRANGEMENTS 

	6.1 	
      Pari Passu Arrangements

	 	 	 	 
		
      The Holder hereby acknowledges and agrees with the
      Corporation:

	 	 	 	 
		(a) 	
      that all senior secured notes of the Corporation issued
      to the Secured Parties on the date hereof representing an aggregate
      principal amount of $5,700,000 (collectively, the “Senior Secured
      Notes”), the Obligations and all indebtedness secured thereby or by
      any portion thereof shall, in all respects, rank pari passu, equally and
      ratably among the Secured Parties, to the effect that all funds received
      by any Secured Party from the Corporation and all proceeds of realization
      of any of the Obligations shall be distributed between the Secured Parties
      on a pro rata basis, based upon the respective amounts owing to them by
      the Corporation, except that the parties acknowledge that if the
      Corporation receives the Tax Credit it is obligated to apply it to, and it
      shall be applied to, repayment in full of the Senior Secured Note in
      favour of E.L. II Properties Trust to the exclusion of the Holder;
    and

	 	 	 	 
		(b) 	
      not to take any actions hereunder, including
to:

	 	 	 	 
			(i) 	
      commence any proceedings to enforce or realize upon the
      Obligations held by it; and

	 	 	 	 
			(ii) 	
      fulfill or waive any matters
hereunder,

except with the consent of Secured
Parties who, together with the Holder, hold at least two-thirds the principal
amounts of all indebtedness secured by the Senior Secured Notes, and to
co-operate fully with the other Secured Parties in connection with any
enforcement or realization of the Obligations. 

ARTICLE 7 
COVENANTS OF THE CORPORATION

7.1      General
Covenants 

       
    For as long as this Note remains outstanding,
the Corporation declares, covenants and agrees as follows: 

	 	(a) 	
      Use of Proceeds. The Corporation shall only use
      the aggregate principal amount of the Senior Secured Notes:

	 	 	 
	 		
      (i)       
      to satisfy the Luxor Demand; and

- 12 - 

	 	(ii) 	
      to provide to for general working capital purposes of the
      Corporation and its Subsidiaries for the remainder of the funds advanced
      to the Corporation on issuance of the Senior Secured
  Notes.

	 	(b) 	
      To Pay Principal and Interest. The Corporation
      will duly and punctually pay the principal and interest accrued on this
      Note and all other amounts owing to it at the time and in the manner
      specified herein and in the other Transaction Documents and the
      Corporation will duly observe and perform all of the terms and covenants
      contained in this Note and in the other Transaction Documents and in every
      other covenant and undertaking hereafter given by the Corporation to the
      Holder.

	 	 	 
	 	(c) 	
      Maintain Corporate Existence. The Corporation
      shall (and shall cause the Guarantor to) maintain its corporate existence,
      carry on and conduct its business in a proper and business-like manner,
      take all reasonable action to maintain all rights, privileges and
      franchises necessary or desirable in the normal conduct of its business
      and comply with all applicable legal requirements.

	 	 	 
	 	(d) 	
      Delivery of Secured Property and Perfection. The
      Corporation shall facilitate such registrations and shall obtain such
      consents, at the sole cost and expense of the Corporation, as may be
      required or desirable and as requested by the Holder, to preserve, protect
      or perfect the security interests to be created with respect to the
      Secured Property. Notwithstanding the foregoing, only the shares in the
      capital of the Guarantor shall be pledged to the Holder pursuant to the
      terms and conditions of a securities pledge agreement dated the date
      hereof, as the same may be amended, modified, renewed, supplemented,
      replaced or extended from time to time and no other securities of the
      Corporation or any other of its Subsidiaries will be pledged in favour of
      the Holder.

	 	 	 
	 	(e) 	
      No Encumbrances. The Corporation shall not (and
      shall cause the Guarantor to not) create, assume or suffer to exist any
      Lien (other than Permitted Encumbrances), including, without limitation,
      any agreement to give any of the foregoing or any conditional sale or
      other title retention agreement, upon all or any part of the Secured
      Property. The Corporation will defend the Secured Property against, and
      will take such other action as is necessary to remove, any and all
      security interests on and claims in respect of the Secured Property other
      than the security interests created by the Security Documents and
      Permitted Encumbrances, and the Corporation will defend the right, title
      and interest of the Holder in and to the Secured Property against the
      claims and demands of all Persons.

	 	 	 
	 	(f) 	
      Operating Leases. The Corporation shall not (and
      shall cause the Guarantor to not) enter into or maintain operating leases
      such that the aggregate annual expenditure on such operating leases would
      be greater than the sum of (i) $100,000 and (ii) the aggregate annual
      expenditure on any operating leases (other than real property leases)
      acquired by the Corporation or the Guarantor as
a result of any new acquisition of a business or company by
  the Corporation or the Guarantor.

- 13 - 

	 	(g) 	
      Insurance. The Corporation shall (and shall cause
      the Guarantor to) insure and keep insured its properties customarily
      insured by companies carrying on a similar business in similar locations,
      or owning or operating similar properties, against all risks, including
      but not limited to, business interruption, product liability and all risks
      insurance, with the Holder being a loss payee (as its interest may appear)
      on all such insurance and an additional insured.

	 	 	 	 
	 	(h) 	
      Non-arm’s Length Transactions. The Corporation
      shall (and shall cause the Guarantor to) not enter into any transaction
      with any officer, director, employee, shareholder or any Person not
      dealing at arm’s length (within the meaning of the Income Tax Act
      (Canada)) or any Affiliate of any of the foregoing (specifically
      excluding any employment or option agreement or intercompany indebtedness
      or transactions between a Subsidiary and the Corporation).

	 	 	 	 
	 	(i) 	
      Subscription Agreement. The Corporation shall
      observe each term, covenant and agreement contained in the Subscription
      Agreement and the Security Documents, and all of its material agreements,
      instruments and documents listed on any schedule to or contemplated in the
      Subscription Agreement (collectively, the “Material
      Agreements”).

	 	 	 	 
	 	(j) 	
      Priority Payables. The Corporation shall (and
      shall cause the Guarantor to) withhold and remit and pay any and all
      Priority Payables, the failure of which could result in the imposition of
      a Lien becoming registered or enforceable against any of the Corporation’s
      assets.

	 	 	 	 
	 	(k) 	
      Negative Covenants. Without the prior written
      consent of the Holder, The Corporation shall (and shall cause the
      Guarantor to) not:

	 	 	 	 
	 		(i) 	
      incur, issue or make any request for or permit any Debt,
      except for the Permitted Debt;

	 	 	 	 
	 		(ii) 	
      grant or permit the existence of any security for Debt
      other than the Permitted Encumbrances;

	 	 	 	 
	 		(iii) 	
      not alter its outstanding share capital by way of share
      split, consolidation or reorganization;

	 	 	 	 
	 		(iv) 	
      sell, lease, exclusively licence or transfer or dispose
      of all or substantially all of its assets or wind-up or liquidate the
      Corporation or the Guarantor pursuant to any transaction where the
      repayment of the Note is not provided for;

	 	 	 	 
	 		(v) 	
      merge, amalgamate or enter into another form of business
      combination or reorganization (including any joint venture or partnership)
      other than with a Subsidiary owned and controlled by the
    Corporation;

- 14 - 

	 	(vi) 	
      make any payment of any dividend and/or other
      distribution to any shareholder other than the Corporation, other than
      payment of director’s fees, salaries, bonuses, commissions and any
      payments of a similar nature in the ordinary course of business and
      consistent with past practice and existing agreements;

	 	 	 
	 	(vii) 	
      continue the Corporation or the Guarantor into a
      jurisdiction in which it is not currently organized or incorporate or
      establish the Guarantor in a manner which may prejudice the Holder or
      could reasonably be expected to result in a Material Adverse Effect on the
      Holder’s secured position or the assets, business, operations or prospects
      of the Corporation or the Guarantor;

	 	 	 
	 	(viii) 	
      make any material amendments to its notice of articles,
      articles or bylaws or the nature of its business;

	 	 	 
	 	(ix) 	
      provide or permit the Corporation or the Guarantor to
      provide a guarantee in respect of the obligations of any Person, other
      than guarantees given in respect of indebtedness secured by a Permitted
      Encumbrance in respect of the Corporation or the Guarantor or in respect
      of Permitted Debt in respect of the Corporation or the
Guarantor;

	 	 	 
	 	(x) 	
      other than Permitted Debt in respect of the Corporation
      or the Guarantor, lend money to or invest money in any Person, whether by
      way of loan or acquisition of debt obligations;

	 	 	 
	 	(xi) 	
      other than in respect of Permitted Debt, enter into any
      instrument, contract document or agreement which specifically prohibits
      the granting of any Lien or assignment by way of security in the assets of
      the Corporation or the Guarantor;

	 	 	 
	 	(xii) 	
      change its name or the location of any of its assets,
      head office, or chief executive office, except that inventory or equipment
      may be transferred in the ordinary course of business by the Corporation
      or the Guarantor to each other provided that such Person has executed and
      delivered a security agreement over its assets to the Holder and has
      complied with all of its Obligations;

	 	 	 
	 	(xiii) 	
      agree or otherwise commit to take any action described in
      paragraphs (i)-(xiii) above.

	 	(l) 	
      Further Documentation. The Corporation will from
      time to time at its expense promptly and duly authorize, execute and
      deliver such further instruments and documents, and take such further
      action, as the Holder may reasonably request for the purpose of preserving
      the Secured Property, and full benefits of, and the rights and powers
      granted by, the Security Documents (including the filing of any financing
      statements or financing change statements under any applicable
      legislation, application for the registration or an application for the
      registration of a rectification with respect to the Secured Property and
      including any steps required to register security on owned real property
      if necessary). The Corporation acknowledges that the Security Documents
      have been prepared based on the existing laws at this time and that a
      change in such laws may require the execution and delivery of different
      forms of security documentation. Accordingly, the Corporation agrees that
      the Holder will have the right to require that the Security Documents be
      amended, supplemented or replaced in the event of any such change in
      applicable laws, and that the Corporation will immediately on request by
      the Holder authorize, execute and deliver any such amendment, supplement
      or replacement (i) to reflect any changes in such laws, whether arising as
      a result of statutory amendments, court decisions or otherwise, (ii) to
      facilitate the creation and registration of appropriate security in all
      appropriate jurisdictions, or (iii) if the Corporation merges or
      amalgamates with any other Person or enters into any corporate
      reorganization, in each case in order to confer on the Holder security
      interests similar to, and having the same effect as, the security
  interests created by the Security Documents.

- 15 - 

	 	(m) 	
      Delivery and Pledge of Certain Collateral. After
      the expiry of any applicable cure period resulting in an Event of Default
      which has not been waived in writing by the Holder, promptly upon request
      from time to time by the Holder, the Corporation will deliver (or cause to
      be delivered) to the Holder, endorsed and/or accompanied by such
      instruments of assignment and transfer in such form and substance as the
      Holder may reasonably request, any and all instruments, investment
      property, securities, documents of title and chattel paper included in or
      relating to the Secured Property as the Holder may specify in its request
      (other than Secured Property to which the holder of a Permitted
      Encumbrance holds a prior ranking charge).

	 	 	 
	 	(n) 	
      Payment of Expenses; Indemnification. The
      Corporation shall promptly pay upon demand therefor, and pursuant to the
      Guarantee, together with the Guarantor on a joint and several basis,
      indemnifies and saves the Holder harmless from and against, any and all
      actions, claims, proceeding, debts, liabilities, obligations, losses,
      costs and expenses (including reasonable legal fees (without reduction for
      tariff rates or similar reductions) and expenses and any sales, goods and
      services or other similar taxes payable to any governmental authority with
      respect to any such liabilities, costs and expenses) incurred by the
      Holder in connection with, arising out of, or in any way relating to, (i)
      the entering into of the Subscription Agreement, the Security Documents,
      the Guarantee or this Note (collectively, the “Transaction
      Documents”), (ii) the enforcement of any of the Transaction Documents,
      (iii) any failure or delay by the Corporation or the Guarantor in
      performing or observing any of its obligations under any of the
      Transaction Documents, or (iv) the performing or observing by the Holder
      of any of the covenants or obligations of the Corporation or the Guarantor
      under any of the Transaction Documents except, in each case, to the extent
      such action, claim, proceeding, debt, liability, obligation, loss, cost or
      expense results from the gross negligence or wilful misconduct of the
      Holder.

- 16 - 

	 	(o) 	
      Maintenance of Records. The Corporation will keep
      and maintain accurate and complete records of the Secured
  Property.

	 	 	 
	 	(p) 	
      Right of Inspection. The Holder may, at any time
      during normal business hours, upon reasonable notice, without charge,
      examine all books and records evidencing or relating to the Secured
      Property, and may discuss the affairs, finances and accounts of the
      Corporation and the Guarantor in a reasonable and professional manner with
      its officers, customers, suppliers, taxing or other governmental
      regulatory authorities and accountants in the presence of such
      representatives of the Corporation as the Corporation may designate. The
      Holder may also, upon reasonable notice, without charge, during normal
      business hours, enter the premises of the Corporation and the Guarantor
      including, where any of the Secured Property is located for the purpose of
      inspecting the Secured Property, observing its use or otherwise protecting
      its interests in the Secured Property. The Corporation, at its expense,
      will provide the Holder with such clerical and other assistance as may be
      reasonably requested by the Holder to exercise any of its rights under
      this paragraph.

	 	 	 
	 	(q) 	
      Other Information. The Corporation will and will
      cause the Guarantor to provide to the Holder, at the request of the Holder
      acting reasonably, such other documentation and information concerning the
      Corporation or the Guarantor and their business as the Holder may
      reasonably require at any time and from time to time.

	 	 	 
	 	(r) 	
      Limitations on Dispositions of Collateral. Other
      than in the ordinary course of business, the Corporation will not, without
      the Holder’s prior written consent, sell, lease, exclusively licence or
      otherwise dispose of any of the Secured Property, except that inventory
      may be sold, leased or otherwise disposed of, equipment that is obsolete
      or requires replacement may be replaced provided it meets any conditions
      hereunder with respect to capital expenditures, and accounts may be
      collected, all in the ordinary course of business and consistent with past
      practice. After the occurrence of any Event of Default which has not been
      waived in writing by the Holder, all proceeds of the Secured Property
      (including all amounts received in respect of accounts receivable),
      whether or not arising in the ordinary course of the Corporation’s
      business, shall be, and shall be deemed to be, held separate and apart and
      received by the Corporation as trustee and agent and for the exclusive
      benefit of the Holder and will be immediately paid over to the
    Holder.

	 	 	 
	 	(s) 	
      Notices. Upon becoming aware of same, the
      Corporation shall provide prompt written notice to the Holder in
      accordance with Section 10.7 hereof, of (i) any Lien (other than the
      security interests created by the Security Documents and Permitted
      Encumbrances) on, or claim asserted against, any of the Secured Property,
      (ii) the occurrence of any event, claim or occurrence that is or could
      reasonably be expected to have a Material Adverse Effect on the operations
      or property of the Corporation and the Guarantor taken as a whole or the
      secured position or value of the Secured Property, (iii) any change in the
      location of the chief executive office or principle place of business of
      the Corporation or the Guarantor and hereby covenants to use best efforts
      to procure a landlord acknowledgement in connection with any North
      American location, (iv) any change in the location of any of the corporeal
      or tangible material Secured Property (including additional locations),
      and hereby covenants to use best efforts to procure a landlord
      acknowledgement in connection with any North American location, and (v)
  any material loss of or damage to any of the Secured Property.

- 17 - 

	 	(t) 	
      Limitations on Modifications, Waivers,
      Extensions.Other than in the ordinary course of business, the
      Corporation will not, and will cause its Subsidiaries not to, (i) amend,
      modify, terminate or waive any provision of any permit, contract or any
      agreement giving rise to an account in any manner which is or could
      reasonably be expected have a Material Adverse Effect on the Holder’s
      secured position or the assets, business, operations or prospects of the
      Corporation and the Guarantor taken as a whole, or (ii) fail to exercise
      promptly and diligently its rights under each permit, contract and
      agreement giving rise to an account if such failure is or could reasonably
      be expected to have a Material Adverse Effect on the Holder’s secured
      position or the assets, business, operations or prospects of the
      Corporation and the Subsidiaries taken as a whole.

	 	 	 
	 	(u) 	
      Return of Luxor Security. The Corporation will
      promptly notify the Secured Parties once Luxor has fully complied with
      Section 10.6 of the Luxor Notes.

7.2      Spin-Out of
Iron Ore Assets Permitted 

      
     Notwithstanding any other provision of
the Transaction Documents, nothing in the Transaction Documents shall prevent or
restrict the Corporation, directly or through any Subsidiary, from proposing,
adopting or effecting, and the consent of the Holder shall not be required for
the Corporation to propose, adopt or effect, a statutory plan of arrangement to
“spin-out” the iron ore assets legally and beneficially owned by Cardero Ghana
Limited, into another company in which the shareholders of the Corporation shall
hold an equity interest upon the completion of such transaction, provided that:

	 	(a) 	
      such iron ore assets do not relate, directly or
      indirectly, to the Project; and

	 	 	 
	 	(b) 	
      such transaction could not reasonably be expected to have
      a Material Adverse Effect on the operations or property of the Corporation
      and the Guarantor taken as a whole or the secured position or value of the
      Secured Property.

7.3      Sale of
Shares of Certain Subsidiaries Permitted 

           
Notwithstanding any other provision of the Transaction Documents,
nothing in the Transaction Documents shall prevent or restrict the Corporation,
directly or through any Subsidiary, from proposing, adopting or effecting, and
the consent of the Holder shall not be required for the Corporation to propose,
adopt or effect, the sale of shares of Minerales y Metales California, S.A. De
CV, a Subsidiary, or the sale of shares of Cardero Hierro del Peru, S.A.C., a
Subsidiary, provided that: 

- 18 - 

	 	(a) 	
      such transactions do not relate, directly or indirectly,
      to the Project; and

	 	 	 
	 	(b) 	
      such transactions could not reasonably be expected to
      have a Material Adverse Effect on the operations or property of the
      Corporation and the Guarantor taken as a whole or the secured position or
      value of the Secured Property.

ARTICLE 8 
EVENTS OF DEFAULT 

	8.1 	
      Events of Default

	 	 	 	 
		
      Any of the following shall constitute an Event of Default
      under this Note:

	 	 	 	 
		(a) 	
      failure by the Corporation to pay in cash, all or any
      part of the Obligations within three (3) days of when due and
    payable;

	 	 	 	 
		(b) 	
      the Corporation or the Guarantor ceases or threatens to
      cease to carry on business in the normal course or any material part of
      its business;

	 	 	 	 
		(c) 	
      the Corporation or the Guarantor becomes unable to
      satisfy its liabilities as they become due and/or the realizable value of
      its assets is less than the aggregate sum of its liabilities, or any of
      them otherwise commit an act of bankruptcy or admits that it is
      “insolvent”;

	 	 	 	 
		(d) 	
      the Corporation, the Guarantor, any creditor of the
      Corporation or the Guarantor or any other Person institutes any proceeding
      or takes any corporate action or executes any agreement in connection with
      the commencement of any proceeding which the Corporation is not contesting
      in good faith and by appropriate proceedings to the satisfaction of the
      Holder, acting reasonably, and reserves satisfactory to the Holder, acting
      reasonably, have not been taken and such proceedings are not permanently
      stayed or dismissed within thirty (30) days from the date of commencement
      thereof:

	 	 	 	 
			(i) 	
      seeking to adjudicate the Corporation or the Guarantor a
      bankrupt or insolvent;

	 	 	 	 
			(ii) 	
      seeking liquidation, dissolution, winding-up,
      reorganization, arrangement, protection, relief or composition of the
      Corporation or the Guarantor or any material part of their property or
      debt, or making a proposal with respect to the Corporation or the
      Guarantor under any law relating to bankruptcy, insolvency, reorganization
      or compromise of debts or other similar laws; or

	 	 	 	 
			(iii) 	
      seeking appointment of a receiver, receiver and manager,
      trustee, agent, custodian, monitor, liquidator or similar official for the
      Corporation or the Guarantor or for any part of their properties and
      assets or for any part of the Secured
Property;

- 19 - 

	 	(e) 	
      a receiver, receiver and manager, trustee, custodian,
      monitor, liquidation or similar official is appointed in respect of the
      Corporation or the Guarantor or any of the Secured Property which is not
      immediately contested and stayed by legitimate and appropriate
      proceedings;

	 	 	 
	 	(f) 	
      there occurs any execution, distress or other enforcement
      process, whether by court order or other formal or informal proceeding, in
      respect of any amount in excess of $25,000 which is not immediately
      contested and stayed by legitimate and appropriate proceedings;

	 	 	 
	 	(g) 	
      other than a payment default under subsection (j) below,
      the occurrence of any default, or any event or condition which, with the
      giving of notice or passage of time, or both, would constitute a default
      by the Corporation or the Guarantor under the terms of any other Debt in
      excess of $50,000 which is not cured within five (5) days;

	 	 	 
	 	(h) 	
      if any representation or warranty made by the Corporation
      or the Guarantor in any of the Material Agreements or any other document,
      instrument or agreement executed and delivered by the Corporation or the
      Guarantor at any time to or in favour of the Holder is untrue or incorrect
      in any material respect as of the date on which it is made;

	 	 	 
	 	(i) 	
      the Corporation or the Guarantor fails to observe any
      term, covenant or agreement contained herein, any other Transaction
      Document or in any of the Material Agreements or any other document,
      instrument or agreement executed and delivered by the Corporation or the
      Guarantor at any time to or in favour of the Holder (including the failure
      to preserve the first ranking of the security interests (subject to
      Permitted Encumbrances) created by the Security Documents) and such
      failure, with respect to such Material Agreements after they should
      reasonably have become aware, is continuing for five (5) days after the
      occurrence thereof provided its capable of being cured;

	 	 	 
	 	(j) 	
      with respect to Debt of the Corporation or the Guarantor
      under any agreement with a third party (other than agreements entered into
      with customers in the ordinary course of business), the Corporation or
      Subsidiary, as the case may be, fails to pay any principal, interest or
      other amount pursuant to such agreement when such amount becomes due and
      payable (whether by scheduled maturity, required repayment, acceleration,
      demand or otherwise) subject to a three (3) day right to cure provided its
      capable of being cured (for greater certainty, to run concurrently with
      any cure period under any such agreement), other than the extension of the
      payment of trade and accounts payable in the ordinary course consistent
      with the past practice of the Corporation or Subsidiary, as the case may
      be, provided such extension has no Material Adverse Effect upon the
      Holder’s secured position or the Corporation or any Subsidiaries’ assets,
      business, operations or prospects;

- 20 - 

	 	(k) 	
      a notice is sent to or received by the Corporation or the
      Guarantor from any creditor with respect to the intention of such creditor
      to enforce its Lien becomes entitled to enforce or otherwise enforces or
      takes possession of any of the property of the Corporation or Subsidiary,
      as the case may be, which action could have a Material Adverse Effect on
      the Holder’s secured position or the Corporation’s and any Subsidiaries’
      assets, business, operations or prospects taken as a whole, unless such
      notice is being contested in good faith by appropriate legal proceedings,
      reserves satisfactory to the Holder in its discretion have been taken and
      such notice will not result in, or does not involve, any prospect of the
      enforcement of such Lien or the sale or forfeiture or loss of any of the
      property of the Corporation or Subsidiary, as the case may be, that is
      subject to such notice;

	 	 	 
	 	(l) 	
      the Corporation or the Guarantor challenges or threatens
      to challenge the validity or enforceability of any of the Transaction
      Documents to which it is party or terminates or repudiates any of them or
      attempts to do so, or such Transaction Documents or any other document,
      instrument, agreement or certificate executed and delivered by the
      Corporation or any of its Subsidiaries to the Holder shall cease to be in
      full force and effect or fail, in whole or in part, to constitute a legal,
      valid, binding and enforceable obligation of the Corporation or any of its
      Subsidiaries, as the case may be;

	 	 	 
	 	(m) 	
      any occurrence, development or change (other than an
      occurrence, development or change to which the Holder consents), which
      would result in the Senior Secured Notes ceasing to have priority over all
      other Debt except for Debt secured by Permitted Encumbrances;

	 	 	 
	 	(n) 	
      other than as contemplated in (f) above, a distress,
      execution, warrant, garnishment, attachment, sequestration, levy, writ, or
      any similar process is issued or enforced upon or against all or any part
      of the Secured Property, or any third party demand is issued, by the
      Crown, governmental authority, administrative body or any taxation
      authority in respect of the Corporation or any of its Subsidiaries or all
      or any part of the Secured Property, or any other seizure is made in
      respect of all or any part of the Secured Property;

	 	 	 
	 	(o) 	
      any material portion of the Secured Property is damaged
      or destroyed if proceeds of insurance do not either (i) adequately
      compensate the Holder if the Corporation does not continue to operate, or
      (ii) adequately compensate the Corporation in such a way as to allow it to
      continue to operate consistent with historical practice and
      performance;

	 	 	 
	 	(p) 	
      this Note or any of the Security Documents shall cease to
      create a valid and perfected Lien;

	 	 	 
	 	(q) 	
      any resolution is passed for, the winding up, dissolution
      or liquidation or amalgamation of the Corporation or any of its
      Subsidiaries other than with or into the Corporation or another Subsidiary or if the
      Corporation or any of its Subsidiaries loses its charter by expiration,
  cancellation, forfeiture or otherwise;

- 21 - 

	 	(r) 	
      there occurs any change, condition, event or occurrence
      which, when considered individually or together with all other changes,
      conditions, events or occurrences, could reasonably be expected to have a
      Material Adverse Effect (or a series of adverse effects, none of which is
      material in of itself but which, cumulatively, results in a Material
      Adverse Effect) on: (A) the business, operations, assets, financial
      condition or prospects of the Corporation or its Subsidiaries taken as a
      whole; or (B) to the extent applicable, the ability of the Corporation to
      perform any of its Obligations, any of the other Transaction Documents,
      any other Material Agreement or any document, instrument or agreement
      executed and delivered by the Corporation or any of its Subsidiaries at
      any time to or in favour of the Holder; or (C) the ability of the Holder
      to enforce any of the obligations of the Corporation or its Subsidiaries
      under this Note or any other of the Transaction Documents; or (D) the
      priority of this Note and the Security Documents against the Secured
      Property;

	 	 	 
	 	(s) 	
      there is an adverse qualification to any of the financial
      statements of the Corporation or its Subsidiaries by its auditors;
    or

	 	 	 
	 	(t) 	
      the Holder, acting in good faith and upon commercially
      reasonable grounds, believes that the prospect of payment or performance
      of any of the Obligations is or is about to be impaired or that all or any
      part of the Secured Property is or is about to be placed in jeopardy and
      the Holder has provided the Corporation with written notice of
  same.

8.2      Notice of
Event of Default 

      
     The Corporation shall promptly give
notice in writing to the Holder of the occurrence of any Event of Default or
other event which, with the lapse of time or giving of notice or otherwise,
would be an Event of Default, forthwith upon becoming aware thereof. Such
written notice shall specify the nature of such default or Event of Default and
the steps taken to remedy the same. Once the Holder becomes aware of the
occurrence of any Event of Default or other event which, with the lapse of time
or giving of notice or otherwise, would be an Event of Default, forthwith upon
becoming aware thereof, the Holder shall promptly give notice in writing to the
Corporation of such (the “Lender’s Default Notice”) . 

8.3      Default
under Other Encumbrances 

         
  Any amount paid by the Holder before or after the
occurrence of an Event of Default on account of monies payable under any Lien
upon the Secured Property or any part thereof shall be repaid by the Corporation
to the Holder on demand and shall: 

	 	(a) 	
      be added to the Obligations and constitute a charge upon
      the Secured Property; and

- 22 - 

	 	(b) 	
      bear interest at the rate of 10% per annum as a
      reasonable and genuine pre- estimate of damages and not as a
    penalty.

8.4      Judgment

        
   Neither the taking of any judgment nor the exercise
of any power of seizure or sale shall operate to extinguish the liability of the
Corporation to perform the Obligations nor shall such operate as a merger of any
covenant or affect the right of the Holder to receive interest at the specified
rate, and any judgment shall bear interest at such rate. 

ARTICLE 9 
REMEDIES 

9.1      Consequences
of an Event of Default 

        
   Upon the occurrence of an Event of Default, and if
such Event of Default is not cured within 10 days after the Corporation receives
the Lender’s Default Notice, the Holder may, at its option, provide written
notice to the Corporation declaring the Obligations to be immediately due and
payable by the Corporation to the Holder. Without the necessity of any further
act or formality, but subject to applicable law, the security hereby created by
the Security Documents shall become immediately enforceable. 

9.2      Limitation
of Liability 

       
    The Holder shall not be liable by reason of any
entry into or taking possession of any of the Secured Property hereby charged or
intended so to be or any part thereof, to account as mortgagee in possession or
for anything except actual receipts or be liable for any loss on realization or
any act or omission for which a secured party in possession might be liable. The
Holder shall not, by virtue of these presents, be deemed to be a mortgagee in
possession of the Secured Property. The Holder shall not be liable or
accountable for any failure to exercise its remedies, take possession of, seize,
collect, realize, sell, lease or otherwise dispose of or obtain payment for the
Secured Property and shall not be bound to institute proceedings for such
purposes or for the purpose of preserving any rights, remedies or powers of the
Holder, the Corporation or any other person in respect of same. To the extent
permitted by applicable law, the Corporation hereby releases and discharges the
Holder from every claim of every nature, whether sounding in damages or not,
which may arise or be caused to the Corporation or any person claiming through
or under the Corporation by reason or as a result of anything done or omitted to
be done, as the case may be, by the Holder or any successor or assign claiming
through or under the Holder under the provisions of this Note, unless such claim
is the result of gross negligence or wilful misconduct. 

- 23 - 

ARTICLE 10 
GENERAL 

10.1    Releases 

      
     The Holder may in its discretion from
time to time release any part of the Secured Property or any other security
either with or without any sufficient consideration therefor, without
responsibility therefor and without thereby releasing any other part of the
Secured Property or any other security or any Person from the security created
by this Note or the Security Documents or from any of the covenants herein
contained. Each and every portion into which the Secured Property is or may
hereafter be divided does and shall stay charged with the Obligations. No Person
shall have the right to require the Obligations to be apportioned and the Holder
shall not be accountable to the Corporation for any moneys except those actually
received by the Holder. 

10.2    Expenses 

      
     The Corporation shall promptly pay to the
Holder on demand all of the Holder’s reasonable costs, charges and expenses in
connection with the enforcement by any means of any provisions hereof or any of
the Transaction Documents or the exercise of any rights, powers or remedies
hereunder or any of the Transaction Documents, including all such costs, charges
and expenses in connection with taking possession, maintaining, completing,
preserving, protecting, collecting or realizing upon all or any part of the
Secured Property. 

10.3    Evidence of
Indebtedness 

            The
Holder shall record the amount of the Obligations owing hereunder from time to
time and its records shall constitute, in the absence of manifest error,
conclusive evidence of the outstanding Obligations owing to the Holder. 

10.4    Whole Agreement

            This
Note, the other Transaction Documents and any and all other documents ancillary
thereto and executed and delivered in connection therewith, constitute the
entire agreement between the parties hereto with respect to the subject matter
hereof. 

10.5    Time 

            Time
shall be of the essence of all provisions of this Note and the other Transaction
Documents. 

10.6    Discharge of Note

            After
the Obligations have been irrevocably repaid in full, the Holder shall return
the Secured Property to the Corporation, cancel and discharge this Note with
respect to any Obligations that are payable by the Corporation to the Holder and
at the Corporation’s sole expense, execute and deliver to the Corporation such
instruments as shall be necessary to discharge this Note and the Security Documents and any
registrations or filings made in relation thereto. 

- 24 - 

10.7    Communication 

            Any
notice or other communication required or permitted to be given hereunder shall
be in writing and shall be given by registered mail, by facsimile or other means
of electronic communication or by hand-delivery as hereinafter provided. Any
such notice or other communication, if mailed by registered mail at any time
other than during, or within three (3) Business Days prior to, a general
discontinuance of postal service due to strike, lockout or otherwise, shall be
deemed to have been received on the fourth Business Day after the postmarked
date thereof, or if sent by facsimile or other means of electronic
communication, shall be deemed to have been received on the Business Day of the
sending (provided it was sent before 4:30 p.m. Toronto time) and the applicable
printed facsimile record shall be definitive evidence of the time and date of
such facsimile transmission, or if delivered by hand shall be deemed to have
been received at the time it is delivered to the applicable address noted below
either to the individual designated below or to an employee of the addressee at
such address with responsibility for matters to which the information relates.
Notice of change of address shall also be governed by this Section 10.7. In the
event of a general discontinuance of postal service due to strike, lock-out or
otherwise, notices or other communications shall be delivered by hand or sent by
facsimile or other means of electronic communication and shall be deemed to have
been received in accordance with the foregoing. Notices and other communications
shall be addressed as follows: 

	 	(a) 	
      if to the Corporation:

	 	 	 
			
      Cardero Resource Corp.

	 		
      Suite 2300 – 1177 West Hastings Street. 
Vancouver,
      British Columbia V6E 2K3

	 	 	 
	 		
      Attention:             
      Lawrence Talbot, Vice-President & General Counsel
      
Facsimile:              
      604-408-7499

	 	 	 
	 		
      with a copy (that does not constitute notice)
  to:

	 	 	 
	 		
      Gowling Lafleur Henderson LLP 
550 Burrard Street,
      Suite 2300 
Vancouver, BC V6C 2B5

	 	 	 
	 		
      Attention:             
      Daniel
      Allen 
Fascimile:              
      604-689-8610

- 25 - 

	 	(b) 	
      if to the Holder:

	 	 	 
	 		
      [Redacted]

	 	 	 
	 		
      Attention:             
      Robert C. Kopple, Trustee
      
Facsimile:              
      [Redacted]

	 	 	 
	 		
      with a copy (that does not constitute notice)
  to:

	 	 	 
	 		
      Owen Bird Law Corporation 
Bentall 3 
595 Burrard
      Street, Suite 2900 
Vancouver, BC V7X 1J5

	 	 	 
	 		
      Attention:            
       Jeffrey B. Lightfoot
      
Facsimile:              
      604-632-4487

10.8    Successors and Assigns

            This
Note shall be binding on the Corporation and its successors and assigns and
shall enure to the benefit of the Holder and its successors and permitted
assigns. The Corporation may not assign, transfer or delegate any of its rights
or obligations under this Note without the prior written consent of the Holder
which it may exercise in its sole and absolute discretion. The Holder may only
assign this Note together with all security given in support hereof in
accordance with the provisions hereof. 

10.9    No Set-Off 

            The
Obligations secured by this Note shall be paid by the Corporation without regard
to any set-off, withholding, counterclaim or equities between the Corporation
and the Holder whatsoever. 

10.10   Permitted Encumbrance

            Notwithstanding
any other provision in this Agreement, the parties confirm their intent that the
references to Permitted Encumbrances herein are not intended to imply the
subordination by the Holder to any Person whatsoever. 

10.11   Counterparts 

            This
Note may be executed in several counterparts and by facsimile transmission, each
of which shall be deemed to be an original and all of which when taken together,
shall constitute one and the same instrument. 

- 26 - 

10.12   Conflicts 

            In
the event of any conflict or inconsistency between this Note and any of the
Security Documents, the provisions of this Note shall govern and prevail to the
extent of such conflict or inconsistency. 

[Remainder of Page Intentionally Left Blank.] 

- 27 - 

       
     IN WITNESS WHEREOF the Corporation has
executed this Note by its duly authorized signing officer this 8th
day of August, 2013. 

CARDERO RESOURCE CORP. 

 

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

SCHEDULE “A” 

PERMITTED ENCUMBRANCES 

“Permitted Encumbrances” means any of the following:

	 	(a) 	
      Liens for taxes, assessments, governmental charges or
      levies not at the time due unless contested in good faith by all necessary
      proceedings and reserves satisfactory to the Holder in its discretion have
      been taken;

	 	 	 
	 	(b) 	
      defects or irregularities in title to land, easements,
      rights of way or other similar rights in land existing at the date of this
      agreement which in the reasonable opinion of the Holder, in the aggregate
      do not materially impair the usefulness of such property or the business
      of the Corporation or its Subsidiaries;

	 	 	 
	 	(c) 	
      rights reserved to or vested in any municipality or
      governmental or other public authority by the terms of any lease, licence,
      franchise, grant or permit, or by any statutory provision, to terminate
      the same or to require annual or other periodic payments as a condition to
      the continuance thereof;

	 	 	 
	 	(d) 	
      any reservations, limitations, provisos and conditions
      expressed in any original grant from the Crown;

	 	 	 
	 	(e) 	
      a security interest in cash or governmental obligations
      deposited in the ordinary course of business in connection with contracts,
      bids, tenders or to secure worker’s compensation, unemployment insurance,
      surety or appeal bonds, costs of litigation when required by law, public
      and statutory obligations, liens or claims incidental to current
      construction, mechanics’, warehousemen’s, carriers’ and other similar
      liens arising by operation of law in the ordinary course of business and
      which are not registered or enforceable against any property of the
      Corporation and/or its Subsidiaries;

	 	 	 
	 	(f) 	
      security given in the ordinary course of business to a
      public utility or any municipality or governmental or other public
      authority when required by such utility or municipality or governmental or
      other authority in connection with the operations of the Corporation
      and/or its Subsidiaries;

	 	 	 
	 	(g) 	
      a security interest in or title retention relating to
      specific Equipment or motor vehicles (not constituting, for greater
      certainty, Inventory or any Equipment which may constitute Inventory in
      the hands of the Corporation or the Guarantor) which is created to secure
      the unpaid purchase price thereof or retain title thereto until so paid,
      provided that each such security interest is limited to the Equipment so
      acquired (and any insurance or other proceeds thereof) and does not secure
      an amount in excess of the purchase price thereof or any re-advance on the
      security of the Equipment (for the purpose of this Schedule “A”,
      “Equipment” and “Inventory” shall have the meaning set out in the
      Personal Property Security Act (British Columbia), as amended,
      replaced or supplemented from time to time);

- 29 - 

	 	(h) 	
      security given in favour of the Holders to secure the
      Corporation’s or the Guarantors’ obligations hereunder and
    thereunder;

	 	 	 
	 	(i) 	
      security that is subordinate to that held by the
      Holders;

	 	 	 
	 	(j) 	
      the security interest in a $28,750 cash collateral
      guaranteed investment certificate granted in favour of Bank of Montreal to
      secure the advances made pursuant to a corporate credit card issued to the
      Guarantor by the Bank of Montreal having a credit limit of
  $25,000;

	 	 	 
	 	(k) 	
      until the Luxor Notes are fully repaid, indebtedness
      under the Luxor Notes or guaranteed by the Luxor Guarantee and security
      given in favour of Luxor to secure the Corporation and the Guarantor’s
      obligations thereunder; and

	 	 	 
	 	(l) 	
      any other encumbrances the Holder declares in writing to
      be Permitted Encumbrances including Liens granted by the Guarantors and
      the Corporation to each other.Cardero Resource Corp. - Exhibit 4.6 - Filed by newsfilecorp.com

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR APPLICABLE
STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES
FOR THE BENEFIT OF CARDERO RESOURCE CORP. (THE “COMPANY”) THAT SUCH SECURITIES
MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT; (B) TO THE COMPANY, (C) OUTSIDE THE
UNITED STATES IN ACCORDANCE WITH REGULATION S UNDER THE 1933 ACT AND IN
COMPLIANCE WITH APPLICABLE LOCAL LAWS OR (D) WITHIN THE UNITED STATES (1) IN
ACCORDANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT PROVIDED BY
RULE 144 OR RULE 144A THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY
APPLICABLE STATE SECURITIES LAWS OR (2) IN A TRANSACTION THAT DOES NOT REQUIRE
REGISTRATION UNDER THE 1933 ACT OR APPLICABLE STATE SECURITIES LAWS, AND THE
HOLDER HAS PROVIDED THE COMPANY, PRIOR TO SUCH OFFER, SALE OR TRANSFER WITH AN
OPINION OF COUNSEL, IN FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY OR OTHER
EVIDENCE SATISFACTORY TO THE COMPANY THAT SUCH SECURITIES ARE REGISTERED UNDER
THE 1933 ACT OR MAY BE SO OFFERED, SOLD OR TRANSFERRED WITHOUT REGISTRATION
UNDER THE 1933 ACT OR APPLICABLE STATE SECURITIES LAWS. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.

UNLESS PERMITTED UNDER APPLICABLE SECURITIES LEGISLATION,
THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE DECEMBER 9, 2013.

CARDERO RESOURCE CORP. 
Senior Secured Note 

	Issued to: 	E.L. II PROPERTIES TRUST 
	 	 
	Issued by: 	CARDERO RESOURCE CORP.

Aggregate Principal Amount: $3,700,000 

Issue Date:      August 8, 2013

ARTICLE 1 
PROMISE TO PAY 

1.1     
 Promise to Pay 

            CARDERO
RESOURCE CORP. (the “Corporation”), a company existing under the laws
of the Province of British Columbia and having its chief executive office at
Suite 2300 – 1177 West Hastings Street, Vancouver, British Columbia, V6E 2K3,
for value received, hereby promises to pay to or to the order of E.L. II
Properties Trust, its successors and permitted assigns (the
“Holder”), at [Redacted] or at such other place as the Holder may direct
at any time and from time to time, the amount of $3,700,000 on the Maturity
Date (as hereinafter defined) (or such other date as amounts owing
hereunder may become due and payable in accordance with the terms hereof) and to
pay interest, payable in cash quarterly (in arrears), on the last Business Day
of March, June, September and December of each calendar year on the principal
amount outstanding and on all other amounts now or hereafter owing hereunder
(including accrued and unpaid interest), at the rate of 10% per annum
(calculated annually and not in advance) until and including the Maturity Date
(or such other date as amounts owing hereunder may become due and payable in
accordance with the terms hereof). Upon the occurrence of any Event of Default
and thereafter, interest shall be calculated on the principal amount outstanding
and all other amounts now and hereafter payable hereunder (including accrued and
unpaid interest) at the rate of 10% per annum until indefeasible repayment and
performance of all Obligations in full or a waiver of the Event of Default by
the Holder in writing, as a reasonable and genuine pre-estimate of damages and
not as a penalty. The principal amount owing from time to time, any interest
payable thereon and all other amounts now or hereafter payable hereunder, and at
any time outstanding hereunder, 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 any and all reasonable costs, fees
and expenses incurred by the Holder in respect of any and all of the obligations
and liabilities owing hereunder shall be referred to herein as the
“Obligations”. 

- 2 - 

1.2      
Transfer and Assignment 

            The
Holder may transfer and assign this Note and all other Transaction Documents to
any Person without the consent of the Corporation; provided that: (a) the Holder
notifies the Corporation of such transferee’s name and address; and (b) the
Holder complies with the terms of any legends included on the first page of this
Note. The terms and conditions of this Note shall enure to the benefit of and be
binding upon the Holder’s successors and permitted assigns. 

ARTICLE 2 
INTERPRETATION 

	2.1 	
      Definitions

	 	 	 
		
      In this Note:

	 	 	 
		(a) 	
      “Affiliate” has the meaning attributed to that
      term in the TSX Company Manual;

	 	 	 
		(b) 	
      “Associate” has the meaning attributed to that
      term in the TSX Company Manual;

	 	 	 
		(c) 	
      “Business Day” means a day other than a Saturday,
      Sunday or any other day on which Canadian chartered banks located in the
      City of Vancouver, Province of British Columbia are not open for
      business;

	 	 	 
		(d) 	
      “Coal Licenses” means the coal licenses originally
      granted to Alan A. Johnson by the Ministry of Energy, Mines and Petroleum
      Resources on June 14, 2012 under nos. 418174 (as amended August 21, 2012),
      418175 (as amended September 11, 2012), 418176 and 418177 and any licenses
      that may hereafter be issued by the Ministry of Energy, Mines and
      Petroleum Resources from any coal licence applications, now legally and
      beneficially owned by the Guarantor;

	 	 	 
		(e) 	
      “Change of Control” means the occurrence of any of
      the following events:

- 3 - 

	 	(i) 	
      any Offeror, other than the Holder or an Associate or
      Affiliate thereof, has acquired beneficial ownership (within the meaning
      of the Securities Act (British Columbia)) of, or the power to
      exercise control or direction over, or securities convertible into, any
      Voting Shares of the Corporation, that together with the offeror’s
      securities in relation to the Voting Shares of the Corporation, would
      constitute Voting Shares of the Corporation representing more than 30% of
      the total voting power attached to all Voting Shares of the Corporation
      then outstanding;

	 	 	 
	 	(ii) 	
      there is consummated any amalgamation, consolidation,
      statutory arrangement (involving a business combination) or merger of the
      Corporation (1) in which the Corporation is not the continuing or
      surviving corporation, or (2) pursuant to which any Voting Shares of the
      Corporation would be reclassified, changed or converted into or exchanged
      for cash, securities or other property, other than (in each case) an
      amalgamation, consolidation, statutory arrangement or merger of the
      Corporation in which the holders of the Voting Shares of the Corporation
      immediately prior to the amalgamation, consolidation, statutory
      arrangement or merger have, directly or indirectly, more than 50% of the
      Voting Shares of the continuing or surviving corporation immediately after
      such transaction;

	 	 	 
	 	(iii) 	
      any Person or group of Persons shall succeed in having a
      sufficient number of its nominees elected as directors of the Corporation
      such that such nominees, when added to any existing directors after such
      election who was a nominee of or is an Affiliate or related Person of such
      Person or group of Persons, will constitute a majority of the directors;
      or

	 	 	 
	 	(iv) 	
      the Guarantor ceases to be a direct or indirect
      wholly-owned Subsidiary of the Corporation;

	 	(f) 	
      “Closing Date” means the date of issuance of this
      Note to the Holder;

	 	 	 	 
	 	(g) 	
      “Corporation” has the meaning attributed thereto
      in Section 1.1;

	 	 	 	 
	 	(h) 	
      “Date of Prepayment” means a date specified in a
      written notice given by the Corporation to the Holder pursuant to Section
      3.2;

	 	 	 	 
	 	(i) 	
      “Debt” of the Corporation or the Guarantor, as the
      case may be, means, without duplication:

	 	 	 	 
	 		(i) 	
      all of its indebtedness for or in respect of borrowed
      money, credit or other financial accommodation, including liabilities and
      obligations with respect to letters of credit, letters of guarantee,
      bankers’ acceptances or similar instruments issued or accepted by banks
      and other financial institutions for the account of the Corporation or the
      Guarantor;

- 4 - 

	 	(ii) 	
      all of its indebtedness for or in respect of the purchase
      or acquisition price of property or services, whether or not recourse is
      limited to the repossession and sale of any such property;

	 	 	 
	 	(iii) 	
      all obligations under any lease entered into as lessee
      which would be classified as a capital lease in accordance with
    IFRS;

	 	 	 
	 	(iv) 	
      all obligations of it to purchase, redeem, retract or
      otherwise acquire any securities issued by the Corporation or the
      Guarantor where such obligation has been exercised or otherwise become
      payable;

	 	 	 
	 	(v) 	
      all Debt (as hereinbefore defined) or any other debt
      which is directly or indirectly guaranteed by the Corporation or the
      Guarantor or which the Corporation or the Guarantor has agreed to purchase
      or otherwise acquire or in respect of which the Corporation or the
      Guarantor has otherwise assured a creditor against
loss;

but for greater certainty, “Debt” shall not include
unsecured trade debt incurred in the ordinary course of business consistent with
past practice, nor any contingent liabilities in connection with contracts
entered into in the ordinary course of business; 

	 	(vi) 	
      the market value of all derivatives in respect of which
      the market value is negative/“out of the money” from the Corporation’s or
      the Guarantor’s perspective;

	 	(j) 	
      “Event of Default” has the meaning attributed
      thereto in Section 8.1;

	 	 	 
	 	(k) 	
      “Exchanges” has the meaning ascribed thereto in
      the Subscription Agreement;

	 	 	 
	 	(l) 	
      “Guarantor” means Cardero Coal Ltd., a wholly
      owned subsidiary of the Corporation;

	 	 	 
	 	(m) 	
      “Holder” has the meaning attributed thereto in
      Section 1.1;

	 	 	 
	 	(n) 	
      “IFRS” means international financial reporting
      standards, approved by the International Accounting Standards Board or
      each successor thereto (“IASB”), adopted by the Guarantor, as
      applicable, as at the date on which any calculation or determination is
      required to be made, provided that, in accordance with the international
      financial reporting standards, where the IASB includes a recommendation
      concerning the treatment of any accounting matter, such recommendation
      shall be regarded as the only international financing reporting
      standard;

	 	 	 
	 	(o) 	
      “John Deere Lease” means the John Deere Commercial
      Lease Agreement (with Purchase Option) dated July 30, 2012 between Brandt
      Tractor Ltd. and the Guarantor pursuant to which Brandt Tractor Ltd.
      leases to the Guarantor a John Deere motor
grader;

- 5 - 

	 	(p) 	
      “Lender’s Default Notice” has the meaning
      attributed thereto in Section 9.1;

	 	 	 	 
	 	(q) 	
      “Lien” means any lien, mortgage, charge, hypothec,
      pledge, security interest, assignment as security, option, warrant, lease,
      sublease, right to possession, right of distress, encumbrance, claim,
      title retention, trust claim, right or restriction which affects, by way
      of a conflicting ownership interest or otherwise, the right, title or
      interest in or to any particular property;

	 	 	 	 
	 	(r) 	
      “Luxor” has the meaning ascribed thereto in the
      Subscription Agreement;

	 	 	 	 
	 	(s) 	
      “Luxor Guarantee” has the meaning ascribed thereto
      in the Subscription Agreement;

	 	 	 	 
	 	(t) 	
      “Luxor Notes” has the meaning ascribed thereto in
      the Subscription Agreement;

	 	 	 	 
	 	(u) 	
      “Material Adverse Effect” has the meaning ascribed
      thereto in the Subscription Agreement;

	 	 	 	 
	 	(v) 	
      “Maturity Date” means, subject to Section 3.3, the
      earlier of:

	 	 	 	 
	 		(i) 	
      December 31, 2013;

	 	 	 	 
	 		(ii) 	
      the date which is five Business Days after receipt by the
      Corporation of the Tax Credit; and

	 	 	 	 
	 		(iii) 	
      the date on which the Holder accelerates repayment of the
      Debt owing to it upon the occurrence of an Event of Default;

	 	 	 	 
	 	(w) 	
      “Note”, “hereto”, “herein”,
      “hereof”, “hereby”, “hereunder”, and any
      similar expressions refer to this Note and the schedules attached hereto
      and not to any particular article, section or other portion hereof, and
      include any and every instrument supplemental hereto or amending or
      replacing any part hereof;

	 	 	 	 
	 	(x) 	
      “Obligations” has the meaning attributed thereto
      in Section 1.1;

	 	 	 	 
	 	(y) 	
      “Permitted Debt” means the Senior Secured Notes,
      the Luxor Notes, the Guarantee, the Luxor Guarantee, the John Deere Lease,
      the other indebtedness secured by Permitted Encumbrances and secured Debt
      or unsecured Debt that is subordinate to that of the Holders, subject to
      the provisions hereof, indebtedness owing by the Guarantor or the
      Corporation to the other, accounts payable incurred in the ordinary course
      of business and consistent with past practice, accrued liabilities, income
      tax, deferred revenues, operating leases incurred in the ordinary course
      of business and consistent with past practice, and capital lease
      obligations incurred in the ordinary course of business (subject to any
      limits established hereunder) and consistent with past practice, and
      includes, without limitation, the Corporation’s and the Guarantor’s
      obligations under its real property leases or subleases (including under
      or in connection with any municipal bonds in
respect of the purchase of such real property) and any other debt
  the Holder may declare in writing to be Permitted Debt;

- 6 - 

	 	(z) 	
      “Permitted Encumbrances” has the meaning
      attributed thereto in Schedule “A” hereto;

	 	 	 
	 	(aa) 	
      “Person” is to be interpreted broadly and includes
      any individual, partnership, limited partnership, joint venture,
      syndicate, sole proprietorship, company or corporation with or without
      share capital, unincorporated association, trust, trustee, executor,
      administrator or other legal personal representative, regulatory body or
      agency, government or governmental agency, authority or entity however
      designated or constituted;

	 	 	 
	 	(bb) 	
      “Priority Payables” means the aggregate of any
      amounts accrued or payable (including interest and penalties) which arise
      by the operation of any applicable law and rank prior to or pari passu
      with any Lien held by the Holder, including in respect of wages,
      salaries, commissions or other remuneration, vacation pay, pension plan
      contributions and/or obligations, amounts required to be withheld from
      payments to employees or other persons for federal and provincial income
      taxes, employee Canada Pension Plan contributions or similar amounts
      payable under similar applicable legislation in other applicable
      jurisdictions and employee employment insurance premiums and additional
      amounts payable on account of employer Canada Pension Plan contributions
      or similar amounts payable under similar applicable legislation in other
      applicable jurisdictions and employer employment insurance premiums,
      federal or provincial goods and services or excise tax or similar amounts
      payable under similar applicable legislation in other applicable
      jurisdictions, or other sales or consumption taxes, employer health tax,
      amounts payable under the Workers Compensation Act (British
      Columbia) or similar legislation in other applicable jurisdictions,
      arrears of rent, utilities or other amounts payable in respect of the use
      of real property, amounts payable for repair, storage, transportation or
      construction or other services which may give rise to a possessory or
      registerable Lien and claims which unpaid trade suppliers could assert
      pursuant to Section 81.1 or Section 81.2 of the Bankruptcy and
      Insolvency Act (Canada) or similar claims/rights under similar
      applicable legislation in other applicable jurisdictions;

	 	 	 
	 	(cc) 	
      “Project” means the Carbon Creek metallurgical
      coal deposit located in northeastern British Columbia;

	 	 	 
	 	(dd) 	
      “Secured Parties” means, collectively, the Holder
      and the holders of the other Senior Secured Notes;

	 	 	 
	 	(ee) 	
      “Secured Property” has the meaning attributed
      thereto in Section 4.1;

	 	 	 
	 	(ff) 	
      “Security Documents” has the meaning attributed
      thereto in Section 4.1;

	 	 	 
	 	(gg) 	
      “Senior Secured Notes” has the meaning attributed
      thereto in Section 6.1(a);

- 7 - 

	 	(hh) 	
      “Subscription Agreement” means the subscription
      agreement dated as of the date hereof pursuant to which, inter
      alia, the Holder subscribes for this Note;

	 	 	 
	 	(ii) 	
      “Subsidiaries” means any subsidiaries of the
      Corporation as such term is defined in Section 2(2) of the Business
      Corporations Act (British Columbia), including the Guarantor, and
      “Subsidiary” means any of the foregoing;

	 	 	 
	 	(jj) 	
      “Tax Credit” means a tax credit payable to the
      Corporation arising from work done by it on the Carbon Creek project in
      2012;

	 	 	 
	 	(kk) 	
      “Transaction Documents” has the meaning ascribed
      thereto in Section 7.1; and

	 	 	 
	 	(ll) 	
      “Voting Shares” means shares of capital stock of
      any class of any corporation carrying voting rights under all
      circumstances, provided that for the purposes of such definition, shares
      which only carry the right to vote conditionally on the happening of any
      event shall not be considered Voting Shares, whether or not such event
      shall have occurred, nor shall any shares be deemed to cease to be Voting
      Shares solely by reason of a right to vote accruing to shares of another
      class or classes by reason of the happening of such
  event.

2.2      Other
Defined Terms 

            Other
capitalized terms used herein which are not defined herein have the meanings
attributed thereto in the Subscription Agreement and the use of the term
“including” shall mean “including, without limitation”. 

2.3      Headings

            The
inclusion of headings in this Note is for convenience of reference only and
shall not affect the construction or interpretation hereof. 

2.4      References
to Sections 

            Whenever
in this Note a particular article, section or other portion thereof is referred
to, such reference pertains to the particular article, section or portion
thereof contained herein, unless otherwise indicated. 

2.5      Currency

            Except
where otherwise expressly provided, all amounts in this Note are stated and
shall be paid in lawful currency of the United States of America. 

2.6      Gender and
Number 

            In
this Note, unless the context otherwise requires, words importing the singular
include the plural and vice versa and words importing gender include all
genders. 

- 8 - 

2.7      Invalidity
of Provisions 

            Each
of the provisions contained in this Note is distinct and severable and a
declaration of invalidity or unenforceability of any such provision or part
thereof by a court of competent jurisdiction shall not affect the validity or
enforceability of any other provision hereof. 

2.8      Amendment or
Waiver 

            No
amendment or waiver of this Note shall be binding unless executed in writing by
the party to be bound thereby. No waiver of any provision of this Note shall
constitute a waiver of any other provision nor shall any waiver of any provision
of this Note constitute a continuing waiver unless otherwise expressly provided.

2.9      Governing
Law; Attornment 

            This
Note shall be exclusively (without regard to any rules or principals relating to
conflicts of laws) governed by, enforced and construed in accordance with the
laws of the Province of British Columbia and the laws of Canada applicable
therein. Each of the Corporation, and, by its acceptance hereof, the Holder
hereby irrevocably attorns to the non-exclusive jurisdiction of the courts of
the Province of British Columbia with respect to any matter arising under or
relating to this Note. 

2.10    Non-Business Days

            If
any date on which any payment is due or any action is required to be taken is
not a Business Day, the date for payment or taking such action shall be the next
Business Day following the date specified for such payment or action. 

2.11     Interest 

            The
annual rates of interests or fees to which the rates calculated in accordance
herewith are equivalent, are the rates as calculated and multiplied by the
actual number of days in the calendar year in which that calculation is made and
divided by 365 or 366, as the case may be. 

            The
Corporation shall not be obligated to pay any interest hereunder to the extent
such interest exceeds the effective annual rate of interest on the credit made
available hereunder that would be lawfully permitted under the Criminal Code
(Canada), each interest rate and fee being distinct and severable obligations
and it is the intention of the parties hereto that any interest and fees shall
be, and shall be deemed to be, reduced by the parties hereto in accordance with
the maximum rate of interest lawfully permitted under the Criminal Code (Canada)
without effecting the remaining terms and conditions hereof. 

- 9 - 

ARTICLE 3 
PAYMENT, PREPAYMENT AND CHANGE OF
CONTROL PAYMENT 

3.1      Prepayment

            At
any time and from time to time, the Corporation may prepay the outstanding
Obligations under this Note in full or in part, without notice, penalty or
payment of any additional fee. Any prepayment shall be applied first to reduce
any outstanding interest, costs and fees, second to reduce the principal amount
due on the Maturity Date. 

3.2      Change of
Control Payment 

            At
any time prior to the Maturity Date, in the event of the occurrence of a Change
of Control, the Holder shall have the right, but not the obligation, in its sole
and absolute discretion, to require the Corporation to purchase, either in whole
or in part, this Note, at a price payable in cash equal to 110% of the principal
amount of the Note being purchased under this Section 3.2 plus accrued and
unpaid interest up to and including the date set forth for the closing of the
Change of Control transaction (the “Change of Control Price”). 

3.3      Notice of
Change of Control 

            Immediately
on becoming aware of Change of Control having occurred or being contemplated,
the Corporation shall notify the Holder and, subject to Section 3.2, the Holder
shall have 10 Business Days to elect to exercise its right to require the
Corporation to purchase, either in whole or in part, this Note under Section
3.2, by providing written notice of such exercise to the Corporation and
surrendering the Note to the Corporation. 

3.4      Method of
Payment of Change of Control Price 

            The
Corporation shall pay and satisfy the Change of Control Price on the date of
closing of the Change of Control transaction by sending by prepaid ordinary mail
a certified cheque or other transfer of funds to the Holder for such Change of
Control Price payable to the order of the Holder or as the Holder may otherwise
in writing direct. In the event of non-receipt of any certified cheque or other
transfer of funds for the Change of Control Price by the Holder, the Corporation
will cause to be issued to the Holder a replacement certified cheque or
replacement transfer of funds for like amount upon the Corporation being
furnished with such evidence of non-receipt as the Corporation shall reasonably
require and upon being indemnified to its satisfaction, acting reasonably. 

3.5      Failure to
Surrender Note in Change of Control 

            In
case the Holder for repurchase of the Note in a Change of Control transaction
fails to surrender this Note on or before the closing of the Change of Control
transaction, the Change of Control Price shall be set aside in trust, in a
chartered bank or with counsel to the Corporation in a bank account with
interest accruing thereon and shall be deemed to be payment in full to the
Holder. To that extent the Note shall thereafter not be considered as
outstanding hereunder, the Holder shall have no other right except to receive
payment out of the Change of Control Price so paid and deposited together with
any accrued interest thereon, which amount the Corporation shall request to be paid upon surrender and delivery of such
Holder's Note. In the event that any money required to be deposited hereunder
shall remain so deposited for a period of five years less one day from the
Closing of the Change of Control transaction, then such monies shall at the end
of such period be paid over to the Corporation on its written demand. 

- 10 - 

3.6      Cancellation
of Note Redeemed 

            If
the Holder requires the Corporation to purchase less than all of the aggregate
outstanding principal amount of the Note under this Article 3, upon surrender of
the Note for payment of the Change of Control Price, the Note shall be cancelled
and the Corporation shall execute one or more new Notes for the remaining part
of the principal amount of the Note so surrendered. If the Holder requires the
Corporation to purchase all of the aggregate outstanding principal amount of the
Note under this Article 3, upon surrender of the Note for payment of the Change
of Control Price, the Note shall be cancelled and no Notes shall be issued in
substitution therefor. 

ARTICLE 4 
SECURITY 

	4.1 	
      Security in favour of the Secured
Parties

	 	 	 
		(a) 	
      As general continuing collateral security for the payment
      of the Obligations, the Corporation shall execute and deliver in favour of
      the Secured Parties, inter alia, a general security agreement (the
      “General Security Agreement”), granting the Secured Parties a first
      ranking security interest (subject to Permitted Encumbrances) in and to
      all undertakings, property and assets (including any Liens in its favour)
      of the Corporation (the “Secured Property”), in form and substance
      satisfactory to the Secured Parties and its counsel.

	 	 	 
		(b) 	
      As additional security for the payment of the Obligations
      all of the shares in the Guarantor held by the Corporation shall be
      pledged to the Secured Parties pursuant to a share pledge agreement to be
      executed and delivered by the Corporation, in favour of the Secured
      Parties (such share pledge agreement, together with the General Security
      Agreement, the “Security Documents”).

	 	 	 
		(c) 	
      The priority of the security under the Security Documents
      shall only become first ranking upon Luxor having fully complied with
      Section 10.6 of the Luxor Notes.

ARTICLE 5 
GUARANTEE 

5.1      Guarantee

            As
it is in the interests of the Guarantor that the Luxor Demand be satisfied, the
Corporation shall cause the Guarantor to execute and deliver in favour of the
Secured Parties, a guarantee (the “Guarantee”) pursuant to which the
Guarantor irrevocably and unconditionally guarantees to the Secured Parties the
due and punctual payment, and due performance of the Obligations hereunder. 

- 11 - 

ARTICLE 6 
PARI PASSU ARRANGEMENTS 

	6.1 	
      Pari Passu Arrangements

	 	 	 	 
		
      The Holder hereby acknowledges and agrees with the
      Corporation:

	 	 	 	 
		(a) 	
      that all senior secured notes of the Corporation issued
      to the Secured Parties on the date hereof representing an aggregate
      principal amount of $5,700,000 (collectively, the “Senior Secured
      Notes”), the Obligations and all indebtedness secured thereby or by
      any portion thereof shall, in all respects, rank pari passu, equally and
      ratably among the Secured Parties, to the effect that all funds received
      by any Secured Party from the Corporation and all proceeds of realization
      of any of the Obligations shall be distributed between the Secured Parties
      on a pro rata basis, based upon the respective amounts owing to them by
      the Corporation, except that the parties acknowledge that if the
      Corporation receives the Tax Credit it is obligated to apply it to, and it
      shall be applied to, repayment in full of the Senior Secured Note in
      favour of the Holder to the exclusion of Kopple Family Partnership, LP;
      and

	 	 	 	 
		(b) 	
      not to take any actions hereunder, including
to:

	 	 	 	 
			(i) 	
      commence any proceedings to enforce or realize upon the
      Obligations held by it; and

	 	 	 	 
			(ii) 	
      fulfill or waive any matters
hereunder,

except with the consent of Secured
Parties who, together with the Holder, hold at least two-thirds the principal
amounts of all indebtedness secured by the Senior Secured Notes, and to
co-operate fully with the other Secured Parties in connection with any
enforcement or realization of the Obligations. 

ARTICLE 7 
COVENANTS OF THE CORPORATION

7.1      General
Covenants 

            For
as long as this Note remains outstanding, the Corporation declares, covenants
and agrees as follows: 

	 	(a) 	
      Use of Proceeds. The Corporation shall only use
      the aggregate principal amount of the Senior Secured
  Notes:

	 	(i) 	
      to satisfy the Luxor Demand;
and

- 12 - 

	 	(ii) 	
      to provide to for general working capital purposes of the
      Corporation and its Subsidiaries for the remainder of the funds advanced
      to the Corporation on issuance of the Senior Secured
  Notes.

	 	(b) 	
      To Pay Principal and Interest. The Corporation
      will duly and punctually pay the principal and interest accrued on this
      Note and all other amounts owing to it at the time and in the manner
      specified herein and in the other Transaction Documents and the
      Corporation will duly observe and perform all of the terms and covenants
      contained in this Note and in the other Transaction Documents and in every
      other covenant and undertaking hereafter given by the Corporation to the
      Holder.

	 	 	 
	 	(c) 	
      Maintain Corporate Existence. The Corporation
      shall (and shall cause the Guarantor to) maintain its corporate existence,
      carry on and conduct its business in a proper and business-like manner,
      take all reasonable action to maintain all rights, privileges and
      franchises necessary or desirable in the normal conduct of its business
      and comply with all applicable legal requirements.

	 	 	 
	 	(d) 	
      Delivery of Secured Property and Perfection. The
      Corporation shall facilitate such registrations and shall obtain such
      consents, at the sole cost and expense of the Corporation, as may be
      required or desirable and as requested by the Holder, to preserve, protect
      or perfect the security interests to be created with respect to the
      Secured Property. Notwithstanding the foregoing, only the shares in the
      capital of the Guarantor shall be pledged to the Holder pursuant to the
      terms and conditions of a securities pledge agreement dated the date
      hereof, as the same may be amended, modified, renewed, supplemented,
      replaced or extended from time to time and no other securities of the
      Corporation or any other of its Subsidiaries will be pledged in favour of
      the Holder.

	 	 	 
	 	(e) 	
      No Encumbrances. The Corporation shall not (and
      shall cause the Guarantor to not) create, assume or suffer to exist any
      Lien (other than Permitted Encumbrances), including, without limitation,
      any agreement to give any of the foregoing or any conditional sale or
      other title retention agreement, upon all or any part of the Secured
      Property. The Corporation will defend the Secured Property against, and
      will take such other action as is necessary to remove, any and all
      security interests on and claims in respect of the Secured Property other
      than the security interests created by the Security Documents and
      Permitted Encumbrances, and the Corporation will defend the right, title
      and interest of the Holder in and to the Secured Property against the
      claims and demands of all Persons.

	 	 	 
	 	(f) 	
      Operating Leases. The Corporation shall not (and
      shall cause the Guarantor to not) enter into or maintain operating leases
      such that the aggregate annual expenditure on such operating leases would
      be greater than the sum of (i) $100,000 and (ii) the aggregate annual
      expenditure on any operating leases (other than real property leases)
      acquired by the Corporation or the Guarantor as
a result of any new acquisition of a business or company by
  the Corporation or the Guarantor.

- 13 - 

	 	(g) 	
      Insurance. The Corporation shall (and shall cause
      the Guarantor to) insure and keep insured its properties customarily
      insured by companies carrying on a similar business in similar locations,
      or owning or operating similar properties, against all risks, including
      but not limited to, business interruption, product liability and all risks
      insurance, with the Holder being a loss payee (as its interest may appear)
      on all such insurance and an additional insured.

	 	 	 	 
	 	(h) 	
      Non-arm’s Length Transactions. The Corporation
      shall (and shall cause the Guarantor to) not enter into any transaction
      with any officer, director, employee, shareholder or any Person not
      dealing at arm’s length (within the meaning of the Income Tax Act
      (Canada)) or any Affiliate of any of the foregoing (specifically
      excluding any employment or option agreement or intercompany indebtedness
      or transactions between a Subsidiary and the Corporation).

	 	 	 	 
	 	(i) 	
      Subscription Agreement. The Corporation shall
      observe each term, covenant and agreement contained in the Subscription
      Agreement and the Security Documents, and all of its material agreements,
      instruments and documents listed on any schedule to or contemplated in the
      Subscription Agreement (collectively, the “Material
      Agreements”).

	 	 	 	 
	 	(j) 	
      Priority Payables. The Corporation shall (and
      shall cause the Guarantor to) withhold and remit and pay any and all
      Priority Payables, the failure of which could result in the imposition of
      a Lien becoming registered or enforceable against any of the Corporation’s
      assets.

	 	 	 	 
	 	(k) 	
      Negative Covenants. Without the prior written
      consent of the Holder, The Corporation shall (and shall cause the
      Guarantor to) not:

	 	 	 	 
	 		(i) 	
      incur, issue or make any request for or permit any Debt,
      except for the Permitted Debt;

	 	 	 	 
	 		(ii) 	
      grant or permit the existence of any security for Debt
      other than the Permitted Encumbrances;

	 	 	 	 
	 		(iii) 	
      not alter its outstanding share capital by way of share
      split, consolidation or reorganization;

	 	 	 	 
	 		(iv) 	
      sell, lease, exclusively licence or transfer or dispose
      of all or substantially all of its assets or wind-up or liquidate the
      Corporation or the Guarantor pursuant to any transaction where the
      repayment of the Note is not provided for;

	 	 	 	 
	 		(v) 	
      merge, amalgamate or enter into another form of business
      combination or reorganization (including any joint venture or partnership)
      other than with a Subsidiary owned and controlled by the
    Corporation;

- 14 - 

	 	(vi) 	
      make any payment of any dividend and/or other
      distribution to any shareholder other than the Corporation, other than
      payment of director’s fees, salaries, bonuses, commissions and any
      payments of a similar nature in the ordinary course of business and
      consistent with past practice and existing agreements;

	 	 	 
	 	(vii) 	
      continue the Corporation or the Guarantor into a
      jurisdiction in which it is not currently organized or incorporate or
      establish the Guarantor in a manner which may prejudice the Holder or
      could reasonably be expected to result in a Material Adverse Effect on the
      Holder’s secured position or the assets, business, operations or prospects
      of the Corporation or the Guarantor;

	 	 	 
	 	(viii) 	
      make any material amendments to its notice of articles,
      articles or bylaws or the nature of its business;

	 	 	 
	 	(ix) 	
      provide or permit the Corporation or the Guarantor to
      provide a guarantee in respect of the obligations of any Person, other
      than guarantees given in respect of indebtedness secured by a Permitted
      Encumbrance in respect of the Corporation or the Guarantor or in respect
      of Permitted Debt in respect of the Corporation or the
Guarantor;

	 	 	 
	 	(x) 	
      other than Permitted Debt in respect of the Corporation
      or the Guarantor, lend money to or invest money in any Person, whether by
      way of loan or acquisition of debt obligations;

	 	 	 
	 	(xi) 	
      other than in respect of Permitted Debt, enter into any
      instrument, contract document or agreement which specifically prohibits
      the granting of any Lien or assignment by way of security in the assets of
      the Corporation or the Guarantor;

	 	 	 
	 	(xii) 	
      change its name or the location of any of its assets,
      head office, or chief executive office, except that inventory or equipment
      may be transferred in the ordinary course of business by the Corporation
      or the Guarantor to each other provided that such Person has executed and
      delivered a security agreement over its assets to the Holder and has
      complied with all of its Obligations;

	 	 	 
	 	(xiii) 	
      agree or otherwise commit to take any action described in
      paragraphs (i)-(xiii) above.

	 	(l) 	
      Further Documentation. The Corporation will from
      time to time at its expense promptly and duly authorize, execute and
      deliver such further instruments and documents, and take such further
      action, as the Holder may reasonably request for the purpose of preserving
      the Secured Property, and full benefits of, and the rights and powers
      granted by, the Security Documents (including the filing of any financing
      statements or financing change statements under any applicable
      legislation, application for the registration or an application for the
      registration of a rectification with respect to the Secured Property and
      including any steps required to register security on owned real property
      if necessary). The Corporation acknowledges that the Security Documents
      have been prepared based on the existing laws at this time and that a
      change in such laws may require the execution and delivery of different
      forms of security documentation. Accordingly, the Corporation agrees that
      the Holder will have the right to require that the Security Documents be
      amended, supplemented or replaced in the event of any such change in
      applicable laws, and that the Corporation will immediately on request by
      the Holder authorize, execute and deliver any such amendment, supplement
      or replacement (i) to reflect any changes in such laws, whether arising as
      a result of statutory amendments, court decisions or otherwise, (ii) to
      facilitate the creation and registration of appropriate security in all
      appropriate jurisdictions, or (iii) if the Corporation merges or
      amalgamates with any other Person or enters into any corporate
      reorganization, in each case in order to confer on the Holder security
      interests similar to, and having the same effect as, the security
  interests created by the Security Documents.

- 15 - 

	 	(m) 	
      Delivery and Pledge of Certain Collateral. After
      the expiry of any applicable cure period resulting in an Event of Default
      which has not been waived in writing by the Holder, promptly upon request
      from time to time by the Holder, the Corporation will deliver (or cause to
      be delivered) to the Holder, endorsed and/or accompanied by such
      instruments of assignment and transfer in such form and substance as the
      Holder may reasonably request, any and all instruments, investment
      property, securities, documents of title and chattel paper included in or
      relating to the Secured Property as the Holder may specify in its request
      (other than Secured Property to which the holder of a Permitted
      Encumbrance holds a prior ranking charge).

	 	 	 
	 	(n) 	
      Payment of Expenses; Indemnification. The
      Corporation shall promptly pay upon demand therefor, and pursuant to the
      Guarantee, together with the Guarantor on a joint and several basis,
      indemnifies and saves the Holder harmless from and against, any and all
      actions, claims, proceeding, debts, liabilities, obligations, losses,
      costs and expenses (including reasonable legal fees (without reduction for
      tariff rates or similar reductions) and expenses and any sales, goods and
      services or other similar taxes payable to any governmental authority with
      respect to any such liabilities, costs and expenses) incurred by the
      Holder in connection with, arising out of, or in any way relating to, (i)
      the entering into of the Subscription Agreement, the Security Documents,
      the Guarantee or this Note (collectively, the “Transaction
      Documents”), (ii) the enforcement of any of the Transaction Documents,
      (iii) any failure or delay by the Corporation or the Guarantor in
      performing or observing any of its obligations under any of the
      Transaction Documents, or (iv) the performing or observing by the Holder
      of any of the covenants or obligations of the Corporation or the Guarantor
      under any of the Transaction Documents except, in each case, to the extent
      such action, claim, proceeding, debt, liability, obligation, loss, cost or
      expense results from the gross negligence or wilful misconduct of the
      Holder.

- 16 - 

	 	(o) 	
      Maintenance of Records. The Corporation will keep
      and maintain accurate and complete records of the Secured
  Property.

	 	 	 
	 	(p) 	
      Right of Inspection. The Holder may, at any time
      during normal business hours, upon reasonable notice, without charge,
      examine all books and records evidencing or relating to the Secured
      Property, and may discuss the affairs, finances and accounts of the
      Corporation and the Guarantor in a reasonable and professional manner with
      its officers, customers, suppliers, taxing or other governmental
      regulatory authorities and accountants in the presence of such
      representatives of the Corporation as the Corporation may designate. The
      Holder may also, upon reasonable notice, without charge, during normal
      business hours, enter the premises of the Corporation and the Guarantor
      including, where any of the Secured Property is located for the purpose of
      inspecting the Secured Property, observing its use or otherwise protecting
      its interests in the Secured Property. The Corporation, at its expense,
      will provide the Holder with such clerical and other assistance as may be
      reasonably requested by the Holder to exercise any of its rights under
      this paragraph.

	 	 	 
	 	(q) 	
      Other Information. The Corporation will and will
      cause the Guarantor to provide to the Holder, at the request of the Holder
      acting reasonably, such other documentation and information concerning the
      Corporation or the Guarantor and their business as the Holder may
      reasonably require at any time and from time to time.

	 	 	 
	 	(r) 	
      Limitations on Dispositions of Collateral. Other
      than in the ordinary course of business, the Corporation will not, without
      the Holder’s prior written consent, sell, lease, exclusively licence or
      otherwise dispose of any of the Secured Property, except that inventory
      may be sold, leased or otherwise disposed of, equipment that is obsolete
      or requires replacement may be replaced provided it meets any conditions
      hereunder with respect to capital expenditures, and accounts may be
      collected, all in the ordinary course of business and consistent with past
      practice. After the occurrence of any Event of Default which has not been
      waived in writing by the Holder, all proceeds of the Secured Property
      (including all amounts received in respect of accounts receivable),
      whether or not arising in the ordinary course of the Corporation’s
      business, shall be, and shall be deemed to be, held separate and apart and
      received by the Corporation as trustee and agent and for the exclusive
      benefit of the Holder and will be immediately paid over to the
    Holder.

	 	 	 
	 	(s) 	
      Notices. Upon becoming aware of same, the
      Corporation shall provide prompt written notice to the Holder in
      accordance with Section 10.7 hereof, of (i) any Lien (other than the
      security interests created by the Security Documents and Permitted
      Encumbrances) on, or claim asserted against, any of the Secured Property,
      (ii) the occurrence of any event, claim or occurrence that is or could
      reasonably be expected to have a Material Adverse Effect on the operations
      or property of the Corporation and the Guarantor taken as a whole or the
      secured position or value of the Secured Property, (iii) any change in the
      location of the chief executive office or principle place of business of
      the Corporation or the Guarantor and hereby covenants to use best efforts
      to procure a landlord acknowledgement in connection with any North
      American location, (iv) any change in the location of any of the corporeal
      or tangible material Secured Property (including additional locations),
      and hereby covenants to use best efforts to procure a landlord
      acknowledgement in connection with any North American location, and (v)
  any material loss of or damage to any of the Secured Property.

- 17 - 

	 	(t) 	
      Limitations on Modifications, Waivers,
      Extensions.Other than in the ordinary course of business, the
      Corporation will not, and will cause its Subsidiaries not to, (i) amend,
      modify, terminate or waive any provision of any permit, contract or any
      agreement giving rise to an account in any manner which is or could
      reasonably be expected have a Material Adverse Effect on the Holder’s
      secured position or the assets, business, operations or prospects of the
      Corporation and the Guarantor taken as a whole, or (ii) fail to exercise
      promptly and diligently its rights under each permit, contract and
      agreement giving rise to an account if such failure is or could reasonably
      be expected to have a Material Adverse Effect on the Holder’s secured
      position or the assets, business, operations or prospects of the
      Corporation and the Subsidiaries taken as a whole.

	 	 	 
	 	(u) 	
      Return of Luxor Security. The Corporation will
      promptly notify the Secured Parties once Luxor has fully complied with
      Section 10.6 of the Luxor Notes.

	 	 	 
	 	(v) 	
      Tax Credit. If the Corporation receives the Tax
      Credit on or before the Maturity Date it shall use the proceeds from the
      Tax Credit to prepay the Note in full.

7.2      Spin-Out
of Iron Ore Assets Permitted 

            Notwithstanding
any other provision of the Transaction Documents, nothing in the Transaction
Documents shall prevent or restrict the Corporation, directly or through any
Subsidiary, from proposing, adopting or effecting, and the consent of the Holder
shall not be required for the Corporation to propose, adopt or effect, a
statutory plan of arrangement to “spin-out” the iron ore assets legally and
beneficially owned by Cardero Ghana Limited, into another company in which the
shareholders of the Corporation shall hold an equity interest upon the
completion of such transaction, provided that: 

	 	(a) 	
      such iron ore assets do not relate, directly or
      indirectly, to the Project; and

	 	 	 
	 	(b) 	
      such transaction could not reasonably be expected to have
      a Material Adverse Effect on the operations or property of the Corporation
      and the Guarantor taken as a whole or the secured position or value of the
      Secured Property.

7.3      Sale of
Shares of Certain Subsidiaries Permitted 

            Notwithstanding
any other provision of the Transaction Documents, nothing in the Transaction
Documents shall prevent or restrict the Corporation, directly or through any
Subsidiary, from proposing, adopting or effecting, and the consent of the Holder
shall not be required for the Corporation to propose, adopt or effect, the sale
of shares of Minerales y Metales California, S.A. De CV, a Subsidiary, or the sale of shares of
Cardero Hierro del Peru, S.A.C., a Subsidiary, provided that: 

- 18 - 

	 	(a) 	
      such transactions do not relate, directly or indirectly,
      to the Project; and

	 	 	 
	 	(b) 	
      such transactions could not reasonably be expected to
      have a Material Adverse Effect on the operations or property of the
      Corporation and the Guarantor taken as a whole or the secured position or
      value of the Secured Property.

ARTICLE 8 
EVENTS OF DEFAULT 

	8.1 	
      Events of Default

	 	 	 	 
		
      Any of the following shall constitute an Event of Default
      under this Note:

	 	 	 	 
		(a) 	
      failure by the Corporation to pay in cash, all or any
      part of the Obligations within three (3) days of when due and
    payable;

	 	 	 	 
		(b) 	
      the Corporation or the Guarantor ceases or threatens to
      cease to carry on business in the normal course or any material part of
      its business;

	 	 	 	 
		(c) 	
      the Corporation or the Guarantor becomes unable to
      satisfy its liabilities as they become due and/or the realizable value of
      its assets is less than the aggregate sum of its liabilities, or any of
      them otherwise commit an act of bankruptcy or admits that it is
      “insolvent”;

	 	 	 	 
		(d) 	
      the Corporation, the Guarantor, any creditor of the
      Corporation or the Guarantor or any other Person institutes any proceeding
      or takes any corporate action or executes any agreement in connection with
      the commencement of any proceeding which the Corporation is not contesting
      in good faith and by appropriate proceedings to the satisfaction of the
      Holder, acting reasonably, and reserves satisfactory to the Holder, acting
      reasonably, have not been taken and such proceedings are not permanently
      stayed or dismissed within thirty (30) days from the date of commencement
      thereof:

	 	 	 	 
			(i) 	
      seeking to adjudicate the Corporation or the Guarantor a
      bankrupt or insolvent;

	 	 	 	 
			(ii) 	
      seeking liquidation, dissolution, winding-up,
      reorganization, arrangement, protection, relief or composition of the
      Corporation or the Guarantor or any material part of their property or
      debt, or making a proposal with respect to the Corporation or the
      Guarantor under any law relating to bankruptcy, insolvency, reorganization
      or compromise of debts or other similar laws; or

	 	 	 	 
			(iii) 	
      seeking appointment of a receiver, receiver and manager,
      trustee, agent, custodian, monitor, liquidator or similar official for the
      Corporation or the Guarantor or for any part of their
properties and assets or for any part of the Secured Property; 

- 19 - 

	 	(e) 	
      a receiver, receiver and manager, trustee, custodian,
      monitor, liquidation or similar official is appointed in respect of the
      Corporation or the Guarantor or any of the Secured Property which is not
      immediately contested and stayed by legitimate and appropriate
      proceedings;

	 	 	 
	 	(f) 	
      there occurs any execution, distress or other enforcement
      process, whether by court order or other formal or informal proceeding, in
      respect of any amount in excess of $25,000 which is not immediately
      contested and stayed by legitimate and appropriate proceedings;

	 	 	 
	 	(g) 	
      other than a payment default under subsection (j) below,
      the occurrence of any default, or any event or condition which, with the
      giving of notice or passage of time, or both, would constitute a default
      by the Corporation or the Guarantor under the terms of any other Debt in
      excess of $50,000 which is not cured within five (5) days;

	 	 	 
	 	(h) 	
      if any representation or warranty made by the Corporation
      or the Guarantor in any of the Material Agreements or any other document,
      instrument or agreement executed and delivered by the Corporation or the
      Guarantor at any time to or in favour of the Holder is untrue or incorrect
      in any material respect as of the date on which it is made;

	 	 	 
	 	(i) 	
      the Corporation or the Guarantor fails to observe any
      term, covenant or agreement contained herein, any other Transaction
      Document or in any of the Material Agreements or any other document,
      instrument or agreement executed and delivered by the Corporation or the
      Guarantor at any time to or in favour of the Holder (including the failure
      to preserve the first ranking of the security interests (subject to
      Permitted Encumbrances) created by the Security Documents) and such
      failure, with respect to such Material Agreements after they should
      reasonably have become aware, is continuing for five (5) days after the
      occurrence thereof provided its capable of being cured;

	 	 	 
	 	(j) 	
      with respect to Debt of the Corporation or the Guarantor
      under any agreement with a third party (other than agreements entered into
      with customers in the ordinary course of business), the Corporation or
      Subsidiary, as the case may be, fails to pay any principal, interest or
      other amount pursuant to such agreement when such amount becomes due and
      payable (whether by scheduled maturity, required repayment, acceleration,
      demand or otherwise) subject to a three (3) day right to cure provided its
      capable of being cured (for greater certainty, to run concurrently with
      any cure period under any such agreement), other than the extension of the
      payment of trade and accounts payable in the ordinary course consistent
      with the past practice of the Corporation or Subsidiary, as the case may
      be, provided such extension has no Material Adverse Effect upon the
      Holder’s secured position or the Corporation or any Subsidiaries’
  assets, business, operations or prospects;

- 20 - 

	 	(k) 	
      a notice is sent to or received by the Corporation or the
      Guarantor from any creditor with respect to the intention of such creditor
      to enforce its Lien becomes entitled to enforce or otherwise enforces or
      takes possession of any of the property of the Corporation or Subsidiary,
      as the case may be, which action could have a Material Adverse Effect on
      the Holder’s secured position or the Corporation’s and any Subsidiaries’
      assets, business, operations or prospects taken as a whole, unless such
      notice is being contested in good faith by appropriate legal proceedings,
      reserves satisfactory to the Holder in its discretion have been taken and
      such notice will not result in, or does not involve, any prospect of the
      enforcement of such Lien or the sale or forfeiture or loss of any of the
      property of the Corporation or Subsidiary, as the case may be, that is
      subject to such notice;

	 	 	 
	 	(l) 	
      the Corporation or the Guarantor challenges or threatens
      to challenge the validity or enforceability of any of the Transaction
      Documents to which it is party or terminates or repudiates any of them or
      attempts to do so, or such Transaction Documents or any other document,
      instrument, agreement or certificate executed and delivered by the
      Corporation or any of its Subsidiaries to the Holder shall cease to be in
      full force and effect or fail, in whole or in part, to constitute a legal,
      valid, binding and enforceable obligation of the Corporation or any of its
      Subsidiaries, as the case may be;

	 	 	 
	 	(m) 	
      any occurrence, development or change (other than an
      occurrence, development or change to which the Holder consents), which
      would result in the Senior Secured Notes ceasing to have priority over all
      other Debt except for Debt secured by Permitted Encumbrances;

	 	 	 
	 	(n) 	
      other than as contemplated in (f) above, a distress,
      execution, warrant, garnishment, attachment, sequestration, levy, writ, or
      any similar process is issued or enforced upon or against all or any part
      of the Secured Property, or any third party demand is issued, by the
      Crown, governmental authority, administrative body or any taxation
      authority in respect of the Corporation or any of its Subsidiaries or all
      or any part of the Secured Property, or any other seizure is made in
      respect of all or any part of the Secured Property;

	 	 	 
	 	(o) 	
      any material portion of the Secured Property is damaged
      or destroyed if proceeds of insurance do not either (i) adequately
      compensate the Holder if the Corporation does not continue to operate, or
      (ii) adequately compensate the Corporation in such a way as to allow it to
      continue to operate consistent with historical practice and
      performance;

	 	 	 
	 	(p) 	
      this Note or any of the Security Documents shall cease to
      create a valid and perfected Lien;

- 21 - 

	 	(q) 	
      any resolution is passed for, the winding up, dissolution
      or liquidation or amalgamation of the Corporation or any of its
      Subsidiaries other than with or into the Corporation or another Subsidiary
      or if the Corporation or any of its Subsidiaries loses its charter by
      expiration, cancellation, forfeiture or otherwise;

	 	 	 
	 	(r) 	
      there occurs any change, condition, event or occurrence
      which, when considered individually or together with all other changes,
      conditions, events or occurrences, could reasonably be expected to have a
      Material Adverse Effect (or a series of adverse effects, none of which is
      material in of itself but which, cumulatively, results in a Material
      Adverse Effect) on: (A) the business, operations, assets, financial
      condition or prospects of the Corporation or its Subsidiaries taken as a
      whole; or (B) to the extent applicable, the ability of the Corporation to
      perform any of its Obligations, any of the other Transaction Documents,
      any other Material Agreement or any document, instrument or agreement
      executed and delivered by the Corporation or any of its Subsidiaries at
      any time to or in favour of the Holder; or (C) the ability of the Holder
      to enforce any of the obligations of the Corporation or its Subsidiaries
      under this Note or any other of the Transaction Documents; or (D) the
      priority of this Note and the Security Documents against the Secured
      Property;

	 	 	 
	 	(s) 	
      there is an adverse qualification to any of the financial
      statements of the Corporation or its Subsidiaries by its auditors;
    or

	 	 	 
	 	(t) 	
      the Holder, acting in good faith and upon commercially
      reasonable grounds, believes that the prospect of payment or performance
      of any of the Obligations is or is about to be impaired or that all or any
      part of the Secured Property is or is about to be placed in jeopardy and
      the Holder has provided the Corporation with written notice of
  same.

8.2      Notice of
Event of Default 

            The
Corporation shall promptly give notice in writing to the Holder of the
occurrence of any Event of Default or other event which, with the lapse of time
or giving of notice or otherwise, would be an Event of Default, forthwith upon
becoming aware thereof. Such written notice shall specify the nature of such
default or Event of Default and the steps taken to remedy the same. Once the
Holder becomes aware of the occurrence of any Event of Default or other event
which, with the lapse of time or giving of notice or otherwise, would be an
Event of Default, forthwith upon becoming aware thereof, the Holder shall
promptly give notice in writing to the Corporation of such (the “Lender’s
Default Notice”) . 

8.3      
Default under Other Encumbrances 

            Any
amount paid by the Holder before or after the occurrence of an Event of Default
on account of monies payable under any Lien upon the Secured Property or any
part thereof shall be repaid by the Corporation to the Holder on demand and
shall: 

	 	(a) 	
      be added to the Obligations and constitute a charge upon
      the Secured Property; and

- 22 - 

	 	(b) 	
      bear interest at the rate of 10% per annum as a
      reasonable and genuine pre- estimate of damages and not as a
    penalty.

8.4      Judgment

            Neither
the taking of any judgment nor the exercise of any power of seizure or sale
shall operate to extinguish the liability of the Corporation to perform the
Obligations nor shall such operate as a merger of any covenant or affect the
right of the Holder to receive interest at the specified rate, and any judgment
shall bear interest at such rate. 

ARTICLE 9 
REMEDIES 

9.1      Consequences
of an Event of Default 

            Upon
the occurrence of an Event of Default, and if such Event of Default is not cured
within 10 days after the Corporation receives the Lender’s Default Notice, the
Holder may, at its option, provide written notice to the Corporation declaring
the Obligations to be immediately due and payable by the Corporation to the
Holder. Without the necessity of any further act or formality, but subject to
applicable law, the security hereby created by the Security Documents shall
become immediately enforceable. 

9.2      Limitation
of Liability 

            The
Holder shall not be liable by reason of any entry into or taking possession of
any of the Secured Property hereby charged or intended so to be or any part
thereof, to account as mortgagee in possession or for anything except actual
receipts or be liable for any loss on realization or any act or omission for
which a secured party in possession might be liable. The Holder shall not, by
virtue of these presents, be deemed to be a mortgagee in possession of the
Secured Property. The Holder shall not be liable or accountable for any failure
to exercise its remedies, take possession of, seize, collect, realize, sell,
lease or otherwise dispose of or obtain payment for the Secured Property and
shall not be bound to institute proceedings for such purposes or for the purpose
of preserving any rights, remedies or powers of the Holder, the Corporation or
any other person in respect of same. To the extent permitted by applicable law,
the Corporation hereby releases and discharges the Holder from every claim of
every nature, whether sounding in damages or not, which may arise or be caused
to the Corporation or any person claiming through or under the Corporation by
reason or as a result of anything done or omitted to be done, as the case may
be, by the Holder or any successor or assign claiming through or under the
Holder under the provisions of this Note, unless such claim is the result of
gross negligence or wilful misconduct. 

- 23 - 

ARTICLE 10 
GENERAL 

10.1    Releases 

            The
Holder may in its discretion from time to time release any part of the Secured
Property or any other security either with or without any sufficient
consideration therefor, without responsibility therefor and without thereby
releasing any other part of the Secured Property or any other security or any
Person from the security created by this Note or the Security Documents or from
any of the covenants herein contained. Each and every portion into which the
Secured Property is or may hereafter be divided does and shall stay charged with
the Obligations. No Person shall have the right to require the Obligations to be
apportioned and the Holder shall not be accountable to the Corporation for any
moneys except those actually received by the Holder. 

10.2    Expenses 

            The
Corporation shall promptly pay to the Holder on demand all of the Holder’s
reasonable costs, charges and expenses in connection with the enforcement by any
means of any provisions hereof or any of the Transaction Documents or the
exercise of any rights, powers or remedies hereunder or any of the Transaction
Documents, including all such costs, charges and expenses in connection with
taking possession, maintaining, completing, preserving, protecting, collecting
or realizing upon all or any part of the Secured Property. 

10.3    Evidence of
Indebtedness 

            The
Holder shall record the amount of the Obligations owing hereunder from time to
time and its records shall constitute, in the absence of manifest error,
conclusive evidence of the outstanding Obligations owing to the Holder. 

10.4    Whole Agreement

            This
Note, the other Transaction Documents and any and all other documents ancillary
thereto and executed and delivered in connection therewith, constitute the
entire agreement between the parties hereto with respect to the subject matter
hereof. 

10.5    Time 

            Time
shall be of the essence of all provisions of this Note and the other Transaction
Documents. 

10.6    Discharge of Note

            After
the Obligations have been irrevocably repaid in full, the Holder shall return
the Secured Property to the Corporation, cancel and discharge this Note with
respect to any Obligations that are payable by the Corporation to the Holder and
at the Corporation’s sole expense, execute and deliver to the Corporation such
instruments as shall be necessary to discharge this Note and the Security Documents and any
registrations or filings made in relation thereto. 

- 24 - 

10.7    Communication 

            Any
notice or other communication required or permitted to be given hereunder shall
be in writing and shall be given by registered mail, by facsimile or other means
of electronic communication or by hand-delivery as hereinafter provided. Any
such notice or other communication, if mailed by registered mail at any time
other than during, or within three (3) Business Days prior to, a general
discontinuance of postal service due to strike, lockout or otherwise, shall be
deemed to have been received on the fourth Business Day after the postmarked
date thereof, or if sent by facsimile or other means of electronic
communication, shall be deemed to have been received on the Business Day of the
sending (provided it was sent before 4:30 p.m. Toronto time) and the applicable
printed facsimile record shall be definitive evidence of the time and date of
such facsimile transmission, or if delivered by hand shall be deemed to have
been received at the time it is delivered to the applicable address noted below
either to the individual designated below or to an employee of the addressee at
such address with responsibility for matters to which the information relates.
Notice of change of address shall also be governed by this Section 10.7. In the
event of a general discontinuance of postal service due to strike, lock-out or
otherwise, notices or other communications shall be delivered by hand or sent by
facsimile or other means of electronic communication and shall be deemed to have
been received in accordance with the foregoing. Notices and other communications
shall be addressed as follows: 

	 	(a) 	
      if to the Corporation:

	 	 	 
	 		
      Cardero Resource Corp.

	 		
      Suite 2300 – 1177 West Hastings Street. 
Vancouver,
      British Columbia V6E 2K3

	 	 	 
	 		
      Attention:             
      Lawrence Talbot, Vice-President & General Counsel
      
Facsimile:              
      604-408-7499

	 	 	 
	 		
      with a copy (that does not constitute notice)
  to:

	 	 	 
	 		
      Gowling Lafleur Henderson LLP 
550 Burrard Street,
      Suite 2300 
Vancouver, BC V6C 2B5

	 	 	 
	 		
      Attention:             
      Daniel Allen
      
Fascimile:              
      604-689-8610

- 25 - 

	 	(b) 	
      if to the Holder:

	 	 	 
	 		
      [Redacted]

	 	 	 
	 		
      Attention:             
      Robert C. Kopple, Trustee
      
Facsimile:              
      [Redacted]

	 	 	 
	 		
      with a copy (that does not constitute notice)
  to:

	 	 	 
	 		
      Owen Bird Law Corporation 
Bentall 3 
595 Burrard
      Street, Suite 2900 
Vancouver, BC V7X 1J5

	 	 	 
	 		
      Attention:              Jeffrey
      B. Lightfoot
      
Facsimile:              
      604-632-4487

10.8    Successors and Assigns

            This
Note shall be binding on the Corporation and its successors and assigns and
shall enure to the benefit of the Holder and its successors and permitted
assigns. The Corporation may not assign, transfer or delegate any of its rights
or obligations under this Note without the prior written consent of the Holder
which it may exercise in its sole and absolute discretion. The Holder may only
assign this Note together with all security given in support hereof in
accordance with the provisions hereof. 

10.9    No Set-Off 

            The
Obligations secured by this Note shall be paid by the Corporation without regard
to any set-off, withholding, counterclaim or equities between the Corporation
and the Holder whatsoever. 

10.10  Permitted Encumbrance 

            Notwithstanding
any other provision in this Agreement, the parties confirm their intent that the
references to Permitted Encumbrances herein are not intended to imply the
subordination by the Holder to any Person whatsoever. 

10.11  Counterparts 

            This
Note may be executed in several counterparts and by facsimile transmission, each
of which shall be deemed to be an original and all of which when taken together,
shall constitute one and the same instrument. 

- 26 - 

10.12  Conflicts 

            In
the event of any conflict or inconsistency between this Note and any of the
Security Documents, the provisions of this Note shall govern and prevail to the
extent of such conflict or inconsistency. 

[Remainder of Page Intentionally Left Blank.] 

- 27 - 

      
     IN WITNESS WHEREOF the Corporation has
executed this Note by its duly authorized signing officer this 8th
day of August, 2013. 

CARDERO RESOURCE CORP. 

 

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

SCHEDULE “A” 

PERMITTED ENCUMBRANCES 

“Permitted Encumbrances” means any of the following:

	 	(a) 	
      Liens for taxes, assessments, governmental charges or
      levies not at the time due unless contested in good faith by all necessary
      proceedings and reserves satisfactory to the Holder in its discretion have
      been taken;

	 	 	 
	 	(b) 	
      defects or irregularities in title to land, easements,
      rights of way or other similar rights in land existing at the date of this
      agreement which in the reasonable opinion of the Holder, in the aggregate
      do not materially impair the usefulness of such property or the business
      of the Corporation or its Subsidiaries;

	 	 	 
	 	(c) 	
      rights reserved to or vested in any municipality or
      governmental or other public authority by the terms of any lease, licence,
      franchise, grant or permit, or by any statutory provision, to terminate
      the same or to require annual or other periodic payments as a condition to
      the continuance thereof;

	 	 	 
	 	(d) 	
      any reservations, limitations, provisos and conditions
      expressed in any original grant from the Crown;

	 	 	 
	 	(e) 	
      a security interest in cash or governmental obligations
      deposited in the ordinary course of business in connection with contracts,
      bids, tenders or to secure worker’s compensation, unemployment insurance,
      surety or appeal bonds, costs of litigation when required by law, public
      and statutory obligations, liens or claims incidental to current
      construction, mechanics’, warehousemen’s, carriers’ and other similar
      liens arising by operation of law in the ordinary course of business and
      which are not registered or enforceable against any property of the
      Corporation and/or its Subsidiaries;

	 	 	 
	 	(f) 	
      security given in the ordinary course of business to a
      public utility or any municipality or governmental or other public
      authority when required by such utility or municipality or governmental or
      other authority in connection with the operations of the Corporation
      and/or its Subsidiaries;

	 	 	 
	 	(g) 	
      a security interest in or title retention relating to
      specific Equipment or motor vehicles (not constituting, for greater
      certainty, Inventory or any Equipment which may constitute Inventory in
      the hands of the Corporation or the Guarantor) which is created to secure
      the unpaid purchase price thereof or retain title thereto until so paid,
      provided that each such security interest is limited to the Equipment so
      acquired (and any insurance or other proceeds thereof) and does not secure
      an amount in excess of the purchase price thereof or any re-advance on the
      security of the Equipment (for the purpose of this Schedule “A”,
      “Equipment” and “Inventory” shall have the meaning set out in the
      Personal Property Security Act (British Columbia), as amended,
      replaced or supplemented from time to time);

- 29 - 

	 	(h) 	
      security given in favour of the Holders to secure the
      Corporation’s or the Guarantors’ obligations hereunder and
    thereunder;

	 	 	 
	 	(i) 	
      security that is subordinate to that held by the
      Holders;

	 	 	 
	 	(j) 	
      the security interest in a $28,750 cash collateral
      guaranteed investment certificate granted in favour of Bank of Montreal to
      secure the advances made pursuant to a corporate credit card issued to the
      Guarantor by the Bank of Montreal having a credit limit of
  $25,000;

	 	 	 
	 	(k) 	
      until the Luxor Notes are fully repaid, indebtedness
      under the Luxor Notes or guaranteed by the Luxor Guarantee and security
      given in favour of Luxor to secure the Corporation and the Guarantor’s
      obligations thereunder; and

	 	 	 
	 	(l) 	
      any other encumbrances the Holder declares in writing to
      be Permitted Encumbrances including Liens granted by the Guarantors and
      the Corporation to each other.

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