Cardero Announces Establishment of USD 5.0M Secured Line of Credit - Seite 2

As additional consideration for the establishment and funding of the Credit Line, the Company has agreed to issue to the Lenders transferrable common share purchase warrants to purchase an aggregate of 38,417,398 common shares of the Company (the "Warrants"). Of this number, 28,359,066 were issued to the Lenders on the closing of the Credit Line on December 5, 2013. The issuance of the additional 10,058,330 Warrants is subject to the approval thereof by the Company's shareholders. The Warrants have a term of seven years, and are exercisable at a price of $0.139. The Warrants, and any shares issuable on the exercise thereof, will be subject to a hold period in Canada of four months from the date of issuance, plus additional restrictions under United States securities laws.

Assuming the full exercise of all of the Warrants, as well as the 28,359,066 warrants currently held by the Lenders ("Existing Warrants") and the incentive stock options held by Mr. Kopple, the Lenders, together with their associates and affiliates, and including their current shareholdings, would then hold approximately 41.31% of the Company's then issued shares. As this exercise of Warrants represents a potential change of control, the Company has agreed to seek shareholder approval to the full exercise of the Warrants and potential change of control arising therefrom at its 2014 annual general meeting (to be held on or before April 2, 2014) ("AGM"). Until such time as the shareholders may approve such change of control, the Warrants may not be exercised if any such exercise would result in the holdings of the Lenders (and their associates or affiliates) going over 19.9%. The Company has also agreed to seek shareholder approval at the 2014 AGM to (a) a reduction in the exercise price of the Warrants from $0.139 to $0.10 and (b) the issuance of the additional 10,058,330 Warrants.

The Warrants contain standard anti-dilution provisions. In addition, for so long as any of the Warrants or Existing Warrants remain outstanding and are held by a Lender, the Lenders will have the right to participate in all future equity financings undertaken by Cardero as to their respective percentage equity holdings of Cardero as if the Warrants then held by the Lenders were fully exercised, subject to receipt of any necessary regulatory approvals/acceptances.