ex4-12.htm


    
Exhibit
4.12

     

     

    
      This SUBORDINATION AGREEMENT
(this “Agreement”),
dated as of July 15, 2008, is among MRU Holdings, Inc., a Delaware
corporation (the “Company”), Professional
Investments of America, LLC (the “Subordinated Creditor”), the
Buyers (as defined in the Purchase Agreement described below), and Viking Asset
Management, LLC, a California limited liability company, in its capacity as
collateral agent for itself and for the Buyers (including any successor agent,
hereinafter, the “Collateral
Agent”).

       

      R
E C I T A L S

       

      A.          Company
has executed and delivered to the Buyers those certain secured senior notes
dated as of October 19, 2007 (as any of the same may be amended, supplemented,
restated or modified and in effect from time to time, the “Note”).  The Note
was issued pursuant to that certain Securities Purchase Agreement dated as of
October 19, 2007 (as the same has been and hereafter may be amended, modified,
supplemented or restated, the “Purchase Agreement”) by and
among the Company and Buyers, and pursuant to which the Buyers have made certain
loans (“Loans”) to the
Company.

       

      B.           Each
of Embark Corp., a Delaware corporation, Embark Online, Inc., a Delaware
corporation, Goto College Holdings Inc., a Delaware corporation, iempower, Inc.,
a Delaware corporation, MRU Originations, Inc., a Delaware corporation and MRU
Universal Guaranty Agency, Inc., each such entity, together with each other
person or entity who becomes a party to the Guaranty (as defined herein) by
execution of a joinder in the form of Exhibit A attached
thereto, is referred to individually as a “Viking Guarantor,” and collectively as the
“Viking Guarantors”)
have executed a Guaranty dated as of October 19, 2007 (as the same may be
amended, supplemented, restated or modified and in effect from time to time, the
“Guaranty”) in favor of
the Collateral Agent in respect of Company’s obligations under the Purchase
Agreement and the Note.

       

      C.           The
Company and the Subordinated Creditor have entered into a promissory note and a
Note and Warrant Purchase Agreement, dated as of even date herewith, pursuant to which, among
other things, the Subordinated Creditor has extended credit to the Company in
the aggregate original principal amount of Six Hundred Thousand Dollars
($600,000) (as it may be amended, supplemented, restated or otherwise modified
from time to time as permitted hereunder and including any note issued in
exchange or substitution therefor, the “Subordinated Note”), and
pursuant to which the Company has agreed that:

       

      
        	
                 
      

              	
                1)

              	
                to
      the extent the Company issues and sells equity securities (the “Equity Securities”)
      pursuant to an equity financing (including the issuance of Equity
      Securities upon the conversion or exchange of debt securities (the “Automatically
      Converting  Debt Securities”) issued after the date
      hereof in connection with such equity financing) in which the Company
      closes a total commitment of at least Seventy Five Million Dollars
      ($75,000,000) (inclusive of the consideration received for the issuance of
      the Company’s Series B-2 Convertible Preferred Stock and all other
      securities that convert into Equity Securities) in gross proceeds and 60%
      of such gross proceeds (at least $45,000,000) is attributable to one
      investor or a group of related investors  (a “Qualifying Financing”),
      then:

              


      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                a.

              	
                upon
      the issuance of the Automatically Converting Debt Securities, if any, the
      Company shall, exclusively with net proceeds received from the sale of the
      Automatically Converting Debt Securities ("Debt
      Proceeds"),

              


      

       

      
        	
                 
      

              	
                ·

              	
                first, redeem
      Five Million Six Hundred Thousand Dollars ($5,600,000) in principal amount
      of the Note pursuant to the terms of the Note (the “Required
      Redemption”),

              


      

       

      
        	
                 
      

              	
                ·

              	
                

                  second, to the
      extent there remain Debt Proceeds therefor, pay the holders of the Twelve
      Million Seven Hundred Fifty Thousand in principal amount of promissory
      notes issued by the Company on July 10, 2008 (the “July 10, 2008 Promissory
      Notes”),
      which notes are subject to a subordination agreement among such
      holders and the parties hereto (other than the Subordinated Creditor) that
      is comparable to this Agreement, the outstanding principal amount of the
      July 10, 2008 Promissory Notes together with accrued but unpaid interest
      thereon, pro rata based on the outstanding principal amount of each July
      10, 2008 Promissory Note, and

                

              


      

       

      
        	
                 
      

              	
                ·

              	
                

                  

                    third, to the
      extent there remain Debt Proceeds therefor, pay the outstanding principal
      amount of the Subordinated Note together with accrued but unpaid interest
      thereon;

                  

                

              


      

       

      
        	
                 
      

              	
                b.

              	
                

                  upon
      the issuance of the Equity Securities and after consummation of the
      Required Redemption (to the extent the Required Redemption was not
      consummated pursuant to the immediately preceding clause a.), the
      outstanding principal amount of the Subordinated Note, together with
      accrued but unpaid interest thereon, may, to the extent not paid pursuant
      to the immediately preceding clause a., be repaid in full (the Required
      Redemption and the payments thereafter of principal and interest on the
      Subordinated Note and the July 10, 2008 Promissory Notes as described in
      this clause b. and clause a. immediately above, following a Qualifying
      Financing, shall collectively be referred to herein as the “Subordinated Note
      Prepayment”)

                

              


      

       

      in each
case in accordance with the terms of the Subordinated Note, as in effect on the
date hereof, without amendment or modification hereafter, unless such amendment
is agreed to in writing by the Collateral Agent.

       

      In addition, in connection with the
issuance of the Subordinated Note, the Company has issued to the Subordinated
Creditor a warrant to purchase in the aggregate  shares of the
Company's common stock, par value $0.001 per share (the "Common Stock"), at a
per share exercise price of $1.83 (the "Warrant").

       

      NOW,
THEREFORE, in reliance upon this Agreement, and as required by the terms of the
Purchase Agreement, and for other good and valuable consideration, the receipt
and sufficiency of which hereby are acknowledged, the parties hereto hereby
agree as follows:

       


      
        
           


        

        
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      1.     Definitions.  All
capitalized terms used but not elsewhere defined in this Agreement shall have
the respective meanings ascribed to such terms in the Purchase Agreement and the
Note. The following terms shall have the following meanings in this
Agreement:

       

      Buyers shall mean holders of
Senior Indebtedness including, without limitation, any holder of any Senior
Indebtedness after the consummation of any Permitted Refinancing.

       

      Enforcement
Action is defined in subsection 2.7.

       

      Loan
Documents means the collective reference to the Purchase Agreement and
the Note, the Security Agreement, the Guaranty and each of the other agreements
to which the Company or any Viking Guarantor is a party or is bound in
connection with the transactions contemplated under the Purchase Agreement and
the Note.

       

      Paid in
Full or Payment
in Full shall mean the indefeasible payment in full in cash of all Senior
Indebtedness and termination of all commitments to lend under the Loan Documents
and Permitted Refinancing Loan Documents.

      


      Permitted
Refinancing means any refinancing of the Senior
Indebtedness.

       

      Permitted
Refinancing Loan Documents means any and all agreements, documents and
instruments executed in connection with a Permitted Refinancing of Senior
Indebtedness.

       

      Proceeding
is defined in subsection 2.3.

       

      Senior
Indebtedness shall mean the obligations, liabilities and other amounts
owed under the Purchase Agreement, the Note or any other Loan Document including
all interest, fees, expenses, indemnities and enforcements costs, whether before
or after the commencement of a Proceeding and without regard to whether or not
an allowed claim, and all obligations and liabilities incurred with respect to
Permitted Refinancings, together with any amendments, restatements,
modifications, renewals or extensions of any thereof.

       

      Subordinated
Creditor shall mean the “Subordinated Creditor” that is a signatory to
this Agreement and any other holder of the Subordinated Note or any other
Subordinated Indebtedness from time to time as permitted hereunder.

       

      Subordinated
Default shall mean a default in the payment of the Subordinated
Indebtedness, or performance of any term, covenant or condition contained in the
Subordinated Indebtedness Documents or the occurrence of any event or condition,
which default, event or condition permits the Subordinated Creditor to
accelerate or demand payment of all or any portion of the Subordinated
Indebtedness.

       

      Subordinated
Default Notice shall mean a written notice to Collateral Agent pursuant
to which Collateral Agent is notified of the existence of a Subordinated
Default, which notice incorporates a reasonably detailed description of such
Subordinated Default.

       


      
        
           


        

        
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      Subordinated
Indebtedness shall mean all of the obligations of the Company to the
Subordinated Creditor evidenced by the Subordinated Note and all other amounts
now or hereafter owed by the Company to the Subordinated Creditor pursuant to
the Subordinated Indebtedness Documents.

       

      Subordinated
Indebtedness Documents shall mean the Subordinated Note and all other
documents and instruments evidencing or pertaining to any portion of the
Subordinated Indebtedness, as amended, supplemented, restated or otherwise
modified from time to time as permitted hereunder.

       

      2.    
       Subordination of
Subordinated Indebtedness to Senior Indebtedness.

       

      2.1        
Subordination.  The
payment of any and all of the Subordinated Indebtedness hereby expressly is
subordinated, to the extent and in the manner set forth herein, to the Payment
in Full of the Senior Indebtedness.  Each holder of Senior
Indebtedness, whether now outstanding or hereafter arising, shall be deemed to
have acquired Senior Indebtedness in reliance upon the provisions contained
herein.

       

      2.2        
Restriction
on Payments.  Notwithstanding any provision of the Subordinated
Indebtedness Documents to the contrary and in addition to any other limitations
set forth herein or therein, no payment (whether made in cash, securities
(except as set forth in the following sentence) or other property or by set-off)
of principal, interest or any other amount due with respect to the Subordinated
Indebtedness shall be made or received, and no Subordinated Creditor shall
exercise any right of set-off or recoupment with respect to any Subordinated
Indebtedness, until all of the Senior Indebtedness is Paid in
Full.  Notwithstanding anything to the contrary contained in the
preceding sentence or in the Loan Documents, the following shall not be deemed a
violation of (i) this Subordination Agreement or (ii) the Loan
Documents:

       

      (i)        
the Subordinated Note Prepayment; and

       

      (ii)       
the issuance of shares of Common Stock to the Subordinated Creditor upon the
exercise of the Warrant,

       

      in each
case in accordance with the terms of the Subordinated Note and the Warrant, as
in effect on the date hereof, without amendment or modification hereafter,
unless such amendment is agreed to in writing by the Collateral
Agent.

       

      For the
avoidance of doubt, the Required Redemption shall not relieve the Company of its
obligation to redeem principal of the Note on the Mandatory Early Redemption
Date (as defined in the Note) or reduce the Mandatory Early Redemption Amount
(as defined in the Note) (i.e., the Required Redemption
shall not, for purposes of the proviso at the end of the first sentence of
Section 3(b) of the Note, be treated as the payment of an Aggregate Early
Redemption Amount pursuant to Section 3(c) of the Note prior to the Mandatory
Early Redemption Date).

       

      2.3           Proceedings.  In
the event of any insolvency, bankruptcy, receivership, custodianship,
liquidation, reorganization, assignment for the benefit of creditors or
other

       

      
        
          
          

        

        
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      proceeding
for the liquidation, dissolution or other winding up of the Company or any of
the Viking Guarantors or any of their respective properties (a “Proceeding”):

       

      (i)           the
Buyers shall be entitled to receive payment in full in cash of the Senior
Indebtedness before the Subordinated Creditor is entitled to receive any payment
upon the Subordinated Indebtedness, and Buyers shall be entitled to receive for
application in payment such Senior Indebtedness any payment or distribution of
any kind or character, whether in cash, property or securities or by set-off or
otherwise, which may be payable or deliverable in any such Proceedings in
respect of the Subordinated Indebtedness;

       

      (ii)           any
payment or distribution of assets of the Company or any Viking Guarantor of any
kind or character, whether in cash, property or securities, by set-off or
otherwise, to which the Subordinated Creditor would be entitled pursuant to the
Subordinated Indebtedness but for the provisions hereof shall be paid by the
liquidating trustee or agent or other Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee
or otherwise, directly to the Collateral Agent for the benefit of Buyers until
the Senior Indebtedness shall have been Paid in Full, and the Subordinated
Creditor acknowledges and agrees that such payment or distribution may,
particularly with respect to interest on Senior Indebtedness after the
commencement of a Proceeding, result in the Subordinated Creditor receiving less
than it would otherwise receive;

       

      (iii)           the
Subordinated Creditor hereby irrevocably (x) authorizes, empowers and directs
all receivers, trustees, debtors in possession, liquidators, custodians,
conservators and others having authority in the premises to effect all such
payments and deliveries, and the Subordinated Creditor also irrevocably
authorizes, empowers and directs, the Collateral Agent until the Senior
Indebtedness shall have been Paid in Full, to demand, sue for, collect and
receive every such payment or distribution, and (y) agrees to execute and
deliver to the Collateral Agent and the Buyers all such further instruments
confirming the authorization referred to in the foregoing clause (x);
and

       

      (iv)           the
Subordinated Creditor hereby irrevocably authorizes, empowers and appoints
Collateral Agent (until the Senior Indebtedness shall have been Paid in Full) as
its agent and attorney in fact to (x) execute, verify, deliver and file such
proofs of claim upon the failure of the Subordinated Creditor promptly to do so
(and in any event prior to thirty (30) days before the expiration of the time to
file any proof) and (y) vote such claims in any such Proceeding; provided that
no holder of Senior Indebtedness shall have any obligation to execute, verify,
deliver and/or file any such proof of claim or vote such claim.  In
the event the Collateral Agent or any Buyer (or any agent, designee or nominee
thereof) 

       


      
        
           


        

        
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      votes any
claim in accordance with the authority granted hereby, the Subordinated Creditor
shall not be entitled to change or withdraw such vote.

       

      The
Senior Indebtedness shall continue to be treated as Senior Indebtedness and the
provisions hereof shall continue to govern the relative rights and priorities of
Buyers and the Subordinated Creditor even if all or part of the Senior
Indebtedness or the security interests securing the Senior Indebtedness are
subordinated, set aside, avoided or disallowed in connection with any such
Proceeding and the provisions hereof shall be reinstated if at any time any
payment of any of the Senior Indebtedness is rescinded or must otherwise be
returned by Collateral Agent, any Buyer or any agent, designee or nominee of
such holder.

       

      2.4           Incorrect
Payments.  If any payment (whether made in cash, securities or
other property) not permitted under this Agreement is received by the
Subordinated Creditor on account of the Subordinated Indebtedness before all
Senior Indebtedness is Paid in Full, such payment shall not be commingled with
any asset of the Subordinated Creditor, shall be held in trust by the
Subordinated Creditor for the benefit of the Buyers and shall promptly be paid
over to the Collateral Agent or its designated representative, for application
(in accordance with the Purchase Agreement, the Note or the Permitted
Refinancing Loan Documents) to the payment of the Senior Indebtedness then
remaining unpaid, until all of the Senior Indebtedness is Paid in
Full.

       

      2.5           Sale,
Transfer.  No Subordinated Creditor shall sell, assign, dispose
of or otherwise transfer all or any portion of the Subordinated Indebtedness (a)
without giving prior written notice of such action to Collateral Agent, (b)
unless prior to the consummation of any such action, the transferee thereof
shall execute and deliver to Collateral Agent a joinder to this Agreement, or an
agreement substantially identical to this Agreement and acceptable to the
Collateral Agent, in either case providing for the continued subordination and
forbearance of the Subordinated Indebtedness to the Senior Indebtedness as
provided herein and for the continued effectiveness of all of the rights of
Collateral Agent and Buyers arising under this Agreement and (c) unless
following such sale, assignment, pledge, disposition or other transfer, there
shall either be (i) no more than four (4) holders of Subordinated Indebtedness
or (ii) one Person acting as agent for all holders of the Subordinated
Indebtedness pursuant to documentation reasonably satisfactory to Collateral
Agent such that any notices and communications to be delivered to the
Subordinated Creditor hereunder and any consents required by Subordinated
Creditor shall be made to or obtained from such agent and shall be binding on
the Subordinated Creditor as if directly obtained from the Subordinated
Creditor.  In the event of a permitted sale, assignment, disposition
or other transfer, the Subordinated Creditor engaging in such sale, assignment,
disposition or other transfer, prior to the consummation of any such action,
shall cause the transferee thereof to execute and deliver to Collateral Agent a
joinder to this Agreement, or an agreement substantially identical to this
Agreement and acceptable to the Collateral Agent, in either case providing for
the continued subordination and forbearance of the Subordinated Indebtedness to
the Senior Indebtedness as provided herein and for the continued 

       

      
        
          
          

        

        
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      effectiveness
of all of the rights of Buyers and Collateral Agent arising under this
Agreement.  Notwithstanding the failure to execute or deliver any such
agreement, the subordination effected hereby shall survive any sale, assignment,
disposition or other transfer of all or any portion of the Subordinated
Indebtedness, and the terms of this Agreement shall be binding upon the
successors and assigns of the Subordinated Creditor, as provided in Section 10
below.

       

      2.6           Legends.  Until
the Senior Indebtedness is Paid in Full, each of the Subordinated Indebtedness
Documents at all times shall contain in a conspicuous manner the following
legend:

       

      “This
Note and the indebtedness evidenced hereby are subordinate in the manner and to
the extent set forth in that certain Subordination Agreement (the “Subordination
Agreement”) dated as of July 15, 2008 among MRU Holdings, Inc., a Delaware
corporation, Professional Investments of America, LLC and Viking Asset
Management L.L.C, a California limited liability company, to the Senior
Indebtedness (as defined in the Subordination Agreement); and each holder of
this Note, by its acceptance hereof, shall be bound by the provisions of the
Subordination Agreement.”

       

      2.7           Restriction
on Action by Subordinated Creditor.

       

      (a)           Until
the Senior Indebtedness is Paid in Full and notwithstanding anything contained
in the Subordinated Indebtedness Documents, the Purchase Agreement, the other
Loan Documents or the Permitted Refinancing Loan Documents to the contrary, no
Subordinated Creditor shall, without the prior written consent of Collateral
Agent, agree to any amendment, modification or supplement to the Subordinated
Indebtedness Documents, the effect of which is to (i) increase the maximum
principal amount of the Subordinated Indebtedness or rate of interest (or cash
pay rate of interest) on any of the Subordinated Indebtedness, (ii) shorten the
dates upon which payments of principal or interest on the Subordinated
Indebtedness are due, (iii) change in a manner adverse to the Company or add any
event of default or add or make more restrictive any covenant with respect to
the Subordinated Indebtedness, (iv) change the redemption, prepayment or put
provisions of the Subordinated Indebtedness, (v) alter the subordination
provisions with respect to the Subordinated Indebtedness, including, without
limitation, subordinating the Subordinated Indebtedness to any other debt, (vi)
shorten the maturity date of any of the Subordinated Indebtedness or otherwise
alter the repayment terms of the Subordinated Indebtedness in a manner adverse
to the Company, (vii) take any liens in any assets of the Company or any of the
Viking Guarantors or any other assets securing the Senior Indebtedness or (viii)
obtain any guaranties or credit support from any Person or (ix) change or amend
any other term of the Subordinated Indebtedness Documents if such change or
amendment would increase the obligations of the Company or confer additional
material rights on the Subordinated Creditor or any other
holder of the Subordinated Indebtedness in a manner adverse to the Company,
Collateral Agent or Buyers.

       

      
        
          
          

        

        
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      (b)           Until
the Senior Indebtedness is Paid in Full, no Subordinated Creditor shall, without
the prior written consent of Collateral Agent, take or continue any action, or
exercise any rights, remedies or powers in respect of the Subordinated Note or
any other Subordinated Indebtedness Documents, or exercise or continue to
exercise any other right or remedy at law or in equity that the Subordinated
Creditor might otherwise possess, to collect any amount due and payable in
respect of any Subordinated Note or any of the other Subordinated Indebtedness,
including, without limitation, the acceleration of the Subordinated
Indebtedness, the commencement of any action to enforce payment or foreclosure
on any lien or security interest, the filing of any petition in bankruptcy or
the taking advantage of any other insolvency law of any jurisdiction (any of the
foregoing, an “Enforcement
Action”).  If any Subordinated Creditor shall attempt to take
any Enforcement Action or otherwise seek to collect or realize upon any of the
Subordinated Indebtedness in violation of the terms hereof, the holders of the
Senior Indebtedness may, by virtue of the terms hereof, restrain any such
Enforcement Action or other action, either in its own name or in the name of the
Company.

       

      (c)           Until
the Senior Indebtedness is Paid in Full, any Liens of Subordinated Creditor in
the Collateral which may exist in breach of the Subordinated Creditor’s
agreement pursuant to subsection 2.7(a)(vii) or Section 18 of this Agreement
shall be and hereby are subordinated for all purposes and in all respects to the
Liens of Collateral Agent and Buyers in the Collateral, regardless of the time,
manner or order of perfection of any such Liens.  In the event that a
Subordinated Creditor obtains any Liens in the Collateral in violation of
subsection 2.7(a)(vii) or Section 18 of this Agreement, such Subordinated
Creditor (i) shall (or shall cause its agent) to promptly execute and deliver to
Collateral Agent such termination statements and releases as Collateral Agent
shall request to effect the release of the Liens of the Subordinated Creditor in
such Collateral and (ii) shall be deemed to have authorized Collateral Agent to
file any and all termination statements required by Collateral Agent in respect
of such Liens. In furtherance of the foregoing, each Subordinated Creditor
hereby irrevocably appoints Collateral Agent as its attorney-in-fact, with full
authority in the place and stead of the Subordinated Creditor and in the name of
the Subordinated Creditor or otherwise, to execute and deliver any document or
instrument which the Subordinated Creditor may be required to deliver pursuant
to this subsection 2.7(c).

       

      3.    
       Continued
Effectiveness of this Agreement; Modifications to Senior
Indebtedness.

       

      (a)           The
terms of this Agreement, the subordination effected hereby, and the rights and
the obligations of Subordinated Creditor, Collateral Agent and Buyers arising
hereunder, shall not be affected, modified or impaired in any manner or to any
extent by: (i) any amendment or modification of or supplement to the Purchase
Agreement, any other Loan Document or any Permitted Refinancing Loan Document or
any Subordinated Indebtedness Document; (ii) the validity or enforceability of
any of such documents; or (iii) any exercise or non-exercise of any right, power
or remedy under or in
respect of the Senior Indebtedness or the Subordinated Indebtedness or any of
the instruments or documents referred to in clause (i) above.

       

      
        
          
          

        

        
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      (b)           Collateral
Agent and Buyers may at any time and from time to time in their sole discretion,
renew, amend, refinance, extend or otherwise modify the terms and provisions of
Senior Indebtedness (including, without limitation, the terms and provisions
relating to the principal amount outstanding thereunder, the rate of interest
thereof, the payment terms thereof and the provisions thereof regarding default
or any other matter) or exercise (or refrain from exercising) any of their
rights under the Loan Documents, all without notice to or consent from the
Subordinated Creditor and without incurring liability to the Subordinated
Creditor and without impairing or releasing the obligations of the Subordinated
Creditor under this Agreement.  No compromise, alteration, amendment,
renewal, restatement, refinancing or other change of, or waiver, consent or
other action in respect of any liability or obligation under or in respect of,
any terms, covenants or conditions of Senior Indebtedness or the Loan Documents,
whether or not in accordance with the provisions of the Senior Indebtedness,
shall in any way alter or affect any of the subordination provisions
hereof.

       

      4.    
       Representations
and Warranties.

       

      The
Subordinated Creditor hereby represents and warrants (as to itself and not as to
any other Subordinated Creditor) to Collateral Agent and Buyers as
follows:

       

      4.1           Existence
and Power.  The Subordinated Creditor is duly organized,
validly existing and in good standing under the laws of the state of its
organization.

       

      4.2           Authority.  The
Subordinated Creditor has full power and authority to enter into, execute,
deliver and carry out the terms of this Agreement and to incur the obligations
provided for herein, all of which have been duly authorized by all proper and
necessary action and are not prohibited by the organizational documents of the
Subordinated Creditor.

       

      4.3           Binding
Agreements.  This Agreement, when executed and delivered, will
constitute the valid and legally binding obligation of the Subordinated Creditor
enforceable in accordance with its terms.

       

      4.4           Conflicting
Agreements; Litigation.  No provisions of any mortgage,
indenture, contract, agreement, statute, rule, regulation, judgment, decree or
order binding on the Subordinated Creditor or affecting the property of the
Subordinated Creditor conflicts with, or requires any consent which has not
already been obtained under, or would in any way prevent the execution, delivery
or performance of the terms of this Agreement.  The execution,
delivery and carrying out of the terms of this Agreement will not constitute a
default under, or result in the creation or imposition of, or obligation to
create, any Lien upon the property of the Subordinated Creditor pursuant to the
terms of any such mortgage, indenture, contract or agreement.  No
pending or, to the best of the Subordinated Creditor’s knowledge, threatened,
litigation, arbitration or other proceedings
if adversely determined would in any way prevent the performance of the terms of
this Agreement.

       

      
        
          
          

        

        
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      4.5           No
Divestiture.  On the date hereof, the Subordinated Creditor
which is signatory hereto is the current owner and holder of its Subordinated
Note and all other Subordinated Indebtedness Documents.

       

      4.6           Default
under Subordinated Indebtedness Documents.

       

      (a)           To
the knowledge of the Subordinated Creditor, on the date hereof, no default
exists under or with respect to the Subordinated Note or any of the other
Subordinated Indebtedness Documents.

       

      (b)           The
Company hereby represents and warrants to Collateral Agent and Buyers that the
signatory to this Agreement under the heading “Subordinated Creditor”
constitutes the only holder of the Subordinated Note and the other Subordinated
Indebtedness.

       

      5.   
        Cumulative
Rights, No Waivers.  Each and every right, remedy and power
granted to Collateral Agent or Buyers hereunder shall be cumulative and in
addition to any other right, remedy or power specifically granted herein, in the
Purchase Agreement, the other Loan Documents or Permitted Refinancing Loan
Documents or now or hereafter existing in equity, at law, by virtue of statute
or otherwise, and may be exercised by Collateral Agent or Buyers, from time to
time, concurrently or independently and as often and in such order as Collateral
Agent or Buyers may deem expedient.  Any failure or delay on the part
of Collateral Agent or Buyers in exercising any such right, remedy or power, or
abandonment or discontinuance of steps to enforce the same, shall not operate as
a waiver thereof or affect Collateral Agent’s or Buyers’ right thereafter to
exercise the same, and any single or partial exercise of any such right, remedy
or power shall not preclude any other or further exercise thereof or the
exercise of any other right, remedy or power, and no such failure, delay,
abandonment or single or partial exercise of Collateral Agent’s or Buyers’
rights hereunder shall be deemed to establish a custom or course of dealing or
performance among the parties hereto.

       

      6.     
      Modification.  Any
modification or waiver of any provision of this Agreement, or any consent to any
departure by Collateral Agent or any Subordinated Creditor therefrom, shall not
be effective in any event unless the same is in writing and signed by Collateral
Agent and the holders of at least 51% of the then outstanding principal balance
of the Subordinated Note, and then such modification, waiver or consent shall be
effective only in the specific instance and for the specific instance and for
the specific purpose given.  Any notice to or demand on any
Subordinated Creditor in any event not specifically required of Collateral Agent
hereunder shall not entitle any Subordinated Creditor to any other or further
notice or demand in the same, similar or other circumstances unless specifically
required hereunder.

       

      7.     
      Additional
Documents and Actions.  The Subordinated Creditor at any time,
and from time to time, after the execution and delivery of this Agreement, upon
the request of Collateral Agent and at the expense of Company, will promptly
execute and deliver such further documents
and do such further acts and things as Collateral Agent may request in order to
effect fully the purposes of this Agreement.

       

      
        
          
          

        

        
          10

          
            

          

        

        
          
          

        

      

       

       

      8.       
    Notices.  Any
notices, consents, waivers or other communications required or permitted to be
given under the terms of this Agreement must be in writing and will be deemed to
have been delivered:  (i) upon receipt, when delivered personally;
(ii) upon receipt, when sent by facsimile (provided confirmation of transmission
is mechanically or electronically generated and kept on file by the sending
party); or (iii) one (1) Business Day after deposit with a nationally recognized
overnight delivery service, in each case properly addressed to the party to
receive the same.  The addresses and facsimile numbers for such
communications shall be:

       

       

      
        	
                If
      to a Subordinated Creditor:    

              	
                Professional
      Investments of America, LLC

                1345
      Enterprise Drive

                West
      Chester, PA 19380

              
	 	 
	
                If
      to the Company:

              	
                MRU
      Holdings, Inc.

                590
      Madison Avenue, 13th
      Floor

                New
      York, NY 10022

                Attention:
      Yariv Katz, Esq.

                Telecopy:  (866)
      896- 1055

              
	 	 
	
                With
      a copy to:

              	
                Paul,
      Hastings, Janofsky & Walker LLP

                75
      East 55th Street

                New
      York, NY 10022

                Attention:
      Michael L. Zuppone, Esq.

                Telecopy:
      (212) 318-6906

              
	 	 
	
                If
      to Collateral Agent:

              	
                Viking
      Asset Management L.L.C.

                600
      Montgomery Street, 44th Floor

                San
      Francisco, CA  94111

                Attention:  Michael
      Rudolph

                Telecopy:  (415)
      981-5301

              
	 	 
	
                with
      a copy to:

              	
                Viking
      Asset Management, LLC

                10
      Glenville Street, 3rd Floor

                Greenwich,
      Connecticut 06831

                Attention:  Robert
      J. Brantman

                Facsimile:
      (646) 840-4958

              
	 	 
	
                with
      a copy to:

              	
                Katten
      Muchin Rosenman LLP

                525
      West Monroe Street

                Chicago,
      Illinois 60661-3693

                Attn:
      Mark Wood, Esq.

                Telecopy:
      (312) 577-8858

              


      

       

      or, in
the case of party named above, at such other address and/or facsimile number
and/or to the attention of such other person as the recipient party has
specified by written notice given to each 

       

      
        
          
          

        

        
          11

          
            

          

        

        
          
          

        

      

       

       

      other
party five (5) days prior to the effectiveness of such
change.  Written confirmation of receipt (A) given by the recipient of
such notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender’s facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by a nationally recognized overnight delivery
service shall be rebuttable evidence of personal service, receipt by facsimile
or deposit with a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

       

      9.       
    Severability.  In
the event that any provision of this Agreement is deemed to be invalid by reason
of the operation of any law or by reason of the interpretation placed thereon by
any court or governmental authority, this Agreement shall be construed as not
containing such provision and the invalidity of such provision shall not affect
the validity of any other provisions hereof, and any and all other provisions
hereof which otherwise are lawful and valid shall remain in full force and
effect.

       

      10.          Successors
and Assigns.  This Agreement shall inure to the benefit of the
successors and assigns of Collateral Agent and Buyers and shall be binding upon
the successors and assigns of the Subordinated Creditor and the
Company.

       

      11.          Counterparts.  This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
counterparts have been signed by each party and delivered to each other party;
provided that a facsimile signature shall be considered due execution and shall
be binding upon the signatory thereto with the same force and effect as if the
signature were an original, not a facsimile signature.

       

      12.          Defines Rights of Creditors;
Subrogation.

       

      (a)           The
provisions of this Agreement are solely for the purpose of defining the relative
rights of Subordinated Creditor, Collateral Agent and Buyers and shall not be
deemed to (i) create any rights or priorities in favor of any other Person,
including, without limitation, the Company or any Viking Guarantor, or (ii)
amend any of the Loan Documents or in any way waive any of the rights that the
Collateral Agent and the Buyers have against the Company or any Viking Guarantor
under the Loan Documents.

       

      (b)           Subject
to the Payment in Full of the Senior Indebtedness, in the event and to the
extent cash, property or securities otherwise payable or deliverable to the
holders of the Subordinated Indebtedness shall have been applied pursuant to
this Agreement to the payment of Senior Indebtedness, then and in each such
event, the holders of the Subordinated Indebtedness shall be subrogated to the
rights of each holder of Senior Indebtedness to receive any further payment or
distribution in respect of or applicable to the Senior Indebtedness; and, for
the purposes of such subrogation, no payment or distribution to the holders of
Senior Indebtedness of any cash, property or securities to which any holder of
Subordinated Indebtedness would be entitled except for the provisions of this
Agreement shall, and no payment over pursuant to the provisions of this
Agreement to the holders of Senior Indebtedness by the holders of the
Subordinated 

       

      
        
          
          

        

        
          12

          
            

          

        

        
          
          

        

      

       

      Indebtedness shall, as
between the Company or any Viking Guarantor, its creditors other than the
holders of Senior Indebtedness and the holders of Subordinated Indebtedness, be
deemed to be a payment by the Company or any Viking Guarantor to or on account
of Senior Indebtedness.

       

      13.          Conflict.  In
the event of any conflict between any term, covenant or condition of this
Agreement and any term, covenant or condition of any of the Subordinated
Indebtedness Documents, the provisions of this Agreement shall control and
govern.  For purposes of this Section 13, to the extent that any
provisions of any of the Subordinated Indebtedness Documents provide rights,
remedies and benefits to Collateral Agent or Buyers that exceed the rights,
remedies and benefits provided to Collateral Agent or Buyers under this
Agreement, such provisions of the applicable Subordinated Indebtedness Documents
shall be deemed to supplement (and not to conflict with) the provisions
hereof.

       

      14.          Statement
of Indebtedness to Subordinated Creditor.  The Company will
furnish to Collateral Agent upon demand, a statement of the indebtedness owing
from the Company to Subordinated Creditor, and will give Collateral Agent access
to the books of the Company in accordance with the Purchase Agreement so that
Collateral Agent can make a full examination of the status of such
indebtedness.

       

      15.          Headings.  The
paragraph headings used in this Agreement are for convenience only and shall not
affect the interpretation of any of the provisions hereof.

       

      16.          Termination.  This
Agreement shall terminate upon the Payment in Full of the Senior
Indebtedness.

       

      17.          Subordinated
Default Notice.  The Company shall provide Collateral Agent
with a Subordinated Default Notice upon the occurrence of each Subordinated
Default, and the Company shall notify Collateral Agent in the event such
Subordinated Default is cured or waived.

       

      18.          No
Contest of Senior Indebtedness or Liens; No Security for Subordinated
Indebtedness.  Each Subordinated Creditor agrees that it will
not, and will not encourage any other Person to, at any time, contest the
validity, perfection, priority or enforceability of the Senior Indebtedness or
Liens in the Collateral granted to Collateral Agent pursuant to the Purchase
Agreement, the other Loan Documents or the Permitted Refinancing Loan Documents
or accept or take any collateral security for the Subordinated
Indebtedness.  In furtherance of the foregoing, on the date hereof,
each Subordinated Creditor hereby represents and warrants that it has not taken
or received a security interest in, or lien upon, any asset of the Company or
any Viking Guarantor, whether in respect of the Subordinated Indebtedness or
otherwise.

       

      19.          Governing
Law, Jurisdiction Waiver of Jury Trial.  All questions
concerning the construction, validity, enforcement and interpretation of this
Agreement shall be governed by the internal laws of the State of New York,
without giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of New
York.  Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts 

       

      
        
          
          

        

        
          13

          
            

          

        

        
          
          

        

      

       

      sitting in the City of New
York, borough of Manhattan, for the adjudication of any dispute hereunder or in
connection herewith or with any transaction contemplated hereby or discussed
herein, and hereby irrevocably waives, and agrees not to assert in any suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought
in an inconvenient forum or that the venue of such suit, action or proceeding is
improper.  Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof.  Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law.  EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT
OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

       

      20.          Waiver of
Consolidation.  Each Subordinated Creditor acknowledges and
agrees that (i) the Company and each Viking Guarantor are each separate and
distinct entities; and (ii) it will not at any time insist upon, plead or seek
advantage of any substantive consolidation, piercing the corporate veil or any
other order or judgment that causes an effective combination of the assets and
liabilities of the Company and any Viking Guarantor in any case or proceeding
under Title 11 of the United States Code or other similar
proceeding.

       

      [Remainder
of Page Intentionally Left Blank; Signature Page to Follow]

       


      
        
           


        

        
          14

          
            

          

        

        
           


        

      


      IN WITNESS WHEREOF, the
Subordinated Creditor, the Company, Collateral Agent and Buyers have caused this
Agreement to be executed as of the date first above written.

       

      SUBORDINATED
CREDITOR:

      


      Professional
Investments Of America, LLC

      


      


      By:      /s/
Greg
Elinsky                              
                                                      

            Name:   Greg
Elinsky

            Title:     President

      


      


      



      
        
          
             

          

           


        

        
           


          
            

          

        

        
           


        

      


      THE
COMPANY:

      


      MRU HOLDINGS, INC., a Delaware
corporation

      


      


      By:     /s/
Vishal
Garg                                  
                                                      

      Name:
Vishal Garg

      Title:   Co-President

      


      


      



      
        
          
             

          

           


        

        
           


          
            

          

        

        
           


        

      


      


      COLLATERAL
AGENT:

      


      VIKING ASSET MANAGEMENT L.L.C.
in its capacity 
as collateral agent for Buyers

      


      


      By:  
     /s/ S. Michael
Rudolph                 

      Name:  
S. Michael Rudolph

      Title:     Chief
Financial Officer

       


      
        
          
             

          

           


        

        
           


          
            

          

        

        
           


        

      


      BUYERS:

       

      LONGVIEW MARQUIS MASTER FUND,
L.P., a 
British Virgin Islands limited partnership

      By:  Viking
Asset Management, LLC

      Its:   Investment
Manager

      


      


      By:     
/s/ S. Michael
Rudolph                  
                                                                

           Name:
S. Michael Rudolph

           Title:   Chief
Financial Officer