Unassociated Document


     

     

    
      Exhibit
4.1


      


      THIS
NOTE AND THE INDEBTEDNESS EVIDENCED HEREBY ARE SUBORDINATE IN THE MANNER AND TO
THE EXTENT SET FORTH IN THAT CERTAIN SUBORDINATION AGREEMENT (AS AMENDED,
RESTATED, SUPPLEMENTED, OR OTHERWISE MODIFIED FROM TIME TO TIME, THE
“SUBORDINATION AGREEMENT”) DATED AS OF JULY 31, 2008 AMONG MRU HOLDINGS, INC., A
DELAWARE CORPORATION, [●], 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.

      


      THIS
PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED FOR
SALE, SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED (I) IN THE ABSENCE OF: (A) AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER SUCH ACT OR APPLICABLE
STATE SECURITIES LAWS OR (B) AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY
THAT REGISTRATION UNDER THE ACT OR APPLICABLE STATE SECURITIES LAWS IS NOT
REQUIRED WITH RESPECT TO SUCH OFFER, SALE, TRANSFER, ASSIGNMENT OR
HYPOTHECATION; OR (II) UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID
ACT.

      


      


      MRU
HOLDINGS, INC.

      


      PROMISSORY
NOTE

      


      


       

      
        	$[●]   	
                 July 31,
      2008

              


      

      


      


      Subject to the terms and conditions of
this Promissory Note (this “Note”), for value received,
the undersigned, MRU Holdings, Inc., a Delaware corporation (the “Company”), whose address is
590 Madison Avenue, 13th Floor,
New York 10022, hereby promises to pay to [●], or permitted
assigns (the “Holder”)
the principal amount of [●] Dollars ($[●]) (the “Original Principal Amount”),
together with interest thereon at the rate set forth below.  This Note
shall have an original issuance discount of 20% of the Original Principal
Amount.  Principal of, and accrued interest on, this Note shall be due
and payable as hereinafter provided on the Maturity Date (as defined
below).

       

      
        
          
          

        

        
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      The following is a statement of the
rights of the Holder of this Note and the terms and conditions to which this
Note is subject, and to which the Holder, by acceptance of this Note,
agrees:

      


      1.           Interest.  Interest
shall accrue on the unpaid Original Principal Amount of this Note from the date
hereof until such Original Principal Amount is repaid in full, at a simple
annual interest rate equal to eighteen percent (18%) per annum; provided, however, the
Original Principal Amount of this Note shall increase by twenty percent (20%)
sixty (60) days after the date of issuance of this Note (the “First Principal Reset Date”)
unless the Company issues the Automatically Converting Debt Securities (as
defined below) or the Equity Securities (as defined below) prior to the First
Principal Reset Date; provided, further, that the
Original Principal Amount of this Note shall increase by an additional twenty
percent (20%) one hundred and twenty (120) days after the date of the issuance
of this Note (the “Second
Principal Reset Date”) unless the Company issues the Automatically
Converting Debt Securities or the Equity Securities prior to the Second
Principal Reset Date.  No interest hereunder shall be due prior to the
Maturity Date (as defined below).

      


      2.           Maturity
Date.  Unless earlier repaid, the principal amount of this
Note, and interest accrued thereon, shall be due and payable on October 31,
2010 (the “Maturity
Date”), subject to any limitations contained in the Subordination
Agreement.

      


      3.           Mandatory Prepayment Under
Certain Circumstances.  If 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 receives at least Seventy Five Million Dollars
($75,000,000) (inclusive of the consideration received for the issuance and sale
of the Company’s Series B-2 Convertible Preferred Stock and any other security
that is converted 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, 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”),

      


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

      


      


      (ii)           second, to the extent
there remain Debt Proceeds therefor, pay the holders of the $12,750,000 in
principal amount of promissory notes of the Company issued on July 10, 2008 (the
“Other Promissory
Notes”) the outstanding principal amount of the Other Promissory Notes
together with accrued but unpaid interest thereon, pro rata based on the
outstanding principal amount of each Other Promissory Note; and

       

      
        
          
          

        

        
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      (iii)           third, to the extent
there remain Debt Proceeds therefor, pay (a) the Holder the outstanding
principal amount of this Note together with accrued but unpaid interest thereon,
(b) the holder of a promissory note issued by the Company on July 15, 2008 in
the principal amount of Six Hundred Thousand (the “July 15, 2008 Promissory
Note”) the outstanding principal amount of the July 15, 2008 Promissory
Note together with accrued but unpaid interest thereon, and (c) any future
promissory notes issued on or after the date hereof on similar terms as this
Note (the “Future
Notes”), pro rata based on the outstanding principal amount and accrued
interest of each of this Note, the July 15, 2008 Promissory Note, and the Future
Notes.

      


      (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 Section 3(a) hereof), the Company shall pay:

      


      (i)           first, the
outstanding principal amount of the Other Promissory Notes, together with
accrued but unpaid interest thereon, to the extent not paid pursuant to Section
3(a) hereof; and

      


      (ii)           second, the
outstanding principal amount of (a) this Note, together with accrued and unpaid
interest thereon, (b) the July 15, 2008 Promissory Note, together with accrued
but unpaid interest thereon, and (c) the Future Notes, together with accrued but
unpaid interest thereon, each to the extent not paid pursuant to Section 3(a)
hereof.

      


      4.           Events of
Default.  The entire outstanding
principal amount of, and all accrued unpaid interest on, this Note shall become
forthwith due and payable, without presentment, demand, protest, or notice of
any kind, upon the happening of any of the following events (each, an
“Event of
Default”):

      


      (a)          if default shall be made in the due and punctual payment
of the principal on this Note or on any other indebtedness of the Company in
excess of $500,000, when and as the same shall become due and payable, whether
at the maturity of any installment thereof, by acceleration, or otherwise, or
default shall be made for thirty (30) days in the payment when due of interest
on this Note or on any other indebtedness of the Company;

      


      (b)          if the Company or any Subsidiary
shall

      


      (1)           admit in writing its inability to pay its debts
generally as they become due,

      


      (2)           file a petition in bankruptcy or a petition to take
advantage of any insolvency act,

      


      (3)           make an assignment for the benefit of its
creditors,

       

      
        
          
          

        

        
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      (4)           consent to the appointment of a receiver of itself or of
the whole or any substantial part of its property,

      


      (5)           on a petition in bankruptcy filed against it, be
adjudicated a bankrupt, or

      


      (6)           file a petition or answer seeking reorganization or
arrangement under the federal bankruptcy laws or any other applicable law or
statute of the United States of America or any state
thereof;

       

       

      (c)          if a court of competent jurisdiction shall enter an
order, judgment or decree appointing, without the consent of the Company or any
“significant subsidiary” within the meaning of Regulation S-X under the
Securities Act of 1934, as amended (each a “Subsidiary”), a receiver of the Company or any Subsidiary or of
the whole or any substantial part of its property, or approving a petition filed
against it seeking reorganization or arrangement of the Company or any
Subsidiary under the federal bankruptcy laws or any other applicable law or
statute of the United States of America or any state thereof, and such order,
judgment or decree shall not be vacated or set aside or stayed within thirty
(30) days from the date of entry thereof;

      


      (d)           if, under the provisions of any other law for the relief
or aid of the Company, any court of competent jurisdiction shall assume custody
or control of the Company or any Subsidiary or of the whole or any substantial
part of its property and such custody or control shall not be terminated or
stayed within thirty (30) days from the date of assumption of such custody or
control;

      


      (e)           if the Company enters into a merger, consolidation,
liquidation, dissolution, sale of all or substantially all of its assets, or
similar transaction; or

      


      (f)           if the Company shall have breached or not performed any
material representation, warranty or covenant in this Note, that certain Note and Warrant Purchase
Agreement of even date herewith, by and among the Company and the investors
named therein, including the Holder, or in any other document or instrument
executed and delivered in connection therewith for thirty (30) days or more
after written notice to the Company by the Holder of such breach or
nonperformance.

      


                            Upon the occurrence of any Event of Default, the Holder
may take all actions available to it, at law or in equity, to collect and
otherwise enforce this Note.


                 

      5.           Costs and Expenses of
Enforcement and Collection.  Upon
receipt of written evidence reasonably satisfactory to the Company, the Company
agrees to pay on demand all costs and expenses, including reasonable attorneys’
fees, incurred or paid by the Holder in enforcing or collecting any of the
obligations of the Company hereunder.  

      


      6.           Mutilated, Destroyed, Lost
or Stolen Notes.  In case any Note shall become mutilated or
defaced, or be destroyed, lost or stolen, the Company shall execute and deliver
a new note of like principal amount in exchange and substitution for the
mutilated or defaced Note,

       

      
        
          
          

        

        
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      or in
lieu of and in substitution for the destroyed, lost or stolen
Note.  In the case of a mutilated or defaced Note, the Holder shall
surrender such Note to the Company.  In the case of any destroyed,
lost or stolen Note, the Holder shall furnish to the Company (a) evidence to its
satisfaction of the destruction, loss or theft of such Note and (b) such
security or indemnity as may be reasonably required by the Company to hold the
Company harmless.

      


      7.           Payment of Interest and
Principal.  All payments with respect to this Note shall be
made in lawful money of the United States of America at such place as the Holder
hereof may designate in writing to the Company.  Payment shall be
credited first to the accrued interest then due and payable and the remainder
applied to principal.  Subject to the limitations imposed by the
Subordination Agreement, the Company may, at its option, on ten (10) days
written notice to the Holder, repay the outstanding principal amount of this
Note without penalty or premium, in whole or in part, together with interest on
the principal amount so repaid accrued to the repayment date.

      


      8.           Certain Debt
Restrictions.  While this Note is outstanding, the Company
shall not (i) create, incur, become obligated on or suffer to exist any
indebtedness which is pari passu with, or senior to, the Notes, or (ii) increase
or extend its existing senior indebtedness to Viking Asset Management, LLC,
except the Company may issue (a) one or a series of related issuances of
Automatically Converting Debt Securities and (b) an aggregate of $20,000,000 of
pari passu indebtedness on similar terms as this Note.

      


      9.           Assignment.  The
rights and obligations of the Company and the Holder of this Note shall be
binding upon, and inure to the benefit of, the permitted successors, assigns,
heirs, administrators and transferees of the parties hereto.  Interest
and principal are payable only to the registered Holder of this
Note.

      


      10.           Waiver and
Amendment.  Any provision of this Note, including, without
limitation, the due date hereof, and the observance of any term hereof, may be
amended, waived or modified (either generally or in a particular instance and
either retroactively or prospectively) only with the written consent of the
Company and the Holder.

      


      11.           Notices.  Any
notice or demand which is required or provided to be given under this Note shall
be deemed to have been sufficiently given and received for all purposes (i) when
delivered in person, or (ii) one business day after being sent by a recognized
overnight courier service or (iii) when transmitted by facsimile, email or other
electronic means, provided that the sender receives confirmation of receipt, to
the following addresses:

      


      if to the
Company:

      


      MRU Holdings, Inc.

      590 Madison Avenue, 13th
Floor

      New York, New York 10022

      Attention: General Counsel

      Fax:  (212)
836-4195

      E-mail:
ykatz@mruholdings.com

       

      
        
          
          

        

        
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      with a copy to:

      


      Paul, Hastings, Janofsky & Walker
LLP

      75 East 55th Street

      New York, NY 10022

      Attention: Keith D. Pisani,
Esq.

      Fax:  (212)
318-6906

      E-mail:
keithpisani@paulhastings.com

      


      if to the
Holder, to:

      


      [address]

      


      with a copy to:

      


      [address]

      


      Any party
hereto may by notice given as specified in this Section 11 change its address
for future notice hereunder.

      


      12.           Governing Law; Venue; Waiver
of Jury Trial.  This Note shall be governed by the laws of the
State of New York, as such laws are applied to contracts to be entered into and
performed entirely in New York by New York residents, without giving effect to
any choice of law or conflict of law provision or rule that would cause the
application of the laws of any jurisdictions other than the State of New
York.  Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in New York County for the
adjudication of any dispute hereunder or in connection herewith or therewith, 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 Note 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.

      


      13.           Severability.  If
one or more provisions of this Note are held to be unenforceable under
applicable law, such provisions shall be excluded from this Note, and the
balance of this Note shall be interpreted as if such provisions were so excluded
and shall be enforceable in accordance with its terms.

       

      
        
          
          

        

        
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      14.           Miscellaneous.  (a)   The Company (i) waives
presentment, demand, notice of demand, protest, notice of protest, and notice of
nonpayment and any other notice required to be given under the law to the
Company, in connection with the delivery, acceptance, performance, default or
enforcement of this Note, except for notice and presentment upon conversion or
at maturity of this Note and notice or proposed transfer of this Note in
accordance with the terms hereof; and (ii) agrees that any failure to act or
failure to exercise any right or remedy on the part of the registered Holder
shall not in any way affect or impair the obligations of the Company or be
construed as a waiver by the Holder of, or otherwise affect, any of its rights
under this Note.  Notwithstanding the foregoing, the Company does not
waive any notice required pursuant to the terms of this
Note.

      


      (b)  No act, omission or delay by the Holder or course of
dealing between the Holder and the Company
shall constitute a waiver of the rights and remedies of the Holder
hereunder.  No single or partial waiver by the Holder of any default
or right or remedy which it may have shall operate as a waiver of any other
default, right or remedy or of the same default, right or remedy on a future
occasion.

      


       [Signature page follows]

       

      
        
          
          

        

        
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      IN WITNESS WHEREOF, the
Company has caused this Note to be issued as of the date first above
written.

       

      
      

       

      
        	 	 MRU HOLDINGS,
      INC.
	 	 	 
	 	 	 
	 	 By:  	_________________________
	 	 	Vishal Garg,
      Co-President