Unassociated Document


    AMENDED
      EMPLOYMENT AGREEMENT

     

    THIS
      AMENDED EMPLOYMENT AGREEMENT (“Agreement”) dated September 27, 2007 (the
“Amendment Date”), between MRU Holdings, Inc., a Delaware corporation with its
      principal place of business located at 590 Madison Avenue 13th Floor, New York,
      NY 10022, its affiliates, subsidiaries, successors and assigns (the “Company”),
      and Edwin J. McGuinn, an individual residing at 20 Cobb Island Drive, Greenwich,
      CT 06830 (the “Executive”).

     

    WHEREAS,
      prior to the Effective Date, the Executive has both consulted for and been
      employed by, and has been performing executive services for, the Company;
      and

     

    WHEREAS,
      the Company and the Executive (the “Parties”) entered into an Employment
      Agreement dated November 17, 2004 (the “Initial Agreement”) which was effective
      as of November 1, 2004 (the “Effective Date”); and

     

    WHEREAS,
      the Parties wish to amend the Initial Agreement in order to continue Executive’s
      employment by the Company upon the terms and conditions set forth herein and
      otherwise to continue the terms and conditions of the Executive’s employment as
      set forth in the Initial Agreement (as amended herein, the
“Agreement”).

     

    NOW,
      THEREFORE, in consideration of the covenants and promises contained herein,
      the
      Parties agree as follows:

     

    1.    Interim
      Periods.
      The
      Parties acknowledge that during the period from April 12, 2004 to July 8, 2004
      (the “Interim Period”), the Executive served Iempower, Inc. (acquired by the
      Company on July 8, 2004 and a wholly owned subsidiary of the Company “Iempower”)
      in the position of senior consultant and member of Iempower’s board of
      directors. The Parties further acknowledge that during the Interim Period,
      the
      Executive has been entitled to receive compensation from the Company in the
      amount of $1,500 per day or fractional equivalent thereof, as applicable (the
      “Interim Compensation”). In full satisfaction of the Company’s obligation to pay
      such Interim Compensation, the Company has issued the Executive 46,875 shares
      of
      its common stock together with warrants to acquire 8,844 shares of common stock
      at an initial exercise price of $2.00 per share. The Parties also acknowledge
      that during the period from July 9, 2004 until October 31, 2004 (the “Second
      Interim Period”), Executive served the Company as Chairman of the Board and
      Interim Chief Executive Officer. The Parties acknowledge that during the Second
      Interim Period, the Executive has been entitled to compensation at the rate
      of
      $125,000 per year, with a guaranteed bonus the pro rata portion of $50,000
      per
      year (“Second Interim Compensation”). In full satisfaction of the Company’s
      obligation to pay such Second Interim Compensation, the Company has paid to
      the
      Executive his pro-rata salary for this period and has issued to the Executive
      options to acquire 410,000 shares of common stock under the Company’s 2004
      Omnibus Incentive Plan (the “Plan”). These options vested and became exercisable
      on a quarterly basis over a period of one year, with 25% of such options being
      vested and exercisable on November 1, 2004 (the “Grant Date”) and an additional
      25% of such options becoming vested and exercisable on the first day of each
      calendar quarter thereafter until all options are fully vested. The options
      granted shall be exercisable for a period of ten years following the Grant
      Date
      and shall have an initial exercise price of $1.60.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2.    Periods
      of Service.

     

    (a)
      Employment
      Period.
      As of
      the Effective Date, the Company shall employ the Executive, and the Executive
      agrees to be employed by Company in the position of Chairman of the Board of
      Directors and Chief Executive Officer in accordance with the terms and subject
      to the conditions of this Agreement, commencing on the Effective Date and
      terminating on October 31, 2008 (the “Scheduled Termination Date”), unless
      terminated in accordance with the provisions of paragraph 11 below, in which
      case the provisions of paragraph 11 shall control (the “Term”). Upon expiration
      of the Term and thereafter, it shall automatically renew itself and continue
      in
      full force and effect from year to year unless written notice of election not
      to
      renew, or written notice of election to modify any provision of this Agreement,
      is given by one party, and received by the other not later than sixty (60)
      days
      prior to the expiration of this Agreement or any extension hereto.

     

    The
      Executive affirms that, except as otherwise set forth herein, no obligation
      exists between the Executive and any other entity which would prevent or impede
      the Executive’s immediate and full performance of every obligation of this
      Agreement.

     

    (b) Additional
      Service.
      Provided that this Agreement has not been terminated by reason of Death,
      Disability or Cause, all as defined in paragraph 11 hereof, then, in the event
      that the Executive’s employment hereunder is not renewed in accordance with
      paragraph 2(a) after the Scheduled Termination Date, the Executive shall
      nevertheless continue to serve the Company for a minimum period of one year
      after the expiration of the Term either (i) as a member of the Company’s Board
      of Directors, in which case the Company shall take all appropriate action to
      nominate the Executive for election as a Director or (ii) as a member of the
      Board of Directors of a Subsidiary of the Company, as defined in the MRU
      Holdings, Inc. Amended and Restated 2004 Incentive Plan. 

     

    (c) Position
      and Duties.
      During
      the Term of the Executive’s employment hereunder, the Executive shall continue
      to serve in, and assume duties and responsibilities consistent with, the
      position of Chairman of the Board of Directors, unless and until otherwise
      instructed by the Company, and shall also serve as the Company’s Chief Executive
      Officer. The Executive agrees to devote his working
      time, as
      set
      forth in Paragraph 5 hereof, utilizing his skill, energy and best business
      efforts on behalf of the Company. Notwithstanding anything to the contrary
      above, the Company acknowledges and agrees that the Executive: (i) will continue
      to serve as an officer and director of eLOT, Inc, formerly a public company
      (and
      now a private holding company for intellectual property); (ii)
      serve as a director of Enigma Software, a privately owned software company
      (not
      involved in the educational finance sector); and
      (iii)
      is and expects to continue to be involved in civic and charitable endeavors.
      However, the Executive shall not engage in activities outside the scope of
      his
      employment with the Company if such activities would detract from or interfere
      with his ability to fulfill his responsibilities and duties under this Agreement
      or require substantial amounts of his time or of his services. Notwithstanding
      anything to the contrary contained herein, upon written notice to the Board
      of
      Directors the Executive may hold officer and non-executive director positions
      (or the equivalent position) in or at other entities not inconsistent with
      the
      best interests of the Company so long as the Board of Directors has not provided
      Executive written notice that it has determined that such activities will
      interfere with his ability to perform his duties and responsibilities hereunder.
      

     

    3.    No
      Conflicts.
      The
      Executive covenants and agrees that for so long as he is employed by the
      Company, he shall inform the Company of each and every business opportunity
      related to the business of the Company of which he becomes aware, and that
      he
      will not, directly or indirectly, exploit any such opportunity for his own
      account, nor will he render any services to any other person or business,
      acquire any interest of any type in any other business or engage in any
      activities that conflict with the Company’s best interests or which is in
      competition with the Company. 

     

    
      
        
        

      

      
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    4.    Days/Hours
      of Work and Work Week.
      The
      Executive shall normally work five (5) days per week and his hours of work
      shall
      be appropriate to the nature of the Executive’s duties and responsibilities with
      the Company, it being recognized that such duties and responsibilities require
      flexibility in the Executive’s work schedule. 

     

    5.    Location.
      For at
      least three days per week, the locus of the Executive’s employment with the
      Company shall be the Company’s office located at 590 Madison Avenue, New York,
      NY 10022. The Executive may spend two days a week at an office in Stamford,
      Connecticut or at such other location within Fairfield County, Connecticut,
      as
      the Executive may choose. The Company agrees that it shall provide a rental
      allowance of $1,200.00 per month for the Executive’s Connecticut office, such
      allowance to be paid as the within five (5) days of the beginning of each month,
      to the Executive or to such person or entity as the Executive may
      direct.

     

    6.    Compensation.

     

    (a)  Base
      Salary.
      During
      the Term of this Agreement, the Company shall pay, and the Executive agrees
      to
      accept, in consideration for the Executive’s services hereunder, pro
      rata
      bi-weekly payments of the annual salary which shall remain at its current rate
      until January 1, 2008 at which time Executive’s annual salary shall increase to
      $250,000, less all applicable taxes and other appropriate deductions.
The
      Executive’s base salary shall be increased annually, effective on January 1 of
      each calendar year, beginning on January 1, 2009, in an amount no less than
      ten
      percent (10%). In addition, the Company’s Board of Directors (the “Board”) shall
      review the Executive’s base salary annually to determine whether it should be
      increased more than ten percent (10%). The decision to increase the Executive’s
      base salary more than ten percent (10%) and the amount of any such increase
      shall be within the Board’s sole discretion.

     

    (b)  Annual
      Bonus.
      During
      the Term of this Agreement, the Executive
      shall be entitled to an annual bonus in an amount no less than $50,000.00 for
      each
      calendar year (or pro-rata
      portion
      thereof in the case of a period of less than twelve (12) months.
      The
      decision to pay any annual bonus to the Executive in excess of $50,000.00,
      and
      the amount of any annual bonus increment in excess of $50,000.00, shall
      be
      within the Board’s sole discretion based on its review of the
      operating performance of the Company during the fiscal year to which the bonus
      pertains. Each annual bonus shall be paid by the Company to the Executive
      promptly after
      the
      first meeting of the Board following the previous calendar year,
      but
      in no case later than March 30th of each year.

     

    7.    Expenses.
      

     

    (a)  Business
      Expenses.
      During
      the Term of this Agreement, the Executive shall be entitled to payment or
      reimbursement of any and all reasonable expenses paid or incurred by him in
      connection with and related to the performance of his duties and
      responsibilities hereunder for the Company. All requests by the Executive for
      payment of
      reimbursement of such expenses shall be supported by appropriate invoices,
      vouchers, receipts or such other supporting documentation in such form and
      containing such information as the Company may from time to time reasonably
      require, evidencing that the Executive, in fact, incurred or paid said
      expenses.

     

    
      
        
        

      

      
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    (b)  Agreement
      Expenses.
      The
      Company agrees that it shall reimburse the Executive for his attorney’s fees and
      legal expenses in the negotiation, review and drafting of this Agreement and
      Amended Agreement up to the amount of $3,500.00. The Executive shall be
      responsible for any such expenses in excess of $3,500.00.

     

    8.    Vacation.
      During
      the Term of this Agreement, the Executive shall be entitled to accrue 20
      vacation days, per year. The Executive shall be entitled to carry over any
      accrued, unused vacation days from year to year without limitation.

     

    9.    Stock
      Options/Warrants.

     

    (a)  Grant
      of Options.
      Upon
      the decisions of the Board of Directors and the approval of the Company’s
      stockholders to increase the number of shares of common stock available under
      the Plan, the Company has granted the Executive options to acquire 250,000
      shares of common stock on September 20, 2005 and 200,000 shares of common stock
      on January 9, 2006. The
      per
      share
      exercise price of options granted prior to the Amendment Date pursuant to this
      paragraph 9(a) is $ 3.00 and $3.85 respectively, the fair market value per
      share
      of Company common voting stock on the date of issuance. The Executive shall,
      in
      the discretion of the Board of Directors and subject to the terms of the Plan
      and any subsequent stock incentive plan as may be approved by the Company’s
      stockholders, continue to be eligible to be granted further options after the
      Amendment Date. Such grant and each subsequent grant of options to the Executive
      during the Term shall be evidenced by an Option Agreement in a form
      substantially similar to Exhibit A, attached hereto and made a part hereof.
      

     

    (b)  Vesting
      and Exercise.
      The
      options granted on September 20, 2005 pursuant to the terms of this paragraph
      9
      vest and became exercisable on a quarterly basis over a period of two years,
      with 25% of such options being vested and exercisable on the grant date and
      an
      additional 121⁄2% of such options becoming vested and exercisable on the first day
      of each calendar quarter thereafter until all options became fully vested.
      The
      options granted on January 9, 2006 became exercisable on an annual basis over
      a
      period of three years, with 33.3% of such options being vested and exercisable
      one year after the grant date and an additional 33.3% of such options becoming
      vested and exercisable two years after the grant date thereafter until all
      options became fully vested. The options granted shall be exercisable for a
      period of ten years following the grant date. Subsequent grants of stock options
      shall vest and be exercisable pursuant to the terms and conditions of the Plan.
      

     

    (c)  Accelerated
      Vesting.In
      the
      event the Executive’s employment with the Company is terminated by reason of
      Death, Disability or without Cause, all as defined in paragraph 11 hereof,
      or in
      the event that the Executive terminates this Agreement for Good Reason, as
      defined in paragraph 11 hereof, or in the event that the Executive shall no
      longer be employed in the position of Chairman of the Board and Chief Executive
      Officer for any reason other than a termination for Cause, all of Executive’s
      granted and unvested options and warrants shall immediately vest and become
      immediately exercisable by the Executive. 
      Said
      options and warrants may be exercised by the Executive, or in the event of
      Death
      or Disability by the Executive’s legal representative, as appropriate, for a
      period of one year following the date of termination of the Executive’s
      employment with the Company.

     

    (d)  Payment.
      The
      full consideration for any shares purchased by the Executive shall be paid
      in
      cash or on such other terms as the Parties may agree. Subject to the terms
      and
      conditions of the Plan and any subsequent stock incentive plan, the Option
      Agreement shall permit cashless exercise of options by the
      Executive.

     

    
      
        
        

      

      
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    10.    Other
      Benefits.
      

     

    (a)  During
      the Term of this Agreement, the Executive shall be eligible to participate
      in
      incentive, savings, retirement (401(k)), and welfare benefit plans, including,
      without limitation, health, medical,
      dental,
      vision,
      life (including accidental death and dismemberment)
      and
      disability insurance plans (collectively, “Benefit Plans”), in substantially the
      same manner and at
      substantially the same levels as the Company makes
      such
      opportunities available to the Company’s executive employees. 

     

    (b)  Notwithstanding
      anything contained in paragraph 10(a) hereinabove to the contrary:

     

    (i)  The
      cost
      of the Executive’s coverage under the Benefit Plans providing health, medical,
      dental, vision,
      life
      (including accidental death and dismemberment) and disability
      insurance, shall be paid by the Company.

     

    (ii)  The
      Executive’s spouse and dependent minor children will be covered under the
      Benefit Plans providing health, medical, dental, and vision benefits, and the
      cost of such coverage shall be paid by the Company. 

     

    (iii)  The
      Company shall reimburse the Executive for any out-of-pocket expenses incurred
      in
      connection with the Benefit Plan coverages provided in this paragraph 10 as
      the
      result of any
      deductible or co-insurance provision of any
      insurance policy; provided, that any such reimbursements shall not
      exceed
      Ten Thousand Dollars ($10,000.00) per calendar
      year.

     

    (iv)  The
      Company will purchase, at its expense,
      long-term disability insurance providing the Executive with payments of
      $10,000.00 per month until age sixty-five (65); provided
      however,
      that
      if
      the cost
      of such long-term disability insurance coverage
      exceeds
      $12,000.00 per year, the
      Executive shall be required to pay any premium amount in excess of $12,000.00
      per year and if the Executive chooses not to pay such excess premium amount,
      the
      Company shall only be required to provide as much long-term disability insurance
      as can be purchased
      for
      $12,000.00
      per
      year.

     

    (v)  The
      Company has purchased a directors and officers liability insurance policy or
      has
      otherwise obtained directors and officers liability insurance coverage, in
      the
      amount of Three Million Dollars ($3,000,000.00), covering the Executive and
      commits to increase such coverage to Five Million Dollars ($5,000,000.00) as
      soon as possible, but in no event later than January 1, 2005.

     

    11.    Termination
      of Employment.

     

    (a)  Death.
      In the
      event that, during the Term of this Agreement, the Executive dies, this
      Agreement and the Executive’s employment with the Company shall automatically
      terminate and the Company shall have no further obligations to the Executive
      or
      his heirs, administrators or executors with respect to compensation and benefits
      accruing thereafter, except for the obligation to pay the Executor’s heirs,
      administrators or executors any earned but unpaid base salary, unpaid
pro
      rata
      annual
      bonus and unused vacation days accrued through the date of death, including
      any
      carryover days. The Company shall deduct, from all payments made hereunder,
      all
      applicable taxes, including income tax, FICA and FUTA, and other appropriate
      deductions.

     

    
      
        
        

      

      
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    (b)  “Disability.” In
      the
      event that, during the Term of this Agreement, the Executive shall be prevented
      from performing his duties and responsibilities hereunder to the full extent
      required by the Company by reason of “Disability,” as defined hereinbelow,
this
      Agreement and the Executive’s employment with the Company shall automatically
      terminate and the Company shall have no further obligations to the Executive
      or
      his heirs, administrators or executors with respect to compensation and benefits
      accruing thereafter, except for the obligation to pay the Executor’s heirs,
      administrators or executors any earned but unpaid base salary, unpaid
pro
      rata
      annual
      bonus and unused vacation days accrued through the date of Disability, including
      any carryover days. The Company shall deduct, from all payments made hereunder,
      all applicable taxes, including income tax, FICA and FUTA, and other appropriate
      deductions through
      the last date of the Executive’s employment with the Company. For purposes of
      this Agreement, “Disability” shall mean a physical or mental disability that, in
      the Board’s discretion, based upon the medical opinions of two qualified
      physicians specializing in the area or areas of the Executive’s affliction, one
      of whom shall be chosen by the Board and one of whom shall be chosen by the
      Executive, prevents the performance by the Executive, with or without reasonable
      accommodation, of his duties and responsibilities hereunder for a continuous
      period of not less than six consecutive months. 

     

    (c)  “Cause.”

     

    (i)  At
      any
      time during the Term of this Agreement, the Company may terminate this Agreement
      and the Executive’s employment hereunder for “Cause.” For purposes of this
      Agreement, “Cause” shall mean:
      (a)
the
      willful and continued failure of the Executive to perform substantially his
      duties and responsibilities for the Company (other than any such failure
      resulting from a Disability) after a written demand by the Board for substantial
      performance is delivered to the Executive by the Company, which specifically
      identifies the manner in which the Board believes that the Executive has not
      substantially performed his duties and responsibilities, which willful and
      continued failure is not cured by the Executive within thirty (30) days of
      his
      receipt of said written demand; (b) the
      conviction of, or plea of guilty or nolo
      contendere
      to a
      felony, after the exhaustion of all available appeals; or (c) fraud,
      dishonesty, competition with the Company, unauthorized use of any of the
      Company’s or any such subsidiary’s trade secrets or confidential
      information, or
      gross
      misconduct which is materially and demonstratively injurious to the Company.
      Termination under paragraphs 11(c)(i)(b) and 11(c)(i)(c) above shall not be
      subject to cure.

     

    (ii)  Termination
      of the Executive for “Cause” pursuant to paragraph 11(c)(i)(a) shall be made by
      delivery to the Executive of a copy of the written demand referred to in
      paragraph 12(c)(i)(a), or pursuant to paragraphs 11(c)(i)(b) or (c) by delivery
      to the Executive of a written notice from the Board, either of which shall
      specify the basis of such termination, the conduct justifying such termination,
      and the particulars thereof and finding that in the reasonable judgment of
      the
      Board, the conduct set forth in paragraph 11(c)(i)(a), 11(c)(i)(b) or
      11(c)(i)(c), as applicable, has occurred and that such occurrence warrants
      the
      Executive’s termination of employment. Upon receipt of such demand or notice,
      the Executive, shall be entitled to appear before the Board for the purpose
      of
      demonstrating that “Cause” for termination does not exist or that the
      circumstances which may have constituted “Cause” have been cured in accordance
      with the provisions of paragraph 11(c)(i). No termination shall be final until
      the Board has reached a determination regarding “Cause” following such
      appearance. 

     

    
      
        
        

      

      
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    (iii)  Upon
      termination of this Agreement for “Cause,” the Company shall have no further
      obligations or liability to the Executive or his heirs, administrators or
      executors with respect to compensation and benefits thereafter, except for
      the
      obligation to pay the Executive any earned but unpaid base salary, unpaid
pro
      rata
      annual
      bonus and unused vacation days accrued through the Executive’s last day of
      employment with the Company, including any carryover days. The Company shall
      deduct, from all payments made hereunder, all applicable taxes, including income
      tax, FICA and FUTA, and other appropriate deductions.

     

    (d)  “Good
      Reason.”

     

    (i)  At
      any
      time during the Term of this Agreement, subject to the conditions set forth
      in
      paragraph 11(d)(iii) below, the Executive may terminate this Agreement and
      the
      Executive’s employment with the Company for “Good Reason.” For purposes of this
      Agreement, “Good Reason” shall mean the occurrence, without the Executive’s
      consent, of any of the following events: (a) the
      assignment to the Executive of duties that are significantly different from,
      and
      that result in a substantial diminution of, the duties that he assumed on the
      Start Date; (b) the
      assignment to the Executive of a title that is different from and subordinate
      to
      the title specified in paragraph 2 hereinabove; (c) a
      Change
      of Control (as defined in paragraph 11(d)(ii) herein below); (d) relocation
      of
      the Company’s office in New York to any location which is more than one hundred
      (100) miles from Executive’s present home address; or (e) a material breach of
      this Agreement by the Company. 

     

    (ii)  For
      purposes of this Agreement, “Change of Control” means the Company’s Board votes
      to approve: (a) any consolidation or merger of the Company pursuant to which
      50
      percent or more of the outstanding voting securities of the surviving or
      resulting company are not owned collectively by the common share and warrant
      holders of Iempower, Inc. as of November 1, 2004 (the “Current Control Group”);
      (b) any sale, lease, exchange or other transfer (in one transaction or a series
      of related transactions) of all, or substantially all, of the assets of the
      Company other than any sale, lease, exchange or other transfer to any company
      where the Company owns, directly or indirectly, 100 percent of the outstanding
      voting securities of such company after any such transfer; (c) any person or
      persons (as such term is used in Section 13(d) of the Exchange Act of 1934,
      as
      amended), other than the Current Control Group, shall acquire or become the
      beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act)
      whether directly, indirectly, beneficially or of record, of 50 percent or more
      of outstanding voting securities of the Company; or (d) commencement by any
      entity, person, or group (including any affiliate thereof, other than the
      Company) of a tender offer or exchange offer where the offeree acquires more
      than 50 percent of the then outstanding voting securities of the
      Company.

     

    (iii)  The
      Executive shall be entitled to terminate this Agreement and his employment
      with
      the Company for “Good Reason” provided that he has delivered written notice to
      the Company of his intention to terminate this Agreement and his employment
      with
      the Company for “Good Reason” within five (5) business days after either (a) the
      date on which the Executive receives written notice from the Company of the
      occurrence of any event included within the meaning of “Good Reason” under
      paragraph 11(d)(i) hereof or (b) the date on which the Executive obtains actual
      knowledge of the occurrence of any event included within the meaning of “Good
      Reason” under paragraph 11(d)(i) hereof. Such notice, if given by the Executive
      pursuant to subparagraph 11(d)(iii)(b) hereof, shall specify in reasonable
      detail the circumstances claimed to provide the basis for such termination
      for
“Good Reason.”
      Notwithstanding the foregoing, the Executive shall not be entitled to terminate
      this Agreement and his employment with the Company if the Company has eliminated
      the circumstances constituting “Good Reason” within 30 days of its receipt from
      the Executive of the written notice described in this paragraph 11(d)(iii).
      

     

    
      
        
        

      

      
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    (iv)  In
      the
      event that the Executive terminates this Agreement and his employment with
      the
      Company for “Good Reason,” the Company shall pay or provide to the Executive
      (or, following his death, to the Executive’s heirs, administrators or
      executors): (a)
      any
      earned but unpaid base salary, unpaid pro
      rata
      annual
      bonus and unused vacation days accrued through the Executive’s last day of
      employment with the Company, including any carryover days; (b) the
      Executive’s full base salary (including guaranteed annual ten percent (10%)
      increases) through the Scheduled Termination Date; (c) the Executive’s
      guaranteed annual bonuses in the amount of $50,000.00 that he would have been
      awarded through the Scheduled Termination Date; (d) the
      value
      of vacation days that the Executive would have accrued through the Scheduled
      Termination Date; (e) continued
      coverage, at the Company’s expense, under all Benefits Plans in which the
      Executive was a participant immediately prior to his last date of employment
      with the Company, or, in the event that any such Benefit Plans do not permit
      coverage of the Executive following his last date of employment with the
      Company, under benefit plans that provide no less coverage than such Benefit
      Plans, through the Scheduled Termination Date (“Continued Benefits”); and (f)
      severance pay in an amount equal to the sum of the Executive’s annual base
      salary in effect immediately prior to his last date of employment with the
      Company. The Company shall deduct, from all payments made hereunder, all
      applicable taxes, including income tax, FICA and FUTA, and other appropriate
      deductions. For purposes of this subparagraph (d), “Scheduled Termination Date”
shall mean the end of the Term if termination occurs prior to the end of the
      Term and shall mean the last day of any one year renewal term if termination
      occurs during such renewal term and prior to the end of such renewal
      term.

     

    (v)  At
      the
      Executive’s option, the amounts described in paragraphs 11(d)(iv)(b) and (c)
      hereinabove shall be paid to the Executive in the same manner as they would
      have
      been paid, in accordance with the provisions of paragraphs 6(a) and (b), had
      the
      Executive remained employed by the Company. To exercise such option, the
      Executive shall deliver to the Company written notice electing such option
      within ten (10) business days after his last date of employment with the
      Company. If the Executive fails to deliver such written notice within ten (10)
      business days after his last date of employment with the Company, the Executive
      shall be entitled to receive the amounts described in paragraphs 11(d)(iv)(b)
      and (c) hereinabove in a lump sum within forty-five (45) days of his last date
      of employment with the Company. The amount described in paragraph 11(d)(iv)(f)
      shall be paid to the Executive within forty-five (45) days of the Executive’s
      last date of employment with the Company. 

     

    (vi)  The
      Executive shall have no duty to mitigate his damages, except that Continued
      Benefits shall be canceled or reduced to the extent of any comparable benefit
      coverage offered to the Executive during the period prior to the Scheduled
      Termination Date by a subsequent employer or other person or entity for which
      the Executive performs services, including but not limited to consulting
      services. 

     

    (e)  Without
      “Cause.”

     

    (i)  By
      The
      Executive.
      At any
      time during the Term of this Agreement, the Executive shall be entitled to
      terminate this Agreement and the Executive’s employment with the Company without
“Cause” or “Good Reason” as these terms are defined hereinabove, by providing
      prior written notice of at least thirty (30) days to the Company. Upon
      termination by the Executive of this Agreement and the Executive’s employment
      with the Company pursuant to this paragraph 11(e)(i), the Company shall have
      no
      further obligations to the Executive or his heirs, administrators or executors
      with respect to compensation and benefits thereafter, except for the obligation
      to pay the Executive (or, following his death, to the Executive’s heirs,
      administrators or executors) any earned but unpaid base salary, pro
      rata
      annual
      bonus and unused vacation days accrued through the Executive’s last day of
      employment with the Company, including any carryover days. The Company shall
      deduct, from all payments made hereunder, all applicable taxes, including income
      tax, FICA and FUTA, and other appropriate deductions.

     

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    (ii)  By
      The
      Company.
      At any
      time during the Term of this Agreement, the Company shall be entitled to
      terminate this Agreement and the Executive’s employment with the Company without
“Cause,” as that term is defined in paragraph 11(c)(i) hereinabove, by providing
      prior written notice of at least ninety (90) days to the Executive. Upon
      termination by the Company of this Agreement and the Executive’s employment with
      the Company without Cause, the Company shall pay or provide to the Executive
      (or, following his death, to the Executive’s heirs, administrators or
      executors): any earned but unpaid base salary, unpaid pro
      rata
      annual
      bonus and unused vacation days accrued through the Executive’s last day of
      employment with the Company, including any carryover days. In addition, so
      long
      as Executive has not and does not violate the provisions of paragraphs 13,
      14
      and 15 of this Agreement, the Company shall pay or provide to the Executive
      (a)
      the Executive’s full base salary (including guaranteed annual ten percent (10%)
      increases) through the Scheduled Termination Date; (b) the Executive’s
      guaranteed annual bonuses in the amount of $50,000.00 that he would have been
      awarded through the Scheduled Termination Date; (c) the value of vacation days
      that the Executive would have accrued through the Scheduled Termination Date;
      (d) continued coverage, at the Company’s expense, under all Benefits Plans in
      which the Executive was a participant immediately prior to his last date of
      employment with the Company, or, in the event that any such Benefit Plans do
      not
      permit coverage of the Executive following his last date of employment with
      the
      Company, under benefit plans that provide no less coverage than such Benefit
      Plans, through the Scheduled Termination Date (“Continued Benefits”); and (e)
      severance in an amount equal to the sum of the Executive’s annual base salary in
      effect immediately prior to his last date of employment with the Company. The
      Company shall deduct, from all payments made hereunder, all applicable taxes,
      including income tax, FICA and FUTA, and other appropriate deductions. For
      purposes of this subparagraph (ii), “Scheduled Termination Date” shall mean the
      end of the Term if termination occurs prior to the end of the Term and shall
      mean the last day of any one year renewal term if termination occurs during
      such
      renewal term and prior to the end of such renewal term.

     

    (iii)  At
      the
      Executive’s option, the amounts described in paragraphs 11(d)(iv)(b) and (c)
      hereinabove shall be paid to the Executive in the same manner as they would
      have
      been paid, in accordance with the provisions of paragraphs 6(a) and (b), had
      the
      Executive remained employed by the Company. To exercise such option, the
      Executive shall deliver to the Company written notice electing such option
      within ten (10) business days after his last date of employment with the
      Company. If the Executive fails to deliver such written notice within ten (10)
      business days after his last date of employment with the Company, the Executive
      shall be entitled to receive the amounts described in paragraphs 11(d)(iv)(b)
      and (c) hereinabove in a lump sum within forty-five (45) days of his last date
      of employment with the Company. The amount described in paragraph 11(d)(iv)(f)
      shall be paid to the Executive within forty-five (45) days of the Executive’s
      last date of employment with the Company. 

     

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    12.    Confidential
      Information.
      

     

    (a)  The
      Executive expressly acknowledges that, in the performance of his duties and
      responsibilities with the Company, he has been exposed, and will be exposed,
      to
      the trade secrets, business and/or financial secrets and confidential and
      proprietary information of the Company, its affiliates and/or its clients or
      customers (“Confidential Information”). The term “Confidential Information”
means, without limitation, information or material that has actual or potential
      commercial value to the Company, its affiliates and/or its clients or customers
      and is not generally known to and is not readily ascertainable by proper means
      to persons outside the Company, its affiliates and/or its clients or
      customers.

     

    (b)  Except
      as
      authorized in writing by the Board, during the performance of the Executive’s
      duties and responsibilities for the Company and until such time as any such
      Confidential Information becomes generally known to and readily ascertainable
      by
      proper means to persons outside the Company, its affiliates and/or its clients
      or customers,
      the
      Executive agrees to keep strictly confidential and not use for his personal
      benefit or the benefit to any other person or entity the Confidential
      Information, whether or not prepared or developed by the Executive. Confidential
      Information includes, without limitation, the following, whether or not
      expressed in a document or medium, regardless of the form in which it is
      communicated, and whether or not marked “trade secret” or “confidential” or any
      similar legend: (i) lists
      of
      and/or information concerning customers, suppliers, employees, consultants,
      and/or co-venturers of the Company, its affiliates or its clients or customers;
      (ii) information
      submitted by customers, suppliers, employees, consultants and/or co-venturers
      of
      the Company, its affiliates and/or its clients or customers; (iii) information
      concerning the business of the Company, its affiliates and/or its clients or
      customers, including, without limitation, cost information, profits, sales
      information, prices, accounting, unpublished financial information, business
      plans or proposals, markets and marketing methods, advertising and marketing
      strategies, administrative procedures and manuals, the terms and conditions
      of
      the Company’s contracts and trademarks and patents under consideration,
      distribution channels, franchises, investors, sponsors and advertisers; (iv)
      technical
      information concerning products and services of the Company, its affiliates
      and/or its clients or customers, including, without limitation, product data
      and
      specifications, diagrams, flow charts, know how, processes, designs, formulae,
      inventions and product development; (v) lists
      of
      and/or information concerning applicants, candidates or other prospects for
      employment, independent contractor or consultant positions at or with any actual
      or prospective customer or client of Company and/or its affiliates,
      any and
      all confidential processes, inventions or methods of conducting business of
      the
      Company, its affiliates and/or its clients or customers; (vi) any
      and
      all versions of proprietary computer software (including source and object
      code), hardware, firmware, code, discs, tapes, data listings and documentation
      of the Company, its affiliates and/or its clients or customers; (vii)
any
      other
      information disclosed to the Executive by, or which the Executive obtained
      under
      a duty of confidence from, the Company, its affiliates and/or its clients or
      customers; and (viii) all
      other
      information concerning the Company not generally known to the public which,
      if
      misused or disclosed, could reasonably be expected to adversely affect the
      business of the Company, its affiliates and/or its clients or
      customers.

     

    (c)  The
      Executive affirms that he does not possess and will not rely upon the protected
      trade secrets or confidential or proprietary information of his prior
      employer(s) in providing services to the Company.

     

    (d)  In
      the
      event that the Executive’s employment with the Company terminates for any
      reason, the Executive shall deliver forthwith to the Company any and all
      originals and copies of Confidential Information.

     

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    13.    Ownership
      and Assignment of Inventions. 

     

    (a)  The
      Executive acknowledges that, in connection with his duties and responsibilities
      relating to his employment with the Company, he and/or other employees of the
      Company working with him, without him or under his supervision, may create,
      conceive of, make, prepare, work on or contribute to the creation of, or may
      be
      asked by the Company or its affiliates to create, conceive of, make, prepare,
      work on or contribute to the creation of, without limitation, lists, business
      diaries, business address books (except
      for business addresses and business address books not related to the Company),
      documentation, ideas, concepts, inventions, designs, works of authorship,
      computer programs, audio/visual works, developments, proposals, works for hire
      or other materials (“Inventions”). To the extent that any such Inventions relate
      to any actual or reasonably anticipated business of the Company or any of its
      affiliates, or falls within, is suggested by or results from any tasks assigned
      to the Executive for or on behalf of the Company or any of its affiliates,
      the
      Executive expressly acknowledges that all of his activities and efforts relating
      to any Inventions, whether or not performed during his or the Company’s regular
      business hours, are within the scope of his employment with the Company and
      that
      the Company owns all right, title and interest in and to all Inventions,
      including, to the extent that they exist, all intellectual property rights
      thereto, including, without limitation, copyrights, patents and trademarks
      in
      and to all Inventions. The Executive also acknowledges and agrees that the
      Company owns and is entitled to sole ownership of all rights and proceeds to
      all
      Inventions.

     

    (b)  The
      Executive expressly acknowledges and agrees to assign to the Company, and hereby
      assigns to the Company, all of the Executive’s right, title and interest in and
      to all Inventions, including, to the extent they exist, all intellectual
      property rights thereto, including, without limitation, copyrights, patents
      and
      trademarks in and to all Inventions.

     

    (c)  In
      connection with all Inventions, the Executive agrees to disclose any Invention
      promptly to the Company and to no other person or entity. The Executive further
      agrees to execute promptly, at the Company’s request, specific written
      assignments of the Executive’s right, title and interest in any Inventions, and
      do anything else reasonably necessary to enable the Company to secure or obtain
      a copyright, patent, trademark or other form of protection in or for any
      Invention in the United States or other countries.

     

    (d)  The
      Executive acknowledges that all rights, waivers, releases and/or assignments
      granted in this paragraph 13 by the Executive are freely assignable by the
      Company and are made for the benefit of the Company and its Affiliates,
      subsidiaries, licensees, successors and assigns.

     

    14.    Non-Competition
      And Non-Solicitation.
      

     

    (a)  The
      Executive agrees and acknowledges that the Confidential Information that the
      Executive has already received and will receive are valuable to the Company,
      its
      affiliates and/or its clients or customers, and
      that
      its protection and maintenance constitutes a legitimate business interest of
      Company, its
      affiliates and/or its clients or customers
      to be
      protected by the non-competition restrictions set forth herein. The Executive
      agrees and acknowledges that the non-competition restrictions set forth herein
      are reasonable and necessary and do not impose undue hardship or burdens on
      the
      Executive. The Executive also acknowledges that the products and services
      developed or provided by the Company, its
      affiliates and/or its clients or customers
      are or
      are intended to be sold, provided, licensed and/or distributed to customers
      and
      clients in and throughout the United States (“the Geographic Boundary”), and
      that the Geographic Boundary, scope of prohibited competition, and time duration
      set forth in the non-competition restrictions set forth below are reasonable
      and
      necessary to maintain the value of the Confidential Information of, and to
      protect the goodwill and other legitimate business interests of, the Company,
      its
      affiliates and/or its clients or customers.
      The
      Executive also acknowledges that the business of the Company is making federal
      and alternative loans to students (the “Business of the Company”).

     

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    (b)  The
      Executive hereby agrees and covenants that he shall not, directly or indirectly,
      in any capacity whatsoever, including, without limitation, as an employee,
      employer, consultant, principal, partner, shareholder, officer, director or
      any
      other individual or representative capacity (other than a holder of less than
      one percent (1%) of the outstanding voting shares of any publicly held company),
      or whether on the Executive’s own behalf or on behalf of any other person or
      entity or otherwise howsoever, during the Executive’s employment with the
      Company and for a period of two years following the termination of this
      Agreement and the Executive’s employment with the Company for any reason, in the
      Geographic Boundary:

     

    (i)  Engage,
      own, manage, operate, control, be employed by, consult for, participate in,
      or
      be connected in any manner with the ownership, management, operation or control
      of any business in competition with the Business of the Company; 

     

    (ii)  Solicit,
      persuade or induce any Customer to terminate, reduce or refrain from renewing,
      extending, or entering into contractual or other relationships with the Company
      or to become a customer of or enter into any contractual or other relationship
      with any other individual, person or entity for the purpose of purchasing
      competitive products or services; or

     

    (iii)  Recruit,
      hire, induce, contact, divert or solicit, or attempt to recruit, induce,
      contact, divert or solicit, any employee of the Company to leave the employment
      thereof, whether or not any such employee is party to an employment agreement.
      

     

    15.    Indemnification.
      The
      Company hereby covenants and agrees to indemnify the Executive to the fullest
      extent permitted by law and to hold the Executive harmless fully, completely,
      and absolutely against and in any respects to any and all actions, suits,
      proceedings, claims, demands, judgments, costs, expenses (including attorneys’
fees), losses, and damages resulting from the Executive’s good faith performance
      of his job duties pursuant to this Agreement. The Company also hereby agrees
      to
      cover the Executive under a directors’ and officers’ liability insurance policy
      at all times, with such coverage no less favorable than that given to other
      executive employees of the Company. 

     

    16.    Dispute
      Resolution.
      The
      Parties agree that any dispute or claim, whether based on contract, tort,
      discrimination, retaliation, or otherwise, relating to, arising from, or
      connected in any manner with this Agreement and the terms and conditions of
      the
      Executive’s employment with the Company shall be resolved exclusively through
      final and binding arbitration under the auspices of the American Arbitration
      Association (“AAA”). The arbitration shall be held in the Borough of Manhattan,
      New York, New York. The arbitration shall proceed in accordance with the
      National Rules for the Resolution of Employment Disputes of AAA in effect at
      the
      time the claim or dispute arose, unless other rules are agreed upon by the
      parties. The arbitration shall be conducted by one arbitrator who is a member
      of
      the AAA, unless the parties mutually agree otherwise. The arbitrators shall
      have
      jurisdiction to determine any claim, including the arbitrability of any claim,
      submitted to them. The arbitrators may grant any relief authorized by law for
      any properly established claim. The interpretation and enforceability of this
      paragraph of this Agreement shall be governed and construed in accordance with
      the United States Federal Arbitration Act, 9. U.S.C. §1, et
      seq.
      More
      specifically, the parties agree to submit to binding arbitration any claims
      for
      unpaid wages or benefits, or for alleged discrimination, harassment, or
      retaliation, arising under Title VII of the Civil Rights Act of 1964, the Equal
      Pay Act, the National Labor Relations Act, the Age Discrimination in Employment
      Act, the Americans With Disabilities Act, the Employee Retirement Income
      Security Act, the Civil Rights Act of 1991, the Family and Medical Leave Act,
      the Fair Labor Standards Act, Sections 1981 through 1988 of Title 42 of the
      United States Code, COBRA, the New York State Human Rights Law, the New York
      City Human Rights Law, and any other federal, state, or local law, regulation,
      or ordinance, and any common law claims, claims for breach of contract, or
      claims for declaratory relief. The Executive acknowledges that the purpose
      and
      effect of this paragraph is solely to elect private arbitration in lieu of
      any
      judicial proceeding he might otherwise have available to him in the event of
      an
      employment-related dispute between him and the Company. Therefore, the Executive
      hereby waives his right to have any such employment-related dispute heard by
      a
      court or jury, as the case may be, and agrees that his exclusive procedure
      to
      redress any employment-related claims will be arbitration. 

     

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    Notwithstanding
      this agreement to arbitrate, the Parties agree that any violation of paragraphs
      13, 14 or 15 of this Agreement may be restrained by the issuance of an
      injunction or other equitable relief by a court of competent jurisdiction,
      in
      addition to other remedies provided by law or this Agreement. 

     

    In
      the
      event of any legal action or other proceeding arising out of or related to
      or
      for the enforcement of this Agreement, the prevailing party shall be entitled
      to
      recover its reasonable attorneys’ fees, costs and expenses incurred in that
      action or proceeding, including attorneys’ fees, costs and expenses incurred on
      appeal, if any, in addition to any other relief to which such party may be
      entitled, from the non-prevailing party.

     

    17.   Notice.
      For
      purposes of this Agreement, notices and all other communications provided for
      in
      this Agreement or contemplated hereby shall be in writing and shall be deemed
      to
      have been duly given when personally delivered, delivered by a nationally
      recognized overnight delivery service or when mailed United States Certified
      or
      registered mail, return receipt requested, postage prepaid, and addressed as
      follows:

     

    If
      to the
      Company:

    MRU
      Holdings, Inc.

    590
      Madison Avenue, 13th Floor

    New
      York,
      NY 10022

     

    If
      to the
      Executive:

    Edwin
      J.
      McGuinn, Jr.

    20
      Cobb
      Island Drive,

    Greenwich,
      CT 06830

     

    18.   Miscellaneous.

     

    (a)  Telephones,
      stationery, postage, e-mail, the internet and other resources made available
      to
      the Executive by the Company, are solely for the furtherance of the Company’s
      business.

     

    (b)  All
      issues and disputes concerning, relating to or arising out of this Agreement
      and
      from the Executive’s employment by the Company, including, without limitation,
      the construction and interpretation of this Agreement, shall be governed by
      and
      construed in accordance with the internal laws of the State of New York, without
      giving effect to that State’s principles of conflicts of law.

     

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    (c)  The
      Parties agree that any provision of this Agreement deemed unenforceable or
      invalid may be reformed to permit enforcement of the objectionable provision
      to
      the fullest permissible extent. Any provision of this Agreement deemed
      unenforceable after modification shall be deemed stricken from this Agreement,
      with the remainder of the Agreement being given its full force and
      effect.

     

    (d)  The
      Company shall be entitled to equitable relief, including injunctive relief
      and
      specific performance as against the Executive, for the Executive’s threatened or
      actual breach of paragraphs 12, 13 and 14 of this Agreement, as money damages
      for a breach thereof would be incapable of precise estimation, uncertain, and
      an
      insufficient remedy for an actual or threatened breach of paragraphs 12, 13
      and
      14 of this Agreement. The Parties agree that any pursuit of equitable relief
      in
      respect of paragraphs 12, 13 and 14 of this Agreement shall have no effect
      whatsoever regarding the continued viability and enforceability of paragraph
      16
      of this Agreement. 

     

    (e)  Any
      waiver or inaction by the Company or the Executive for any breach of this
      Agreement shall not be deemed a waiver of any subsequent breach of this
      Agreement.

     

    (f)  The
      Parties independently have made all inquiries regarding the qualifications
      and
      business affairs of the other which either party deems necessary. The Executive
      affirms that he fully understands this Agreement’s meaning and legally binding
      effect. Each party has participated fully and equally in the negotiation and
      drafting of this Agreement. 

     

    (g)  The
      Executive’s obligations under this Agreement are personal in nature and may not
      be assigned by the Executive to any other person or entity. This
      Agreement shall be enforceable by the
      Company
      and its
      parents, affiliates, successors and assigns.

     

    (h)  This
      instrument constitutes the entire Agreement between the parties regarding its
      subject matter. When signed by all parties, this Agreement supersedes and
      nullifies all prior or contemporaneous conversations, negotiations, or
      agreements, oral and written, regarding the subject matter of this Agreement.
      In
      any future construction of this Agreement, this Agreement should be given its
      plain meaning. This Agreement may be amended only by a writing signed by the
      Parties.

     

    (i)  This
      Agreement may be executed in counterparts, a counterpart transmitted via
      facsimile, and all executed counterparts, when taken together, shall constitute
      sufficient proof of the parties’ entry into this Agreement. The parties agree to
      execute any further or future documents which may be necessary to allow the
      full
      performance of this Agreement. This Agreement contains headings for ease of
      reference. The headings have no independent meaning.

     

    THE
      EXECUTIVE STATES THAT HE HAS FREELY AND VOLUNTARILY ENTERED INTO THIS AGREEMENT
      AND THAT HE HAS READ AND UNDERSTOOD EACH AND EVERY PROVISION THEREOF. THIS
      AGREEMENT IS EFFECTIVE UPON THE EXECUTION OF THIS AGREEMENT BY BOTH
      PARTIES.

    UNDERSTOOD,
      AGREED, AND ACCEPTED:

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    
      
        	Edwin J. McGuinn,
                Jr. 	MRU
                HOLDINGS, INC.
	 	 
	/s/ Edwin J. McGuinn, Jr.	
                By: /s/
                  Michael Brown

                Name:
                  Michael Brown

                Title: Lead
                  Independent Director

              
	 	 
	
                Dated: November
                  17, 2004

                Amended as of: September 27, 2007

              	
                Dated: November
                  17, 2004

                Amended as of: September 27,
                  2007

              


      

    

     

    
      
        
        

      

      
        -15-