Incentive
      Stock Option Agreement

     

    _______,
      200_

    


    [Name]

    [Address]

    


    Dear
      ___________:

     

    I
      am
      pleased to inform you that MRU Holdings, Inc. (the “Company”) has granted you
incentive
      stock options
      to
      purchase shares of the Company’s common stock, par value $0.001, (the "Common
      Stock") as set forth below.

     

    The
      grant
      of this option is made pursuant to the MRU Holdings, Inc. 2004 Incentive Plan
      (the “Plan”). This stock option is intended to qualify as an "incentive stock
      option" under Section 422 of the Internal Revenue Code of 1986, as amended
      from
      time to time. The terms of the Plan are incorporated into this letter and in
      the
      case of any conflict between the Plan and this letter, the terms of the Plan
      shall control. 

     

    Now,
      therefore, in consideration of the foregoing and the mutual covenants
      hereinafter set forth:

     

    1. Incentive
      Stock Option.
      The
      Company hereby grants you an incentive stock option (“ISO”) to purchase from the
      Company _____ shares of Common Stock at a price of $___ per share. The Date
      of
      Grant is ______, 200_. Unless earlier exercised or terminated in accordance
      with
      the terms hereunder and in the Plan, this ISO will expire on the date that
      is
      the tenth (10th)
      anniversary of the Date of Grant.

     

    2. Entitlement
      to Exercise the ISO.
      The
      grant of the ISO is subject to the following terms and conditions:

     

    (a) This
      ISO
      is vested 1/3 on _____, 200_, 1/3 on _____, 200_ and the remaining 1/3 on
      ______, 20__.

     

    (b) If
      you
      die when any portion of the ISO is exercisable, then the person to whom your
      rights under the ISO shall have passed by will or by the laws of distribution
      may exercise any of the exercisable portion of the ISO within one (1) year
      after
      your death, provided
      that no ISO may be exercised in any event more than ten (10) years after the
      Date of Grant.

     

    4. Method
      of Exercise & Payment Under ISO.
      You may
      exercise the vested portion of the ISO in whole or in part, by giving written
      notice to the Company which shall state the election to exercise the ISO and
      the
      number of shares of Common Stock with respect to which the ISO is being
      exercised. The written notice shall be signed by the person exercising the
      ISO,
      shall be delivered to the Corporate Secretary of the Company at the Company’s
      principal executive office, and shall be accompanied by payment in full of
      the
      exercise price for the shares of Common Stock being purchased, by delivery
      of
      cash or check. 

     

    5. Tax
      Withholding.
      As a
      condition of exercise, you agree that at the time of exercise that you will
      pay
      to the Company the Applicable Withholding Taxes (as that term is defined in
      the
      Plan), if any, that the Company is required to withhold in connection with
      the
      exercise of the ISO. To satisfy the Applicable Withholding Taxes, you may elect
      to (i) make cash payment or authorize additional withholding from cash
      compensation, (ii) deliver Mature Shares (as that term is defined in the Plan)
      (valued at their Fair Market Value) or (iii) have the Company retain that number
      of shares of Common Stock that would satisfy all or a portion of the Applicable
      Withholding Taxes. 

     

    



     

    
      
         

      

      
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    6. Transferability
      of ISO.
      The ISO
      is not transferable by you (other than by will or by the laws of descent and
      distribution) and may be exercised during your lifetime only by
      you.

     

    7. Termination
      of ISO.
      In the
      event that your employment or other relationship underlying the issuance of
      this
      ISO is terminated for Cause (as that term is defined in the Plan), your vested
      and non-vested ISO rights shall be forfeited and terminated immediately and
      may
      not thereafter be exercised to any extent. 

     

    In
      the
      event that your employment or other relationship underlying the issuance of
      this
      ISO is terminated by you or the Company for any reason other than Cause or
      your
      death, you shall have the right to exercise the portion of the ISO that has
      vested as of the date of such termination at any time during the ninety (90)
      day
      period following the date of such termination, and not thereafter, provided
      that
      no ISO may be exercised in any event more than ten (10) years after the Date
      of
      Grant.

     

    8. Adjustments.
      If the
      number of outstanding shares of Common Stock is increased or decreased as a
      result of one or more stock splits, reverse stock splits, stock dividends,
      recapitalizations, mergers, share exchange acquisitions, combinations or
      reclassifications, the number of shares with respect to which you have an
      unexercised ISO and the ISO price shall be appropriately adjusted as provided
      in
      the Plan.

     

    9. Delivery
      of Certificate.
      The
      Company may delay delivery of the certificate for shares purchased pursuant
      to
      the exercise of an ISO until (i) receipt of any required representation by
      you
      or completion of any registration or other qualification of such shares under
      any state or federal law regulation that the Company’s counsel shall determine
      as necessary or advisable, and (ii) receipt by the Company of advice by counsel
      that all applicable legal requirements have been complied with. As a condition
      of exercising the ISO, you may be required to execute a customary written
      indication of your investment intent and such other agreements the Company
      deems
      necessary or appropriate to comply with applicable securities laws.

     

    10. No
      Guaranteed Right of Employment.
      If you
      are employed by the Company, nothing contained herein shall confer upon you
      any
      right to be continued in the employment of the Company or interfere in any
      way
      with the right of the Company to terminate your employment at any time for
      any
      cause.

     

    11. Notice
      of Disqualifying Dispositions.
      You
      agree to notify the Company in writing immediately after you make a disposition
      of any shares acquired upon exercise of this ISO if such disposition occurs
      before the later of (a) the date that is two years after the Date of Grant,
      or
      (b) the date that is one year after the date that you acquired such shares
      upon
      exercise of this ISO.

    


    12. Notices.
      Notices
      hereunder shall be mailed or delivered to the Company at its principal place
      of
      business, and shall be delivered to you in person or mailed or delivered to
      you
      at the address set forth below, or in either case at such other address as
      one
      party may subsequently furnish to the other party in writing. 

     

    13. Choice
      of Law.
      This
      Agreement shall be governed by Delaware law, without giving effect to the
      conflicts of laws provisions thereof.

    


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      	 	MRU Holdings, Inc. 
	 	 
	 	 
	 	By:
              _____________________________________
	 	Name: 
	 	Title: 


    

    


    


    ACKNOWLEDGEMENT
      BY OPTIONEE

    


    The
      foregoing ISO is hereby accepted and the terms and conditions thereof hereby
      agreed to by the undersigned as of the Date of Grant specified
      above.

    


     

    
      	 	
              ____________________________

              Optionee's
                Signature

              


              


              Optionee's
                Address:

              


              _____________________________

              


              _____________________________

              


              _____________________________

            


    

     

    




    
      
         

      

      
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