MRU enters fourth amendment to 12% notes' payables covenant

By Caroline Salls

Pittsburgh, Jan. 12 - MRU Holdings, Inc. has entered into a fourth amendment to a purchase agreement related to its 12% senior secured notes that changes a covenant related to the amount of debt in relation to payables, according to an 8-K filed with the Securities and Exchange Commission.

Specifically, the covenant was amended to extend the date by which the company's receivables must decrease to $5 million to Jan. 21 from Jan. 8.

In addition, the fourth amendment changes a related security agreement by adding new clauses that require each of MRU's subsidiaries to appoint an independent director and to not institute or consent to the institution of any bankruptcy or insolvency proceeding or admit in writing its inability to pay its debts as they become due, unless that subsidiary's independent director votes in favor of the action.

The individual director for each subsidiary must be approved by the company's collateral agent, must be reasonably knowledgeable and experienced in the subsidiary's business and must not have had "disqualifying relationships" with any of the purchase agreement parties during the past five years.

MRU said the fourth amendment also requires each subsidiary to provide director's and officer's insurance coverage to its independent director.

MRU is a New York-based provider of student loans.

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