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EX-10.36

                                                                       ANNEX VII

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE
HAVE  BEEN  REGISTERED  WITH  THE  SECURITIES  AND  EXCHANGE  COMMISSION  OR THE
SECURITIES   COMMISSION  OF  ANY  STATE  IN  RELIANCE  UPON  AN  EXEMPTION  FROM
REGISTRATION  UNDER THE  SECURITIES  ACT OF 1933,  AS AMENDED  (THE  "SECURITIES
ACT"),  AND,  ACCORDINGLY,  MAY NOT BE OFFERED  OR SOLD  EXCEPT  PURSUANT  TO AN
EFFECTIVE  REGISTRATION  STATEMENT  UNDER THE  SECURITIES  ACT OR PURSUANT TO AN
AVAILABLE  EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE  REGISTRATION
REQUIREMENTS  OF THE  SECURITIES  ACT AND IN ACCORDANCE  WITH  APPLICABLE  STATE
SECURITIES  LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH  EFFECT,  THE  SUBSTANCE  OF WHICH SHALL BE  REASONABLY  ACCEPTABLE  TO THE
COMPANY.  THIS  SECURITY  AND THE  SECURITIES  ISSUABLE  UPON  EXERCISE  OF THIS
SECURITY MAY BE PLEDGED IN CONNECTION  WITH A BONA FIDE MARGIN  ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.

                          COMMON STOCK PURCHASE WARRANT

                  To Purchase 140,000 Shares of Common Stock of

                              SONOMA COLLEGE, INC.

       THIS COMMON STOCK PURCHASE  WARRANT (the  "WARRANT")  certifies that, for
value received,  CAMOFI MASTER LDC (the "HOLDER"),  is entitled,  upon the terms
and subject to the  limitations on exercise and the conditions  hereinafter  set
forth, at any time on or after the date hereof (the "INITIAL EXERCISE DATE") and
on or prior to the  close of  business  on  September  28,  2011,  the five year
anniversary  of the  Initial  Exercise  Date (the  "TERMINATION  DATE")  but not
thereafter,  to  subscribe  for  and  purchase  from  Sonoma  College,  Inc.,  a
California corporation (the "COMPANY"), 140,000 shares (the "WARRANT SHARES") of
Common Stock, $.01 par value, of the Company (the "COMMON STOCK").  The purchase
price of one share of Common  Stock  under  this  Warrant  shall be equal to the
Exercise Price, as defined in Section 2(b).

SECTION 1.    DEFINITIONS.  Capitalized  terms  used and not  otherwise  defined
              herein shall have the  meanings  set forth in that certain  Bridge
              Loan Agreement (the "BRIDGE LOAN AGREEMENT"),  dated September 28,
              2006, between the Company and the Buyers signatory thereto.

SECTION 2.    EXERCISE.

              a)     EXERCISE  OF  WARRANT.  Exercise  of  the  purchase  rights
                     represented  by this  Warrant  may be  made at any  time or
                     times  on or  after  the  Initial  Exercise  Date and on or
                     before the Termination Date by delivery to the Company of a
                     duly executed facsimile copy of the Notice of Exercise Form
                     annexed  hereto  (or such  other  office  or  agency of the
                     Company  as it may  designate  by notice in  writing to the
                     registered  Holder at the address of such Holder  appearing
                     on the books of the Company);  PROVIDED,  HOWEVER, within 5
                     Trading  Days  of the  date  said  Notice  of  Exercise  is
                     delivered to the Company, the Holder shall have surrendered
                     this
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                     Warrant to the Company and the Company  shall have received
                     payment  of the  aggregate  Exercise  Price  of the  shares
                     thereby purchased by wire transfer or cashier's check drawn
                     on a United States bank.

              b)     EXERCISE  PRICE.  The  exercise  price of the Common  Stock
                     under this Warrant shall be $0.11 (the  "EXERCISE  PRICE"),
                     subject to adjustment pursuant to Section 3 hereof.

              c)     CASHLESS  EXERCISE.  This  Warrant may also be exercised by
                     means of a "cashless exercise" in which the Holder shall be
                     entitled to receive a certificate for the number of Warrant
                     Shares  equal to the quotient  obtained by dividing  [(A-B)
                     (X)] by (A), where:

                     (A) = the VWAP on the Trading Day immediately preceding the
                     date of such election;

                     (B) = the Exercise Price of this Warrant, as adjusted; and

                     (X) = the number of Warrant  Shares  issuable upon exercise
                     of this  Warrant  in  accordance  with  the  terms  of this
                     Warrant by means of a cash exercise  rather than a cashless
                     exercise.

              d)     EXERCISE  LIMITATIONS;  HOLDER'S  RESTRICTIONS.  The Holder
                     shall not have the right to  exercise  any  portion of this
                     Warrant,  pursuant  to Section  2(c) or  otherwise,  to the
                     extent  that after  giving  effect to such  issuance  after
                     exercise,   the   Holder   (together   with  the   Holder's
                     affiliates),  as set  forth  on the  applicable  Notice  of
                     Exercise,  would  beneficially own in excess of 4.9% of the
                     number   of  shares  of  the   Common   Stock   outstanding
                     immediately  after  giving  effect  to such  issuance.  For
                     purposes of the foregoing sentence, the number of shares of
                     Common  Stock  beneficially  owned  by the  Holder  and its
                     affiliates  shall  include  the  number of shares of Common
                     Stock  issuable  upon exercise of this Warrant with respect
                     to which the  determination of such sentence is being made,
                     but shall  exclude  the  number  of shares of Common  Stock
                     which would be issuable upon (A) exercise of the remaining,
                     nonexercised  portion of this Warrant beneficially owned by
                     the Holder or any of its  affiliates  and (B)  exercise  or
                     conversion of the  unexercised or  nonconverted  portion of
                     any other  securities  of the Company  (including,  without
                     limitation,  any  other  Notes or  Warrants)  subject  to a
                     limitation  on  conversion  or  exercise  analogous  to the
                     limitation  contained  herein  beneficially  owned  by  the
                     Holder or any of its affiliates. Except as set forth in the
                     preceding  sentence,  for  purposes of this  Section  2(d),
                     beneficial ownership shall be calculated in accordance with
                     Section 13(d) of the Exchange Act, it being acknowledged by
                     Holder that the Company is not  representing to Holder that
                     such calculation is in compliance with Section 13(d) of the
                     Exchange  Act and  Holder  is  solely  responsible  for any
                     schedules required to be filed in accordance therewith.  To
                     the extent that the  limitation  contained  in this Section
                     2(d) applies,  the determination of whether this Warrant is
                     exercisable (in relation to other  securities  owned by the
                     Holder)  and  of  which  a  portion  of  this   Warrant  is
                     exercisable shall be in the sole discretion of such Holder,
                     and the  submission of a Notice of Exercise shall be deemed
                     to be such Holder's  determination  of whether this Warrant
                     is exercisable  (in relation to other  securities  owned by
                     such  Holder)  and of  which  portion  of this  Warrant  is
                     exercisable, in each case subject to such

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                     aggregate percentage limitation, and the Company shall have
                     no  obligation  to verify or confirm  the  accuracy of such
                     determination.  For  purposes  of  this  Section  2(d),  in
                     determining  the  number  of  outstanding  shares of Common
                     Stock,  the Holder  may rely on the  number of  outstanding
                     shares of Common Stock as  reflected  in (x) the  Company's
                     most recent  Form 10-QSB or Form 10-KSB (or similar  form),
                     as the case may be, (y) a more recent  public  announcement
                     by the  Company or (z) any other  notice by the  Company or
                     the  Company's  Transfer  Agent setting forth the number of
                     shares of Common  Stock  outstanding.  Upon the  written or
                     oral  request of the Holder,  the Company  shall within two
                     Trading  Days  confirm  orally and in writing to the Holder
                     the number of shares of Common Stock then  outstanding.  In
                     any case, the number of outstanding  shares of Common Stock
                     shall be determined  after giving effect to the  conversion
                     or exercise of  securities of the Company,  including  this
                     Warrant,  by the Holder or its affiliates since the date as
                     of which such number of outstanding  shares of Common Stock
                     was  reported.  The  provisions of this Section 2(d) may be
                     waived by the Holder  upon,  at the election of the Holder,
                     not less than 61 days' prior notice to the Company, and the
                     provisions  of this  Section  2(d) shall  continue to apply
                     until such 61st day (or such later date,  as  determined by
                     the Holder, as may be specified in such notice of waiver).

              e)     MECHANICS OF EXERCISE.

                     i)     AUTHORIZATION   OF  WARRANT   SHARES.   The  Company
                            covenants  that  all  Warrant  Shares  which  may be
                            issued  upon the  exercise  of the  purchase  rights
                            represented  by this Warrant will,  upon exercise of
                            the purchase rights represented by this Warrant,  be
                            duly  authorized,  validly  issued,  fully  paid and
                            nonassessable  and free  from all  taxes,  liens and
                            charges in respect of the issue thereof  (other than
                            taxes  in   respect   of  any   transfer   occurring
                            contemporaneously  with  such  issue).  The  Company
                            covenants  that  during the  period  the  Warrant is
                            outstanding, it will reserve from its authorized and
                            unissued Common Stock a sufficient  number of shares
                            to provide for the  issuance  of the Warrant  Shares
                            upon the exercise of any purchase  rights under this
                            Warrant.  The  Company  further  covenants  that its
                            issuance  of  this  Warrant  shall  constitute  full
                            authority  to its  officers who are charged with the
                            duty of executing stock  certificates to execute and
                            issue the  necessary  certificates  for the  Warrant
                            Shares  upon the  exercise  of the  purchase  rights
                            under this  Warrant.  The Company will take all such
                            reasonable action as may be necessary to assure that
                            such Warrant Shares may be issued as provided herein
                            without   violation   of  any   applicable   law  or
                            regulation,  or of any  requirements  of the Trading
                            Market upon which the Common Stock may be listed.

                     ii)    DELIVERY OF CERTIFICATES UPON EXERCISE. Certificates
                            for shares purchased  hereunder shall be transmitted
                            by the  transfer  agent of the Company to the Holder
                            by  crediting  the  account  of the  Holder's  prime
                            broker with the Depository Trust Company through its
                            Deposit Withdrawal Agent Commission  ("DWAC") system
                            if the Company is a participant in such system,  and
                            otherwise  by  physical   delivery  to  the  address
                            specified  by the Holder in the  Notice of  Exercise
                            within  3  Trading  Days  from the  delivery  to the
                            Company of the Notice of Exercise Form, surrender of
                            this Warrant and payment of the  aggregate  Exercise
                            Price as set forth

<PAGE>

                            above ("WARRANT SHARE DELIVERY DATE").  This Warrant
                            shall be deemed to have been  exercised  on the date
                            the Exercise  Price is received by the Company.  The
                            Warrant  Shares shall be deemed to have been issued,
                            and Holder or any other person so  designated  to be
                            named  therein  shall  be  deemed  to have  become a
                            holder of record of such shares for all purposes, as
                            of the  date  the  Warrant  has  been  exercised  by
                            payment to the Company of the Exercise Price and all
                            taxes  required  to be paid by the  Holder,  if any,
                            pursuant to Section  2(e)(vii) prior to the issuance
                            of such shares, have been paid.

                     iii)   DELIVERY  OF NEW  WARRANTS  UPON  EXERCISE.  If this
                            Warrant  shall  have  been  exercised  in part,  the
                            Company  shall,  at  the  time  of  delivery  of the
                            certificate  or  certificates  representing  Warrant
                            Shares,  deliver to Holder a new Warrant  evidencing
                            the  rights of Holder to  purchase  the  unpurchased
                            Warrant Shares called for by this Warrant, which new
                            Warrant  shall in all other  respects  be  identical
                            with this Warrant.

                     iv)    RESCISSION RIGHTS. If the Company fails to cause its
                            transfer   agent  to   transmit   to  the  Holder  a
                            certificate or certificates representing the Warrant
                            Shares  pursuant  to this  Section  2(e)(iv)  by the
                            Warrant Share  Delivery  Date,  then the Holder will
                            have the right to rescind such exercise.

                     v)     COMPENSATION FOR BUY-IN ON FAILURE TO TIMELY DELIVER
                            CERTIFICATES UPON EXERCISE. In addition to any other
                            rights available to the Holder, if the Company fails
                            to  cause  its  transfer  agent to  transmit  to the
                            Holder a certificate  or  certificates  representing
                            the  Warrant  Shares  pursuant  to an exercise on or
                            before the Warrant Share Delivery Date, and if after
                            such date the  Holder is  required  by its broker to
                            purchase   (in  an  open   market   transaction   or
                            otherwise)  shares of  Common  Stock to  deliver  in
                            satisfaction  of a sale by the Holder of the Warrant
                            Shares which the Holder  anticipated  receiving upon
                            such exercise (a  "BUY-IN"),  then the Company shall
                            (1) pay in cash to the  Holder  the  amount by which
                            (x) the Holder's  total  purchase  price  (including
                            brokerage  commissions,  if any) for the  shares  of
                            Common  Stock so  purchased  exceeds  (y) the amount
                            obtained  by  multiplying  (A) the number of Warrant
                            Shares that the  Company was  required to deliver to
                            the Holder in connection  with the exercise at issue
                            times (B) the price at which the sell  order  giving
                            rise to such purchase  obligation was executed,  and
                            (2) at the option of the  Holder,  either  reinstate
                            the portion of the Warrant and equivalent  number of
                            Warrant  Shares  for  which  such  exercise  was not
                            honored  or  deliver  to the  Holder  the  number of
                            shares of Common  Stock that would have been  issued
                            had the Company  timely  complied  with its exercise
                            and delivery obligations hereunder.  For example, if
                            the Holder  purchases  Common  Stock  having a total
                            purchase  price of  $11,000  to cover a Buy-In  with
                            respect to an attempted exercise of shares of Common
                            Stock with an  aggregate  sale price  giving rise to
                            such purchase  obligation  of $10,000,  under clause
                            (1)  of  the  immediately   preceding  sentence  the
                            Company shall be required to pay the Holder  $1,000.
                            The Holder shall provide the Company  written notice
                            indicating  the  amounts  payable  to the  Holder in
                            respect  of the  Buy-In,  together  with  applicable
                            confirmations and other

<PAGE>

                            evidence   reasonably   requested  by  the  Company.
                            Nothing  herein  shall  limit a  Holder's  right  to
                            pursue any other remedies available to it hereunder,
                            at law or in equity including, without limitation, a
                            decree of  specific  performance  and/or  injunctive
                            relief  with  respect  to the  Company's  failure to
                            timely deliver  certificates  representing shares of
                            Common  Stock  upon   exercise  of  the  Warrant  as
                            required pursuant to the terms hereof.

                     vi)    NO FRACTIONAL  SHARES OR SCRIP. No fractional shares
                            or scrip  representing  fractional  shares  shall be
                            issued upon the exercise of this Warrant.  As to any
                            fraction of a share which Holder would  otherwise be
                            entitled to purchase upon such exercise, the Company
                            shall pay a cash adjustment in respect of such final
                            fraction  in  an  amount  equal  to  such   fraction
                            multiplied by the Exercise Price.

                     vii)   CHARGES,    TAXES   AND   EXPENSES.    Issuance   of
                            certificates   for  Warrant  Shares  shall  be  made
                            without  charge  to the  Holder  for  any  issue  or
                            transfer tax or other incidental  expense in respect
                            of the  issuance of such  certificate,  all of which
                            taxes and expenses shall be paid by the Company, and
                            such certificates shall be issued in the name of the
                            Holder or in such  name or names as may be  directed
                            by the Holder; PROVIDED,  HOWEVER, that in the event
                            certificates  for Warrant Shares are to be issued in
                            a name  other  than  the  name of the  Holder,  this
                            Warrant  when  surrendered  for  exercise  shall  be
                            accompanied by the Assignment  Form attached  hereto
                            duly  executed  by the  Holder;  and the Company may
                            require,  as a condition  thereto,  the payment of a
                            sum  sufficient to reimburse it for any transfer tax
                            incidental thereto.

                     viii)  CLOSING  OF BOOKS.  The  Company  will not close its
                            stockholder  books or records  in any  manner  which
                            prevents  the  timely   exercise  of  this  Warrant,
                            pursuant to the terms hereof.

SECTION 3.    CERTAIN ADJUSTMENTS.

              a)     STOCK  DIVIDENDS  AND SPLITS.  If the Company,  at any time
                     while  this  Warrant  is  outstanding:  (A)  pays  a  stock
                     dividend or otherwise make a distribution or  distributions
                     on shares of its Common Stock or any other equity or equity
                     equivalent  securities  payable  in shares of Common  Stock
                     (which,  for  avoidance  of doubt,  shall not  include  any
                     shares of Common  Stock  issued by the Company  pursuant to
                     this Warrant),  (B) subdivides outstanding shares of Common
                     Stock  into  a  larger  number  of  shares,   (C)  combines
                     (including  by  way of  reverse  stock  split)  outstanding
                     shares of Common Stock into a smaller number of shares,  or
                     (D)  issues by  reclassification  of  shares of the  Common
                     Stock any shares of capital  stock of the Company,  then in
                     each  case the  Exercise  Price  shall be  multiplied  by a
                     fraction  of which  the  numerator  shall be the  number of
                     shares of Common Stock (excluding  treasury shares, if any)
                     outstanding  before such event and of which the denominator
                     shall be the number of shares of Common  Stock  outstanding
                     after  such event and the  number of shares  issuable  upon
                     exercise of this Warrant shall be proportionately adjusted.
                     Any  adjustment  made  pursuant to this  Section 3(a) shall
                     become effective  immediately after the record date for the
                     determination  of  stockholders  entitled  to receive  such
                     dividend or distribution

<PAGE>

                     and shall become effective  immediately after the effective
                     date  in  the  case  of  a   subdivision,   combination  or
                     re-classification.

              b)     SUBSEQUENT  EQUITY SALES.  If the Company or any Subsidiary
                     thereof,  as applicable,  at any time while this Warrant is
                     outstanding,   shall  offer,  sell,  grant  any  option  to
                     purchase  or offer,  sell or grant any right to reprice its
                     securities,  or otherwise  dispose of or issue (or announce
                     any offer,  sale,  grant or any option to purchase or other
                     disposition)  any Common Stock or Common Stock  Equivalents
                     entitling any Person to acquire shares of Common Stock,  at
                     an  effective  price per share less than the then  Exercise
                     Price (such lower  price,  the "BASE SHARE  PRICE" and such
                     issuances collectively, a "DILUTIVE ISSUANCE"), as adjusted
                     hereunder  (if the  holder  of the  Common  Stock or Common
                     Stock  Equivalents so issued shall at any time,  whether by
                     operation of purchase price adjustments,  reset provisions,
                     floating   conversion,   exercise  or  exchange  prices  or
                     otherwise, or due to warrants,  options or rights per share
                     which is  issued  in  connection  with  such  issuance,  be
                     entitled to receive  shares of Common Stock at an effective
                     price per share which is less than the Exercise Price, such
                     issuance shall be deemed to have occurred for less than the
                     Exercise Price),  then, the Exercise Price shall be reduced
                     to equal the Base  Share  Price and the  number of  Warrant
                     Shares issuable  hereunder shall be increased such that the
                     aggregate  Exercise Price payable  hereunder,  after taking
                     into account the decrease in the Exercise  Price,  shall be
                     equal  to  the  aggregate  Exercise  Price  prior  to  such
                     adjustment.  Such  adjustment  shall be made  whenever such
                     Common Stock or Common Stock  Equivalents are issued.  Such
                     adjustment  shall be made  whenever  such  Common  Stock or
                     Common  Stock  Equivalents  are issued.  The Company  shall
                     notify the Holder in writing, no later than the Trading Day
                     following  the issuance of any Common Stock or Common Stock
                     Equivalents subject to this section, indicating therein the
                     applicable  issuance price,  or of applicable  reset price,
                     exchange  price,  conversion  price and other pricing terms
                     (such notice the "DILUTIVE ISSUANCE NOTICE").  For purposes
                     of  clarification,  whether or not the  Company  provides a
                     Dilutive  Issuance  Notice  pursuant to this Section  3(b),
                     upon the  occurrence  of any Dilutive  Issuance,  after the
                     date of such  Dilutive  Issuance  the Holder is entitled to
                     receive  a number of  Warrant  Shares  based  upon the Base
                     Share Price  regardless  of whether  the Holder  accurately
                     refers to the Base Share Price in the Notice of Exercise.

              c)     PRO RATA  DISTRIBUTIONS.  If the Company, at any time prior
                     to the Termination Date, shall distribute to all holders of
                     Common Stock (and not to Holders of the Warrants) evidences
                     of its  indebtedness  or assets or  rights or  warrants  to
                     subscribe  for or  purchase  any  security  other  than the
                     Common Stock (which shall be subject to Section 3(b)), then
                     in each such case the  Exercise  Price shall be adjusted by
                     multiplying the Exercise Price in effect  immediately prior
                     to the record date fixed for  determination of stockholders
                     entitled  to receive  such  distribution  by a fraction  of
                     which the  denominator  shall be the VWAP  determined as of
                     the record date mentioned above, and of which the numerator
                     shall be such  VWAP on such  record  date less the then per
                     share fair market  value at such record date of the portion
                     of such assets or evidence of  indebtedness  so distributed
                     applicable to one outstanding  share of the Common Stock as
                     determined  by the Board of  Directors  in good  faith.  In
                     either  case  the  adjustments  shall  be  described  in  a
                     statement  provided to the Holders of the portion of assets
                     or  evidences  of   indebtedness  so  distributed  or  such
                     subscription  rights  applicable  to one  share  of  Common
                     Stock. Such adjustment shall be made

<PAGE>

                     whenever  any such  distribution  is made and shall  become
                     effective  immediately  after  the  record  date  mentioned
                     above.

              d)     CALCULATIONS.  All calculations  under this Section 3 shall
                     be made to the  nearest  cent or the  nearest  1/100th of a
                     share,  as the case may be.  The number of shares of Common
                     Stock  outstanding  at any given  time  shall not  includes
                     shares of Common  Stock owned or held by or for the account
                     of the Company,  and the  description of any such shares of
                     Common Stock shall be considered on issue or sale of Common
                     Stock. For purposes of this Section 3, the number of shares
                     of Common Stock deemed to be issued and outstanding as of a
                     given  date  shall be the sum of the  number  of  shares of
                     Common Stock (excluding treasury shares, if any) issued and
                     outstanding.

              e)     NOTICE TO HOLDERS.

                            i.     ADJUSTMENT  TO EXERCISE  PRICE.  Whenever the
                     Exercise Price is adjusted  pursuant to this Section 3, the
                     Company shall promptly mail to each Holder a notice setting
                     forth the Exercise Price after such  adjustment and setting
                     forth  a  brief  statement  of  the  facts  requiring  such
                     adjustment. If the Company issues a variable rate security,
                     the Company  shall be deemed to have issued Common Stock or
                     Common Stock Equivalents at the lowest possible  conversion
                     or exercise price at which such securities may be converted
                     or exercised.

                            ii.    NOTICE TO ALLOW  EXERCISE  BY HOLDER.  If (A)
                     the  Company   shall  declare  a  dividend  (or  any  other
                     distribution)  on the Common  Stock;  (B) the Company shall
                     declare  a  special  nonrecurring  cash  dividend  on  or a
                     redemption  of the  Common  Stock;  (C) the  Company  shall
                     authorize  the  granting to all holders of the Common Stock
                     rights or warrants to subscribe  for or purchase any shares
                     of  capital  stock of any class or of any  rights;  (D) the
                     approval  of any  stockholders  of  the  Company  shall  be
                     required in  connection  with any  reclassification  of the
                     Common  Stock,  any  consolidation  or  merger to which the
                     Company  is a  party,  any  sale  or  transfer  of  all  or
                     substantially  all of the  assets  of the  Company,  of any
                     compulsory  share  exchange  whereby  the  Common  Stock is
                     converted into other securities,  cash or property; (E) the
                     Company  shall   authorize  the  voluntary  or  involuntary
                     dissolution,  liquidation  or winding up of the  affairs of
                     the Company; then, in each case, the Company shall cause to
                     be mailed to the Holder at its last  addresses  as it shall
                     appear upon the Warrant  Register of the Company,  at least
                     20  calendar  days  prior  to  the  applicable   record  or
                     effective date hereinafter  specified, a notice stating (x)
                     the date on which a record is to be taken  for the  purpose
                     of  such  dividend,  distribution,  redemption,  rights  or
                     warrants, or if a record is not to be taken, the date as of
                     which  the  holders  of the  Common  Stock of  record to be
                     entitled  to  such  dividend,  distributions,   redemption,
                     rights or warrants are to be  determined or (y) the date on
                     which such reclassification,  consolidation,  merger, sale,
                     transfer or share exchange is expected to become  effective
                     or  close,  and the date as of which  it is  expected  that
                     holders of the Common  Stock of record shall be entitled to
                     exchange  their shares of the Common Stock for  securities,
                     cash   or   other    property    deliverable    upon   such
                     reclassification,  consolidation, merger, sale, transfer or
                     share  exchange;  PROVIDED,  that the  failure to mail such
                     notice or any  defect  therein  or in the  mailing  thereof
                     shall not  affect  the  validity  of the  corporate  action
                     required  to be  specified  in such  notice.  The Holder is
                     entitled to exercise this Warrant during the 20-day

<PAGE>

                     period  commencing the date of such notice to the effective
                     date of the event triggering such notice.

              f)     FUNDAMENTAL TRANSACTION. If, at any time while this Warrant
                     is  outstanding,  (A) the  Company  effects  any  merger or
                     consolidation  of the Company with or into another  Person,
                     (B) the Company  effects  any sale of all or  substantially
                     all  of  its   assets  in  one  or  a  series  of   related
                     transactions,  (C)  any  tender  offer  or  exchange  offer
                     (whether  by the  Company or another  Person) is  completed
                     pursuant to which  holders of Common Stock are permitted to
                     tender or exchange their shares for other securities,  cash
                     or   property,    or   (D)   the   Company    effects   any
                     reclassification  of the  Common  Stock  or any  compulsory
                     share  exchange  pursuant  to  which  the  Common  Stock is
                     effectively   converted   into  or   exchanged   for  other
                     securities,   cash  or  property   (in  any  such  case,  a
                     "FUNDAMENTAL  TRANSACTION"),   then,  upon  any  subsequent
                     conversion of this Warrant, the Holder shall have the right
                     to  receive,  for each  Warrant  Share that would have been
                     issuable  upon  such  exercise   absent  such   Fundamental
                     Transaction, at the option of the Holder, (a) upon exercise
                     of this  Warrant,  the number of shares of Common  Stock of
                     the successor or acquiring  corporation  or of the Company,
                     if  it  is  the   surviving   corporation,   and  Alternate
                     Consideration  receivable  upon  or  as a  result  of  such
                     reorganization,  reclassification, merger, consolidation or
                     disposition  of assets by a Holder of the  number of shares
                     of Common  Stock  for which  this  Warrant  is  exercisable
                     immediately  prior to such  event or (b) cash  equal to the
                     value of this Warrant as determined in accordance  with the
                     Black-Scholes   option  pricing   formula  (the  "ALTERNATE
                     CONSIDERATION").  For  purposes of any such  exercise,  the
                     determination  of the Exercise Price shall be appropriately
                     adjusted to apply to such Alternate  Consideration based on
                     the amount of Alternate  Consideration  issuable in respect
                     of  one   share  of  Common   Stock  in  such   Fundamental
                     Transaction,  and the Company shall  apportion the Exercise
                     Price among the  Alternate  Consideration  in a  reasonable
                     manner  reflecting  the  relative  value  of any  different
                     components  of the Alternate  Consideration.  If holders of
                     Common  Stock are given  any  choice as to the  securities,
                     cash  or  property   to  be   received  in  a   Fundamental
                     Transaction, then the Holder shall be given the same choice
                     as to the  Alternate  Consideration  it  receives  upon any
                     exercise  of  this  Warrant   following  such   Fundamental
                     Transaction.  To the extent  necessary  to  effectuate  the
                     foregoing  provisions,  any  successor  to the  Company  or
                     surviving  entity  in such  Fundamental  Transaction  shall
                     issue  to the  Holder  a new  warrant  consistent  with the
                     foregoing  provisions  and evidencing the Holder's right to
                     exercise  such warrant into  Alternate  Consideration.  The
                     terms of any  agreement  pursuant  to  which a  Fundamental
                     Transaction is effected  shall include terms  requiring any
                     such  successor  or  surviving  entity to  comply  with the
                     provisions  of this  paragraph  (f) and insuring  that this
                     Warrant  (or  any  such   replacement   security)  will  be
                     similarly   adjusted   upon  any   subsequent   transaction
                     analogous to a Fundamental Transaction.

              g)     VOLUNTARY  ADJUSTMENT  BY  COMPANY.  The Company may at any
                     time  during  the  term of this  Warrant  reduce  the  then
                     current  Exercise Price to any amount and for any period of
                     time deemed  appropriate  by the Board of  Directors of the
                     Company.
<PAGE>

       SECTION 4.    TRANSFER OF WARRANT.

              a)     TRANSFERABILITY.  Subject to compliance with any applicable
                     securities  laws and the  conditions  set forth in Sections
                     5(a) and 4(d) hereof, this Warrant and all rights hereunder
                     are  transferable,  in whole or in part,  upon surrender of
                     this  Warrant  at the  principal  office  of  the  Company,
                     together   with  a  written   assignment  of  this  Warrant
                     substantially  in the form attached hereto duly executed by
                     the Holder or its agent or attorney and funds sufficient to
                     pay any  transfer  taxes  payable  upon the  making of such
                     transfer.  Upon  such  surrender  and,  if  required,  such
                     payment,  the  Company  shall  execute  and  deliver  a new
                     Warrant  or  Warrants  in  the  name  of  the  assignee  or
                     assignees  and  in  the   denomination   or   denominations
                     specified in such instrument of assignment, and shall issue
                     to the  assignor a new  Warrant  evidencing  the portion of
                     this  Warrant  not so  assigned,  and  this  Warrant  shall
                     promptly be cancelled. A Warrant, if properly assigned, may
                     be  exercised  by a new holder for the  purchase of Warrant
                     Shares without having a new Warrant issued.

              b)     NEW WARRANTS.  This Warrant may be divided or combined with
                     other  Warrants upon  presentation  hereof at the aforesaid
                     office  of the  Company,  together  with a  written  notice
                     specifying  the  names  and   denominations  in  which  new
                     Warrants  are to be  issued,  signed  by the  Holder or its
                     agent or attorney. Subject to compliance with Section 4(a),
                     as to any transfer  which may be involved in such  division
                     or combination, the Company shall execute and deliver a new
                     Warrant or Warrants in exchange for the Warrant or Warrants
                     to be divided or combined in accordance with such notice.

              c)     WARRANT REGISTER.  The Company shall register this Warrant,
                     upon  records  to be  maintained  by the  Company  for that
                     purpose (the "WARRANT REGISTER"), in the name of the record
                     Holder  hereof from time to time.  The Company may deem and
                     treat the registered Holder of this Warrant as the absolute
                     owner hereof for the purpose of any exercise  hereof or any
                     distribution  to the  Holder,  and for all other  purposes,
                     absent actual notice to the contrary.

              d)     TRANSFER RESTRICTIONS.  If, at the time of the surrender of
                     this  Warrant  in  connection  with  any  transfer  of this
                     Warrant,   the  transfer  of  this  Warrant  shall  not  be
                     registered pursuant to an effective  registration statement
                     under  the  Securities  Act  and  under   applicable  state
                     securities or blue sky laws, the Company may require,  as a
                     condition of allowing  such transfer (i) that the Holder or
                     transferee of this Warrant,  as the case may be, furnish to
                     the  Company a written  opinion of counsel  (which  opinion
                     shall  be  in  form,  substance  and  scope  customary  for
                     opinions  of counsel  in  comparable  transactions)  to the
                     effect that such transfer may be made without  registration
                     under  the  Securities  Act  and  under   applicable  state
                     securities  or blue  sky  laws,  (ii)  that the  holder  or
                     transferee execute and deliver to the Company an investment
                     letter in form and substance  acceptable to the Company and
                     (iii) that the  transferee be an  "accredited  investor" as
                     defined  in Rule  501(a)(1),  (a)(2),  (a)(3),  (a)(7),  or
                     (a)(8)  promulgated under the Securities Act or a qualified
                     institutional  buyer as defined in Rule  144A(a)  under the
                     Securities Act.
<PAGE>

       SECTION 5.    MISCELLANEOUS.

              a)     TITLE TO WARRANT. Prior to the Termination Date and subject
                     to compliance  with  applicable  laws and Section 4 of this
                     Warrant,   this  Warrant  and  all  rights   hereunder  are
                     transferable,  in whole or in part, at the office or agency
                     of  the  Company  by  the  Holder  in  person  or  by  duly
                     authorized   attorney,   upon  surrender  of  this  Warrant
                     together with the Assignment  Form annexed hereto  properly
                     endorsed. The transferee shall sign an investment letter in
                     form and substance reasonably satisfactory to the Company.

              b)     NO RIGHTS AS SHAREHOLDER UNTIL EXERCISE.  This Warrant does
                     not entitle the Holder to any voting rights or other rights
                     as a  shareholder  of the  Company  prior  to the  exercise
                     hereof.  Upon the surrender of this Warrant and the payment
                     of the aggregate  Exercise Price (or by means of a cashless
                     exercise),  the Warrant Shares so purchased shall be and be
                     deemed to be issued to such  Holder as the record  owner of
                     such shares as of the close of business on the later of the
                     date of such surrender or payment.

              c)     LOSS,  THEFT,  DESTRUCTION  OR MUTILATION  OF WARRANT.  The
                     Company  covenants  that upon  receipt  by the  Company  of
                     evidence reasonably  satisfactory to it of the loss, theft,
                     destruction  or  mutilation  of this  Warrant  or any stock
                     certificate  relating to the Warrant Shares, and in case of
                     loss,  theft  or  destruction,  of  indemnity  or  security
                     reasonably  satisfactory  to it (which,  in the case of the
                     Warrant,  shall not include  the posting of any bond),  and
                     upon  surrender and  cancellation  of such Warrant or stock
                     certificate,  if  mutilated,  the  Company  will  make  and
                     deliver a new  Warrant or stock  certificate  of like tenor
                     and dated as of such cancellation,  in lieu of such Warrant
                     or stock certificate.

              d)     SATURDAYS, SUNDAYS, HOLIDAYS, ETC. If the last or appointed
                     day for the taking of any action or the  expiration  of any
                     right  required  or  granted  herein  shall be a  Saturday,
                     Sunday or a legal holiday, then such action may be taken or
                     such right may be exercised on the next  succeeding day not
                     a Saturday, Sunday or legal holiday.

              e)     AUTHORIZED  SHARES.  The Company  covenants that during the
                     period the Warrant is outstanding, it will reserve from its
                     authorized and unissued Common Stock a sufficient number of
                     shares to provide for the  issuance  of the Warrant  Shares
                     upon  the  exercise  of  any  purchase  rights  under  this
                     Warrant. The Company further covenants that its issuance of
                     this  Warrant  shall   constitute  full  authority  to  its
                     officers who are charged  with the duty of executing  stock
                     certificates   to   execute   and   issue   the   necessary
                     certificates  for the Warrant  Shares upon the  exercise of
                     the purchase  rights under this  Warrant.  The Company will
                     take all such  reasonable  action  as may be  necessary  to
                     assure that such  Warrant  Shares may be issued as provided
                     herein   without   violation  of  any   applicable  law  or
                     regulation,  or of any  requirements  of the trading market
                     upon which the Common Stock may be listed.

                     Except and to the extent as waived or  consented  to by the
                     Holder,  the Company  shall not by any  action,  including,
                     without    limitation,    amending   its   certificate   of
                     incorporation  or through any  reorganization,  transfer of
                     assets, consolidation,  merger, dissolution,  issue or sale
                     of securities or any other voluntary action,

<PAGE>

                     avoid or seek to avoid the observance or performance of any
                     of the terms of this Warrant, but will at all times in good
                     faith  assist in the  carrying out of all such terms and in
                     the  taking  of all such  actions  as may be  necessary  or
                     appropriate to protect the rights of Holder as set forth in
                     this  Warrant  against  impairment.  Without  limiting  the
                     generality  of the  foregoing,  the  Company  will  (a) not
                     increase  the par  value of any  Warrant  Shares  above the
                     amount  payable  therefor  upon such  exercise  immediately
                     prior  to such  increase  in par  value,  (b) take all such
                     action as may be necessary or appropriate in order that the
                     Company  may  validly  and  legally  issue  fully  paid and
                     nonassessable  Warrant  Shares  upon the  exercise  of this
                     Warrant,  and (c) use  commercially  reasonable  efforts to
                     obtain all such authorizations, exemptions or consents from
                     any public regulatory body having  jurisdiction  thereof as
                     may be  necessary  to enable the  Company  to  perform  its
                     obligations under this Warrant.

                     Before   taking  any  action   which  would  result  in  an
                     adjustment  in the number of Warrant  Shares for which this
                     Warrant  is  exercisable  or in  the  Exercise  Price,  the
                     Company shall obtain all such  authorizations or exemptions
                     thereof,  or consents thereto, as may be necessary from any
                     public  regulatory  body  or  bodies  having   jurisdiction
                     thereof.

              f)     JURISDICTION.  All questions  concerning the  construction,
                     validity,  enforcement and  interpretation  of this Warrant
                     shall be determined in  accordance  with the  provisions of
                     the Bridge Loan Agreement.

              g)     RESTRICTIONS.  The  Holder  acknowledges  that the  Warrant
                     Shares  acquired upon the exercise of this Warrant,  if not
                     registered,  will have  restrictions upon resale imposed by
                     state and federal securities laws.

              h)     NONWAIVER AND  EXPENSES.  No course of dealing or any delay
                     or failure to exercise  any right  hereunder on the part of
                     Holder shall operate as a waiver of such right or otherwise
                     prejudice    Holder's    rights,    powers   or   remedies,
                     notwithstanding   the  fact  that  all   rights   hereunder
                     terminate on the Termination Date. If the Company willfully
                     and  knowingly  fails to comply with any  provision of this
                     Warrant,  which  results  in any  material  damages  to the
                     Holder,  the Company  shall pay to Holder  such  amounts as
                     shall  be  sufficient  to  cover  any  costs  and  expenses
                     including,  but not limited to, reasonable attorneys' fees,
                     including  those  of  appellate  proceedings,  incurred  by
                     Holder in collecting any amounts due pursuant  hereto or in
                     otherwise  enforcing any of its rights,  powers or remedies
                     hereunder.

              i)     NOTICES. Any notice,  request or other document required or
                     permitted  to be given or  delivered  to the  Holder by the
                     Company  shall be delivered in  accordance  with the notice
                     provisions of the Bridge Loan Agreement.

              j)     LIMITATION  OF  LIABILITY.  No  provision  hereof,  in  the
                     absence  of any  affirmative  action by Holder to  exercise
                     this Warrant or purchase Warrant Shares, and no enumeration
                     herein of the rights or  privileges  of Holder,  shall give
                     rise to any  liability of Holder for the purchase  price of
                     any  Common  Stock  or as a  stockholder  of  the  Company,
                     whether  such  liability  is  asserted by the Company or by
                     creditors of the Company.
<PAGE>

              k)     REMEDIES. Holder, in addition to being entitled to exercise
                     all rights granted by law,  including  recovery of damages,
                     will be  entitled  to  specific  performance  of its rights
                     under  this  Warrant.  The  Company  agrees  that  monetary
                     damages  would not be  adequate  compensation  for any loss
                     incurred by reason of a breach by it of the  provisions  of
                     this Warrant and hereby  agrees to waive the defense in any
                     action for specific  performance that a remedy at law would
                     be adequate.

              l)     SUCCESSORS  AND ASSIGNS.  Subject to applicable  securities
                     laws, this Warrant and the rights and obligations evidenced
                     hereby  shall inure to the  benefit of and be binding  upon
                     the  successors  of the  Company  and  the  successors  and
                     permitted assigns of Holder. The provisions of this Warrant
                     are intended to be for the benefit of all Holders from time
                     to time of this  Warrant  and shall be  enforceable  by any
                     such Holder or holder of Warrant Shares.

              m)     AMENDMENT.  This  Warrant may be modified or amended or the
                     provisions  hereof  waived with the written  consent of the
                     Company and the Holder.

              n)     SEVERABILITY.  Wherever  possible,  each  provision of this
                     Warrant  shall  be  interpreted  in  such  manner  as to be
                     effective  and  valid  under  applicable  law,  but  if any
                     provision of this Warrant shall be prohibited by or invalid
                     under  applicable  law, such provision shall be ineffective
                     to the extent of such  prohibition or  invalidity,  without
                     invalidating  the  remainder  of  such  provisions  or  the
                     remaining provisions of this Warrant.

              o)     HEADINGS.  The  headings  used in this  Warrant are for the
                     convenience  of  reference  only  and  shall  not,  for any
                     purpose, be deemed a part of this Warrant.

                              ********************

<PAGE>

              IN WITNESS  WHEREOF,  the Company  has caused  this  Warrant to be
executed by its officer thereunto duly authorized.

Dated:  September 28, 2006

                                        SONOMA COLLEGE, INC.

                                        ---------------------------------------
                                        Name:
                                        Title:
<PAGE>

                               NOTICE OF EXERCISE

TO:

              (1) The  undersigned  hereby elects to purchase  ________  Warrant
Shares of the Company  pursuant to the terms of the  attached  Warrant  (only if
exercised in full),  and tenders herewith payment of the exercise price in full,
together with all applicable transfer taxes, if any.

              (2)________Payment shall take the form of (check applicable box):

                     [_]    in lawful money of the United States; or

                     [_]    the cancellation of such number of Warrant Shares as
                     is necessary,  in accordance  with the formula set forth in
                     subsection  2(c),  to exercise this Warrant with respect to
                     the maximum number of Warrant Shares  purchasable  pursuant
                     to the cashless exercise  procedure set forth in subsection
                     2(c).

              (3)________Please issue a certificate or certificates representing
said Warrant  Shares in the name of the  undersigned or in such other name as is
specified below:

                     -------------------------------

The Warrant Shares shall be delivered to the following:

                     -------------------------------

                     -------------------------------

                     -------------------------------

              (4)  ACCREDITED  INVESTOR.   The  undersigned  is  an  "accredited
investor" as defined in Regulation D  promulgated  under the  Securities  Act of
1933, as amended.

[SIGNATURE OF HOLDER]

Name of Investing Entity: ______________________________________________________

SIGNATURE OF AUTHORIZED SIGNATORY OF INVESTING ENTITY: _________________________

Name of Authorized Signatory: __________________________________________________

Title of Authorized Signatory: _________________________________________________

Date: __________________________________________________________________________

<PAGE>

                                 ASSIGNMENT FORM

                    (To assign the foregoing warrant, execute
                   this form and supply required information.
                 Do not use this form to exercise the warrant.)

              FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced
thereby are hereby assigned to

                                                                whose address is
---------------------------------------------------------------

-------------------------------------------------------------------------------.

--------------------------------------------------------------------------------

                                                  Dated:               ,
                                                         --------------  -------

                               Holder's Signature:
                                                   -----------------------------
                               Holder's Address:
                                                   -----------------------------

                                                   -----------------------------

Signature Guaranteed:
                      -------------------------------------------

NOTE: The signature to this  Assignment Form must correspond with the name as it
appears on the face of the Warrant,  without  alteration or  enlargement  or any
change whatsoever,  and must be guaranteed by a bank or trust company.  Officers
of corporations and those acting in a fiduciary or other representative capacity
should file proper evidence of authority to assign the foregoing Warrant.EX-10.37

                                                                         ANNEX I
                                                           BRIDGE LOAN AGREEMENT

                                  FORM OF NOTE

       THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
       OF 1933, AS AMENDED,  OR THE SECURITIES  LAWS OF ANY STATE AND MAY
       NOT BE SOLD OR OFFERED  FOR SALE IN THE  ABSENCE  OF AN  EFFECTIVE
       REGISTRATION STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL
       OR OTHER EVIDENCE ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION
       IS NOT REQUIRED.

US $275,000
-----------

                    ----------------------------------------

                 10% SECURED PROMISSORY NOTE DUE MARCH 28, 2007

       FOR VALUE  RECEIVED,  Sonoma College,  Inc., a corporation  organized and
existing under the laws of the State of California (the "Company"),  promises to
pay to CAMOFI  MASTER LDC, the  registered  holder  hereof (the  "Holder"),  the
principal  sum of Two  Hundred  Seventy-Five  Thousand  and 00/100  Dollars  (US
$275,000)  on the  Maturity  Date (as defined  below) and to pay interest on the
principal  sum  outstanding  from time to time in arrears at the rate of 10% per
annum  (computed on the basis of the actual number of days elapsed and a year of
360 days),  accruing from  September 28, 2006,  the date of initial  issuance of
this Note (the "Issue  Date"),  to the date of payment.  Such interest  shall be
payable on the date which is the earlier of (i) the Maturity  Date,  or (ii) the
date of any prepayment of principal  permitted  hereunder;  except that interest
for month in advance shall be paid on the Issue Date.  Accrual of interest shall
commence  on the Issue Date and shall  continue to accrue on a daily basis until
payment in full of the principal sum has been made or duly provided for (whether
before or after the Maturity Date).

       This  Note is being  issued  pursuant  to the  terms of the  Bridge  Loan
Agreement,  dated as of September 28, 2006 (the "Loan Agreement"),  to which the
Company and the Holder (or the Holder's  predecessor  in interest)  are parties.
Capitalized  terms not otherwise defined herein shall have the meanings ascribed
to them in the Loan Agreement.

       This Note is subject to the following additional provisions:

       1.     The term  "Maturity  Date" means the earlier of (x) March 28, 2007
or (y) the date on which the Company  consummates an equity financing or funding
transaction in excess of

<PAGE>

$1,500,000,  whether or not such  transaction is effected in connection with the
current or future issuance of securities.

       2.     (i)    This  Note may be  prepaid  in whole or in part at any time
prior to the Maturity  Date,  without  penalty.  Any payment shall be applied as
provided in Section 3.

              (ii)   TIME IS OF THE  ESSENCE  WITH  RESPECT TO ANY  PAYMENT  DUE
HEREUNDER.  The Company shall be in default hereunder if any payment is not made
in a timely  manner,  without  any right to cure  unless  such  right to cure is
granted by the Holder in each  instance;  provided,  however,  that the grant of
such right is in the sole  discretion  of the Holder and may be withheld for any
reason or for no reason whatsoever.

              (iii)  If, at the end of any Trading Day, the value of the Pledged
Shares  (using the closing  price of the stock on such day) is less than 400% of
the aggregate  principal amount  outstanding on the Note, then the Company shall
within two  Trading  Days either (i) pay to the Lender an amount  sufficient  to
reduce the outstanding principal amount on the Note or (ii) provide the Lender a
first priority perfected  security interest in additional  collateral (which may
include  additional  shares of common  stock of the Company or other  collateral
acceptable to Lender in its sole  discretion) such that the value of the Pledged
Shares (plus the value of any additional  collateral delivered to the Lender) is
at least 400% of the aggregate principal amount outstanding on the Note.

       3.     Any  payment  made on  account of the Note shall be applied in the
following order of priority:  (i) first, to any amounts due hereunder other than
principal  and accrued  interest,  (ii) then,  to accrued  interest  through and
including the date of payment, and (iii) then, to principal of this Note.

       4.     All  payments  contemplated  hereby to be made "in cash"  shall be
made in immediately available good funds of United States of America currency by
wire  transfer to an account  designated in writing by the Holder to the Company
(which account may be changed by notice similarly  given).  For purposes of this
Note, the phrase "date of payment" means the date good funds are received in the
account designated by the notice which is then currently effective.

       5.     Subject to the terms of the Loan  Agreement,  no provision of this
Note shall alter or impair the obligation of the Company,  which is absolute and
unconditional,  to pay the principal of, and interest on, this Note at the time,
place, and rate, and in the coin or currency, as herein prescribed. This Note is
direct  obligations  of the Company.  Any  payments  received by the Holder with
respect to this Note shall be applied in the  following  order of priority:  (i)
first, to any amounts due to the Holder under any of the Transaction  Agreements
other than interest and principal on the Note,  (ii) then, to accrued but unpaid
interest on the Note, and (iii) then, to principal on the Note.

       6.     The  obligations  of the Company  under this Note are secured by a
mortgage  executed  by the  Pledgors in favor of the Holder in  connection  with
certain real estate (the "Real  Estate").  If the Holder  forecloses on the Real
Estate, the obligations of the Company will be reduced only to the extent of the
proceeds actually realized from such foreclosure,  in the priority  specified in
Section 5 hereof.
<PAGE>

       7.     CONVERSION.

              a)     VOLUNTARY CONVERSION.  At any time after the Original Issue
Date until this Note is no longer  outstanding,  this Note shall be  convertible
into shares of Common Stock at the option of the Holder,  in whole or in part at
any time and from time to time (subject to the  limitations  on  conversion  set
forth in Section 7(d) hereof). The Holder shall effect conversions by delivering
to the Company the form of Notice of  Conversion  attached  hereto (a "Notice of
Conversion"),  specifying  therein the principal amount of Notes to be converted
and the date on which such  conversion is to be effected (a "Conversion  Date").
If no Conversion  Date is specified in a Notice of  Conversion,  the  Conversion
Date shall be the date that such Notice of Conversion is provided hereunder.  To
effect  conversions  hereunder,  the Holder shall not be required to  physically
surrender Notes to the Company unless the entire  principal  amount of this Note
plus all accrued and unpaid interest thereon has been so converted.  Conversions
hereunder shall have the effect of lowering the outstanding  principal amount of
this Note in an amount equal to the  applicable  conversion.  The Holder and the
Company shall maintain  records showing the principal  amount  converted and the
date of such conversions.  The Company shall deliver any objection to any Notice
of Conversion  within 3 Business Days of receipt of such notice. In the event of
any dispute or  discrepancy,  the records of the Holder shall be controlling and
determinative in the absence of manifest error. The Holder and any assignee,  by
acceptance of this Note, acknowledge and agree that, by reason of the provisions
of this  paragraph,  following  conversion of a portion of this Note, the unpaid
and unconverted principal amount of this Note may be less than the amount stated
on the  face  hereof.  However,  at the  Company's  request,  the  Holder  shall
surrender the Note to the Company  within five (5) Trading Days  following  such
request so that a new Note reflecting the correct principal amount may be issued
to Holder.

              b)     CONVERSION  PRICE.  Subject  to the  provisions  of Section
8(b), the initial  conversion  price in effect on any  Conversion  Date shall be
$0.90.

              c)     RESERVED.

              d)     CONVERSION LIMITATIONS; HOLDER'S RESTRICTION ON CONVERSION.
The Company shall not effect any  conversion of this Note,  and the Holder shall
not have the right to convert any portion of this Note, pursuant to Section 7(a)
or  otherwise,  to the extent that after giving effect to such  conversion,  the
Holder (together with the Holder's  affiliates),  as set forth on the applicable
Notice of Conversion, would beneficially own in excess of 4.99% of the number of
shares of the Common Stock  outstanding  immediately after giving effect to such
conversion.  For  purposes of the  foregoing  sentence,  the number of shares of
Common Stock  beneficially  owned by the Holder and its affiliates shall include
the number of shares of Common Stock issuable upon  conversion of this Note with
respect to which the  determination  of such  sentence is being made,  but shall
exclude the number of shares of Common  Stock  which would be issuable  upon (A)
conversion  of the  remaining,  nonconverted  portion of this Note  beneficially
owned by the Holder or any of its  affiliates  and (B) exercise or conversion of
the unexercised or nonconverted  portion of any other  securities of the Company
(including,  without  limitation,  any other Notes or the Warrants) subject to a
limitation on

<PAGE>

conversion or exercise analogous to the limitation contained herein beneficially
owned  by the  Holder  or any of its  affiliates.  Except  as set  forth  in the
preceding  sentence,  for purposes of this Section  7(d),  beneficial  ownership
shall be calculated in accordance with Section 13(d) of the Exchange Act. To the
extent that the limitation  contained in this section applies, the determination
of whether this Note is convertible  (in relation to other  securities  owned by
the Holder) and of which a portion of this Note is  convertible  shall be in the
sole discretion of such Holder. To ensure compliance with this restriction,  the
Holder will be deemed to represent to the Company each time it delivers a Notice
of Conversion  that such Notice of Conversion has not violated the  restrictions
set forth in this  paragraph  and the Company shall have no obligation to verify
or confirm the  accuracy of such  determination.  For  purposes of this  Section
7(d), in  determining  the number of  outstanding  shares of Common  Stock,  the
Holder may rely on the number of outstanding shares of Common Stock as reflected
in (x) the  Company's  most recent  Form 10-QSB or Form 10-KSB (or such  related
form), as the case may be, (y) a more recent public  announcement by the Company
or (z) any other notice by the Company or the Company's  Transfer  Agent setting
forth the number of shares of Common Stock outstanding. Upon the written or oral
request of the Holder,  the Company shall within two Trading Days confirm orally
and in  writing  to the  Holder  the  number  of shares  of  Common  Stock  then
outstanding. In any case, the number of outstanding shares of Common Stock shall
be determined after giving effect to the conversion or exercise of securities of
the Company, including this Note, by the Holder or its affiliates since the date
as of which such number of outstanding shares of Common Stock was reported.  The
provisions  of this  Section  7(d) may be  waived  by the  Holder  upon,  at the
election of the Holder, not less than 61 days' prior notice to the Company,  and
the  provisions of this Section 7(d) shall continue to apply until such 61st day
(or such later date, as  determined  by the Holder,  as may be specified in such
notice of waiver).

              e)     MECHANICS OF CONVERSION

                     i.     CONVERSION   SHARES   ISSUABLE  UPON  CONVERSION  OF
PRINCIPAL  AMOUNT.  The  number  of  shares  of  Common  Stock  issuable  upon a
conversion  hereunder  shall be determined by the quotient  obtained by dividing
(x) the  outstanding  principal  amount of this Note to be  converted by (y) the
Conversion Price.

                     ii.    DELIVERY OF CERTIFICATE UPON  CONVERSION.  Not later
than three Trading Days after any  Conversion  Date, the Company will deliver to
the Holder (A) a certificate or certificates  representing the Conversion Shares
which shall be free of restrictive legends and trading  restrictions (other than
those required by the Purchase  Agreement)  representing the number of shares of
Common Stock being  acquired  upon the  conversion  of Notes  (including,  if so
timely elected by the Company,  shares of Common Stock  representing the payment
of accrued  interest)  and (B) a bank check in the amount of accrued  and unpaid
interest  (if the  Company is required  to pay  accrued  interest in cash).  The
Company shall, if available and if allowed under applicable securities laws, use
its best  efforts to deliver  any  certificate  or  certificates  required to be
delivered  by  the  Company  under  this  Section   electronically  through  the
Depository  Trust  Corporation  or  another  established   clearing  corporation
performing similar functions.
<PAGE>

                     iii.   FAILURE TO DELIVER  CERTIFICATES.  If in the case of
any Notice of Conversion such  certificate or certificates  are not delivered to
or as  directed  by the  applicable  Holder  by the  fifth  Trading  Day after a
Conversion  Date,  the Holder shall be entitled by written notice to the Company
at any  time on or  before  its  receipt  of such  certificate  or  certificates
thereafter,  to  rescind  such  conversion,  in which  event the  Company  shall
immediately  return the certificates  representing the principal amount of Notes
tendered for conversion.

                     iv.    OBLIGATION ABSOLUTE;  PARTIAL LIQUIDATED DAMAGES. If
the Company  fails for any reason to deliver to the Holder such  certificate  or
certificates  pursuant to Section  7(d)(ii)  by the fifth  Trading Day after the
Conversion  Date,  the Company shall pay to such Holder,  in cash, as liquidated
damages  and not as a  penalty,  for  each  $1,000  of  principal  amount  being
converted,  $10 per  Trading  Day  (increasing  to $20 per  Trading  Day after 5
Trading Days after such damages begin to accrue) for each Trading Day after such
fifth  Trading  Day  until  such  certificates  are  delivered.   The  Company's
obligations to issue and deliver the Conversion  Shares upon  conversion of this
Note in  accordance  with the  terms  hereof  are  absolute  and  unconditional,
irrespective  of any action or inaction  by the Holder to enforce the same,  any
waiver or consent  with  respect to any  provision  hereof,  the recovery of any
judgment  against any Person or any action to enforce  the same,  or any setoff,
counterclaim,  recoupment,  limitation or termination,  or any breach or alleged
breach by the Holder or any other Person of any obligation to the Company or any
violation  or alleged  violation of law by the Holder or any other  person,  and
irrespective  of  any  other  circumstance  which  might  otherwise  limit  such
obligation of the Company to the Holder in connection  with the issuance of such
Conversion  Shares;  PROVIDED,  HOWEVER,  such  delivery  shall not operate as a
waiver by the  Company  of any such  action the  Company  may have  against  the
Holder.  In the event a Holder of this Note shall elect to convert any or all of
the outstanding  principal amount hereof,  the Company may not refuse conversion
based on any claim that the Holder or any one associated or affiliated  with the
Holder of has been engaged in any  violation of law,  agreement or for any other
reason,  unless,  an  injunction  from a court,  on notice,  restraining  and or
enjoining  conversion  of all or part of this Note  shall  have been  sought and
obtained  and the  Company  posts a surety bond for the benefit of the Holder in
the amount of 150% of the principal  amount of this Note  outstanding,  which is
subject  to the  injunction,  which  bond  shall  remain  in  effect  until  the
completion  of  arbitration/litigation  of the dispute and the proceeds of which
shall be  payable  to such  Holder to the  extent it  obtains  judgment.  In the
absence of an injunction precluding the same, the Company shall issue Conversion
Shares or, if applicable,  cash,  upon a properly  noticed  conversion.  Nothing
herein shall limit a Holder's right to pursue actual damages or declare an Event
of Default  pursuant  to Section 9 herein for the  Company's  failure to deliver
Conversion  Shares within the period specified herein and such Holder shall have
the right to pursue all remedies  available to it at law or in equity including,
without limitation,  a decree of specific  performance and/or injunctive relief.
The  exercise of any such rights  shall not prohibit the Holders from seeking to
enforce damages pursuant to any other Section hereof or under applicable law.

                     v.     COMPENSATION FOR BUY-IN ON FAILURE TO TIMELY DELIVER
CERTIFICATES  UPON CONVERSION.  In addition to any other rights available to the
Holder,  if the  Company  fails for any reason to  deliver  to the  Holder  such
certificate or  certificates  pursuant to Section  7(d)(ii) by the fifth Trading
Day after the Conversion Date, and if after such fifth Trading Day the Holder is

<PAGE>

required by its  brokerage  firm to purchase (in an open market  transaction  or
otherwise)  Common Stock to deliver in  satisfaction of a sale by such Holder of
the  Conversion  Shares  which  the  Holder  anticipated   receiving  upon  such
conversion  (a  "Buy-In"),  then the Company shall (A) pay in cash to the Holder
(in addition to any  remedies  available to or elected by the Holder) the amount
by which (x) the Holder's total purchase price (including brokerage commissions,
if any) for the Common  Stock so  purchased  exceeds  (y) the product of (1) the
aggregate  number  of  shares  of Common  Stock  that  such  Holder  anticipated
receiving from the  conversion at issue  multiplied by (2) the actual sale price
of the Common Stock at the time of the sale (including brokerage commissions, if
any)  giving  rise to such  purchase  obligation  and (B) at the  option  of the
Holder,  either reissue Notes in principal  amount equal to the principal amount
of the  attempted  conversion  or  deliver to the Holder the number of shares of
Common Stock that would have been issued had the Company  timely  complied  with
its delivery  requirements  under Section 7(e)(ii).  For example,  if the Holder
purchases  Common  Stock  having a total  purchase  price of  $11,000 to cover a
Buy-In with  respect to an attempted  conversion  of Notes with respect to which
the  actual  sale  price  of the  Conversion  Shares  at the  time  of the  sale
(including  brokerage  commissions,   if  any)  giving  rise  to  such  purchase
obligation was a total of $10,000 under clause (A) of the immediately  preceding
sentence,  the Company  shall be required to pay the Holder  $1,000.  The Holder
shall provide the Company  written notice  indicating the amounts payable to the
Holder in respect of the Buy-In.  Notwithstanding  anything  contained herein to
the contrary,  if a Holder  requires the Company to make payment in respect of a
Buy-In for the failure to timely deliver certificates  hereunder and the Company
timely pays in full such payment,  the Company shall not be required to pay such
Holder liquidated  damages under Section 7(d)(iv) in respect of the certificates
resulting in such Buy-In.

                     vi.    RESERVATION OF SHARES ISSUABLE UPON CONVERSION.  The
Company  covenants  that it will at all times reserve and keep  available out of
its  authorized  and  unissued  shares of Common Stock solely for the purpose of
issuance upon  conversion of the Notes and payment of interest on the Note, each
as herein provided,  free from preemptive  rights or any other actual contingent
purchase rights of persons other than the Holders,  not less than such number of
shares of the Common Stock as shall (subject to any additional  requirements  of
the  Company  as to  reservation  of  such  shares  set  forth  in the  Purchase
Agreement) be issuable  (taking into account the adjustments and restrictions of
Section 8) upon the conversion of the outstanding  principal amount of the Notes
and payment of interest  hereunder.  The  Company  covenants  that all shares of
Common Stock that shall be so issuable  shall,  upon issue,  be duly and validly
authorized,  issued  and fully  paid,  nonassessable  and,  if the  Registration
Statement is then effective under the Securities Act, registered for public sale
in accordance with such Registration Statement.

                     vii.   FRACTIONAL SHARES.  Upon a conversion  hereunder the
Company shall not be required to issue stock certificates representing fractions
of shares of the  Common  Stock,  but may if  otherwise  permitted,  make a cash
payment in respect of any final  fraction  of a share  based on the VWAP at such
time. If the Company elects not, or is unable, to make such a cash payment,  the
Holder shall be entitled to receive,  in lieu of the final  fraction of a share,
one whole share of Common Stock.

                     TRANSFER TAXES.  The issuance of certificates for shares of
the Common Stock

<PAGE>

on conversion of the Notes shall be made without  charge to the Holders  thereof
for any documentary stamp or similar taxes that may be payable in respect of the
issue or delivery of such  certificate,  provided  that the Company shall not be
required to pay any tax that may be payable in respect of any transfer  involved
in the issuance and delivery of any such  certificate  upon conversion in a name
other than that of the Holder of such Notes so converted  and the Company  shall
not be required to issue or deliver such certificates unless or until the person
or persons  requesting  the issuance  thereof shall have paid to the Company the
amount of such tax or shall have  established to the satisfaction of the Company
that such tax has been paid.

       8.     Certain Adjustments.

              a)     STOCK  DIVIDENDS AND STOCK SPLITS.  If the Company,  at any
time  while the  Notes  are  outstanding:  (A)  shall  pay a stock  dividend  or
otherwise make a distribution or  distributions on shares of its Common Stock or
any other  equity or equity  equivalent  securities  payable in shares of Common
Stock  (which,  for  avoidance of doubt,  shall not include any shares of Common
Stock  issued by the  Company  pursuant  to this  Note,  including  as  interest
thereon),  (B) subdivide outstanding shares of Common Stock into a larger number
of shares,  (C) combine  (including by way of reverse  stock split)  outstanding
shares  of  Common  Stock  into a  smaller  number  of  shares,  or (D) issue by
reclassification  of shares of the Common  Stock any shares of capital  stock of
the Company,  then the  Conversion  Price shall be  multiplied  by a fraction of
which the  numerator  shall be the number of shares of Common  Stock  (excluding
treasury  shares,  if any)  outstanding  before  such  event  and of  which  the
denominator shall be the number of shares of Common Stock outstanding after such
event.  Any  adjustment  made  pursuant to this Section  shall become  effective
immediately after the record date for the determination of stockholders entitled
to receive such dividend or distribution and shall become effective  immediately
after  the  effective  date  in  the  case  of  a  subdivision,  combination  or
re-classification.

              b)     SUBSEQUENT EQUITY SALES.  Notwithstanding the provisions of
Section 7(b), if the Company or any Subsidiary  thereof,  as applicable,  at any
time while this Note is  outstanding,  shall  offer,  sell,  grant any option to
purchase  or offer,  sell or grant  any  right to  reprice  its  securities,  or
otherwise dispose of or issue (or announce any offer,  sale, grant or any option
to purchase or other  disposition) any Common Stock or Common Stock  Equivalents
entitling any Person to acquire  shares of Common Stock,  at an effective  price
per share less than the then Conversion Price (such lower price, the "Base Share
Price" and such  issuances  collectively,  a "Dilutive  Issuance"),  as adjusted
hereunder  (if the holder of the Common  Stock or Common  Stock  Equivalents  so
issued shall at any time,  whether by operation of purchase  price  adjustments,
reset provisions, floating conversion, exercise or exchange prices or otherwise,
or due to  warrants,  options or rights per share which is issued in  connection
with such  issuance,  be  entitled  to  receive  shares  of  Common  Stock at an
effective price per share which is less than the Conversion Price, such issuance
shall be deemed to have occurred for less than the Conversion Price),  then, the
Conversion  Price  shall be reduced to equal the Base Share Price and the number
of Conversion  Shares  issuable  hereunder  shall be increased.  Such adjustment
shall be made whenever such Common Stock or Common Stock Equivalents are issued.
The Company  shall  notify the Holder in writing,  no later than the Trading Day
following the issuance of any Common Stock or Common Stock  Equivalents  subject
to this

<PAGE>

section,  indicating  therein the applicable  issuance  price,  or of applicable
reset price,  exchange  price,  conversion  price and other  pricing terms (such
notice the "Dilutive Issuance Notice").  For purposes of clarification,  whether
or not the Company provides a Dilutive  Issuance Notice pursuant to this Section
8(b),  upon the  occurrence  of any  Dilutive  Issuance,  after the date of such
Dilutive  Issuance  the Holder is  entitled  to  receive a number of  Conversion
Shares  based  upon the Base  Share  Price  regardless  of  whether  the  Holder
accurately refers to the Base Share Price in the Notice of Conversion.

              c)     PRO RATA  DISTRIBUTIONS.  If the Company, at any time while
Notes are outstanding,  shall distribute to all holders of Common Stock (and not
to Holders)  evidences  of its  indebtedness  or assets or rights or warrants to
subscribe  for or purchase any security,  then in each such case the  Conversion
Price  shall be  determined  by  multiplying  such  Conversion  Price in  effect
immediately  prior to the record date fixed for  determination  of  stockholders
entitled to receive  such  distribution  by a fraction of which the  denominator
shall be the VWAP determined as of the record date mentioned above, and of which
the  numerator  shall be such VWAP on such record date less the then fair market
value  at such  record  date  of the  portion  of such  assets  or  evidence  of
indebtedness so distributed  applicable to one  outstanding  share of the Common
Stock as determined by the Board of Directors in good faith.  In either case the
adjustments  shall be  described  in a statement  provided to the Holders of the
portion  of  assets  or  evidences  of   indebtedness  so  distributed  or  such
subscription  rights  applicable to one share of Common Stock.  Such  adjustment
shall be made whenever any such  distribution is made and shall become effective
immediately after the record date mentioned above.

              d)     CALCULATIONS.  All calculations  under this Section 8 shall
be made to the nearest cent or the nearest  1/100th of a share,  as the case may
be. The number of shares of Common Stock outstanding at any given time shall not
includes  shares  of Common  Stock  owned or held by or for the  account  of the
Company,  and the  description  of any such  shares  of  Common  Stock  shall be
considered on issue or sale of Common Stock. For purposes of this Section 8, the
number of shares of Common  Stock  deemed to be issued and  outstanding  as of a
given date shall be the sum of the number of shares of Common  Stock  (excluding
treasury shares, if any) issued and outstanding.

              e)     NOTICE TO HOLDERS.

                     i.     ADJUSTMENT   TO  CONVERSION   PRICE.   Whenever  the
Conversion  Price is  adjusted  pursuant  to any of this  Section 8, the Company
shall promptly mail to each Holder a notice  setting forth the Conversion  Price
after such adjustment and setting forth a brief statement of the facts requiring
such adjustment.

                     ii.    NOTICE TO ALLOW  CONVERSION  BY  HOLDER.  If (A) the
Company  shall  declare a  dividend  (or any other  distribution)  on the Common
Stock; (B) the Company shall declare a special  nonrecurring cash dividend on or
a redemption of the Common Stock;  (C) the Company shall  authorize the granting
to all  holders of the Common  Stock  rights or  warrants  to  subscribe  for or
purchase  any shares of  capital  stock of any class or of any  rights;  (D) the
approval of any stockholders of the Company shall be required in connection with
any  reclassification  of the Common Stock, any consolidation or merger to which
the Company is a party, any sale or transfer of

<PAGE>

all or substantially  all of the assets of the Company,  of any compulsory share
exchange  whereby the Common Stock is converted into other  securities,  cash or
property;   (E)  the  Company  shall  authorize  the  voluntary  or  involuntary
dissolution,  liquidation or winding up of the affairs of the Company;  then, in
each  case,  the  Company  shall  cause  to be filed at each  office  or  agency
maintained  for the purpose of  conversion  of the Notes,  and shall cause to be
mailed to the  Holders at their last  addresses  as they shall  appear  upon the
stock books of the Company,  at least 20 calendar  days prior to the  applicable
record or effective date hereinafter specified, a notice stating (x) the date on
which a record is to be taken for the  purpose of such  dividend,  distribution,
redemption,  rights or warrants,  or if a record is not to be taken, the date as
of which the  holders  of the  Common  Stock of record  to be  entitled  to such
dividend, distributions,  redemption, rights or warrants are to be determined or
(y) the  date on  which  such  reclassification,  consolidation,  merger,  sale,
transfer or share  exchange is expected to become  effective  or close,  and the
date as of which it is expected that holders of the Common Stock of record shall
be entitled to exchange their shares of the Common Stock for securities, cash or
other property deliverable upon such  reclassification,  consolidation,  merger,
sale, transfer or share exchange; PROVIDED, that the failure to mail such notice
or any defect therein or in the mailing thereof shall not affect the validity of
the  corporate  action  required to be  specified  in such  notice.  Holders are
entitled to convert Notes during the 20-day period  commencing  the date of such
notice to the effective date of the event triggering such notice.

                     iii.   FUNDAMENTAL TRANSACTION.  If, at any time while this
Note is outstanding,  (A) the Company effects any merger or consolidation of the
Company with or into another Person,  (B) the Company effects any sale of all or
substantially all of its assets in one or a series of related transactions,  (C)
any tender offer or exchange offer (whether by the Company or another Person) is
completed  pursuant to which  holders of Common Stock are permitted to tender or
exchange their shares for other securities, cash or property, or (D) the Company
effects  any  reclassification  of the  Common  Stock  or any  compulsory  share
exchange  pursuant to which the Common Stock is  effectively  converted  into or
exchanged  for  other  securities,  cash  or  property  (in  any  such  case,  a
"Fundamental  Transaction"),  then upon any subsequent  conversion of this Note,
the Holder shall have the right to receive, for each Conversion Share that would
have been issuable upon such conversion absent such Fundamental Transaction, the
same kind and  amount of  securities,  cash or  property  as it would  have been
entitled to receive upon the  occurrence of such  Fundamental  Transaction if it
had been, immediately prior to such Fundamental  Transaction,  the holder of one
share of Common Stock (the "Alternate Consideration").  For purposes of any such
conversion,  the  determination  of the Conversion  Price shall be appropriately
adjusted  to apply  to such  Alternate  Consideration  based  on the  amount  of
Alternate Consideration issuable in respect of one share of Common Stock in such
Fundamental  Transaction,  and the Company shall apportion the Conversion  Price
among the Alternate Consideration in a reasonable manner reflecting the relative
value of any different components of the Alternate Consideration.  If holders of
Common Stock are given any choice as to the  securities,  cash or property to be
received in a Fundamental  Transaction,  then the Holder shall be given the same
choice as to the Alternate Consideration it receives upon any conversion of this
Note  following  such  Fundamental  Transaction.  To  the  extent  necessary  to
effectuate the foregoing  provisions,  any successor to the Company or surviving
entity in such  Fundamental  Transaction  shall  issue to the  Holder a new note
consistent  with the foregoing  provisions  and evidencing the Holder's right to
convert  such  note into  Alternate  Consideration.  The

<PAGE>

terms of any agreement  pursuant to which a Fundamental  Transaction is effected
shall include terms  requiring any such successor or surviving  entity to comply
with the  provisions  of this  paragraph (c) and insuring that this Note (or any
such  replacement  security)  will be  similarly  adjusted  upon any  subsequent
transaction analogous to a Fundamental Transaction.

                     EXEMPT   ISSUANCE.   Notwithstanding   the  foregoing,   no
adjustment will be made under this Section 8 in respect of an Exempt Issuance.

       9.     The Holder of the Note,  by  acceptance  hereof,  agrees that this
Note is being acquired for investment and that such Holder will not offer,  sell
or  otherwise  dispose of this Note except  under  circumstances  which will not
result  in a  violation  of the  Securities  Act of  1933,  as  amended,  or any
applicable  state Blue Sky or foreign laws or similar laws  relating to the sale
of securities.

       10.    Any notice  given by any party to the other  with  respect to this
Note  shall be given in the manner  contemplated  by the Loan  Agreement  in the
section entitled "Notices."

       11.    This Note shall be governed by and  construed in  accordance  with
the laws of the State of New York. Each of the parties consents to the exclusive
jurisdiction  of the federal  courts whose  districts  encompass any part of the
County of New York or the state  courts of the State of New York  sitting in the
County of New York in connection  with any dispute  arising under this Agreement
and hereby  waives,  to the maximum  extent  permitted  by law,  any  objection,
including any  objection  based on FORUM NON  COVENIENS,  to the bringing of any
such proceeding in such  jurisdictions.  To the extent determined by such court,
the  Company  shall  reimburse  the  Holder  for any  reasonable  legal fees and
disbursements  incurred by the Holder in  enforcement of or protection of any of
its rights under any of this Note.

       12.    JURY TRIAL WAIVER. The Company and the Holder hereby waive a trial
by jury in any  action,  proceeding  or  counterclaim  brought  by either of the
Parties  hereto  against the other in respect of any matter arising out of or in
connection with this Note.

       13.    The following shall constitute an "Event of Default":

              a.     The Company  shall default in the payment of any amount due
                     on  this  Note,  time  being  of the  essence,  whether  by
                     maturity, pursuant to Section 2 or otherwise; or

              b.     Any  of  the  representations  or  warranties  made  by the
                     Company  herein,  in the Loan Agreement or any of the other
                     Transaction  Agreements shall be false or misleading in any
                     material respect at the time made; or

              c.     The Company shall (1) make an assignment for the benefit of
                     creditors or commence  proceedings for its dissolution;  or
                     (2) apply for or consent to the  appointment  of a trustee,
                     liquidator or receiver for its or for a substantial part of
                     its property or business; or
<PAGE>

              d.     A trustee,  liquidator  or receiver  shall be appointed for
                     the Company or for a  substantial  part of its  property or
                     business without its consent; or

              e.     Any   governmental   agency  or  any  court  of   competent
                     jurisdiction  at the  instance of any  governmental  agency
                     shall  assume  custody  or  control  of  the  whole  or any
                     substantial  portion  of the  properties  or  assets of the
                     Company; or

              f.     Any Pledgor shall default on any of its  obligations  under
                     the Pledge Agreements; or

              g.     The  Company  shall enter into,  create,  incur,  assume or
                     suffer  to exist any  indebtedness  for  borrowed  money or
                     liens  of  any  kind,  on or  with  respect  to  any of its
                     property or assets now owned or  hereafter  acquired or any
                     interest therein or any income or profits therefrom that is
                     senior to or pari passu with, in any respect, the Company's
                     obligations  under this Note, other than as provided in the
                     Disclosure Annex to the Loan Agreement; or

              h.     Bankruptcy,   reorganization,   insolvency  or  liquidation
                     proceedings  or other  proceedings  for  relief  under  any
                     bankruptcy  law or any law for the relief of debtors  shall
                     be  instituted  by or  against  the  Company  or any of the
                     Pledgors.

If an Event of Default shall have occurred, then, or at any time thereafter, and
in each and every such case, unless such Event of Default shall have been waived
in writing by the Holder (which waiver shall not be deemed to be a waiver of any
subsequent  default)  at the  option  of the  Holder  and in the  Holder's  sole
discretion,  the Holder may consider this Note  immediately due and payable (and
the  Maturity  Date  shall be  accelerated  accordingly),  without  presentment,
demand,  protest  or notice of any  kinds,  all of which  are  hereby  expressly
waived,  anything  herein or in any note or other  instruments  contained to the
contrary notwithstanding, and interest shall accrue on the total amount due (the
"Default  Amount") on the date of the Event of Default (the  "Default  Date") at
the rate of 110% per annum or the  maximum  rate  allowed by law,  whichever  is
lower,  from the Default Date until the date payment is made, and the Holder may
immediately  enforce any and all of the Holder's  rights and  remedies  provided
herein or any other rights or remedies afforded by law.

       14.    In the event for any reason,  any payment by or act of the Company
or the Holder shall  result in payment of interest  which would exceed the limit
authorized  by or be in violation of the law of the  jurisdiction  applicable to
this Note,  then IPSO FACTO the  obligation  of the  Company to pay  interest or
perform such act or requirement  shall be reduced to the limit  authorized under
such law,  so that in no event shall the  Company be  obligated  to pay any such
interest, perform any such act or be bound by any requirement which would result
in the payment of interest  in excess of the limit so  authorized.  In the event
any payment by or act of the Company shall result in the extraction of a rate of
interest in excess of a sum which is lawfully collectible as interest, then such
amount (to the extent of such excess not returned to the Company) shall, without
further  agreement or notice between or by

<PAGE>

the Company or the Holder,  be deemed  applied to the payment of  principal,  if
any, hereunder immediately upon receipt of such excess funds by the Holder, with
the same force and effect as though the Company had specifically designated such
sums to be so applied to principal and the Holder had agreed to accept such sums
as an interest-free  prepayment of this Note. If any part of such excess remains
after the  principal  has been paid in full,  whether by the  provisions  of the
preceding sentences of this Section or otherwise, such excess shall be deemed to
be an  interest-free  loan from the Company to the  Holder,  which loan shall be
payable  immediately upon demand by the Company.  The provisions of this Section
shall control every other provision of this Note.

                   [Balance of page intentionally left blank]
<PAGE>

       IN WITNESS  WHEREOF,  the Company has caused this  instrument  to be duly
executed by an officer  thereunto  duly  authorized  this 28th day of September,
2006.

                                        SONOMA COLLEGE, INC.

                                        By:
                                           -------------------------------------

                                        ----------------------------------------
                                        (Print Name)

                                        ----------------------------------------
                                        (Title)

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