EX-10.34
ANNEX VI
BRIDGE LOAN AGREEMENT
SECURITY INTEREST AND PLEDGE AGREEMENT
SECURITY INTEREST AND PLEDGE AGREEMENT ("Pledge Agreement") dated as of
September 28, 2006, by and among CAMOFI Master LDC ("Secured Party"), Sonoma
College, Inc., a
California corporation
having its principal executive offices
at 1304 South Point
Boulevard,
Suite 280, Petaluma, California 94954 (the
"Company" or the "Debtor"), Charles D. Newman and Elysa K. Newman
("Pledgors").
RECITALS
A.
Reference is made to (i) that certain Bridge Loan Agreement of
even date herewith (the "Loan Agreement") to which the Company and the
Secured
Party are parties, and (ii) the Transaction Agreements (as that term is
defined
in the Loan Agreement), including, without limitation, the Note. Capitalized
terms not otherwise
defined herein shall have the meanings ascribed to them in
the relevant Transaction Agreements.
B.
Pursuant to the
Transaction
Agreements,
the Debtor has
certain
obligations to the
Secured Party (all
such obligations,
the "Obligations"),
including, but not
limited to, obligations to pay principal and interest of the
Note, which was issued in the original aggregate principal amount of $275,000,
on the Maturity Date. The Note Obligations are secured by a
mortgage on certain
real estate
that is held in the names of the Pledgors and is more fully
described below.
The obligations of the Company and of
the Pledgors, if
any,
under the Note are referred to collectively as the "Note
Obligations".
C.
To
secure the Note Obligations, the Pledgors have agreed to pledge
certain real estate; specifically, Condominium Unit 7BC located at
525 East 80th
Street, New York, New York 10021 (the "Real Estate").
D.
The
Pledgors are
shareholders of the
Debtor and have
determined
that it is in the
Pledgors' best
interests,
including to the benefit of the
other interests of the
Pledgors in the Company, to provide the pledge referred
to herein.
E.
The
Secured Party is willing to enter into the Loan Agreement and
the other Transaction
Agreements only upon receiving the Pledgors' mortgage for
the Real Estate, as set forth in this Pledge Agreement.
NOW,
THEREFORE,
in consideration of
the premises, the
mutual covenants
and conditions contained herein, and for other good and valuable
consideration,
the receipt and sufficiency of which are hereby acknowledged, the
parties hereto
hereby agree as follows:
<PAGE>
1.
GRANT OF SECURITY INTEREST.
To secure the Note
Obligations of Debtor,
the Pledgors hereby
pledge to the Secured
Party all of their
interest in the Real Estate. Said
pledge shall be evidenced by a mortgage in the form attached hereto
as Exhibit A
(the "Mortgage").
2.
OBLIGATIONS SECURED.
During the term hereof, the Collateral shall
secure the following:
(a)
The
performance by the Company of the Note Obligations; and
(b)
The
performance by the Pledgors of their obligations, covenants,
and agreements under this Agreement.
The obligations,
covenants and agreements described in clauses (a) and (b)
are
the "Obligations."
3.
PERFECTION OF SECURITY
INTERESTS. Upon
execution of this
Pledge
Agreement by the Debtor and the Pledgors,
(a) the
Pledgors shall deliver
and transfer
possession of the
Mortgage, to the Secured Party.
(b) The
Mortgage shall be recorded in the New York County
Clerk's Office, to perfect the security interest of the Secured
Party, until the
earlier of
(i)
the
payment in full of all amounts due under the Note, or
(ii)
foreclosure
of Secured
Party's security interests as provided
herein.
(c) The
Debtor and the
Pledgors hereby
appoint the Secured
Party, as attorney-in-fact with powers of substitution, to execute
all documents
and perform all acts in order to perfect and maintain a valid
security interest
for Secured Party in the Real Estate.
4.
RESERVED.
5.
PLEDGORS' WARRANTY.
The Pledgors represent
and warrant hereby to
the Secured Party as follows with respect to the Real Estate:
A.
WITH RESPECT TO TITLE TO THE REAL ESTATE
(i) that
the Real Estate is free and clear of any encumbrances
of every nature whatsoever, aside from any existing mortgages which
have already
been disclosed to the Secured Party, and the Pledgors are the sole
owners of the
Real Estate;
<PAGE>
(ii) that
the Pledgors agree not to grant or create, any
security interest,
claim, lien, pledge or other encumbrance with respect to the
Real Estate or attempt to sell, transfer or otherwise dispose of
any of the Real
Estate until (a) the
Obligations have been
paid in full, or (b) this Agreement
has terminated, or
(iii) the Pledgors
receive express written permission from
the Secured Party.
B.
WITH RESPECT TO CERTAIN OTHER MATTERS:
(i) that
the Pledgors
have made necessary inquiries of the
Company and
believe that the Company fully intends to fulfill and has the
capability of
fulf
