Item 1.01 Entry Into A Material Definitive
Agreement.
Loan Agreement with Moriah
On October 14, 2016, Greenwood Hall, Inc.,
a Nevada corporation (the ”Company”), entered into a Loan and Security Agreement (the “Loan Agreement”)
with PCS Link, Inc., a California corporation and the Company’s wholly-owned subsidiary (“PCS”, and together
with the Company, the “Borrower”), and Moriah Education Management, LLC, a Delaware limited liability company (“Moriah”),
pursuant to which Moriah granted a loan (the “Loan”) to the Borrower in exchange for a promissory note in the principal
amount of $3,500,000. The loan Agreement is attached hereto as Exhibit 10.1 and incorporated herein by reference.
On October 14, 2016, (i) the Company entered
into a Stock Pledge Agreement with Moriah, pursuant to which the Company pledged 1,007,920 shares of common stock of PCS held
by the Company, representing 100% of the issued and outstanding shares of common stock of PCS, and (ii) John R. Hall, the Chief
Executive Officer of the Company and the Chief Executive Officer of PCS, executed a personal guaranty (“Personal Guaranty”),
to secure the Borrower’s obligations under the Loan Agreement.
In connection with the Loan Agreement, on
October 14, 2016, the Company and Moriah entered into a Securities Issuance Agreement pursuant to which the Company issued a five-year
warrant to purchase 8,125,000 shares of the Company’s common stock at a price of $0.14 per share and a seven-year warrant
to purchase 3,500,000 shares of the Company’s common stock at a price of $0.12 per share. The warrants were issued in reliance
on Section 4(a)(2) of the Securities Act of 1933.
Restructuring
of Indebtedness to Redwood Fund
In connection with
the Loan, the Company entered into a Note Purchase and Restructuring Agreement (“Redwood Restructuring Agreement”),
dated September 30, 2016, with Redwood Fund LP (“Redwood”), pursuant to which Redwood Fund agreed to (i) forgive all
amounts owed to Redwood under that certain convertible promissory note issued on November 6, 2015 with a principal amount of $125,000
and all amounts owed to Redwood under that certain convertible promissory note issued on December 14, 2015 with a principal amount
of $30,000, (ii) consolidate all other indebtedness owed by the Company to Redwood in exchange for $300,000 (the “Additional
Funding”), and (iii) issue to Redwood a promissory note (“September 2016 Promissory Note”) in the principal
amount of $1,418,496.92, representing such consolidated indebtedness and Additional Funding at an original issue discount of 15%.
The September 2016 Promissory Note shall be due and payable on the first anniversary thereof.
In further connection
with the Loan, the Company, Moriah and Redwood entered into a Subordination Agreement, dated October 14, 2016, pursuant to which
Redwood agreed to subordinate all indebtedness owed thereto so long as any obligations of the Company owed to Moriah under the
Loan Agreement remain outstanding; provided, however, that the Company may continue to make regular payments of interest under
the September 2016 Promissory Note.
Restructuring
of Indebtedness to Lincoln Park Capital
In connection with
the Loan, the Company entered into an Exchange Agreement (“Lincoln Park Exchange Agreement”), dated October 14, 2016,
with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which the Company authorized the issuance to Lincoln
Park new notes and warrants with a principal amount of $685,000 in exchange for the cancellation of any and all obligation under
notes and warrants issued by the Company to Lincoln Park pursuant to note purchase agreements dated April 24, 2015 and August
21, 2015.
In further connection
with the Loan, the Company, Moriah and Lincoln Park entered into a Subordination Agreement, dated October 14, 2016, pursuant to
which Lincoln Park agreed to subordinate all indebtedness owed thereto so long as any obligations of the Company owed to Moriah
under the Loan Agreement remain outstanding; provided, however, that the Company may continue to make regular payments of interest
under the September 2016 Promissory Note.
Restructuring
of Indebtedness to Colgan Financial Group, Inc.
On October 14, 2016
(the “Effective Date”), in connection with the Loan, the Company amended and restated that certain secured promissory
note, dated December 23, 2013 (as amended, amended and restated, supplemented or otherwise, modified, the “2013 Colgan Note”)
(the “2013 Colgan Amended Note”), in a principal amount equal to $840,892.80, representing the outstanding balance
of the 2013 Colgan Note, less $150,000 paid by the Company to Colgan Financial Group, Inc. (“CFG”) and Robert Logan
(together with CFG, the “Investor”). Also, on the Effective Date, in connection with the Loan, the Company amended
and restated that certain secured convertible promissory note, dated December 5, 2014 (as amended, amended and restated, supplemented
or otherwise modified, the “2014 Colgan Note”) (the “2014 Colgan Amended Note”), to extend the exercise
period of any stock purchase warrants issued to the Investor in connection with the 2014 Colgan Note to five years following the
issuance of the 2014 Colgan Amended Note in a principal amount equal to $400,000.
In further connection
with the Loan, the Company, Moriah and CFG entered into a Subordination Agreement, dated October 14, 2016, pursuant to which CFG
agreed to subordinate all indebtedness owed thereto so long as any obligations of the Company owed to Moriah under the Loan Agreement
remain outstanding; provided, however, that the Company may continue to make regular payments of interest under the September
2016 Promissory Note.
Item 3.02 Unregistered
Sale of Securities.
The information required under this Item is
described in Item 1.01, above, and Item 5.02, below, which items 1.01 and 5.02 are incorporated herein by reference.
Item 5.02 Compensatory Arrangements of
Certain Officers.
On October 14, 2016, in consideration for
the Personal Guaranty, as described in Item 1.01, above, the Company issued to John Hall, its Chief Executive Officer, a five-year
warrants to purchase up to 5,000,000 shares of common stock of the Company at a price of $0.10 per share. The warrants were issued
in reliance on Section 4(a)(2) of the Securities Act of 1933.