Exhibit 10.24

 

EXCHANGE AGREEMENT

 

This Exchange Agreement (the “Agreement”) is entered into as of the 3rd day of
October, 2016, by and among Greenwood Hall, Inc., a Nevada corporation with
offices located at 12424 Wilshire Boulevard, Suite 1030, Los Angeles, CA 90205
(the “Company”), and the investor signatory hereto (the “Investor”), with
reference to the following facts:

 

A. On or about April 24, 2015, pursuant to that Note Purchase Agreement, dated
as of April 24, 2015, by and among the Company and the Investor (the “April 2015
Note Purchase Agreement”), the Company issued a Convertible Promissory Note and
Warrant to Purchase Common Stock to the Investor, certain of which are currently
held by the Investor in such aggregate amounts as set forth below the signature
of the Investor hereto (without regard to any limitations on exercise set forth
therein) (collectively, the “April 2015 Convertible Note and Warrant”, as
exercised, the “April 2015 Convertible Note and Warrant Shares”);

 

B. On or about August 21, 2015, pursuant to that Note Purchase Agreement, dated
as of August 21, 2015, by and among the Company and the Investor (the “August
2015 Note Purchase Agreement”), the Company issued a Convertible Promissory Note
and Warrant to Purchase Common Stock to the Investor, certain of which are
currently held by the Investor in such aggregate amounts as set forth below the
signature of the Investor hereto (without regard to any limitations on exercise
set forth therein) (collectively, the “August 2015 Convertible Note and Warrant”
and together with the April 2015 Convertible Note and Warrant, the “Investor
Notes and Warrants”, and as exercised, the “August 2015 Convertible Note and
Warrant Shares” and together with the April 2015 Convertible Note and Warrant
Shares, collectively the “Investor Notes and Warrants Shares”);

 

C. The Company has duly authorized the issuance to the Investor of new notes and
warrants in the form attached hereto as Exhibit A to initially purchase $685,000
in principal of new notes and warrants as set forth below the signature of the
Investor hereto in exchange for the Investor Notes and Warrants (the “Exchanged
Notes and Warrants”, as exercised, the “Exchanged Notes and Warrant Shares”, and
together with the Exchanged Notes and Warrant, the “Exchanged Securities”);

 

D. Each of the Company and the Investor desire to effectuate such exchanges on
the basis and subject to the terms and conditions set forth in this Agreement;

 

E. The exchange of the Investor Notes and Warrants for the Exchanged Notes and
Warrants is being made in reliance upon the exemption from registration provided
by Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities
Act”);

 

F. Capitalized terms used but not otherwise defined herein shall have the
meanings set forth in the Note Purchase Agreements.

 

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants hereinafter contained, the parties hereto agree as follows:

 

 

 

 

1.           Exchange of Securities. On the Effective Date (as defined below),
pursuant to Section 3(a)(9) of the Securities Act, the Investor hereby agrees to
fully extinguish, cancel and terminate any and all obligations under the
Investor Notes and Warrants in exchange for which the Company agrees to issue
the Exchanged Notes and Warrants to the Investor as follows (such transactions
in this Section 1, the “Exchange”).

 

(a)          In exchange for the cancellation of the Investor Notes and Warrant,
on the date hereof the Company shall deliver or cause to be delivered to the
Investor (or its designee) the Exchanged Notes and Warrants at the address for
delivery set forth on the signature page of the Investor. The Exchanged Notes
and Warrants shall be issued without any restrictive legend.

 

(b)          The Investor shall deliver or cause to be delivered to the Company
(or its designee) the Investor Notes and Warrants as soon as commercially
practicable following the date hereof. Immediately following the delivery of the
Exchanged Notes and Warrants to the Investor (or its designee) (such time, the
“Delivery Time”), the Investor Notes and Warrants shall be cancelled.

 

(c)          The Company and the Investor shall execute and/or deliver such
other documents and agreements as are customary and reasonably necessary to
effectuate the Exchange.

 

2.           Representations and Warranties of the Company. The Company
represents and warrants to the Investor, as of the date hereof, and as of the
time of consummation of the Exchange, that:

 

(a)          Organization and Qualification. The Company and each Subsidiary are
duly incorporated or otherwise organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization (as
applicable), with the requisite power and authority to own and use its
properties and assets and to carry on its business as currently conducted.
Neither the Company nor any Subsidiary is in violation of any of the provisions
of its respective certificate or articles of incorporation, bylaws or other
organizational or charter documents except, with respect to the Subsidiaries,
for violations which would not, individually or in the aggregate, have or
reasonably be expected to result in a Material Adverse Effect. The Company and
each Subsidiary are duly qualified to conduct its respective businesses and are
in good standing as a foreign corporation or other entity in each jurisdiction
in which the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, would not, individually or in the aggregate, have
or reasonably be expected to result in a Material Adverse Effect.

 

(b)          Authorization and Binding Obligation. The Company has the requisite
power and authority to enter into and perform its obligations under this
Agreement and each of the other agreements and certificates entered into by the
parties hereto in connection with the transactions contemplated by this
Agreement (collectively, the “Exchange Documents”) and to issue the Exchanged
Securities in accordance with the terms hereof and thereof. The execution and
delivery of the Exchange Documents by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby, including, without
limitation, the issuance of the Exchanged Securities, have been duly authorized
by the Board of Directors of the Company and, other than such filings required
under applicable securities or “Blue Sky” laws of the states of the United
States, no further filing, consent, or authorization is required by the Company
or of its Board of Directors or its shareholders. This Agreement and the other
Exchange Documents have been duly executed and delivered by the Company and
constitute the legal, valid and binding obligations of the Company enforceable
against the Company in accordance with their respective terms, except as such
enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws
relating to, or affecting generally, the enforcement of applicable creditors’
rights and remedies.

 

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(c)          No Conflict; Required Filings and Consents.

 

(i)          The execution, delivery and performance of the Exchange Documents
by the Company and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the issuance of
the Exchanged Warrants and reservation for issuance and issuance of the
Exchanged Warrant Shares) will not (A) result in a violation of the Certificate
of Incorporation, the terms of any share capital of the Company or any of its
Subsidiaries, the Bylaws or any of the organizational documents of the Company
or any of its Subsidiaries or (B) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Company or
any of its Subsidiaries is a party, or (C) result in a violation of any law,
rule, regulation, order, judgment or decree (including U.S. federal and state
securities laws, rules, and regulations, and the rules and regulations of the
OTC Markets (the “Principal Market”) applicable to the Company or any of its
Subsidiaries or by which any property or asset of the Company or any of its
Subsidiaries is bound or affected.

 

(ii)         Neither the Company nor any of its Subsidiaries is required to
obtain any consent, authorization or order of, or, make any filing or
registration with, any court, governmental agency or any regulatory or
self-regulatory agency or any other Person in order for it to execute, deliver
or perform any of its obligations under or contemplated by the Exchange
Documents, in each case in accordance with the terms hereof or thereof. All
consents, authorizations, orders, filings and registrations (which the Company
is required to obtain pursuant to the preceding sentence) have been obtained or
effected, or will have been obtained or effected, on or prior to the date
hereof, and the Company and its Subsidiaries are unaware of any facts or
circumstances that might prevent the Company from obtaining or effecting any of
the registration, application or filings pursuant to the preceding sentence. The
Company is not in violation of the listing requirements of the Principal Market
and has no knowledge of any facts that would reasonably lead to delisting or
suspension of the shares of Common Stock by the Principal Market in the
foreseeable future.

 

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(d)          No Integration. None of the Company, its Subsidiaries, any of their
affiliates, or any Person acting on their behalf has, directly or indirectly,
made any offers or sales of any security or solicited any offers to buy any
security, under circumstances that would require registration of any of
Exchanged Securities under the Securities Act or cause this offering of the
Exchanged Securities to be integrated with prior offerings by the Company for
purposes of the Securities Act or any applicable shareholder approval
provisions, including, without limitation, under the rules and regulations of
any exchange or automated quotation system on which any of the securities of the
Company are listed or designated. None of the Company, its Subsidiaries, their
affiliates or any Person acting on their behalf will take any action or steps
referred to in the preceding sentence that would require registration of any of
Exchanged Securities under the Securities Act or cause the offering of the
Exchanged Securities to be integrated with other offerings.

 

(e)          Securities Law Exemptions. Assuming the accuracy of the
representations and warranties of the Investor contained herein, the offer and
issuance by the Company of the Exchanged Securities is exempt from registration
under the Securities Act and all applicable state securities laws. The offer and
issuance of the Exchanged Securities is exempt from registration under the
Securities Act pursuant to the exemption provided by Section 3(a)(9) thereof.

 

(f)          Issuance of Exchanged Securities. The issuance of the Exchanged
Securities is duly authorized and upon issuance in accordance with the terms of
the Exchange Documents shall be validly issued, fully paid and non-assessable
and free from all taxes, liens, charges and other encumbrances with respect to
the issue thereof. Upon issuance in accordance with the Exchanged Warrant, the
Exchanged Warrant Shares will be validly issued, fully paid and nonassessable
and free from all preemptive or similar rights, taxes, liens, charges and other
encumbrances with respect to the issue thereof, with the holders being entitled
to all rights accorded to a holder of Common Stock.

 

(g)          No Consideration Paid. No commission or other remuneration has been
paid by Company for soliciting the exchange of the Investor Warrant for the
Exchanged Securities as contemplated hereby.

 

(h)          Disclosure. Other than as set forth in the Press Release (as
defined below), the Company confirms that neither it nor any other Person acting
on its behalf has provided the Investor or its agents or counsel with any
information that constitutes or could reasonably be expected to constitute
material, nonpublic information. The Company understands and confirms that the
Investor will rely on the foregoing representations in effecting transactions in
the Exchanged Securities. All disclosure provided to the Investor regarding the
Company and its Subsidiaries, their business and the transactions contemplated
hereby, including the schedules to this Agreement, furnished by or on behalf of
the Company is true and correct and does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading. No event or circumstance has occurred or information
exists with respect to the Company or any of its Subsidiaries or its or their
business, properties, prospects, operations or financial conditions, which,
under applicable law, rule or regulation, requires public disclosure or
announcement by the Company but which has not been so publicly announced or
disclosed.

 

3.          Representations and Warranties of Investors. The Investor represents
and warrants to the Company , as of the date hereof, as follows:

 

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(a)          Organization and Authority. The Investor has the requisite power
and authority to enter into and perform its obligations under this Agreement.
The execution and delivery of this Agreement by the Investor and the
consummation by Investor of the transactions contemplated hereby has been duly
authorized by Investor’s board of directors or other governing body. This
Agreement has been duly executed and delivered by Investor and constitutes the
legal, valid and binding obligation of Investor, enforceable against Investor in
accordance with its terms.

 

(b)          Ownership of Investor Notes and Warrants. The Investor owns the
Investor Notes and Warrants free and clear of any liens (other than the
obligations pursuant to this Agreement, the Transaction Documents and applicable
securities laws).

 

(c)          Reliance on Exemptions. The Investor understands that the Exchanged
Securities are being offered and exchanged in reliance on specific exemptions
from the registration requirements of United States federal and state securities
laws and that the Company is relying in part upon the truth and accuracy of, and
the Investor’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of the Investor set forth herein and in the
Exchange Documents in order to determine the availability of such exemptions and
the eligibility of the Investor to acquire the Exchanged Securities.

 

(d)          Validity; Enforcement. This Agreement and the Exchange Documents to
which the Investor is a party have been duly and validly authorized, executed
and delivered on behalf of the Investor and shall constitute the legal, valid
and binding obligations of the Investor enforceable against the Investor in
accordance with their respective terms, except as such enforceability may be
limited by general principles of equity or to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors’ rights and
remedies.

 

(e)          No Conflicts. The execution, delivery and performance by the
Investor of this Agreement and the Exchange Documents to which the Investor is a
party, and the consummation by the Investor of the transactions contemplated
hereby and thereby will not (i) result in a violation of the organizational
documents of the Investor or (ii) conflict with, or constitute a default (or an
event which with notice or lapse of time or both would become a default) under,
or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the Investor is
a party, or (iii) result in a violation of any law, rule, regulation, order,
judgment or decree (including federal and state securities laws) applicable to
the Investor, except in the case of clauses (ii) and (iii) above, for such
conflicts, defaults, rights or violations which would not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
ability of the Investor to perform its obligations hereunder.

 

(f)          No Consideration Paid. No commission or other remuneration has been
paid by the Investor for soliciting the exchange of the Investor Warrant for the
Exchanged Warrant as contemplated hereby.

 

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4.          Disclosure of Transaction. The Company shall, on or before 8:30
a.m., New York City Time, on the first business day after the date of this
Agreement, issue a press release and/or Current Report on Form 8-K
(collectively, the “Press Release”) disclosing all material terms of the
transactions contemplated hereby. From and after the issuance of the Press
Release, the Investor shall not be in possession of any material, nonpublic
information received from the Company or any of its respective officers,
directors, employees or agents, that is not disclosed in the Press Release. The
Company shall not, and shall cause its officers, directors, employees and
agents, not to, provide the Investor with any material, nonpublic information
regarding the Company from and after the filing of the Press Release without the
express written consent of the Investor. The Company shall not disclose the name
of the Investor in any filing, announcement, release or otherwise, unless such
disclosure is required by law or regulation.

 

5.          No Integration. None of the Company, its Subsidiaries, any of their
affiliates, or any Person acting on their behalf shall, directly or indirectly,
make any offers or sales of any security (as defined in the Securities Act) or
solicit any offers to buy any security or take any other actions, under
circumstances that would require registration of any of the Exchanged Securities
under the Securities Act or cause this offering of the Exchanged Securities to
be integrated with such offering or any prior offerings by the Company for
purposes of the Securities Act or any applicable shareholder approval
provisions, including, without limitation, under the rules and regulations of
the Principal Market and/or any exchange or automated quotation system on which
any of the securities of the Company are listed or designated.

 

6.          Holding Period. For the purposes of Rule 144, the Company
acknowledges that the holding period of (i) the Exchanged Notes and Warrant (and
upon exercise of the Exchanged Notes and Warrants, the Exchanged Notes and
Warrants Shares (if acquired using a Cashless Exercise (as defined in the
Exchanged Notes and Warrants))) may be tacked onto the holding period of the
Investor Notes and Warrants, and the Company agrees not to take a position
contrary to this Section 9. The Company agrees to take all actions, including,
without limitation, the issuance by its legal counsel of any necessary legal
opinions, necessary to issue the Exchanged Notes and Warrants Shares that are
freely tradable on the Principal Market without restriction and not containing
any restrictive legend without the need for any action by the Investor.

 

7.          Form D and Blue Sky. The Company shall make all filings and reports
relating to the Exchange required under applicable securities or “Blue Sky” laws
of the states of the United States following the date hereof, if any.

 

8.          No Commissions. Neither the Company nor the Investor has paid or
given, or will pay or give, to any person, any commission, fee or other
remuneration, directly or indirectly, in connection with the transactions
contemplated by this Agreement.

 

9.          Termination. Notwithstanding anything contained in this Agreement to
the contrary, if the Effective Date has not occurred and the Company does not
deliver the Exchanged Notes and Warrant to the Investor in accordance with
Section 1 hereof, then, at the election of the Investor delivered in writing to
the Company at any time after the fifth (5th) business day immediately following
the date of this Agreement, this Agreement shall be terminated and be null and
void ab initio and the Investor Notes and Warrants shall not be terminated
hereunder and shall remain outstanding as if this Agreement never existed.

 

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IN WITNESS WHEREOF, Investor and the Company have executed this Agreement as of
the date set forth on the first page of this Agreement.

 

  INVESTOR:       Lincoln Park Capital Fund, LLC                 By:       Name:
    Title:         Amount of principal and interest of the notes and number of
shares of Common Stock issuable upon exercise warrants of the Investor Notes and
Warrants to be exchanged*:       $685,000 in Principal and Interest and Warrants
      Amount of principal of the notes and number of shares issuable upon
exercise of the warrants of the Exchanged Notes and Warrants in the Exchange*:  
    $685,000 in Principal and a Warrant for 5,000,000 warrant shares      
Delivery Information:   Lincoln Park Capital Fund, LLC   c/o Josh
Scheinfeld/Robert Garcia   440 N. Wells St., #440   Chicago, IL 60654       *
Without regard to any limitations on exercise set forth therein       THE
COMPANY:       Greenwood Hall, Inc.         By:       Name:     Title: