Document:

Exhibit 10.22

 

NOTE PURCHASE AND RESTRUCTURING AGREEMENT

 

This NOTE PURCHASE
AND RESTRUCTURING AGREEMENT (this “Agreement”) is made and entered into as of September 30, 2016 (the “Effective
Date”), by and among Greenwood Hall, Inc., a Nevada corporation (the “Company”), and Redwood Fund,
LP, a Delaware limited partnership (“Investor”). Each of the Company and Investor shall hereinafter be referred
to as a “Party” and collectively referred to as the “Parties”.

 

RECITALS

 

A.           On
March 31, 2015, the Company issued to Investor that certain convertible promissory note (as amended, amended and restated, supplemented
or otherwise modified, the “March 2015 Redwood Note”) with a principal amount of $295,000, which March 2015
Redwood Note has an outstanding balance of $0 as of the Effective Date;

 

B.           On
August 14, 2015, the Company issued to Investor that certain convertible promissory note (as amended, amended and restated, supplemented
or otherwise modified, the “August 2015 Redwood Note”) with a principal amount of $588,236.30, which August
2015 Redwood Note has an outstanding balance of $654,956.80 as of the Effective Date;

 

C.           On
November 6, 2015, the Company issued to Investor that certain convertible promissory note (as amended, amended and restated, supplemented
or otherwise modified, the “November 2015 Redwood Note”) with a principal amount of $125,000, which November
2015 Redwood Note has an outstanding balance of $138,345.89 as of the Effective Date;

 

D.           On
December 14, 2015, the Company issued to Investor that certain convertible promissory note (as amended, amended and restated, supplemented
or otherwise modified, the “December 2015 Redwood Note”) with a principal amount of $30,000, which December
2015 Redwood Note was amended on January 18, 2016 to increase the principal amount thereon to $45,100 and has an outstanding balance
of $48,910.64 as of the Effective Date;

 

E.           On
February 4, 2016, the Company issued to Investor that certain convertible promissory note (as amended, amended and restated, supplemented
or otherwise modified, the “February 2016 Redwood Note”) with a principal amount of $235,294.18, which February
2016 Redwood Note has an outstanding balance of $250,765.58 as of the Effective Date;

 

F.           The
August 2015 Redwood Note, the November 2015 Redwood Note, the December 2015 Redwood Note and the February 2016 Redwood Note (collectively
referred to as the “Redwood Notes”), have a combined principal amount of $993,630.48 and, as of the Effective
Date, a combined outstanding balance of $1,092,978.91 (the “Redwood Note Balance”);

 

G.           Reference
is made herein to that certain convertible promissory note (as amended, amended and restated, supplemented or otherwise modified,
the “FirstFire Note”) issued by the Company on December 21, 2015 to FirstFire Global Opportunities Fund, LLC
with a principal amount of $250,000, which FirstFire Note has an outstanding balance of $375,000 as of the Effective Date;

 

H.           The
Company contemplates entering into a Loan and Security Agreement with Moriah Education Management, LLC (“Black Dolphin”)
on or about the Effective Date, pursuant to which the Company shall issue to Black Dolphin a revolving promissory note (the “Black
Dolphin Note”) in the principal amount of up to $3,500,000, secured by substantially all of the assets of the Company;
and

 

     

     

    

 

I.           The
Company and Investor desire to consolidate the Redwood Note Balance into one (1) promissory note, and Investor desires to advance
and the Company desires to receive additional funds thereon, in accordance with the terms and conditions set forth in this Agreement,
as of the Effective Date.

 

AGREEMENT

 

NOW, THEREFORE,
in consideration of the foregoing promises and other good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Parties hereto, intending to be bound legally, agree as follows:

 

1.           Waiver
of Default. Investor hereby waives all existing defaults, including financial covenant defaults, cross defaults to other
indebtedness and defaults relating to the non-payment of any amounts due under the Note as of the Effective Date.

 

2.           Sale
and Purchase of September 2016 Note.

 

A.           Sale
and Issuance of the September 2016 Note. Subject to the terms and conditions of this Agreement, Investor agrees to purchase
at the Closing, as defined below, and the Company agrees to sell and issue to Investor the promissory note, in substantially the
form attached to this Agreement as Exhibit A (the “September 2016 Note”).  In consideration
for the payment of $300,000 (the “Purchase Price”), Investor shall receive a September 2016 Note in the principal
amount of $1,418,496.92, representing the sum of (i) the Redwood Note Balance, plus (ii) $352,941.18 in additional principal.  The
September 2016 Note shall be issued with an original issue discount equal to fifteen percent (15%).   

 

B.           Closing;
Delivery. The purchase, sale and issuance of the September 2016 Note shall take place on the date first set forth above (the
“Closing”), or at such other time as the Company and Investor mutually agree upon, orally or in writing.  At
the Closing, the Company shall deliver to Investor the September 2016 Note to be purchased by Investor against payment of the Purchase
Price by check or by wire transfer to the Company’s bank account or an escrow account designated by the Company.

 

C.           Use
of Proceeds. Proceeds from the September 2016 Note shall be used exclusively to satisfy and fully extinguish all obligations
under the FirstFire Note.

 

3.           Termination
of Consolidated Notes. Immediately upon the Closing, and without any further action by Investor or the Company, the November
2015 Redwood Note and the December 2015 Redwood Note, with a combined outstanding balance equal to $187,256.53 as of the Effective
Date, shall be automatically terminated and of no further force or effect, and there shall be no further obligations of the Company
or Investor thereunder as of such date.

 

4.           Subsequent
Restructuring. So long as the Company continues to make timely payments of interest pursuant to the terms of the September
2016 Note, and is not otherwise in default thereunder, on the one (1) year anniversary following the issuance thereof, the Company
and Investor shall fully extinguish and terminate all obligations under the September 2016 Note (the “Extinguishment”)
and the Company shall issue a new promissory note to Investor in the principal amount outstanding under the September 2016 Note
as of the date of Extinguishment, at an original issue discount equal to ten percent (10%).

 

5.           Representations
and Warranties of the Company. The Company hereby represents and warrants to Investor as of the Effective Date that:

 

     

     

    

 

A.           Organization,
Good Standing and Qualification.  The Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Nevada and has all requisite corporate power and authority to carry on its business as now conducted
and as proposed to be conducted. 

 

B.           Authorization.  All
corporate action required to be taken by the Company’s Board of Directors, stockholders and creditors in order to authorize
the Company to enter into the this Agreement, and issue the September 2016 Note and the authorization, sale, issuance and delivery
of the September 2016 Note , and the performance of all obligations of the Company thereunder has been taken or will be taken prior
to the Closing.  All action on the part of the officers of the Company necessary for the execution and delivery of the
September 2016 Note, and the issuance and delivery of the September 2016 Note has been taken or will be taken prior to the Closing.  The
September 2016 Note, when executed and delivered by the Company, shall constitute valid and legally binding obligations of the
Company, enforceable against the Company in accordance with its terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, or other laws of general application relating to or affecting the enforcement
of creditors’ rights generally and (ii) as limited by laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies.

 

C.           Valid
Issuance of Security.  The September 2016 Note, when issued, sold and delivered in accordance with the terms
and for the consideration set forth in this Agreement, will be validly issued, fully paid and nonassessable, subject to any restrictions
on transfer contained therein and under applicable state and federal securities laws.  Assuming the accuracy of the representations
of Investor in Section 6 of this Agreement and subject to the filings described in Section 2.4,
the September 2016 Note will be issued in compliance with all applicable federal and state securities laws.  

 

D.           Governmental
Consents and Filings.  Assuming the accuracy of the representations made by Investor in Section 6,
no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any federal,
state or local governmental authority is required on the part of the Company in connection with the consummation of the transactions
contemplated by the September 2016 Note, except for filings pursuant to Regulation D of the Securities Act, and applicable
state securities laws, which have been made or will be made in a timely manner.

 

E.           Capitalization.  The
authorized capital of the Company consists, or will consist, immediately prior to the Closing, of:

 

(i) 56,839,723 shares
of Common Stock, issued and outstanding immediately prior to the Closing.  All of the outstanding shares of Common Stock
have been duly authorized, fully paid and are nonassessable and issued in compliance with all applicable federal and state securities
laws.

 

(ii) Except for warrants and options
to purchase 1,176,473 shares of Common Stock, there are no outstanding options, warrants, rights (including conversion or preemptive
rights and rights of first refusal or similar rights) or agreements, orally or in writing, for the purchase or acquisition from
the Company of any shares of its capital stock.

 

F.           No
Litigation.  There is no action, suit, proceeding, judgment, claim or investigation pending or, to the knowledge
of the Company, threatened against the Company which could reasonably be expected in any manner to challenge or seek to prevent,
enjoin, alter or materially delay any of the transactions contemplated by the 2016 Promissory Note

 

     

     

    

 

G.           SEC
Filings.

 

(i) Since January 1,
2014, the Company has filed all reports, registrations, documents, filings, statements and submissions, together with any amendments
thereto, that the Company was required to file with the SEC (the “SEC Filings”).  As of the time it
was filed (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing): (a) each
of the SEC Filings complied as to form in all material respects with the applicable requirements of the Act or the Securities Exchange
Act of 1934, as amended (as the case may be), and (b) none of the SEC Filings contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading.

 

(ii) The consolidated
financial statements contained in the SEC Filings: (a) complied as to form in all material respects with the published rules
and regulations of the SEC applicable thereto; (b) were prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods covered, except as may be indicated in the notes to such financial statements
and (in the case of unaudited financial statements) as permitted by Form 10-Q of the SEC, and except that unadjusted financial
statements may not contain footnotes and are subject to year-end audit adjustments; and (c) fairly present the consolidated
financial position of the Company and its subsidiaries as of the respective dates thereof and the consolidated results of operations
of the Company and its subsidiaries for the periods covered thereby.

 

6.           Representations
and Warranties of Investor. Investor hereby represents and warrants to the Company as of the Effective Date that:

 

A.           Purchase
Entirely for Own Account.  The September 2016 Note to be acquired by Investor will be acquired for investment for
Investor’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof,
and Investor has no present intention of selling, granting any participation in, or otherwise distributing the same.  Investor
has not been formed for the specific purpose of acquiring the September 2016 Note.

 

B.           Knowledge.  Investor
is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company
to reach an informed and knowledgeable decision to acquire the September 2016 Note.

 

C.           Investment
Experience.  Investor has substantial experience in evaluating and investing in private placement transactions of
securities in companies similar to the Company and acknowledges that Investor can protect its own interests.  Investor
has such knowledge and experience in financial and business matters so that Investor is capable of evaluating the merits and risks
of its investment in the Company.

 

D.           Speculative
Nature of Investment.  Investor understands and acknowledges that an investment in the Company is highly speculative
and involves substantial risks.  Investor can bear the economic risk of the investment and is able, without impairing
Investor’s financial condition, to hold the September 2016 Note for an indefinite period of time and to suffer a complete
loss of the investment.

 

E.           Restricted
Securities.  Investor understands that the September 2016 Note has not been registered under the Securities Act of
1933, as amended (the “Act”), by reason of a specific exemption from the registration provisions of the Act
which depends upon, among other things, the bona fide nature of the investment intent and the accuracy of Investor’s representations
as expressed herein.  Investor understands that the September 2016 Note is a “restricted security” under
applicable U.S. federal and state securities laws. Investor further acknowledges that if an exemption from registration or qualification
is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding
period for the September 2016 Note, and on requirements relating to the Company which are outside of Investor’s control,
and which the Company is under no obligation and may not be able to satisfy.

 

     

     

    

 

F.           Legends.  Investor
understands that the September 2016 Note, and any securities issued in respect thereof or exchange therefor, may bear one or all
of the following legends:

 

(i) “THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF.  NO SUCH SALE OR DISTRIBUTION
MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO
THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.”

 

(ii) Any legend
required by the Blue Sky laws of any state to the extent such laws are applicable to the shares represented by the certificate
so legended.

 

G.           Accredited
Investor.  Investor is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Act.

 

7.           Conditions
to Investor’s Obligations at Closing. The obligations of Investor to the Company under this Agreement are subject
to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived:

 

A.           Representations
and Warranties.  The representations and warranties of the Company contained in Section 5 shall
be true on and as of the Closing with the same effect as though such representations and warranties had been made on and as of
the date of the Closing.

 

B.           Repayment
of Redwood Notes. The Company shall pay to Investor $187,256.53 to satisfy and fully extinguish existing obligations under
the November 2015 Redwood Note and the December 2015 Redwood Note at or before the Closing.

 

C.           Approval
of Black Dolphin Note. Investor shall be given a reasonable opportunity to review and approve the Black Dolphin Note, in substantial
form, prior to the Closing.

 

D.           Qualifications.  All
authorizations, approvals or permits, if any, of any governmental authority or regulatory body of the United States or of any state
that are required in connection with the lawful issuance and sale of the September 2016 Note pursuant to this Agreement shall be
obtained and effective as of the Closing.

 

E.           Waivers.  Any
and all waivers and consents necessary to issue the September 2016 Note and to waive any applicable anti-dilution provisions have
been obtained prior to the Closing.

 

8.           Conditions
to the Company’s Obligations at Closing. The obligations of the Company to Investor under this Agreement are subject
to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived:

 

A.           Representations
and Warranties.  The representations and warranties of Investor contained in Section 6 shall
be true on and as of the Closing with the same effect as though such representations and warranties had been made on and as of
the Closing.

 

B.           Qualifications.  All
authorizations, approvals or permits, if any, of any governmental authority or regulatory body of the United States or of any state
that are required in connection with the lawful issuance and sale of the September 2016 Note pursuant to this Agreement shall be
obtained and effective as of the Closing.

 

     

     

    

 

9.            Successors
and Assigns.  The terms and conditions of this Agreement shall inure to the benefit of and be binding
upon the respective successors and assigns of the parties.  Nothing in this Agreement, express or implied, is intended
to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations,
or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

 

10.          Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Agreement, including
the schedules and exhibits attached hereto, shall be governed by and construed and enforced in accordance with the internal laws
of the State of Nevada, without regard to the principles of conflicts of law thereof.

 

11.          Execution;
Counterparts. This Agreement may be executed in two or more counterparts, all of which when taken together shall
be considered one and the same agreement and shall become effective when counterparts have been signed by each Party and delivered
to each other Party, it being understood that the parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create
a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect
as if such facsimile or “.pdf” signature page were an original thereof.

 

12.          Notices.
All notices, requests, demands, consents, instructions or other communications required or permitted hereunder shall in writing
and faxed, mailed or delivered to each party as follows:

 

if to Investor, at:

 

5023 N. Parkway Calabasas

Calabasas, CA 91302

 

if to the Company, at:

 

12424 Wilshire Blvd.,
Suite 1030

Los Angeles, CA 90025

Attn: Chief Executive
Officer

 

or at such other address
or facsimile number as the Company shall have furnished to Investor in writing.  All such notices and communications
shall be effective (a) when sent by Federal Express or other overnight service of recognized standing, on the business day following
the deposit with such service; (b) when mailed, by registered or certified mail, first class postage prepaid and addressed as aforesaid
through the United States Postal Service, upon receipt; (c) when delivered by hand, upon delivery; and (d) when faxed, upon confirmation
of receipt.

 

13.         Fees
and Expenses.  At the Closing, the Company shall pay to Ladyface Capital, LLC the reasonable legal and administrative
fees and expenses incurred by Investor in an amount not to exceed, in the aggregate, $25,000.

 

     

     

    

 

14.         Finder’s
Fee.  Each party represents that it neither is nor will be obligated for any finder’s fee or commission
in connection with this transaction.  Investor agrees to indemnify and to hold harmless the Company from any liability
for any commission or compensation in the nature of a finder’s fee (and the costs and expenses of defending against such
liability or asserted liability) for which Investor or any of its officers, employees, or representatives is responsible.  The
Company agrees to indemnify and hold harmless Investor from any liability for any commission or compensation in the nature of a
finder’s fee (and the costs and expenses of defending against such liability or asserted liability) for which the Company
or any of its officers, employees or representatives is responsible.

 

15.         Amendments
and Waivers.  Any term of this Agreement may be amended or waived only with the written consent of the Company
and Investor.  Any amendment or waiver effected in accordance with this Section 15 shall be binding
upon Investor and each transferee of the September 2016 Note, each future holder the September 2016 Note and the Company.

 

16.         Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the Parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the Parties that
they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

 

17.         Entire
Agreement.  This Agreement, and the documents referred to herein constitute the entire agreement between the
parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements existing between the parties
hereto are expressly canceled.

 

[Remainder of Page Intentionally Left
Blank]

 

     

     

    

 

IN WITNESS WHEREOF,
the Parties hereto have caused this Note Purchase and Restructuring Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.

 

	 	GREENWOOD HALL, INC.
	 	 	 
	 	By:	 
	 	 	
        Name: John Hall

        Title: Chief Executive Officer

 

	 	REDWOOD FUND, LP
	 	 	 
	 	By:	Lady Face Capital, LLC,
	 	 	
        Its general partner

         

	 	By:	 
	 	 	
        Name: Ronald Levy

        Title: Chief Operating Officer

 

     

     

    

 

Exhibit A

 

September 2016 NoteExhibit 10.23

 

THIS NOTE HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES REPRESENTED HEREBY MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (i) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT
REQUIRED UNDER SAID ACT OR (ii) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.

 

GREENWOOD HALL, INC. 

 

PROMISSORY NOTE

 

	Issuance Date: September 30 2016	Principal: U.S. $1,418,496.92

 

FOR VALUE RECEIVED,
Greenwood Hall, Inc., a Nevada corporation (the “Company”), hereby promises to pay
to Redwood Fund, LP, or its registered assigns (the “Holder”), the amount set out
above opposite the caption "Principal" (as such amount may be increased or reduced from time to time pursuant to the
terms hereof, through prepayment or otherwise, the “Principal”) when due, whether upon
the Maturity Date (as defined below), acceleration, prepayment or otherwise (in each case, in accordance with the terms hereof)
and to pay Interest (as defined below) on the outstanding Principal at the rates, in the manner and at the times set forth herein.
This Promissory Note (the “Note”) is issued pursuant to the Note Purchase and Restructuring
Agreement dated concurrently herewith. Certain capitalized terms used herein are defined in Section 16.

 

1.           PAYMENTS
OF PRINCIPAL.

 

(a)          Voluntary.
Subject to the Holder's written consent, the Company may prepay this Note at any time, in whole or in part, without penalty or
premium. All prepayments of Principal made pursuant to this Section 1(a) shall be accompanied by accrued and unpaid Interest
thereon through such prepayment date.

 

(b)          Mandatory.
On the Maturity Date, the Holder shall surrender this Note to the Company and the Company shall pay to the Holder in cash an amount
equal to the outstanding Principal and accrued and unpaid Interest thereon.

 

2.          INTEREST.
Simple interest shall accrue on the outstanding Principal at the Interest Rate from and including the date set forth above
opposite the caption “Issuance Date” (the “Issuance Date”) until the Principal
is paid in full, shall be computed on the basis of a 365-day year and actual days elapsed.

 

(a)          Payment
of Interest in Cash. Unless the Holder of the Note requires otherwise but except for the period when Interest is
calculated at the default rate, Interest, which is required to be made in cash utilizing automatic ACH means of payment,
shall be payable on or before the fifth (5th) calendar day of each month to the record holder of this Note, subject to Section
2(b).

 

     

     

    

 

(b)          Application
of Payments. Payments made in connection with this Note shall be applied first to amounts due hereunder other than
Principal and Interest, thereafter to Interest and finally to Principal.

 

3.           EVENTS
OF DEFAULT; RIGHTS UPON EVENT OF DEFAULT.

 

(a)          Events
of Default. Each of the following events (so long as it is continuing) shall constitute an “Event of Default”:

 

(i)          any
Change of Control;

 

(ii)         the
Company's failure to pay to the Holder any amount of Principal, Interest or other amounts when and as due under this Note, provided,
that in the case of a failure to pay Interest when and as due, such failure shall constitute an Event of Default only if such failure
continues for a period of at least seven (7) Business Days;

 

(iii)        any
event of default under, redemption of or acceleration prior to maturity of any Indebtedness of the Company or any of its Subsidiaries
(other than this Note) in an aggregate principal amount in excess of $100,000;

 

(iv)       the
Company or any of its Subsidiaries pursuant to or within the meaning of any Bankruptcy Law, (A) commences a voluntary case, (B)
consents to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a Custodian,
(D) makes a general assignment for the benefit of its creditors or (E) admits in writing that it is generally unable to
pay its debts as they become due;

 

(v)        a
court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (A) is for relief against the Company or
any of its Subsidiaries in an involuntary case, (B) appoints a Custodian of the Company or any of its Subsidiaries or (C)
orders the liquidation of the Company or any of its Subsidiaries;

 

(vi)        a
final judgment or judgments for the payment of money aggregating in excess of $100,000 are rendered against the Company or any
of its Subsidiaries and which judgments are not, within sixty (60) days after the entry thereof, bonded, discharged or stayed pending
appeal, or are not discharged within sixty (60) days after the expiration of such stay; provided, however, that any judgment which
is covered by insurance or an indemnity from a creditworthy party shall not be included in calculating the $100,000 amount set
forth above so long as the Company provides the Holder with a written statement from such insurer or indemnity provider (which
written statement shall be reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an
indemnity and the Company will receive the proceeds of such insurance or indemnity within thirty (30) days of the issuance of such
judgment or such later date as provided by the terms of such insurance policy;

 

(vii)       any
representation or warranty made by the Company in this Note or the Note Purchase Agreement shall prove to be materially false or
misleading as of the date made or deemed made;

 

(viii)      the
Company shall breach any covenant or other material term or condition of this Note or the Note Purchase Agreement and, in the case
of a breach of a covenant or term or condition which is curable, such breach continues for a period of at least ten (10) consecutive
Business Days; or

 

(ix)         any
material provision of this Note or the Note Purchase Agreement ceases to be of full force and effect other than by its terms, or
the Company contests in writing (or supports any other person in contesting) the validity or enforceability of any provision of
this Note or the Note Purchase Agreement.

 

     

     

    

 

(b)          Acceleration.
Upon the occurrence and during the continuance of an Event of Default, the Holder may take either or both of the following actions:
(i) declare all or any part of the Outstanding Note Obligations to be immediately due and payable; provided, however, that
if an Event of Default shall occur under either Section 3(a)(iv) or 3(a)(v), the outstanding Principal, accrued and
unpaid Interest and any other amounts outstanding under this Note shall automatically become immediately due and payable, and (ii)
exercise on behalf of itself all rights and remedies available to it under applicable law. To the extent that the Holder declares
this Note to be immediately due and payable (or this Note becomes due and payable following an Event of Default under Section
3(a)(iv) or 3(a)(v)), the Company shall pay the sum of the Outstanding Note Obligations to the Holder within five (5)
Business Days after the date that the Outstanding Note Obligations are declared due and payable, and upon full payment, the Note
shall be extinguished.

 

4.          RIGHTS
UPON FUNDAMENTAL TRANSACTION. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor
Entity assumes in writing all of the obligations of the Company under this Note in accordance with the provisions of this Section
4 pursuant to written agreements in form and substance satisfactory to and approved by the Holder prior to such Fundamental
Transaction, including agreements to deliver to the Holder in exchange for this Note a security of the Successor Entity evidenced
by a written instrument substantially similar in form and substance to this Note, including, without limitation, having a principal
amount and interest rate equal to the principal amount and the interest rate of this Note and having similar ranking to this Note,
and satisfactory to the Holder. Upon the occurrence of any Fundamental Transaction, the Successor Entity shall succeed to, and
be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Note referring to the
"Company" shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall
assume all of the obligations of the Company under this Note with the same effect as if such Successor Entity had been named as
the Company herein. The provisions of this Section shall apply similarly and equally to successive Fundamental Transactions and
shall be applied without regard to any limitations on the redemption of this Note.

 

5.           COVENANTS.

 

(a)          Incurrence
of Indebtedness. So long as this Note is outstanding, without the affirmative vote or written consent of the Holder, the Company
shall not, and the Company shall not permit any of its Subsidiaries to, directly or indirectly, incur or guarantee, assume or suffer
to exist any Indebtedness in excess of $250,000, other than (i) the Indebtedness evidenced by this Note, and (ii) Permitted Indebtedness.

 

(b)          Existence
of Liens. So long as this Note is outstanding, the Company shall not, and the Company shall not permit any of its Subsidiaries
to, directly or indirectly, allow or suffer to exist, a Lien, other than Permitted Liens.

 

(c)          Restricted
Payments. The Company shall not, and the Company shall not permit any of its Subsidiaries to, directly or indirectly, redeem,
defease, repurchase, repay or make any payments in respect of, by the payment of cash or cash equivalents (in whole or in part,
whether by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of any Indebtedness
described in clause (i) of the definition of Permitted Indebtedness, whether by way of payment in respect of principal of (or premium,
if any) or interest on such Indebtedness if at the time such payment is due or is otherwise made or, after giving effect to such
payment, an event constituting, or that with the passage of time and without being cured would constitute, an Event of Default
has occurred and is continuing.

     

     

    

 

6.          AMENDMENTS.
The affirmative vote at a meeting duly called for such purpose or the written consent without a meeting of the Holder shall
be required for any amendment or waiver of this Note.

 

7.          REISSUANCE
OF THIS NOTE.

 

(a)          Transfer.
The Company may, as a condition to the transfer of any of this Note, require that the request for transfer be accompanied by an
opinion of counsel reasonably satisfactory to the Company, to the effect that the proposed transfer does not result in a violation
of the Securities Act, unless such transfer is covered by an effective registration statement or by Rule 144 or Rule 144A under
the Securities Act; provided, however, that an opinion of counsel shall not be required for a transfer by a Holder that
is (i) a partnership transferring to its partners or former partners in accordance with partnership interests, (ii) a corporation
transferring to a wholly owned subsidiary or a parent corporation that owns all of the capital stock of the Holder, (iii) a limited
liability company transferring to its members or former members in accordance with their interest in the limited liability company,
(iv) an individual transferring to the Holder's family member or trust for the benefit of an individual Holder, or (v) transferring
its Note to any Affiliate of the Holder, in the case of an institutional investor, or other Person under common management with
such Holder; provided, further, that (A) the transferee in each case agrees to be subject to the restrictions in this Section
8 and provides the Company with a representation letter containing substantially the same representations and warranties of
a "Purchaser" set forth in the Note Purchase Agreement, (B) the Company satisfies itself that the number of transferees
is sufficiently limited and (C) in the case of transferees that are partners or limited liability company members, the transfer
is for no consideration. It is understood that the certificates evidencing the Note may bear substantially the following legends
(in addition to any other legends as legal counsel for the Company deems necessary or advisable under the applicable state and
federal securities laws or any other agreement to which the Company is a party):

 

"THIS NOTE HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES REPRESENTED HEREBY MAY NOT BE
OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (i) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS
NOT REQUIRED UNDER SAID ACT OR (ii) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT."

 

If this Note is to be transferred in compliance
with the foregoing, the Holder shall surrender this Note to the Company, whereupon the Company will forthwith issue and deliver
upon the order of the Holder a new Note (in accordance with Section 7(d)), registered as the Holder may request, representing
the outstanding Principal being transferred by the Holder and, if less than the entire outstanding Principal is being transferred,
a new Note (in accordance with Section 7(d)) to the Holder representing the outstanding Principal not being transferred.

 

(b)          Lost,
Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of an indemnification undertaking by the
Holder to the Company, in customary form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company
shall execute and deliver to the Holder a new Note (in accordance with Section 7(d)) representing the outstanding Principal.

 

(c)          Note
Exchangeable for Different Denominations. This Note is exchangeable, upon the surrender hereof by the Holder at the principal
office of the Company, for a new Note or Notes (in accordance with Section 7(d)) representing in the aggregate the outstanding
Principal of this Note, and each such new Note will represent such portion of such outstanding Principal as is designated by the
Holder at the time of such surrender.

 

     

     

    

 

(d)          Issuance
of New Notes. Whenever the Company is required to issue a new Note pursuant to the terms of this Note, such new Note (i) shall
be of like tenor with this Note, (ii) shall represent, as indicated on the face of such new Note, the Principal remaining outstanding
(or in the case of a new Note being issued pursuant to Section 7(a) or Section 7(c), the Principal designated by
the Holder which, when added to the principal represented by the other new Notes issued in connection with such issuance, does
not exceed the Principal remaining outstanding under this Note immediately prior tosuch issuance of new Notes), (iii) shall have
an issuance date, as indicated on the face of such new Note which is the same as the Issuance Date of this Note, (iv) shall have
the same rights and conditions as this Note, and (v) shall represent accrued and unpaid Interest of this Note from the Issuance
Date.

 

8.         REMEDIES, CHARACTERIZATIONS,
OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF.

 

(a)          The
remedies provided in this Note shall be cumulative and in addition to all other remedies available at law or in equity (including
a decree of specific performance and/or other injunctive relief), and, subject to Section 8(b), nothing herein shall limit
the Holder's right to pursue monetary damages for any failure by the Company to comply with the terms of this Note. Amounts set
forth or provided for herein with respect to payments and the like (and the computation thereof) shall be the amounts to be received
by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance
thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and
that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach
or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining any
breach, without the necessity of showing economic loss and without any bond or other security being required.

 

(b)          Notwithstanding
the foregoing, the right of the Holder to receive payment of Principal and Interest on this Note, on or after the respective due
dates set forth herein, or to bring suit for the enforcement of any such right to payment, shall not be impaired or affected without
the consent of the Holder.

 

9.          PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is placed in the hands of an attorney for collection or enforcement
or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this
Note or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership of the Company
or other proceedings affecting Company creditors' rights and involving a claim under this Note, then the Company shall pay the
costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization,
receivership or other proceeding, including, but not limited to, reasonable attorneys' fees and disbursements.

 

10.        CONSTRUCTION;
HEADINGS. This Note shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against
any person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect
the interpretation of, this Note.

 

11.        FAILURE
OR INDULGENCE NOT WAIVER. No failure or delay on the part of the Holder in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privilege.

 

     

     

    

 

12.        NOTICES;
PAYMENTS.

 

(a)        Notices.
All notices, requests, consents, and other communications under this Note shall be in writing and shall be deemed delivered (i)
when delivered, if delivered personally, (ii) four (4) Business Days after being sent by registered or certified mail, return receipt
requested, postage prepaid; (iii) one Business Day after being sent via a reputable nationwide overnight courier service guaranteeing
next business day delivery, or (iv) when receipt is acknowledged, in the case of facsimile, in each case to the intended recipient
as set forth below:

 

(i)          If
to the Holder, at:

 

5023 North Parkway Calabasas

Calabasas, CA 91302

 

(ii)         If
to the Company, at:

 

12424 Wilshire Blvd., Suite 1030

Los Angeles, CA 90025

Attn: Chief Executive Officer

 

or at such other address as
the Company or the Holder each may specify by written notice to the other parties hereto in accordance with this Section 12.
The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Note, including in reasonable
detail a description of such action and the reason therefore.

 

(b)          Payments.
Whenever any payment of cash is to be made by the Company to any Person pursuant to this Note, such payment shall be made in lawful
money of the United States of America by a check drawn on the account of the Company and sent via overnight courier service to
such Person at such address as previously provided to the Company in writing; provided that the Holder may elect to receive
a payment of cash via wire transfer of immediately available funds by providing the Company with prior written notice setting out
such request and the Holder's wire transfer instructions. Whenever any amount expressed to be due by the terms of this Note is
due on any day which is not a Business Day, the same shall instead be due on the next succeeding day which is a Business Day.

 

(c)          Withholding
Taxes. All payments made by the Company hereunder shall be made without withholding for or on account of any present or future
taxes (other than overall net income taxes imposed on the recipient). If any such withholding is so required, the Company shall
make the withholding, pay the amount withheld to the appropriate authority before penalties attach thereto or interest accrues
thereon and pay to the recipient such additional amount as may be necessary to ensure that the net amount actually received by
the recipient free and clear of such taxes (including taxes on such additional amount) is equal to the amount that the recipient
would have received had such withholding not been made. If the recipient is required to pay any such taxes, penalties or interest,
the Company shall reimburse the recipient for that payment on demand. If the Company pays any such taxes, penalties or interest,
it shall deliver official tax receipts or other evidence of payment to the recipient on whose account such withholding was made
on or before the thirtieth day after payment. The Holder agrees to provide, promptly following the Company's request therefore,
such forms or certifications as it is legally able to provide to establish an exemption from, or a reduction in, any withholding
taxes that might otherwise apply.

 

13.       CANCELLATION.
After all Principal, accrued Interest and other amounts at any time owed on this Note have been paid in full, this Note shall
automatically be deemed canceled, shall be surrendered to the Company for cancellation and shall not be reissued.

 

14.       WAIVER
OF NOTICE. To the extent permitted by law, the Company hereby waives demand, notice, protest and all other demands and notices
in connection with the delivery, acceptance, performance, default or enforcement of this Note.

 

     

     

    

 

15.       GOVERNING
LAW. This Note shall be construed and enforced in accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Note shall be governed by, the internal laws of the State of Nevada, without giving effect
to any choice of law or conflict of law provision or rule (whether of the State of Nevada or any other jurisdictions) that would
cause the application of the laws of any jurisdictions other than the State of Nevada.

 

16.       CERTAIN
DEFINITIONS. For purposes of this Note, the following terms shall have the following meanings:

 

(a)          “Affiliate”
means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control
with such entity provided that, for purposes of this definition, “control” (including, with correlative meanings, the
terms “controlled by” and “under common control with”), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through
the ownership of voting securities or by contract or otherwise.

 

(b)          “Bankruptcy
Law” means Title II of the U.S. Code, or any similar Federal, foreign or state law for the relief of debtors.

 

(c)          “Business
Day” means any day other than Saturday, Sunday or other day on which commercial banks in the city of Los Angeles
are authorized or required by law to remain closed.

 

(d)          “Change
of Control” means any Fundamental Transaction other than (i) a Fundamental Transaction in which holders of the Company's
voting power immediately prior to the Fundamental Transaction continue after the Fundamental Transaction to hold publicly traded
securities and, directly or indirectly, the voting power of the surviving entity or entities necessary to elect a majority of the
members of the board of directors (or their equivalent if other than a corporation) of such entity or entities, (ii) a Fundamental
Transaction with any Holder, any Affiliate of any Holder or any person otherwise related to or associated with a Holder, or (iii)
pursuant to a migratory merger effected solely for the purpose of changing the jurisdiction of incorporation of the Company.

 

(e)          “Common
Stock” means the Common Stock of the Company.

 

(f)          “Company”
has the meaning set forth in the introductory paragraph of this Note.

 

(g)          “Contractual
Obligation” means, with respect to any Person, any contract, agreement, deed, mortgage, lease, sublease, license,
sublicense or other legally enforceable commitment, promise, undertaking, obligation, arrangement, instrument or understanding,
whether written or oral, to which or by which such Person is a party or otherwise subject or bound or to which or by which any
property, business, operation or right of such Person is subject or bound.

 

(h)          
“Custodian” means a receiver, trustee, assignee, liquidator or similar
official.

 

(i)          
“Event of Default” has the meaning set forth in Section 3(a).

 

(j)          “Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

(k)          “Fundamental
Transaction” means that the Company shall, directly or indirectly, in one or more related transactions, (i) consolidate
or merge with or into (whether or not the Company is the surviving corporation) another Person, or (ii) sell, assign, transfer,
convey or otherwise dispose of all or substantially all of the assets of the Company to another Person, or (iii) allow another
Person to make a purchase, tender or exchange offer that is accepted by the holders of more than the 50% of the outstanding shares
of Common Stock (not including any shares of Common Stock held by the Person or Persons making or party to, or associated or affiliated
with the Persons making or party to, such purchase, tender or exchange offer), or (iv) consummate a stock purchase agreement or
other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement)
with another Person whereby such other Person acquires more than the 50% of the outstanding shares of Common Stock (not including
any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other
Persons making or party to, such stock purchase agreement or other business combination), or (v) reorganize, recapitalize or reclassify
its Common Stock.

 

     

     

    

 

(l)          “GAAP”
means generally accepted accounting principles as promulgated by the Financial Accounting Standards Board, as in effect
from time to time.

 

(m)          “Holder”
has the meaning set forth in the introductory paragraph of this Note.

 

(n)          “Indebtedness”
means, with respect to any Person, and without duplication, all Liabilities, including all obligations in respect of principal,
accrued interest, penalties, fees and premiums, of such Person (i) for borrowed money (including amounts outstanding under overdraft
facilities), (ii) evidenced by notes, bonds, debentures or other similar Contractual Obligations, (iii) in respect of "earn-out"
obligations and other obligations for the deferred purchase price of property, goods or services (other than trade payables or
accruals incurred in the ordinary course of business), (iv) for the capitalized liability under all capital leases of such Person
(determined in accordance with GAAP), (v) in respect of letters of credit and bankers' acceptances, (vi) for Contractual Obligations
relating to interest rate protection, swap agreements and collar agreements, in each case, to the extent payable if such Contractual
Obligation is terminated at the Closing, and (vii) in the nature of guarantees of the obligations described in clauses (i) through
(vi) above of any other Person.

 

(o)          “Interest
Rate” means seventeen percent (17%) per annum; provided that upon the occurrence and during
the continuance of an Event of Default, the Interest Rate shall be increased to twenty percent (20%) per annum. In the event that
such Event of Default is subsequently cured or waived, the Interest Rate shall be reduced to seventeen percent (17%) per annum
as of the date of such cure or waiver, it being understood, however, that unless the Holder otherwise agrees in writing, such reduction
shall not apply retroactively to the period when such Event of Default was continuing.

 

(p)          “Issuance
Date” has the meaning set forth in Section 2.

 

(q)          “Liability”
means, with respect to any Person, any liability or obligation of such Person whether known or unknown, whether asserted
or unasserted, whether determined, determinable or otherwise, whether absolute or contingent, whether accrued or unaccrued, whether
liquidated or unliquidated, whether directly incurred or consequential, whether due or to become due and whether or not required
under GAAP to be accrued on the financial statements of such Person.

 

(r)          “Lien”
or “Liens” means any mortgage, lien, pledge, charge, security interest or other
similar encumbrance upon or in any property or assets (including accounts and contract rights) owned by the Company or any of its
Subsidiaries.

 

(s)          “Material
Adverse Effect” means any (i) adverse effect on the issuance or validity of this Note or the transactions
contemplated hereby or on the ability of the Company to perform its obligations under this Note, or (ii) material adverse effect
on the condition (financial or otherwise), properties, assets, liabilities, business or operations of the Company and its Subsidiaries
taken as a whole.

 

(t)          “Maturity
Date” means the first anniversary of the Issuance Date.

 

(u)          “Note
Purchase Agreement” means that certain Note Purchase and Restructuring Agreement dated concurrently
herewith by and between the Company and Holder.

 

(v)         
“Outstanding Note Obligations” means the outstanding Principal, accrued and unpaid Interest
and any other amounts outstanding under this Note as of any point in time.

 

     

     

    

 

(w)          “Permitted
Indebtedness” means (i) Indebtedness incurred by the Company that is made expressly subordinate
in right of payment to the Indebtedness evidenced by this Note, as reflected in a written agreement reasonably acceptable to the
Holder and approved by the Holder in writing, and which Indebtedness does not provide at any time for (A) the payment, prepayment,
repayment, repurchase or defeasance, directly or indirectly, of any principal or premium, if any, thereon until ninety-one (91)
days after the Maturity Date or later and (B) total interest and fees at a rate in excess of six percent (6%) per annum, (ii) Indebtedness
secured by Permitted Liens, (iii) Indebtedness to trade creditors or for professional services incurred in the ordinary course
of business, (iv) any Indebtedness owing under the Note, and (v) extensions, refinancings and renewals of any items of Permitted
Indebtedness described in clauses (i) through (iv) above, provided that the principal amount is not increased or the terms modified
to impose more burdensome terms upon the Company or its Subsidiary, as the case may be.

 

(x)          “Permitted
Liens” means (i) any Lien for taxes not yet due or delinquent or being contested in good faith by appropriate
proceedings for which adequate reserves have been established in accordance with GAAP, (ii) any statutory Lien arising in the ordinary
course of business by operation of law with respect to a liability that is not yet due or delinquent, (iii) any Lien created by
operation of law, such as materialmen's liens, mechanics' liens and other similar liens, arising in the ordinary course of business
with respect to a liability that is not yet due or delinquent or that are being contested in good faith by appropriate proceedings,
(iv) Liens securing the Company's obligations under the Note, (v) Liens (A) upon or in any equipment acquired or held by the Company
or any of its Subsidiaries to secure the purchase price of such equipment or indebtedness incurred solely for the purpose of financing
the acquisition or lease of such equipment, or (B) existing on such equipment at the time of its acquisition, provided that the
Lien is confined solely to the property so acquired and improvements thereon, and the proceeds of such equipment, (vi) Liens incurred
in connection with the extension, renewal or refinancing of the indebtedness secured by Liens of the type described in clauses
(i) through (v) above, provided that any extension, renewal or replacement Lien shall be limited to the property encumbered by
the existing Lien and the principal amount of the Indebtedness being extended, renewed or refinanced does not increase, (vii) leases
or subleases and licenses and sublicenses granted to others in the ordinary course of the Company's business, not interfering in
any material respect with the business of the Company and its Subsidiaries taken as a whole, (viii) Liens in favor of customs and
revenue authorities arising as a matter of law to secure payments of custom duties in connection with the importation of goods,
and (ix) Liens arising from judgments, decrees or attachments in circumstances not constituting an Event of Default under Section
3(a)(vi). 

 

(y)          “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated
organization, any other entity and a government or any department or agency thereof.

 

(z)          “Principal”
has the meaning given in the introductory paragraph of this Note.

 

(aa)         “Register”
has the meaning set forth in Section 17.

 

(bb)         “SEC”
means the United States Securities and Exchange Commission.

 

(cc)         “Securities
Act” means the Securities Act of 1933, as amended.

 

(dd)         “Subsidiary”
means any corporation, association trust, limited liability company, partnership, joint venture or other
business association or entity (i) at least 50% of the outstanding voting securities of which are at the time owned or controlled
directly or indirectly by the Company or (ii) with respect to which the Company possesses, directly or indirectly, the power to
direct or cause the direction of the affairs or management of such Person.

 

     

     

    

 

(ee)         “Successor
Entity” means the Person, which may be the Company, formed by, resulting from or surviving any Fundamental
Transaction or the Person with which such Fundamental Transaction shall have been made.

 

17.         REGISTERED
OBLIGATION. The Company shall establish and maintain a record of ownership (the “Register”)
in which it will register by book entry the interest of the Holder and of each subsequent assignee in this Note, and in
the right to receive any payments of principal and interest or any other payments hereunder, and any assignment of any such interest.
Notwithstanding anything herein to the contrary, this Note is intended to be treated as a registered obligation for federal income
tax purposes and the right, title, and interest of the Holder and its assignees in and to payments under this Note shall be transferable
only upon notation of such transfer in the Register. This Section shall be construed so that the Note is at all times maintained
in “registered form” within the meaning of Sections 163(1), 871(h)(2) and 881(c)(2) of the Internal Revenue Code and
any related regulations (or any successor provisions of the Code or such regulations).

 

18.         PRIORITY.
This Note shall be subordinate only to that certain revolving promissory note issued by Moriah Education Management,
LLC on or about the Issuance Date, and shall be senior in priority to all other debt instruments issued by the Company existing
as of the Issuance Date and issued thereafter so long as any amounts remain outstanding under this Note.

 

19.         SECURITY
INTEREST. This Note shall be secured by any and all office furniture owned by the Company as of the Issuance Date and
acquired thereafter so long as any amounts remain outstanding under this Note.

 

20.         RESTRUCTURING.
So long as the Company continues to make timely payments of interest pursuant to the terms of this Note, and is not otherwise
in default hereunder, on the one (1) year anniversary following the Issuance Date, the Company and Holder shall fully extinguish
and terminate all obligations under this Note (“Extinguishment”) and the Company shall issue a new promissory
note to the Holder in the principal amount outstanding hereunder as of the date of Extinguishment, at an original issue discount
equal to ten percent (10%).

 

[SIGNATURE PAGE FOLLOWS]

 

     

     

    

 

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

 

	Dated: September 30, 2016	 
	 	GREENWOOD HALL, INC.:
	 	 	 
	 	By:	 
	 	 	John Hall, Chief Executive Officer

 

	Acknowledged and Agreed:	 
	 	 
	REDWOOD FUND, LP	 
	 	 
	By:	Lady Face Capital, LLC	 
	 	its General Partner	 
	 	 	 
	By:	 	 
	 	Ronald Levy, Chief Operating Officer

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