Exhibit 10.1

 
THIS REVOLVING PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE,
AND HAS BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION
WITH, THE SALE OR DISTRIBUTION THEREOF.  NO SUCH SALE OR DISPOSITION MAY BE
EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN
OPINION OF COUNSEL FOR THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
THE SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS.

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$150,000.00
May 3, 2011

Woodland Hills, California

REVOLVING PROMISSORY NOTE

In consideration of such advances (hereinafter “Advance” or “Advances”) as W-NET
FUND I, L.P., a Delaware limited partnership, or its assigns (collectively,
“Holder”), from time to time may make hereon to or for the benefit of PHOTOTRON
HOLDINGS, INC., a Delaware corporation (the “Company”), pursuant to the
Revolving Credit Commitment (as defined below), including the Advance of One
Hundred Thousand Dollars ($100,000) made by Holder to the Company on April 26,
2011, the Company hereby promises to pay to Holder the principal amount of all
Advances, together with accrued interest thereon from the date of such Advances,
all subject to the terms and conditions set forth below.

1.           Revolving Credit Commitment.

1.1           Advances.  The Holder agrees to make Advances to the Company from
time to time during the Revolving Credit Commitment Period (as defined below),
at its sole discretion, in an aggregate principal amount at any one time
outstanding which does not exceed One Hundred Fifty Thousand Dollars
($150,000.00) (the “Revolving Credit Commitment”).  During the Revolving Credit
Commitment Period, the Company may use the Revolving Credit Commitment by
borrowing, prepaying any Advances in whole or in part, and re-borrowing, all in
accordance with the terms and conditions hereof.

1.2           Interest.  Interest shall accrue from the date of any Advances on
any principal amount withdrawn, and on accrued and unpaid interest thereon, at
the rate of twelve percent (12%) per annum (calculated on the basis of a three
hundred sixty-five (365) day year for the actual number of days elapsed),
compounded annually.

2.           Revolving Credit Commitment Period.  The revolving credit
commitment period (the “Revolving Credit Commitment Period”) shall commence as
of the date hereof and shall expire on May 2, 2012 (the “Expiration Date”).

 
 

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3.           Procedure for Revolving Credit Advances.

3.1           Advance Request.  The Company may request Advances under the
Revolving Credit Commitment during the Revolving Credit Commitment Period on any
day of the week, Monday through Friday, 9:00 a.m. through 5:00 p.m., Pacific
Time, (hereinafter referred to as any “Business Day” or “Business Days”),
provided that the Company shall give Holder irrevocable notice (which notice
must be received by Holder prior to 12:00 p.m., Pacific Time) one (1) Business
Day prior to the requested Advance date, specifying (i) the amount of the
Advance, and (ii) the requested Advance date.  Each Advance under the Revolving
Credit Commitment shall be in an amount equal to $5,000 or a whole multiple of
$5,000 in excess thereof.  Upon receipt of any such notice from the Company,
Holder may (but shall not be required to), at Holder’s sole discretion, make the
amount of the Advance available prior to 12:00 p.m., Pacific Time, on the
Advance date requested by the Company in funds immediately available to the
Company.

3.2           Account Evidencing Indebtedness.  Holder shall maintain in
accordance with its usual practice an account or accounts evidencing
indebtedness of the Company to Holder resulting from each Advance from time to
time, including the amounts of principal and interest payable and paid to the
Holder from time to time under this Revolving Promissory Note (“Note”).

4.           Repayment Procedure.

4.1           General.  Repayment on any Advances shall be made in lawful tender
of the United States.  Any payments on this Note made during the Revolving
Credit Commitment Period shall be credited first to any interest due and the
remainder to principal.

4.2           Repayment of Principal and Interest.  All outstanding and unpaid
principal, and all outstanding and accrued unpaid interest, shall become due and
payable on and as of the Expiration Date.

4.3           Optional Prepayment.  The Company may, at any time and from time
to time and without penalty, prepay all or any portion of the accrued and unpaid
interest on this Note and any outstanding principle amount of this Note.

5.           Transfers.

5.1           General.  Holder acknowledges that this Note has not been
registered under the Securities Act of 1933, as amended, or any state securities
laws, and agrees not to sell, pledge, distribute, offer for sale, transfer or
otherwise dispose of this Note in the absence of (i) an effective registration
statement under the Securities Act as to this Note and registration or
qualification of this Note under any applicable state securities laws then in
effect, or (ii) an opinion of counsel, satisfactory to the Company, that such
registration and qualification are not required.

 
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5.2           Transferability.  Subject to the provisions of Section 5.1 hereof,
this Note and all rights hereunder are transferable, in whole or in part, upon
surrender of the Note with a properly executed assignment, in the form
prescribed by the Company, at the principal office of the Company; provided,
however, that this Note may not be transferred in whole or in part without the
prior written consent of the Company.

5.3           Registered Holder.  Until any transfer of this Note is made in the
Note register, the Company may treat the registered Holder of this Note as the
absolute owner hereof for all purposes; provided, however, that if and when this
Note is properly assigned in blank, the Company may (but shall not be required
to) treat the bearer hereof as the absolute owner hereof for all purposes,
notwithstanding any notice to the contrary.

5.4           Note Register.  The Company will maintain a register containing
the name and address of the registered Holder of this Note.  Any registered
Holder may change such registered Holder’s address as shown on the Note register
by written notice to the Company requesting such change.

5.5           Transferee Agreement.  In the discretion of the Company, the
Company may condition any transfer of all or any portion of this Note (other
than a disposition satisfying the conditions set forth in clause (i) of Section
5.1 above) upon the transferee’s delivery to the Company of a written agreement,
in form and substance satisfactory to the Company, whereby the transferee agrees
to be bound by the transfer restrictions set forth in this Section 5.

6.           Events of Default.

6.1           Events of Default.  The occurrence of any or all of the following
events shall constitute an event of default (each, an “Event of Default”) by the
Company under this Note:

(i)           Default by the Company in any payment on this Note after any such
payment becomes due and payable; or

(ii)          Breach by the Company of any material provisions of any agreement
between the Company and the Holder; or

(iii)         The Company shall file a voluntary petition in bankruptcy or any
petition or answer seeking for itself any reorganization, readjustment,
arrangement, composition or similar relief; or shall commence a voluntary case
under the federal bankruptcy laws; or shall admit in writing its insolvency or
its inability to pay its debts as they become due; or shall make an assignment
for the benefit of creditors; or shall apply for, consent to, or acquiesce in
the appointment of, or the taking of possession by, a trustee, receiver,
custodian or similar official or agent of the Company or of substantially all of
its property and shall not be discharged within sixty (60) days; or a petition
seeking reorganization, readjustment, arrangement, composition or other similar
relief as to the Company under the federal bankruptcy laws or any similar law
for the relief of debtors shall be brought against the Company and shall be
consented to by it or shall remain un-dismissed for sixty (60) days.

 
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6.2           Consequence of Default.  Upon the occurrence of any Event of
Default, this Note shall immediately become due and payable upon written notice
from the Holder, and, from the time of the Company’s receipt of such written
notice until this Note shall be paid in full, the unpaid outstanding principal
balance of this Note shall bear interest at the rate of fifteen percent (15%)
per annum (calculated on the basis of a three hundred sixty-five (365) day year
for the actual number of days elapsed), compounded annually (the “Default
Rate”).  Moreover, after the occurrence of any Event of Default, the Holder may
proceed to protect and enforce its rights, at law, in equity or otherwise,
against the Company.

6.3           Payment of Costs and Expenses.  In the event that this Note is
placed in the hands of any attorney for collection, or any suit or proceeding is
brought for the recovery or protection of the indebtedness hereunder, then and
in any such events, the Company shall pay on demand all reasonable costs and
expenses of such suit or proceedings incurred by Holder, including reasonable
attorneys’ fees.

7.           Miscellaneous.

7.1           Delay.  No extension of time for payment of any amount owing
hereunder shall affect the liability of the Company for payment of the
indebtedness evidenced hereby.  No delay by the Holder or any holder hereof in
exercising any power or right hereunder shall operate as a waiver of any power
or right hereunder.

7.2           Waiver and Amendment.  No waiver or modification of the terms of
this Note shall be valid without the written consent of the Holder.

7.3           Governing Law.  This Note shall be governed by and construed in
accordance with the laws of the State of California without regard to conflict
of law principles thereof.

7.4           Severability.  In case any provision contained herein (or part
thereof) shall for any reason be held to be invalid, illegal, or unenforceable
in any respect, such invalidity, illegality, or other unenforceability shall not
affect any other provision (or the remaining part of the affected provision)
hereof, but this Note shall be construed as if such invalid, illegal, or
unenforceable provision (or part thereof) had never been contained herein, but
only to the extent that such provision is invalid, illegal, or unenforceable.

7.5           Notice.  All notices and other communications among the parties
shall be in writing and shall be deemed to have been duly given when (i)
delivered in person, or (ii) five (5) days after posting in the U.S. mail as
registered mail or certified mail, return receipt requested, or (iii) one (1)
business day when delivered by confirmed facsimile, addressed as follows:
 

If to the Company, to:
Phototron Holdings, Inc.
20259 Ventura Boulevard
Woodland Hills, CA 91364
Attention: President
Facsimile: (818) 992-0202

 
 
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If to the Holder, to:
Woodman Management Corporation
12400 Ventura Boulevard, Suite 327
Studio City, CA 91604
Attention: Chief Executive Officer
Facsimile: (818) 474-7589

 
7.6           Entire Agreement.  This Note contains the entire agreement among
the parties hereto with respect to the subject matter hereof and supersedes all
prior agreements and understandings with respect thereto.

7.7           Excessive Interest Rate.  This Note is hereby expressly limited so
that the interest rate charged hereunder shall at no time exceed the maximum
rate permitted by applicable law.  If, for any circumstance whatsoever, the
interest rate charged exceeds the maximum rate permitted by applicable law, the
interest rate shall be reduced to the maximum rate permitted.

[Signature Page Follows]

 
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IN WITNESS WHEREOF, the Company has caused this Revolving Promissory Note to be
duly executed and delivered by its authorized officer as of the date first above
written.
 
 

 
PHOTOTRON HOLDINS, INC.
                           
By:
/s/ Brian B. Sagheb      
Brian B. Sagheb, President
 

 
ACKNOWLEDGED:

W-NET FUND I, L.P.

By: W-Net Fund GP I, LLC
Its: General Partner

 

By:
/s/ David Weiner     
David Weiner, Manager
 

 
 
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