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.

______________________________________________________________________________

 

 

$150,000.00 December 14, 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 Thirty
Thousand Dollars ($30,000) made by Holder to the Company on or about November 8,
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 and 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principal amount withdrawn, and on accrued and unpaid interest thereon, at the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.

 

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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 December 31, 2012 (the “Expiration Date”).

 

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 with a copy sent by electronic mail 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: CFO

Facsimile: (818) 992-0202

 

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

 

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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 SAGHEB

Brian B. Sagheb, CFO

 

 

 

ACKNOWLEDGED:

 

 

W-NET FUND I, L.P.

 

By: W-Net Fund GP I, LLC

Its: General Partner

 

 

By: /s/ DAVID WEINER

David Weiner, Manager