Exhibit 10.1
 
FIRST AMENDMENT TO AMENDED AND RESTATED
SECURITIES PURCHASE AGREEMENT
 
This FIRST AMENDMENT TO AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT (the
“Amendment”) is dated effective as of the 30th day of April, 2016, by and
between GROWLIFE, INC., a Delaware corporation (the “Borrower”), EVERGREEN
GARDEN CENTERS LLC, a Delaware limited liability company, GROWLIFE HYDROPONICS,
INC., a Delaware corporation, ROCKY MOUNTAIN HYDROPONICS, a Colorado limited
liability company (collectively, the “Guarantors,” and together with the
Borrower, the “Credit Parties”), and TCA GLOBAL CREDIT MASTER FUND, LP, a Cayman
Islands limited partnership (the “Lender”).
 
RECITALS
 
WHEREAS, the Borrower and Lender entered into that certain Securities Purchase
Agreement dated as of April 30, 2015, but made effective as of July 9, 2015 (the
“Original Purchase Agreement”), as supplemented by that certain Securities
Purchase Agreement dated as of April 30, 2015, but made effective as of August
6, 2015 (the “Supplemental Purchase Agreement”), together with Amended and
Restated Securities Purchase Agreement dated as of October 27, 2015 (the
“Restated Purchase Agreement”) (the Original Purchase Agreement, the
Supplemental Purchase Agreement, and the Restated Purchase Agreement, together
with any other amendments, renewals, substitutions, supplements, replacements,
or modifications from time to time, collectively referred to as the “Purchase
Agreement”); and
 
WHEREAS, pursuant to the Original Purchase Agreement, the Borrower executed and
delivered to Lender that certain Senior Secured, Convertible, Redeemable
Debenture dated as of April 30, 2015, but made effective as of July 9, 2015, in
the original face amount of $700,000.00 (the “Original Debenture”); and
 
WHEREAS, pursuant to the Supplemental Purchase Agreement, the Borrower executed
and delivered to Lender that certain Senior Secured, Convertible, Redeemable
Debenture dated as of April 30, 2015, but made effective as of August 6, 2015,
in the original face amount of $100,000.00 (the “Supplemental Debenture”); and
 
WHEREAS, pursuant to the Restated Purchase Agreement, the Borrower executed and
delivered to Lender that certain Amended, Restated, and Consolidated Senior
Secured, Convertible, Redeemable Debenture dated as of October 16, 2015, but
made effective as of October 27, 2015, in the original face amount of
$1,050,000.00 (the “Restated Debenture”), which Restated Debenture amended,
restated and replaced the Original Debenture in its entirety (the Restated
Debenture and the Supplemental Debenture, collectively referred to as the
“Debentures”); and
 
WHEREAS, in connection with the Purchase Agreement, the Original Debenture, and
the Debentures, the Borrower executed and delivered to the Lender various
ancillary documents referred to in the Purchase Agreement as the “Transaction
Documents”; and
 
WHEREAS, the Borrower’s obligations under the Purchase Agreement and the
Debentures are secured by the following, all of which are included within the
Transaction Documents: (i) the Security Agreements; (ii) the Guaranty
Agreements; (iii) the Pledge Agreements; (iv) the Validity Certificates; and (v)
UCC-1 Financing Statements naming the Credit Parties, as debtors, and Lender, as
secured party (the “UCC-1’s”), among other Transaction Documents; and
 
 
1

 
 
WHEREAS, the Credit Parties are currently in default of their respective
obligations under the Purchase Agreement and other Transaction Documents for
failing to pay certain sums required under the Purchase Agreement and certain
other Transaction Documents, among other defaults (these defaults, together any
other default which may be existing as of the date hereof, the “Existing
Defaults”); and
 
WHEREAS, the Credit Parties and Lender desire to desire to resolve the Existing
Defaults, and enter into certain agreements with respect to the Purchase
Agreement, the Debentures, and the other Transaction Documents, all as more
specifically set forth in this Amendment;
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants of the
parties hereinafter expressed and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
each intending to be legally bound, agree as follows:
 
1. Recitals. The recitations set forth in the preamble of this Amendment are
true and correct and incorporated herein by this reference.
 
2. Capitalized Terms. All capitalized terms used in this Amendment shall have
the same meaning ascribed to them in the Purchase Agreement, except as otherwise
specifically set forth herein.
 
3. Conflicts. In the event of any conflict or ambiguity by and between the terms
and provisions of this Amendment and the terms and provisions of the Purchase
Agreement, the terms and provisions of this Amendment shall control, but only to
the extent of any such conflict or ambiguity.
 
4. Modification of Debentures. From and after the date hereof, the Debentures
shall be and are hereby combined, and thereafter severed, split, divided and
apportioned into two (2) separate and distinct replacement debentures, as
follows:
 
(a) Second Replacement Debenture A evidencing a principal indebtedness of One
Hundred Fifty Thousand and No/100 Dollars ($150,000.00), which is being executed
and delivered by Borrower to Lender simultaneously herewith (the “Second
Replacement Debenture A”). Second Replacement Debenture A shall be and remain
secured by the Security Agreements, the Guaranty Agreements, the Pledge
Agreements, the Validity Certificates, the UCC-1’s, and all other applicable
Transaction Documents.
 
(b) Second Replacement Debenture B evidencing a principal indebtedness of Two
Million Six Hundred Eighty-One Thousand Two Hundred Nine and 82/100 Dollars
($2,681,209.82) (as of April 30, 2016), which is being executed and delivered by
Borrower to Lender simultaneously herewith (the “Second Replacement Debenture
B”, and together with Second Replacement Debenture A, collectively, the “Second
Replacement Debentures”). Second Replacement Debenture B shall be and remain
secured by the Security Agreements, the Guaranty Agreements, the Pledge
Agreements, the Validity Certificates, the UCC-1’s, and all other applicable
Transaction Documents.
 
(c) The Second Replacement Debentures are being executed and delivered
simultaneously herewith in substitution for and to supersede the Debentures in
their entirety. It is the intention of the Borrower and Lender that while the
Second Replacement Debentures replace and supersede the Debentures, in their
entirety, they are not in payment or satisfaction of the Debentures, but rather
are the substitute of one evidence of debt for another without any intent to
extinguish the old. Nothing contained in this Amendment or in the Second
Replacement Debentures shall be deemed to extinguish the indebtedness and
obligations evidenced by the Debentures or constitute a novation of the
indebtedness evidenced by the Debentures.
 
 
2

 
 
(d) Notwithstanding the splitting of the Debentures into the Second Replacement
Debentures in the principal amounts as contemplated by this Amendment, the
Credit Parties understand and acknowledge that all sums received by Lender in
payment of the Second Replacement Debentures, or either one of them, shall be
applied by Lender in accordance with the terms of the Purchase Agreement, first
to outstanding fees, charges and other costs due and payable under the Purchase
Agreement and other Transaction Documents, second to accrued and unpaid
interest, and last to outstanding principal. By way of example, and not in
limitation, if Second Replacement Debenture A is sold as contemplated under the
Debt Purchase Agreement, as hereinafter defined, upon Lender’s receipt of the
purchase price therefor, such amounts received by Lender shall be applied to the
total indebtedness evidenced by the Second Replacement Debentures in the order
described above.
 
(e) Borrower understands and acknowledges that in connection with the Debt
Purchase Agreement, it may be necessary or desirable, in Lender’s sole and
absolute discretion, to have the Borrower further sever, split, divide and
apportion the Second Replacement Debentures further to accomplish the sale of
the Outstanding Claims to Purchaser, as more specifically set forth in the Debt
Purchase Agreement. In that regard, within no later than three (3) Business Days
after request therefor is made by Lender to Borrower from time to time, the
Borrower agrees to further sever, split, divide and apportion the Second
Replacement Debentures, or any of them (or any replacement debentures issued in
replacement thereof from time to time), and to execute and deliver such
replacement debentures to Lender within such time frames as required or
requested by Lender from time to time.
 
(f) Lender acknowledges that the amount of First Closing Advisory Fees and
Second Closing Advisory Fees due under the Purchase Agreement has been added and
included within the principal balance of the Second Replacement Debentures, and
accordingly, Lender agrees to return to Borrower the Series B Preferred shares
previously received by Lender towards payment of such advisory fees.
 
5. Sale of Second Replacement Debentures.
 
(a) The parties acknowledge that Lender is entering into this Amendment, in
part, in connection with the contemplated sale of the indebtedness represented
by the Second Replacement Debentures to Old Main Capital, LLC, or any other
Person who may from time to time seek to purchase any of such indebtedness (any
such Person hereinafter referred to as a “Purchaser”) under the terms of a Debt
Purchase Agreement (the “Debt Purchase Agreement”) to be entered into between a
Purchaser, Lender, and Borrower. In that regard, the Credit Parties hereby
represent and warrant to Lender as follows, which representations and warranties
shall be true and correct as of the date hereof, and which representations and
warranties shall be deemed re-made and be true and correct as of each sale of
the Second Replacement Debentures (or any replacement debentures issued in
replacement thereof from time to time):
 
(i) All amounts of any nature or kind due and owing by the Borrower to Lender
under the Purchase Agreement and the other Transaction Documents, and
represented by the Second Replacement Debentures or any other Transaction
Documents (collectively, the “Outstanding Claims”) are bona fide Outstanding
Claims against the Borrower and are enforceable obligations of the Borrower
arising in the ordinary course of business, for services and financial
accommodations rendered to the Borrower by Lender in good faith. The Outstanding
Claims are currently due and owing and are payable in full.
 
 
3

 
 
(ii) The amount of the Second Replacement Debentures, respectively and as
applicable, is the amount due to Lender with respect thereto as of the date
hereof, and neither the Borrower, nor the Guarantors, are entitled to any
discounts, allowances or other deductions with respect thereto. The aggregate
amount of the indebtedness evidenced by the Second Replacement Debentures was
funded by Lender to Borrower at least [__X___] six months preceding the date
hereof, or [_____]  one year preceding the date hereof.
 
(iii) The Outstanding Claims are not subject to dispute by the Credit Parties,
and the Credit Parties are unconditionally obligated to pay the full amount of
all Outstanding Claims without defense, counterclaim or offset.
 
(iv) Except for the Purchase Agreement and other Transaction Documents,
including this Amendment, there has been no modification, compromise,
forbearance, or waiver (written or oral) entered into or given by Lender to
Credit Parties with respect to the Outstanding Claims.
 
(v) Lender has not filed or commended any action against Credit Parties based on
the Outstanding Claims, and no such action will be pending in any court or other
legal venue, and no judgments based upon the Outstanding Claims have been
previously entered in favor of Lender in any legal proceeding.
 
(vi) That the Purchase Agreement and each of the Transaction Documents executed
by the Credit Parties, respectively and as applicable, and all obligations due
and owing thereunder, are valid and binding obligations of the Credit Parties,
respectively and as applicable, enforceable against the Credit Parties in
accordance with their respective terms.
 
(b) The Credit Parties acknowledge that the Outstanding Claims, or a portion
thereof, are contemplated to be sold by Lender to a Purchaser in accordance with
a Debt Purchase Agreement, and that payment of the purchase price by Purchaser
to Lender for such Outstanding Claims may be conditioned upon the Borrower’s
strict compliance with the terms of certain agreements to be entered into
between the Borrower and Purchaser (the “Exchange Agreements”). If applicable,
each of the Credit Parties hereby covenants and agrees to strictly comply with
each and every term and provision of the Exchange Agreements, including, without
limitation, timely issuance and delivery of Common Stock to Purchaser upon
conversion or exchange by Purchaser of any convertible debentures then in
Purchaser’s possession.
 
(c) The Credit Parties understand and acknowledge that Lender is relying on the
representations, warranties and covenants of the Credit Parties set forth in
this Amendment in order to enter into a Debt Purchase Agreement with a
Purchaser, and the foregoing representations, warranties and acknowledgements by
the Credit Parties are a material inducement for Lender to agree to a sale of
the Outstanding Claims, or portion thereof, to a Purchaser, and without this
acknowledgement, Lender would not have sold the Outstanding Claims, or portion
thereof, to Purchaser.
 
6. Payment of Obligations. The Credit Parties hereby agree that all outstanding
Obligations due and owing under the Purchase Agreement and other Transaction
Documents shall be paid as follows:
 
 
4

 
 
(a) Payments. As a material inducement for Lender to enter into this Amendment,
the Borrower agrees to make payment for all Obligations due under the Purchase
Agreement and the other Transaction Documents in accordance with this Section
6(a). The Borrower shall make payments to Lender in the amounts and on the
respective due dates as set forth in the payment schedule attached hereto as
Exhibit “A”, until the “Extended Maturity Date” (as hereinafter defined) (each
length of time between payment due dates referred to as a “Payment Period”). Any
payments due and owing as set forth in this Section 6(a), or a portion thereof,
may be satisfied through: (i) the sale of the Outstanding Claims, or portions
thereof, from time to time to a Purchaser under a Debt Purchase Agreement; or
(ii) payments that Borrower has agreed are to be remitted to Lender in
connection with a transaction between Borrower and Chicago Ventures (the
“Payment Methods”), such that if Lender receives any sums during any Payment
Period from any of the Payment Methods, then the Dollar amount of the sums so
received by Lender from the Payment Methods during such Payment Period shall be
credited towards the payment due from the Borrower on the subsequent payment due
date as follows: (A) if the Dollar amount of the sums received by Lender from
any of the Payment Methods during any Payment Period is equal to or greater than
the payment due on the subsequent payment due date, then no further payment
shall be due from Borrower on such subsequent payment due date; (B) if the
Dollar amount of the sums received by Lender from any of the Payment Methods
during any Payment Period is less than the payment due on the subsequent payment
due date, then Borrower shall be liable for and obligated to pay to Lender, on
such subsequent payment due date, the difference between the amount of that
payment and the Dollar amount of the sums received by Lender from any of the
Payment Methods during such Payment Period; and (C) if no sums are received by
Lender from any of the Payment Methods during any Payment Period, for whatever
reason, then the Borrower shall be liable and obligated to timely make the
payment in full when due on the subsequent payment due date.
 
(b) Maturity Date.  The Purchase Agreement is hereby amended such that the
Maturity Date shall be extended to the earlier to occur of: (i) April 28, 2018;
or (ii) the occurrence of any Future Default and acceleration of all Obligations
pursuant to this Agreement and the Purchase Agreement (the “Extended Maturity
Date”). Notwithstanding anything contained in this Agreement to the contrary,
all Obligations owing by the Borrower and all other Credit Parties under the
Purchase Agreement, and all other Transaction Documents shall be paid in full by
the Extended Maturity Date.
 
7. Ratification. The Credit Parties each hereby acknowledge, represent, warrant
and confirm to Lender that: (i) each of the Transaction Documents executed by
the Credit Parties are valid and binding obligations of the Credit Parties,
respectively and as applicable, enforceable against the Credit Parties in
accordance with their respective terms; (ii) all Obligations of the Credit
Parties under the Purchase Agreement, all other Transaction Documents and this
Amendment, shall be and continue to be and remain (after execution of this
Amendment and any Debt Purchase Agreement) secured by and under the Transaction
Documents, including the Security Agreements, the Guaranty Agreements, the
Pledge Agreements, the Validity Certificates, and the UCC-1’s; and (iii) no oral
representations, statements, or inducements have been made by Lender, or any
agent or representative of Lender, with respect to the Purchase Agreement, this
Amendment, or any other Transaction Documents, or any Debt Purchase Agreement.
 
8. Additional Confirmations. The Credit Parties hereby represent, warrant and
covenant as follows: (i) that the Lender’s Liens and security interests in all
of the “Collateral” (as such term is defined in the Purchase Agreement and each
of the Security Agreements) are and remain valid, perfected, first-priority
security interests in such Collateral, subject only to Permitted Liens, and none
of the Credit Parties have granted any other Liens or security interests of any
nature or kind in favor of any other Person affecting any of such Collateral.
 
 
5

 
 
9. Lender’s Conduct. As of the date of this Amendment, the Credit Parties hereby
acknowledge and admit that: (i) the Lender has acted in good faith and has
fulfilled and fully performed all of its obligations under or in connection with
the Purchase Agreement or any other Transaction Documents; and (ii) that there
are no other promises, obligations, understandings or agreements with respect to
the Purchase Agreement or the Transaction Documents, except as expressly set
forth herein, or in the Purchase Agreement and other Transaction Documents.
 
10. Redefined Terms. The term “Transaction Documents,” as defined in the
Purchase Agreement and as used in this Amendment, shall be deemed to refer to
and include this Amendment, the Second Replacement Debentures, and all other
documents or instruments executed in connection with this Amendment.
 
11. Affirmation of Guaranty Agreements. The Guarantors do hereby acknowledge and
agree as follows: (i) Guarantors acknowledge having reviewed the terms of this
Amendment, and agree to the terms thereof; (ii) that the Guaranty Agreements,
and all representations, warranties, covenants, agreements and guaranties made
by Guarantors thereunder, and any other Transaction Documents by which the
Guarantors may be bound, shall and do hereby remain, are effective and continue
to apply to the Transaction Documents, and with respect to all Obligations of
the Borrower under the Transaction Documents, as amended by this Amendment;
(iii) that this Amendment shall not in any way adversely affect or impair the
obligations of the Guarantors to Lender under any of the Transaction Documents;
and (iv) the Guaranty Agreements are hereby ratified, confirmed and continued,
all as of the date of this Amendment.
 
12. Representations and Warranties of the Borrower and Guarantors. The Borrower
and Guarantors hereby make the following representations and warranties to the
Lender:
 
(a) Authority and Approval of Agreement; Binding Effect. The execution and
delivery by the Borrower and Guarantors of this Amendment, the Second
Replacement Debentures, and all other documents executed and delivered in
connection herewith and therewith, and the performance by Borrower and
Guarantors of all of their respective Obligations hereunder and thereunder, have
been duly and validly authorized and approved by the Borrower and the Guarantors
and their respective board of directors, managers, members, or other governing
board or committee pursuant to all applicable laws and no other corporate action
or consent on the part of the Borrower, the Guarantors, their board of
directors, members, managers, stockholders, or any other Person is necessary or
required by the Borrower and Guarantors to execute this Amendment, the Second
Replacement Debentures, and the documents executed and delivered in connection
herewith and therewith, to consummate the transactions contemplated herein or
therein, or perform all of the Borrower’s and Guarantors’ obligations hereunder
or thereunder. This Amendment, the Second Replacement Debentures, and each of
the documents executed and delivered in connection herewith and therewith have
been duly and validly executed by the Borrower and the Guarantors (and the
officer executing this Amendment and all such other documents for each Borrower
and Guarantors is duly authorized to act and execute same on behalf of each
Borrower and Guarantors) and constitute the valid and legally binding agreements
of the Borrower and Guarantors, enforceable against the Borrower and Guarantors
in accordance with their respective terms.
 
 
6

 
 
13. Indemnification. Each of the Credit Parties, jointly and severally, hereby
indemnifies and holds the Buyer Indemnified Parties, their successors and
assigns, and each of them, harmless from and against any and all charges,
complaints, claims, counter-claims, liabilities, obligations, promises,
agreements, controversies, damages, actions, causes of action, cross-actions,
threats, setoffs, equities, judgments, accounts, suits, liens, rights, demands,
benefits, costs, losses, debts, expenses, and other distributions, of every kind
and nature whatsoever, payable by any of the Buyer Indemnified Parties to any
Person, including reasonable attorneys’ and paralegals’ fees and expenses, court
costs, settlement amounts, costs of investigation and interest thereon from the
time such amounts are due at the highest non-usurious rate of interest permitted
by applicable law (collectively, the “Claims”), through all negotiations,
mediations, arbitrations, trial and appellate levels, as a result of, or arising
out of, or relating to any matters relating to this Amendment, the Purchase
Agreement, or any other Transaction Documents. The foregoing indemnification
obligations shall survive the termination of the Purchase Agreement or any of
the Transaction Documents, and repayment of the Obligations.
 
14. Waiver and Release.  Each of the Credit Parties hereby represents and
warrants to Lender that none of them have any defenses, setoffs, claims,
counterclaims, cross-actions, equities, or any other Claims in favor of the
Credit Parties, to or against the enforcement of any of the Transaction
Documents, and to the extent any of the Credit Parties have any such defenses,
setoffs, claims, counterclaims, cross-actions, equities, or other Claims against
Lender and/or against the enforceability of any of the Transaction Documents,
the Credit Parties each acknowledge and agree that same are hereby fully and
unconditionally waived by the Credit Parties.  In addition to the foregoing full
and unconditional waiver, each of the Credit Parties does hereby release, waive,
discharge, covenant not to sue, acquit, satisfy and forever discharges each of
the Buyer Indemnified Parties and their respective successors and assigns, from
any and all Claims whatsoever, in law or in equity, whether known or unknown,
whether suspected or unsuspected, whether fixed or contingent, which the Credit
Parties ever had, now have, or which any successor or assign of the Credit
Parties hereafter can, shall, or may have against any of the Buyer Indemnified
Parties or their successors and assigns, for, upon or by reason of any matter,
cause or thing whatsoever, from the beginning of the world through and including
the date hereof, including, without limitation, any matter, cause, or thing
related to the Purchase Agreement, this Amendment, the Original Debentures, the
Debentures, the Second Replacement Debentures, or any other Transaction
Documents (collectively, the “Released Claims”).  Without in any manner limiting
the generality of the foregoing waiver and release, Credit Parties hereby agree
and acknowledge that the Released Claims specifically include: (i) any and all
Claims regarding or relating to the enforceability of the Transaction Documents
as against any of the Credit Parties; (ii) any and all Claims regarding,
relating to, or otherwise challenging the governing law provisions of the
Transaction Documents; (iii) any and all Claims regarding or relating to  the
amount of principal, interest, fees or other Obligations due from any of the
Credit Parties to the Lender under any of the Transaction Documents; (iv) any
and all Claims regarding or relating to Lender’s conduct or Lender’s failure to
perform any of Lender’s covenants or obligations under any of the Transaction
Documents; (v) any and all Claims regarding or relating to any delivery or
failure to deliver any notices by Lender to Credit Parties; (vi) any and all
Claims regarding or relating to any failure by Lender to fund any advances or
other amounts under any of the Transaction Documents; (vii) any and all Claims
regarding or relating to any advisory services (or the lack thereof) provided by
Lender to any of the Credit Parties for which any advisory fees may be due and
owing and included within the Obligations; and (viii) any and all Claims based
on grounds of public policy, unconscionability, or implied covenants of fair
dealing and good faith. The Credit Parties further expressly agree that the
foregoing release and waiver agreement is intended to be as broad and inclusive
as permitted by the laws governing the Transaction Documents, and the Released
Claims include all Claims that the Credit Parties do not know or suspect to
exist, whether through ignorance, oversight, error, negligence, or otherwise,
and which, if known, would materially affect their decision to enter into this
Amendment.  The foregoing waiver and release agreements by the Credit Parties
are a material inducement for Lender to enter into this Amendment, and Lender’s
agreement to enter into this Amendment is separate and material consideration to
the Credit Parties for the waiver and release agreements contained herein, the
receipt and sufficiency of such consideration hereby acknowledged by Credit
Parties. In addition, each of the Credit Parties agrees and acknowledges that it
has had an opportunity to negotiate the terms and provisions of this Amendment,
including the foregoing waiver and release agreements, with and through their
own competent counsel, and that each of the Credit Parties have sufficient
leverage and economic bargaining power, and have used such leverage and economic
bargaining power, to fairly and fully negotiate this Amendment, including the
waiver and release agreements herein, in a manner that is acceptable to the
Credit Parties.  The foregoing waiver and release agreements shall survive the
termination of the Purchase Agreement or any of the Transaction Documents, and
repayment of the Obligations.
 
 
7

 
 
15. Effect on Agreement and Transaction Documents. Except as expressly amended
by this Amendment, all of the terms and provisions of the Purchase Agreement and
the Transaction Documents shall remain and continue in full force and effect
after the execution of this Amendment, are hereby ratified and confirmed, and
incorporated herein by this reference.
 
16. Default. In addition to the Events of Default under the Purchase Agreement,
any breach or default by Credit Parties under this Amendment, which breach or
default is not cured within ten (10) calendar days after notice of such breach
or default is given to the Credit Parties, shall be deemed an immediate “Event
of Default” under the Purchase Agreement, and such Events of Default hereunder
include, without limitation, the following: (i) failure by Borrower to
consummate any and all of the Purchase Tranche Closings, as such term is defined
in the Debt Purchase Agreement, because of any of the conditions described in
Section 3(b) of the Debt Purchase Agreement; or (ii) any other failure of the
Credit Parties, or any one of them, to comply with, satisfy, or perform any
term, provision, covenant or agreement of the Credit Parties under this
Amendment or any of the Exchange Agreements.
 
17. Waiver; Forbearance. The parties recognize and acknowledge that by entering
into this Amendment, the Lender is not waiving any rights or remedies it may
have under any of the Transaction Documents, or any defaults or Events of
Default arising thereunder, including the Existing Defaults (collectively, the
“Existing Rights”); provided, however, that Lender hereby agrees that it shall
not thereafter enforce, and Lender shall thereafter forbear from pursuing
enforcement of, any of its Existing Rights, unless and until an additional
default or Event of Default occurs under this Amendment, the Purchase Agreement,
or any other Transaction Documents (a “Future Default”), whereupon the foregoing
forbearance shall automatically become null and void and of no further force or
effect, without any further notice or demand from Lender, and Lender shall have
the absolute right to pursue and obtain all Existing Rights.
 
18. Consultation with Counsel. Credit Parties represent that they have fully
reviewed this Amendment with their respective attorneys and understand the legal
effect of this Amendment, and each of the Credit Parties represents that having
understood the legal effects of this Amendment, each of them has freely and
voluntarily consented to and authorized this Amendment.
 
19. Execution. This Amendment may be executed in one or more counterparts, all
of which taken together shall be deemed and considered one and the same
Amendment. In the event that any signature is delivered by facsimile
transmission or by e-mail delivery of a “.pdf” format file or other similar
format file, such signature shall be deemed an original for all purposes and
shall create a valid and binding obligation of the party executing same with the
same force and effect as if such facsimile or “.pdf” signature page was an
original thereof.
 
 
8

 
 
20. Fees and Expenses.
 
(a) Document Review and Legal Fees; Due Diligence. The Borrower hereby agrees to
pay to the Lender or its counsel a legal fee equal to Four Thousand Five Hundred
and No/100 Dollars ($4,500.00) for the preparation, negotiation and execution of
this Amendment and all other documents in connection herewith, which legal fee
and costs, to the extent not previously paid, shall be paid simultaneously with
the execution of this Amendment.
 
[Signatures on the following page]
 
 
9

 
 
IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of
the day and year first above written.
 
BORROWER:
 
GROWLIFE, INC., a Delaware
corporation
 
 
By:            /s/ Marco Hegyi
Name:       Marco Hegyi
Title:         Chief Executive Officer
 
GUARANTORS:
EVERGREEN GARDEN CENTERS LLC,
GROWLIFE HYDROPONICS, INC.,
a Delaware limited liability company
 a Delaware corporation
 
 
By:            /s/ Marco Hegyi
 By: /s/ Marco Hegyi
Name:       Marco Hegyi
 Name: Marco Hegyi
Title:         Chief Executive Officer
 Title: Chief Executive Officer

 
 
ROCKY MOUNTAIN HYDROPONICS, a
Colorado limited liability company
 
 
By:            /s/ Marco Hegyi
Name:       Marco Hegyi
Title:         Chief Executive Officer
 
LENDER:
 
TCA GLOBAL CREDIT MASTER FUND, LP
 
By:            TCA Global Credit Fund GP, Ltd.
Its:            General Partner
 
By:            /s/ Robert Press
   Robert Press, Director
 
 
 
10

 
EXHIBIT “A”
 
PAYMENT SCHEDULE
 
 
Payment Date
Payment No.
Interest Payment
Prin. Payment
Total Payable
Balance Outstanding
5/30/2016
1
$42,468.15
 
$42,468.15
 
6/30/2016
2
$42,468.15
 
$42,468.15
 
7/30/2016
3
$42,468.15
 
$42,468.15
 
8/30/2016
4
$42,468.15
$36,615.32
$79,083.47
$2,831,209.82
9/30/2016
5
$41,918.92
$37,164.55
$79,083.47
$2,794,594.50
10/30/2016
6
$41,361.45
$37,722.02
$79,083.47
$2,757,429.95
11/30/2016
7
$40,795.62
$38,287.85
$79,083.47
$2,719,707.93
12/30/2016
8
$40,221.30
$38,862.17
$79,083.47
$2,681,420.08
1/30/2017
9
$39,638.37
$39,445.10
$79,083.47
$2,642,557.91
2/28/2017
10
$39,046.69
$150,047.48
$189,094.18
$2,603,112.81
3/28/2017
11
$36,795.98
$152,298.20
$189,094.18
$2,453,065.32
4/28/2017
12
$34,511.51
$154,582.67
$189,094.18
$2,300,767.13
5/28/2017
13
$32,192.77
$156,901.41
$189,094.18
$2,146,184.46
6/28/2017
14
$29,839.25
$159,254.93
$189,094.18
$1,989,283.05
7/28/2017
15
$27,450.42
$161,643.75
$189,094.18
$1,830,028.12
8/28/2017
16
$25,025.77
$164,068.41
$189,094.18
$1,668,384.36
9/28/2017
17
$22,564.74
$166,529.44
$189,094.18
$1,504,315.95
10/28/2017
18
$20,066.80
$169,027.38
$189,094.18
$1,337,786.51
11/28/2017
19
$17,531.39
$171,562.79
$189,094.18
$1,168,759.13
12/28/2017
20
$14,957.95
$174,136.23
$189,094.18
$997,196.35
1/28/2018
21
$12,345.90
$176,748.27
$189,094.18
$823,060.11
2/28/2018
22
$9,694.68
$179,399.50
$189,094.18
$646,311.84
3/28/2018
23
$7,003.69
$182,090.49
$189,094.18
$466,912.34
4/28/2018
24
$4,272.33
$284,821.85
$289,094.18
$284,821.85
 
 
 
 
 
 

 
 
11