Exhibit
10.2


SECURITY
AGREEMENT


This SECURITY
Agreement (this “Agreement”) is made as of the 16th
day of March, 2012 (the “Effective Date”), by and among Phototron Holdings, Inc., a Delaware corporation (the
“Borrower”), Growlife, Inc., a Delaware corporation (“Growlife”), Phototron, Inc., a California
corporation (“Phototron” and together with the Borrower and Growlife, collectively, the “Debtors”),
and the holders, each signatory hereto, of the Borrower’s 6% Senior Secured Convertible Notes
issued or to be issued in the original aggregate principal amount of up to $2,000,000 (the “Notes”) pursuant
to the Purchase Agreement (as defined herein) (collectively, together with their endorsees, transferees and assigns, the “Secured
Parties”, and each individually, a “Secured Party”), and W-net Fund I, L.P., who will serve
as the representative of the Secured Parties and is referred to herein from time to time as the as the “Secured Party
Representative”.


RECITALS






WHEREAS, pursuant to that
certain Securities Purchase and Exchange Agreement, dated on or about March 16, 2012, by and among the Borrower and the Secured
Parties (the “Purchase Agreement”), the Secured Parties have severally agreed to extend the loans to the Borrower
evidenced by the Notes;


 


WHEREAS, in order to induce
the Secured Parties to extend the loans evidenced by the Notes, each Debtor has agreed to execute and deliver to the Secured Parties
this Agreement and to grant the Secured Parties a security interest in certain property of such Debtor to secure the prompt payment,
performance and discharge in full of all of the Borrower’s obligations under the Notes and other Transaction Documents; and


WHEREAS, the rights
of each Secured Party hereunder shall be pari passu with each other Secured Party and enforced through the Secured
Party Representative.


AGREEMENT


NOW, THEREFORE,
in consideration of loans made by the Secured Parties under the Notes, the parties’ agreements herein, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:


 


1.                 
Collateral Security. As collateral security for the payment and performance of the Borrower’s obligations under
the Notes and the prompt and punctual performance of all undertakings and covenants of the Borrower under, or pursuant to, the
Notes and the other Transaction Documents (as defined in the Purchase Agreement), whether now existing or hereafter incurred (hereinafter
collectively referred to as the “Obligations”), each Debtor hereby grants to the Secured Parties a lien upon
and security interest in all assets and property of every kind, nature and description, wherever located and in whatever form,
whether real or personal, including, without limitation, all accounts and accounts receivable, inventory, machinery, equipment,
fixtures, cash or cash equivalents, general intangibles, Intellectual Property (as defined herein), chattel paper (whether tangible
or electronic), instruments, letter of credit rights, securities and investment property, financial assets, deposit accounts, documents,
goods (including, without limitation, all accessions to any goods), causes of action and other property rights to cash settlements,
and all books and records pertaining to all such property, in which such Debtor at any time has any right, title and interest (collectively,
the “Collateral”). As used herein, the term “Intellectual Property” means the
collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States,
multinational or foreign laws or otherwise, including, without limitation, (a) all copyrights arising under the laws of the United
States, any other country or any political subdivision thereof, whether registered or unregistered and whether published or unpublished,
all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, all registrations,
recordings and applications in the United States Copyright Office, (b) all letters patent of the United States, any other country
or any political subdivision thereof, all reissues and extensions thereof, and all applications for letters patent of the United
States or any other country and all divisions, continuations and continuations-in-part thereof, (c) all trademarks, trade names,
corporate names, company names, business names, fictitious business names, trade dress, service marks, logos, domain names and
other source or business identifiers, and all goodwill associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any state thereof or any other country or any political subdivision
thereof, or otherwise, and all common law rights related thereto, (d) all trade secrets arising under the laws of the United States,
any other country or any political subdivision thereof, (e) all rights to obtain any reissues, renewals or extensions of the foregoing,
(f) all licenses for any of the foregoing, and (g) all causes of action for infringement of the foregoing.


 


2.                 
Appointment of Secured Party Representative.


 


(a)               
By virtue of the execution of this Agreement by each Secured Party, each Secured Party shall be deemed to have agreed to
appoint W-net Fund I, L.P. as its agent and attorney-in-fact, as the Secured Party Representative for and on behalf of the Secured
Parties to give and receive notices and communications, to agree to, negotiate, enter into settlements and compromises of, and
comply with orders of courts with respect to any claim by the Borrower against any Secured Party or by any such Secured Party against
the Borrower, in each case relating to the Security Documents (as defined in the Purchase Agreement) or the transactions contemplated
thereby, and to take all other actions that are either (i) necessary or appropriate in the judgment of the Secured Party Representative
for the accomplishment of the foregoing or (ii) specifically mandated by the terms of the Security Documents. Such agency
may be changed by the Secured Parties from time to time upon not less than thirty (30) days’ prior written notice to the
Borrower; provided, however, that the Secured Party Representative may not be removed unless a Majority in Interest
(as defined herein) agree to such removal and to the identity of the substituted agent. A vacancy in the position of Secured Party
Representative, whether due to the resignation, removal or dissolution of the Secured Party Representative or for any other reason,
may be filled by a Majority in Interest. No bond shall be required of the Secured Party Representative, and the Secured Party Representative
shall not receive any compensation for its services. As used herein, the term “Majority in Interest” means,
at any time of determination, at least a majority in interest (based on then-outstanding principal amounts of Notes at the time
of such determination) of the Secured Parties.


 


(b)              
The Secured Party Representative shall not be liable for any act done or omitted hereunder as Secured Party Representative
while acting (i) in good faith or (ii) with the consent of the Majority in Interest. The Secured Parties shall indemnify the Secured
Party Representative and hold the Secured Party Representative harmless against any loss, liability or expense incurred without
willful misconduct or bad faith on the part of the Secured Party Representative and arising out of, or in connection with, the
acceptance or administration of the Secured Party Representative’s duties hereunder, including the reasonable fees and expenses
of any legal counsel, accountant or other professional advisor retained by the Secured Party Representative. The Secured Party
Representative will be entitled to the advancement and reimbursement by the Secured Parties of costs and expenses incurred by or
on behalf of the Secured Party Representative in the performance of its duties hereunder, including the reasonable fees and expenses
of any legal counsel. A decision, act, consent or instruction of the Secured Party Representative shall constitute a decision of
the Secured Parties and shall be final, binding and conclusive upon the Secured Parties, and the Borrower may rely upon any such
decision, act, consent or instruction of the Secured Party Representative as being the decision, act, consent or instruction of
the Secured Parties.


 


3.                 
General Representations, Warranties and Covenants. Each Debtor agrees, and represents, warrants and covenants to
the Secured Parties, that:


 


(a)               
Such Debtor has the requisite corporate power and authority to enter into this Agreement and
otherwise to carry out its obligations hereunder. 


 


(b)              
Such Debtor’s exact legal name, jurisdiction of incorporation and chief executive office is set forth in the preamble
above or Section 32 hereof, as applicable. Such Debtor shall give the Secured Parties prior written notice of any change
in such Debtor’s name, identity or corporate structure, or of any reincorporation, reorganization or other action that may
result in a change of the jurisdiction or organization of such Debtor.


 


(c)               
The execution, delivery and performance by such Debtor of this Agreement and the other Security Documents are within such
Debtor’s powers, have been duly authorized by all necessary action, and do not contravene (i) such Debtor’s charter
or bylaws or (ii) any law binding on or affecting such Debtor.


 


(d)              
No authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory
body is required for the due execution, delivery and performance by such Debtor of any Security Document.


 


(e)               
Each Security Document constitutes the legal, valid and binding obligation of such Debtor, enforceable against such Debtor
in accordance with its terms.


 


(f)               
Each Debtor shall cause each subsidiary of such
Debtor to immediately become a party hereto (an “Additional Debtor”), by executing and delivering an Additional
Debtor Joinder in substantially the form of Annex A attached hereto and comply with the provisions hereof applicable to
the Debtors. Upon delivery of the foregoing to the Secured Party Representative, the Additional Debtor shall be and become a party
to this Agreement with the same rights and obligations as the Debtors, for all purposes hereof as fully and to the same extent
as if it were an original signatory hereto and shall be deemed to have made the representations, warranties and covenants set forth
herein as of the date of execution and delivery of such Additional Debtor Joinder, and all references herein to the “Debtors”
shall be deemed to include each Additional Debtor.


 


4.                 
Financing Statements. Each Debtor authorizes the Secured Party Representative to file any financing statement necessary
to perfect the liens and security interests granted under this Agreement, and any continuation statement or amendment with respect
thereto, in any appropriate filing office without the signature of such Debtor where permitted by applicable law. At any time upon
the request of the Secured Party Representative, each Debtor shall execute or deliver to the Secured Party Representative any and
all financing statements, original financing statements in lieu of continuation statements, security agreements, pledges, assignments
by way of security, endorsements of certificates of title, and all other similar documents, in form and substance reasonably satisfactory
to the Secured Party Representative (collectively, the “Additional Documents”), and take any other actions,
that the Secured Party Representative may request in its reasonable discretion to create, perfect and continue perfected or to
better perfect the Secured Parties’ lien on the Collateral, and in order to fully consummate all of the transactions contemplated
hereby. To the maximum extent permitted by applicable law, each Debtor authorizes the Secured Party Representative to execute any
such Additional Documents and take any such other actions in such Debtor’s name and authorizes the Secured Party Representative
to file such executed Additional Documents in any appropriate filing office. Each Debtor hereby irrevocably makes, constitutes,
and appoints the Secured Party Representative (and any of the Secured Party Representative’s officers or designated agents)
as such Debtor’s true and lawful attorney, with power to (a) if such Debtor refuses to, or fails timely to execute and deliver
any of the Additional Documents, sign the name of such Debtor on any of the Additional Documents, and (b) endorse such Debtor’s
name on any of its payment items (including all of its respective cash collections) that may come into the Secured Party Representative’s
possession. The appointment of the Secured Party Representative as such Debtor’s attorney, and each and every one of its
respective rights and powers, being coupled with an interest, is irrevocable until all of the obligations under this Agreement
have been fully and finally repaid and performed.


 


5.                 
Power of Attorney. Each of the officers and designated agents of the Secured Party Representative is hereby irrevocably
made, constituted and appointed the true and lawful attorney for each Debtor (without requiring any of them to act as such) with
full power of substitution to do the following (such power to be deemed coupled with an interest): (a) after an Event of Default
(as defined herein), endorse the name of such Debtor upon any and all checks, drafts, money orders and other instruments for the
payment of monies that are payable to such Debtor and constitute collections on the Collateral, (b) at any time, execute in the
name of such Debtor and/or file any financing statements, schedules, assignments, instruments, documents and statements that such
Debtor is obligated to give the Secured Party Representative hereunder or is necessary to perfect the Secured Parties’ security
interest in or lien upon the Collateral, (c) at any time, to verify the validity, amount or any other matter relating to the Collateral
by mail, telephone, telecopy or otherwise, provided that, if an Event of Default has not occurred, the Secured Party Representative
shall give prior notice thereof describing the manner in which such verification shall be conducted, and (d) after an Event of
Default, do such other and further acts and deeds in the name of such Debtor that the Secured Party Representative may reasonably
deem necessary or desirable to enforce or protect the Secured Parties’ interest in any Collateral.


 


6.                 
Control Collateral. Each Debtor agrees that it will take any and all reasonable steps that the Secured Party Representative
requests in order for Secured Party Representative to obtain control of any Collateral in accordance with Sections 9-104,
9-105, 9-106, and 9-107 of the Uniform Commercial Code with respect to any of such Debtor’s securities accounts and deposit
accounts, electronic chattel paper, investment property, and letter-of-credit rights. No arrangement contemplated hereby or by
any control agreement in respect of any deposit accounts or securities accounts or other investment property shall be modified
by such Debtor without the prior written consent of the Secured Party Representative. Upon the occurrence and during the continuance
of an Event of Default, the Secured Party Representative may notify any bank or securities intermediary to liquidate the applicable
deposit account or securities account or any related investment property maintained or held thereby up to the amount of the Obligations
and remit the proceeds thereof to the Secured Parties to be applied as payment of Obligations payable under this Agreement.


 


7.                 
Sale, Lease, or Disposition of Collateral. Each Debtor will not, other than in the ordinary course of business, sell,
contract to sell, lease, encumber (including, without limitation, granting a security interest in all or any portion of the Collateral
to any third party other than the Secured Parties), or dispose of the Collateral or any interest in it without the written consent
of the Secured Party Representative until this Agreement and all of the Obligations have been fully satisfied and indefeasibly
paid in full.


 


8.                 
Dissolution or Liquidation. Each Debtor shall not commence a dissolution or liquidation without the Secured
Party Representative’s prior consent.


 


9.                 
Reimbursement of Expenses. At the option of the Secured Parties, the Secured Party Representative may discharge taxes,
liens, interests, or perform or cause to be performed for and on behalf of each Debtor any actions and conditions, obligations,
or covenants that such Debtor has failed or refused to perform. In addition, the Secured Party Representative may pay for the preservation
of the Collateral. All sums expended by the Secured Party Representative under this Section 9, including, but not limited
to, attorneys’ fees, court costs, agent’s fees, or commissions, or any other cost or expenses, shall be deemed and
be included in the Obligations and will bear interest from the date of payment at same rate as the Notes and will be payable at
the time and place designated in the Notes, and will be secured by this Agreement.


 


10.             
Payment; Guaranty.


 


(a)               
The Borrower will pay the Notes secured by this Agreement and any renewal or extensions thereof in accordance with the terms
and provisions of the Notes. The Borrower also will repay immediately all sums expended by the Secured Parties in accordance with
the terms and provisions of this Agreement.


 


(b)              
Growlife and Phototron hereby jointly and severally, unconditionally guaranty (a) the due and punctual payment of the principal
of, premium on, if any, and interest, if any, on, the Notes, whether at maturity, by acceleration, redemption or otherwise, the
due and punctual payment of interest on overdue principal of, premium on, if any, and interest, if any, on, the Notes, if any,
if lawful, and the due and punctual performance of all other obligations of the Borrower to the Secured Parties all in accordance
with the terms of the Notes and (b) in case of any extension of time of payment or renewal of the Notes or any of such other obligations,
that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether
at stated maturity, by acceleration or otherwise.


 


11.             
Change of Place of Business. Each Debtor will promptly notify the Secured Parties of any change of such Debtor’s
chief place of business, the location of the Collateral or the place where records concerning the Collateral are kept.


 


12.             
Leases. Each Debtor shall deliver to the Secured Party Representative, at such Debtor’s expense, copies of
all leases for each leased premises on which such Debtor operates.


 


13.             
Insurance. Each Debtor shall maintain or cause to be maintained insurance on the Collateral against fire, flood,
casualty and such other hazards in such amounts, with such deductibles and with such insurers as are customarily used by companies
operating in the same industry as such Debtor. If and when the Secured Party Representative requests such in writing, each Debtor
shall furnish the Secured Party Representative with evidence of insurance as the Secured Party Representative may reasonably require.
In the event a Debtor fails to procure or cause to be procured any such insurance or to timely pay or cause to be paid the premium(s)
on any such insurance, the Secured Party Representative may do so for such Debtor, but such Debtor shall continue to be liable
for the same. The policies of all such casualty insurance shall contain standard Loss Payable Clauses issued in favor of the Secured
Parties under which all losses thereunder shall be paid to the Secured Parties as the Secured Parties’ interest may appear.
Such policies shall expressly provide that the requisite insurance cannot be altered or canceled without thirty (30) days’
prior written notice to the Secured Party Representative and shall insure the Secured Parties notwithstanding the act or neglect
of a Debtor. Each Debtor hereby appoints the Secured Party Representative as such Debtor’s attorney-in-fact, exercisable
at the Secured Party Representative’s option to endorse any check which may be payable to such Debtor in order to collect
the proceeds of such insurance and any amount or amounts collected by the Secured Party Representative pursuant to the provisions
of this paragraph may be applied by the Secured Party Representative to the Obligations. Each Debtor also agrees to notify the
Secured Party Representative, promptly, upon such Debtor’s receipt of a notice of termination, cancellation, or non-renewal
from its insurance company of any such policy. Each Debtor shall maintain, and shall deliver to the Secured Party Representative
upon request evidence of public liability, products liability and business interruption insurance in such amounts as are customary
for companies in the same or similar businesses located in the same or similar area.


 


14.             
Financial Records. Each Debtor shall keep current and accurate books of records and accounts in which full and correct
entries will be made of all of its business transactions, and will reflect in its financial statements adequate accruals and appropriations
to reserves, all in accordance with GAAP. Each Debtor shall deliver to the Secured Party Representative (all to be in form and
substance satisfactory to the Secured Party Representative) such data, reports, statements and information, financial or otherwise,
as the Secured Party Representative may reasonably request.


 


15.             
Existence and Rights. Each Debtor shall do, or cause to be done, all things necessary to preserve and keep in full
force and affect its existence, good standing and rights.


 


16.                
Inspection. Each Debtor will permit any of the Secured Party Representative’s officers or other designated
agents to visit and inspect any of such Debtor’s facilities, or any other facility where any Collateral is kept, during regular
business hours, to examine and audit all of such Debtor’s books of account, records, reports and other papers, to make copies
and extracts therefrom and to discuss its affairs, finances and accounts with its officers, employees and independent certified
public accountants and attorneys. Each Debtor shall pay to the Secured Party Representative all reasonable fees based on standard
rates for such inspections.


 


17.             
Time of Performance and Waiver. In performing any act under any Security Document, time is of the essence. The Secured
Parties’ acceptance of partial or delinquent payments, or the failure of the Secured Parties to exercise any right or remedy,
will not constitute a waiver of any obligation of any Debtor or right of the Secured Parties and will not constitute a waiver of
any other similar default that occurs later.


 


18.             
Material Adverse Developments. Each Debtor agrees that immediately upon becoming aware of any development or other
information which would reasonably be expected to materially and adversely affect its business, financial condition or property,
or its ability to perform under this Agreement, it shall give to the Secured Parties telephonic or facsimile notice specifying
the nature of such development or information and such anticipated effect.


 


19.             
Default. Each Debtor will be in default under this Agreement on the occurrence of any of the following events or
conditions (each, an “Event of Default”):


 


(a)               
Default in the payment or performance of the Notes or any other note with respect to any of the Obligations secured by this
Agreement, including, without limitation, the Borrower’s failure to pay any of the Obligations, including, but not limited
to, charges, fees, expenses or other monetary obligations owing to the Secured Parties arising out of or incurred in connection
with any of the Security Documents on the date when such payment is due and payable, whether upon maturity, acceleration, demand
or otherwise;


 


(b)              
If any warranty, representation or other statement by or on behalf of a Debtor contained in, or pursuant to, this Agreement,
or in any document, agreement or instrument furnished in compliance with, relating to, or in reference to this Agreement, is false,
erroneous, or misleading in any material respect when made;


 


(c)               
Any material portion of a Debtor’s assets is attached, seized, subjected to a writ or distress warrant, or is levied
upon, or (unless permitted by the terms of this Agreement) comes into the possession of any third person and the same is not lifted
or discharged before the earlier of thirty (30) days after the date it first arises or five (5) days prior to the date on which
such property or asset is subject to forfeiture by such Debtor;


 


(d)              
If a notice of lien, levy or attachment is filed or issued by the United States or any department or instrumentality thereof
or by any state, county, municipality or other governmental agency against all or any portion of the Collateral or a material portion
of a Debtor’s property, which levy, lien or attachment (i) would be entitled to priority over the Secured Parties’
lien on the Collateral and (ii) is not lifted or discharged within the earlier of thirty (30) days of issuance or five (5)
days prior to the exercise of remedies with respect to any such levy, assessment or attachment;


 


(e)               
If the obligations of a Debtor under this Agreement or under any other Security Document is limited or terminated by operation
of law or by such Debtor;


 


(f)               
If this Agreement or any other Security Document that purports to create a lien in favor of the Secured Party, shall, for
any reason, fail or cease to create a valid and perfected and, except to the extent permitted by the terms hereof or thereof, first
priority lien on the Collateral covered hereby or thereby;


 


(g)              
If any provision of any Security Document shall at any time for any reason be declared to be null and void, or the validity
or enforceability thereof shall be contested by a Debtor or any other person, or a proceeding shall be commenced by such Debtor
or any other person, or by any governmental authority having jurisdiction over such Debtor, seeking to establish the invalidity
or unenforceability thereof, or such Debtor shall deny that it has any liability or obligation purported to be created under any
Security Document;


 


(h)              
If any Debtor ceases its business operations; or


 


(i)                
Dissolution, termination of existence, insolvency, appointment of a receiver for any part of the Collateral, assignment
for the benefit of creditors, or the commencement of any proceeding under any bankruptcy or insolvency law by or against any Debtor.


 


20.             
Cure. Nothing contained in this Agreement or any of the other Security Documents shall be deemed to compel the Secured
Parties to accept a cure of any Event of Default hereunder, if such cure occurs after the Secured Parties’ acceleration of
the Obligations.


 


21.             
Remedies. On the occurrence of any Event of Default, and at any later time, the Secured Parties may declare all Obligations
due and payable immediately and may proceed to enforce payment and exercise any and all of the rights and remedies provided by
the California Uniform Commercial Code as well as other rights and remedies either at law or in equity possessed by the Secured
Parties. The Secured Parties may require each Debtor to assemble the Collateral and make it available to the Secured Party Representative
at any place to be designated by the Secured Party Representative that is reasonably convenient to the Secured Party Representative
and such Debtor. Unless the Collateral is perishable, threatens to decline speedily in value, or is of a type customarily sold
on a recognized market, the Secured Party Representative will give each Debtor reasonable notice of the time and place of any public
sale or of the time after which any private sale or any other intended deposition of the Collateral is to be made. The requirements
of reasonable notice will be met if the notice is mailed, postage prepaid, to the address of the Debtor set forth below at least
ten (10) days before the time of the sale or disposition. Expenses of retaking, holding, preparing for sale, selling, or the like
will include the Secured Party Representative’s reasonable attorneys’ fees and legal expenses, and all will be included
as part of the Obligations and will be secured by this Agreement. All rights and remedies granted to the Secured Parties hereunder
and under the Security Documents, or otherwise available at law or in equity, shall be deemed concurrent and cumulative, and not
alternative remedies, and the Secured Parties may proceed with any number of remedies at the same time until all Obligations are
indefeasibly satisfied in full. The exercise of any one right or remedy shall not be deemed a waiver or release of any other right
or remedy, and Secured Parties, upon or at any time after the occurrence of an Event of Default, may proceed against any Debtor,
at any time, under any agreement, with any available remedy and in any order.


 


22.             
Intellectual Property. In addition to, and without limiting in any way the granting of the liens hereunder, upon
the Event of Default, each Debtor hereby assigns, transfers, and conveys to the Secured Parties a nonexclusive license and right
to use all trademarks, trade names, copyrights, patents or technical processes owned or used by such Debtor that relate to the
Collateral, together with any goodwill associated therewith, all to the extent necessary to enable the Secured Parties to realize
on the Collateral and to enjoy the benefits of the Collateral. This right shall inure to the benefit of all successors, transferees
and assigns of the Secured Parties and their successors, transferees and assigns, whether by voluntary conveyance, operation of
law, transfer, assignment, foreclosure, deed in lieu of foreclosure or otherwise. Such license and right shall be granted free
of charge without the requirement that any payment of any kind or nature whatsoever be made to the Debtor.


 


23.             
Termination of Security Interest. The security interest granted herein shall terminate, and all rights to the Collateral
shall revert to the applicable Debtor, upon the payment in full, or other satisfaction to which the Secured Parties agree, of all
Obligations. Upon such termination each Secured Party hereby authorizes each Debtor to file any UCC termination statements necessary
to effect such termination and each Secured Party shall, at such Debtor’s expense, execute and deliver to such Debtor any
additional documents or instruments as such Debtor shall reasonably request to evidence such termination.


 


24.             
Inter Secured Party Rights; Transaction/Applications of Proceeds.


 


(a)               
All Obligations owed to the Secured Parties shall rank in the order of priority pari passu
and pro-rata in proportion to each Secured Party’s outstanding principal amount of Notes at any given time
that a determination needs to be made of pro-rata holdings. If an Event of Default occurs and any party hereto collects
proceeds pursuant to its rights under any Obligations, the Secured Party Representative shall be immediately notified and such
payment shall be shared with all of the other Secured Parties as set forth in this Section 24(a). Notwithstanding anything
to the contrary contained in the Purchase Agreement or any document executed in connection with the Obligations and irrespective
of: (i) the time, order or method of attachment or perfection of the security interests created in favor of Secured Parties; (ii)
the time or order of filing or recording of financing statements or other documents filed or recorded to perfect security interests
in any Collateral; (iii) anything contained in any filing or agreement to which any Secured Party now or hereafter may be a party;
and (iv) the rules for determining perfection or priority under the Uniform Commercial Code or any other law governing the relative
priorities of secured creditors, each of the Secured Parties acknowledges that (x) all other Secured Parties have a valid security
interest in the Collateral and (y) the security interests of the Secured Parties in any Collateral pursuant to any outstanding
Obligations shall be pari passu with each other and enforced pursuant to the terms of this Agreement through the
Secured Party Representative. Each Secured Party, severally and not jointly with the other Secured Parties, shall indemnify, defend,
and hold harmless the other Secured Parties against and in respect of any and all claims, demands, losses, costs, expenses, obligations,
liabilities, damages, recoveries, and deficiencies, including interest, penalties, and reasonable professional and attorneys’
fees, including those arising from settlement negotiations, that the other Secured Parties shall incur or suffer, which arise,
result from, or relate to a breach of, or failure by such Secured Party to perform under this Agreement.


 


(b)              
The proceeds of any such sale, lease or other disposition of the Collateral hereunder or from
payments made on account of any insurance policy insuring any portion of the Collateral shall be applied first, to the expenses
of retaking, holding, storing, processing and preparing for sale, selling, and the like (including, without limitation, any taxes,
fees and other costs incurred in connection therewith) of the Collateral, then to the reasonable attorneys’ fees and expenses
incurred by the Secured Party Representative in enforcing the Secured Parties’ rights hereunder
and in connection with collecting, storing and disposing of the Collateral, then to satisfaction of the Obligations pro rata among
the Secured Parties (based on then-outstanding principal amounts of Notes at the time of any such determination), and then to the
payment of any other amounts required by applicable law. To the extent permitted by applicable law, each Debtor waives all claims,
damages and demands against the Secured Parties arising out of the repossession, removal, retention or sale of the Collateral,
unless due solely to the gross negligence or willful misconduct of the Secured Parties as determined by a final judgment (not subject
to further appeal) of a court of competent jurisdiction.


 


25.             
Governing Law. All questions concerning the construction, validity, enforcement
and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the
State of California, without regard to the principles of conflicts of law thereof. Each Debtor agrees that all proceedings concerning
the interpretations, enforcement and defense of the transactions contemplated by this Agreement and the Notes (whether brought
against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents)
shall be commenced exclusively in the state and federal courts sitting in the County of Los Angeles. Each Debtor hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in the County of Los Angeles for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby
irrevocably waives, and agrees not to assert in any proceeding, any claim that it is not personally subject to the jurisdiction
of any such court or that such proceeding is improper. Each party hereto hereby irrevocably waives personal service of process
and consents to process being served in any such proceeding by mailing a copy thereof via registered or certified mail or overnight
delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to
the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating
to this Agreement or the transactions contemplated hereby. If any party shall commence a proceeding to enforce any provisions of
this Agreement, then the prevailing party in such proceeding shall be reimbursed by the other party for its reasonable attorney’s
fees and other costs and expenses incurred with the investigation, preparation and prosecution of such proceeding.


 


26.             
Parties Bound. This Agreement will binding on and inure to the benefit of the parties and their respective heirs,
executors, administrators, legal representatives, successors, and assigns as permitted by this Agreement.


 


27.             
Validity and Construction. If any one or more of the provisions contained in this Agreement is for any reason held
to be invalid, illegal, or unenforceable, the invalidity, illegality, or unenforceability of that provision will not affect any
other provision of this Agreement, and this Agreement will be construed as if the invalid, illegal, or unenforceable provision
had never been contained in it.


 


28.             
Sole Agreement. The Security Documents constitute the only agreement of the parties with respect to securing the
payment and performance of the Obligations, and supersede any prior understandings or written or oral agreements between the parties,
respecting the subject matter thereof.


 


29.             
Integrated Agreement. The Security Documents shall be construed as integrated and complementary of each other, and
as augmenting and not restricting the Secured Parties’ rights and remedies. If, after applying the foregoing, an inconsistency
still exists, the provisions of this Agreement shall constitute an amendment thereto and shall control.


 


30.             
Commercial Code Definitions Applicable. All terms used in this Agreement that are defined in the California Uniform
Commercial Code will have the same meaning in this Agreement as in the California Uniform Commercial Code.


 


31.             
Marshaling. The Secured Parties shall not be required to marshal any present or future collateral security (including
but not limited to the Collateral) for, or other assurances of payment of, the Obligations or any of them or to resort to such
collateral security or other assurances of payment in any particular order, and all of its rights and remedies hereunder and in
respect of such collateral security and other assurances of payment shall be cumulative and in addition to all other rights and
remedies, however existing or arising. To the extent that it lawfully may, each Debtor hereby agrees that it will not invoke any
law relating to the marshaling of collateral which might cause delay in or impede the enforcement of the Secured Parties’
rights and remedies under this Agreement or under any other instrument creating or evidencing any of the Obligations or under which
any of the Obligations is outstanding or by which any of the Obligations is secured or payment thereof is otherwise assured, and,
to the extent that it lawfully may, such Debtor hereby irrevocably waives the benefits of all such laws.


 


32.             
Notices. All notices, requests, demands and other communications hereunder shall be subject
to the notice provisions of the Purchase Agreement. All communications shall be sent:


 


If to a Debtor, to:717 E. Gardena Blvd.


Gardena, CA 90248


Attn: Chief Executive Officer


Facsimile: (818) 992-0202


		If to the Secured Parties, to:	W-net Fund I, L.P.



12400 Ventura Blvd. Suite 327


Studio City, California 91604


Facsimile: (818) 474-7589


 


or at such other address,
e-mail address or facsimile number as the Debtor or the Secured Party Representative may designate by ten (10) days’ advance
written notice.


 


33.             
Expenses. In addition to the rights of the Secured Parties hereunder, each Debtor hereby agrees to pay on demand
all costs and expenses (including, without limitation, fees, expenses, audit fees, search fees, filing fees and other client charges
of counsel to the Secured Party) incurred by the Secured Parties in connection with the enforcement of the Secured Parties’
rights, and the collections of all amounts due, under any Security Document, all of which will be included as part of the Obligations
and will be secured by this Agreement.


 


34.             
Indemnity. Each Debtor releases and shall indemnify, defend and hold harmless the Secured Parties and the Secured
Party Representative, and their officers and designated agents, of and from any claims, demands, liabilities, obligations, judgments,
injuries, losses, damages and costs and expenses (including, without limitation, reasonable legal fees) resulting from (a) acts
or conduct of such Debtor or under, pursuant or related to this Agreement and the other Security Documents, (b) such Debtor’s
breach, or alleged breach, or violation of any representation, warranty, covenant or undertaking contained in this Agreement or
the other Security Documents, and (c) such Debtor’s failure, or alleged failure, to comply with any or all laws, statutes,
ordinances, governmental rules, regulations or standards, whether federal, state or local, or court or administrative orders or
decrees, and all costs, expenses, fines, penalties or other damages resulting therefrom, unless resulting from acts or conduct
of the Secured Parties constituting willful misconduct or gross negligence. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE
TO ANY OTHER PARTY TO ANY SECURITY DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON
ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED
AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER ANY SECURITY DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION
CONTEMPLATED HEREUNDER OR THEREUNDER.


 


35.             
Additional Secured Parties. Notwithstanding anything to the contrary contained herein, if the Borrower issues additional
Notes after the date hereof, any purchaser of such Notes shall become a party to this Agreement by executing and delivering a counterpart
signature page hereto, agreeing to be bound by and subject to the terms of this Agreement as a Secured Party.


 


36.             
Headings. The headings of any paragraph or section of this Agreement are for convenience only and shall not be used
to interpret any provision of this Agreement.


 


37.             
Survival. All warranties, representations, and covenants made by each Debtor herein, or in any agreement referred
to herein or on any certificate, document or other instrument delivered by it or on its behalf under this Agreement, shall be considered
to have been relied upon by the Secured Parties, regardless of any investigation made by the Secured Parties or on their behalf.
All statements in any such certificate or other instrument prepared and/or delivered for the benefit of the Secured Parties shall
constitute warranties and representations by each Debtor hereunder. Except as otherwise expressly provided herein, all representations,
warranties and covenants made by each Debtor hereunder or under any other agreement or instrument shall be deemed continuing until
all Obligations are satisfied in full.


 


38.             
Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns
of each of the parties. No Debtor may transfer, assign or delegate any of its duties or obligations hereunder.


 


39.             
No Duty on the Part of the Secured Parties. The powers conferred on the Secured Parties hereunder are solely to protect
their interest in the Collateral and shall not impose any duty upon them to exercise any such powers. The Secured Parties shall
be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither the Secured
Parties nor any of their officers or agents shall be responsible to any Debtor for any act or failure to act hereunder, except
for their own gross negligence or willful misconduct.


 


40.             
Duplicate Originals; Counterparts. Two or more duplicate originals of this Agreement may be signed by the parties,
each of which shall be an original but all of which together shall constitute one and the same instrument. This Agreement may be
executed in counterparts (including via facsimile or digital image format), all of which counterparts taken together shall constitute
one completed fully executed document.


 


41.             
Modification; Action of Secured Parties. No modification hereof or any agreement referred to herein shall be binding
or enforceable unless in writing and signed by the Borrower and a Majority in Interest. Whenever any action or consent of the Secured
Parties is required pursuant to this Agreement, except as otherwise expressly permitted hereunder, the action or consent of a Majority
in Interest shall constitute the action or consent of the Secured Parties.


 


42.             
Third Parties. No rights are intended to be created hereunder, or under any related agreements or documents for the
benefit of any third party donee, creditor or incidental beneficiary of any Debtor. Nothing contained in this Agreement shall be
construed as a delegation to the Secured Parties of a Debtor’s duty of performance, including, without limitation, such Debtor’s
duties under any account or contract with any other person or entity.


 


43.             
Revival and Reinstatement of Obligations. If the incurrence or payment of the Obligations by the Borrower or the
transfer to the Secured Parties of any property should for any reason subsequently be declared to be void or voidable under any
state, federal or other law relating to creditors’ rights, including provisions of any bankruptcy law relating to fraudulent
conveyances, preferences, or other voidable or recoverable payments of money or transfers of property (collectively, a “Voidable
Transfer”), and if the Secured Parties are required to repay or restore, in whole or in part, any such Voidable Transfer,
or elect to do so upon the reasonable advice of counsel, then, as to any such Voidable Transfer, or the amount thereof that the
Secured Parties are required or elect to repay or restore, and as to all reasonable costs, expenses, and attorneys fees of the
Secured Parties related thereto, the liability of each Debtor automatically shall be revived, reinstated, and restored and shall
exist as though such Voidable Transfer had never been made.


 


44.             
Parol Evidence. This writing is intended by the parties as a final expression of their agreement and, together with
the other Security Documents, is intended as a complete and exclusive statement of the terms of their agreement, thereby superseding
all oral negotiations and prior writing with respect to the subject matter thereof. No course of prior dealings between the parties
and no usage of the trade shall be relevant to supplement or explain the terms or provisions of this Agreement. Acceptance or acquiescence
in the course of performance rendered under this Agreement shall not be relevant to determine the meaning of this Agreement even
though the accepting or acquiescing party has knowledge of the nature of the performance or opportunity for objection.


 


(Signature
Pages Follow)


 



     

     

    

In
Witness Whereof, the parties have executed this Agreement as of the Effective Date.


 


Debtors:PHOTOTRON
HOLDINGS, INC.


 


 


By: /s/ Craig Ellins


Name: Craig Ellins


Title: Chief Executive Officer


 


 


GROWLIFE, INC.


 


 


By /s/ Craig Ellins


Name: Craig Ellins


Title: Chief Executive Officer


 


 


PHOTOTRON, INC.


 


 


By: /s/ Craig Ellins


Name: Craig Ellins


Title: Chief Executive Officer


 


 


 


 



     

     

    

In Witness
Whereof, the parties have executed this Agreement as of the Effective Date.


 


Secured Party Representative:W-net
Fund I, L.P.


 


 


 


By:/s/ David Weiner


Name: David Weiner


Title: Manager of the General Partner


 


 


Secured Parties:W-net
Fund I, L.P.


 


 


 


By: /s/ David Weiner


Name: David Weiner


Title: Manager of the General Partner


 


 


Europa International
Inc.


 


 


 


By: /s/ Fred Knoll


Name: Fred Knoll


Title: Investment Manager


 


 


 


 



     

     

    

In
Witness Whereof, the parties have executed this Agreement as of ________________________
___, 20___ with respect to an Additional Closing (as defined in the Purchase Agreement) pursuant to Section 2.1(b) of the Purchase
Agreement.


 


Secured Parties:


 


If an Entity:


(Print Entity
Name)


 


By (Sign): 



Name (Print): 



Title (Print): 


 


If an Individual:


(Sign)



Name (Print): 


 


Email Address of Secured Party: _____________________________________________


Facsimile Number of Secured Party: __________________________________________


Address of Secured Party:


 


________________________________________________


 


________________________________________________


 





 


 


 


 


 



     

     

    

ANNEX A


 


FORM OF ADDITIONAL
DEBTOR JOINDER


 


Security Agreement dated as of March 16, 2012
made by


Phototron Holdings, Inc.


and its subsidiaries party thereto from time
to time, as Debtors


to and in favor of


the Secured Parties identified therein (the
“Security Agreement”)


 


Reference is made to the
Security Agreement as defined above; capitalized terms used herein and not otherwise defined herein shall have the meanings given
to such terms in, or by reference in, the Security Agreement.


 


The undersigned hereby
agrees that upon delivery of this Additional Debtor Joinder to the Secured Parties referred to above (or the Secured Party Representative
on their behalf), the undersigned shall (a) be an Additional Debtor under the Security Agreement, (b) have all the rights and obligations
of the Debtors under the Security Agreement as fully and to the same extent as if the undersigned was an original signatory thereto,
and (c) be deemed to have made the representations and warranties set forth therein as of the date of execution and delivery of
this Additional Debtor Joinder. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE UNDERSIGNED SPECIFICALLY GRANTS TO THE SECURED
PARTIES A SECURITY INTEREST IN THE COLLATERAL OWNED BY IT AS MORE FULLY SET FORTH IN THE SECURITY AGREEMENT AND ACKNOWLEDGES AND
AGREES TO THE WAIVER OF JURY TRIAL PROVISIONS SET FORTH THEREIN.


 


An executed copy of this
Joinder shall be delivered to the Secured Parties (or the Secured Party Representative on their behalf), and the Secured Parties
may rely on the matters set forth herein on or after the date hereof. This Joinder shall not be modified, amended or terminated
without the prior written consent of the Secured Parties.


 


IN WITNESS WHEREOF, the
undersigned has caused this Joinder to be executed in the name and on behalf of the undersigned.


 


			[Name of Additional Debtor]



 


By: ________________________


			Name:



			Title:



Address: