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                                                                    Exhibit 10.5


                              HINES NURSERIES, INC.


August 9, 2006



Mr. Stephen C. Avery



Re: Separation Benefits

Dear Mr. Avery:

         In order to reward your loyalty to us, our parent or any of our
subsidiaries (collectively, the "Company") and to encourage your continued
dedication to your assigned management responsibilities, with this letter we
offer you certain separation benefits which are subject to your honoring your
confidentiality and non-solicitation obligations and the other conditions set
forth herein.

         1. DEATH, DISABILITY, VOLUNTARY RESIGNATION OR TERMINATION FOR CAUSE.
If you die or become disabled while employed by us (determined in accordance
with our policies), you will receive the standard benefits available to you,
i.e., earned wages, sick pay and benefits available under existing insurance or
benefit plans to the extent applicable. If you voluntarily resign other than for
Good Reason (as defined below) or are terminated for Cause (as defined below),
you will be paid for earned wages as of the date of your resignation or
termination and retain whatever rights under our benefit plans that are
expressly provided for thereunder or otherwise required by law. For purposes of
this agreement, "Cause" means (A) your material breach of any provision of this
agreement, our policies or procedures, our code of conduct, any confidentiality
agreement, or any other agreements you have with the Company; (B) your willful
failure to perform or the gross negligence in your performance of duties in
connection with your employment with us; (C) your engagement in an act of
dishonesty involving the Company; (D) your indictment or conviction for a crime
of theft, embezzlement, fraud, misappropriation of funds or other alleged act of
dishonesty, or crime involving moral turpitude; or (E) your engagement in any
violation of law relating to your employment by, or your violation of your duty
of loyalty to, the Company.

         2. TERM. Unless extended by us in writing, this agreement shall expire
on the second anniversary of the date of this agreement (the "Termination
Date").

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Mr. Stephen C. Avery
August 9, 2006
Page - 2


         3. VOLUNTARILY RESIGNATION FOR GOOD REASON; TERMINATION WITHOUT CAUSE.
If we terminate you without Cause or you voluntarily resign for Good Reason
during the term of this agreement, we will pay to you (a) a lump sum payment
equal to six (6) months of your then-current monthly base salary less deductions
or withholdings permitted or required by applicable law within thirty (30) days
of the date of your termination or resignation; (b) any bonus amount which you
had earned as determined in accordance with its applicable terms and conditions
for the fiscal year ended prior to the date of your termination for Cause or
resignation for Good Reason and which remains unpaid to you as of the date of
your termination or resignation, which bonus shall be paid to you at the same
time that other bonuses for such ended fiscal year are paid to other employees
of the Company, consistent with past practices; and (c) the pro rata portion of
any bonus which you otherwise would have been entitled to receive had you
otherwise been employed by the Company on the last day of the fiscal year during
which you were terminated for Cause or voluntarily resigned for Good Reason,
which bonus shall be paid to you at the same time that other bonuses for such
ended fiscal year are paid to other employees of the Company, consistent with
past practices. The amounts referred to in subparagraphs (a) through (c) above
are referred to herein collectively as the "Severance Pay". As a condition to
receiving the Severance Pay described in subparagraphs (a) and (c), you shall
execute and not revoke a release of claims in the form attached hereto as
EXHIBIT A. For purposes of this agreement, "Good Reason" means that (x) your
base salary is reduced without your consent, (y) you are assigned to an office
or facility which is different than the office or facility where you are located
on the date of this agreement and which is not within a radius of fifty (50)
miles of your current office or facility and you reasonably object to the
transfer to the new place of assignment, or (z) the Company takes any other
action which results in a material adverse diminution in your position,
authority, duties or responsibilities, and the Company fails to cure such
reduction, re-assignment or material adverse diminution within fifteen (15)
business days after the Company's receipt of written notice from you specifying
the particular acts objected to and the specific cure requested by you.

         Notwithstanding anything in this Section 3 to the contrary, if any
payment or benefit to you under this Section 3 that is payable to you on account
of your termination of, or resignation from, employment with the Company,
constitutes a "deferral of compensation" under Section 409A of the Internal
Revenue Code of 1986, as amended (the "Code") (as set forth in IRS Notice
2005-1, Q&A-4 or successor Temporary or Final Treasury Regulations) and you are
a "specified employee" within the meaning of Code Section 409A(a)(2)(B)(i), the
Company shall delay commencement of any such payment or benefit until six months
after your last day of employment with the Company (the "409A Suspension
Period"). Within fourteen calendar days after the end of the 409A Suspension
Period, the Company shall pay to you a lump sum payment in cash equal to any
payments (including interest on any such payments, at an interest of not less
than the prime interest rate, as published in the Wall Street Journal, over the
period such payment is restricted from being paid to you) and benefits that the
Company would otherwise have been required to provide under this Section 3 but
for the imposition of the 409A Suspension Period. Thereafter, you shall receive
any remaining payments and benefits due under this Section 3 in accordance with
the terms of this Section (as if there had not been any suspension period
beforehand).

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Mr. Stephen C. Avery
August 9, 2006
Page - 3


         4. CONFIDENTIALITY, NON-DISPARAGEMENT AND NON-SOLICITATION. In exchange
for the foregoing benefits, you agree that you will maintain and preserve the
confidentiality of all of the proprietary and confidential information entrusted
to you (or that you learned) in the course of your employment by the Company and
to abide by any similar confidentiality or non-disclosure agreements. This
obligation applies to our confidential and proprietary information and to the
confidential information entrusted to the Company by vendors, contractors,
licensors and customers. Specifically, you acknowledge that the identity of the
Company's customers, pricing policies for the Company's customers and the
Company's customers' requirements and preferences are the Company's proprietary
and confidential information. You further agree, during your employment with the
Company and for a period of one (1) year after the cessation of your employment
with the Company for any reason, not to publish or communicate disparaging or
derogatory statements or opinions about the Company and/or its affiliated and
related entities (and the current and former directors, officers, employees and
agents of all such business entities), or the operations, products or services
of all such entities at any time. You further agree that any breach of this no
disparagement provision by you will result in irreparable harm to the Company
and therefore, the Company shall be entitled to seek an injunction prohibiting
you from any violation or threatened violation of this no disparagement
provision, and other relief, including monetary damages.

                  You further agree, during your employment with the Company and
for a period of one (1) year after the cessation of your employment with the
Company for any reason, not to, directly or indirectly, either on your own
behalf or on behalf of anyone else, attempt to persuade or solicit any of the
Company's customers, vendors or distributors to cease to do business or to
reduce the amount of business with which the customer has customarily done or
contemplates doing with the Company or to expand its business with one of the
Company's competitors.

                  You further agree, during your employment with us and for a
period of one (1) year after the cessation of your employment with us for any
reason, not to, directly or indirectly, either on your own behalf or on behalf
of any other person or entity, attempt to persuade or solicit any person who is
an employee of the Company to terminate such employment. After you leave us, you
agree not to seek to obtain any of our confidential and proprietary information
or other internal information from any current or former employee.

                  You further acknowledge and agree that the terms, agreements
and covenants contained in this Agreement are reasonable as to scope, breadth
and time and necessary to protect the legitimate interests of the Company,
including, without limitation, the trade secrets and goodwill of the Company.

                  At the time your employment terminates for any reason, you
agree to return all property, information, address lists, keys, credit cards and
other items of value to us.

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Mr. Stephen C. Avery
August 9, 2006
Page - 4


                  If you breach any of the provisions contained in this
Paragraph 4 or contained in any other confidentiality, non-solicitation or
non-disclosure agreement which you may have with the Company, then the benefits
provided to you in this agreement shall terminate. Your agreements contained in
this Paragraph 4 shall survive the termination of any such benefits.

         5. SUCCESSORS; BINDING AGREEMENT. This agreement shall inure to the
benefit of and be enforceable by you and the Company and your and the Company's
assigns. If you should die while any amount would still be payable to you
hereunder had you continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this agreement to your
devisee, legatee or other designee or, if there is no such designee, to your
estate.

         6. NOTICE. For the purpose of this agreement, notices and all other
communications provided for in this agreement shall be in writing and shall be
deemed to have been duly given when personally delivered, or if sent by
overnight, commercial air courier service, on the second business day after
being delivered to the air courier service, or if mailed, on the fifth day after
being sent by first class, certified or registered mail, return receipt
requested.

         7. MODIFICATION AND WAIVER. No provision of this agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing and signed by you and such officer as may be specifically
designated by our Board of Directors. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not expressly set forth in this agreement.

         8. TAXES. Any payments provided for hereunder shall be paid net of any
applicable withholding required under federal, state or local law.

         9. GOVERNING LAW. This Agreement shall be governed pursuant to the laws
of the State of California.

         10. OTHER AGREEMENTS. This agreement sets forth the entire agreement of
the parties with respect to the benefits provided to you herein. Nothing in this
agreement, however, negates or otherwise limits any other agreements which you
may have made with the Company regarding non-disclosure, non-solicitation and
the protection of our information or other similar confidentiality or
non-disclosure agreement. The provisions of this agreement do not change your
rights under any Company sponsored employee benefit plans or any stock option or
bonus plans.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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Mr. Stephen C. Avery
August 9, 2006
Page - 5


         If you agree with the terms of this letter, kindly sign and return to
us the enclosed copy of this letter. We will sign this letter, and a
fully-executed copy will be returned to you, constituting our agreement. Unless
and until accepted in writing by us, this agreement shall not be effective.


Sincerely,

Hines Nurseries, Inc.


By:    /S/ ROBERT A. FERGUSON
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Name:  Robert A. Ferguson
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Title: President and Chief Executive Officer
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Agreed and Accepted,

this 9th day of August, 2006.



/S/ STEPHEN C. AVERY
---------------------
Stephen C. Avery