Document:

Exhibit 10.11

 

EXECUTION
VERSION

 

 

 

CREDIT AGREEMENT

 

DATED MAY 12, 2017 and

 

BY AND AMONG

 

HYDROFARM HOLDINGS LLC

(to be succeeded as a Borrower by Hydrofarm, LLC, WJCO LLC, EHH Holdings, LLC and

SunBlaster LLC),

as Initial Borrower,

 

THE OTHER LOAN PARTIES WHICH ARE PARTY
HERETO,

 

THE LENDERS WHICH ARE PARTY HERETO

 

AND

 

BRIGHTWOOD LOAN SERVICES LLC

as Administrative Agent

 

    

     

    

 

	 	 	 	 
	 	 	TABLE OF CONTENTS	 
	 	 	 	 
	 	 	 	Page
		 	ARTICLE I	 
	 	 	DEFINITIONS AND OTHER TERMS	 
	 		 	 
	1.1		Defined Terms	1
	 	 	ARTICLE II	 
	 	 	THE TERM LOANS	 
	 		 	 
	2.1		The Term Loans	34
	2.2		Election by Borrower Agent	40
	2.3		Payments	40
	2.4		Setoff; etc.	40
	2.5		Sharing	41
	2.6		Fees	41
	2.7		Lending Branch	41
	2.8		Application of Payments and Collections	41
	2.9		Defaulting Lenders	42
	2.10		Joint and Several Liability	43
	2.11		Borrower Agent	45
	 	 	ARTICLE III	 
	 	 	CONDITIONS PRECEDENT	 
	 	 	 	 
	3.1		Conditions Precedent to Term Loans on the Closing Date	45
	3.2		Perfection on the Closing Date	49
	 	 	 	 
	 	 	ARTICLE IV	 
	 	 	REPRESENTATIONS AND WARRANTIES	 
	 		 	 
	4.1		Organization; etc.	49
	4.2		Due Authorization	50
	4.3		Subsidiaries	50
	4.4		Validity of the Agreement	50
	4.5		Financial Statements	50
	4.6		Litigation; etc.	50
	4.7		Compliance with Law	51
	4.8		ERISA Compliance	51
	4.9		Title to Assets	52
	4.10		Use of Proceeds	52
	4.11		Governmental Regulation	52
	4.12		Margin Stock	52
	4.13		Not a Regulated Entity	52
	4.14		Accuracy of Information	53
	4.15		Tax Returns; Audits	53
	4.16		Environmental and Safety Regulations	53
	4.17		Payment of Wages; Labor Matters	53
	4.18		Intellectual Property	54

 

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	4.19	 	Projections	54
	4.20	 	Solvency	54
	4.21	 	No Material Adverse Effect	54
	4.22	 	Brokers’ Fees	54
	4.23	 	Deposit Accounts	54
	4.24	 	Hydrofarm Acquisition Agreement	54
	4.25	 	Material Contracts	55
	4.26	 	Valid Liens	55
	4.27	 	Foreign Assets Control Regulations and Anti-Money Laundering	55
	4.28	 	Patriot Act	55
	4.29	 	Surety Obligations	56
	4.30	 	Trade Relations	56
	4.31	 	Holdings	56
	4.32	 	Revolving Loan Documents	56
	4.33	 	Insurance	56
	4.34	 	SBA Matters	56
	 	 	 	 
	 	 	ARTICLE V	 
	 	 	CERTAIN AFFIRMATIVE COVENANTS	 
	 	 	 	 
	5.1	 	Financial Information; etc.	57
	5.2	 	Maintenance of Existence and Licenses; etc.	60
	5.3	 	Maintenance of Properties	60
	5.4	 	Payment of Liabilities	61
	5.5	 	Compliance with Laws	61
	5.6	 	Books and Records; Inspection Rights; etc.	61
	5.7	 	Insurance	62
	5.8	 	ERISA	63
	5.9	 	Additional Subsidiary Guarantors	63
	5.10	 	Landlord Agreements	64
	5.11	 	Cash Management Systems	64
	5.12	 	Further Assurances	64
	5.13	 	SBA Matters	64
	5.14	 	OFAC; Patriot Act	65
	5.15	 	Senior Credit Enhancements	65
	 	 	 	 
	 	 	ARTICLE VI	 
	 	 	FINANCIAL COVENANTS AND NEGATIVE COVENANTS	 
	 	 	 	 
	6.1	 	Financial Covenants	65
	6.2	 	Limitations on Indebtedness	67
	6.3	 	Liens	69
	6.4	 	Sales of Assets	70
	6.5	 	Liquidations, Mergers and Consolidations	71
	6.6	 	Investments	72
	6.7	 	Transactions with Affiliates	72
	6.8	 	Acquisitions	72
	6.9	 	Amendment and Waiver	72
	6.10	 	Restricted Payments	73
	6.11	 	Payments in Respect of Certain Indebtedness	74
	6.12	 	Change in Business	74

 

    -ii-

     

    

 

	6.13	 	Changes in Accounting, Name and Jurisdiction of Organization	74
	6.14	 	No Negative Pledges	74
	6.15	 	Holding Company Status	75
	6.16	 	Use of Proceeds	75
	6.17	 	Tax Consolidation	75
	6.18	 	Accounting Changes	75
	6.19	 	Hedging Agreements	75
	6.20	 	Plans	75
	 	 	 	 
	 	 	ARTICLE VII	 
	 	 	EVENTS OF DEFAULT	 
	 	 	 	 
	7.1	 	Events of Default	76
	7.2	 	Action If Event of Default	78
	7.3	 	Remedies	78
	 	 	 	 
	 	 	ARTICLE VIII	 
	 	 	THE ADMINISTRATIVE AGENT	 
	 	 	 	 
	8.1	 	Appointment and Authorization	79
	8.2	 	Power	79
	8.3	 	Interest Holders	79
	8.4	 	Employment of Counsel; etc.	80
	8.5	 	Reliance	80
	8.6	 	General Immunity	80
	8.7	 	Credit Analysis	81
	8.8	 	Administrative Agent and Affiliates	81
	8.9	 	Indemnification	81
	8.10	 	Security Documents	82
	8.11	 	Collateral Matters	82
	8.12	 	Action by the Administrative Agent	82
	8.13	 	Successor Administrative Agent	83
	8.14	 	Legal Representation of Administrative Agent	83
	 	 	 	 
	 	 	ARTICLE IX	 
	 	 	MISCELLANEOUS	 
	 	 	 	 
	9.1	 	Waivers, Amendments; etc.	84
	9.2	 	Payment Dates	84
	9.3	 	Notices	84
	9.4	 	Costs and Expenses	85
	9.5	 	Indemnification	85
	9.6	 	Severability	86
	9.7	 	Headings	86
	9.8	 	Governing Law	87
	9.9	 	Successors and Assigns	87
	9.10	 	Execution in Counterparts	89
	9.11	 	Several Liability	90
	9.12	 	Financial Information	90
	9.13	 	Entire Agreement	90
	9.14	 	Other Relationships	90

 

    -iii-

     

    

 

	9.15	 	Consent to Jurisdiction	90
	9.16	 	Waiver of Jury Trial	90
	9.17	 	USA Patriot Act	91
	9.18	 	Confidentiality	91
	9.19	 	Replacement of Lenders	91
	9.20	 	Keepwell	92
	9.21	 	Electronic Execution of Assignments and Certain Other Documents	92
	9.23	 	Assumption by Holdings and Successor Borrowers	93
	 	 	 	 
	 	 	ARTICLE X	 
	 	 	TAXES, YIELD PROTECTION AND ILLEGALITY	 
	 	 	 	 
	10.1	 	Taxes	94
	10.2	 	Illegality	98
	10.3	 	Inability to Determine Rates	98
	10.4	 	Increased Costs; Reserves on LIBOR Rate Loans	99
	10.5	 	Funding Losses	100
	10.6	 	Mitigation Obligations; Replacement of Lenders	101
	10.7	 	Survival	101

 

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	SCHEDULE I	 	-	 	Lenders/Commitments
	SCHEDULE 1.1	 	-	 	Consolidated EBITDA, Consolidated Fixed Charges and Fixed Charge Coverage Ratio Amounts
	SCHEDULE 4.1	 	-	 	List of Jurisdictions in which the Loan Parties and Subsidiaries are Qualified to Do Business
	SCHEDULE 4.3	 	-	 	List of Subsidiaries
	SCHEDULE 4.6	 	-	 	Litigation
	SCHEDULE 4.8	 	-	 	ERISA
	SCHEDULE 4.9	 	-	 	Flood Zones
	SCHEDULE 4.16	 	-	 	Environmental Matters
	SCHEDULE 4.17	 	-	 	Labor Matters
	SCHEDULE 4.18	 	-	 	Intellectual Property
	SCHEDULE 4.23	 	-	 	Deposit Accounts
	SCHEDULE 6.2	 	-	 	Existing Indebtedness
	SCHEDULE 6.3	 	-	 	Existing Liens
	SCHEDULE 6.6	 	-	 	Permitted Investments
	SCHEDULE 6.7	 	-	 	Affiliate Transactions
	SCHEDULE 9.3	 	-	 	Administrative Agent’s Office; Certain Addresses for Notices
	EXHIBIT A	 	-	 	Form of Note
	EXHIBIT B	 	-	 	Form of Guaranty
	EXHIBIT C	 	-	 	Form of Notice of Borrowing
	EXHIBIT D	 	-	 	Form of Assignment and Assumption Agreement
	EXHIBIT E	 	-	 	Compliance Certificate

 

    -v-

     

    

 

CREDIT AGREEMENT

 

This CREDIT AGREEMENT
effective as of the 12th day of May, 2017, by and among HYDROFARM HOLDINGS LLC, a Delaware limited liability company (“Initial
Borrower” or “Holdings”; immediately upon consummation of the Hydrofarm Acquisition and execution
of the Assumption Agreement, Initial Borrower shall be succeeded as a Borrower hereunder by HYDROFARM, LLC, a California
limited liability company (“Hydrofarm”), WJCO LLC, a Colorado limited liability company (“WJCO”),
EHH HOLDINGS, LLC (“EHH”), a Delaware limited liability company and SUNBLASTER, LLC, a Delaware
limited liability company (“SunBlaster”)), the other Loan Parties party hereto, the Lenders now or hereafter
parties hereto, and BRIGHTWOOD LOAN SERVICES LLC, in its capacity as Administrative Agent for the Lenders.

 

WHEREAS, the
Borrowers have requested and the Lenders have agreed to provide, subject to the terms and conditions hereof, certain extensions
of credit.

 

NOW, THEREFORE,
in consideration of the terms and conditions contained herein, and of any loans or extensions of credit heretofore, now or hereafter
made to or for the benefit of the Borrower by the Lenders and the Administrative Agent, the parties hereto agree as follows:

 

ARTICLE I

DEFINITIONS AND OTHER TERMS

 

1.1       Defined
Terms. The following terms when used in this Agreement shall, except where

 

the context otherwise requires, have the following meanings:

 

“Acquired Company” means, collectively,
Hydrofarm and its Subsidiaries.

 

“Acquisition”
means (whether by purchase, exchange, issuance of Equity Interests or Equity Interests Equivalents, merger, reorganization, joint
venture or otherwise) a transaction or series of transactions resulting, directly or indirectly, in (a) the acquisition by
a Borrower or its Subsidiaries of all or a substantial portion of a business, division or substantially all assets of a Person,
(b) the record or beneficial ownership by a Borrower or its Subsidiaries of 50% or more of the Equity Interests of a Person,
or otherwise causing any Person to become a Subsidiary of a Borrower or its Subsidiaries, (c) the merger, consolidation or
combination of a Borrower or a Subsidiary with another Person (other than a Person that is already a Subsidiary), or (d) any
other business combination by a Borrower or its Subsidiaries with any Person to effect any of the transactions referred to in clauses
(a), (b) or (c) above.

 

“Acquisition
Documents” means the Hydrofarm Acquisition Agreement, and all other agreements, instruments, deeds, assignments, bills
of sale, affidavits, certificates and closing statements executed and delivered by and/or to Holdings or a Borrower, as applicable,
to effect the Hydrofarm Acquisition.

 

“Adjusted
Consolidated EBITDA” means, for any Test Period, the sum of Consolidated EBITDA for such Test Period calculated on a
Pro Forma Basis.

 

“Administrative
Agent” means Brightwood Loan Services LLC, as Administrative Agent for the Lenders, or any successor Administrative Agent
hereunder.

 

“Administrative
Questionnaire” means an administrative questionnaire to be completed and provided to the Administrative Agent in form
and substance as provided by the Administrative Agent.

 

    1

     

    

 

“Affiliate”
means, respect to a specified Person, (a) another Person that directly, or indirectly through one or more intermediaries,
Controls or is Controlled by or is under common Control with the Person specified, and (b) solely with respect to Sections
6.7, 8.8, 9.5, 9.9, 9.14 and 9.18, any officer or director of such Person. “Control”
means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled”
have correlative meanings. For purposes of this definition, a Person shall be deemed to Control another Person if the Controlling
Person owns or controls directly or indirectly ten percent (10%) or more of the shares of stock, other Equity Interests or Equity
Interests Equivalents or voting powers of the Controlled Person. Unless expressly stated otherwise herein, neither the Administrative
Agent nor any Lender shall be deemed an Affiliate of any Loan Party or any of their respective Subsidiaries.

 

“Agreement”
means this Credit Agreement as originally executed and as amended, modified or supplemented from time to time.

 

“Applicable
Margin” means (a) 7.00% per annum with respect to LIBOR Rate Loans, and (b) 6.00% per annum with respect to
Base Rate Loans.

 

“Approved
Fund” means any Fund that is administered, advised or managed by (a) a Lender, (b) an Affiliate of a Lender
or (c) an entity or an Affiliate of an entity that administers, advises or manages a Lender.

 

“Asset Disposition”
means any sale, lease, license, consignment, transfer or other disposition of Property by any Person, including any disposition
in connection with a sale-leaseback transaction or synthetic lease.

 

“Assignment and Assumption Agreement”
shall have the meaning set forth in Section 9.9(b).

 

“Assumption
Agreement” means that certain Borrower/Guarantor Assumption Agreement, dated as of the Closing Date, among Initial Borrower,
Hydrofarm, WJCO, EHH, SunBlaster and the Administrative Agent.

 

“Base Rate”
means, for any day, a rate per annum equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1% and (c) the sum of (x) the LIBOR Rate calculated for
each such day based on an Interest Period of one month determined two (2) Business Days prior to such day, plus (y) 1%.
If the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable
to ascertain the Federal Funds Effective Rate for any reason, including the inability or failure of the Administrative Agent to
obtain sufficient quotations in accordance with the terms of the definition thereof, the Base Rate shall be determined without
regard to clause (b) of the preceding sentence until the circumstances giving rise to such inability no longer exist.
Any change in the Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the LIBOR Rate shall be effective
on the effective date of such change in the Prime Rate, the Federal Funds Effective Rate or the LIBOR Rate, as the case may be.

 

“Base Rate Loan” means
any Term Loan accruing interest by reference to the Base Rate.

 

“Borrower”
means (a) at any time prior to the consummation of the Hydrofarm Acquisition and the execution and delivery of the Assumption
Agreement, Initial Borrower, and (b) upon and at any time after the consummation of the Hydrofarm Acquisition and the
execution and delivery of the Assumption Agreement, each of Hydrofarm, WJCO, EHH and SunBlaster.

 

    2

     

    

 

“Borrower Agent” shall have the
meaning set forth in Section 2.11. “Brightwood” means Brightwood Loan Services LLC and any Affiliate
thereof.

 

“Business
Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under
the laws of, or are in fact closed in, North Carolina and New York, New York and, if such day relates to an event, a transaction
or a notice in respect of a LIBOR Rate Loan, a day which is also a day on which dealings in U.S. Dollar deposits are carried out
in the London interbank market.

 

“Call Premium”
means (i) 2.0% during the period from the Closing Date through and including the first anniversary of the Closing Date, (ii) 1.0%
during the period from and including the date after the first anniversary of the Closing Date through and including the date that
is 18 months following the Closing Date and (iii) thereafter, 0%, in each case of the principal amount of the Term Loans prepaid
in accordance with Sections 2.1(g)(1)(i), 2.1(g)(4)(ii) (in the case of Section 2.1(g)(4)(ii), solely
to the extent such prepayment is made with respect to a Major Asset Disposition), 2.1(g)(5) or 2.1(g)(7) during
such period.

 

“Capital Expenditures”
means (a) all expenditures made and capitalized by Holdings, the Loan Parties, and their Subsidiaries for property, plant,
equipment, other fixed assets (including any such expenditures by way of Acquisition of a Person or by way of incurrence or assumption
of Indebtedness or other obligations, to the extent reflected as plant, property, equipment or other fixed assets), research and
development or other long-term assets, but in each case excluding any portion of the purchase price paid with respect to any Permitted
Acquisition plus, (b) deposits made in anticipation of the purchase of such property, plant, equipment, other fixed
assets, research and development or other long-term assets less such deposits previously included, less (c)(i) Net
Cash Proceeds of Asset Dispositions received from Asset Dispositions permitted pursuant to Section 6.4 which (x) Holdings,
the Loan Parties, and their Subsidiaries are permitted to reinvest pursuant to the terms of Section 2.1(g)(4) and
(y) are included in expenditures made and capitalized pursuant to clause (a) above, (ii) Net Cash Proceeds
of property insurance policies received which (x) Holdings, the Loan Parties, and their Subsidiaries are permitted to reinvest
pursuant to the terms of Section 2.1(g)(4) and (y) are included in expenditures made and capitalized pursuant
to clause (a) above, (iii) capitalized trade-ins of equipment that is worn, damaged or obsolete with equipment
of like function and value, and (iv) Capital Expenditures financed with the Net Cash Proceeds of common Equity Interests (that
are Qualified Equity Interests) issued by Holdings.

 

“Capital Lease”
means, with respect to any Person, a lease of (or other agreement conveying the right to use) real and/or personal property, which
obligation is, or in accordance with GAAP (including Statement of Financial Accounting Standards No. 13 of the Financial Accounting
Standards Board) is required to be, classified and accounted for as a capital lease on a balance sheet of such Person.

 

“Capital Lease
Obligations” means, for any period for which the amount thereof is to be determined, any obligation of such Person to
pay rent or other amounts under a Capital Lease that is required to be capitalized in accordance with GAAP.

 

“Casualty
Event” means any event that gives rise to the receipt by any Loan Party of any insurance proceeds (including business
interruption insurance proceeds) or condemnation awards in respect of any equipment, fixed assets or real property (including any
improvements thereon).

 

“CERCLA”
means the Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C. § 9601 et seq.).

 

    3

     

    

 

“Change in
Law” means the occurrence, after the Closing Date, of any of the following: (a) the adoption or taking effect of
any law, order, policy, rule, regulation or treaty, (b) any change in any law, order, policy, rule, regulation or treaty or
in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making
or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority;
provided that notwithstanding anything herein to the contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection
Act and all requests, rules, guidelines, regulations or directives thereunder or issued in connection therewith and (ii) all
requests, rules, guidelines, regulations or directives promulgated by the Bank for International Settlements, the Basel Committee
on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each
case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted
or issued.

 

“Change of
Control” means the occurrence of any of the following: (a) Holdings ceases to own and control, beneficially and
of record, directly or indirectly, all Equity Interests in a Borrower or any other Loan Party, (b) Sponsor and Co-Investor,
collectively, cease to directly or indirectly (x) own and control, beneficially and of record, at least 50.1% of the Equity
Interests of Holdings, or (y) possess the right to elect (through contract, ownership of voting securities or otherwise) at
all times a majority of the board of directors (or similar governing body) of Holdings or to direct the management policies and
decisions of Holdings, (c) Sponsor ceases to directly or indirectly own and control, beneficially and of record, Equity Interests
of Holdings representing at least 50% of the voting power and 50% of the economic interest represented by the Equity Interests
of Holdings held by Sponsor on the Closing Date, or (d) any “change of control” (or similar term) under the Revolving
Loan Facility, the Revolving Loan Documents or any Subordinated Indebtedness, while outstanding, shall have occurred.

 

“Closing Date” means May 12,
2017.

 

“Closing Equity
Contribution” shall mean the contribution of cash by the Sponsor and Co-Investor to Holdings, together with the rollover
of equity by certain holders of Equity Interests in the Acquired Company into Equity Interests of Holdings, on or prior to the
Closing Date in exchange for the issuance to the Sponsor, the Co-Investor and such rollover investors of Qualified Equity Interests
of Holdings in an aggregate amount equal to at least 40.0% of the sum of (i) total funded Indebtedness used to fund the Hydrofarm
Acquisition and the Refinancing (including, without limitation the Term Loans and the initial borrowings of Revolving Loans under
the Revolving Loan Documents on the Closing Date and (ii) the aggregate amount of equity contributions to Holdings hereinabove
described.

 

“Co-Investor”
means collectively, (i) Aaron Serruya, Michael Serruya, Simon Serruya, and Jacques Serruya, individually and each such individual’s
Controlled Investment Affiliates, (ii) Serruya Private Equity and its Controlled Investment Affiliates, and (iii) BCM
X3 Holdings, LLC and its Controlled Investment Affiliates.

 

“Code” means the Internal Revenue
Code of 1986, as amended from time to time.

 

“Collateral”
means all present and future assets and properties of the Borrowers and the Guarantors, whether real or personal, tangible or intangible,
in which Liens are granted or purported to be granted pursuant to the Security Documents; provided, that Collateral shall
not include any Excluded Assets.

 

“Colorado
Property” means that certain Real Property located at 4200 East 50th Avenue in Denver, Colorado.

 

    4

     

    

 

“Colorado
Property Sale-Leaseback” means any sale-leaseback transaction consummated by the Loan Parties with respect to the Colorado
Property.

 

“Commitment”
means, for each Lender, the aggregate amount of such Lender’s commitment to fund Term Loans as set forth opposite of such
Lender’s name under the heading “Commitment” on Schedule I or as set forth in an Assignment and
Assumption Agreement delivered pursuant to Section 9.9(b), as such amount may be modified from time to time pursuant
to the terms hereof.

 

“Commodity
Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor
statute.

 

“Compliance
Certificate” means a certificate in substantially the form set forth as Exhibit E, completed and signed
by a Responsible Officer of the Borrower Agent.

 

“Connection
Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that
are franchise Taxes or branch profits Taxes.

 

“Consolidated
Amortization Expense” means the amount of amortization expense deducted in determining Consolidated Net Income.

 

“Consolidated
Depreciation Expense” means the amount of depreciation expense deducted in determining Consolidated Net Income.

 

“Consolidated
EBITDA” means, for any period for which the amount thereof is to be determined, an amount equal to Consolidated Net Income
for such measurement period: plus (a) the following, without duplication, in each case to the extent deducted in calculating
such Consolidated Net Income:

 

(i)           Consolidated
Interest Expense during such period,

 

(ii)          Consolidated
Amortization Expense during such period,

 

(iii)         Consolidated
Depreciation Expense during such period,

 

(iv)         Consolidated
Tax Expenses paid or accrued during such period and the amount of any Tax Distributions made in cash during such period,

 

(v)          non-recurring
fees and expenses paid in cash during such period in connection with the Hydrofarm Acquisition, this Agreement, the Loan Documents
and the Revolving Loan Facility, in an aggregate amount (for all periods in the aggregate) not to exceed $6,000,000,

 

(vi)         any
non-cash losses arising from the sale of capital assets during such period,

 

(vii)        the
aggregate amount of all Permitted Management Fees paid or accrued with respect to such period,

 

(viii)       extraordinary
non-cash losses with respect to such period (other than with respect to the write-downs of accounts receivable or inventory),

 

(ix)         transaction
fees, costs, and expenses incurred in such period in connection with Permitted Acquisitions (whether or not consummated) in an
aggregate amount not to exceed $500,000 in any twelve-month period,

 

    5

     

    

 

 

(x)            to
the extent actually reimbursed in cash from insurance proceeds, the amount of expenses for such period with respect to any business
interruption,

 

(xi)           non-recurring
costs and expenses incurred between the Closing Date and the second anniversary thereof in connection with the integration and
implementation of streamlining and efficiency strategies; provided, that, (i) the anticipated cost saving benefits of such
costs and expenses are (x) reasonably identifiable, factually supportable and certified in writing by a Responsible Officer
of the Borrower Agent, and (y) reasonably expected by the Borrower to be realized within 12 months following such operational
initiative, and (ii) the aggregate amount of such costs and expenses do not exceed $2,500,000 (for all periods in the aggregate),

 

(xii)          other
non-recurring fees and expenses approved by Administrative Agent in its Permitted Discretion so long as, and only to the extent
that, such other non-recurring fees and expenses are similarly being added to “EBITDA” under the Revolving Loan Agreement
pursuant to clause (a)(xii) of the definition of “EBITDA” set forth in the Revolving Loan Agreement,

 

and minus (b) to the extent added in calculating
such Consolidated Net Income, the aggregate amount of:

 

(i)            any
non-cash gains during such period arising from the sale of capital assets,

 

(ii)           any
non-cash gains during such period arising from the write-up of assets (other than with respect to accounts receivable or inventory),
and

 

(iii)          any
non-cash extraordinary gains during such period.

 

Notwithstanding the
foregoing, the Consolidated EBITDA for the fiscal quarters ended March 31, 2016, June 30, 2016, September 30, 2016,
and December 31, 2016 shall be the amounts set forth under the heading “Consolidated EBITDA” on Schedule
1.1.

 

“Consolidated
Fixed Charges” means, for any period for which the amount thereof is to be determined, the sum, without duplication of
(a) Consolidated Interest Expense (other than payment-in-kind interest expense), and (b) the principal amount of all
scheduled principal payments made on Indebtedness (other than Revolving Loans) of Holdings, the Borrowers and their Subsidiaries,
in each case, for such period.

 

Notwithstanding the
foregoing, the Consolidated Fixed Charges for the fiscal quarters ended March 31, 2016, June 30, 2016, September 30,
2016, and December 31, 2016 shall be the amounts set forth under the heading “Consolidated Fixed Charges” on Schedule
1.1.

 

“Consolidated
Interest Expense” means, for any period for which the amount thereof is to be determined, the consolidated interest expense
of Holdings, the Borrowers and their Subsidiaries, including (i) all interest on Indebtedness (including imputed interest
related to Capital Leases), (ii) all amortization of debt discount and expense, (iii) all commissions, discounts and
other fees and charges owed with respect to letters of credit or bankers’ acceptances and (iv) Swap Obligations of such
Person and its Subsidiaries, to the extent required to be reflected on the income statement of such Person on a consolidated basis
in accordance with GAAP.

 

“Consolidated
Net Income” means, for any fiscal period, the consolidated net income (or loss) of Holdings, the Borrowers and their
Subsidiaries determined on a consolidated basis in accordance with GAAP; provided that there shall be excluded from such
net income (to the extent otherwise included therein), without duplication:

 

    6 

    

    

 

(a)            the
net income (or loss) of any Person (other than a Subsidiary of Holdings) in which any Person other than Holdings, a Borrower or
any of their Subsidiaries has an ownership interest, except to the extent that cash in an amount equal to any such income has actually
been received by Holdings, a Borrower or any of their Subsidiaries from such Person during such period,

 

(b)            the
net income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of Holdings or is merged into or consolidated
with Holdings, a Borrower or any of their Subsidiaries or that Person’s assets are acquired by Holdings, a Borrower or any
of their Subsidiaries,

 

(c)            the
net income of any Subsidiary of Holdings during such period to the extent that the declaration and/or payment of dividends or similar
distributions by such Subsidiary of that income is not permitted by operation of the terms of its organizational documents or any
agreement, instrument, order or other legal requirement applicable to that Subsidiary or its equityholders during such period,
and

 

(d)            the
cumulative effect of a change in accounting principles.

 

“Consolidated
Tax Expenses” means federal, state and local income tax expenses of Holdings, the Borrowers and their Subsidiaries.

 

“Contingent
Obligation” means any obligation of a Person arising from a guaranty, indemnity or other assurance of payment or performance
of any Indebtedness, lease, dividend or other obligation (“primary obligations”) of another obligor (“primary
obligor”) in any manner, whether directly or indirectly, including any obligation of such Person under any (a) guaranty,
endorsement, co-making or sale with recourse of an obligation of a primary obligor; (b) obligation to make take-or-pay or
similar payments regardless of nonperformance by any other party to an agreement; and (c) arrangement (i) to purchase
any primary obligation or security therefor, (ii) to supply funds for the purchase or payment of any primary obligation, (iii) to
maintain or assure working capital, equity capital, net worth or solvency of the primary obligor, (iv) to purchase Property
or services for the purpose of assuring the ability of the primary obligor to perform a primary obligation, or (v) otherwise
to assure or hold harmless the holder of any primary obligation against loss in respect thereof. The amount of any Contingent Obligation
shall be deemed to be the stated or determinable amount of the primary obligation (or, if less, the maximum amount for which such
Person may be liable under the instrument evidencing the Contingent Obligation) or, if not stated or determinable, the maximum
reasonably anticipated liability with respect thereto.

 

“Controlled
Investment Affiliate” means, as to any Person, any other Person that (a) directly or indirectly, is in control of,
is controlled by, or is under common control with, such Person and (b) is organized by such Person primarily for the purpose
of making equity or debt investments in one or more companies. For purposes of this definition, “control” of a Person
means the power, directly or indirectly, to direct or cause the direction of the management and policies of such Person whether
by contract or otherwise.

 

“Conversion”
has the meaning set forth in the Hydrofarm Acquisition Agreement, as in effect on the date hereof.

 

“Credit Loan” means,
individually or collectively, a Base Rate Loan or a LIBOR Rate Loan.

 

“Debt Issuance”
means the issuance by any Loan Party or any of their Subsidiaries of any Indebtedness.

 

“Debtor Relief
Laws” means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy,
assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief laws of the United States of America or other applicable jurisdictions from time to time
in effect.

 

    7 

    

    

 

“Default”
means any Event of Default and any event which with the giving of notice or lapse of time, or both, would become an Event of Default.

 

“Default Interest” shall have the
meaning set forth in Section 2.1(e)(2).

 

“Default Rate”
means a simple interest rate per annum equal to the sum of the otherwise then applicable interest rate plus two percent
(2%). With respect to amounts bearing interest at the Default Rate, for purposes of the foregoing sentence, the words “otherwise
then applicable interest rate” shall be deemed to mean the Base Rate plus the Applicable Margin with respect to Base
Rate Loans or the LIBOR Rate plus the Applicable Margin with respect to LIBOR Rate Loans, as applicable.

 

“Defaulting
Lender” means, subject to Section 2.9(b), any Lender that (a) has failed to (i) fund all or any
portion of its Loans within two (2) Business Days of the date such Term Loans were required to be funded hereunder unless
such Lender notifies the Administrative Agent and the Borrower Agent in writing that such failure is the result of such Lender’s
determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable
default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent
or any other Lender any other amount required to be paid by it hereunder within two (2) Business Days of the date when due,
(b) has notified the Borrower Agent or the Administrative Agent in writing that it does not intend to comply with its funding
obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s
obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition
precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such
writing or public statement) cannot be satisfied), (c) has failed, within three (3) Business Days after written request
by the Administrative Agent or the Borrower Agent, to confirm in writing to the Administrative Agent and the Borrower Agent that
it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender
pursuant to this clause (c)  upon receipt of such written confirmation by the Administrative Agent and the Borrower
Agent), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under
any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for
the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the
Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that
a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any Equity Interest in that Lender
or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result
in or provide such Lender with immunity from the jurisdiction of courts within the United States of America or from the enforcement
of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate,
disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender
is a Defaulting Lender under any one or more of clauses (a) through (d) above, and of the effective date
of such status, shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender
(subject to Section 2.9(b)) as of the date established therefor by the Administrative Agent in a written notice of
such determination, which shall be delivered by the Administrative Agent to the Borrower Agent and each Lender promptly following
such determination.

 

“Disqualified
Equity Interests” means any Equity Interest that, by its terms (or by the terms of any Equity Interests or Equity Interests
Equivalent into which it is convertible or for which it is exchangeable), or upon the happening of any event or condition,

 

    8 

    

    

 

(a)            matures
or is mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise
(except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a
change of control or asset sale event shall be subject to the prior repayment in full of the Term Loans and all other Obligations
that are accrued and payable),

 

(b)           provides
for the scheduled payments of dividends in cash,

 

(c)            is
redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests of the applicable Person and except
as permitted by clause (a) above), in whole or in part, or

 

(d)            is
or becomes convertible into or exchangeable for Indebtedness or any other Equity Interests or Equity Interests Equivalents that
would constitute Disqualified Equity Interests, in the case of each of clauses (a), (b), (c) and (d) hereof,
prior to the date that is 180 days after the Maturity Date at the time of issuance;

 

provided that if such Equity Interests
or Equity Interests Equivalents are issued pursuant to a plan for the benefit of future, current or former employees, directors,
or officers of Holdings, a Borrower or its Subsidiaries or by any such plan to such employees, directors or officers, such Equity
Interests shall not constitute Disqualified Equity Interests solely because they may be required to be repurchased by Holdings,
a Borrower or any Subsidiary in order to satisfy applicable statutory or regulatory obligations or as a result of such employee’s,
director’s or officer’s termination, death or disability.

 

“Dollars” or “$”
means the basic unit of the lawful currency of the United States of America.

 

“ECF Liquidity”
means, as of any date of determination, (i) the aggregate amount of cash and cash equivalents on hand of Holdings, the Borrowers
and their Subsidiaries as of such date plus (ii) the “Availability” (as defined in the Revolving Loan Documents)
as of such date.

 

“ECF Payment Amount” has the meaning
set forth in Section 2.1(g)(3).

 

“ECP Rules”
means the final rules issued jointly by the Commodity Futures Trading Commission and the Securities and Exchange Commission
as published in 77 FR 30596 (May 23, 2012), as may amended, modified or replaced from time to time.

 

“Eligible
Assignee” means any Person (other than a natural person) that meets the requirements to be an assignee under Section 9.9
(subject to such consents, if any, as may be required under Section 9.9(b)); provided, that, no Defaulting Lender
shall be an Eligible Assignee

 

“Environmental
Laws” means any applicable Laws (including programs, permits and guidance promulgated by regulators) relating to public
health (other than occupational safety and health regulated by the Occupational Safety and Hazard Act of 1970) or the protection
or pollution of the environment, including CERCLA, the Resource Conservation and Recovery Act and the Clean Water Act.

 

“Environmental
Notice” means a notice (whether written or oral) from any Governmental Authority or other Person of any possible noncompliance
with, investigation of a possible violation of, litigation relating to, or potential fine or liability under any Environmental
Law, or with respect to any Environmental Release, environmental pollution or hazardous materials, including any complaint, summons,
citation, order, claim, demand or request for correction, remediation or otherwise.

 

    9 

    

    

 

“Environmental
Release” means a release as defined in CERCLA or under any other Environmental Law.

 

“Equity Cure Contribution” has
the meaning set forth in Section 6.1(c).

 

“Equity Interests”
means all shares of capital stock (whether denominated as common stock or preferred stock), equity interests, beneficial, partnership
or membership interests, joint venture interests, participations or other ownership or profit interests in or equivalents (regardless
of how designated) of or in a Person (other than an individual), whether voting or non-voting.

 

“Equity Interests
Equivalents” means all securities convertible into or exchangeable for Equity Interests and all warrants, options or
other rights to purchase, subscribe for or otherwise acquire any Equity Interests, whether or not presently convertible, exchangeable
or exercisable.

 

“Equity Issuance”
means any sale or issuance of any Equity Interests or Equity Interests Equivalents of a Borrower or any direct or indirect parent
of a Borrower or the contribution to the capital of a Borrower or any direct or indirect parent of a Borrower, in each case, the
proceeds of which are contributed to the common equity of a Borrower or any of its Subsidiaries.

 

“Equity Prepay Expiration Date”
means the 30th day following the Closing Date.

 

“ERISA”
means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute of similar import, together with
the regulations promulgated and rulings issued thereunder and under the Code, in each case as in effect from time to time. References
to sections of ERISA shall be construed to also refer to any successor sections.

 

“ERISA Affiliate”
means any Person, including Affiliates or Subsidiaries of the Loan Parties, that is a member of any group of organizations or a
controlled group of trades or businesses, as described in Sections 414(b), 414(c), 414(m) or 414(o) of the Code or Section 4001
of ERISA, of which any of the Loan Parties or any of their respective Subsidiaries is a member.

 

“ERISA Event”
means any of (a) a Reportable Event with respect to a Pension Plan, (b) a withdrawal of a Loan Party or ERISA Affiliate
from a Pension Plan subject to Section 4063 of ERISA during a plan year in which it was a substantial employer (as defined
in Section 4001(a)(2) of ERISA) or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA, (c) a complete or partial withdrawal by any Loan Party or ERISA Affiliate from a Multiemployer Plan or notification
that a Multiemployer Plan is in reorganization, (d) the filing of a notice of intent to terminate, the treatment of a Pension
Plan amendment as a termination under Section 4041 or 4041A of ERISA, or the institution of proceedings by the PBGC to terminate
a Pension Plan, (e) the determination that any Pension Plan is considered an at-risk plan or a plan in critical or endangered
status under the Code or ERISA, (f) an event or condition that constitutes grounds under Section 4042 of ERISA for termination
of, or appointment of a trustee to administer, any Pension Plan, (g) the imposition of any liability under Title IV of ERISA,
other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any Loan Party or ERISA Affiliate, or
(h) the failure by any Loan Party or ERISA Affiliate to meet all applicable requirements under the Pension Funding Rules in
respect of a Pension Plan, whether or not waived, or to make a required contribution to a Multiemployer Plan.

 

“Event of Default” means any Event
of Default described in Article VII.

 

“Excess Cash Flow” means, for any
Excess Cash Flow Period, without duplication:

 

    10 

    

    

 

(a)            the
sum, without duplication, of:

 

		(i)	Consolidated EBITDA for such Excess Cash Flow Period;

 

		(ii)	the decrease, if any, in the Net Working Capital from the beginning to the end of such Excess Cash
Flow Period; and

 

		(iii)	to the extent not otherwise provided in this clause (a), any other cash receipts received
by Holdings, the Loan Parties or any of their Subsidiaries during such Excess Cash Flow Period;

 

(b)            minus,
the sum, without duplication, of:

 

		(i)	the amount of any Consolidated Tax Expense paid or payable by the Borrowers and their Subsidiaries
in cash with respect to such Excess Cash Flow Period and the amount of any Tax Distributions made in cash with respect to such
Excess Cash Flow Period;

 

		(ii)	Consolidated Interest Expense for such Excess Cash Flow Period;

 

		(iii)	the increase, if any, in the Net Working Capital from the beginning to the end of such Excess Cash
Flow Period;

 

		(iv)	cash used for Capital Expenditures and Permitted Acquisitions (including with respect to fees and
expenses and, with respect to any Permitted Acquisition, cash consideration that is payable upon the closing of such Permitted
Acquisition pursuant to any letter of intent or definitive purchase agreement with respect to such Permitted Acquisition to which
a Borrower or any of its Subsidiaries is a party), in each case to the extent financed with Internally Generated Funds;

 

		(v)	the aggregate amount of all scheduled amortization payments of Indebtedness of the Borrowers and
their Subsidiaries to the extent funded with Internally Generated Funds;

 

		(vi)	Permitted Management Fees and Restricted Payments pursuant to Sections 6.10(b)(i) and
6.10(b)(iii), in each case, paid in cash in accordance with the Loan Documents during such Excess Cash Flow Period;

 

		(vii)	to the extent paid in cash, the add-backs in clauses (a)(v), (a)(ix), (a)(x),
(a)(xi) and (a)(xii) of the definition of Consolidated EBITDA; and

 

		(viii)	to the extent not already deducted in calculating Consolidated EBITDA and not otherwise provided
in this clause (b), any other cash expenses paid by Holdings, the Loan Parties or any of their Subsidiaries during such
Excess Cash Flow Period.

 

“Excess Cash
Flow Period” means (i) the period from and including the Closing Date through and including December 31, 2017
and (ii) each subsequent fiscal year of the Borrowers commencing with the fiscal year ending on December 31, 2018. For
the avoidance of doubt, with respect to any mandatory prepayment under Section 2.1(g)(3), the applicable Excess Cash
Flow Period shall be the mostly recently ended Excess Cash Flow Period ending prior to the date of such mandatory prepayment.

 

    11 

    

    

 

“Excluded
Accounts” means, with respect to any Loan Party, any deposit account used solely for (i) payroll and accrued payroll
expenses, (ii) tax payments, (iii) employee benefit accounts and/or (iv) petty cash and other accounts in the aggregate
not exceeding $100,000 for all such accounts.

 

“Excluded
Assets” means (i) any Excluded Account; (ii) any equipment or goods that is subject to a “purchase money
security interest” to the extent that such purchase money security interest (x) constitutes a Permitted Lien under this
Agreement and (y) prohibits the creation by a Loan Party of a junior security interest therein, unless the holder thereof
has consented to the creation of such a junior security interest, (iii) any Equity Interest in any Foreign Subsidiary (x) that
is not a first-tier Subsidiary of a Loan Party, (y) that the granting of a Lien therein is prohibited by the laws of the jurisdiction
of organization of such Foreign Subsidiary or (z) to the extent the same represents, for all Loan Parties in the aggregate,
more than 65% of the total combined voting power of all classes of capital stock or similar Equity Interests of such Foreign Subsidiary
which are entitled to vote, (iv) any general intangible, instrument, software, license, permit, lease, contract, governmental
approval or franchise (but not the proceeds thereof), if the grant of a Lien in such general intangible, instrument, software,
license, permit, lease, contract, governmental approval or franchise in the manner contemplated by the Loan Documents is prohibited
by the terms of such general intangible, instrument, software, license, permit, lease, contract, governmental approval or franchise
and would result in the termination of such general intangible, instrument, software, license, permit, lease, contract, governmental
approval or franchise, but only to the extent that any such prohibition is not rendered ineffective pursuant to the Uniform Commercial
Code or any other applicable law or principles of equity, (v) upon the written consent of the Administrative Agent, any Equity
Interests in any pledged entity acquired on or after the Closing Date that is not a Subsidiary of a Loan Party, if the terms of
the Organic Documents of such pledged entity do not permit the grant of a security interest in such Equity Interests by the owner
thereof or the applicable Loan Party has been unable to obtain any approval or consent to the creation of a security interest therein
which is required under such Organic Documents, (vi) any property or asset to the extent the burden of perfection would exceed
the benefit to the Lenders as determined in writing by the Administrative Agent in its sole discretion (including without limitation
the annotation of vehicle and other titles to reflect the Liens granted by the Loan Documents), (vii) any Excluded Real Property;
provided, however, the foregoing exclusions shall in no way be construed (a) to apply if any such prohibition
would be rendered ineffective under the Uniform Commercial Code (including Sections 9-406, 9-407 and 9-408 thereof) or other applicable
law (including any Debtor Relief Law) or principles of equity, (b) so as to limit, impair or otherwise affect the Administrative
Agent’s unconditional continuing Liens upon any rights or interests of any Loan Party in or to the proceeds thereof (including
proceeds from the sale, license, lease or other disposition thereof), including monies due or to become due under any such lease,
license, contract, or agreement (including any accounts receivable), or (c) to apply at such time as the condition causing
such prohibition shall be remedied (including pursuant to a waiver thereof or a consent related thereto) and, to the extent severable,
 “Collateral” shall include any portion of such lease, license, contract, agreement or assets subject thereto that does
not result in such prohibition.

 

“Excluded
Real Property” means any Real Property acquired by a Loan Party after the Closing Date with an individual value less
than $1,000,000.

 

“Excluded
Swap Obligation” means, with respect to a Borrower, any Affiliate of a Borrower or a Guarantor, any Swap Obligation
if, and to the extent that, all or a portion of the Guarantee of such Borrower, such Affiliate or such Guarantor of, or the
grant by such Borrower, such Affiliate or such Guarantor of a security interest to secure, such Swap Obligation (or any
Guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity
Futures Trading Commission (or the application or official interpretation of any thereof) by virtue of such Borrower’s,
such Affiliate’s or such Guarantor’s failure for any reason not to constitute an “Eligible Contract
Participant” as defined in Section 1a(18) of the Commodity Exchange Act (and the regulations thereunder), as
further defined and modified by the ECP Rules (determined after giving effect to Section 9.20 and any other
keepwell, support or other agreement for the benefit of such Borrower, such Affiliate or such Guarantor and any and all
Guarantees of such Borrower’s, such Affiliate’s or such Guarantor’s Swap Obligations by any other Borrower,
Affiliate or the Guarantor), at the time the applicable Swap Obligation was entered into and at such other relevant time as
provided in the ECP Rules or any other applicable law and to the extent that the providing of such Guarantee or the
granting of such security interest by such Borrower, such Affiliate or such Guarantor would violate the ECP Rules or any
other applicable law. If a Swap Obligation arises under a Master Agreement governing more than one Swap Contract, such
exclusion shall apply only to the portion of such Swap Obligation that is attributable to Swap Contracts for which such
Guarantee or Lien is or becomes excluded in accordance with the first sentence of this definition.

 

    12 

    

    

 

“Excluded
Taxes” means any of the following Taxes imposed on or with respect to any Recipient or required to be withheld or deducted
from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and
branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having
its principal office or, in the case of any Lender, its Lending Office located in, the jurisdiction imposing such Tax (or any political
subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes
imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Term Loan or Commitment
pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Term Loan or Commitment (other
than pursuant to an assignment request by the Borrower Agent under Section 9.19), or (ii) such Lender changes
its lending office, except in each case to the extent that, pursuant to Section 10.1(a)(ii), (a)(iii) or
(c), amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender
became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s
failure to comply with Section 10.1(e) and (d) any U.S. federal withholding Taxes imposed under FATCA.

 

“Extraordinary
Receipts” means any cash received by or paid to or for the account of any Loan Party or any of their Subsidiaries not
in the ordinary course of business (and not consisting of proceeds described in any of clause (4), (5) or (6) of
Section 2.1(g)), including without limitation tax refunds, insurance proceeds, indemnification payments (other than
such indemnification payments to the extent that the amounts so received are applied by a Loan Party or its Subsidiary, as applicable,
or are reimbursement or payment on behalf of a Loan Party or its Subsidiary, as applicable, for costs incurred for the purpose
of replacing, repairing or restoring any assets or properties of a Loan Party or its Subsidiary or reimbursement for settlement
costs, thereby satisfying the condition giving rise to the claim for indemnification, or reimbursement or indemnification for costs,
or otherwise covering losses arising as a result of the circumstances giving rise to the underlying claims, or any out-of-pocket
expenses incurred by any Loan Party or any of their Subsidiaries in obtaining such payments or the payment of taxes arising thereunder)
and purchase price adjustments (other than working capital and other similar adjustments) made pursuant to the Hydrofarm Acquisition
or any other Permitted Acquisition; provided, that Extraordinary Receipts shall exclude any single or related series of
amounts received in an aggregate amount less than $350,000.

 

“FATCA”
means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively
comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof
and any agreements entered into pursuant to Section 1471(b)(1) of the Code, and any intergovernmental agreement and any
fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection
with the implementation of such sections of the Code.

 

    13 

    

    

 

“Federal Funds
Effective Rate” means, for any day, the weighted average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers, as published on the next succeeding Business Day by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations
for such day for such transactions received by the Administrative Agent from three Federal funds brokers of recognized standing
reasonably selected by it.

 

“Fee Letter”
means that certain fee letter, dated as of April 10, 2017, among (x) the Initial Borrower, (y) immediately after
giving effect to the Hydrofarm Acquisition and execution and delivery of the Assumption Agreement, Hydrofarm, WJCO, EHH and SunBlaster
and (z) the Administrative Agent, as the same may be amended, restated, supplemented or otherwise modified from time to time,
providing for payment of the fees described therein.

 

“Financial
Covenants” the covenants, agreements and obligations set forth in Sections 6.1(a) and 6.1(b).

 

“Fixed Charge
Coverage Ratio” means, as of any date of determination, the ratio, determined for the most recent four consecutive fiscal
quarters ending on or prior to such date of determination (subject to the immediately following sentence) of: (a) Consolidated
EBITDA for such period minus (i) all Capital Expenditures for such period (other than Capital Expenditures funded or
financed with any Indebtedness other than Revolving Loans), minus (ii) all cash payments in respect of Consolidated
Tax Expenses and, without duplication, Tax Distributions during such period, minus (iii) all Restricted Payments made
in cash during such period, minus (iv) all Permitted Management Fees paid in cash pursuant to the Management Agreements
during such period; to (b) Consolidated Fixed Charges for such period.

 

Notwithstanding the
foregoing, the aggregate sum of clauses (a)(i), (a)(ii), (a)(iii) and (a)(iv) above for the
fiscal quarters ended March 31, 2016, June 30, 2016, September 30, 2016, and December 31, 2016 shall be the
amounts set forth under the heading “Fixed Charge Coverage Ratio Amounts” on Schedule 1.1.

 

“Flood Insurance
Laws” collectively, (i) National Flood Insurance Reform Act of 1994 (which comprehensively revised the National
Flood Insurance Act of 1968 and the Flood Disaster Protection Act of 1973) as now or hereafter in effect or any successor statute
thereto, (ii) the Flood Insurance Reform Act of 2004 as now or hereafter in effect or any successor statute thereto and (iii) the
Biggert-Waters Flood Insurance Reform Act of 2012 as now or hereafter in effect or any successor statute thereto.

 

“Foreign Lender”
means, with respect to any Borrower (a) if such Borrower is a U.S. Person, a Lender that is not a U.S. Person, and (b) if
the Borrower is not a U.S. Person, a Lender that is resident or organized under the laws of a jurisdiction other than that in which
the Borrower is resident for tax purposes. For purposes of this definition, the United States, each State thereof and the District
of Columbia shall be deemed to constitute a single jurisdiction.

 

“Foreign Plan”
means any employee benefit plan or arrangement (a) maintained or contributed to by any Loan Party or Subsidiary that is not
subject to the laws of the United States, or (b) mandated by a government other than the United States for employees of any
Loan Party or Subsidiary.

 

“Foreign Subsidiary”
means, with respect to any Person, a Subsidiary that is a “controlled foreign corporation” under Section 957 of
the Code, such that a guaranty by such Subsidiary of the Obligations or a Lien on the assets of such Subsidiary to secure the Obligations
would result in material tax liability to Borrowers.

 

    14 

    

    

 

“Fund”
means any Person (other than a natural person) that is engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

 

“GAAP”
means generally accepted accounting principles in the United States, as in effect from time to time; provided, that no change
in the accounting principles used in the preparation of any financial statement hereafter adopted by a Borrower or any other Loan
Party shall be given effect for purposes of measuring compliance with any provision of this Agreement unless the Borrower Agent,
Administrative Agent and the Required Lenders agree to modify such provisions to reflect such changes in GAAP and, unless such
provisions are modified, all financial statements, Compliance Certificates and similar documents provided hereunder shall be provided
together with a reconciliation between the calculations and amounts set forth therein before and after giving effect to such change
in GAAP; provided, further that no effect shall be given to any change in GAAP that would require leases of the type
classified as operating leases under GAAP as in effect on the Closing Date to be classified or reclassified as capitalized leases.
Notwithstanding the foregoing, pursuant to Section 5.6, books and records shall be kept in accordance with GAAP commencing
July 1, 2017. All references in this Agreement to “in accordance with GAAP” for any time preceding July 1,
2017 shall be deemed to be “on a tax basis”.

 

“Governmental
Authority” means any federal, state, local, foreign or other agency, authority, body, commission, court, instrumentality,
political subdivision, central bank, or other entity or officer exercising executive, legislative, judicial, taxing, regulatory
or administrative powers or functions for any governmental, judicial, investigative, regulatory or self-regulatory authority (including
the Financial Conduct Authority, the Prudential Regulation Authority and any supra-national bodies such as the European Union or
the European Central Bank).

 

“Guarantee(s)”
means all direct and indirect guarantees, sales with recourse, endorsements (other than for collection or deposit in the ordinary
course of business) and other obligations (contingent or otherwise, including interest that would accrue during the pendency of
any proceeding under Debtor Relief Laws, regardless of whether allowed or allowable in such proceeding) by any Person to pay, purchase,
repurchase or otherwise acquire or become liable upon or in respect of any Indebtedness of any other Person, and, without limiting
the generality of the foregoing, all obligations (contingent or otherwise) by any Person to purchase products, supplies or other
property or services for any Person under agreements requiring payment therefor regardless of the non-delivery or non-furnishing
thereof, or to make investments in any other Person, or to maintain the capital, working capital, solvency or general financial
conditions of any other Person, or to indemnify any other Person against and hold him harmless from damages, losses and liabilities,
all under circumstances intended to enable such other Person or Persons to discharge any Indebtedness or to comply with agreements
relating to such Indebtedness or otherwise to assure or protect creditors against loss in respect of such Indebtedness. The amount
of any Guarantee shall be deemed to be the amount of the Indebtedness of, or damages, losses or liabilities of, the other Person
or Persons in connection with which the Guarantee is made or to which it is related unless the obligations under the Guarantee
are limited to a determinable amount, in which case the amount of such Guarantee shall be deemed to be such determinable amount.
The term “Guarantee” as a verb has a corresponding meaning. For the avoidance of doubt, the keepwell provided
by a Borrower, any Affiliate of Borrower or any Guarantor in Section 9.20 shall constitute a Guarantee.

 

“Guarantor(s)”
means, collectively, (i) Holdings, (ii) any Subsidiary that becomes a Guarantor in accordance with Section 5.9,
and (iii) any other Person who executes and delivers a Guaranty of the Obligations, jointly and severally.

 

    15 

    

    

 

 

“Guaranty”
means, individually or collectively, as the case may be, the Guaranty made by the Guarantors in favor of Administrative Agent for
the benefit of the Secured Parties in form substantially as attached hereto as Exhibit B.

 

“Historical
Financial Statements” means reviewed financial statements of Hydrofarm, Inc. for the fiscal year ending December 31,
2015, unaudited financial statements of Hydrofarm, Inc for the fiscal year ending December 31, 2016 and unaudited financial
statements of Hydrofarm, Inc. for the two months ending February 28, 2017.

 

“Holdings” means Hydrofarm
Holdings LLC, a Delaware limited liability company.

 

“Hydrofarm”
means Hydrofarm, LLC, a California limited liability company, which is the successor to Hydrofarm, Inc., a California corporation,
as a result of the Reorganization and the Conversion.

 

“Hydrofarm
Acquisition” means the Acquisition by Holdings of all of the Equity Interests of Hydrofarm on the date hereof pursuant
to and in accordance with the Hydrofarm Acquisition Agreement.

 

“Hydrofarm
Acquisition Agreement” means that certain Securities Purchase Agreement dated as of April 10, 2017 by and among
Holdings, Hydrofarm, Hydrofarm, Inc. Employee Stock Ownership Plan and Trust and the Wardenburg 2009 Family Trust, as the
same may be amended, supplemented and otherwise modified from time to time in accordance with the terms hereof.

 

“Impacted Loans” has the meaning
set forth in Section 10.3(b).

 

“Indebtedness”
means, as to any Person at a particular time, without duplication, the following: (a) all obligations of such Person for borrowed
money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments, (b) the
maximum amount (after giving effect to any prior drawings or reductions that may have been reimbursed) of all letters of credit
(including standby and commercial), bankers’ acceptances, bank guaranties, surety bonds, performance bonds and similar instruments
issued or created by or for the account of such Person, (c) net obligations of such Person under any Swap Contract, (d) all
obligations of such Person to pay the deferred purchase price of property or services (other than (i) trade accounts and accrued
expenses payable in the ordinary course of business and (A) not overdue by more than 90 days or (B) to the extent overdue
by more than 90 days (but not more than 270 days) are being Properly Contested, (ii) any earn-out obligation to the extent
such obligation is not required to be reflected on such Person’s balance sheet in accordance with GAAP, (iii) accruals
for payroll and other liabilities accrued in the ordinary course of business), (e) indebtedness in respect of the foregoing
(excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness
arising under conditional sales or other title retention agreements and mortgage, industrial revenue bond, industrial development
bond and similar financings), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse,
(f) all Capital Lease Obligations, (g) all obligations of such Person in respect of Disqualified Equity Interests, (h) the
principal balance of synthetic leases or other off-balance sheet financing arrangements, (i) all Contingent Obligations of
such Person, and (j) all Guarantees of such Person in respect of any of the foregoing.

 

For all purposes
hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint
venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint
venturer, except to the extent such Person’s liability for such Indebtedness is otherwise limited and only to the
extent such Indebtedness would be included in the calculation of consolidated Indebtedness. The amount of any net obligation
under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of
Indebtedness of any Person for purposes of clause (e) (to the extent that such Indebtedness is non recourse to
such Person for amounts in excess of the value of the property securing such Indebtedness) shall be deemed to be equal to the
lesser of (i) the aggregate unpaid amount of such Indebtedness and (ii) the fair market value (as determined by
such Person in good faith) of the property encumbered thereby as determined by such Person in good faith.

 

    	 	16	 

     

    

 

“Indemnified Parties” has the meaning
specified in Section 9.5.

 

“Indemnified
Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account
of any obligation of any Borrower or Guarantor under any Loan Document and (b) to the extent not otherwise described in clause
(a), Other Taxes.

 

“Initial Borrower” has the meaning
specified in the preamble to this Agreement.

 

“Initial ECF Payment Date” has the meaning set forth in Section 2.1(g)(3).

 

“Insolvency
Proceeding” means any voluntary or involuntary case or proceeding commenced by or against a Person under any state, federal
or foreign law for, or any agreement of such Person to, (a) the entry of an order for relief under the Bankruptcy Code of
the United States of America, or any other insolvency, debtor relief or debt adjustment law, (b) the appointment of a receiver,
trustee, liquidator, administrator, conservator or other custodian for such Person or any part of its Property, or (c) an
assignment or trust mortgage for the benefit of creditors.

 

“Intellectual
Property” means (i) all intellectual and similar Property of a Person, including inventions, designs, patents, copyrights,
trademarks, service marks, trade names, trade secrets, confidential or proprietary information, customer lists, know-how, software
and databases, (ii) all embodiments or fixations thereof and all related documentation, applications, registrations and franchises,
(iii) all licenses or other rights to use any of the foregoing, and (iv) all books and records relating to the foregoing.

 

“Intellectual
Property Claim” means any claim or assertion (whether in writing, by suit or otherwise) that a Loan Party’s or
Subsidiary’s ownership, use, marketing, sale or distribution of any inventory, equipment, Intellectual Property or other
Property violates another Person’s Intellectual Property.

 

“Intercreditor
Agreement” means that certain Intercreditor Agreement, dated as of the date hereof, between the Revolving Loan Agent
and the Administrative Agent, as the same may be amended, amended and restated, and/or modified from time to time in accordance
with the terms thereof and hereof.

 

“Interest Payment Date” has the
meaning set forth in Section 2.1(e)(3)(C).

 

“Interest
Period” means with respect to any LIBOR Rate Loan, the period commencing on the date the relevant Term Loan is made
and ending on the date which is one (1), two (2) or three (3) months thereafter, as selected by the Borrower Agent
by irrevocable written notice to the Administrative Agent not less than three (3) Business Days prior to the date the
relevant Term Loan is made and each subsequent one (1), two (2) or three (3) month period thereafter, as selected
by the Borrower Agent by irrevocable written notice to the Administrative Agent not less than three (3) Business Days
prior to the last day of the then current Interest Period with respect thereto. For purposes of determining an Interest
Period, a month means a period starting on one day in a calendar month and ending on a numerically corresponding date in the
next calendar month. Notwithstanding the foregoing, however, (i) any applicable Interest Period which would otherwise
end on a day which is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls
in another calendar month, in which case such Interest Period shall end on the next preceding Business Day, (ii) any
applicable Interest Period which begins on a day for which there is no numerically corresponding day in the calendar month
during which such Interest Period is to end shall (subject to clause (i) above) end on the last day of such
calendar month, and (iii) no Interest Period shall extend beyond the Maturity Date or such earlier date as would
interfere with the Borrowers’ repayment obligations hereunder. There shall not be more than five (5) different
Interest Periods with respect to LIBOR Rate Loans hereunder at any one time.

 

    	 	17	 

     

    

 

“Internally
Generated Funds” means funds not constituting the proceeds of any Indebtedness, Debt Issuance, Equity Issuance, Asset
Disposition or Casualty Event (in each case, without regard to the exclusions from the definitions thereof).

 

“Investment”
means, with respect to any Person, any loan, advance or extension of credit (other than to customers in the ordinary course of
business) by such Person to, or any Guarantee or other contingent liability with respect to the capital stock, Indebtedness
or other obligations of, or any contributions to the capital of, any other Person, or any ownership, purchase or other acquisition
by such Person of any interest in any capital stock, limited partnership interest, general partnership interest, or other securities
of any such other Person, other than an Acquisition; and “Invest,” “Investing” or “Invested”
means the making of an Investment.

 

“IRS” means the United States Internal
Revenue Service.

 

“Knowledge”
of the Loan Parties means the actual knowledge of any Responsible Officer of any Loan Party.

 

“Laws”
means, collectively, all international, foreign, federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances,
codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental
Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed
duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether
or not having the force of law.

 

“Lender”
means each Person that has a Commitment or holds an outstanding Term Loan, from time to time. As of the Closing Date, the “Lenders”
consist of the Persons set forth on Schedule I.

 

“Lending Office”
means, as to any Lender, the office or offices of such Lender described as such in such Lender’s Administrative Questionnaire,
or such other office or offices as a Lender may from time to time notify the Borrower Agent and the Administrative Agent.

 

“LIBOR
Rate” means, for any Interest Period with respect to any LIBOR Rate Loan, the greater of (a) the offered rate
per annum for deposits of dollars for the applicable Interest Period (as defined below) that appears on Reuters Screen
LIBOR01 Page as of 11:00 A.M. (London, England time) 2 Business Days prior to the first day in each Interest Period
and (b) the offered rate per annum for deposits of dollars for an Interest Period of 3 months that appears on Reuters
Screen LIBOR01 Page as of 11:00 A.M. (London, England time) 2 Business Days prior to the first day of the
applicable Interest Period. If no such offered rate exists, such rate will be the rate of interest per annum, as determined
by the Lenders at which deposits of dollars in immediately available funds are offered at 11:00 A.M. (London, England
time) 2 Business Days prior to the first day in such Interest Period by major financial institutions reasonably satisfactory
to the Lenders in the London interbank market for such Interest Period for the applicable principal amount on such date of
determination; provided, that if no such offered rate exists, such rate will be the rate of interest per annum, as
determined by the Administrative Agent at which deposits of dollars in immediately available funds with a term equal to three
months are offered at 11:00 A.M. (London, England time) 2 Business Days prior to the first day in such Interest Period
by major financial institutions reasonably satisfactory to the Lenders in the London interbank market for such Interest
Period for the applicable principal amount on such date of determination.

 

    	 	18	 

     

    

 

“LIBOR Rate Loan” means a Term
Loan accruing interest at the LIBOR Rate.

 

“License”
means any license or agreement under which a Loan Party is authorized to use Intellectual Property in connection with any manufacture,
marketing, distribution or disposition of Collateral, any use of Property or any other conduct of its business.

 

“Lien”
means, with respect to any interest in Property (whether real, personal or mixed and whether tangible or intangible) (a) any
interest or right which secures the payment of Indebtedness or an obligation owed to, or a claim by, a Person other than the owner
of such Property, whether such interest is based on common law, statute or contract, and whether or not choate, vested or perfected,
including any such interest or right arising from a mortgage, charge, pledge, negative pledge or other agreement not to lien or
pledge, assignments, security interest, conditional sale, levy, execution, seizure, attachment, garnishment, conditional sale,
Capital Lease or trust receipt, or arising from a lease, consignment or bailment given for security purposes, and (b) any
exception to or defect in the title to or ownership interest in such Property, including reservations, rights of entry, possibilities
of reverter, encroachments, easements, rights of way, restrictive covenants, leases and licenses. For purposes of this Agreement,
a Borrower or any Subsidiary shall be deemed to be the owner of any Property which it has acquired or holds subject to a conditional
sale agreement, Capital Lease or other arrangement pursuant to which title to the Property has been retained by or vested in some
other Person for security purposes.

 

“Liquidity”
means, as of any date of determination, (i) the cash-on-hand of the Borrowers and their Subsidiaries plus (ii) the
 “Availability” (as defined in the Revolving Loan Documents) as of such date.

 

“Loan Document(s)”
means, individually or collectively, as the case may be, this Agreement, the Fee Letter, any Notes, the Guaranty, the Assumption
Agreement, each Security Document, the Intercreditor Agreement and all other documents, agreements and certificates executed or
delivered in connection with or contemplated by this Agreement or any other document evidencing or securing a Term Loan, each as
may be amended, modified or supplemented from time to time.

 

“Loan Party” means each Borrower
and each Guarantor.

 

“Major Asset
Disposition” means a sale, transfer or other disposition of all or substantially all of the assets of the Borrowers and
their Subsidiaries (taken as a whole) in a single or a series of related transactions.

 

“Management
Agreements” means, collectively, the (a) Management Agreement dated the Closing Date between Hawthorn Equity Partners, Inc.
and Holdings, and (b) Management Agreement dated the Closing Date between JAMS Holdings LLC and Holdings, in each case, as
the same may be amended, modified, supplemented and/or restated to the extent permitted under this Agreement.

 

“Managers” means, collectively,
Hawthorn Equity Partners, Inc. and JAMS International LLC.

 

“Master Agreement” has the meaning set forth
in the definition of Swap Contract.

 

    	 	19	 

     

    

 

“Material
Adverse Effect” means the effect of any event or circumstance that, taken alone or in conjunction with other events or
circumstances, (a) has or could be reasonably expected to have a material adverse effect on the business, operations, Properties,
or financial condition of any Loan Party, on the value of any material Collateral, on the enforceability of any Loan Documents,
or on the validity or priority of the Liens in favor of the Administrative Agent for the benefit of the Secured Parties on any
Collateral, (b) impairs the ability of a Loan Party to perform its obligations under the Loan Documents, including repayment
of any Obligations, or (c) otherwise impairs the ability of the Administrative Agent or any Lender to enforce or collect any
Obligations or to realize upon any Term Loan Priority Collateral or any other material Collateral.

 

“Material
Contract” means, other than the Hydrofarm Acquisition Agreement and the Loan Documents. any agreement or arrangement
to which Holdings, any Loan Party or any of their Subsidiaries is party (a) that is deemed to be a material contract under
any securities law applicable to such Person, including the Securities Act of 1933, (b) for which breach, termination, nonperformance
or failure to renew could reasonably be expected to have a Material Adverse Effect, or (c) that relates to either (x) Subordinated
Indebtedness or (y) Indebtedness, in the case of this clause (y), in an aggregate amount of $1,000,000 or more.

 

“Maturity Date” means May 12,
2022.

 

“Moody’s”
means Moody’s Investors Service, Inc., or any successor to the rating agency business thereof.

 

“Multiemployer
Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which a Loan
Party or ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been
obligated to make contributions.

 

“Net Cash Proceeds” means:

 

(a)          with
respect to any Asset Disposition, issuance of Equity Interests, receipt of Extraordinary Receipts or Casualty Event by or of a
Borrower or any Subsidiary, the cash proceeds (including, when received, any deferred or escrowed payments) as and when received
by a Loan Party or Subsidiary in cash from such disposition and/or such receipt (as applicable) (including cash proceeds received
pursuant to policies of insurance (including business interruption insurance)), net of (i) reasonable and customary costs
and expenses actually incurred in connection therewith, including legal, accounting and investment banking fees and sales commissions,
(ii) amounts applied to repayment of Indebtedness secured by a Permitted Lien senior to the Liens in favor of the Administrative
Agent for the benefit of the Secured Parties on Collateral sold (with respect to an Asset Disposition), (iii) transfer or
similar taxes paid (together with any Tax Distributions made to pay any such transfer or similar taxes) as a result of any applicable
Asset Disposition, and (iv) reasonable and customary reserves for indemnities in connection with any applicable Asset Disposition,
until such reserves are no longer needed; and

 

(b)          with
respect to any issuance of debt securities or other incurrence of Indebtedness (other than Indebtedness incurred in accordance
with Section 6.2), the aggregate cash proceeds received by Holdings, a Borrower or any Subsidiary pursuant to such
issuance or receipt, net of the reasonable and customary direct costs paid as a result thereof relating to such issuance.

 

“Net
Working Capital” means the total current assets (excluding cash and cash equivalents) of the Borrowers and their
Subsidiaries minus the total current liabilities (excluding current portion of any Indebtedness under this Agreement
and the current portion of any other long-term Indebtedness which would otherwise be included therein (including Capital
Lease Obligations), current interest and current taxes) of the Borrowers and their Subsidiaries, determined in accordance
with GAAP.

 

    	 	20	 

     

    

 

“Non-Consenting
Lender” means any Lender that does not approve any consent, waiver or amendment that (a) requires the approval of
all Lenders or all affected Lenders in accordance with the terms of Section 9.1 and (b) has been approved by the
Required Lenders.

 

“Non-Defaulting
Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.

 

“Note(s)”
means, individually or collectively, as the case may be, (a) the Notes (as defined in Section 2.1(a)), and (b) such
other promissory notes accepted by the Lenders in exchange for or in substitution of any such Notes.

 

“Notice of
Borrowing” means the notice in the form of Exhibit C attached hereto to be delivered to the Administrative
Agent pursuant to Section 2.1 or such other form as may be reasonably approved by the Administrative Agent (including
any form on an electronic platform or electronic transmission system as shall be reasonably approved by the Administrative Agent),
substantially completed and signed by a Responsible Officer of the Borrower Agent.

 

“Obligations”
means (i) all Term Loans, debts, liabilities, payment and performance obligations, covenants and duties of every kind, nature
and description owing by the Borrowers or the Guarantors to the Administrative Agent, the Lenders or any Lender of any kind or
nature, present or future, arising under this Agreement or any other Loan Document, whether direct or indirect (including those
acquired by permitted assignment or participation), absolute or contingent, liquidated or unliquidated, due or to become due, now
existing or hereafter arising and however acquired, and (ii) all Rate Hedging Obligations owing at any time or from time to
time by the Borrowers or the Guarantors, or any of them, to the Lenders, any Lender or any Affiliate of any Lender (excluding,
as to any Borrower or Guarantor, any Excluded Swap Obligations). The term includes all principal, interest, fees, charges, expenses,
reasonable attorneys’ fees, and any other sum chargeable (including interest that would accrue during the pendency of any
proceeding under Debtor Relief Laws, regardless of whether allowed or allowable in such proceeding) to the Borrowers or the Guarantors
under this Agreement or any other Loan Document or in connection with any Rate Hedging Obligation.

 

“Ordinary
Course of Business” means the ordinary course of business of any Loan Party or Subsidiary, undertaken in good faith and
consistent with applicable Law and past practices.

 

“Organic Documents”
means, with respect to any Person, its charter, certificate or articles of incorporation or formation, bylaws, articles of organization,
limited liability agreement, operating agreement, members agreement, shareholders agreement, partnership agreement, certificate
of partnership, certificate of formation, voting trust agreement, or similar agreement or instrument governing the formation or
operation of such Person.

 

“Other Connection
Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such
Recipient and the jurisdiction imposing such Tax (other than connections arising solely from such Recipient having executed, delivered,
become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged
in any other transaction pursuant to, enforced any Loan Document.

 

“Other
Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that
arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the
receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes
that are imposed with respect to an assignment (other than an assignment made pursuant to Section 10.6).

 

    	 	21	 

     

    

 

“Outside Date” means May 12,
2017.

 

“Partial ECF Payment Amount” has
the meaning set forth in Section 2.1(g)(3).

 

“Payment Item”
means each check, draft or other item of payment payable to Loan Party, including those constituting proceeds of any Collateral.

 

“PBGC”
means the Pension Benefit Guaranty Corporation and any entity succeeding to any or all of its functions under ERISA.

 

“Pension Funding
Rules” means the Code and ERISA rules regarding minimum required contributions (including installment payments)
to Pension Plans set forth in, for plan years ending prior to the Pension Protection Act of 2006 effective date, Section 412
of the Code and Section 302 of ERISA, both as in effect prior to such act, and thereafter, Sections 412, 430, 431, 432 and
436 of the Code and Sections 302, 303, 304 and 305 of ERISA.

 

“Pension Plan”
any employee pension benefit plan (as defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is subject
to Title IV of ERISA and is sponsored or maintained by any Loan Party or ERISA Affiliate or to which the Loan Party or ERISA Affiliate
contributes or has an obligation to contribute, or in the case of a multiple employer or other plan described in Section 4064(a) of
ERISA, has made contributions at any time during the preceding five plan years.

 

“Permitted
Acquisition” means any Acquisition to the extent that each of the following conditions is satisfied with respect to such
Acquisition:

 

(a)          no
Default or Event of Default exists on the date of the consummation of such Acquisition or would result therefrom;

 

(b)          after
giving effect to such Acquisition and/or series of related Acquisitions on a Pro Forma Basis, the Borrowers shall be in compliance
with all of the Financial Covenants for the most recently ended Test Period;

 

(c)          after
giving effect to such Acquisition and/or series of related Acquisitions on a Pro Forma Basis, the Total Net Leverage Ratio for
the most recently ended Test Period shall not exceed 4.00:1.00;

 

(d)          the
assets, business or Person being acquired had pro forma positive EBITDA for the 12 month period most recently ended;

 

(e)          either
(x) the assets, business or Person being acquired is located or organized within the United States or (y) the aggregate
purchase price payable in respect of such Acquisition (together with the aggregate purchase price paid or payable in respect of
all other Acquisitions consummated after the Closing Date in which the assets, business or Person acquired was located or organized
outside the United States) does not exceed $15,000,000;

 

(f)           neither
a Loan Party or any of their respective Subsidiaries shall, in connection with any such Acquisition and/or series of related
Acquisitions, assume or remain liable with respect to any Indebtedness of the related sellers or the business, Person or
properties acquired, except to the extent permitted by Sections 6.2(e) and 6.3(i);

 

    	 	22	 

     

    

 

(g)          the
Persons or businesses to be acquired shall be, or shall be engaged in, a business of the type that the Borrowers and their Subsidiaries
are permitted to be engaged in under the Loan Documents and, to the extent required by the Security Documents, the Collateral acquired
in connection with any such Acquisition and/or series of related Acquisitions shall be made subject to the Liens in favor of the
Administrative Agent for the benefit of the Secured Parties in accordance with the Security Documents (having the priority set
forth in the Intercreditor Agreement) and the Loan Parties shall otherwise comply with the terms of the Loan Documents relating
to additional guarantees and further assurances;

 

(h)          the
Acquisition has been approved by the board of directors (or other equivalent governing body) of the Person to be acquired;

 

(i)           with
respect to such Acquisition or any series of related Acquisitions, the Borrower Agent shall have provided the Administrative Agent
with (i) in each case only if made available to a Borrower prior to the consummation of such transaction, historical financial
statements for the last three fiscal years of the Person or business to be acquired and unaudited financial statements thereof
for the most recent interim period that is available, (ii) a reasonably detailed description of all material information relating
thereto and copies of all material documentation pertaining to such transaction, (iii) a Compliance Certificate after giving
pro forma effect to such Permitted Acquisition on a Pro Forma Basis, and (iv) to the extent that the aggregate purchase price
payable in respect of such Acquisition is greater than or equal to $15,000,000, a quality of earnings report prepared for the Borrower
Agent by an independent certified accounting firm of nationally recognized standing reasonably acceptable to the Administrative
Agent;

 

(j)           at
least ten (10) Business Days prior to the proposed date of consummation of each such Acquisition, the Borrower Agent shall
have delivered to the Administrative Agent a certificate certifying that such Acquisition and related series of Acquisitions complies
with this definition (which shall have attached thereto reasonably detailed backup data and calculations showing such compliance);
and

 

(k)          such
Acquisition or any series of related Acquisitions shall be permitted under the Revolving Loan Facility and the Revolving Loan Documents.

 

“Permitted
Affiliate Sub Debt” means (x) Indebtedness of Holdings to a Related Party and (y) solely to the extent funded
in its entirety from the proceeds of Permitted Affiliate Sub Debt of Holdings to a Related Party, Indebtedness of the Borrower
Agent to Holdings, in each case, that (a) is unsecured, (b) is fully and completely subordinated to the prior payment
in full of the Obligations for the benefit of, and to, the Lenders pursuant to a subordination agreement, which shall, in each
case, be in form and substance satisfactory to the Administrative Agent in its sole discretion, (c) has a final maturity date
that is not earlier than, and provides for no scheduled payments of principal or mandatory redemption obligations prior to, August 11,
2022, (d) provides for payments of interest solely in-kind (and not in cash) until not earlier than August 11, 2022,
(e) does not contain any financial covenants, (f) is not cross-defaulted (but may be cross-accelerated) to the Loan Documents,
and (g) is subject to permanent standstill provisions.

 

“Permitted
Colorado Property Sale-Leaseback” means a sale-leaseback transaction consummated by the Loan Parties with respect to
the Colorado Property so long as (i) such sale-leaseback transaction is consummated on or prior to the date that is six (6) months
following the Closing Date, (ii) no Default or Event of Default exists on the date of the consummation of such sale-leaseback
transaction or would result therefrom, and (iii) after giving effect to such sale-leaseback transaction on a Pro Forma Basis,
the Total Net Leverage Ratio for the most recently ended Test Period shall not exceed 4.00:1.00.

 

    	 	23	 

     

    

 

“Permitted
Contingent Obligations” means Contingent Obligations (a) arising from endorsements of Payment Items for collection
or deposit in the Ordinary Course of Business, (b) arising from Swap Contracts permitted hereunder, (c) existing on the
Closing Date and set forth on Schedule 6.2, and any extension or renewal thereof that does not increase the amount
of such Contingent Obligation when extended or renewed, (d) incurred in the Ordinary Course of Business with respect to surety,
appeal or performance bonds, or other similar obligations, (e) arising from customary indemnification obligations in favor
of purchasers in connection with dispositions of Property permitted hereunder, (f) arising under the Loan Documents, (g) arising
under the Revolving Loan Documents to the extent permitted by the Revolving Loan Facility and the Intercreditor Agreement, (h) arising
as a result of an unsecured Guaranty by Holdings of the Indebtedness, Real Property lease or other obligation of a Loan Party permitted
by this Agreement (provided, that if any such Indebtedness, lease or other obligation is subordinated to the Obligations, any such
Holdings guaranty shall be subordinated to the Obligations on terms no less favorable to the Administrative Agent and the Lenders
as compared to the subordination terms applicable to such Indebtedness, lease or other obligations), or (i) in an aggregate
amount of $3,000,000 or less at any time.

 

“Permitted
Discretion” means a determination made in the exercise, in good faith, of reasonable business judgment (from the perspective
of a secured term loan lender).

 

“Permitted Indebtedness” has the
meaning set forth in Section 6.2.

 

“Permitted
Investment” means any of the following Investments made by the Borrower or any of its Subsidiaries in any Person: (i) Investments
in Subsidiaries to the extent existing on the Closing Date and set forth on Schedule 6.6, (ii) cash equivalents
that that are subject to the Liens in favor of the Administrative Agent for the benefit of the Secured Parties and the Administrative
Agent’s control (subject to the Intercreditor Agreement), (iii) Permitted Acquisitions, (iv) Investments consisting
of bank deposits in the Ordinary Course of Business, (v) Investments consisting of contributions of capital or asset transfers
to the Borrower or any Wholly Owned Loan Party, so long as no Change of Control occurs as a result thereof, (vi) Investments
consisting of (a) advances to an officer or employee for salary, travel expenses, commissions and similar items in the Ordinary
Course of Business, (b) prepaid expenses and extensions of trade credit made in the Ordinary Course of Business, (c) deposits
with financial institutions permitted hereunder, (d) intercompany loans by the Borrower or a Wholly Owned Loan Party to the
Borrower or a Wholly Owned Loan Party, and (e) non-cash loans consisting of promissory notes from officers, directors and
employees for the purchase of newly issued Equity Interests of Holdings, so long as no Change of Control occurs thereby, (vii) Investments
consisting of securities of account debtors received pursuant to a plan of reorganization of such account debtor or in connection
with the settlement of such accounts, (viii) Investments consisting of securities or instruments received pursuant to a disposition
of assets permitted hereby, and (ix) so long as no Default or Event of Default has occurred and is continuing, other Investments
by a Loan Party or Subsidiary (including Investments by a Loan Party or Subsidiary in Foreign Subsidiaries) in an aggregate amount
not to exceed $5,000,000 at any one time outstanding.

 

“Permitted Lien” has the meaning
set forth in Section 6.3.

 

“Permitted
Management Fees” means the fees, in an aggregate amount not in excess of $850,000 per fiscal year, payable by the Borrowers
to the Managers pursuant to the Management Agreements, as in effect on the Closing Date or as amended in accordance with Section 6.9(c).

 

“Permitted
Purchase Money Debt” means Purchase Money Debt of the Loan Parties and Subsidiaries that is unsecured or secured only
by a Purchase Money Lien, as long as the aggregate amount of Permitted Purchase Money Debt outstanding does not exceed $1,000,000
at any time.

 

    	 	24	 

     

    

 

“Person”
means any natural person, corporation, firm, joint venture, partnership, limited partnership, limited liability company, association,
trust or other entity or organization, whether acting in an individual, fiduciary or other capacity, or any government or political
subdivision thereof or any agency, department or instrumentality thereof.

 

“Plan”
means each employee benefit plan (as defined in Section 3(3) of ERISA) whether now in existence or hereafter instituted,
of, or contributed to by, any Loan Party or any of their Subsidiaries or any of their respective ERISA Affiliates.

 

“Prime Rate”
means the rate of interest quoted in The Wall Street Journal (or another national publication reasonably selected by the
Administrative Agent) as the U.S. “Prime Rate.”

 

“Pro Forma
Basis” means, with respect to compliance with any financial performance test hereunder for the applicable Test Period,
in respect of any Specified Transaction, the making of such calculation after giving pro forma effect to:

 

(a)          the
consummation of such Specified Transaction as of the first day of the applicable Test Period, as if such Specified Transaction
had been consummated on the first day of such Test Period;

 

(b)          the
assumption, incurrence or issuance of any Indebtedness by Holdings or any of its Subsidiaries (including any Person which becomes
a Subsidiary pursuant to or in connection with such Specified Transaction) in connection with such Specified Transaction, as if
such Indebtedness had been assumed, incurred or issued (and the proceeds thereof applied) on the first day of such Test Period
(with any such Indebtedness bearing interest during any portion of the applicable Test Period prior to the relevant acquisition
at the weighted average of the interest rates applicable to such Indebtedness incurred during such Test Period);

 

(c)          the
costs and expenses of any target that have not been assumed by Holdings or any of its Subsidiaries shall be disregarded to the
extent such costs and expenses are reasonably identifiable, factually supportable and certified by a Responsible Officer, and any
(i) cost and expenses of any such target that have been assumed in any Specified Transaction and (ii) incremental recurring
costs and expenses incurred in connection with any Specified Transaction shall, in the case of each of (i) and (ii) be
calculated as if such costs and expenses were assumed on the first day of such Test Period; and

 

(d)          with
respect to any Colorado Property Sale-Leaseback, the incurrence of any lease, rental or other payment obligations by Holdings or
any of its Subsidiaries in connection with such Colorado Property Sale-Leaseback, as if such lease, rental or other payment obligations
had been incurred on the first date of such Test Period (and as if such payments had been paid during such Test Period);

 

with clauses (a) through (d) calculated
in a manner consistent with GAAP and the definition of Consolidated EBITDA and subject to, the limitations set forth in the definition
of Consolidated EBITDA, including adjustments for restructuring charges or reserves and non-recurring integration costs.

 

“Proceeding” has the meaning ascribed
to it in Section 9.5.

 

“Properly
Contested” means, with respect to any obligation of a Loan Party or Subsidiary, (a) the obligation is subject
to a bona fide dispute regarding amount or the Loan Party’ or Subsidiary’s liability to pay, (b) the
obligation is being properly contested in good faith by appropriate proceedings promptly instituted and diligently pursued,
(c) appropriate reserves have been established in accordance with GAAP, (d) non-payment would not have a Material
Adverse Effect, nor result in forfeiture or sale of any assets of the Loan Party or Subsidiary, (e) no Lien is imposed
on assets of the Loan Party or Subsidiary, unless bonded and stayed to the satisfaction of the Administrative Agent, and
(f) if the obligation results from entry of a judgment or other order, such judgment or order is stayed pending appeal
or other judicial review.

 

    	 	25	 

     

    

 

“Property”
means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, and any right
in respect of any of the foregoing.

 

“Purchase
Money Debt” means (a) Indebtedness (other than the Obligations) for payment of any of the purchase price of fixed
assets or payments pursuant to a Capital Lease of fixed assets, (b) Indebtedness (other than the Obligations) incurred within
ten (10) days before or after acquisition of any fixed assets, for the purpose of financing any of the purchase price thereof,
and (c) any renewals, extensions or refinancings (but not increases) thereof; provided, that, in no event shall the
amount of Purchase Money Debt exceed the purchase price of the assets being financed in respect thereof.

 

“Purchase
Money Lien” means a Lien that secures Purchase Money Debt, encumbering only the fixed assets acquired with such Indebtedness
and constituting a Capital Lease or a purchase money security interest under the Uniform Commercial Code.

 

“Qualified
ECP Guarantor” means, at any time, each Borrower, Affiliate of Borrower or Guarantor with total assets exceeding $10,000,000
or that qualifies at such time as an “eligible contract participant” under the Commodity Exchange Act and can cause
another Person to qualify as an “eligible contract participant” at such time under Section 1a(18)(A)(v)(II) of
the Commodity Exchange Act.

 

“Qualified
Equity Interests” means any Equity Interests or Equity Interests Equivalents that are not Disqualified Equity Interests.

 

“Qualifying
Issuance” means an issuance and sale for cash by Holdings, on or prior to the Equity Prepay Expiration Date, of common
Equity Interests of Holdings that are Qualified Equity Interests.

 

“Rate Hedging
Obligations” means any and all obligations of the Borrowers, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefor)
under Swap Contracts which are entered into or maintained by any Borrower, Guarantor or any of their Affiliates with the Administrative
Agent or a Lender or an Affiliate of the Administrative Agent or a Lender and which are not prohibited by the express terms of
the Loan Documents.

 

“Real Property”
means all real property or interests therein wherever situated owned or ground (or space) leased by a Borrower or any other Loan
Party or any of their respective Subsidiaries.

 

“Recipient”
means the Administrative Agent or any Lender or any other recipient of any payment to be made by or on account of any obligation
of any Borrower or Guarantor hereunder.

 

“Refinancing” has the meaning ascribed
to it in Section 2.1(a).

 

“Refinancing
Conditions” means the following conditions (a) for Refinancing Debt (other than with respect to the extending,
renewing or refinancing of Indebtedness arising under the Revolving Loan Facility): (i) it is in an aggregate principal
amount that does not exceed the principal amount of the Indebtedness being extended, renewed or refinanced, (ii) it has
a final maturity no sooner than, a weighted average life no less than, and an interest rate no greater than, the Indebtedness
being extended, renewed or refinanced, (iii) it is subordinated to the Obligations at least to the same extent as the
Indebtedness being extended, renewed or refinanced, (iv) the representations, covenants and defaults applicable to it
are no less favorable to the Loan Parties than those applicable to the Indebtedness being extended, renewed or refinanced,
(v) no additional Lien is granted to secure it, (vi) no additional Person is obligated on such Indebtedness, and
(vii) upon giving effect to it, no Default or Event of Default exists, or (b) for Refinancing Debt that is
extending, renewing or refinancing Indebtedness arising under the Revolving Loan Facility, such Indebtedness is extended,
renewed or refinanced in accordance with and to the extent permitted by the terms and provisions of the Intercreditor
Agreement.

 

    	 	26	 

     

    

 

“Refinancing
Debt” means Indebtedness that is the result of an extension, renewal or refinancing of Permitted Debt permitted under
Section 6.2(b), (d), (e) or (g).

 

“Register” has the meaning ascribed
to it in Section 9.9(d).

 

“Regulation
D,” “Regulation T,” “Regulation U” and “Regulation X” means
Regulation D, Regulation T, Regulation U and Regulation X, respectively, of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor to all or a portion thereof establishing margin requirements.

 

“Related Agreements”
means the Hydrofarm Acquisition Agreement, the Management Agreements and all agreements, instruments and documents executed or
delivered in connection therewith.

 

“Related Indemnified Party” has
the meaning ascribed to it in Section 9.5.

 

“Related Parties”
means the Sponsor or any of Holdings’ other equity holders as of the Closing Date and, in each case, their Controlled Investment
Affiliates.

 

“Remaining ECF Payment Amount”
has the meaning set forth in Section 2.1(g)(3).

 

“Reorganization”
has the meaning set forth in the Hydrofarm Acquisition Agreement, as in effect on the date hereof.

 

“Reportable
Event” any event set forth in Section 4043(c) of ERISA, other than an event for which the thirty (30) day notice
period has been waived.

 

“Required
Lenders” means Lenders holding more than fifty percent (50%) of the aggregate outstanding principal amount of the Term
Loans; provided that if there are at least two Lenders (treating Lenders that are Affiliates of one another as a single
Lender for the purposes of this proviso), “Required Lenders” must include at least two Lenders. The Commitments
and Loans of any Defaulting Lender shall be disregarded in determining Required Lenders at any time.

 

“Resignation Effective Date” has
the meaning specified in Section 8.13.

 

“Responsible
Officer” means the chief executive officer, president, senior vice president, senior vice president (finance), vice
president, chief financial officer, treasurer, manager of treasury activities or assistant treasurer or other similar officer
or Person performing similar functions of a Loan Party and, as to any document delivered on the Closing Date, any secretary
or assistant secretary of a Loan Party. To the extent requested by the Administrative Agent, each “Responsible
Officer” will provide an incumbency certificate and to the extent requested by the Administrative Agent, appropriate
authorization documentation, in form and substance reasonably satisfactory to the Administrative Agent. Any document
delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been
authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible
Officer shall be conclusively presumed to have acted on behalf of such Loan Party. Unless otherwise specified, all references
herein to a “Responsible Officer” shall refer to a Responsible Officer of the Borrower Agent.

 

    	 	27	 

     

    

 

“Restricted
Payment” means (a) any declaration or payment of a distribution, interest or dividend on, any payment on account
of, or any setting apart assets for a sinking or other analogous fund for, any Equity Interest or Equity Interests Equivalents,
(b) any distribution, advance or repayment of any Indebtedness to a direct or indirect holder of Equity Interests or Equity
Interests Equivalents, (c) any purchase, redemption, or other acquisition or retirement for value of, or any setting apart
assets for a sinking or other analogous fund for the purchase, redemption, or other acquisition or retirement for value of, any
Equity Interest or Equity Interests Equivalents or (d) any management fees paid to the Manager, the Sponsor, the Co-Investor
or any of their respective Affiliates.

 

“Revolving
Loan Agent” means Bank of America N.A., in its capacity as administrative agent and collateral agent under the Revolving
Loan Facility, and its successors and assigns.

 

“Revolving
Loan Agreement” has the meaning assigned to that term in the definition of “Revolving Loan Documents”.

 

“Revolving
Loan Documents” has the meaning assigned to the term “Revolving Loan Documents” in the Intercreditor Agreement.

 

“Revolving
Loan Facility” means (i) that certain Loan and Security Agreement, dated as of the date hereof, as may be amended,
amended and restated, modified or supplemented from time to time in accordance with the terms hereof and of the Intercreditor Agreement,
among the Loan Parties, the Revolving Loan Agent and the Revolving Loan Lenders (the “Revolving Loan Agreement”),
and (ii) any other credit agreement, debt facility, loan agreement, note agreement, promissory note, indenture or other agreement
or instrument evidencing or governing the terms of any Indebtedness or other financial accommodation that has, subject to the limitations
set forth herein and in the Intercreditor Agreement, been incurred by the Loan Parties to increase, extend, replace or refinance
in whole or in part the Indebtedness and other obligations outstanding under (x) the Loan and Security Agreement referred
to in clause (i) or (y) any subsequent Revolving Loan Facility, unless such agreement or instrument expressly
provides that it is not intended to be and is not an Revolving Loan Facility hereunder, in any case, in accordance with the Intercreditor
Agreement. Any reference to the Revolving Loan Facility hereunder shall be deemed a reference to any Revolving Loan Facility then
in existence.

 

“Revolving
Loan Lenders” has the meaning assigned to the term “Revolving Loan Lenders” in the Intercreditor Agreement.

 

“Revolving
Loan Maximum Amount” has the meaning assigned to such term in the Intercreditor Agreement.

 

“Revolving
Loan Obligations” shall mean the “Obligations” as such term is defined in the Revolving Loan Facility or
any equivalent term used to describe the obligations arising thereunder and in connection therewith.

 

“Revolving
Loan Priority Collateral” has the meaning assigned to such term in the Intercreditor Agreement.

 

    	 	28	 

     

    

 

“Revolving
Loans” means the “Revolver Loans” made pursuant to and as defined in the Revolving Loan Facility or any equivalent
term used to describe the revolving loans (including any swingline loans, overadvances and protective advances made thereunder
and in connection therewith).

 

“SBIA” means the Small Business
Investment Act of 1958, as amended.

 

“S&P”
means Standard & Poor’s Ratings Services, a division of the McGraw Hill Companies, Inc., or any successor to
the rating agency business thereof.

 

“SDN List” has the meaning set
forth in Section 4.27.

 

“Second ECF Payment Date” has the
meaning set forth in Section 2.1(g)(3).

 

“Secured Parties”
means, collectively, with respect to each of the Security Documents, the Administrative Agent, the Lenders, and each Affiliate
of the Administrative Agent or any Lender, which Affiliate is party to any Rate Hedging Obligations and each agent or sub-agent
appointed by the Administrative Agent from time to time pursuant to Section 8.10.

 

“Security
Agreement” means a Security Agreement dated as of the Closing Date, entered into by the Borrowers and the Guarantors
in favor of the Administrative Agent for the benefit of the Secured Parties, as it may be amended, modified, restated or replaced
from time to time.

 

“Security
Documents” means and refer to the Security Agreement, the Perfection Certificate (as defined in the Security Agreement),
the Guarantees and each other assignment, pledge or security agreement, instrument, certificate, financing statements, filings
or document pursuant to which any Borrower, any Guarantor or any other Person shall grant or convey to the Administrative Agent
or the Lenders a Lien in Collateral as security for all or any portion of the Obligations, whether now or hereafter in existence,
as said agreements or documents may be amended, modified, restated or replaced from time to time, each in form and substance reasonably
satisfactory to the Administrative Agent.

 

“Solvent”
means, as to any Person, such Person (a) owns Property whose fair salable value is greater than the amount required to pay
all of its debts (including contingent, subordinated, unmatured and unliquidated liabilities), (b) owns Property whose present
fair salable value (as defined below) is greater than the probable total liabilities (including contingent, subordinated, unmatured
and unliquidated liabilities) of such Person as they become absolute and matured, (c) is able to pay all of its debts as they
mature, (d) has capital that is not unreasonably small for its business and is sufficient to carry on its business and transactions
and all business and transactions in which it is about to engage, (e) is not “insolvent” within the meaning of
Section 101(32) of the Bankruptcy Code of the United States of America, and (f) has not incurred (by way of assumption
or otherwise) any obligations or liabilities (contingent or otherwise) under any Loan Documents, or made any conveyance in connection
therewith, with actual intent to hinder, delay or defraud either present or future creditors of such Person or any of its Affiliates.
 “Fair salable value” means the amount that could be obtained for assets within a reasonable time, either through
collection or through sale under ordinary selling conditions by a capable and diligent seller to an interested buyer who is willing
(but under no compulsion) to purchase.

 

“Specified
Loan Party” means any Borrower, Affiliate of Borrower or Guarantor that is not then an “eligible contract participant”
under the Commodity Exchange Act (determined prior to giving effect to Section 9.20).

 

    	 	29	 

     

    

 

“Specified
Acquisition Agreement Representations” means such of the representations and warranties made by or in respect of
Hydrofarm, the Acquired Company, the Seller (as defined in the Hydrofarm Acquisition Agreement) or the Stockholders (as
defined in the Hydrofarm Acquisition Agreement) in the Hydrofarm Acquisition Agreement, but only to the extent that the
Initial Borrower (or any of its Affiliates) have the right to terminate its obligations to consummate the Hydrofarm
Acquisition under the Hydrofarm Acquisition Agreement (or the right to not consummate the Hydrofarm Acquisition pursuant to
the Hydrofarm Acquisition Agreement) (in each case, in accordance with the terms thereof) as a result of a breach of such
representations and warranties in the Hydrofarm Acquisition Agreement (determined without regard to whether any notice is
required to be delivered under the Hydrofarm Acquisition Agreement).

 

“Specified
Representations” means the representations and warranties of the Loan Parties in Sections
4.1 (solely with respect to (x) the first sentence thereof (other than with respect to qualifications to do business
as a foreign corporation) and (y) the third sentence thereof), 4.2, 4.4,
4.6(i), 4.7, 4.10,
4.11, 4.12, 4.13,
4.15, 4.20, 4.24
(solely with respect to the consummation of the transactions contemplated by the Hydrofarm Acquisition Agreement being not in violation
of any statute, regulation, order, judgment or decree), 4.26 (other than, in the case
of the second sentence thereof, with respect to the perfection of the Lien in respect of any Collateral that, pursuant to Section 3.2,
is not required to be provided on the Closing Date), 4.27, 4.28
and 4.32 (solely with respect to the last sentence thereof).

 

“Specified
Transaction” means the Hydrofarm Acquisition, any Investment (including any Acquisition), Asset Disposition (including,
without limitation, any Colorado Property Sale-Leaseback), incurrence or repayment of Indebtedness or Restricted Payment that by
the terms of this Agreement requires such test to be calculated on a “Pro Forma Basis”.

 

“Sponsor”
means Hawthorn Equity Partners and its Controlled Investment Affiliates.

 

“Subordinated
Indebtedness” any Permitted Affiliate Sub Debt and any other Indebtedness incurred by a Loan Party that (a) is
unsecured, (b) is fully and completely subordinated to the prior payment in full of the Obligations for the benefit of, and
to, the Lenders pursuant to a subordination agreement, which shall, in each case, be in form and substance satisfactory to the
Administrative Agent in its Permitted Discretion, (c) has a final maturity date that is not earlier than, and provides for
no scheduled payments of principal or mandatory redemption obligations prior to, August 11, 2022, (d) provides for payments
of interest solely in-kind (and not in cash) until not earlier than August 11, 2022, (e) does not contain any financial
covenants, (f) is not cross-defaulted (but may be cross-accelerated) to the Loan Documents, (g) is subject to permanent
standstill provisions, and (h) is otherwise on terms (including maturity, interest, fees, repayment, covenants and subordination)
satisfactory to the Administrative Agent in its Permitted Discretion.

 

“Subsidiary”
of any Person means (i) any corporation of which more than 50% of the outstanding Equity Interests and Equity Interests Equivalents
of any class or classes having ordinary voting power for the election of directors (irrespective of whether or not at the time
Equity Interests or Equity Interests Equivalents of any class or classes of such corporation shall have or might have voting power
by reason of the happening of any contingency) is now or hereafter owned directly or indirectly by such Person, by such Person
and one or more of its Subsidiaries, or by one or more of such Person’s other Subsidiaries, (ii) any partnership, association,
limited liability company, joint venture or other entity in which such Person, such Person and one or more of its Subsidiaries,
or one or more of its Subsidiaries, is either a general partner or has an equity or voting interest of more than 50% at the time,
and (iii) any other entity which is directly or indirectly controlled by such Person or one or more Subsidiaries of such Person
or both; provided that, unless otherwise specified, any reference to “Subsidiary”
means a Subsidiary of a Borrower.

 

    	 	30	 

     

    

 

“Swap Contract”
means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index
swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign
exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate
swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing
(including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any
master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms
and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc.,
any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any
related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

 

“Swap Obligations”
means with respect to any Borrower or Guarantor, any obligation to pay or perform under any agreement, contract or transaction
that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act, as amended from
time to time.

 

“Swap Termination
Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed
out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior
to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts,
as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such
Swap Contracts (which may include a Lender or any Affiliate of a Lender).

 

“Tax
Distribution” means, with respect to any taxable year with respect to which Hydrofarm is a disregarded entity for
U.S. federal and state income tax purposes and Holdings is a partnership for U.S. federal and state income tax purposes,
distributions by Hydrofarm to Holdings (which Holdings may further distribute to its direct owner(s)) in an aggregate amount
equal to the sum of (x) the product of (i) the aggregate net taxable income of Holdings for such taxable year (or
portion thereof), taking into account any depreciation (or other cost recovery) in respect of basis adjustments under
Section 734 or Section 743 of the Code, and reduced by any cumulative net taxable losses with respect to all prior
taxable years (determined as if all such periods were one period) to the extent such cumulative net taxable loss is of the
same character (ordinary or capital) and (ii) the lesser of (a) the highest combined marginal federal and state
income tax rate (taking into account the deductibility of state and local income taxes for U.S. federal income tax purposes
and the character of the taxable income in question (i.e., long term capital gain, qualified dividend income, etc.))
applicable to an individual resident in California for the taxable year in question (or portion thereof) and (b) 40%,
plus (y) solely to the extent that (A) one or more holders of equity interests in Holdings is a resident of
California (each such holder that is a resident of California is herein referred to as an “Applicable
Holder”), and (B) the amount of such Tax Distribution is determined by reference to clause
(x)(ii)(b) above, the aggregate amount by which the actual federal and state income tax liability of each such
Applicable Holder for such taxable year with respect to the net tax taxable income of Holdings allocated to such Applicable
Holder (such Applicable Holder’s “Allocated Taxable Income”) for such taxable year exceeds the
product of (a) 40%, times (b) such Allocated Taxable Income; provided that such cash distributions shall be reduced
by amounts withheld by any Loan Party (or otherwise paid directly to any taxing authority) with respect to any taxable income
or gain of Holdings or any Subsidiary (including all amounts paid with composite tax returns and amounts paid by any Loan
Party pursuant to Section 6225 of the Code) and any income tax credits allocated to any direct or indirect members of
Holdings (to the extent Holdings reasonably determines that such tax credits may be utilized by the direct or indirect owners
of Holdings).

 

    	 	31	 

     

    

 

“Taxes”
means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments,
fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

 

“Term Loan
Priority Collateral” has the meaning assigned to such term in the Intercreditor Agreement (it being understood and agreed
that any time the Revolving Loan Facility is not in effect, the term “Term Loan Priority Collateral” shall mean all
Collateral).

 

“Term Loans” means the
term loans made on the Closing Date pursuant to Section 2.1(a).

 

“Test Period”
in effect at any time means the most recent period of four consecutive fiscal quarters of the Borrowers ended on or prior to such
time (taken as one accounting period) in respect of which financial statements have been or are required to be delivered pursuant
to Section 5.1(b) or (c), as applicable. A Test Period may be designated by reference to the last day thereof
(e.g., the “June 30, 2017 Test Period” refers to the period of four
consecutive fiscal quarters of the Borrowers ended on June 30, 2017), and a Test Period shall be deemed to end on the last
day thereof.

 

“Third ECF Payment Date” has the
meaning set forth in Section 2.1(g)(3).

 

“Total Net
Debt” means, as of any date of determination, (a) Indebtedness of the type described in clauses (a), (b),
(d), (f), (h), (i) and (j) (but (1) excluding Permitted Affiliate Sub Debt and
(2) in the case of clauses (i) and (j) solely to the extent Guaranteeing or related to Indebtedness
described in clauses (a), (b), (d), (f) (but, in the case of earn-out obligations, only to the
extent not paid when due) and (h)), minus (b) unrestricted cash and cash equivalents of the Borrowers and their
Subsidiaries to the extent such cash or cash equivalents are subject to a first priority perfected security interest in favor
of the Administrative Agent (subject to the Intercreditor Agreement) in an amount of up to $4,000,000 in the aggregate for all
such cash and cash equivalents; provided that Total Net Debt shall not include Indebtedness in respect of (i) letters
of credit, except to the extent of unreimbursed amounts thereunder and (ii) obligations under swap contracts.

 

“Total Net
Leverage Ratio” means, in respect of any fiscal quarter of the Borrowers, on a consolidated basis, the ratio of Total
Net Debt as of the last day of such fiscal quarter to Adjusted Consolidated EBITDA for the Test Period ending on the last day of
such fiscal quarter.

 

“Transactions”
means, collectively, (a) the execution, delivery and performance by each Loan Party of the Loan Documents to which such Loan
Party is a party and, in the case of the Borrowers, the borrowing of the Term Loans hereunder and the use of proceeds thereof in
accordance with the terms hereof, (b) the execution, delivery and performance by each Loan Party of the Revolving Loan Documents
to which such Loan Party is a party and, in the case of the borrowers under the Revolving Loan Documents, the making of the initial
borrowings of Revolving Loans thereunder and the use of proceeds thereof in accordance with the terms thereof, (c) the execution,
delivery and performance by Holdings of the Hydrofarm Acquisition Agreement and the other Acquisition Documents and the consummation
of the transactions contemplated thereby, (d) the consummation of the Closing Equity Contribution, (e) the execution
and delivery of the Assumption Agreement and the consummation of the transactions contemplated thereby, including the assumption
by the Borrowers of the obligations of the Initial Borrower hereunder, and (f) the payment of related fees and expenses.

 

“United States” and “U.S.”
mean the United States of America.

 

    	 	32	 

     

    

 

“U.S. Person”
means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.

 

“U.S. Tax Compliance Certificate”
has the meaning assigned thereto in Section 10.1(e)(ii)(B)(3).

 

“Wholly Owned
Loan Party” means any Loan Party that is a Subsidiary of a Borrower so long as all of the Equity Interests and Equity
Interests Equivalents of such Loan Party (other than directors’ qualifying shares required by law) are owned by a Borrower,
either directly or through one or more Subsidiaries of a Borrower that are Wholly Owned Loan Parties.

 

“WJCO”
means WJCO LLC, a Colorado limited liability company, which is the successor to WJCO, Inc., a Colorado corporation, as a result
of the Reorganization and the Conversion.

 

1.2          Other
Interpretive Provisions. With reference to this Agreement and each other Loan Document, unless otherwise specified herein
or in such other Loan Document:

 

(a)          The
meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

 

(b)          All
undefined terms contained in any of the Loan Documents shall, unless the context indicates otherwise, have the meanings provided
for by the Uniform Commercial Code to the extent the same are used or defined therein; in the event that any term is defined differently
in different Articles or Divisions of the Uniform Commercial Code, the definition contained in Article or Division 9 shall
control.

 

(c)          The
meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

 

(d)          The
words “herein,” “hereto,” “hereof” and “hereunder” and words of similar import
when used in any Loan Document shall refer to such Loan Document as a whole and not to any particular provision thereof.

 

(e)          References
in this Agreement to an Exhibit, Schedule, Article, Section, clause or sub-clause refer (A) to the appropriate Exhibit or
Schedule to, or Article, Section, clause or sub-clause in this Agreement or (B) to the extent such references are not present
in this Agreement, to the Loan Document in which such reference appears.

 

(f)           The
term “including” is by way of example and not a limitation.

 

(g)          The
term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial
statements and other writings, however evidenced, whether in physical or electronic form.

 

(h)          In
the computation of periods of time from a specified date to a later specified date, the word “from” means “from
and including;” the words “to” and “until” each mean “to but excluding;” and the word
 “through” means “to and including.”

 

(i)           Section headings
herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of
this Agreement or any other Loan Document.

 

    	 	33	 

     

    

 

1.3          Accounting
Terms; Payment Dates. All accounting terms not specifically or completely defined herein shall be construed in conformity
with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to
this Agreement shall be prepared in conformity with, GAAP, except as otherwise specifically prescribed herein. Unless the context
indicates otherwise, any reference to a “fiscal year” or a “fiscal quarter” shall refer to a fiscal year
ending December 31 or fiscal quarter ending March 31, June 30, September 30 or December 31 of the Borrowers.

 

1.4          References
to Agreements, Laws, Etc. Unless otherwise expressly provided herein, (a) any definition of or reference to any
agreement, instrument or other document herein or in any Loan Document shall be construed as referring to such agreement,
instrument or other document as may be from time to time amended, restated, amended and restated, supplemented or otherwise
modified, extended, refinanced or replaced (subject to any restrictions or qualifications on such amendments, restatements,
amendment and restatements, supplements or modifications, extensions, refinancings or replacements set forth herein or in any
Loan Document) and (b) any reference to any law in any Loan Document shall include all statutory and regulatory
provisions consolidating, amending, replacing, supplementing or interpreting such law.

 

1.5          Times
of Day. Unless otherwise specified, all references herein to times of day shall be references to New York City time
(daylight or standard, as applicable).

 

ARTICLE II

THE TERM LOANS

 

2.1          The
Term Loans.

 

(a)          Term
Loans. Subject (x) with respect to the conditions to the obligation to make such Term Loans on the Closing Date, only
to the conditions precedent set forth in Section 3.1 and (y) otherwise, to the other terms and conditions set
forth herein, the Lenders severally agree to make term loans (the “Term Loans”) under the Commitments to the
Borrowers on the Closing Date in an aggregate principal amount equal to $75,000,000 to fund (i) a portion of the purchase
price for the Hydrofarm Acquisition, which will be consummated on the Closing Date substantially concurrently with the funding
of the Term Loans, (ii) a portion of the repayment, prepayment or redemption, as applicable, in full of all Indebtedness owing
to third parties for borrowed money of the Acquired Company (together with the defeasance, discharge and termination thereof and
the related release and termination of all guarantees and security interests granted thereunder, the “Refinancing”),
(iii) the payment of fees, premiums, accrued and unpaid interest, expenses and other similar transaction costs related to
the foregoing and (iv) to the extent any proceeds of the Term Loans remain after such proceeds are applied to the purposes
set forth in the foregoing clauses (i) through (iii), ongoing working capital requirements of the Borrowers
and their Subsidiaries and for other general corporate purposes. The Commitments shall be terminated concurrently with the funding
of the Term Loans on the Closing Date. The Borrowers’ obligation to pay the principal of, and interest on, the Term Loan
shall be evidenced by the records of the Lenders and by one or more promissory note(s) in form substantially as attached hereto
as Exhibit A (the “Notes”). The entries made in the Register shall (absent manifest error)
be prima facie evidence of the existence and amounts of the obligations of the Borrowers therein recorded; provided,
that the failure or delay of the Lenders in maintaining or making entries into any such record or on such schedule or any error
therein shall not in any manner affect the obligation of the Borrowers to repay the Term Loan (both principal and unpaid accrued
interest) in accordance with the terms of this Agreement.

 

    	 	34	 

     

    

 

(b)          Notes.
If requested by any Lender, the Term Loans made or held by such Lender shall be evidenced by, and be payable in accordance with,
the terms of the Note issued to such Lender made by the Borrowers payable to the order of such Lender in a principal amount equal
to the Term Loans held by such Lender; subject, however, to the provisions of such Note to the effect that the principal
amount payable thereunder at any time shall not exceed the then unpaid principal amount of the Term Loans made or held by such
Lender. The Borrowers hereby irrevocably authorize each Lender to make or cause to be made, at or about the time of the Term Loans
made by such Lender, an appropriate notation on the records of such Lender, reflecting the principal amount of such Term Loans,
and such Lender shall make or cause to be made, on or about the time of receipt of payment of any principal of any Term Loans,
an appropriate notation on its records reflecting such payment and such Lender will, prior to any transfer of any of such Note,
endorse on the reverse side thereof the outstanding principal amount of the Term Loans evidenced thereby. Failure to make any such
notation shall not affect the Loan Parties’ obligations in respect of such Term Loans. The aggregate amount of all Term Loans
set forth on the Register shall be conclusive evidence of the principal amount owing and unpaid on such Lender’s Note, absent
manifest error.

 

(c)          Promise
to Pay. The Borrowers hereby promise to pay in full to the Administrative Agent for the benefit of the Lenders the amount of
all Obligations, including the principal amount of all Term Loans, together with accrued interest, fees and other amounts due thereon,
all in accordance with the terms of this Agreement. All outstanding Obligations, including the outstanding principal amount of
all Term Loans, together with unpaid accrued interest, fees and other amounts due thereon, shall be due and payable in full on
the Maturity Date.

 

(d)          Required
Payments.

 

(1)          Amortization.
Commencing September 30, 2017, and continuing on the last day of each fiscal quarter of the Borrowers thereafter, the Borrowers
shall make quarterly repayments of the principal amount of the Term Loans in the aggregate principal amount equal to 0.625% of
the original principal amount of the Term Loans on the Closing Date.

 

(2)          Maturity.
The entire remaining unpaid principal balance of the Term Loan, together with accrued but unpaid interest, shall be due and payable
in full on the Maturity Date.

 

(e)           Interest.
The Borrowers agree to pay interest on the aggregate outstanding principal amount of the Term Loans until paid in full as follows:

 

(1)          Accrual.
From the Closing Date through the Maturity Date, the Term Loans shall bear interest at the rate of (i) with respect to LIBOR
Rate Loans, the LIBOR Rate plus the Applicable Margin, and (ii) with respect to Base Rate Loans, the Base Rate plus
the Applicable Margin.

 

(2)          Default
Interest. While any Default or Event of Default exists and is continuing, either (i) from and after the delivery of written
notice to the Borrower from the Administrative Agent or the Required Lenders of their election to charge Default Interest until
the applicable Event of Default is cured or waived or (ii) immediately upon the occurrence of any Default or Event of Default
under Section 7.1(a) or 7.1(j) until the applicable Event of Default is cured or waived, the Borrower
shall pay interest (“Default Interest”) with respect to each Term Loan, plus any accrued and unpaid interest
thereon, then outstanding at the Default Rate. All Default Interest shall be payable on demand.

 

    	 	35	 

     

    

 

(3)          Payment
Dates. Interest accrued on each Term Loan shall be payable, without duplication:

 

(A)          on
the Maturity Date;

 

(B)          in
respect of any Term Loan, on the date of any payment or prepayment, in whole or in part, of principal outstanding on such Term
Loan, on the principal amount so paid or prepaid; and

 

(C)          in
respect of (i) any Base Rate Loan, on May 31, 2017 and on the last Business day of each month thereafter and (ii) with
respect to any LIBOR Rate Loan, at the end of each Interest Period (together with the Maturity Date, each an “Interest
Payment Date”);

 

The Administrative
Agent shall determine each interest rate applicable to the Term Loan in accordance with the terms hereof and, upon any rate change,
shall promptly notify the Borrower Agent of such rate in writing (or by telephone, promptly confirmed in writing). Any such determination
shall be conclusive and binding for all purposes, absent manifest error.

 

(f)           Calculation
of Interest. All computations of interest for Base Rate Loans (including Base Rate Loans determined by reference to the LIBOR
Rate) shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations
of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest,
as applicable, being paid than if computed on the basis of a 365-day year). Interest shall accrue on each Term Loan for the day
on which the Term Loan is made, and shall not accrue on a Term Loan, or any portion thereof, for the day on which the Term Loan
or such portion is paid. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive
and binding for all purposes, absent manifest error.

 

(g)          Prepayment.
Subject to the Intercreditor Agreement, prepayments of the Term Loans shall be (or in the case of Section 2.1(g)(1),
may be) made as set forth below:

 

(1)          (i)          The
Borrower Agent shall have the right, by giving written notice to the Administrative Agent (which such written notice shall be
in a form approved by the Administrative Agent (including any form on an electronic platform or electronic transmission
system as shall be reasonably approved by the Administrative Agent), substantially completed and signed by a Responsible
Officer) by not later than 1:00 p.m. on the third (3rd) Business Day preceding the date of such prepayment,
to prepay all or any portion of the aggregate principal amount of the Term Loans, without premium or penalty, except that any
prepayment of Term Loans pursuant to this Section 2.1(g)(1)(i) effected on or prior to the date that is 18
months following the Closing Date shall be accompanied by a fee payable to the Lenders in an amount equal to the applicable
Call Premium. Such fee shall be paid by Borrowers to the Administrative Agent, for the account of the Lenders, on the date of
such prepayment. Each partial prepayment shall be in an aggregate principal amount of not less than $1,000,000 and shall be
accompanied by accrued interest to the date of prepayment on the amount prepaid. Borrowers shall reimburse the Lenders and
the Administrative Agent on demand for any amounts set forth in, and to the extent required by, Section 10.5.
Voluntary prepayments of Term Loans shall be applied to reduce the remaining scheduled repayments required by Section 2.1(d)(1) as
the Borrower Agent shall direct.

 

    	 	36	 

     

    

 

(ii)        On
or prior to the Equity Prepay Expiration Date, the Borrower Agent shall have the right, by giving written notice to the Administrative
Agent (which such written notice shall be in a form approved by the Administrative Agent (including any form on an electronic platform
or electronic transmission system as shall be reasonably approved by the Administrative Agent), substantially completed and signed
by a Responsible Officer) by not later than 1:00 p.m. on the third (3rd) Business Day preceding the date of such
prepayment, to prepay all or any portion of the aggregate principal amount of the Term Loans, without premium or penalty, from
the Net Cash Proceeds received by Holdings from a Qualifying Issuance; provided, that (A) the maximum principal amount
of the Term Loans that may prepaid pursuant to this Section 2.1(g)(1)(ii) with respect to any Qualifying Issuance
shall not exceed fifty percent (50%) of the Net Cash Proceeds received by Holdings from such Qualifying Issuance, (B) the
aggregate principal amount of the Term Loans that may prepaid pursuant to this Section 2.1(g)(1)(ii), whether in connection
with one or multiple Qualifying Issuances, shall in no event exceed $2,500,000, and (C) in no event shall the Loan Parties
be permitted to prepay any Term Loans pursuant to this Section 2.1(g)(1)(ii) after the Equity Prepay Expiration
Date. Each partial prepayment shall be in an aggregate principal amount of not less than $1,000,000 and shall be accompanied by
accrued interest to the date of prepayment on the amount prepaid. Borrowers shall reimburse the Lenders and the Administrative
Agent on demand for any amounts set forth in, and to the extent required by, Section 10.5. Voluntary prepayments of
Term Loans shall be applied to reduce the remaining scheduled repayments required by Section 2.1(d)(1) as the
Borrower Agent shall direct.

 

(2)          Concurrently
with the receipt by Holdings or any of its Subsidiaries of any Net Cash Proceeds of any Extraordinary Receipts, the Borrowers shall
make a mandatory prepayment of the Term Loans in an amount equal to 100.0% of such Net Cash Proceeds.

 

(3)          No
later than five (5) days following the date of delivery of annual audited financial statements for the fiscal year
ending December 31, 2017 pursuant to Section 5.1(b) and thereafter no later than the date five
(5) days following the date of delivery of annual audited financial statements for each subsequent fiscal year pursuant
to Section 5.1(b)  (such required payment date during any fiscal year is herein referred to as the
 “Initial ECF Payment Date” in respect of such fiscal year), the Borrowers shall make a mandatory
prepayment of the Term Loans in an amount equal to (i) if the Total Net Leverage Ratio at the end of such the applicable
Excess Cash Flow Period shall have been greater than or equal to 3.25:1.00, 50.0% of Excess Cash Flow for such Excess Cash
Flow Period, (ii) if the Total Net Leverage Ratio at the end of such the applicable Excess Cash Flow Period shall have
been less than 3.25:1.00 but greater than or equal to 2.50:1.00, 25.0% of Excess Cash Flow for such Excess Cash Flow Period,
or (iii) if the Total Net Leverage Ratio at the end of such the applicable Excess Cash Flow Period shall have been less
than 2.50:1.00, 0.0% of Excess Cash Flow for such Excess Cash Flow Period (the amount of the required mandatory prepayment to
be made in a fiscal year as determined in accordance with the foregoing is herein referred to as the “ECF Payment
Amount” in respect of such fiscal year); provided that, at the option of the Borrowers, any voluntary
prepayments of the Term Loans (to the extent paid with Internally Generated Funds) made during such fiscal year prior to the
applicable Initial ECF Payment Date in such fiscal year (and without duplication in the next fiscal year) will reduce the ECF
Payment Amount required for such fiscal year on a dollar-for-dollar basis; provided, further, that, if the ECF
Liquidity as of the Initial ECF Payment Date in a particular fiscal year, calculated on a pro forma basis assuming that the
entire ECF Payment Amount for such fiscal year was paid on such Initial ECF Payment Date, is less than $10,000,000, then:

 

    	 	37	 

     

    

 

(A)          the
Borrowers shall have the option (exercisable by delivery of written notice thereof delivered by the Borrower Agent to the Administrative
Agent on or prior to such Initial ECF Payment Date) to either:

 

(i)            make
a mandatory prepayment of Term Loans under this Section 2.1(g)(3) on such Initial ECF Payment Date in an amount
equal to the entire ECF Payment Amount for such fiscal year; or

 

(ii)           elect
to (a) reduce the mandatory prepayment of Term Loans required to be made pursuant to this Section 2.1(g)(3) on
such Initial ECF Payment Date to an amount equal to the product of (x) 50%, times (y) the ECF Payment Amount for such
fiscal year (the “Partial ECF Payment Amount”), which Partial ECF Payment Amount shall be due and payable by
the Borrowers no later than the date five (5) days following the date of delivery of the annual audited financial statements
pursuant to Section 5.1(b) for the prior fiscal year, and (b) defer the obligation of the Borrowers’
to prepay the amount by which the ECF Payment Amount for such fiscal year exceeds such Partial ECF Payment Amount (the “Remaining
ECF Payment Amount”) until either the Second ECF Payment Date or Third ECF Payment Date as determined in accordance with
clauses (B) and (C) below;

 

(B)          if,
pursuant to clause (A) above, the Borrowers shall have duly elected to make a payment of the Partial ECF Payment Amount
on the Initial ECF Payment Date in respect of such fiscal year, then, on June 30 of such fiscal year (or, if such date is
not a Business Day, on the next succeeding Business Day) (the “Second ECF Payment Date”), the Borrowers shall
make a mandatory prepayment of Term Loans under this Section 2.1(g)(3) in an amount equal to the Remaining ECF
Payment Amount for such fiscal year; provided, that, if the ECF Liquidity as of such Second ECF Payment Date, calculated
on a pro forma basis assuming that the entire Remaining ECF Payment Amount for such fiscal year was paid on such Second ECF Payment
Date, is less than $10,000,000, then the Borrowers shall have the option (exercisable by delivery of written notice thereof delivered
by the Borrower Agent to the Administrative Agent on or prior to such Second ECF Payment Date) to either:

 

(i)            make
a mandatory prepayment of Term Loans under this Section 2.1(g)(3) on such Second ECF Payment Date in an amount
equal to the Remaining ECF Payment Amount for such fiscal year; or

 

(ii)           elect
to defer the obligation of the Borrowers’ to prepay the Remaining ECF Payment Amount until the Third ECF Payment Date; and

 

(C)          if,
pursuant to clause (B) above, the Borrowers shall have duly elected to defer the obligation of the Borrowers’
to prepay the Remaining ECF Payment Amount until the Third ECF Payment Date, then, on September 30 of such fiscal year (or,
if such date is not a Business Day, on the next succeeding Business Day) (the “Third ECF Payment Date”), the
Borrowers shall make a mandatory prepayment of Term Loans under this Section 2.1(g)(3) in an amount equal to the
Remaining ECF Payment Amount for such fiscal year.

 

    	 	38	 

     

    

 

(4)          Concurrently
with the receipt by Holdings or any of its Subsidiaries of Net Cash Proceeds from (i) any Casualty Event or (ii) any
Asset Disposition (other than an Asset Disposition permitted under clause (a), (b), (c), (d), (f),
(g), (h), (i), (j) or (l) of Section 6.4), the Borrowers shall make a
mandatory prepayment of the Term Loans in an amount equal to 100.0% of such Net Cash Proceeds; provided that the foregoing
prepayment obligation shall not apply to the extent such Net Cash Proceeds, are reinvested or committed to be reinvested in other
assets or property useful in the business of the Borrowers and their Subsidiaries within 180 days of the receipt of such Net Cash
Proceeds, and if so committed to be reinvested, reinvested no later than ninety (90) days after the end of such 180 day period
(provided, that, in the event that the property or asset that was subject to such Casualty Event or Asset Disposition was
Term Loan Priority Collateral, any property or asset in which such Net Cash Proceeds are so reinvested must be Term Loan Priority
Collateral); provided, further, that the foregoing prepayment obligation shall not apply to the extent that (A) such
Net Cash Proceeds are received by the Loan Parties in connection with a Permitted Colorado Property Sale-Leaseback, (B) within
five (5) Business Days following the consummation of such Permitted Colorado Property Sale-Leaseback, the Borrower Agent
shall have delivered to the Administrative Agent a certificate certifying that (i) no Default or Event of Default exists
on the date of the consummation of such Permitted Colorado Property Sale-Leaseback or would result therefrom, (ii) after
giving effect to such Permitted Colorado Property Sale-Leaseback on a Pro Forma Basis, the Total Net Leverage Ratio for the most
recently ended Test Period does not exceed 4.00:1.00, and (iii) the Loan Parties will, within five (5) Business Days
following the consummation of such Permitted Colorado Property Sale-Leaseback, apply 100% of such Net Cash Proceeds to make a
prepayment of Revolving Loan Obligations, and (C) within five (5) Business Days following the consummation of such Permitted
Colorado Property Sale-Leaseback, the Loan Parties shall have applied 100% of such Net Cash Proceeds to make a prepayment of Revolving
Loan Obligations.

 

(5)          Concurrently
with the receipt by Holdings or any of its Subsidiaries of Net Cash Proceeds of any Indebtedness (except for Permitted Indebtedness)
by Holdings or any of its Subsidiaries, the Borrowers shall make a mandatory prepayment of the Term Loans in an amount equal to
100.0% of such Net Cash Proceeds.

 

(6)          Concurrently
with the receipt by a Borrower of Equity Cure Contributions, the Borrowers shall make a mandatory prepayment of the Term Loans
in an amount equal to 100.0% of such Equity Cure Contributions.

 

(7)          Concurrently
with a Change of Control or a sale of all or substantially all of the assets of the Borrowers and their Subsidiaries (taken as
a whole) in a single or a series of related transactions occurs, the Borrowers shall prepay the Term Loans, plus accrued and unpaid
interest thereon, together with any other then outstanding Obligations.

 

(8)          Any
prepayment of Term Loans pursuant to Sections 2.1(g)(1)(i), 2.1(g)(4)(ii) (in the case of Section 2.1(g)(4)(ii),
solely to the extent such prepayment is made with respect to a Major Asset Disposition), 2.1(g)(5) or 2.1(g)(7),
effected on or prior to the date that is 18 months following the Closing Date shall be accompanied by a fee payable to the
Lenders in an amount equal to the applicable Call Premium. Such fee shall be paid by the Borrowers to the Administrative
Agent, for the account of the Lenders, on the date of such prepayment. Each prepayment made pursuant to Section 2.1(g) shall
be accompanied by accrued interest to the date of prepayment on the amount prepaid. To the extent applicable, the Borrowers
shall reimburse the Lenders and the Administrative Agent on demand for amounts set forth in and, to the extent required by, Section 10.5.
The Borrower Agent shall give the Administrative Agent prior written notice of any event or circumstances reasonably likely
to give rise to a mandatory prepayment obligation under this Section 2.1(g) (including the date and an
estimate of the aggregate amount of such mandatory prepayment) at least five (5) Business Days prior thereto); provided that
the failure to give such notice shall not constitute a Default or an Event of Default but shall not relieve the Borrowers of
their obligation to make such mandatory prepayments.

 

    	 	39	 

     

    

 

2.2          Election
by Borrower Agent.

 

(a)          Interest
Rate for Term Loans. The Borrower Agent may, upon irrevocable written notice to the Administrative Agent delivered at least
three Business Days prior to such conversion or continuation, elect (i) as of any Business Day, to convert any Term Loans
(or any part thereof in an aggregate amount of not less than $100,000 or a higher integral multiple of $50,000) into Credit Loans
of the other type or (ii) as of the last day of the applicable Interest Period, to continue any LIBOR Rate Loans having Interest
Periods expiring on such day (or any part thereof in an aggregate amount not less than $100,000 or a higher integral multiple
of $50,000) for a new Interest Period; provided, that any conversion of a LIBOR Rate Loan on a day other than the last
day of an Interest Period therefor shall be subject to Section 10.5.

 

(b)          Lenders’
Records. The Borrowers hereby irrevocably authorize the Administrative Agent to make, or cause to be made, an appropriate
notation on the Register, reflecting the date and original principal amount of each Term Loan made by any Lender, the dates for
each period when such Term Loan is being maintained as a LIBOR Rate Loan, the interest rate for each such period and the dates
of principal and interest payments on such Term Loan. The Register shall be conclusive evidence of the status of such Lender’s
Term Loans, absent manifest error. Failure to make any such notation shall not affect the Borrowers’ obligations in respect
of such Term Loans.

 

2.3          Payments.
Any other provision of this Agreement to the contrary notwithstanding, the Borrowers shall make each payment of interest on
and principal of the Notes, and fees and other payments due under this Agreement (except as otherwise expressly provided
herein), in immediately available funds to the Administrative Agent at its office referred to in Section 9.3 not
later than 2:00 p.m. on the date when due. Subject to Section 10.1 (Taxes) hereof, payments by the Borrowers
under this Agreement shall be made without offset, counterclaim or other deduction and in such amounts as may be necessary in
order that all such payments shall not be less than the amounts otherwise specified to be paid under this Agreement and the
Notes. The Administrative Agent will promptly thereafter distribute like funds ratably to each Lender (unless such amount is
not to be shared ratably in accordance with the terms hereof).

 

2.4          Setoff;
etc. Upon the occurrence and during the continuance of an Event of Default, each Lender and the Administrative Agent
are hereby authorized at any time and from time to time, without prior notice to the Borrowers (any such notice being
expressly waived by the Borrowers), to set off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing by such Lender or Administrative Agent to or
for the credit or the account of any Borrower or any of the other Loan Parties, including specifically any amounts held in
any account maintained at such Lender or Administrative Agent, against amounts then due to the Administrative Agent or the
Lenders, or any of them, by any Borrower or any of the other Loan Parties in connection with this Agreement or any Loan
Document; provided that no Lender shall exercise any such right without the prior written consent of the
Administrative Agent (at the direction of the Required Lenders). The rights of the Lenders and the Administrative Agent under
this Section 2.4 are in addition to other rights and remedies (including other rights of set-off) which the
Lenders and the Administrative Agent may have under applicable law. Each Lender and the Administrative Agent agrees,
severally and not jointly, to use reasonable efforts to notify the Borrower Agent of any exercise of its rights pursuant to
this Section 2.4, provided, however, that failure to provide such notice shall not affect any
Lender’s or the Administrative Agent’s rights under this Section 2.4 or the effectiveness of any
action taken pursuant hereto; provided, that in the event that any Defaulting Lender shall exercise any such right of
setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in
accordance with the provisions of Section 2.9 and, pending such payment, shall be segregated by such Defaulting
Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent and the Lenders, and
(y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail
the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. Each Lender agrees to notify
the Borrower Agent and the Administrative Agent promptly after any such setoff and application; provided that the
failure to give such notice shall not affect the validity of such setoff and application.

 

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2.5          Sharing.
If any Lender shall obtain any payment (whether voluntary, involuntary, by application of offset or otherwise) on account of
the Term Loans made by it in excess of such Lender’s ratable share of payments on account of the Term Loans obtained by
all the Lenders, such Lender shall purchase from the other Lenders such participations in the Term Loans made by them as
shall be necessary to cause such purchasing Lender to share the excess payment ratably with each of them; provided that,
(i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered,
such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and
(ii) the provisions of this Section 2.5 shall not be construed to apply to any payment made by or on behalf
of a Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds
arising from the existence of a Defaulting Lender). The Borrowers agree that any Lender so purchasing a participation from
another Lender pursuant to this Section 2.5 may, to the fullest extent permitted by law, exercise all its rights
of payment (including the right to setoff) with respect to such participation as fully as if such Lender were the direct
creditor of the Borrowers in the amount of such participation.

 

2.6          Fees.
The Borrowers shall pay to the Administrative Agent for its own account or for the account of the Lenders, as specified
therein, fees in the amounts and at the times specified in the Fee Letter. Such fees shall be fully earned when paid and
shall not be refundable for any reason whatsoever.

 

2.7          Lending
Branch. Subject to the provisions of Section 10.6(a), each Lender may, at its option, elect to make, fund
or maintain its Term Loans hereunder at the branch or office specified on the signature pages hereto or such other of
its branches or offices as such Lender may from time to time elect.

 

2.8          Application
of Payments and Collections.

 

(a)          Order
of Application of Payments. Subject to the Intercreditor Agreement and the provisions of subsection (b) below,
all payments and prepayments and any other amounts received by the Administrative Agent from or for the benefit of the a Borrower
shall be applied, first to pay principal of and interest on any portion of the Term Loans which the Administrative Agent
may have advanced on behalf of any Lender for which the Administrative Agent has not then been reimbursed by such Lender or the
Borrowers, second ratably to pay all other Obligations in respect of fees, expenses, reimbursements or indemnities then
due and payable, third ratably to pay interest then due in respect of the Term Loans, and fourth to pay the principal
of the Term Loans then due and payable.

 

(b)          Application
of Payments After an Event of Default. Subject to the Intercreditor Agreement, after the occurrence of an Event of
Default and while the same is continuing, the Administrative Agent shall, unless the Administrative Agent and the Lenders
shall agree otherwise, apply all payments and prepayments in respect of any Obligations in the following order:

 

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(1)          to
pay interest on and then principal of any portion of the Term Loans which the Administrative Agent may have advanced on behalf
of any Lender for which the Administrative Agent has not then been reimbursed by such Lender or the Borrowers;

 

(2)          to
pay Obligations in respect of any fees, expense reimbursements or indemnities then due to the Administrative Agent;

 

(3)          ratably
to pay Obligations in respect of any fees, expenses, reimbursements or indemnities (other than principal and interest) payable
to the Lenders;

 

(4)          to
the payment of interest on all Term Loans and any amounts due pursuant to Sections 10.4 and 10.5, to be allocated
among the Lenders pro rata based on the respective aggregate amounts of such accrued interest and amounts owed to them; and

 

(5)          to
the payment of the outstanding principal amounts of all Term Loans and Obligations under Rate Hedging Obligations to be allocated
among the Lenders, pro rata based on the respective outstanding principal amounts described in this clause (5) payable
to them.

 

(c)          Each
of the Lenders hereby irrevocably designates the Administrative Agent its attorney in fact for the purpose of receiving any and
all payments to be made to such Lender in respect of Obligations held by it, and hereby directs each payor of any such payment
to make such payment to the Administrative Agent. Each of the Lenders hereby further agrees that if, notwithstanding the foregoing,
it should receive any such payment (including by set-off), it shall hold such payment in trust for, and promptly deliver such payment
to, the Administrative Agent.

 

(d)          The
Administrative Agent shall promptly distribute to each Lender at its primary address set forth on the appropriate signature page hereof
or at such other address as a Lender may notify the Administrative Agent in writing, such funds as such Lender may be entitled
to receive.

 

2.9          Defaulting
Lenders.

 

(a)          Adjustments.
Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such
time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:

 

(1)          Waivers
and Amendments. Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect
to this Agreement shall be restricted as set forth in the definition of “Required Lenders” and Section 9.1.

 

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(2)          Defaulting
Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the
account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VII or
otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 2.4 shall be
applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of
any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, as the Borrower Agent may
request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting
Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; third,
if so determined by the Administrative Agent and the Borrower Agent, to be held in a deposit account and released pro rata in
order to satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this
Agreement; fourth, to the payment of any amounts owing to the Lenders as a result of any judgment of a court of
competent jurisdiction obtained by any Lender against such Defaulting Lender as a result of such Defaulting Lender’s
breach of its obligations under this Agreement; fifth, so long as no Default or Event of Default exists, to the
payment of any amounts owing to the Borrowers as a result of any judgment of a court of competent jurisdiction obtained by
the Borrowers against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under
this Agreement; and sixth, to such Defaulting Lender or as otherwise as may be required under the Loan Documents in
connection with any Lien conferred thereunder or directed by a court of competent jurisdiction; provided that if
(x) such payment is a payment of the principal amount of any Term Loans in respect of which such Defaulting Lender has
not fully funded its appropriate share, and (y) such Term Loans were made at a time when the conditions set forth in Section 3.1
were satisfied or waived, such payment shall be applied solely to pay the Term Loans of all Non-Defaulting Lenders on a pro
rata basis prior to being applied to the payment of any Term Loans of such Defaulting Lender until such time as all Term
Loans are held by the Lenders pro rata in accordance with the Commitments hereunder. Any payments, prepayments or other
amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender shall be
deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

 

(b)          Defaulting
Lender Cure. If the Borrower Agent and the Administrative Agent agree in writing that a Lender is no longer a Defaulting Lender,
the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject
to any conditions set forth therein, that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans
of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Term Loans
to be held on a pro rata basis by the Lenders in accordance with their respective Commitments, whereupon such Lender will cease
to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments
made by or on behalf of a Borrower while that Lender was a Defaulting Lender; and provided, further, that except to the
extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute
a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

 

2.10        Joint and Several Liability.

 

(a)          Joint
and Several Liability. All Term Loans made to the Borrowers (or assumed by the Borrowers pursuant to the Assumption
Agreement) and all of the other Obligations of the Borrowers, including all interest, fees and expenses with respect thereto
and all indemnity and reimbursement obligations hereunder, shall constitute one joint and several direct and general
obligation of all of the Borrowers. Notwithstanding anything to the contrary contained herein, each of the Borrowers shall be
jointly and severally, with each other Borrower, directly and unconditionally, liable for all Obligations, it being
understood that the advances to each Borrower inure to the benefit of all Borrowers, and that the Administrative Agent and
the Lenders are relying on the joint and several liability of the Borrowers as co-makers in extending the Term Loans
hereunder. Each Borrower hereby unconditionally and irrevocably agrees that upon default in the payment when due (whether at
stated maturity, by acceleration or otherwise) of any principal of, or interest on, any Obligation, it will forthwith pay the
same, without notice or demand, unless such payment is then prohibited by applicable Law.

 

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(b)          No
Reduction in Obligations. No payment or payments made by any of the Borrowers or any other Person or received or collected
by the Administrative Agent or any Lender from any of the Borrowers or any Person by virtue of any action or proceeding or any
setoff or appropriation or application at any time or from time to time in reduction of or in payment of the Obligations shall
be deemed to modify, reduce, release or otherwise affect the liability of each Borrower under this Agreement for the remaining
Obligations, which shall remain liable for all remaining and thereafter arising Obligations until the payment in full in cash
of the Obligations and the Commitments are terminated.

 

(c)          Obligations
Absolute. Each Borrower agrees that the Obligations will be paid strictly in accordance with the terms of the Loan Documents,
regardless of any law, regulation or order now or hereafter in effect in any jurisdiction affecting any of such terms or the rights
of the Administrative Agent or any Lender with respect thereto, unless such payment is then prohibited by applicable Law. All
Obligations shall be conclusively presumed to have been created in reliance hereon. The liabilities of the Borrowers under this
Agreement shall be absolute and unconditional irrespective of: (i) any lack of validity or enforceability of any Loan Document
or any other agreement or instrument relating thereto, (ii) any change in the time, manner or place of payments of, or in
any other term of, all or any part of the Obligations, or any other amendment or waiver thereof or any consent to departure therefrom,
including any increase in the Obligations resulting from the extension of additional credit to any Borrower or otherwise, (iii) any
taking, exchange, release or non-perfection of any Collateral, or any release or amendment or waiver of or consent to departure
from any guaranty for all or any of the Obligations, (iv) any change, restructuring or termination of the corporate structure
or existence of any Loan Party, or (v) any other circumstance which would otherwise constitute a defense available to, or
a discharge of, any Loan Party, other than payment in full in cash of the Obligations.

 

(d)          Waiver
of Suretyship Defenses. Each Borrower agrees that the joint and several liability of the Borrowers provided for in this Section 2.10
shall not be impaired or affected by any modification, supplement, extension or amendment of any contract or agreement to which
the other Borrowers may hereafter agree (other than an agreement signed by the Administrative Agent and the Lenders specifically
releasing such liability), nor by any delay, extension of time, renewal, compromise or other indulgence granted by the Agent or
any Lender with respect to any of the Obligations, nor by any other agreements or arrangements whatever with the other Borrowers
or with anyone else, each Borrower hereby waiving all notice of such delay, extension, release, substitution, renewal, compromise
or other indulgence, and hereby consenting to be bound thereby as fully and effectually as if it had expressly agreed thereto
in advance. The liability of each Borrower is direct and unconditional as to all of the Obligations, and may be enforced without
requiring the Administrative Agent or any Lender first to resort to any other right, remedy or security. Each Borrower hereby
expressly waives promptness, diligence, notice of acceptance and any other notice (except to the extent expressly provided for
herein or in another Loan Document) with respect to any of the Obligations, this Agreement or any other Loan Documents and any
requirement that the Administrative Agent or any Lender protect, secure, perfect or insure any Lien or any property subject thereto
or exhaust any right or take any action against any Borrower or any other Person or any Collateral.

 

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(e)          Contribution
and Indemnification among the Borrowers. Each Borrower is obligated to repay the Obligations as joint and several
obligors under this Agreement. To the extent that any Borrower shall, under this Agreement as a joint and several obligor,
repay any of the Obligations constituting Term Loans made to another Borrower hereunder or other Obligations incurred
directly and primarily by any other Borrower (an “Accommodation Payment”), then the Borrower making such
Accommodation Payment shall be entitled to contribution and indemnification from, and be reimbursed by, each of the other
Borrowers in an amount, for each of such other Borrowers, equal to a fraction of such Accommodation Payment, the numerator of
which fraction is such other Borrower’s “Allocable Amount” (as defined below) and the denominator of which
the sum of the Allocable Amounts of all of the Borrowers. As of any date of determination, the “Allocable
Amount” of each Borrower shall be equal to the maximum amount of liability for Accommodation Payments which could
be asserted against such Borrower hereunder without (i) rendering such Borrower “insolvent” within the
meaning of Section 101(31) of Title 11 of the United States Code entitled “Bankruptcy” (the
 “Bankruptcy Code”), Section 2 of the Uniform Fraudulent Transfer Act (the “UFTA”),
or Section 2 of the Uniform Fraudulent Conveyance Act (“UFCA”), (ii) leaving such Borrower with
unreasonably small capital or assets, within the meaning of Section 548 of the Bankruptcy Code, Section 4 of the
UFTA, or Section 4 of the UFCA, or (iii) leaving such Borrower unable to pay its debts as they become due within
the meaning of Section 548 of the Bankruptcy Code, Section 4 of the UFTA, or Section 5 of the UFCA. Each
Borrower hereby subordinates any claims, including any rights at law or in equity to payment, subrogation, reimbursement,
exoneration, contribution, indemnification or set off, that it may have at any time against any other Loan Party, howsoever
arising, to the payment in full in cash of its Obligations.

 

2.11        Borrower
Agent. Each Borrower hereby designates (a) at all times prior to the Hydrofarm Acquisition and the execution and delivery
of the Assumption Agreement, the Initial Borrower and (b) upon and at all times after the consummation of the Hydrofarm Acquisition
and the execution and delivery of the Assumption Agreement, Hydrofarm (the “Borrower Agent”) as its representative
and agent for all purposes under the Loan Documents, including requests for and receipt of Term Loans, designation of interest
rates, delivery or receipt of communications, payment of Obligations, requests for waivers, amendments or other accommodations,
actions under the Loan Documents (including in respect of compliance with covenants), and all other dealings with the Administrative
Agent or any Lender. Borrower Agent hereby accepts such appointment. The Administrative Agent and Lenders shall be entitled to
rely upon, and shall be fully protected in relying upon, any notice or communication (including any notice of borrowing) delivered
by Borrower Agent on behalf of any Borrower. The Administrative Agent and Lenders may give any notice or communication with a Borrower
hereunder to Borrower Agent on behalf of such Borrower. Each of the Administrative Agent and Lenders shall have the right, in its
discretion, to deal exclusively with Borrower Agent for all purposes under the Loan Documents. Each Borrower agrees that any notice,
election, communication, delivery, representation, agreement, action, omission or undertaking by Borrower Agent shall be binding
upon and enforceable against such Borrower.

 

ARTICLE III

CONDITIONS PRECEDENT

 

3.1          Conditions
Precedent to Term Loans on the Closing Date. The obligation of each Lender to make the Term Loans on the Closing Date
shall be subject only to the following conditions precedent, each to the satisfaction of, and as determined by,
Administrative Agent and Lenders (including, with respect to any documents or agreements referred to below, that such
documents or agreements are in form and substance reasonable and customary for transactions of the type contemplated by this
Agreement):

 

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(a)          The
Administrative Agent shall have received copies (in sufficient number for each of the Lenders to receive a copy) of all of the
following, each dated the Closing Date or such earlier date as approved by the Administrative Agent:

 

(1)          This
Agreement, appropriately completed and duly executed by the parties hereto;

 

(2)          The
Notes, to the extent requested, appropriately completed and duly executed by the Borrowers;

 

(3)          The
Guaranty, appropriately completed and duly executed and delivered by each of the Guarantors;

 

(4)          The
Security Agreement, appropriately completed and duly executed by the parties thereto;

 

(5)          Uniform
Commercial Code financing statements authorized by the applicable Loan Party as debtor, and naming the Administrative Agent as
secured party with respect to the Collateral;

 

(6)          Favorable
legal opinions of Perkins Coie LLP, special counsel to the Loan Parties, addressed to the Administrative Agent and each of the
Lenders, acceptable to Administrative Agent in its reasonable discretion, as to such matters as are reasonably required by Administrative
Agent with respect to the Loan Parties and this Agreement, each of the Security Documents executed on the Closing Date and the
other Loan Documents and covering such other matters relating to the Loan Documents as the Administrative Agent shall reasonably
request;

 

(7)          A
closing certificate executed by a Responsible Officer of the Borrower Agent, certifying in the name of and on behalf of the Borrower
Agent as to the items set forth in Section 3.1(d), (e), (f), (g), (h), (j), (k),
(l) and (m);

 

(8)          A
certificate executed by a Responsible Officer or member of each Loan Party, certifying in the name of and on behalf of such Loan
Party that (A) a true, correct and complete copy of its charter document, with all amendments thereto (as certified by the
Secretary of State or similar state official), is attached to the certificate, (B) a true, correct and complete copy of its
operating agreement or bylaws, with all amendments thereto, is attached to the certificate, (C) a correct and complete copy
of the resolutions of its members or shareholders authorizing the execution, delivery and performance of the Loan Documents to
which it is a party are attached to the certificate, and such resolutions have not been subsequently modified or repealed, (D) a
certificate of good standing dated within a reasonably close period of time prior to the Closing Date for such Loan Party issued
by the Secretary of State or similar state official for the state in which such Loan Party is incorporated, formed or organized
and (E) signature and incumbency certificates of its officers executing any of the Loan Documents, all certified by its secretary
or an assistant secretary (or similar officer) as being in full force and effect without modification;

 

(9)          On
the Closing Date after giving effect to the initial funding of the Term Loans and the initial funding under the Revolving Loan
Facility, the Loan Parties shall have (x) no outstanding Indebtedness other than the Term Loans funded on the Closing Date
and other Permitted Indebtedness, and (y) no Liens outstanding other than Permitted Liens;

 

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(10)        Duly
executed payoff letters and UCC-3 termination statements with respect to any Liens which are not Permitted Liens upon any Property
of the Loan Parties or any of their Subsidiaries, including for the avoidance of doubt all payoff letters and UCC-3 termination
statements as are necessary to effect the Refinancing;

 

(11)        A
certificate, duly executed by a Responsible Officer of Borrower Agent, certifying as to the solvency on the Closing Date of Holdings
and its Subsidiaries;

 

(12)        The
Acquisition Documents for the Hydrofarm Acquisition and an assignment and/or contribution to the Loan Parties of Holdings’
rights under the Acquisition Documents, including, without limitation, any escrow accounts or representation and warranty insurance
entered into in connection therewith, together with a certificate of a Responsible Officer of the Borrower Agent certifying that
each such document is a true, correct, and complete copy thereof;

 

(13)        The
Revolving Loan Documents, together with a certificate of a Responsible Officer of the Borrower Agent certifying that each such
document is a true, correct, and complete copy thereof;

 

(14)        Administrative
Agent shall have received, in each case in form and substance reasonably satisfactory to Administrative Agent, evidence of property,
business interruption and liability insurance covering each Loan Party (provided that to the extent the appropriate endorsements
naming Administrative Agent as lender’s loss payee on all policies for property hazard insurance and as additional insured
on all policies for liability insurance cannot be delivered by the Closing Date, they should be required to be delivered to the
extent required under Section 5.12); and

 

(15)        A
Notice of Borrowing appropriately completed and duly executed by the Borrowers.

 

(b)          The
Borrowers shall have paid all fees due on or prior to the Closing Date in accordance with the provisions of Section 2.6
which payment shall be nonrefundable (which amounts, in the case of fees payable to Administrative Agent and Lenders and at the
option of the Borrowers (but subject to the consent of the Administrative Agent and the Lenders), may be offset or net funded against
the proceeds of the Term Loan made on the Closing Date).

 

(c)          The
Borrowers shall have paid all reasonable costs and expenses of the Administrative Agent (including reasonable and documented legal
fees and expenses) incurred in connection with the preparation and execution of the Loan Documents and incident to all proceedings
in connection with, transactions contemplated by, and documents relating to this Agreement and the Loan Documents, which payment
shall be nonrefundable to the extent required by Section 9.4 and which payment,
at the option of the Borrowers (but subject to the consent of the Administrative Agent and the Lenders), may be offset or net funded
against the proceeds of the Term Loan made on the Closing Date.

 

(d)          The
Hydrofarm Acquisition shall have been, or substantially concurrently with the initial borrowing under this Agreement and
shall be, consummated in accordance with the Hydrofarm Acquisition Agreement, without giving effect to any modifications,
supplements, amendments or express waivers or consents thereto that are materially adverse to Lenders in their capacities as
such without the consent of Administrative Agent (it being understood and agreed that (a) any modification, amendment or
waiver to the definition of “Material Adverse Effect” or any similar term contained in the Hydrofarm Acquisition
Agreement shall require consent of the Administrative Agent and the Lenders, (b) any increase in the purchase price
shall not require consent of the Administrative Agent and the Lenders so long as such increase shall be funded by an increase
in the Closing Equity Contribution, and (c) any modification, amendment or waiver to any provision of the Hydrofarm
Acquisition Agreement to which the Lenders are a third party beneficiary pursuant to the terms thereof (including, without
limitation, Section 12.8 of the Hydrofarm Acquisition Agreement) shall require consent of the Administrative Agent and
the Lenders).

 

    	 	47	 

     

    

 

(e)          The
Specified Acquisition Agreement Representations shall be true and correct in all respects on and as of the Closing Date.

 

(f)           The
Specified Representations shall be true and correct in all material respects (except for representations and warranties that are
already qualified as to materiality, which representations and warranties shall be true and correct in all respects after giving
effect to such materiality qualifier) on and as of, and after giving effect to the making of the Term Loans and the consummation
of the other Transactions on, the Closing Date.

 

(g)          Since
December 31, 2015, there shall not have occurred any change, effect, condition or state of facts that, individually or in
the aggregate, has had or would reasonably be expected to have a Material Adverse Effect (as defined in the Hydrofarm Acquisition
Agreement).

 

(h)          The
Refinancing shall be consummated on the Closing Date at or substantially simultaneously with the funding of the Term Loans.

 

(i)           Each
Borrower and each of the Guarantors shall have provided the documentation and other information to the Administrative Agent (to
the extent reasonably requested by the Administrative Agent in writing at least five (5) Business Days prior to the Closing
Date) that are required by regulatory authorities under the applicable “know-your-customer” rules and regulations,
including the PATRIOT Act, in each case at least two (2) Business Days prior to the Closing Date.

 

(j)           The
Consolidated EBITDA of Holdings and its Subsidiaries, after giving effect to the making of the Term Loans and the consummation
of the other Transactions on a Pro Forma Basis, for the twelve month period ending February 28, 2017, shall not be less than
$25,000,000.

 

(k)          The
Total Net Leverage Ratio as of the Closing Date, after giving effect to the making of the Term Loans and the consummation of the
other Transactions on a Pro Forma Basis, shall not be greater than 4.27:1.00.

 

(l)           An
initial borrowing of Revolving Loans under the Revolving Loan Documents providing net proceeds to the Loan Parties of not more
than $30,000,000 shall have occurred substantially simultaneously with the funding of the Term Loans and, immediately after giving
effect to such initial borrowing, the Loan Parties shall have “Availability” (as defined in the Revolving Loan Documents)
of at least $10,000,000 under the Revolving Loan Facility.

 

(m)         The
Closing Equity Contribution shall have been consummated on the Closing Date at or substantially simultaneously with the funding
of the Term Loans.

 

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(n)          The
Administrative Agent shall have received (i) a pro forma balance sheet of Hydrofarm and its Subsidiaries dated as of the Closing
Date and giving effect to the Hydrofarm Acquisition, which such balance sheet shall reflect no material change from the most recent
pro forma balance sheet of Hydrofarm and its Subsidiaries previously delivered to the Administrative Agent, and (ii) financial
projections (prepared on a fiscal monthly basis) of Hydrofarm and its Subsidiaries evidencing the Loan Parties’ ability to
comply with the financial covenants set forth in Section 6.1.

 

(o)          The
Administrative Agent will have received the Historical Financial Statements.

 

(p)          The
Closing Date shall occur on or before the Outside Date.

 

(q)          Subject
to Section 3.2, the Administrative Agent shall have received (i) the certificates,
as applicable, representing the Equity Interests pledged pursuant to the Security Agreement, together with an undated stock power
for each such certificate executed in blank by a duly authorized officer of the pledgor thereof and such other documents required
by the Security Agreement in respect thereof, and (ii) all duly prepared financing statements on form UCC-1 and all other
documents, instruments, filings, recordings, and registrations required to perfect the Liens created by the Security Documents,
in sufficient copies and in form adequate to effect all such filings, recordings, and registrations.

 

3.2          Perfection
on the Closing Date. Notwithstanding anything to the contrary herein, to the extent a perfected security interest in
any Collateral (other than (i) any security interest that can be perfected by means of the filing of a UCC financing
statement or by short-form intellectual property filings with the United States Patent and Trademark Office and the United
States Copyright Office, and (ii) the pledge and perfection of security interests in the Equity Interests of the
Borrowers and their Subsidiaries with respect to which a Lien may be perfected by the delivery of a stock or equity
certificate) is not or cannot be provided on the Closing Date after the Initial Borrower’s use of commercially
reasonable efforts to do so or without undue burden or expense, then the perfection of such security interests shall not
constitute a condition precedent to the making of the Term Loans on the Closing Date, but instead shall be required to be
delivered after the Closing Date in accordance with Section 5.12.

 

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

 

Each of the Loan Parties
represents and warrants to the Administrative Agent and each of the Lenders that as of the Closing Date:

 

4.1          Organization;
etc. Each Loan Party and each of their respective Subsidiaries is a limited liability company, corporation or other
organization, as the case may be, validly organized and existing and in good standing under the laws of the jurisdiction of
its organization, has full power and authority to own its property and conduct its business as conducted by it and is duly
qualified to do business and is in good standing as a foreign corporation in each jurisdiction where such qualification is
necessary, except where the failure to be so qualified or in good standing could not reasonably be expected, in the
aggregate, to result in a Material Adverse Effect. A list of jurisdictions in which each such Loan Party and each such
Subsidiary is qualified to do business is set forth in Schedule 4.1. Each Loan Party has full power and
authority to enter into and to perform its obligations under the Loan Documents to which it is a party and, in the case of
the Borrowers only, to request and borrow the Term Loans under this Agreement. Each Loan Party and each of their respective
Subsidiaries has all licenses, permits and rights necessary to carry on its business as now being and hereafter proposed to
be conducted and to own and operate its Property, except for permits, licenses, and rights the failure of which to have or
obtain could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.

 

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4.2          Due
Authorization. The execution, delivery and performance by each Loan Party of the Loan Documents to which it is a
party and the consummation by such Loan Party of each of the Transactions (a) have been duly authorized by all necessary
corporate or limited liability company action, as the case may be, (b) do not and will not conflict with, result in any
violation of or constitute any default under (i) any provision of the Organic Documents of such Loan Party,
(ii) any Material Contract binding on or applicable to such Loan Party, or (iii) any law or governmental regulation
or court decree or order binding upon or applicable to such Loan Party or any of its Property and (c) will not result in
the creation or imposition of any Lien on any of such Loan Party’s Property pursuant to the provisions of any agreement
binding on or applicable to such Loan Party, or any of its Property, except any such Liens created pursuant to the Security
Documents in favor of the Administrative Agent, for the benefit of the Secured Parties, and Permitted Liens.

 

4.3          Subsidiaries.
As of the Closing Date, no Loan Party has any Subsidiaries except those listed on Schedule 4.3, which correctly
sets forth the name of each Subsidiary, the jurisdiction of its incorporation, formation or organization and the percentage
ownership of each Subsidiary which is owned, of record or beneficially, by such Loan Party and/or one or more of its
Subsidiaries. Each Loan Party and its Subsidiaries has good and marketable title to all of the Equity Interests or Equity
Interests Equivalents it owns in each of its Subsidiaries, free and clear of any Lien (other than any Liens in favor of the
Administrative Agent for the benefit of the Secured Parties, Permitted Liens under Section 6.3(j) and
inchoate Permitted Liens) and all such Equity Interests and Equity Interests Equivalents have been duly issued and are fully
paid and non-assessable. Each Loan Party has full power and authority to own and operate its properties, to carry on its
business as now conducted and to enter into and perform the Loan Documents to which it is a party. Each Loan Party has all
licenses, permits, and rights necessary to carry on its business as now being and hereafter proposed to be conducted and to
own and operate its properties, except for permits, licenses, and rights the failure of which to have or obtain, individually
or in the aggregate, is not, and could not reasonably be expected to result in, a Material Adverse Effect.

 

4.4          Validity
of the Agreement. Each Loan Document is the legal, valid and binding obligation of each Loan Party and is enforceable
in accordance with its terms except that, as to enforcement of remedies, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’
and secured parties’ rights generally or by equitable principles relating to enforceability, regardless of whether
considered in equity or at law.

 

4.5          Financial
Statements. The Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout
the periods covered thereby, except as otherwise expressly noted therein; and (ii) fairly present the financial
condition of the Acquired Company as of the dates thereof and their results of operations for the periods covered thereby in
accordance with GAAP consistently applied throughout the periods covered thereby (except as otherwise expressly noted therein
and, in the case of quarterly financial statements, subject to the absence of footnotes.

 

4.6          Litigation;
etc. Except as set forth on Schedule 4.6, there is no action, suit, claim, demand, disputes, cause of
action, proceeding, arbitration or investigation at law or equity, or before or by any federal, state, local or other
governmental department, commission, court, tribunal, board, bureau, agency or instrumentality, domestic or foreign, pending,
or to the Knowledge of the Loan Parties, threatened in writing, against or affecting any Loan Party or any of their
Subsidiaries or any of their respective Properties, (i) that involve any Loan Document or the Transactions, or
(ii) which if determined adversely could reasonably be expected to result in a Material Adverse Effect.

 

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4.7          Compliance
with Law. No Loan Party nor any of their Subsidiaries is (a) in default or breach with respect to any judgment,
order, writ, injunction, rule, regulation or decree of any court, governmental authority, department, commission, agency or
arbitration board or tribunal or (b) in violation of any law, rule, regulation, ordinance or order relating to its or
their respective businesses, in each case of clause (a) and (b) above, the breach, default or
violation of which could reasonably be expected to result in a Material Adverse Effect. There have been no citations, notices
or orders of material noncompliance issued to any Loan Party or Subsidiary under any applicable Law. To the Knowledge of the
Loan Parties, no Loan Party, nor any of their Subsidiaries (other than any Foreign Subsidiary), sells and products or
services directly to marijuana growers or to retailers that sell only to the marijuana industry.

 

4.8          ERISA
Compliance. Except as set forth on Schedule 4.8:

 

(a)          Each
Plan is in compliance in all material respects with the applicable provisions of ERISA, the Code, and other federal and state laws.
Each Plan that is intended to qualify under Section 401(a) of the Code has received a favorable determination letter
from the IRS or an application for such a letter is currently being processed by the IRS with respect thereto and, to the Knowledge
of the Loan Parties, nothing has occurred which would prevent, or cause the loss of, such qualification. Each Loan Party and ERISA
Affiliate has met all applicable requirements under the Code, ERISA and the Pension Protection Act of 2006, and no application
for a waiver of the minimum funding standards or an extension of any amortization period has been made by any Loan Party or ERISA
Affiliate with respect to any Pension Plan.

 

(b)          There
are no pending or, to the Knowledge of the Loan Parties, threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect. There has been no prohibited
transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted in or could reasonably
be expected to have a Material Adverse Effect.

 

(c)          (i) No
ERISA Event has occurred or is reasonably expected to occur, (ii) as of the most recent valuation date for any Pension Plan,
the funding target attainment percentage (as defined in Section 430(d)(2) of the Code) is at least 60%, and no Loan Party
or ERISA Affiliate knows of any reason that such percentage could reasonably be expected to drop below 60%, (iii) no Loan
Party or ERISA Affiliate has incurred any liability to the PBGC except for the payment of premiums, and no premium payments are
due and unpaid, (iv) no Loan Party or ERISA Affiliate has engaged in a transaction that could be subject to Section 4069
or 4212(c) of ERISA, and (v) no Pension Plan has been terminated by its plan administrator or the PBGC, and no fact or
circumstance exists that could reasonably be expected to cause the PBGC to institute proceedings to terminate a Pension Plan.

 

(d)          With
respect to any Foreign Plan, (i) all employer and employee contributions required by law or by the terms of the Foreign Plan
have been made, or, if applicable, accrued, in accordance with normal accounting practices, (ii) the fair market value of
the assets of each funded Foreign Plan, the liability of each insurer for any Foreign Plan funded through insurance, or the book
reserve established for any Foreign Plan, together with any accrued contributions, is sufficient to procure or provide for the
accrued benefit obligations with respect to all current and former participants in such Foreign Plan according to the actuarial
assumptions and valuations most recently used to account for such obligations in accordance with applicable generally accepted
accounting principles, and (iii) it has been registered as required and has been maintained in good standing with applicable
regulatory authorities.

 

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4.9          Title
to Assets. Each Loan Party and each of their respective Subsidiaries holds or will hold good title to all of its
Property (including, without limitation, good record title to any owned Real Property in fee simple and good, legal and
marketable title to any equipment and other personal Property) in each case, free and clear of all Liens except for Permitted
Liens. No Real Property is located in a special flood hazard zone, except as disclosed on Schedule 4.9. Each
Loan Party and Subsidiary has paid and discharged all lawful claims that, if unpaid, could become a Lien on its Properties,
other than Permitted Liens. Except for Uniform Commercial Code financing statements evidencing Permitted Liens, no financing
statement under the Uniform Commercial Code as in effect in any jurisdiction and no other filing which names any Loan Party
or any of their Subsidiaries as debtor or which covers or purports to cover any of their respective Property, will be
effective and on file in any state or other jurisdiction, and no Loan Party nor any of their respective Subsidiaries will
sign or authorize any such financing statement or filing or any security agreement authorizing any secured party thereunder
to file any such financing statement or filing other than in respect of Permitted Liens.

 

4.10        Use of Proceeds.
Proceeds of the Term Loans, together with the proceeds of the Closing Equity Contribution and the initial borrowing of Revolving
Loans under the Revolving Loan Documents, will be used to fund (i) the purchase price of the Hydrofarm Acquisition, which
will be consummated on the Closing Date substantially concurrently with the funding of the Term Loans, (ii) the Refinancing,
(iii) the payment of fees, premiums, accrued and unpaid interest, expenses and other similar transaction costs related to
the foregoing and (iv) to the extent any proceeds of the Term Loans remain after such proceeds are applied to the purposes
set forth in the foregoing clauses (i) through (iii), ongoing working capital requirements of the Borrowers
and their Subsidiaries and for other general corporate purposes.

 

4.11        Governmental
Regulation. No Loan Party, nor any of their respective Subsidiaries, is required to obtain any consent, approval, authorization,
permit or license which has not already been obtained from, or effect any filing or registration (other than the filing of the
Uniform Commercial Code financing statements) which has not already been effected with, any federal, state or local regulatory
authority in connection with the execution and delivery of this Agreement or any other Loan Document, the performance, in accordance
with their respective terms, of this Agreement or any other Loan Document, or the consummation of the Transactions.

 

4.12        Margin Stock.
No part of any Term Loans shall be used at any time by any Loan Party or any of their respective Subsidiaries to purchase or carry
margin stock (within the meaning of Regulations T, U and X) or to extend credit to others for the purpose of purchasing or carrying
any margin stock. No Loan Party, nor any of their respective Subsidiaries, is engaged principally, or as one of its important activities,
in the business of extending credit for the purposes of purchasing or carrying any such margin stock. No part of the proceeds of
any Term Loans will be used by any Loan Party or any of their respective Subsidiaries for any purpose which violates, or which
is inconsistent with, any regulations promulgated by the Board of Governors of the Federal Reserve System.

 

4.13        Not a Regulated
Entity. No Loan Party, nor any of their respective Subsidiaries, is (a) registered or required to be registered as
an “investment company,” or an “affiliated person” of, or a “promoter” or “principal
underwriter” for, an “investment company,” as such terms are defined in the Investment Company Act of 1940, as
amended, or (b) subject to regulation under the Federal Power Act, the Interstate Commerce Act, any public utilities code
or any other applicable Law regarding its authority to incur Indebtedness. The making of the Term Loans, the application of the
proceeds and repayment thereof by the Borrowers and the performance by each Loan Party of the transactions contemplated by this
Agreement and each of the other Loan Documents will not violate any provision of said Laws, or any rule, regulation or order issued
by the Securities and Exchange Commission thereunder.

 

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4.14        Accuracy
of Information. All written information heretofore furnished by or on behalf of any Loan Party to the Administrative Agent
or the Lenders for purposes of or in connection with this Agreement or any other Loan Document or any transaction contemplated
by this Agreement or any of the other Loan Documents is, and all other such information furnished by or on behalf of such Loan
Party to the Administrative Agent is, when considered as a whole, complete and correct in all material respects and did not, when
delivered, contain any untrue statement of material fact or omit to state a fact necessary in order to make the statements contained
therein not materially misleading in light of the circumstances under which such statements have been made (after giving effect
to all supplements thereto).

 

4.15        Tax Returns;
Audits. Each Loan Party and each of their respective Subsidiaries has filed all material federal, state and local tax returns
and other material reports which are required to be filed, and has paid all material taxes as shown on said returns and on all
assessments received by any such Person (except for any assessments which are being Properly Contested), to the extent that such
taxes have become due or has obtained extensions with respect to the filing of such returns and has made provision in accordance
with GAAP for the payment of taxes anticipated to be payable in connection with such returns. Each Loan Party and each of their
respective Subsidiaries has made all material required withholding deposits.

 

4.16        Environmental
and Safety Regulations. Each Loan Party and each of their respective Subsidiaries is in compliance with all requirements
of applicable federal, state and local Environmental Laws except for any noncompliance which, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect. Except as disclosed on Schedule 4.16, no
Loan Party’s or Subsidiary’s past or present operations, Real Property or other Properties are subject to any federal,
state or local investigation to determine whether any remedial action is needed to address any environmental pollution, hazardous
material or environmental clean-up. The Real Property and its intended use complies with all applicable laws, governmental regulations
and the terms of any enforcement action by any federal, state, regional or local governmental agency regarding all applicable federal,
state and local laws pertaining to air and water quality, hazardous waste, waste disposal and other environmental matters (including,
but not limited to, the Clean Water, Clean Air, Federal Water Pollution Control, Solid Waste Disposal, Resource Conservation and
Recovery and Comprehensive Environmental Response, Compensation, and Liability Acts, as said acts may be amended), and the rules,
regulations and ordinances of all applicable federal, state and local agencies and bureaus under such laws, except in each case
for any noncompliance which, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse
Effect. No Loan Party or Subsidiary has received any Environmental Notice. No Loan Party or Subsidiary has any contingent liability
with respect to any Environmental Release, environmental pollution or hazardous material on any Real Property now or previously
owned, leased or operated by it.

 

4.17        Payment
of Wages; Labor Matters. Each Loan Party and each of their respective Subsidiaries is in compliance with the Fair Labor
Standards Act, as amended, in all material respects, and each Loan Party and each of their respective Subsidiaries has paid all
minimum and overtime wages required by law to be paid to their respective employees. There are no strikes, work stoppages, slowdowns
or lockouts existing, pending or, to the Knowledge of the Loan Parties, threatened against or involving any Loan Party or any Subsidiary
of any Loan Party, except for those that could reasonably be expected to result in a Material Adverse Effect. Except as set forth
on Schedule 4.17, (a) there is no collective bargaining or similar agreement with any union, labor organization,
works council or similar representative covering any employee of any Loan Party or any Subsidiary of any Loan Party, (b) no
petition for certification or election of any such representative is existing or pending with respect to any employee of any Loan
Party or any Subsidiary of any Loan Party and (c) to the knowledge of any Loan Party, no such representative has sought certification
or recognition with respect to any employee of any Loan Party or any Subsidiary of any Loan Party.

 

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4.18        Intellectual
Property. Each Loan and Subsidiary owns or has the lawful right to use all Intellectual Property necessary for the conduct
of its business, without conflict with any rights of others. There is no pending or, to any Loan Party’s Knowledge, threatened
Intellectual Property Claim with respect to any Loan Party, any Subsidiary or any of its Property (including any Intellectual Property).
Except as set forth on Schedule 4.18, no Loan Party or Subsidiary pays or owes any royalty or other compensation
to any Person with respect to any material Intellectual Property. All Intellectual Property owned, used or licensed by, or otherwise
subject to any interests of, any Loan Party or Subsidiary is set forth on Schedule 4.18. To any Loan Party’s
knowledge, there is no third party Intellectual Property licensed to a Loan Party that is necessary for, or critical to, the manufacture,
sale or distribution of any products or services of any Loan Party, and no licensed third party Intellectual Property is necessary
for the Administrative Agent to exercise its rights to enforce the Liens in favor of the Administrative Agent for the benefit of
the Secured Parties with respect to the Term Loan Priority Collateral, including the right to dispose of it, in the event of an
Event of Default.

 

4.19        Projections.
The projections of the Borrowers, previously furnished to the Administrative Agent on March 22, 2017, have been prepared
in the light of the past business history of the Borrowers and their Subsidiaries and on the basis of the assumptions set
forth therein, which assumptions are in the opinion of the Borrowers reasonable at the time such budget projections were
prepared (it being recognized that budget projections may differ from actual results and such differences may be material and
such budget projections are subject to significant uncertainties and contingencies which are beyond the Borrowers’
control and no assurance can be given that any particular projection will be realized).

 

4.20        Solvency.
After giving effect to the making of the Term Loans hereunder and the consummation of the other Transactions on the Closing Date,
as of the Closing Date, the Loan Parties and their Subsidiaries taken as a whole are Solvent.

 

4.21        No Material
Adverse Effect. Since December 31, 2015, there has occurred no event which is or which could reasonably be expected
to result in a Material Adverse Effect.

 

4.22        Brokers’
Fees. Except for fees payable to the Administrative Agent and the Lenders, none of the Loan Parties or any of their respective
Subsidiaries has any obligation to any Person in respect of any finder’s, broker’s or investment banker’s fee
in connection with the transactions contemplated hereby.

 

4.23        Deposit
Accounts. Schedule 4.23 lists all banks and other financial institutions at which any Loan Party maintains
deposit or other accounts as of the Closing Date, and such Schedule correctly identifies the name, address and any other relevant
contact information reasonably requested by the Administrative Agent with respect to each depository, the name in which the account
is held, a description of the purpose of the account, and the complete account number therefor.

 

4.24        Hydrofarm
Acquisition Agreement. As of the Closing Date, the Borrowers have delivered to the Administrative Agent a complete
and correct copy of the Hydrofarm Acquisition Agreement (including all schedules, exhibits, amendments, supplements,
modifications, assignments and all other material documents delivered pursuant thereto or in connection therewith). The
Hydrofarm Acquisition Agreement is in full force and effect as of the Closing Date and has not been terminated, rescinded or
withdrawn. The consummation of the transactions contemplated by the Hydrofarm Acquisition Agreement on the Closing Date will
not violate any statute or regulation of the United States (including any securities law) or of any state or other applicable
jurisdiction, or any order, judgment or decree of any court or governmental body binding on any Loan Party or, to any Loan
Party’s knowledge, any other party to the Hydrofarm Acquisition Agreement, or result in a breach of, or constitute a
default under, any material agreement, indenture, instrument or other document, or any judgment, order or decree, to which
any Loan Party is a party or by which any Loan Party is bound or, to any Loan Party’s Knowledge, to which any other
party to the Transactions is a party or by which any such party is bound. To the Knowledge of the Loan Party’s, the
Hydrofarm Acquisition Agreement was duly executed and delivered by each other party thereto and is enforceable against such
parties, except as the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent transfer or conveyance,
moratorium, or other similar laws relating to the enforcement of creditors’ rights generally and by general equitable
principles.

 

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4.25        Material
Contracts. All of the Material Contracts are in full force and effect and no Loan Party, nor any of their respective Subsidiaries,
is in default under any Material Contract and, to the Knowledge of the Loan Parties, no other Person that is a party thereto is
in default under any of the Material Contracts. There is no basis upon which any party (other than a Loan Party or Subsidiary)
could terminate a Material Contract prior to its scheduled termination date.

 

4.26        Valid Liens.
The Security Agreement and each other Security Document delivered pursuant hereto will, upon execution and delivery thereof, be
effective to create in favor of the Administrative Agent, for the benefit of the Secured Parties, to the secure the Obligations,
legal, valid and enforceable Liens on, and security interests in, each Loan Party’s right, title and interest in and to the
Collateral thereunder, and, subject to the Intercreditor Agreement, (i) when all appropriate filings or recordings are made
in the appropriate offices as may be required under applicable law and (ii) upon the taking of possession or control by the
Administrative Agent of such Collateral with respect to which a security interest may be perfected only by possession or control
(which possession or control shall be given to the Administrative Agent to the extent required by any Security Document), the Liens
created by such Security Document will constitute fully perfected Liens on, and security interests in, all right, title and interest
of each Loan Party in such Collateral having the priority set forth in the Intercreditor Agreement, in each case subject to no
Liens other than the applicable Permitted Liens. All Liens of the Administrative Agent, for the benefit of the Secured Parties,
in the Term Loan Priority Collateral are duly perfected, first priority Liens and all Liens of the Administrative Agent, for the
benefit of the Secured Parties, in the Revolving Loan Priority Collateral are duly perfected Liens having the priority set forth
in the Intercreditor Agreement, in each case, subject only to Permitted Liens that are expressly allowed to have priority over
the Liens of the Administrative Agent, for the benefit of the Secured Parties.

 

4.27        Foreign
Assets Control Regulations and Anti-Money Laundering. Each Loan Party and each of their respective Subsidiaries
is in compliance in all material respects with all U.S. economic sanctions laws, Executive Orders and implementing regulations
as promulgated by the U.S. Treasury Department’s Office of Foreign Assets Control (“OFAC”), and all applicable
anti-money laundering and counter-terrorism financing provisions of the Bank Secrecy Act and all regulations issued pursuant to
it. None of the Loan Parties, nor any of their respective Subsidiaries, (i) is a Person designated by the U.S. government
on the list of the Specially Designated Nationals and Blocked Persons (the “SDN List”) with which a U.S. Person
cannot deal with or otherwise engage in business transactions, (ii) is a Person who is otherwise the target of U.S. economic
sanctions laws such that a U.S. Person cannot deal or otherwise engage in business transactions with such Person or (iii) is
controlled by (including by virtue of such person being a director or owning voting shares or interests), or acts, directly or
indirectly, for or on behalf of, any person or entity on the SDN List or a foreign government that is the target of U.S. economic
sanctions prohibitions such that the entry into, or performance under, this Agreement or any other Loan Document would be prohibited
under U.S. law.

 

4.28        Patriot
Act. The Loan Parties, each of their Subsidiaries and, to their knowledge, each of their Affiliates, are in
compliance in all material respects with (a) the Trading with the Enemy Act, and each of the foreign assets control
regulations of the United States Treasury Department and any other enabling legislation or executive order relating thereto,
(b) the Patriot Act and (c) other federal or state laws relating to “know your customer” and anti-money
laundering rules and regulations. No part of the proceeds of any Term Loan will be used directly or indirectly for any
payments to any government official or employee, political party, official of a political party, candidate for political
office, or anyone else acting in an official capacity, in order to obtain, retain or direct business or obtain any improper
advantage, in violation of the United States Foreign Corrupt Practices Act of 1977.

 

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4.29         Surety Obligations.
No Loan Party or Subsidiary is obligated as surety or indemnitor under any bond or other contract that assures payment or performance
of any obligation of any Person, except as permitted hereunder.

 

4.30         Trade Relations.
There exists no actual or threatened termination, limitation or modification of any business relationship between any Loan Party
or Subsidiary and any customer or supplier, or any group of customers or suppliers, who individually or in the aggregate are material
to the business of such Loan Party or Subsidiary. There exists no condition or circumstance that could reasonably be expected to
impair the ability of any Loan Party or Subsidiary to conduct its business at any time hereafter in substantially the same manner
as conducted on the Closing Date.

 

4.31         Holdings.
Holdings (a) has not engaged in any activities other than acting as a holding company and transactions incidental thereto,
maintaining its corporate existence, and entering into and performing its obligations under the Loan Documents, the Revolving Loan
Documents and the Related Agreements, (b) does not hold any assets other than (i) all of the issued and outstanding Equity
Interests of the Borrower Agent, (ii) contractual rights pursuant to the Loan Documents, the Revolving Loan Documents and
Related Agreements, and (iii) cash and cash equivalents in an amount not to exceed the amount required for the purpose of
promptly paying general operating expenses (including without limitation audit fees, director and officer compensation and indemnification
obligations pursuant to its Organic Documents), and (c) has no liabilities other than under the Loan Documents, the Revolving
Loan Documents, the Related Agreements, Permitted Contingent Obligations and obligations incurred in the Ordinary Course of Business
related to its existence, including taxes, franchise or other entity existence taxes and fees payable to the State of Delaware,
payment of reasonable and customary director fees and expenses, and indemnification obligations pursuant to its Organic Documents.

 

4.32         Revolving
Loan Documents. The Revolving Loan Documents dated as of the date hereof are being executed and delivered concurrently
with the execution and delivery of this Agreement, true, correct and complete copies of which have been delivered to the Administrative
Agent. The transactions contemplated by the Revolving Loan Documents comply in all material respects with all applicable Laws.

 

4.33         Insurance.
The Loan Parties and their Subsidiaries maintain insurance policies with respect to their respective properties and business, in
each case in compliance with Section 5.7.

 

4.34
         SBA Matters. Each of Holdings and each Borrower acknowledges that
Brightwood Capital SBIC I, LP is, and certain other Lenders may from time to time be or become, a Small Business Investment
Company (as defined in the SBIA), subject to the rules and regulations contained in and promulgated under the SBIA. As
of the Closing Date, each of Holdings and each Borrower, together with its “affiliates” (for purposes of this
paragraph only, as that term is defined in Title 13, Code of Federal Regulations, §121.103), is a Small Business Concern
(as defined in the SBIA). Neither Holdings nor any of its Subsidiaries presently engages in, and shall not hereafter engage
in, any activities for which a Small Business Concern is prohibited from engaging in under the SBIA, nor shall any such
Person use directly or indirectly the proceeds of the Term Loans for any purpose for which a Small Business Investment
Company is prohibited from providing funds by the SBIA. The representations made by Holdings and each Borrower in the SBA
forms delivered on the Closing Date pursuant to Section 5.13 (or such later date of delivery) shall be deemed to
be representations made by Holdings and each Borrower as of the Closing Date (or such later date) under this Section 4.34.

 

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ARTICLE V

CERTAIN AFFIRMATIVE COVENANTS

 

Each of the Loan Parties
agrees with the Administrative Agent and each of the Lenders that, from the date hereof and thereafter for so long as any portion
of any Term Loan shall be outstanding or any Lender shall have any Commitment hereunder, unless the Required Lenders shall otherwise
consent in writing:

 

5.1            Financial
Information; etc. The Borrowers will furnish to the Administrative Agent copies of the following financial statements,
reports and information:

 

(a)            as
soon as available and in any event on or prior to June 30, 2017, a copy of the consolidated and consolidating audited financial
statements, including balance sheet, related statements of operations, and statements of cash flows, of the Acquired Company for
the fiscal year ended December 31, 2016, with comparative figures for the preceding fiscal year, prepared in accordance with
GAAP, certified without qualification or exception by a nationally recognized auditor that is not subject to qualification as to
 “going concern” or the scope of such audit, accompanied by a certificate of a Responsible Officer of the Borrower Agent
which shall state, in the name and on behalf of the Borrower Agent, that said financial statements are complete and correct in
all material respects and fairly present the financial condition and results of operations of the Acquired Company in accordance
with GAAP for such period;

 

(b)            as
soon as available and in any event within one hundred twenty (120) days after the end of each fiscal year of the Borrowers (commencing
with the fiscal year ending December 31, 2017), a copy of the consolidated and consolidating audited financial statements,
including balance sheet, related statements of operations, and statements of cash flows, of Holdings, the Borrowers and their Subsidiaries
for such fiscal year, with comparative figures for the preceding fiscal year, prepared in accordance with GAAP, certified without
qualification or exception by a nationally recognized auditor that is not subject to qualification as to “going concern”
or the scope of such audit other than solely with respect to, or resulting solely from, an upcoming Maturity Date under the Term
Loans, accompanied by a certificate of a Responsible Officer of the Borrower Agent which shall state, in the name and on behalf
of the Borrower Agent, that said financial statements are complete and correct in all material respects and fairly present the
financial condition and results of operations of Holdings, the Borrowers and their Subsidiaries in accordance with GAAP for such
period;

 

(c)            as
soon as available and in any event within thirty (30) days after the end of each fiscal quarterly period of each fiscal year
of the Borrowers (or, for with respect to the last such quarterly period ending in any fiscal year, forty five (45) days
after the end of such quarterly period), commencing with the fiscal quarter ended March 31, 2017, consolidated and
consolidating statements of operations and cash flows of Holdings, the Borrowers and their Subsidiaries for such period and
for the period from the beginning of the respective fiscal year to the end of such period, and the related balance sheets as
at the end of such period, setting forth in each case in comparative form the corresponding figures for the corresponding
period in the preceding fiscal year, accompanied by a certificate of a Responsible Officer of the Borrower Agent which shall
state, in the name and on behalf of the Borrower Agent, that said financial statements are complete and correct in all
material respects and fairly present the financial condition and results of operations of Holdings, the Borrowers and their
Subsidiaries in accordance with GAAP for such period, (subject to year-end adjustments and the lack of GAAP footnotes);

 

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(d)            as
soon as available and in any event within thirty (30) days after the end of each of the first two fiscal months of each fiscal
quarter of the Borrowers, consolidated and consolidating statements of operations and cash flows of Holdings, the Borrowers and
their Subsidiaries for such period and for the period from the beginning of the respective fiscal year to the end of such period,
and the related balance sheets as at the end of such period, setting forth in each case in comparative form the corresponding figures
for the corresponding period in the preceding fiscal year;

 

(e)            with
each financial statement required by Section 5.1(b) and Section 5.1(c) (other than the last fiscal
quarter of such year) to be delivered to the Administrative Agent, a Compliance Certificate signed by a Responsible Officer of
the Borrower Agent;

 

(f)             concurrently
with delivery of financial statements under clauses (a), (b)  and (c) above, a management report,
in reasonable detail, signed by the chief financial officer of the Borrower Agent, describing the operations and financial condition
of the Loan Parties and their Subsidiaries for the fiscal quarter and the portion of the fiscal year then ended (or for the fiscal
year then ended in the case of annual financial statements), together with a discussion comparing such results as compared to the
applicable figures for such period set forth in the projections most recently delivered pursuant to clause (k) below;

 

(g)            promptly
after any Borrower knows or has reason to know that any Default or Event of Default has occurred and is continuing, any “Default”
or “Event of Default” under and as defined in any Revolving Loan Documents has occurred and is continuing or any Material
Adverse Effect has occurred, but in any event not later than five (5) Business Days after any Responsible Officer of any Borrower
becomes aware thereof, a notice from the Borrower Agent of such Default, Event of Default, “Default”, “Event
of Default” or Material Adverse Effect describing the same in reasonable detail and a description of the action that the
Borrowers have taken and propose to take with respect thereto;

 

(h)            promptly
after a Loan Party’s obtaining knowledge thereof, notice to the Administrative Agent of any of the following that affects
a Loan Party: (a) the threat or commencement of any proceeding or investigation, whether or not covered by insurance, if an
adverse determination could reasonably be expected to have a Material Adverse Effect, (b) any pending or threatened labor
dispute, strike or walkout, or the expiration of any material labor contract, (c) any default under or termination of a Material
Contract, (d) any judgment in an amount exceeding $500,000, (e) the assertion of any Intellectual Property Claim, if
an adverse resolution could reasonably be expected to have a Material Adverse Effect, (f) any violation or asserted violation
of any applicable Law (including ERISA, the Fair Labor Standards Act of 1938, or any Environmental Laws), if an adverse resolution
could reasonably be expected to have a Material Adverse Effect, (g) any Environmental Release by a Loan Party or on any Real
Property owned, leased or occupied by a Loan Party, or receipt of any Environmental Notice, (h) the occurrence of any ERISA
Event, (i) the discharge of or any withdrawal or resignation by Borrowers’ independent accountants, or (j) any
opening of a new office or place of business, at least thirty (30) days prior to such opening.

 

(i)             promptly
after receipt thereof, but in any event not later than five (5) Business Days after any Responsible Officer of a
Borrower becomes aware thereof, all final letters and reports to management of a Borrower prepared by its independent
certified public accountants and the responses of the management of such Borrower thereto;

 

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(j)             promptly
following the commencement of any litigation, suit, administrative proceeding or arbitration relating to any Borrower or any of
its Properties which if adversely determined could reasonably be expected to result in a Material Adverse Effect or otherwise relating
in any way to the transactions contemplated by this Agreement, but in any event not later than (5) Business Days after any
Responsible Officer of a Borrower becomes aware thereof, a notice thereof from the Borrower Agent describing the allegations of
such litigation, suit, administrative proceeding or arbitration and the Borrowers’ response thereto;

 

(k)            not
later than thirty (30) days after the start of each fiscal year of the Borrowers, projections of Holdings’, the Borrowers’
and their Subsidiaries’ consolidated balance sheets, results of operations, cash flow and “Availability” (as
defined in the Revolving Loan Documents) for the next fiscal year, fiscal month by fiscal month, together with a statement of all
underlying assumptions, and promptly following the preparation thereof, updates to any of the foregoing from time to time prepared
by management of any Loan Party;

 

(l)             promptly
after receipt thereof, but in any event not later than five (5) Business Days after any Responsible Officer of a Borrower
becomes aware thereof, copies of all notices, requests and other documents (including amendments, waivers and other modifications)
so received under or pursuant to any instrument, indenture, loan or credit or similar agreement (including, without limitation,
the Revolving Loan Documents) and, from time to time upon request by the Administrative Agent, such information and reports regarding
such instruments, indentures and loan and credit and similar agreements as the Administrative Agent may reasonably request;

 

(m)           promptly
after the sending or filing thereof, any certifications or other documents (including any exhibits or other backup thereto) regarding
the post-closing settlement or other “true-up” of consideration paid under the Acquisition Documents;

 

(n)            at
the Administrative Agent’s request, a listing of each Loan Party’s trade payables, specifying the trade creditor and
balance due, and a detailed trade payable aging, all in form satisfactory to the Administrative Agent;

 

(o)            promptly
after the sending or filing thereof, copies of any proxy statements, financial statements or reports that any Loan Party has made
generally available to its shareholders; copies of any regular, periodic and special reports or registration statements or prospectuses
that any Loan Party files with the Securities and Exchange Commission or any other Governmental Authority, or any securities exchange;
and copies of any press releases or other statements made available by a Loan Party to the public concerning material changes to
or developments in the business of such Loan Party;

 

(p)            promptly
after the sending or filing thereof, copies of any annual report to be filed in connection with each Plan or Foreign Plan;

 

(q)            promptly
upon any officer of any Loan Party obtaining knowledge that any Loan Party has either (i) registered or applied to
register any Intellectual Property with any Governmental Authority or (ii) acquired any interest in Real Property
(including leasehold interests in Real Property), a certificate of a Responsible Officer describing such Intellectual
Property and/or such Real Property in such detail as the Administrative Agent shall reasonably require;

 

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(r)             promptly
upon the completion thereof, any third-party audit or other review of the Closing Date balance sheet of the Loan Parties;

 

(s)            as
soon as available, and in any event within 120 days after the close of each fiscal year of the Borrowers, financial statements
for each Guarantor, in form and substance satisfactory to the Administrative Agent;

 

(t)             upon
request, provide the Administrative Agent with copies of all existing agreements, and promptly after execution thereof provide
the Administrative Agent with copies of all future agreements, between a Loan Party and any landlord, warehouseman, processor,
shipper, bailee or other Person that owns any premises at which any Collateral may be kept or that otherwise may possess or handle
any Collateral;

 

(u)            from
time to time (but no more frequently than one time per fiscal quarter) upon the reasonable request of Administrative Agent, the
Borrowers shall make appropriate members of management available at reasonable times during normal business hours for a telephone
conference to discuss with Administrative Agent and the Lenders the financial condition and operations of the Borrowers and their
Subsidiaries; and

 

(v)            such
other information with respect to the financial condition and operations of the Borrowers and their Subsidiaries as the Administrative
Agent or any Lender may reasonably request.

 

5.2           Maintenance
of Existence and Licenses; etc.

 

(a)            Each
Loan Party shall, and shall cause each of its Subsidiaries to, maintain and preserve its existence, and qualification and good
standing in all states and jurisdictions in which such qualification and good standing are required in order to conduct its business
and own its property as conducted and owned in such states, except, other than with respect Holdings or a Borrower, where the failure
to do so could not reasonably be expected to result in a Material Adverse Effect.

 

(b)           Each
Loan Party shall, and shall cause each of its Subsidiaries to, (i) keep each material License affecting any Collateral (including
the manufacture, distribution or disposition of inventory) or any other material Property of the Loan Parties and Subsidiaries
in full force and effect, (ii) promptly notify the Administrative Agent of any proposed modification to any such material
License, or entry into any new material License, in each case at least thirty (30) days prior to its effective date, (iii) pay
all royalties and other amounts when due under any material License, and (iv) notify the Administrative Agent of any default
or breach asserted by any Person to have occurred under any material License.

 

5.3           Maintenance
of Properties. Each Loan Party will, and shall cause each of its Subsidiaries to, maintain or cause to be maintained
in the ordinary course of business in good repair, working order and condition (reasonable wear and tear excepted) all
material Properties used in their respective businesses (whether owned or held under lease), and from time to time make or
cause to be made all necessary repairs, renewals, replacements, additions, betterments and improvements thereto, except to
the extent the failure to maintain such Properties could not reasonably be expected to result in a Material Adverse
Effect.

 

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5.4            Payment
of Liabilities. Each Loan Party shall, and shall cause each of its Subsidiaries to, pay and discharge as the same may
become due and payable, all taxes, assessments and other governmental charges or levies against or on any of its Property, in
each case, prior to the date on which they become delinquent or penalties attach, as well as all other lawful claims of any
kind which, if unpaid, might become a Lien upon any of its Property; provided, however, that the foregoing
shall not require such Loan Party or such Subsidiary to pay any such tax, assessment, charge, levy or claim so long as the
validity thereof shall be Properly Contested, but (with respect to claims that are not Taxes, assessments and other
governmental charges or levies) only so long as such claim does not become a Lien on any assets of such Loan Party or such
Subsidiary.

 

5.5            Compliance
with Laws. Each Loan Party shall, and shall cause each of its Subsidiaries to, carry on its business activities in
substantial compliance with all applicable federal or state laws and all applicable rules, regulations and orders of all
governmental bodies and offices having power to regulate or supervise its business activities, including all applicable
environmental, pollution control, health and safety statutes, laws and regulations, except in each case where the failures to
so comply could not reasonably be expected to result in a Material Adverse Effect. Each Loan Party shall, and shall cause
each of its Subsidiaries to, maintain all material rights, liens, permits, certificates of compliance or grants of authority
necessary for the conduct of its business, except where the failure to maintain could not reasonably be expected to result in
a Material Adverse Effect. The Real Property and its intended use will comply at all times with all applicable laws,
governmental regulations and the terms of any enforcement action now or hereafter commenced by any federal, state, regional
or local governmental agency, including all applicable federal, state and local laws pertaining to air and water quality,
hazardous waste, waste disposal and other environmental matters (including, but not limited to, the Clean Water, Clean Air,
Federal Water Pollution Control, Solid Waste Disposal, Resource Conservation and Recovery and Comprehensive Environmental
Response, Compensation, and Liability Acts, as said acts may be amended from time to time), and the rules, regulations and
ordinances of all applicable federal, state and local agencies and bureaus, except where the failures to so comply could not
reasonably be expected to result in a Material Adverse Effect. Each Loan Party shall, and shall cause each of its
Subsidiaries to, institute and maintain policies and procedures (satisfactory to the Administrative Agent) designed to ensure
that no Loan Party, nor any of their Subsidiaries (other than any Foreign Subsidiary), sells any products or services
directly to marijuana growers or to retailers that sell only to the marijuana industry.

 

5.6            Books
and Records; Inspection Rights; etc. Each Loan Party shall, and shall cause each of its Subsidiaries to, keep
(a) from and after July 1, 2017, a system of accounting administered in accordance with GAAP and (b) books and
records reflecting all of its business affairs and transactions in accordance with GAAP. Each Loan Party shall, and shall
cause each of its Subsidiaries to, permit the Administrative Agent (accompanied by any Lender) or any representative thereof,
at reasonable times and intervals, during normal business hours and upon reasonable notice to the Borrower Agent, to visit
the offices of such Loan Party or such Subsidiary, discuss financial matters with Responsible Officers of such Loan Party or
such Subsidiary and with its independent public accountants (and by this provision each Loan Party authorizes its and its
Subsidiaries’ independent public accountants to participate in such discussions) and examine any of the such Loan
Party’s or such Subsidiary’s books and other company records in a non-disruptive manner; provided, that
unless an Event of Default has occurred and is continuing there shall be no more than one such inspection or visit per year; provided,
further, that, unless an Event of Default has occurred and is continuing, a representative of the Borrower Agent shall be
given the opportunity to be present during any such inspection or discussion. Notwithstanding anything to the contrary in
this Section 5.6, no Loan Party, nor any of their respective Subsidiaries, will be required to disclose, permit
the inspection, examination or making copies or abstracts of, or discussion of, any document, information or other matter, or
provide information, that (i) constitutes non-financial trade secrets or non-financial proprietary information,
(ii) in respect of which disclosure is prohibited by Law, (iii) is subject to attorney-client or similar privilege
or constitutes attorney work product or (iv) the disclosure of which is restricted by binding agreements with a third
party that is not a controlled Affiliate of any Loan Party.

 

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5.7            Insurance.
Subject to the Intercreditor Agreement:

 

(a)            Each
Loan Party shall maintain insurance with respect to the Collateral, covering casualty, hazard, theft, malicious mischief, flood
and other risks, in amounts, with endorsements and with insurers (with a Best rating of at least A+, unless otherwise approved
by the Administrative Agent in its discretion) reasonably satisfactory to the Administrative Agent; provided, that if Real Property
secures any Obligations, flood hazard diligence, documentation and insurance shall comply with the Flood Disaster Protection Act
or otherwise shall be satisfactory to all Lenders. All proceeds under each policy shall be payable to the Administrative Agent.
From time to time upon request, the Loan Parties shall deliver to the Administrative Agent certified copies of its insurance policies
and updated flood plain searches. Unless the Administrative Agent shall agree otherwise, each policy shall include endorsements
in form and substance reasonably satisfactory to it (i) showing the Administrative Agent as loss payee (other than with respect
to workers’ compensation, D&O insurance, kidnap, ransom and terrorism policies); (ii) requiring thirty (30) days
prior written notice to the Administrative Agent in the event of cancellation of the policy for any reason whatsoever; and (iii) specifying
that the interest of the Administrative Agent shall not be impaired or invalidated by any act or neglect of any Loan Party or the
owner of the Property, nor by the occupation of the premises for purposes more hazardous than are permitted by the policy. If any
Loan Party fails to provide and pay for any insurance, the Administrative Agent may, at its option, but shall not be required to,
procure the insurance and charge the Loan Parties therefor. Each Loan Party agrees to deliver to the Administrative, promptly as
rendered, copies of all reports made to insurance companies (other than with respect to workers’ compensation, D&O insurance,
kidnap, ransom and terrorism policies). While no Event of Default exists, the Loan Parties may settle, adjust or compromise any
insurance claim, as long as the proceeds (other than with respect to workers’ compensation, D&O insurance, kidnap, ransom
and terrorism policies) are delivered to the Administrative, subject to Loan Party reinvestment rights in accordance with this
Agreement. If an Event of Default exists, only the Administrative Agent shall be authorized to settle, adjust and compromise such
claims (other than with respect to workers’ compensation, D&O insurance, kidnap, ransom and terrorism policies).

 

(b)           Any
proceeds of insurance (other than proceeds from workers’ compensation or D&O insurance or kidnap, ransom and terrorism
policies) and any awards arising from condemnation of any Collateral shall be paid to the Administrative Agent upon receipt thereof;
provided that, so long as no Event of Default exists, the Loan Parties shall have the right to elect to reinvest such proceeds
to the extent provided in Section 2.1(g)(4). Subject to the Intercreditor Agreement, any such proceeds or awards that
relate to any Collateral and not so reinvested shall be applied to payment of the Term Loans in accordance with Section 2.1(g)(4).

 

(c)            If
at any time the improvements on a Real Property are located in an area identified by the Federal Emergency Management Agency
(or any successor agency) as a “special flood hazard area” with respect to which flood insurance has been made
available under Flood Insurance Laws, then the applicable Loan Party (i) has obtained and will maintain, with
financially sound and reputable insurance companies (except to the extent that any insurance company insuring the Real
Property of such Loan Party ceases to be financially sound and reputable after the Closing Date, in which case, Holdings or
such Loan Party shall promptly replace such insurance company with a financially sound and reputable insurance company), such
flood insurance in such reasonable total amount as the Administrative Agent and the Lenders may from time to time reasonably
require, and otherwise sufficient to comply with all applicable rules and regulations promulgated pursuant to the Flood
Insurance Laws and (ii) promptly upon request of the Administrative Agent or any Lender, will deliver to the
Administrative Agent or such Lender, as applicable, evidence of such compliance in form and substance reasonably acceptable
to the Administrative Agent and such Lender, including, without limitation, evidence of annual renewals of such
insurance.

 

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(d)         The
Loan Parties shall maintain insurance with insurers (with a Best rating of at least A+, unless otherwise approved by the
Administrative Agent in its discretion) satisfactory to the Administrative Agent, (a) with respect to the Properties and
business of the Loan Parties and Subsidiaries of such type (including product liability, workers’ compensation,
larceny, embezzlement, or other criminal misappropriation insurance), in such amounts, and with such coverages and
deductibles as are customary for companies similarly situated, and (b) business interruption insurance in an amount not
less than $4,000,000, with deductibles and subject to an endorsement or insurance assignment reasonably satisfactory to the
Administrative Agent.

 

5.8            ERISA.
Each Loan Party agrees that all assumptions and methods used to determine the actuarial valuation of employee benefits, both
vested and unvested, under any Plan, and each such Plan, will comply in all material respects with ERISA and other applicable
laws.

 

(a)          No
Loan Party will at any time permit any Plan to:

 

(1)           engage
in any “prohibited transaction” for which an exemption is not available as such term is defined in Section 4975
of the Code or in Section 406 of ERISA;

 

(2)           fail
to satisfy the minimum funding standard as such term is defined in Section 302 of ERISA, whether or not waived;

 

(3)           be
terminated under circumstances which are likely to result in the imposition of a lien on the property of any Loan Party or any
of their respective Subsidiaries pursuant to Section 4068 of ERISA, if and to the extent such termination is within the control
of a Loan Party or any of the Subsidiaries; or

 

(4)           be
operated or administered in a manner which is not in compliance with ERISA or any applicable provisions of the Code;

 

if the event or condition described in
clause (1), (2), (3) or (4) above could reasonably be expected to subject any Loan Party
or any of their respective Subsidiaries to a Material Adverse Effect.

 

(b)          Upon
the request of the Administrative Agent or any Lender, the Borrower Agent will furnish a copy of the annual report of each
Plan (Form 5500) required to be filed with the IRS. Copies of such annual reports shall be delivered no later than
thirty (30) days after the date the copy is requested.

 

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5.9           Additional
Subsidiary Guarantors.     The Borrower Agent shall notify the Administrative Agent
within ten (10) Business Days after it makes an Investment in any Subsidiary or, within ten (10) Business Days
after it creates an entity which is or becomes a Subsidiary, and promptly thereafter (and in any event within thirty (30)
days), cause such Person (other than a Foreign Subsidiary) to (i) become a Guarantor by executing and delivering to the
Administrative Agent a counterpart of the Guaranty or such other document as the Administrative Agent shall reasonably deem
appropriate for such purpose, (ii) take all such action and execute such agreements, documents and instruments,
including execution and delivery of a counterpart signature page to the Security Agreement and execution and delivery of
such other Security Documents, that may be necessary to grant to the Administrative Agent, for the benefit of the Secured
Parties, a perfected security interest and Lien in any Collateral owned by such new Subsidiary (having the priority set forth
in the Intercreditor Agreement) and (iii) deliver to the Administrative Agent documents of the types referred to in Section 3.1(a)(8) and,
if reasonably requested by the Administrative Agent, favorable opinions of counsel to such Person (which shall cover, among
other things, the legality, validity, binding effect and enforceability of the documentation referred to in clauses
(i) and (ii) of this subsection), all in form, content and scope reasonably satisfactory to the
Administrative Agent. Notwithstanding anything to the contrary set forth herein, no Subsidiary of Holdings may guarantee (or
be a borrower under) the Revolving Loan Facility that does not also guarantee the Obligations (or is a Borrower
hereunder).

 

5.10         Landlord
Agreements. The Loan Parties shall use commercially reasonable efforts to obtain a landlord agreement or bailee or mortgagee
waiver, as applicable, within sixty (60) days after the Closing Date from (a) the lessor of each Loan Party’s chief
executive office and each other location where any books and records of a Loan Party are held or maintained and (b) from the
lessor of each leased property, bailee in possession of any Collateral or mortgagee of any owned property with respect to any location
where Collateral with an aggregate fair market value in excess of $350,000 is stored or located.

 

5.11         Cash Management
Systems. Within one-hundred twenty (120) days after the Closing Date, unless waived or extended by the Administrative Agent
in its Permitted Discretion, each Loan Party shall enter into, and cause each depository, securities intermediary or commodities
intermediary to enter into, control agreements subject to the provisions in the Security Agreement.

 

5.12         Further
Assurances. Promptly upon reasonable request by the Administrative Agent, the Loan Parties shall take such additional actions
and execute such documents as the Administrative Agent may reasonably request from time to time in order (i) to carry out
the purposes of this Agreement or any other Loan Documents, (ii) to subject to the Liens in the Collateral granted by any
of the Security Documents (having the priority set forth in the Intercreditor Agreement) any of the Collateral and (iii) to
perfect and maintain the validity, effectiveness and priority of the Liens granted by any of the Security Documents and the Liens
intended to be created thereby (in each case, subject to the terms of the Intercreditor Agreement). Notwithstanding anything to
the contrary in this Agreement or any other Loan Document, so long as any Revolving Loan Obligations are outstanding, the actions
and deliverables required by this Section 5.12 with respect to the Administrative Agent’s security interest in
any Revolving Loan Priority Collateral shall be subject to the terms of the Intercreditor Agreement and required only to the extent
required under the Revolving Loan Documents. Notwithstanding anything to the contrary set forth herein or in the Security Agreement,
the Borrowers shall not be required to execute and deliver a Mortgage in respect of the Colorado Property prior to the date that
is 180 days following the Closing Date.

 

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5.13         SBA
Matters. Each Loan Party will, and will cause each of its Subsidiaries to: (a) upon the request of any Lender
that is a Small Business Investment Company (as defined in the SBIA), repay such Lender’s Term Loan in full (including
the applicable prepayment fee), in immediately available funds, in the event that any Borrower or any other Loan Party
changes the nature of its business within one year after the Closing Date (or, if applicable, any later borrowing date
hereunder) in a manner that would cause such Lender to have provided funds any Borrower or any other Loan Party pursuant to
this Agreement or any other Loan Document in violation of 13 C.F.R. §§ 107.700-107.760 (as amended from time to
time); (b) upon the request of any Lender that is a Small Business Investment Company or the SBA, (i) submit to
such Lender and/or the SBA timely and accurate compliance reports at such times and in such form and containing such
information as the SBA may determine to be necessary to enable the SBA to ascertain whether each Borrower and each other Loan
Party have complied or are complying with 13 C.F.R. Part 112 (“Part 112”), (ii) submit to
such Lender such information as may be necessary to enable such Lender to meet its reporting requirements under
Part 112, and (iii) permit the SBA to have access with advance written notice and during normal business hours to
such of its books, records, accounts and other sources of information, and its facilities as may be pertinent to ascertain
compliance with Part 112. Where any information required of any Borrower or any other Loan Party is in the exclusive
possession of any other agency, institution or Person and such agency, institution or Person shall fail or refuse to furnish
this information, each Borrower and each other Loan Party shall so certify in its report and shall set forth what efforts it
has made to obtain this information; and (c) upon any Lender’s request, take any and all actions required to
permit any Lender to comply with SBIA and applicable law, in the event such Lender is restricted or prohibited from holding
Term Loans or Qualified Equity Interests in any Loan Party or any Affiliate thereof as a result of any noncompliance
thereunder.

 

5.14         OFAC; Patriot
Act. The Loan Parties shall, and shall cause their Subsidiaries to, comply with the laws, regulations and executive orders
referred to in Section 4.27 and Section 4.28 (subject to any materiality qualifiers set forth in such Section 4.27
and Section 4.28).

 

5.15         Senior Credit
Enhancements. If the Revolving Loan Agent or any Revolving Loan Lender under the Revolving Loan Documents receives any
additional guaranty, Collateral or other credit enhancement after the Closing Date, each Loan Party shall cause the same to be
granted to the Administrative Agent and the Lenders, subject to the terms of the Intercreditor Agreement.

 

ARTICLE VI

FINANCIAL COVENANTS AND NEGATIVE COVENANTS

 

The Loan Parties agree
with the Administrative Agent and each of the Lenders that, from the date hereof and thereafter for so long as any portion of any
Term Loans shall be outstanding or any Lender shall have any Commitment hereunder, unless the Required Lenders shall otherwise
consent in writing:

 

6.1            Financial
Covenants.

 

(a)            Fixed
Charge Coverage Ratio. The Borrowers shall not permit the Fixed Charge Coverage Ratio for the date set forth in the table below
for the Test Period ending on such date to be less than the minimum ratio set forth opposite such date:

 

	Fiscal Quarter Ending	Minimum Fixed Charge Coverage Ratio
	June 30, 2017	1.25:1.00
	September 30, 2017	1.25:1.00
	December 31, 2017	1.25:1.00
	March 31, 2018	1.25:1.00
	June 30, 2018	1.50:1.00
	September 30, 2018	1.50:1.00

 

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	Fiscal Quarter Ending	Minimum Fixed Charge Coverage Ratio
	December 31, 2018	1.50:1.00
	March 31, 2019	1.50:1.00
	June 30, 2019	1.75:1.00
	September 30, 2019	1.75:1.00
	December 31, 2019	1.75:1.00
	March 31, 2020	1.75:1.00
	June 30, 2020	1.75:1.00
	September 30, 2020	1.75:1.00
	December 31, 2020	1.75:1.00
	March 31, 2021	1.75:1.00
	June 30, 2021	1.75:1.00
	September 30, 2021	1.75:1.00
	
        December 31,
2021

and the last day of each fiscal quarter thereafter
	2.00:1.00

 

(b)            Total
Net Leverage Ratio. The Borrowers shall not permit the Total Net Leverage Ratio as of the
date set forth in the table below for the Test Period ending on such date to be greater than the maximum ratio set forth in
the table below opposite such date:

 

	Fiscal Quarter Ending	Maximum Total Net Leverage Ratio
	June 30, 2017	5.50:1.00
	September 30, 2017	5.50:1.00
	December 31, 2017	5.25:1.00
	March 31, 2018	5.25:1.00
	June 30, 2018	5.00:1.00
	September 30, 2018	4.75:1.00
	December 31, 2018	4.75:1.00

 

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	Fiscal Quarter Ending	Maximum Total Net Leverage Ratio
	March 31, 2019	4.75:1.00
	June 30, 2019	4.50:1.00
	September 30, 2019	4.50:1.00
	December 31, 2019	4.00:1.00
	March 31, 2020	4.00:1.00
	June 30, 2020	4.00:1.00
	September 30, 2020	4.00:1.00
	
        December 31, 2020

        and the last day of each fiscal quarter
        thereafter
	3.75:1.00

 

 

(c)             Equity
Cure Contributions. For purposes of determining compliance with the Financial Covenants as of the last day of any fiscal quarter
of the Borrower, any cash equity contribution to the Borrower by Holdings (to the extent funded by Holdings from the proceeds of
the issuance of Qualified Equity Interests or Permitted Affiliate Sub Debt by Holdings) after the last day of any fiscal quarter
and on or prior to the day that is fifteen (15) Business Days after the day on which financial statements are required to be delivered
for such fiscal quarter (each an “Equity Cure Contribution”) will, at the request of the Borrower, be included
in the calculation of Consolidated EBITDA for purposes of determining compliance with the Financial Covenants for the applicable
fiscal quarter and any applicable subsequent periods that include such fiscal quarter; provided, that (i) in each four
(4) fiscal quarter period, there shall be a period of at least two (2) fiscal quarters in which no Equity Cure Contribution
is made and only four (4) Equity Cure Contributions may be made during the term of this Agreement, (ii) the amount of
any Equity Cure Contributions shall not exceed the amount required to cause the Borrower to be in compliance with the Financial
Covenants, (iii) all Equity Cure Contributions will be used solely for curing the Financial Covenants and will be disregarded
for purposes of determining the availability of any baskets, pricing or step-downs with respect to other provisions contained in
the Loan Documents, (iv) the proceeds of each Equity Cure Contribution shall have been contributed to the Borrower as a cash
common equity contribution or as Permitted Affiliate Sub Debt and shall be promptly used by the Borrower to prepay the Term Loans
pursuant to Section 2.1(g)(6)  and (e) there shall be no pro forma or other reduction of Total Net Debt (including
by way of cash netting) using the proceeds of any Equity Cure Contribution for purposes of determining compliance for the fiscal
quarter (and subsequent quarters in the applicable Test Period) in respect of which such Equity Cure Contribution was made.

 

6.2            Limitations
on Indebtedness. The Loan Parties shall not, and shall not permit any of their Subsidiaries to, create, assume, incur,
issue, guarantee or otherwise become or remain obligated in respect of, or permit to be outstanding, any Indebtedness, except the
following (the “Permitted Indebtedness”):

 

(a)             the
Obligations;

 

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(b)            Subordinated
Indebtedness in an aggregate amount outstanding (together with any Refinancing Debt in respect thereof) at any time not in excess
of $20,000,000; provided, that, in the event that such Subordinated Indebtedness is Permitted Affiliate Sub Debt, subject
to the Intercreditor Agreement, 100% of the proceeds thereof are immediately applied by Holdings to make a Specified Equity Contribution
in the Borrower Agent in accordance with Section 6.1(c);

 

(c)             Permitted
Purchase Money Debt;

 

(d)            Indebtedness
(other than the Obligations, Subordinated Indebtedness, Permitted Purchase Money Debt and Revolving Loan Obligations) set forth
on Schedule 6.2 (other than the Obligations, Subordinated Indebtedness, Permitted Purchase Money Debt and Revolving
Loan Obligations), but only to the extent outstanding on the Closing Date and not satisfied with proceeds of the Term Loans;

 

(e)             Indebtedness
that is in existence when a Person becomes a Subsidiary or that is secured by an asset when acquired by a Loan Party or Subsidiary,
as long as (i) such Indebtedness was not incurred in contemplation of such Person becoming a Subsidiary or such acquisition,
and (i) the aggregate amount of Indebtedness outstanding under this clause (e) (together with any Refinancing
Debt in respect thereof) does not exceed $1,000,000 in the aggregate at any time;

 

(f)             Permitted
Contingent Obligations;

 

(g)             Revolving
Loan Obligations so long as such obligations do not exceed the Revolving Loan Maximum Amount, subject to the limitations set forth
in the Intercreditor Agreement;

 

(h)             Refinancing
Debt as long as each Refinancing Condition is satisfied;

 

(i)              intercompany
loans by a Borrower or a Wholly Owned Loan Party to a Borrower or a Wholly Owned Loan Party;

 

(j)              Indebtedness
in respect of appeal bonds, workers’ compensation claims, self-insurance obligations and bankers acceptances, in each case,
issued for the account of any Loan Party in the Ordinary Course of Business, including guarantees or obligations of any Loan Party
with respect to letters of credit supporting such appeal bonds, workers’ compensation claims, self-insurance obligations
and bankers acceptances (in each case other than for an obligation for money borrowed);

 

(k)             Indebtedness
arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except
in the case of daylight overdrafts) drawn against insufficient funds in the Ordinary Course of Business;

 

(l)              Subordinated
Indebtedness of any Loan Party to repurchase Equity Interests from any employee, officer, director or such person’s spouse,
estate or estate planning vehicle upon the death, disability or termination of employment of such employee, officer or director,
so long as (x) no Default or Event of Default has occurred and is continuing or would occur as a result thereof, and (y) the
aggregate amount of Indebtedness outstanding under this clause (l) does not exceed $1,000,000 in the aggregate at any
time;

 

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(m)           Indebtedness
consisting of accrued and unpaid management fees permitted under the Management Agreements;

 

(n)            Indebtedness
consisting of any final judgment rendered against any Loan Party that has not been paid, discharged or vacated or had execution
thereof stayed pending appeal prior to such final judgment constituting an Event of Default in accordance with Section 7.1(g) hereof;

 

(o)            Indebtedness
that is not included in any of the preceding clauses of this Section 6.2, is not secured by a Lien and does not exceed
$1,000,000 in the aggregate at any time outstanding; and

 

(p)            all
premium (if any), interest, fees, expenses, charges and additional or contingent interest on obligations described in clauses
(a) through (o) above.

 

6.3            Liens.
The Loan Parties shall not, and will cause their Subsidiaries not to, create, incur, assume or permit to exist or to be created
or assumed any Lien on any of their respective Property, whether now owned or hereafter acquired, except the following (the “Permitted
Liens”):

 

(a)            Liens
in favor of the Administrative Agent for the benefit of the Secured Parties or otherwise to secure the Obligations;

 

(b)            Purchase
Money Liens securing Permitted Purchase Money Debt;

 

(c)             Liens
for Taxes not yet due or being Properly Contested;

 

(d)            statutory
Liens (other than Liens for Taxes or imposed under ERISA) arising in the Ordinary Course of Business, but only if (i) payment
of the obligations secured thereby is not yet due or is being Properly Contested, and (ii) such Liens do not materially impair
the value or use of the Property or materially impair operation of the business of any Loan Party or Subsidiary;

 

(e)             Liens
incurred or deposits made in the Ordinary Course of Business to secure the performance of government tenders, bids, contracts,
statutory obligations and other similar obligations, as long as such Liens are at all times junior to the Liens in favor of the
Administrative Agent for the benefit of the Secured Parties and are required or provided by law;

 

(f)             Liens
arising by virtue of a judgment or judicial order against any Loan Party or Subsidiary, or any Property of a Loan Party or Subsidiary,
as long as such Liens are (i) in existence for less than 20 consecutive days or being Properly Contested, and (ii) at
all times junior to the Liens in favor of the Administrative Agent for the benefit of the Secured Parties;

 

(g)            easements,
rights-of-way, restrictions, covenants or other agreements of record, and other similar charges or encumbrances, or any encroachments,
on Real Property, that do not secure any monetary obligation and do not interfere with the Ordinary Course of Business;

 

(h)            normal
and customary rights of setoff upon deposits in favor of depository institutions, and Liens of a collecting bank on Payment Items
in the course of collection;

 

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(i)             Liens
on assets (other than accounts receivable and inventory) acquired in a Permitted Acquisition, securing Indebtedness permitted by
Section 6.2(e);

 

(j)             Liens
securing Indebtedness under the Revolving Loan Documents permitted by Section 6.2(g) to
the extent such Liens are subject to the Intercreditor Agreement

 

(k)            Liens
existing on the Closing Date and set forth on Schedule 6.3;

 

(l)             leases,
subleases, licenses or sublicenses of the Property of any Loan Party, in each case entered into in the Ordinary Course of Business
of such Loan Party which do not (i) interfere in any material respect with the business of any Loan Party or any Subsidiary
and (ii) secure any Indebtedness;

 

(m)           licenses
or sublicenses of Intellectual Property granted by any Loan Party in the Ordinary Course of Business;

 

(n)            the
filing of UCC financing statements solely as a precautionary measure in connection with operating leases or consignment of goods;

 

(o)            Liens
for the benefit of a seller attaching solely to cash earnest money deposits in connection with a letter of intent or acquisition
agreement with respect to a Permitted Acquisition;

 

(p)            Liens
on an insurance policy of any Loan Party and the identifiable cash proceeds thereof in favor of the issuer of such policy and securing
Indebtedness permitted to finance the premiums of such policies; and

 

(q)            statutory
Liens arising in the Ordinary Course of Business that are not related to Indebtedness for borrowed money so long as (x) such
Liens are subject to a landlord agreement or bailee or mortgagee waiver, as applicable, in form and substance acceptable to the
Administrative Agent and (y) such Liens are similarly permitted under the Revolving Loan Agreement pursuant to clause (f) of
Section 10.2.2 of the Revolving Loan Agreement.

 

6.4            Sales
of Assets. The Loan Parties shall not, and will cause their Subsidiaries not to, make any Asset Dispositions, except for:

 

(a)             a
sale or lease of inventory in the Ordinary Course of Business;

 

(b)            termination
of a lease of real or personal Property that is not necessary for the Ordinary Course of Business, could not reasonably be expected
to have a Material Adverse Effect and does not result from a Loan Party’s or Subsidiary’s default;

 

(c)             a
lease or sublease of Real Property in the Ordinary Course of Business;

 

(d)             a
license or sublicense of Intellectual Property (including, without limitation, any non-exclusive license of Intellectual Property)
entered into in the Ordinary Course of Business;

 

(e)             an
Asset Disposition, abandonment or lapse of Intellectual Property that is immaterial or no longer used or the expiration of Intellectual
Property in accordance with its statutory term;

 

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(f)             Asset
Dispositions of cash equivalents in the Ordinary Course of Business;

 

(g)            Asset
Dispositions of Property to a Borrower or any Wholly Owned Loan Party (other than Holdings);

 

(h)            Restricted
Payments by the Loan Parties and their Subsidiaries, in each case solely to the extent expressly permitted by Section 6.10;

 

(i)             the
discount, write-down, sale or other Asset Disposition in the Ordinary Course of Business of trade or accounts receivable more than
120 days past due;

 

(j)             Asset
Dispositions approved in writing by the Administrative Agent and Required Lenders;

 

(k)            as
long as no Default or Event of Default exists, (i) an Asset Disposition of any Property which is to be replaced, and is in
fact replaced, or subject to a binding contract to be replaced, within 180 days (and if so committed to be replaced, actually replaced
no later than ninety (90) days after the end of such 180 day period) with another asset useful in the Loan Parties’ business
(so long as the Administrative Agent has a first priority and perfected Lien on any newly-acquired asset, subject to the terms
of the Intercreditor Agreement), (ii) Asset Dispositions of Property (other than accounts receivable or inventory) that, in
the aggregate during any 12 fiscal month period, has a fair market or book value (whichever is more) of $1,000,000 or less, or
(iii) Asset Dispositions of Property (other than accounts receivable or inventory) that is obsolete or no longer used or useful
in the business or inventory that is unmerchantable or otherwise unsalable in the Ordinary Course of Business;

 

(l)             replacement
of equipment that is worn, damaged or obsolete with equipment of like function and value, if the replacement equipment is acquired
substantially contemporaneously with such disposition (or such longer period consented to by Administrative Agent) and is free
of Liens other than Permitted Liens; or

 

(m)           a
sale or disposition of the Colorado Property so long as (i) no Default or Event of Default exists or results therefrom, (ii) 100%
of the consideration received from such sale or disposition is in the form of cash, (iii) the purchase price of such sale
or disposition is for at least fair market value, and (iv) the Net Cash Proceeds of such sale or other disposition are applied
to make a prepayment of the Term Loans in accordance with Section 2.01(g)(4).

 

6.5            Liquidations,
Mergers and Consolidations. Except as permitted pursuant to Sections 6.6 and 6.8 and except for the merger,
consolidation or amalgamation of any Loan Party or any Subsidiary of any Loan Party into a Borrower or any Wholly Owned Loan Party,
the Loan Parties shall not, and will cause their Subsidiaries not to, liquidate or dissolve itself (or suffer any liquidation or
dissolution) or otherwise wind up, or consolidate with or merge into any other Person, or sell, transfer, lease or otherwise dispose
of (in one transaction or in a series of transactions) all or substantially all of its assets or less than all the Equity Interests
of a Borrower or any of their Subsidiaries; provided that any Subsidiary of a Borrower may liquidate or dissolve or change
its legal form if the Borrowers determine in good faith that such action is in the best interests of the Borrowers and their Subsidiaries
and is not materially disadvantageous to the Lenders so long as (A) no Event of Default shall result therefrom and (B) the
surviving Person or the Person who receives the assets of such dissolving or liquidated Subsidiary that is Loan Party shall be
a Borrower or a Wholly Owned Loan Party; provided, further, that if a Borrower is a party to any such transaction, a Borrower
shall be the surviving entity of such transaction.

 

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6.6            Investments.
The Loan Parties shall not, and will cause their Subsidiaries not to, make or permit to exist any Investment, except that, so
long as no Event of Default then exists or is caused thereby, the Borrowers and their Subsidiaries may make Permitted
Investments.

 

6.7            Transactions
with Affiliates. The Loan Parties shall not, and will cause their Subsidiaries not to, enter into any transaction
(including the purchase, sale or exchange of Property, the rendering of any service, the making of any Investment in an
Affiliate or the repayment of any Indebtedness owed to an Affiliate) with an Affiliate (other than any such transactions
among the Loan Parties), except for (i) any agreement, instrument or arrangement as in effect as of the Closing Date and
set forth on Schedule 6.7, or any amendment thereto (so long as any such amendment is not adverse to the
Lenders in any material respect as compared to the applicable agreement as in effect on the Closing Date) and (ii) any
material transaction in the ordinary course of business and pursuant to the reasonable requirements of the Loan Parties and
their Subsidiaries business, upon terms which are fair and reasonable to the Loan Parties and their Subsidiaries and which
are not less favorable to the Loan Parties and their Subsidiaries than would be obtained in a comparable transaction with a
Person not an Affiliate; provided, that, so long as no Default or Event of Default has occurred and is continuing or
would occur as a result thereof, the Borrowers may pay Permitted Management Fees.

 

6.8            Acquisitions.
The Loan Parties shall not, and will cause their Subsidiaries not to, make any Acquisitions, except that the Borrowers and
their Subsidiaries may make Permitted Acquisitions.

 

6.9            Amendment
and Waiver.

 

(a)            The
Loan Parties shall not, and will cause their Subsidiaries not to, enter into any amendment of, or agree to or accept or consent
to any waiver of any of the provisions of its Organic Documents in any manner that is adverse to the Administrative Agent or the
Lenders, other than any amendment of any Organic Documents of Holdings necessary to facilitate the issuance of Equity Interests
of Holdings so long as such amendment is not adverse to the Administrative Agent or the Lenders.

 

(b)            The
Loan Parties shall not, and will cause their Subsidiaries not to, amend, modify, change, waive, or obtain any consent, waiver or
forbearance with respect to, any of the terms or provisions of any agreement, instrument, document, indenture, or other writing
evidencing or concerning the Revolving Loan Obligations (including, without limitation, the Revolving Loan Documents) except to
the extent permitted by the Intercreditor Agreement.

 

(c)            The
Loan Parties shall not, and will cause their Subsidiaries not to, amend, modify, change, waive, or obtain any consent, waiver or
forbearance with respect to, any of the terms or provisions of any Management Agreement in any manner that is adverse to the Administrative
Agent or the Lenders (it being understood that any amendment or modification to any Management Agreement that has the effect of
either (x) increasing the fees or other amounts payable to any Manager thereunder or (y) modifying the subordination
provisions set forth therein shall, in any such event, be adverse to the Administrative Agent or the Lenders).

 

(d)            The
Loan Parties shall not, and will cause their Subsidiaries not to, amend, modify, change, waive, or obtain any consent, waiver
or forbearance with respect to, any of the terms or provisions of any agreement, instrument, document, indenture, or other
writing evidencing or concerning the Hydrofarm Acquisition (including the Hydrofarm Acquisition Agreement) in any manner that
(i) is contrary to the terms of this Agreement or any other Loan Document, or (ii) could reasonably be expected to
result in a Material Adverse Effect or otherwise be materially adverse to the rights, interests or privileges of the
Administrative Agent or Lenders or their ability to enforce the Loan Documents.

 

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(e)            The
Loan Parties shall not, and will cause their Subsidiaries not to, amend, modify, change, waive, or obtain any consent, waiver or
forbearance with respect to, any of the terms or provisions of any agreement, instrument, document, indenture, or other writing
evidencing or concerning any Permitted Affiliate Sub Debt.

 

(f)             The
Loan Parties shall not, and will cause their Subsidiaries not to, amend, modify, change, waive, or obtain any consent, waiver or
forbearance with respect to, any of the terms or provisions of any agreement, instrument, document, indenture, or other writing
evidencing or concerning any Subordinated Indebtedness (other that Permitted Affiliate Sub Debt which is governed by clause
(e) above) if the effect thereof (i) increases the principal balance of such Subordinated Indebtedness, or increases
any required payment of principal or interest, (ii) accelerates the date on which any installment of principal or any interest
is due, or adds any additional redemption, put or prepayment provisions, (iii) shortens the final maturity date or otherwise
accelerates amortization, (iv) increases the interest rate, (v) increases or adds any fees or charges, (vi) modifies
any covenant in a manner or adds any representation, covenant or default that is more onerous or restrictive in any material respect
for any Loan Party or Subsidiary, or that is otherwise materially adverse to any Loan Party, any Subsidiary or the Lenders, or
(vii) results in the Obligations not being fully benefited by the subordination provisions thereof.

 

6.10          Restricted
Payments. The Loan Parties shall not, and will cause their Subsidiaries not to, make any Restricted Payment, except that
the Loan Parties and their Subsidiaries may:

 

(a)            make
Tax Distributions to Holdings (and, from the proceeds thereof, Holdings may make Tax Distributions to the holders of its Equity
Interests), in each case, in the Ordinary Course of Business; and

 

(b)            so
long as no Default or Event of Default has occurred and is continuing or would occur as a result thereof, (i) pay Permitted
Management Fees in an amount not to exceed $850,000 per fiscal year; (ii) pay (or make Restricted Payments to allow Holdings
or any direct or indirect parent thereof to pay) for the repurchase, retirement or other acquisition or retirement for value of
Equity Interests or Equity Interests Equivalents of Holdings (or of any direct or indirect parent thereof) held by any future,
present or former employee, director, consultant or distributor (or any spouses, former spouses, successors, executors, administrators,
heirs, legatees or distributees of any of the foregoing) of a Borrower or any of their Subsidiaries upon the death, disability,
retirement or termination of employment of any such Person or otherwise pursuant to any employee or director equity plan, employee
or director stock option or profits interest plan or any other employee or director benefit plan or any agreement (including any
separation, stock subscription, shareholder or partnership agreement) with any employee, director, consultant or distributor of
a Borrower or any of their Subsidiaries in an aggregate amount after the Closing Date not to exceed, together with any payments
made under any other Indebtedness permitted under Section 6.2(l), $500,000 in any calendar year, in each case so long
as no Default or Event of Default has occurred and is continuing or would occur as a result thereof; and (iii) provided that
(1) the Loan Parties are in pro forma compliance with the Financial Covenants, after giving effect thereto, as of the last
day of the most recently ended Test Period, and (2) the Loan Parties’ have pro forma minimum Liquidity of at least $10,000,000,
make Restricted Payments in an amount not to exceed $500,000 in the aggregate.

 

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6.11         Payments
in Respect of Certain Indebtedness. The Loan Parties shall not, and will cause their Subsidiaries not to, make any payments
(whether voluntary or mandatory, or a prepayment, redemption, retirement, defeasance, purchase or acquisition, and whether of interest,
principal or any other amounts) with respect to:

 

(a)            any
Subordinated Indebtedness (other than Permitted Affiliate Sub Debt, which shall be subject to clause (c)), except regularly
scheduled payments of principal, interest and fees, but only to the extent permitted under any subordination agreement relating
to such Indebtedness (and a Responsible Officer of Borrower Agent shall certify to the Administrative Agent, not less than five
Business Days prior to the date of payment, that all conditions under such agreement have been satisfied);

 

(b)            any
mandatory prepayments under the Revolving Loan Obligations or any other Indebtedness under the Revolving Loan Documents to the
extent any such mandatory payments are prohibited from being paid pursuant to the terms of the Intercreditor Agreement;

 

(c)             any
Permitted Affiliate Sub Debt; or

 

(d)            any
Indebtedness (other than the Obligations, Subordinated Indebtedness, the Revolving Loan Obligations or Permitted Affiliate Sub
Debt), except, so long as no Default or Event of Default has occurred and is continuing or would occur as a result thereof, (i) required
payments under the agreements evidencing such Indebtedness as in effect on the Closing Date (or as amended thereafter with the
consent of the Administrative Agent), or (ii) payments in an aggregate amount not to exceed $500,000 in any fiscal year of
the Borrowers.

 

6.12          Change in
Business. The Loan Parties shall not, and will cause their Subsidiaries not to, engage in any business, other than its
business as conducted on the Closing Date and any activities incidental thereto.

 

6.13         Changes
in Accounting, Name and Jurisdiction of Organization. The Loan Parties shall not, and will cause their Subsidiaries not
to, (i) change their fiscal year, (ii) change its name as it appears in official filings in its jurisdiction of organization
or (iii) change its jurisdiction or form of organization, in the case of clauses (ii) and (iii), without
at least ten (10) Business Days’ prior written notice to the Administrative Agent and the acknowledgement of the Administrative
Agent that all actions reasonably required by the Administrative Agent have been completed.

 

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6.14          No
Negative Pledges. No Loan Party shall, and shall not permit any of its Subsidiaries to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective any consensual restriction or encumbrance of any kind on the
ability of any Subsidiary to pay dividends or make any other distribution on any of such Subsidiary’s Equity Interests
or Equity Interests Equivalents or to pay fees, including management fees, or make other payments and distributions to a
Borrower or any Subsidiary, except pursuant to the terms of the Loan Documents and the Revolving Loan Documents. No Loan
Party shall, and shall not permit any of its Subsidiaries to, directly or indirectly, enter into, assume or become subject to
any contractual obligation prohibiting or otherwise restricting the existence of any Lien upon any Collateral in favor of the
Administrative Agent to secure the Obligations, whether now owned or hereafter acquired except (i) in connection with
any document or instrument governing Liens permitted herein, provided that any such restriction contained therein relates
only to the Property subject to such Permitted Liens, (ii) with consent of the Administrative Agent and
(iii) pursuant to the Revolving Loan Documents and the Intercreditor Agreement. Nothing in this Section 6.14
shall prohibit (1) this Agreement or any of the other Loan Documents, (2) customary restrictions and conditions
contained in any agreement relating to the sale of any property permitted hereunder pending the consummation of such sale,
(3) restrictions imposed by applicable law, (4) any agreement in effect at the time a Person first became a
Subsidiary of any Loan Party, so long as such agreement was not entered into solely in contemplation of such Person becoming
a Subsidiary and such restrictions are limited to such Subsidiary and its Subsidiaries, (5) in the case of any
Subsidiary that is not a wholly-owned Subsidiary of Holdings, restrictions and conditions imposed by its organizational
documents or any related joint venture, shareholder or similar agreements, or (6) contained in any financing
documentation governing Indebtedness permitted to be incurred hereunder that are incurred by a Subsidiary that is not
required to be a Guarantor, so long as such restrictions operate only upon the occurrence and during the continuance of an
event of default under the documentation governing such Indebtedness and only impose restrictions on such Subsidiary and its
Subsidiaries.

 

6.15          Holding
Company Status. Notwithstanding anything contained in this Agreement or the other Loan Documents to the contrary, Holdings
shall not (a) engage in any activities other than acting as a holding company and transactions incidental thereto, maintaining
its corporate existence, and entering into and performing its obligations under the Loan Documents, the Revolving Loan Documents
and the Related Agreements, (b) hold any assets other than (i) all of the issued and outstanding Equity Interests of
the Borrower Agent, (ii) contractual rights pursuant to the Loan Documents, the Revolving Loan Documents and Related Agreements,
and (iii) cash and cash equivalents in an amount not to exceed the amount required for the purpose of promptly paying general
operating expenses (including without limitation audit fees, director and officer compensation and indemnification obligations
pursuant to its Organic Documents), (c) incur any liabilities other than under the Loan Documents, the Revolving Loan Documents,
the Related Agreements, Permitted Contingent Obligations and obligations incurred in the Ordinary Course of Business related to
its existence, including taxes, franchise or other entity existence taxes and fees payable to the State of Delaware, payment of
reasonable and customary director fees and expenses, and indemnification obligations pursuant to its Organic Documents, (d) merge,
amalgamate or consolidate with any other Person, (e) sell or otherwise transfer any of its assets, (f) permit or suffer
to exist any Lien on any of its assets other than Permitted Liens, or (g) accept or receive any Collateral (other than distributions
that are expressly permitted by Section 6.10).

 

6.16          Use of Proceeds.
No Loan Party shall, nor shall it permit any of its Subsidiaries to, use the proceeds of the Term Loans other than for lawful purposes
and in accordance with Sections 4.10 and 4.12.

 

6.17          Tax Consolidation.
No Loan Party shall, nor shall it permit any of its Subsidiaries to, file or consent to the filing of any consolidated income tax
return with any Person other than Holdings, the Borrowers and their Subsidiaries.

 

6.18          Accounting
Changes. No Loan Party shall, nor shall it permit any of its Subsidiaries to, make any material change in accounting treatment
or reporting practices, except as required by GAAP, or change its fiscal year or any fiscal quarter.

 

6.19          Hedging
Agreements. No Loan Party shall, nor shall it permit any of its Subsidiaries to, enter into any Swap Contract, except to
hedge risks arising in the Ordinary Course of Business and not for speculative purposes.

 

6.20          Plans.
No Loan Party shall, nor shall it permit any of its Subsidiaries to, become party to any Multiemployer Plan or Foreign Plan, other
than any in existence on the Closing Date.

 

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ARTICLE VII

EVENTS OF DEFAULT

 

7.1            Events
of Default. The term “Event of Default” means any of the following events occurring for whatever reason,
whether voluntary or involuntary, effected by operation of law, judgment, order or otherwise:

 

(a)            A
failure to pay when and as due any Obligations (whether at stated maturity, on demand, upon acceleration or otherwise);

 

(b)            Any
representation, warranty or other written statement of a Loan Party made in connection with any Loan Documents or transactions
contemplated thereby is incorrect or misleading in any material respect when given;

 

(c)            A
default in the due performance and observance of any of the covenants or agreements contained in Sections 5.1, 5.2(a),
5.5, 5.6, 5.7, 5.13, 5.14 or 9.23 or Article VI;

 

(d)            A
Loan Party breaches or fails to perform any other covenant contained in any Loan Documents, and such breach or failure is not cured
within thirty (30) days after a Responsible Officer of such Loan Party has knowledge thereof or receives notice thereof from the
Administrative Agent, whichever is sooner; provided, however, that such notice and opportunity to cure shall not
apply if the breach or failure to perform is not capable of being cured within such period or is a willful breach by a Loan Party;

 

(e)            Any
of the following shall occur: (i) a Guarantor repudiates, revokes or attempts to revoke its Guaranty, (ii) a Loan Party
or an Affiliate thereof denies or contests the validity or enforceability of any Loan Documents or Obligations, or the perfection
or priority of any Lien granted to the Administrative Agent for the benefit of the Secured Parties (except as modified by the Intercreditor
Agreement), or (iii) any Loan Document ceases to be in full force or effect for any reason (other than a waiver or release
by the Administrative Agent and Lenders);

 

(f)             Any
breach or default of a Loan Party occurs under (i) any Swap Contract or (ii) any instrument or agreement to which it
is a party or by which it or any of its Properties is bound relating to (x) the Revolving Loan Obligations or (y) any
other Indebtedness (other than the Obligations or the Revolving Loan Obligations), in the case of this clause (y), in excess
of $1,000,000, in either case of clauses (i) or (ii), if the maturity of or any payment with respect to such
Indebtedness may be accelerated or demanded due to such breach;

 

(g)            Any
final judgment or order for the payment of money is entered against a Loan Party in an amount that remains unpaid for more than
ten (10) days and that exceeds, individually or cumulatively with all unsatisfied judgments or orders against all Loan Parties,
$1,000,000 (net of insurance coverage therefor that has not been denied by the insurer), unless a stay of enforcement of such judgment
or order is in effect;

 

(h)            A
loss, theft, damage or destruction occurs with respect to any Term Loan Priority Collateral if the amount not covered by insurance
exceeds $1,000,000;

 

(i)            Any
of the following shall occur: (i) a Loan Party is enjoined, restrained or in any way prevented by any Governmental
Authority from conducting any material part of its business, (ii) a Loan Party suffers the loss, revocation or
termination of any material license, permit, lease or agreement necessary to its business, (iii) there is a cessation of
any material part of an Loan Party’s business for a material period of time, (iv) any material Collateral or
Property of a Loan Party is taken or impaired through condemnation, (v) except as expressly permitted by Section 5.2,
a Loan Party agrees to or commences any liquidation, dissolution or winding up of its affairs, or (vi) a Loan Party is
not Solvent;

 

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(j)             Any
of the following shall occur: (i) an Insolvency Proceeding is commenced by a Loan Party, (ii) a Loan Party makes an offer
of settlement, extension or composition to its unsecured creditors generally, (iii) a Loan Party admits in writing its inability
to pay its obligations generally as they become due, (iv) a trustee is appointed to take possession of any substantial Property
of or to operate any of the business of Loan Party, or (v) an Insolvency Proceeding is commenced against Loan Party and, in
the case of this clause (v), (A) the Loan Party consents to institution of the proceeding, (B) the petition commencing
the proceeding is not timely contested by the Loan Party, (C) the petition is not dismissed within 60 days after filing, or
(D) an order for relief is entered in the proceeding;

 

(k)            Any
of the following shall occur: (i) an ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan that has resulted
or could reasonably be expected to result in liability of a Loan Party or ERISA Affiliate to a Pension Plan, Multiemployer Plan
or PBGC, or that constitutes grounds for appointment of a trustee for or termination by the PBGC of any Pension Plan or Multiemployer
Plan, (ii) a Loan Party or ERISA Affiliate fails to pay when due any installment payment with respect to its withdrawal liability
under Section 4201 of ERISA under a Multiemployer Plan, or (iii) any event similar to the foregoing occurs or exists
with respect to a Foreign Plan;

 

(l)             A
Loan Party or its chairman of the board, president, chief executive officer or chief financial officer is criminally indicted or
convicted for (i) a felony committed in the conduct of the Loan Party’s business, or (ii) violating any state or
federal law (including the Controlled Substances Act, Money Laundering Control Act of 1986 and Illegal Exportation of War Materials
Act) that could lead to forfeiture of any material Property of any Loan Party or any Collateral;

 

(m)           A
Change of Control occurs;

 

(n)            Any
of the following shall occur: (i) the Intercreditor Agreement shall for any reason be revoked or invalidated, or otherwise
cease to be in full force and effect, or any Loan Party or any Affiliate of any Loan Party shall contest in any manner, or assist
any Person party thereto to contest in any manner, the validity or enforceability thereof or deny that it has any further liability
or obligation thereunder, or the Obligations, for any reason shall not have the priority contemplated by this Agreement, the Security
Documents or the Intercreditor Agreement or (ii) the subordination provisions of any agreement or instrument relating to any
Subordinated Indebtedness shall for any reason be revoked or invalidated, or otherwise cease to be in full force and effect, or
any Person party thereto (other than the Administrative Agent or the Lenders) shall contest in any manner the validity or enforceability
thereof or deny that it has any further liability or obligation thereunder, or the Obligations, for any reason shall not have the
priority contemplated by this Agreement or such subordination provisions; or

 

(o)            Any
Loan Document or any material provision of any Loan Document shall at any time and for any reason cease to be valid and
binding on or enforceable against any Loan Party party thereto or any Loan Party shall so state in writing or bring an action
to limit its obligations or liabilities thereunder; or any security interest and Lien on the Collateral purported to be
granted to the Administrative Agent for the benefit of the Secured Parties by any Security Document shall for any reason
(other than as expressly permitted hereunder or pursuant to the terms thereof) cease to be in full force and effect or create
a valid security interest in any material portion of the Collateral or such security interest shall for any reason (other
than the failure of the Administrative Agent to take any action within its control) cease to be a perfected security interest
with the priority stated in the Security Documents, except (in each case) (x) to the extent that any such grant,
perfection or priority is not required pursuant to the terms hereof or the Security Documents and (y) to the extent that
such losses are covered by a lender’s title insurance policy and such insurer has not denied coverage.

 

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7.2            Action
If Event of Default. If an Event of Default described in Section 7.1(j) shall
occur, to the extent permitted by law, the full unpaid principal amount of and interest on the Term Loans and all other
amounts due and owing and Obligations hereunder shall automatically be due and payable without any declaration, notice,
presentment, protest or demand of any kind (all of which are hereby waived). If any Event of Default other than pursuant to Section 7.1(j) shall
occur and be continuing, the Required Lenders, upon written notice to the Borrower Agent (which shall be given by the
Administrative Agent at the request of the Required Lenders), may declare the outstanding principal amount of and interest on
the Term Loans and all other amounts due and owing and Obligations hereunder to be due and payable without other notice to
any Borrower, presentment, protest or demand of any kind (all of which are hereby waived), whereupon the full unpaid amount
of the Term Loans and any and all other Obligations, which shall be so declared due and payable shall bear interest at the
Default Rate and shall be and become immediately due and payable.

 

7.3            Remedies.

 

(a)            Upon
acceleration of the Term Loans, as provided in Section 7.2, the Administrative
Agent shall, at the request of the Required Lenders, exercise on behalf of itself and the Lenders all rights and remedies available
to it and the Lenders under the Loan Documents and/or under applicable law.

 

(b)            The
Administrative Agent, personally or by attorney, shall, at the request of the Required Lenders, proceed to protect and enforce
its rights and the rights of the Lenders by pursuing any available remedy, including a suit or suits in equity or at law, whether
for damages or for the specific performance of any obligation, covenant or agreement contained in this Agreement or in the Notes,
or in aid of the execution of any power herein or therein granted, or for the enforcement of any other appropriate legal or equitable
remedy, as the Administrative Agent shall deem most effectual to collect the payments then due and thereafter to become due on
the Notes or under this Agreement, to enforce performance and observance of any obligation, agreement or covenant of a Borrower
hereunder or under the Notes or to protect and enforce any of the Administrative Agent’s or any Lender’s rights or
duties hereunder.

 

(c)            Upon
acceleration of the Term Loans, as provided in Section 7.2, to the extent permitted
by law, the Administrative Agent shall, if so directed by the Required Lenders, have the right to the appointment of a receiver
for the Collateral of the Loan Parties pledged to secure the Obligations, both to operate and to sell such Collateral, and each
Borrower hereby consents to such right and such appointment and hereby waives, to the fullest extent permitted by applicable law,
any objection each Borrower may have thereto or the right to have a bond or other security posted by the Administrative Agent on
behalf of the Lenders in connection therewith.

 

(d)            No
remedy herein conferred upon or reserved to the Administrative Agent or any Lender is intended to be exclusive of any other
remedy or remedies, and each and every such remedy shall be cumulative, and shall be in addition to every other remedy given
hereunder or under any other Loan Document now or hereafter existing at law, in equity or by statute.

 

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(e)            Each
Lender agrees that it will not take any action, nor institute any actions or proceedings, against a Borrower hereunder or
under any Loan Document, without the prior written consent of the Required Lenders or, as may be provided in this Agreement
or the other Loan Documents, at the direction of the Administrative Agent with the consent of the Required Lenders.

 

ARTICLE VIII

THE ADMINISTRATIVE AGENT

 

8.1            Appointment
and Authorization. Each Lender hereby irrevocably appoints the Administrative Agent as the Administrative Agent of
such Lender and authorizes the Administrative Agent to act on such Lender’s behalf to the extent provided herein or
under any of the other Loan Documents, and to take such other action and exercise such other powers as may be reasonably
incidental thereto. Each Lender hereby agrees that it will require any transferee of any of such Lender’s interests in
its Term Loans to irrevocably appoint and authorize the Administrative Agent as such transferee’s Administrative Agent
in accordance with the terms hereof. Notwithstanding the use of the term “agent,” it is expressly understood and
agreed that the Administrative Agent shall not have any fiduciary responsibilities to any Lender by reason of this Agreement
and that the Administrative Agent is merely acting as the representative of the Lenders with only those duties as are
expressly set forth in this Agreement and the other Loan Documents. In its capacity as the Lenders’ contractual
representative, the Administrative Agent (i) does not hereby assume any fiduciary duties to the Loan Parties, any of the
Lenders or any other Person (and no such fiduciary duties shall be implied) and (ii) is acting as an independent
contractor, the rights and duties of which are limited to those expressly set forth in this Agreement and the other Loan
Documents. The Borrowers, on behalf of the Loan Parties, and each of the Lenders hereby agrees to assert no claim against the
Administrative Agent on any agency theory or any other theory of liability for breach of fiduciary duty, all of which claims
the Borrowers and each Lender hereby waives.

 

8.2            Power.
The Administrative Agent shall have and may exercise such powers under this Agreement and any other Loan Documents as are
specifically delegated to the Administrative Agent by the terms hereof or thereof, together with such powers as are
reasonably incidental thereto. As to any matters not expressly provided for by the Loan Documents (including enforcement or
collection of the Notes), the Administrative Agent shall not be required to exercise any discretion or take any action, but
shall be required to act or to refrain from acting (and shall be fully protected in so acting or refraining from acting) upon
the instructions of the Required Lenders, and such instructions shall be binding upon all Lenders and all holders of the
Notes; provided, however, that the Administrative Agent shall not be required to take any action which exposes
the Administrative Agent to personal liability or which is contrary to any Loan Document or applicable law. The
Administrative Agent shall not have any implied duties or any obligation to take any action under this Agreement or any other
Loan Document except such action as is specifically provided by this Agreement or any other Loan Document to be taken by the
Administrative Agent.

 

8.3            Interest
Holders. The Administrative Agent may treat each Lender, or the Person designated in the last notice filed with the
Administrative Agent, whether under Section 9.3 or 9.9, or otherwise hereunder, as the holder of all of
the interests of such Lender in its Term Loans until written notice of transfer, signed by such Lender (or the Person
designated in the last notice filed with the Administrative Agent) and by the Person designated in such written notice of
transfer, in form and substance satisfactory to the Administrative Agent, shall have been filed with the Administrative
Agent.

 

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8.4            Employment
of Counsel; etc. The Administrative Agent may execute any of its duties under this Agreement or any other Loan
Document, and any instrument, agreement or document executed, issued or delivered pursuant or in connection herewith or
therewith, by or through employees, agents and attorneys-in-fact and shall not be answerable for the default or misconduct of
any such employee, agent or attorney-in-fact selected by it with reasonable care (other than employees, officers and
directors of the Administrative Agent, when acting on behalf of the Administrative Agent). The Administrative Agent shall be
entitled to rely on advice of counsel (including counsel who are the employees of the Administrative Agent) selected by the
Administrative Agent concerning all matters pertaining to the agency hereby created and its duties under any of the Loan
Documents.

 

8.5            Reliance.
The Administrative Agent shall be entitled to rely upon and shall not be under a duty to examine or pass upon the validity,
effectiveness, genuineness of this Agreement, any other Loan Document or any notice, consent, waiver, amendment, certificate,
affidavit, letter, telegram, statement, paper, document or writing furnished pursuant to this Agreement or any other Loan
Document, and the Administrative Agent shall be entitled to assume (absent actual knowledge to the contrary) that the same
are valid, effective and genuine, have been signed or sent by the proper Person(s) and are what they purport to be. The
Administrative Agent shall be entitled to assume that no Default has occurred and is continuing unless it has actual
knowledge, or has been notified in writing by the Borrower Agent, of such fact, or has been notified by a Lender in writing
that such Lender considers that a Default has occurred and is continuing, and such Lender shall specify in detail the nature
thereof in writing. The Administrative Agent shall not be liable hereunder for any action taken or omitted to be taken except
for its own gross negligence or willful misconduct. The Administrative Agent shall provide promptly each Lender with copies
of such documents received from the Borrower Agent pursuant to the terms of this Agreement or any other Loan Document as such
Lender may reasonably request.

 

8.6            General
Immunity. Neither the Administrative Agent nor any of the Administrative Agent’s directors, officers, agents,
attorneys or employees shall be liable or responsible in any manner to any Loan Party, any Lender or any other Person for any
action taken or omitted to be taken by it or them under the Loan Documents or in connection therewith except for any
liability imposed by law for its own willful misconduct or gross negligence. Without limitation on the generality of the
foregoing, the Administrative Agent: (a) shall not be responsible to any Lender for any recitals, statements,
warranties, representations, or failure or delay of performance under the Loan Documents or any agreement or document related
thereto or for the financial condition of the Loan Parties; (b) shall not be responsible for the authenticity, accuracy,
completeness, value, validity, effectiveness, due execution, legality, genuineness, enforceability or sufficiency of any of
the Loan Documents, any provisions thereof or any document contemplated thereby; (c) shall not be responsible for the
validity, genuineness, creation, perfection or priority of any of the Liens created or reaffirmed by any of the Loan
Documents, or the validity, genuineness, enforceability, existence, value or sufficiency of any Collateral or other security;
(d) shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, covenants or
conditions of any of the Loan Documents on the part of the Loan Parties or of any of the terms of any such agreement by any
party thereto and shall have no duty to inspect the property (including the books and records) of the Loan Parties;
(e) shall incur no liability under or in respect of any of the Loan Documents or any other document or Collateral by
acting upon any notice, consent, certificate or other instrument or writing (which may be by telegram, cable or telex)
furnished pursuant to this Agreement or any other Loan Document; (f) shall incur no liability to the Loan Parties or any
other Person as a consequence of any failure or delay in performance by, or any breach by, any Lender or Lenders of any of
its or their obligations under this Agreement; and (g) may consult with legal counsel (including counsel for the
Borrowers), independent public accountants and other experts selected by the Administrative Agent.

 

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8.7            Credit
Analysis. Each Lender has made, and shall continue to make, its own independent investigation or evaluation of the
operations, business, property and condition, financial and otherwise, of the Loan Parties in connection with the making of
its commitments hereunder and has made, and will continue to make, its own independent appraisal of the creditworthiness of
the Loan Parties. Without limiting the generality of the foregoing, each Lender acknowledges that prior to the execution of
this Agreement, it had this Agreement and all other Loan Documents and such other documents or matters as it deemed
appropriate relating thereto reviewed by its own legal counsel as it deemed appropriate, and it is satisfied with the form
and substance of this Agreement and all other Loan Documents. Each Lender agrees and acknowledges that neither the
Administrative Agent nor any of its directors, officers, attorneys or employees makes any representation or warranties about
the creditworthiness of the Loan Parties or with respect to the due execution, legality, validity, genuineness,
effectiveness, sufficiency or enforceability of this Agreement or any other Loan Documents, or the validity, genuineness,
execution, perfection or priority of Liens created or reaffirmed by any of the Loan Documents, or the validity, genuineness,
enforceability, existence, value or sufficiency of any Collateral or other security. Except as explicitly provided herein,
neither the Administrative Agent nor any Lender has any duty or responsibility, either initially or on a continuing basis, to
provide any other Lender with any credit or other information with respect to such operations, business, property, condition
or creditworthiness, whether such information comes into its possession on or before a Default or an Event of Default or at
any time thereafter.

 

8.8            Administrative
Agent and Affiliates. With respect to the Term Loans made by it and the Notes issued to it, the Administrative Agent,
in its individual capacity, shall have the same rights and powers under the Loan Documents as any other Lender and may
exercise the same as though it were not an Administrative Agent; and the term “Lender” or “Lenders”
shall, unless otherwise expressly indicated, include the Administrative Agent in its individual capacity. The Administrative
Agent, in its individual capacity, and its Affiliates may accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business with, the Loan Parties, and any Person who may do business with
or own securities of the Loan Parties, all as if it were not an Administrative Agent and without any duty to account therefor
to the Lenders.

 

8.9            Indemnification.
The Lenders jointly and severally agree to indemnify and hold harmless the Administrative Agent and its officers, directors,
employees and agents (to the extent not reimbursed by the Borrowers), ratably according to their respective Commitments and
Term Loans, from and against any and all claims, liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which may be imposed on, incurred by, or asserted
against the Administrative Agent or any of its officers, directors, employees or agents, in any way relating to or arising
out of any investigation, litigation or proceeding concerning or relating to the transaction contemplated by this Agreement
or any of the other Loan Documents, or any of them, or any action taken or omitted by the Administrative Agent or any of its
officers, directors, employees or agents, under any of the Loan Documents; provided, however, that no Lender
shall be liable for any portion of such claims, liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting from the gross negligence or willful misconduct of the Administrative Agent
or any of its officers, directors, employees or agents. Without limitation of the foregoing, each Lender agrees to reimburse
the Administrative Agent promptly upon demand for such Lender’s proportionate share of any out-of-pocket expenses
(including counsel fees) incurred by the Administrative Agent or its officers, directors, employees or agents in connection
with the preparation, execution, administration, or enforcement of, or legal advice in respect of rights or responsibilities
under any of, the Loan Documents, to the extent that the Administrative Agent is not reimbursed for such expenses by the
Borrowers.

 

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8.10
         Security Documents. The Administrative Agent, as collateral
agent hereunder and under the Security Documents, is hereby authorized to act on behalf of the Secured Parties, in its own
capacity and through other agents and sub-agents appointed by it in good faith, under the Security Documents, provided that
the Administrative Agent shall not agree to the release of any Collateral, or any property encumbered by any mortgage, pledge
or security interests except in compliance with Section 8.11. In connection with its role as secured party with
respect to the Collateral hereunder, the Administrative Agent shall act as collateral agent, for itself and for the ratable
benefit of the Lenders, and such role as Administrative Agent shall be disclosed on all appropriate accounts, filings,
mortgages, and other Collateral documentation.

 

8.11         Collateral
Matters. The Administrative Agent is authorized on behalf of all the Lenders without the necessity of any notice to or
further consent from the Lenders, from time to time to take any action with respect to the Security Documents or any Collateral
thereunder which may be necessary to perfect and maintain perfected the security interest in and Liens upon the Collateral granted
pursuant to the Security Documents. The Lenders irrevocably authorize the Administrative Agent, at its option and in its discretion,
to release any Lien granted to or held by the Administrative Agent upon any Collateral (i) upon payment in full of all Term
Loans and all other Obligations of the Loan Parties known to the Administrative Agent and payable under this Agreement or any other
Loan Document; (ii) constituting Property sold or to be sold or disposed of to a Person that is not a Loan Party as part of
or in connection with any Asset Disposition permitted hereunder; (iii) consisting of an instrument evidencing Indebtedness
or other debt instrument, if the Indebtedness evidenced thereby has been paid in full; or (iv) if approved, authorized or
ratified in writing by all the Lenders. Upon request by the Administrative Agent at any time, the Lenders will confirm in writing
the Administrative Agent’s authority to release particular types or items of Collateral pursuant to this Section 8.11,
provided that the absence of any such confirmation for whatever reason shall not affect the Administrative Agent’s
rights under this Section 8.11. In the event that any landlord in favor of which a Loan Party has granted a Permitted
Lien on Excluded Assets requests an acknowledgement that the Collateral does not include any Excluded Assets secured by such Permitted
Lien (a “Permitted Lien Acknowledgement”), the Administrative Agent shall deliver a Permitted Lien Acknowledgement
to such landlord, on terms and conditions, and subject to documentation reasonably acceptable to the Administrative Agent and,
if required by such landlord, shall amend any UCC-1 financing statements filed against a Loan Party in favor of the Administrative
Agent to exclude the specific Excluded Assets that are the subject of such Permitted Lien Acknowledgement.

 

8.12          Action by the Administrative Agent.

 

(a)            The
Administrative Agent shall be entitled to use its discretion with respect to exercising or refraining from exercising any rights
with which it may be vested and with respect to taking or refraining from taking any action or actions which it may be able to
take under or in respect of, this Agreement, unless the Administrative Agent shall have been instructed by the Required Lenders
to exercise or refrain from exercising such rights or to take or refrain from taking such action; provided that the Administrative
Agent shall not exercise any rights under Section 7.3 of this Agreement except upon the request of the Required Lenders
or of all the Lenders, where expressly required by this Agreement. The Administrative Agent shall incur no liability under or in
respect of this Agreement with respect to anything which it may do or refrain from doing in the exercise of its judgment or which
may seem to it to be necessary or desirable in the circumstances, except for its gross negligence or willful misconduct as determined
by a final, non-appealable order of a court having jurisdiction over the subject matter.

 

(b)            The
Administrative Agent shall not be liable to the Lenders or to any Lender in acting or refraining from acting under this
Agreement or any other Loan Document in accordance with the instructions of the Required Lenders or of all the Lenders, where
expressly required by this Agreement, and any action taken or failure to act pursuant to such instructions shall be binding
on all Lenders.

 

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(c)            Notice
of Default or Event of Default. In the event that the Administrative Agent or any Lender shall acquire actual knowledge,
or shall have been notified in writing, of any Default (other than through a notice by one party hereto to all other
parties), such Lender shall promptly notify the Administrative Agent and the Administrative Agent shall promptly notify the
Lenders, and the Administrative Agent shall take such action and assert such rights under this Agreement and the other Loan
Documents as the Required Lenders (or all the Lenders, where expressly required by this Agreement) shall request in writing,
and the Administrative Agent shall not be subject to any liability by reason of its acting pursuant to any such request. If
the Required Lenders shall fail to request the Administrative Agent to take action or to assert rights under this Agreement
in respect of any Default within ten (10) days after their receipt of the notice of any Default from the Administrative
Agent or any Lender, or shall request inconsistent action with respect to such Default, the Administrative Agent may, but
shall not be required to, take such action and assert such rights as it deems in its discretion to be advisable for the
protection of the Lenders, except that, if the Required Lenders have instructed the Administrative Agent not to take such
action or assert such right, in no event shall the Administrative Agent act contrary to such instructions.

 

8.13          Successor
Administrative Agent. The Administrative Agent may resign at any time as Administrative Agent under the Loan Documents
by giving thirty (30) days’ prior written notice thereof to the Lenders and the Borrower Agent. Upon any such resignation,
the Required Lenders shall, with (so long as no Event of Default exists) the consent of the Borrower Agent (which shall not be
unreasonably withheld or delayed), have the right to appoint a successor Administrative Agent hereunder that is organized under
the laws of the United States of America or a political subdivision thereof. If no such successor shall have been so appointed
by the Required Lenders and shall have accepted such appointment within thirty (30) days after the retiring Administrative Agent
gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “Resignation Effective
Date”), then the retiring Administrative Agent may (but shall not be obligated to), on behalf of the Lenders, with (so
long as no Event of Default exists) the consent of the Borrower Agent (which shall not be unreasonably withheld or delayed), appoint
a successor Administrative Agent, which shall be a commercial bank organized under the laws of the United States or of any state
thereof and having a combined capital and surplus of at least $250,000,000. Whether or not a successor has been appointed, such
resignation shall become effective in accordance with such notice on the Resignation Effective Date. Upon the acceptance of any
appointment as Administrative Agent under the Loan Documents by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations under the Loan Documents. After
any retiring Administrative Agent’s resignation as Administrative Agent under the Loan Documents, the provisions of this
Article VIII shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative
Agent under the Loan Documents.

 

8.14         Legal
Representation of Administrative Agent. In connection with the negotiation, preparation and execution of this Agreement
and the other Loan Documents, and in connection with future legal representation relating to loan administration, amendments,
modifications, waivers or enforcement of remedies in connection herewith, Greenberg Traurig LLP has represented only and shall
represent only Brightwood Loan Services LLC, in its capacity as Administrative Agent. Each Borrower and each other Lender hereby
acknowledges that Greenberg Traurig LLP does not represent it in connection with any such matters.

 

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ARTICLE IX

MISCELLANEOUS

 

9.1            Waivers,
Amendments; etc. The provisions of this Agreement, including the closing conditions set forth herein, may from time
to time be amended, modified or waived, if such amendment, modification or waiver is in writing and consented to by the
Borrower Agent and the Required Lenders; provided, that no amendment, waiver or consent shall: (a) increase the
Commitment of any Lender or subject a Lender to any additional obligations, without the written consent of such Lender,
(b) reduce the principal of, or interest on, the Notes or any fees or other amounts payable to any Lender hereunder
without the written consent of such Lender, (c) postpone any date fixed for any payment of principal of, or interest on,
the Notes or any fees or other amounts payable to any Lender hereunder without the written consent of such Lender,
(d) change the number of Lenders which shall be required for the Lenders or any of them to take any action hereunder,
unless in writing and signed by all the Lenders, (e) discharge any Borrower from its obligations under the Loan
Documents, unless in writing and signed by all the Lenders, (f) amend Section 2.8 or this Section 9.1,
unless in writing and signed by all Lenders or (g) except as specifically permitted hereby or thereby, release or impair
the security interest in any of the Collateral granted to the Administrative Agent, for the benefit of the Secured Parties,
under the Security Documents or discharge any Guarantor, unless in writing and signed by all the Lenders; provided, further,
that no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the
Lenders required above to take such action, affect the rights or duties of the Administrative Agent under this Agreement or
any Note.

 

No failure or delay
on the part of the Administrative Agent, any Lender or the holder of any Note in exercising any power or right under this Agreement
or any Note shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right preclude any
other or further exercise thereof or the exercise of any other power or right. No notice to or demand on any Borrower in any case
shall entitle it to any notice or demand in similar or other circumstances.

 

Notwithstanding anything
to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder
(and any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected
with the consent of the applicable Lenders other than Defaulting Lenders), except that (x) the Commitment of any Defaulting
Lender may not be increased or extended without the consent of such Lender and (y) any waiver, amendment or modification requiring
the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender disproportionately adversely
relative to other affected Lenders shall require the consent of such Defaulting Lender.

 

9.2            Payment
Dates. Except as expressly provided in this Agreement, whenever any payment to be made hereunder by or to the Lenders
or to the holder of any Note shall otherwise be due on a day which is not a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall be included in computing the fees or interest payable on such
next succeeding Business Day.

 

9.3            Notices.
All communications and notices provided under this Agreement shall be in writing by in writing (including email or facsimile
transmission), telecopy or personal delivery and if to a Loan Party addressed or delivered to such Loan Party at its address
shown on the signature page hereof or if to the Administrative Agent delivered to it at the address shown on Schedule
9.3 attached hereto, or to any party at such other address as may be designated by such party in a notice to the
other parties. Any notice shall be deemed given when transmitted by email, telecopier or, when personally delivered, if
mailed properly addressed, shall be deemed given upon the third Business Day after the placing thereof in the United States
mail, postage prepaid.

 

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9.4            Costs
and Expenses. The Loan Parties, joint and severally, agree to pay, or reimburse, the Administrative Agent for all
expenses reasonably incurred for the preparation of this Agreement, including exhibits, and the Loan Documents and any
amendments hereto or thereto or consents or waivers hereunder or thereunder as may from time to time hereafter be required
thereby or by the transactions contemplated hereby, including, but not limited to, the fees and out-of-pocket expenses of the
Administrative Agent, charges and disbursements of special counsel to the Administrative Agent from time to time incurred in
connection with the preparation and execution of this Agreement and any document relevant to this Agreement, including the
Loan Documents, any amendments hereto or thereto, or consents or waivers hereunder or thereunder, and the consideration of
legal questions relevant hereto and thereto. The Loan Parties, joint and severally, agree to pay, or reimburse, the
Administrative Agent and each Lender upon demand for all costs and expenses (including attorneys’, auditors’ and
accountants’ fees and expenses) reasonably incurred and arising out of the transactions contemplated by this Agreement
and the Loan Documents, in connection with any work-out or restructuring of the transactions contemplated hereby and by the
Loan Documents and any collection or enforcement of the obligations of any Loan Party hereunder or thereunder, whether or not
suit is commenced, including attorneys’ fees and legal expenses (limited to one (1) primary counsel for the
Administrative Agent and, if deemed appropriate by the Administrative Agent, one (1) counsel in each relevant
jurisdiction and any special counsel (except in the case of actual or perceived conflict, in which case one
(1) additional counsel for each Lender similarly situated in respect of such conflict)) in connection with any appeal of
a lower court’s order or judgment. The obligations of the Loan Parties under this Section 9.4 shall survive
any termination of this Agreement.

 

9.5            Indemnification.
In consideration of the execution and delivery of this Agreement by the Administrative Agent and the Lenders, the Loan
Parties, joint and severally, agree to indemnify and hold harmless the Administrative Agent and each Lender and their
respective Affiliates, officers, directors, employees, shareholders, agents, successors and assigns (the
 “Indemnified Parties”) from and against any and all losses, claims, damages, liabilities and expenses
(other than the expenses to be paid or reimbursed pursuant to Section 9.4 above), joint or several, to which any
such Indemnified Party may become subject arising out of or in connection with this Agreement and the other transactions
contemplated hereby, the Term Loans and the use of proceeds thereof in connection with any claim, litigation, investigation
or proceeding (any of the foregoing, a “Proceeding”) relating to any of the foregoing, regardless of
whether any such Indemnified Party is a party hereto or whether a Proceeding is brought by a third party or by you any Loan
Party or Affiliate of a Loan Party, and to reimburse each such Indemnified Party within ten (10) days of receipt of an
invoice for any reasonable legal or other out-of-pocket expenses incurred in connection with investigating or defending any
of the foregoing; it being understood and agreed that no Loan Party shall be required to reimburse legal fees or expenses of
more than one counsel to all Indemnified Parties, taken as a whole and in the case of a conflict of interest where such
Indemnified Parties affected by such conflict inform the Borrower Agent of such actual or potential conflict as determined in
their sole discretion, one additional counsel to each group of affected Indemnified Parties similarly situated taken as a
whole (and, if reasonably necessary as determined by the Administrative Agent, a single local counsel for all Indemnified
Parties taken as a whole in each relevant jurisdiction and, in the case of a conflict of interest where such Indemnified
Parties affected by such conflict inform the Borrower Agent of such actual or potential conflict as determined in their sole
discretion, one additional counsel in each relevant jurisdiction to each group of affected Indemnified Parties similarly
situated taken as a whole); provided that the foregoing indemnity will not, as to any Indemnified Party, apply to
losses, claims, damages, liabilities or related expenses to the extent (x) they have been determined in a final judgment
of a court of competent jurisdiction to have resulted from the willful misconduct, bad faith or gross negligence of such
Indemnified Party or any Related Indemnified Party (as defined below) of such Indemnified Party, (y) they have been
determined in a final judgment of a court of competent jurisdiction to have resulted from a material breach of the material
obligations of such Indemnified Party or any of its Related Indemnified Parties under this Agreement or any of the Loan
Documents at a time when no Loan Party has breached its obligations hereunder in any material respect, or (z) they
relate to any dispute solely among Indemnified Parties at a time when no Loan Party has breached its obligations hereunder or
any other Loan Document in any material respect (other than any claims against the Administrative Agent in its capacity or in
fulfilling its role as Administrative Agent, but not any other Person or entity party to any such Proceeding).

 

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Notwithstanding any
other provision of this Agreement or any Loan Document, (i) no Indemnified Party or Related Indemnified Party shall be liable
for any damages arising from the use by others of information or other materials obtained through electronic, telecommunications
or other information transmission systems, except to the extent such damages have been determined in a final judgment of a court
of competent jurisdiction to have resulted from the willful misconduct, bad faith or gross negligence of any Indemnified Party
and (ii) none of the Loan Parties, any of their Affiliates or any Indemnified Party or Related Indemnified Party shall be
liable for any indirect, special, punitive or consequential damages incurred in connection with this Agreement or the transactions
contemplated herein (provided that this provision shall not limit the Loan Parties’ indemnification obligations set
forth above). For purposes hereof, a “Related Indemnified Party” of an Indemnified Party means (1) any
controlling person or controlled affiliate of such Indemnified Party, (2) the respective directors, trustees, officers, or
employees of such Indemnified Party or any of its controlling persons or controlled Affiliates and (3) the respective agents
or advisors of such Indemnified Party or any of its controlling persons or controlled Affiliates, in the case of this clause
(3), acting at the instructions of such Indemnified Party, controlling person or such controlled Affiliate; provided
that each reference to a controlled Affiliate or controlling person in this paragraph pertains to a controlled Affiliate or controlling
person involved in the negotiation of this Agreement and the other Loan Documents.

 

No Loan Party shall
be liable for any settlement of any Proceedings effected without the Borrower Agent’s consent (which consent shall not be
unreasonably conditioned, withheld or delayed), but if settled with the Borrower Agent’s written consent or if there is a
final judgment for the plaintiff in any such Proceedings, the Loan Parties, jointly and severally, agree to indemnify and hold
harmless each Indemnified Party from and against any and all losses, claims, damages, liabilities and expenses by reason of such
settlement or judgment in accordance with this Section 9.5. No Loan Party shall, without the prior written consent
of an Indemnified Party, effect any settlement or consent to the entry of any judgment of any pending or threatened Proceedings
in respect of which indemnity could have been sought hereunder by such Indemnified Party, unless (i) such settlement includes
an unconditional release of such Indemnified Party in form and substance reasonably satisfactory to such Indemnified Party from
all liability on claims that are the subject matter of such Proceedings, and (ii) does not include any statement as to or
any admission of fault, culpability or a failure to act by or on behalf of such Indemnified Party.

 

The provisions of this
Section 9.5 shall survive termination of this Agreement and payment in full of the Notes. This Section 9.5
shall not apply with respect to Taxes, other than Taxes that represent losses, claims, damages, etc. arising from any non-Tax
claim.

 

9.6            Severability.
Any provision of this Agreement, the Notes or any other Loan Document

 

executed pursuant hereto which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions of this Agreement, the Notes or any other Loan Document or affecting the validity
or enforceability of such provision in any other jurisdiction.

 

9.7            Headings.
The various headings of this Agreement are inserted for convenience only and shall not affect the meaning or interpretation
of this Agreement or any provisions hereof.

 

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9.8            Governing
Law. This Agreement and the Notes shall each be deemed to be a contract made under, governed by and interpreted
pursuant to the internal laws (and not the law of conflicts) of the State of New York.

 

9.9            Successors
and Assigns.

 

(a)            This
Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns
except that: (i) other than as set forth in the Assumption Agreement, a Loan Party may not assign or transfer its rights hereunder
without the prior written consent of all of the Lenders and the Administrative Agent, and (ii) any assignment by a Lender
must be made in compliance with subsection (b) below and any participation by a Lender must be made in compliance with
subsection (c) below. Notwithstanding clause (ii) of this subsection (a), any Lender may at any
time, without the consent any Borrower or the Administrative Agent, assign all or any portion of its rights under this Agreement
and its Notes to a Federal Reserve Bank. Except to the extent otherwise required by its context, the word “Lender”
where used in this Agreement means and includes any such assignee and such assignee shall be bound by and have the benefits of
this Agreement the same as if such holder had been a signatory hereto.

 

(b)            Any
Lender may, in the ordinary course of its business and in accordance with applicable law, at any time assign to one or more
banks or other entities that are Eligible Assignees all or a portion of its Commitments, Term Loans, and its rights and
obligations under this Agreement in respect thereof in accordance with the provisions of this subsection (b). Each
assignment shall be of a constant, and not a varying, ratable percentage of the assigning Lender’s rights and
obligations under this Agreement and each Eligible Assignee shall assume a pro rata share of the assigning Lender’s
obligations determined by the percentage of the Commitments and Term Loans assigned for the period from the effective date of
the assignment through the Maturity Date. Such assignment shall be substantially in the form of the Assignment and Assumption
Agreement attached as Exhibit D hereto (the “Assignment and Assumption Agreement”) and
shall not be permitted hereunder unless (i) such assignment is for all of such Lender’s Commitment and Term Loans
and the rights and obligations under this Agreement related thereto, (ii) the amount of the Commitment and Term Loans
assigned by the assigning Lender pursuant to each assignment shall be at least $1,000,000, or (iii) such assignment is
to another Lender or an Affiliate of a Lender, in which case no minimum amount shall apply. The consent of the Administrative
Agent and, provided no Default or Event of Default then exists, the Borrower Agent (which consents shall not be unreasonably
withheld or delayed) shall be required prior to an assignment becoming effective with respect to a transferee which is not a
Lender, an Affiliate of a Lender, or an Approved Fund. The Borrower Agent’s consent shall be deemed to have been given
unless the Borrower Agent objects within ten (10) Business Days after receipt of notice of such assignment. Upon
(i) delivery to the Administrative Agent of an executed Assignment and Assumption Agreement, together with any required
consents and (ii) payment of a $3,500 fee to the Administrative Agent by either the assigning Lender or the assignee
Lender for processing such assignment, such assignment shall become effective on the effective date specified in such
Assignment and Assumption Agreement; provided, that (a) if an assignment by a Lender is made to an Affiliate or an
Approved Fund of such assigning Lender, then no assignment fee shall be due in connection with such assignment and
(b) if an assignment by a Lender is made to an assignee that is not an Affiliate or Approved Fund of such assignor
Lender, and concurrently to one or more Affiliates or Approved Funds of such assignee, then only one assignment fee of $3,500
shall be due in connection with such assignment (unless waived or reduced by the Administrative Agent). On and after the
effective date of such assignment, such transferee, if not already a Lender, shall for all purposes be a Lender party to this
Agreement and any other Loan Documents executed by the Lenders and shall have all the rights and obligations of a Lender
under the Loan Documents, to the same extent as if it were an original party hereto, and no further consent or action by the
Borrowers, the Lenders or the Administrative Agent shall be required to release the transferor Lender with respect to the
percentage of the Commitment and Term Loans assigned to such transferee Lender. To the extent requested by the applicable
Lenders, upon the consummation of any assignment pursuant to this Section 9.9,
the Administrative Agent and the Borrowers shall make appropriate arrangements so that replacement Notes are issued to such
transferor Lender and new Notes or, as appropriate, replacement Notes, are issued to such transferee Lender, in each case in
principal amounts reflecting their Commitment and Term Loans, as adjusted pursuant to such assignment.

 

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(c)            Each
Lender may, without the consent of any Borrower, sell participations to one or more banks or other entities that are Eligible Assignees
in all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment or the Term
Loans owing to it hereunder); provided, however,
that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations, (iii) the participating banks or other entities
shall be entitled to the benefit of, and obligations under, Section 10.1 and of
the cost protection provisions contained in Section 10.4, as well as Sections
9.19 and 10.6 to the extent of the Lender selling such participation and
the Borrowers’ aggregate obligations with respect to Section 10.1 and Section 10.4
shall not be increased by reason of such participation, provided that such participant shall not be entitled to the benefits of
Sections 10.1 and 10.4 unless such participant
complies with Section 10.1(e) as (and to the extent) applicable, as if such
participant were a Lender (it being understood that the documentation required under Section 10.1(e) shall
be delivered to the participating Lender) (iv) the Borrowers, the Administrative Agent and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement,
and such Lender shall retain the sole right (and shall not limit its rights) to enforce the obligations of the Borrowers relating
to the Term Loans and to approve any amendment, modification or waiver of any provision of this Agreement (other than amendments,
modifications or waivers with respect to any fees payable hereunder (to the extent such participants are entitled to such fees)
or the amount of principal of or the rate at which interest is payable on the Term Loans, or the dates fixed for payments of principal
of or interest on the Term Loans). Each Lender that sells a participation shall, acting solely for this purpose as an agent of
the Borrowers, maintain a register on which it enters the name and address of each participant and the principal amounts (and stated
interest) of each participant’s interest in the loans or other obligations under the Loan Documents (the “Participant
Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant
Register to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, or other
obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in
the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded
in the Participant Register as the owner of such participation for all purposes of this Agreement.

 

(d)            The
Administrative Agent shall maintain a copy of each Assignment and Assumption Agreement delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of, and the principal amount of the Term Loans
owing to, each Lender pursuant to the terms hereof from time to time (the “Register”).
The entries in the Register shall be conclusive, absent manifest error, and the Borrowers, the Administrative Agent and the
Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement and the other Loan Documents, notwithstanding notice to the contrary. It is the intent of the
parties that the Obligations shall be treated as issued in registered form under Section 5f. 103-1(c) of the United
States Treasury Regulations. Upon the Administrative Agent’s receipt of a duly completed Assignment and Assumption
Agreement executed by an assigning Lender, an assignee Lender that is an Eligible Assignee and, to the extent required
hereunder, the Borrowers, such Eligible Assignee’s completed Administrative Questionnaire (unless the assignee is
already a Lender), the fee referred to in Section 9.9(b) above, and any
written consent to such assignment required by such subsection, the Administrative Agent shall accept such Assignment and
Assumption Agreement and record the information contained therein in the Register. No assignment shall be effected for
purposes of this Agreement unless it has been recorded in the Register as provided in this subsection.

 

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(e)            Notwithstanding
anything to the contrary contained in this Section 9.9, a Lender that is a fund
that invests in bank loans may pledge all or a portion of its rights in connection with this Agreement to the trustee or other
agent for holders of obligations owed, or securities issued, by such fund as security for such obligations or securities, provided
that any foreclosure or other exercise of remedies by such trustee shall be subject, in all respects, to the provisions of this
Section 9.9 regarding assignments. No pledge described in the immediately preceding
sentence shall release any such Lender from its obligations hereunder.

 

(f)             Except
as specifically set forth in this Section 9.9, nothing in this Agreement, expressed
or implied, is intended to or shall confer on any Person other than the respective parties hereto and thereto and their successors
and assignees permitted hereunder and thereunder any benefit or any legal or equitable right, remedy or other claim under this
Agreement or any Notes.

 

(g)            The
provisions of this Section 9.9 shall not apply to any purchase of participations
among the Lenders pursuant to Section 2.5.

 

(h)            In
connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective
unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional
payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be
outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding,
with the consent of the Borrower Agent and the Administrative Agent, the applicable pro rata share of Loans previously requested
but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to
(x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent or any
Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata share of all Term
Loans in accordance with its respective Commitment. Notwithstanding the foregoing, in the event that any assignment of rights and
obligations of any Defaulting Lender hereunder shall become effective under applicable law without compliance with the provisions
of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement
until such compliance occurs.

 

9.10          Execution
in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute
one and the same agreement.

 

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9.11          Several
Liability. The Obligations of the Administrative Agent and each of the Lenders hereunder are several, not joint.

 

9.12          Financial
Information. Each Loan Party assumes responsibility for keeping itself informed of its own financial condition and the
financial condition of any and all endorsers and/or other guarantors of all or any part of the Obligations, and of all other circumstances
bearing upon the risk of nonpayment of the Obligations, or any part thereof, that diligent inquiry would reveal, and the Loan Parties
agree that the Administrative Agent and the Lenders shall have no duty to advise the Loan Parties of information known to them
regarding such condition or any such circumstances.

 

9.13          Entire Agreement.
Except as otherwise expressly provided herein, this Agreement and the other documents described or contemplated herein embody the
entire agreement and understanding among the parties hereto and thereto and supersede all prior agreements and understandings relating
to the subject matter hereof and thereof.

 

9.14          Other Relationships.
No relationship created hereunder or under any other Loan Document shall in any way affect the ability of the Administrative Agent
or its Affiliates and each Lender or their respective Affiliates to enter into or maintain business relationships with the Loan
Parties beyond the relationships specifically contemplated by this Agreement and the other Loan Documents.

 

9.15         Consent
to Jurisdiction. EACH LOAN PARTY HEREBY IRREVOCABLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION
OF THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK CITY AND OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK,
AND ANY APPELLATE COURT FROM ANY THEREOF, OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE NOTES
OR ANY OTHER LOAN DOCUMENT AND HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT.
EACH LOAN PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING. EACH PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF COPIES OF THE SUMMONS
AND COMPLAINT AND ANY OTHER PROCESS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING BY UNITED STATES CERTIFIED
MAIL, RETURN RECEIPT REQUESTED, OF COPIES OF SUCH PROCESS TO SUCH LOAN PARTY’S ADDRESS REFERENCED IN SECTION 9.3.
EACH PARTY AGREES THAT A JUDGMENT, FINAL BY APPEAL OR EXPIRATION OF TIME TO APPEAL WITHOUT AN APPEAL BEING TAKEN, IN ANY SUCH
ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER PROVIDED BY LAW. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF ANY PARTY TO SERVE LEGAL PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO BRING ANY ACTION OR PROCEEDING AGAINST SUCH LOAN
PARTY OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTION.

 

9.16          Waiver of
Jury Trial. EACH LOAN PARTY, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY WAIVE ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY NOTE, OR ANY OTHER INSTRUMENT OR
DOCUMENT DELIVERED HEREUNDER OR THEREUNDER.

 

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9.17           USA Patriot
Act. Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on
behalf of any Lender) hereby notifies the Loan Parties that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub.
L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record
information that identifies the Loan Parties, which information includes the name and address of the Loan Parties and other information
that will allow such Lender or the Administrative Agent, as applicable, to identify the Loan Parties in accordance with the Act.
The Loan Parties shall, promptly following a request by the Administrative Agent or any Lender, provide all documentation and other
information that the Administrative Agent or such Lender requests in order to comply with its ongoing obligations under applicable
 “know your customer” and anti-money laundering rules and regulations, including the Act.

 

9.18          Confidentiality.
Each of the Administrative Agent and each Lender agree to maintain the confidentiality of information obtained by it pursuant to
any Loan Document, except that such information may be disclosed (i) with the Borrower Agent’s written consent, (ii) in
any legal, judicial, administrative proceeding or compulsory process or otherwise as required by applicable law or regulations
(in which case such Person agrees to promptly notify the Borrower Agent to the extent practicable and permitted by applicable law);
(iii) upon the request or demand of any Governmental Authority having jurisdiction over the Administrative Agent or such Lender,
or their respective Affiliates (in which case such Person agrees to, except with respect to any audit or examination conducted
by bank accountants, any governmental bank or insurance regulatory authority exercising examination or regulatory authority, or
any regulatory requests made by the National Association of Insurance Commissioners, promptly notify the Borrower Agent to the
extent lawfully permitted to do so); (iv) to officers, directors, trustees, agents, members, partners, equity holders, approved
and managed funds, employees, attorneys, accountants and advisors of the Administrative Agent or any Lender who are informed of
the confidential nature of such information and are or have been advised of their obligation to keep such information confidential
solely on a need-to-know basis in connection with the transactions contemplated by this Agreement; (v) to any Affiliates of
the Administrative Agent or any Lender (provided that any such Affiliate is advised of its obligation to retain such information
as confidential) on a need-to-know basis in connection with the transactions contemplated by this Agreement; (vi) to the extent
any such information becomes publicly available other than by reason of disclosure in breach of this Agreement; and (vii) in
connection with the exercise or enforcement of any right or remedy under any Loan Document.

 

9.19           Replacement
of Lenders. If the Borrower Agent is entitled to replace a Lender pursuant to the provisions of Section 10.6,
or if any Lender is a Defaulting Lender or a Non-Consenting Lender, then the Borrower Agent may, at its sole expense and effort,
upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance
with and subject to the restrictions contained in, and consents required by, Section 9.9), all of its interests, rights
(other than its existing rights to payments pursuant to Sections 10.1 and 10.4 with respect to payments made prior
to such assignment) and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume
such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:

 

(a)            the
Borrower Agent shall have paid to the Administrative Agent the assignment fee (if any) specified in Section 9.9(b);

 

(b)            such
Lender shall have received payment of an amount equal to 100% of the outstanding principal of its Term Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under
Section 10.5) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the
Borrower Agent (in the case of all other amounts);

 

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(c)            in
the case of any such assignment resulting from a claim for compensation under Section 10.4
or payments required to be made pursuant to Section 10.1, such assignment will
result in a reduction in such compensation or payments thereafter;

 

(d)            such
assignment does not conflict with applicable Laws; and

 

(e)            in
the case of an assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented
to the applicable amendment, waiver or consent.

 

A Lender shall not
be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower Agent to require such assignment and delegation cease to apply.

 

9.20           Keepwell.
Each of the Borrowers, any Affiliate of the Borrowers or any Guarantor that is a Qualified ECP Guarantor at the time the Guarantee
or the grant of a Lien under the Loan Documents, in each case, by any Specified Loan Party becomes effective with respect to any
Swap Obligation, hereby jointly and severally, absolutely, unconditionally and irrevocably undertakes to provide such funds or
other support to each Specified Loan Party with respect to such Swap Obligation as may be needed by such Specified Loan Party from
time to time to honor all of its obligations under the Loan Documents in respect of such Swap Obligation (but, in each case, only
up to the maximum amount of such liability that can be hereby incurred without rendering such Qualified ECP Guarantor’s obligations
and undertakings under this Article IX voidable under applicable law relating
to fraudulent conveyance or fraudulent transfer, and not for any greater amount). The obligations and undertakings of each Qualified
ECP Guarantor under this Section 9.20 shall remain in full force and effect until
the Obligations have been indefeasibly paid and performed in full. Each of the Borrowers, each Affiliate of the Borrowers and each
Guarantor intends this Section 9.20 to constitute, and this Section 9.20
shall be deemed to constitute, a guarantee of the obligations of, and a “keepwell, support, or other agreement” for
the benefit of, each Specified Loan Party for all purposes of the Commodity Exchange Act.

 

9.21           Electronic
Execution of Assignments and Certain Other Documents. The words “delivery,” “execute,” “execution,”
 “signed,” “signature,” and words of like import in any Loan Document or any other document executed in
connection herewith shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract
formations on electronic platforms approved by the Administrative Agent, or the keeping of records in electronic form, each of
which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof
or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable Law,
including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records
Act, or any other similar state laws based on the Uniform Electronic Transactions Act; provided that notwithstanding anything contained
herein to the contrary neither the Administrative Agent nor any Lender is under any obligation to agree to accept electronic signatures
in any form or in any format unless expressly agreed to by the Administrative Agent or such Lender pursuant to procedures approved
by it and provided further without limiting the foregoing, upon the request of any party, any electronic signature shall be promptly
followed by such manually executed counterpart.

 

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9.22           INTERCREDITOR AGREEMENT.

 

(a) EACH
LENDER PARTY HERETO (I) UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT IT (AND EACH OF ITS SUCCESSORS AND ASSIGNS) AND EACH
OTHER LENDER (AND EACH OF THEIR SUCCESSORS AND ASSIGNS) SHALL BE BOUND BY THE INTERCREDITOR AGREEMENT, (II) AUTHORIZES
AND DIRECTS THE ADMINISTRATIVE AGENT TO ENTER INTO THE INTERCREDITOR AGREEMENT ON ITS BEHALF, AND (III) AGREES THAT ANY
ACTION TAKEN BY THE ADMINISTRATIVE AGENT PURSUANT TO THE INTERCREDITOR AGREEMENT SHALL BE BINDING UPON SUCH LENDER.

 

(b)            THE
PROVISIONS OF THIS SECTION 9.22 ARE NOT INTENDED

TO SUMMARIZE OR FULLY DESCRIBE THE PROVISIONS OF THE INTERCREDITOR AGREEMENT. REFERENCE MUST BE MADE TO THE INTERCREDITOR AGREEMENT
ITSELF TO UNDERSTAND ALL TERMS AND CONDITIONS THEREOF. EACH LENDER IS RESPONSIBLE FOR MAKING ITS OWN ANALYSIS AND REVIEW OF THE
INTERCREDITOR AGREEMENT AND THE TERMS AND PROVISIONS THEREOF, AND NEITHER THE ADMINISTRATIVE AGENT NOR ANY OF ITS AFFILIATES MAKES
ANY REPRESENTATION TO ANY LENDER AS TO THE SUFFICIENCY OR ADVISABILITY OF THE PROVISIONS CONTAINED IN THE INTERCREDITOR AGREEMENT.
A COPY OF THE INTERCREDITOR AGREEMENT MAY BE OBTAINED FROM THE ADMINISTRATIVE AGENT.

 

(c)            THE
INTERCREDITOR AGREEMENT IS AN AGREEMENT SOLELY AMONGST THE SECURED PARTIES (AS DEFINED IN THE INTERCREDITOR AGREEMENT) AND THEIR
RESPECTIVE AGENTS (INCLUDING THEIR SUCCESSORS AND ASSIGNS) AND IS ACKNOWLEDGED AND AGREED TO BY THE LOAN PARTIES. AS MORE FULLY
PROVIDED THEREIN, THE INTERCREDITOR AGREEMENT CAN ONLY BE AMENDED BY THE PARTIES THERETO IN ACCORDANCE WITH THE PROVISIONS THEREOF.

 

(d)            IN
THE EVENT OF ANY CONFLICT BETWEEN THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND THE INTERCREDITOR AGREEMENT, THE INTERCREDITOR
AGREEMENT SHALL GOVERN.

 

9.23          Assumption
by Holdings and Successor Borrowers. Immediately following the consummation of the Hydrofarm Acquisition, (i) the
Initial Borrower shall cause each of Hydrofarm, WJCO, EHH and SunBlaster to duly execute and deliver to the Administrative Agent
the Assumption Agreement and assume the rights and obligations of the Initial Borrower hereunder as a Borrower, (ii) Holdings
shall duly execute and deliver to the Administrative Agent the Assumption Agreement and become a Guarantor hereunder and under
each other Loan Document applicable to it, and (iii) the Initial Borrower shall cause each of Hydrofarm, WJCO, EHH and SunBlaster
to duly execute and deliver to the Administrative Agent each of the agreements, instruments and certificates listed in Section 3.1(a) to
which Hydrofarm, WJCO, EHH or SunBlaster is, or is contemplated to be, a party. Immediately upon the completion of the actions
set forth in clauses (i), (ii) and (iii) above, (x) Holdings shall be automatically released
from its obligations as a Borrower hereunder and shall instead assume the obligations as a Guarantor hereunder and under the other
Loan Documents and (y) each of Hydrofarm, WJCO, EHH and SunBlaster shall become a Borrower hereunder and under the other Loan
Documents. Upon the reasonable request by the Administrative Agent, the Loan Parties shall take such additional actions and execute
such documents as the Administrative Agent may reasonably request to implement the transactions contemplated by the Assumption
Agreement and reflect the assumption by Hydrofarm, WJCO, EHH and SunBlaster of the obligations of the Initial Borrower contemplated
thereby.

 

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ARTICLE X

TAXES, YIELD PROTECTION AND ILLEGALITY

 

10.1          Taxes.

 

(a)            Payments
Free of Taxes; Obligation to Withhold; Payments on Account of Taxes.

 

(i)            Any
and all payments by or on account of any obligation of any Borrower or Guarantor under any Loan Document shall be made without
deduction or withholding for any Taxes, except as required by applicable Laws. If any applicable Laws (as determined in the good
faith discretion of the applicable withholding agent) require the deduction or withholding of any Tax from any such payment by
the Administrative Agent or a Borrower or Guarantor, then the Administrative Agent or such Borrower or Guarantor shall be entitled
to make such deduction or withholding, upon the basis of the information and documentation to be delivered pursuant to subsection
(e) below.

 

(ii)            If
any Borrower or Guarantor or the Administrative Agent shall be required by the Code to withhold or deduct any Taxes, including
both United States federal backup withholding and withholding taxes, from any payment on account of any obligation of such Borrower
or Guarantor under any Loan Document, then (A) the Administrative Agent shall withhold or make such deductions as are determined
by the Administrative Agent to be required based upon the information and documentation it has received pursuant to subsection
(e) below, (B) the Administrative Agent shall timely pay the full amount withheld or deducted to the relevant Governmental
Authority in accordance with the Code and provide evidence of such payment to the Borrower Agent, and (C) to the extent that
the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the applicable Borrower or Guarantor shall
be increased as necessary so that after any required withholding or the making of all required deductions (including deductions
applicable to additional sums payable under this Section 10.1) the applicable Recipient receives an amount equal to
the sum it would have received had no such withholding or deduction been made.

 

(iii)            If
any Borrower or Guarantor or the Administrative Agent shall be required by any applicable Laws other than the Code to withhold
or deduct any Taxes from any payment on account of any obligation of such Borrower or Guarantor under any Loan Document, then (A) such
Borrower or Guarantor or the Administrative Agent, as required by such Laws, shall withhold or make such deductions as are determined
by it to be required based upon the information and documentation it has received pursuant to subsection (e) below,
(B) such Borrower or Guarantor or the Administrative Agent, to the extent required by such Laws, shall timely pay the full
amount withheld or deducted to the relevant Governmental Authority in accordance with such Laws, and, if paid by the Administrative
Agent, the Administrative Agent shall provide evidence of such payment to the Borrower Agent, and (C) to the extent that the
withholding or deduction is made on account of Indemnified Taxes, the sum payable by the applicable Borrower or Guarantor shall
be increased as necessary so that after any required withholding or the making of all required deductions (including deductions
applicable to additional sums payable under this Section 10.1) the applicable Recipient receives an amount equal to
the sum it would have received had no such withholding or deduction been made.

 

(b)            Payment
of Other Taxes by Borrower and/or Guarantor. Without limiting the provisions of subsection (a) above, each
Borrower and/or Guarantor shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at
the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.

 

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(c)            Tax
Indemnifications.

 

(i)             Each
Borrower and Guarantor shall, and does hereby, jointly and severally indemnify each Recipient, and shall make payment in respect
thereof within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes
imposed or asserted on or attributable to amounts payable under this Section 10.1) payable or paid by such Recipient
or required to be withheld or deducted from a payment to such Recipient, and any penalties, interest and reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Borrower Agent by a Lender
(with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be
conclusive absent manifest error.

 

(ii)            Each
Lender shall, and does hereby, severally indemnify and shall make payment in respect thereof within ten (10) days after demand
therefor, (A) the Administrative Agent against any Indemnified Taxes attributable to such Lender (but only to the extent that
any Borrower or Guarantor has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting
the obligation of each Borrower and/or Guarantor to do so), and (B) the Administrative Agent and the Borrower and/or Guarantor,
as applicable, against any Taxes attributable to such Lender’s failure to comply with the provisions of Section 9.9(c) relating
to the maintenance of a Participant Register, and (C) the Administrative Agent and the Borrower and/or Guarantor, as applicable,
against any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent or a
Borrower or Guarantor in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto,
whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as
to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest
error. Each Lender hereby authorizes the Administrative Agent, Borrowers or Guarantor to set off and apply any and all amounts
at any time owing to such Lender under this Agreement or any other Loan Document or otherwise payable by the Administrative Agent,
Borrower or Guarantor from any other source against any amount due to the Administrative Agent, Borrowers or Guarantor under this
clause (ii).

 

(d)            Evidence
of Payments. As soon as practicable after any payment of Taxes by any Borrower or Guarantor to a Governmental Authority, as
provided in this Section  10.1, the Borrowers shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return reporting such payment or
other evidence of such payment reasonably satisfactory to the Administrative Agent.

 

(e)            Status
of Lenders; Tax Documentation.

 

(i)             Any
Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan
Document shall deliver to the Borrower Agent and the Administrative Agent, at the time or times reasonably requested by the
Borrower Agent or the Administrative Agent, such properly completed and executed documentation reasonably requested by the
Borrower Agent or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate
of withholding. In addition, any Lender, if reasonably requested by the Borrower Agent or the Administrative Agent, shall
deliver such other documentation prescribed by applicable Law or reasonably requested by the Borrower Agent or the
Administrative Agent as will enable the Borrower Agent or the Administrative Agent to determine whether or not such Lender is
subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the
preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set
forth in Section 10.1(e)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in
the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material
unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

 

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(ii)            Without
limiting the generality of the foregoing, in the event that a Borrower is a U.S. Person,

 

(A)            any
Lender that is a U.S. Person shall deliver to the Borrower Agent and the Administrative Agent on or prior to the date on which
such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower
Agent or the Administrative Agent), executed copies of IRS Form W-9 certifying that such Lender is exempt from U.S. federal
backup withholding tax;

 

(B)            any
Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower Agent and the Administrative Agent
(in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes
a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower Agent or the Administrative
Agent), whichever of the following is applicable:

 

(1)            in
the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with
respect to payments of interest under any Loan Document, executed copies of IRS Form W-8BEN-E (or W-8BEN, as applicable) establishing
an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty
and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN-E (or W-8BEN, as
applicable) establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits”
or “other income” article of such tax treaty;

 

(2)            executed
originals of IRS Form W-8ECI;

 

(3)            in
the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the
Code, (x) a certificate to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of
the Code, a “10 percent shareholder” of a Borrower within the meaning of Section 881(c)(3)(B) of the Code,
or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax
Compliance Certificate”) and (y) executed copies of IRS Form W-8BEN-E (or W-8BEN, as applicable); or

 

(4)            to
the extent a Foreign Lender is not the beneficial owner, executed copies of IRS Form W-8IMY, accompanied by IRS
Form W-8ECI, IRS Form W-8BEN-E (or W-8BEN, as applicable), a U.S. Tax Compliance Certificate, IRS
Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the
Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio
interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate satisfactory to the Administrative
Agent on behalf of each such direct and indirect partner;

 

(C)            any
Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower Agent and the Administrative Agent
(in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes
a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower Agent or the Administrative
Agent), executed copies (or originals, as required) of any other form prescribed by applicable Law as a basis for claiming exemption
from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed
by applicable Law to permit the Borrower Agent or the Administrative Agent to determine the withholding or deduction required to
be made;

 

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(D)            if
a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender
were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or
1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower Agent and the Administrative Agent at the time
or times prescribed by law and at such time or times reasonably requested by the Borrower Agent or the Administrative Agent such
documentation prescribed by applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such
additional documentation reasonably requested by the Borrower Agent or the Administrative Agent as may be necessary for the Borrower
Agent and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied
with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for
purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement;
and

 

(E)            the
Administrative Agent shall deliver to the Borrower Agent on or prior to the date on which the Administrative Agent becomes the
Administrative Agent under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower Agent),
executed copies of IRS Form W-9 certifying that the Administrative Agent is a U.S. Person exempt from U.S. federal backup
withholding tax.

 

(iii)          Each
Lender agrees that if any form or certification it previously delivered pursuant to this Section 10.1 expires or becomes
obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower Agent and the
Administrative Agent in writing of its legal inability to do so.

 

(f)            Treatment
of Certain Refunds. Unless required by applicable Laws, at no time shall the Administrative Agent have any obligation to
file for or otherwise pursue on behalf of a Lender, or have any obligation to pay to any Lender, any refund of Taxes withheld
or deducted from funds paid for the account of such Lender. If any Recipient determines, in its sole discretion exercised in
good faith, that it has received a refund (or credit in lieu of a cash refund) of any Taxes (“Refund”) as
to which it has been indemnified by any Borrower or Guarantor or with respect to which any Borrower or Guarantor has paid
additional amounts pursuant to this Section 10.1, it shall pay to such Borrower or Guarantor an amount equal to
such Refund (but only to the extent of indemnity payments made, or additional amounts paid, by such Borrower or Guarantor
under this Section 10.1 with respect to the Taxes giving rise to such Refund), net of all out-of-pocket expenses
(including Taxes) incurred by such Recipient, as the case may be, and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such Refund), provided that each Borrower or Guarantor, upon the request of
the Recipient, agrees to repay the amount paid over to such Borrower or Guarantor (plus any penalties, interest or other
charges imposed by the relevant Governmental Authority) to the Recipient in the event the Recipient is required to repay such
Refund to such Governmental Authority. Notwithstanding anything to the contrary in this subsection, in no event will the
applicable Recipient be required to pay any amount to such Borrower or Guarantor pursuant to this subsection the payment of
which would place the Recipient in a less favorable net after-Tax position than such Recipient would have been in if the Tax
subject to indemnification and giving rise to such Refund had not been deducted, withheld or otherwise imposed and the
indemnification payments or additional amounts with respect to such Tax had never been paid. This subsection shall not be
construed to require any Recipient to make available its tax returns (or any other information relating to its taxes that it
deems confidential) to any Borrower or Guarantor or any other Person.

 

(g)           Survival.
Each party’s obligations under this Section 10.1 shall survive the resignation or replacement of the Administrative
Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction
or discharge of all other Obligations.

 

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10.2          Illegality.
If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its Lending Office to make, maintain or fund Term Loans whose interest is determined by reference to the LIBOR
Rate, or to determine or charge interest rates based upon the LIBOR Rate, or any Governmental Authority has imposed material restrictions
on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice
thereof by such Lender to the Borrower Agent through the Administrative Agent, (a) any obligation of such Lender to make or
continue LIBOR Rate Loans shall be suspended, and (b) if such notice asserts the illegality of such Lender making or maintaining
Base Rate Loans the interest rate on which is determined by reference to the LIBOR Rate component of the Base Rate, the interest
rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative
Agent without reference to the LIBOR Rate component of the Base Rate, in each case until such Lender notifies the Administrative
Agent and the Borrower Agent that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice,
(i) the Borrowers shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all LIBOR Rate Loans of such Lender to Base Rate Loans (the interest rate on which Base Rate Loans of such Lender shall,
if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the LIBOR Rate component
of the Base Rate), either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such
LIBOR Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such LIBOR Rate Loans and (ii) if
such notice asserts the illegality of such Lender determining or charging interest rates based upon the LIBOR Rate, the Administrative
Agent shall during the period of such suspension compute the Base Rate applicable to such Lender without reference to the LIBOR
Rate component thereof until the Administrative Agent is advised in writing by such Lender that it is no longer illegal for such
Lender to determine or charge interest rates based upon the LIBOR Rate. Upon any such prepayment or conversion, the Borrowers shall
also pay accrued interest on the amount so prepaid or converted.

 

10.3          Inability to Determine Rates.

 

(a)           If
in connection with any request for a LIBOR Rate Loan or a continuation thereof, (i) the Administrative Agent determines
that (A) Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable
amount and Interest Period of such LIBOR Rate Loan or (B) adequate and reasonable means do not exist for determining the
LIBOR Rate for any requested Interest Period with respect to a proposed LIBOR Rate Loan or in connection with an existing or
proposed Base Rate Loan (in each case with respect to clause (i), “Impacted Loans”), or
(ii) the Administrative Agent or the Required Lenders determine that for any reason LIBOR Rate for any requested
Interest Period with respect to a proposed LIBOR Rate Loan does not adequately and fairly reflect the cost to such Lenders of
funding such Term Loan, the Administrative Agent will promptly so notify the Borrower Agent and each Lender. Thereafter,
(x) the obligation of the Lenders to make or maintain LIBOR Rate Loans shall be suspended (to the extent of the affected
LIBOR Rate Loans or Interest Periods), and (y) in the event of a determination described in the preceding sentence with
respect to the LIBOR Rate component of the Base Rate, the utilization of the LIBOR Rate component in determining the Base
Rate shall be suspended, in each case until the Administrative Agent (upon the instruction of the Required Lenders) revokes
such notice. Upon receipt of such notice, the Borrower Agent may revoke any pending request for a continuation of LIBOR Rate
Loans (to the extent of the affected LIBOR Rate Loans or Interest Periods) or, failing that, will be deemed to have converted
such request into a request to convert such LIBOR Rate Loans to Base Rate Loans in the amount specified therein.

 

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(b)           Notwithstanding
the foregoing, if the Administrative Agent has made the determination described in clause (a)(i) of this Section 10.3,
the Administrative Agent in consultation with the Borrower Agent and the Required Lenders, may establish an alternative interest
rate for the Impacted Loans, in which case, such alternative rate of interest shall apply with respect to the Impacted Loans until
(1) the Administrative Agent revokes the notice delivered with respect to the Impacted Loans under clause (a)(i) of
this Section 10.3, (2) the Administrative Agent or the Required Lenders notify the Administrative Agent and the
Borrower Agent that such alternative interest rate does not adequately and fairly reflect the cost to such Lenders of funding the
Impacted Loans, or (3) any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted
that it is unlawful, for such Lender or its applicable Lending Office to make, maintain or fund Term Loans whose interest is determined
by reference to such alternative rate of interest or to determine or charge interest rates based upon such rate or any Governmental
Authority has imposed material restrictions on the authority of such Lender to do any of the foregoing and provides the Administrative
Agent and the Borrower Agent written notice thereof.

 

10.4          Increased Costs; Reserves on LIBOR Rate
Loans.

 

(a)            Increased
Costs Generally. If any Change in Law shall:

 

(i)            impose,
modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets
of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement contemplated
by Section 10.4(e));

 

(ii)           subject
any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through
(d) of the definition of Excluded Taxes) and (C) Connection Income Taxes on its loans, loan principal, letters
of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

 

(iii)          impose
on any Lender or the London interbank market any other condition, cost or expense affecting this Agreement or LIBOR Rate
Loans made by such Lender; and the result of any of the foregoing shall be to increase the cost to such Lender of making,
continuing or maintaining any Term Loan the interest on which is determined by reference to the LIBOR Rate (or of maintaining
its obligation to make any such Term Loan), or to reduce the amount of any sum received or receivable by such Lender (whether
of principal, interest or any other amount) then, upon request of such Lender, the Borrowers will pay to such Lender such
additional amount or amounts as will compensate such Lender for such additional costs incurred or reduction suffered.

 

(b)           Capital
Requirements. If any Lender determines that any Change in Law affecting such Lender or any Lending Office of such Lender,
or such Lender’s holding company, if any, regarding capital or liquidity requirements has or would have the effect of reducing
the rate of return on such Lender’s capital or on the capital of such Lender’s holding company, if any, as a consequence
of this Agreement, the Commitments of such Lender or the Term Loans made by such Lender to a level below that which such Lender
or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s
policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time the
Borrowers will pay to such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding
company for any such reduction suffered.

 

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(c)           Certificates
for Reimbursement. A certificate of a Lender setting forth the amount or amounts necessary to compensate such Lender or such
Lender’s holding company, as the case may be, as specified in subsection (a) or (b) of this Section 10.4
and delivered to the Borrower Agent shall be conclusive absent manifest error. The Borrowers shall pay such Lender the amount
shown as due on any such certificate within ten (10) days after receipt thereof.

 

(d)           Delay
in Requests. Failure or delay on the part of any Lender to demand compensation pursuant to the foregoing provisions of this
Section 10.4 shall not constitute a waiver of such Lender’s right to demand such compensation, provided that
the Borrowers shall not be required to compensate a Lender pursuant to the foregoing provisions of this Section 10.4 for
any increased costs incurred or reductions suffered more than nine (9) months prior to the date that such Lender notifies
the Borrower Agent of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention
to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive,
then the nine (9) month period referred to above shall be extended to include the period of retroactive effect thereof).

 

(e)           Reserves
on LIBOR Rate Loans. The Borrowers shall pay to each Lender, as long as such Lender shall be required to maintain reserves
with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently known as “Eurocurrency
liabilities”), additional interest on the unpaid principal amount of each LIBOR Rate Loan equal to the actual costs of such
reserves allocated to such Term Loan by such Lender (as determined by such Lender in good faith, which determination shall be
conclusive), which shall be due and payable on each date on which interest is payable on such Term Loan, provided the Borrower
Agent shall have received at least ten (10) days’ prior notice (with a copy to the Administrative Agent) of such additional
interest from such Lender. If a Lender fails to give notice ten (10) days prior to the relevant Interest Payment Date, such
additional interest shall be due and payable ten (10) days from receipt of such notice.

 

10.5         Funding
Losses. Upon written demand of any Lender (with a copy to the Administrative Agent) from time to time, which demand shall
set forth in reasonable detail the basis for requesting such amount, the Borrowers shall promptly compensate such Lender for and
hold such Lender harmless from any loss, cost, liability or expense (excluding loss of anticipated profits or margin) actually
incurred by it as a result of:

 

(a)           any
continuation, conversion, payment or prepayment of any Term Loan other than a Base Rate Loan on a day other than the last day of
the Interest Period for such Term Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);

 

(b)           any
failure by a Borrower (for a reason other than the failure of such Lender to make a Term Loan) to prepay, borrow, continue or convert
any Term Loan other than a Base Rate Loan on the date or in the amount notified by the Borrower Agent; or

 

(c)           any
assignment of a LIBOR Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the
Borrower Agent pursuant to Section 9.19; including any loss or expense (excluding
loss of anticipated profits or margin) actually incurred by reason of the liquidation or reemployment of funds obtained by it to
maintain such Term Loan or from fees payable to terminate the deposits from which such funds were obtained. The Borrowers shall
also pay any customary administrative fees charged by such Lender in connection with the foregoing.

 

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10.6          Mitigation Obligations; Replacement of
Lenders.

 

(a)           Designation
of a Different Lending Office. If any Lender requests compensation under Section 10.4,
or requires the Borrowers to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 10.1, or if any Lender gives a notice
pursuant to Section 10.2, then at the request of the Borrower Agent, such Lender
shall use reasonable efforts to designate a different Lending Office for funding or booking its Term Loans hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such
designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 10.1
or 10.4, as the case may be, in the future, or eliminate the need for the
notice pursuant to Section 10.2, as applicable, and (ii) in each case, would
not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrowers
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

 

(b)           Replacement
of Lenders. If any Lender requests compensation under Section 10.4,
or if the Borrowers are required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority
for the account of any Lender pursuant to Section 10.1 and, in each case, such
Lender has declined or is unable to designate a different lending office in accordance with Section 10.6(a) that
eliminates the need to pay additional amounts for Indemnified Taxes under Section 10.1
or compensation under Section 10.4, the Borrower Agent may replace such Lender
in accordance with Section 9.19.

 

10.7         Survival.
All of the Borrowers’ obligations under Sections 10.4 and 10.5
shall survive termination of the Commitments, repayment of all other Obligations hereunder and resignation of the Administrative
Agent.

 

[Signature pages follow]

 

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IN WITNESS
WHEREOF, the parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized as
of the day and year first above written.

 

	 	HOLDINGS AND INITIAL BORROWER:
	 	 
	 	 HYDROFARM HOLDINGS LLC, as Holdings and Initial Borrower

 

	 	By:	/s/ Michael Serruya
	 	Name:	Michael Serruya
	 	Title:	President
	 	 	 
	 	Address for Notices:
	 	 	 

	 	210 Shields Court	 
	 	Markham ON, L3R 8V2	 
	 	 	 

 

[Signature Page to
Credit Agreement]

 

    

     

    

 

	 	Each of the undersigned hereby confirms that, immediately
after the funding of the Term Loans on the Closing Date and the consummation of the Hydrofarm Acquisition and execution of the
Assumption Agreement, it hereby assumes all of the rights and obligations of a Borrower under this Agreement and hereby is joined
to this Agreement as a Borrower hereunder.

 

		HYDROFARM, LLC, as a Borrower
	 	 

	 	By:	/s/ Peter Wardenburg
	 	Name:	Peter Wardenburg
	 	Title:	President and Chief Executive Officer
	 	 	 

		Address for Notices:

	 	2249 S. McDowell Ext	
	 	Petaluma, CA 94954	 
	 	 	 

 

		EHH HOLDINGS,
                                         LLC
	 	 

	 	By:	/s/ Peter Wardenburg
	 	Name:	Peter Wardenburg
	 	Title:	Manager
	 	 	 

		Address for Notices:

	 	2249 S. McDowell Ext	
	 	Petaluma, CA 94954	 
	 	 	 

 

		SUNBLASTER LLC
	 	 

	 	By:	/s/ Peter Wardenburg
	 	Name:	Peter Wardenburg
	 	Title:	Manager
	 	 	 

		Address for Notices:

	 	2249 S. McDowell Ext	
	 	Petaluma, CA 94954	 
	 	 	 

 

[Signature Page to Credit Agreement]

 

    

     

    

 

		WJCO LLC
	 	 
	 	 

	 	By:	/s/ Peter Wardenburg
	 	Name:	Peter Wardenburg
	 	Title:	Manager
	 	 	 

		Address for Notices:

	 	4200 E. 50th Ave.	
	 	Denver, CO 80216	 
	 	 	 

 

[Signature Page to Credit Agreement]

 

    

     

    

 

	 	ADMINISTRATIVE AGENT:
	 	 
	 	BRIGHTWOOD LOAN SERVICES LLC, in its capacity as Administrative Agent
	 	 
	 	 
	 	By:	/s/ Damien Dwin
	 	Name:	Damien Dwin
	 	Title:	Authorized Person
	 	 	 
	 	By:	/s/ Phil Daniele
	 	Name:	 Phil Daniele
	 	Title:	Chief Risk Officer
	 	Address:	810 Seventh Avenue, 26th Floor
	 	 	New York, NY 10019

 

[Signature Page to Credit Agreement]

 

    

     

    

 

 

	 	LENDERS:
	 	 
	 	BRIGHTWOOD LOAN SERVICES LLC, in
    its capacity as a Lender

 

	 	By:	/s/ Damien Dwin
	 	Name:	Damien Dwin
	 	Title:	Authorized Person
	 	 
	 	By:	/s/ Phil Daniele
	 	Name:	Phil Daniele
	 	Title:	Chief Risk Officer
	 	 
	 	Address:	810 Seventh Avenue, 26th Floor
	 	 	New York, NY 10019 

 

[Signature Page to Credit Agreement]

 

    

     

    

 

 

	 	BRIGHTWOOD CAPITAL FUND III 2016-2, LLC, in
    its capacity as a Lender
	 	 
	 	By: Brightwood Capital Fund Managers III, LLC, as its Manager

 

 

	 	By:	/s/ Damien Dwin
	 	Name:	Damien Dwin
	 	Title:	Managing Member
	 	 
	 	By:	/s/ Phil Daniele
	 	Name:	Phil Daniele
	 	Title:	Chief Risk Officer
	 	 
	 	Address:	810 Seventh Avenue, 26th Floor
	 	 	New York, NY 10019 

 

[Signature Page to Credit Agreement]

 

    

     

    

 

	 	BRIGHTWOOD CAPITAL FUND III-U, LP in
    its capacity as a Lender
	 	 
	 	By: Brightwood Capital Fund Managers III, LLC, its General Partner

 

 

	 	By:	/s/ Damien Dwin
	 	Name:	Damien Dwin
	 	Title:	Managing Member
	 	 
	 	By:	/s/ Phil Daniele
	 	Name:	Phil Daniele
	 	Title:	Chief Risk Officer
	 	 
	 	Address:	810 Seventh Avenue, 26th Floor
	 	 	New York, NY 10019 

 

[Signature Page to Credit Agreement]

 

    

     

    

 

	 	BCOF CAPITAL, LP in
    its capacity as a Lender
	 	 
	 	By: BCOF Capital Managers, LLC, its General Partner

 

 

	 	By:	/s/ Damien Dwin
	 	Name:	Damien Dwin
	 	Title:	Managing Member
	 	 
	 	By:	/s/ Phil Daniele
	 	Name:	Phil Daniele
	 	Title:	Chief Risk Officer
	 	 
	 	Address:	810 Seventh Avenue, 26th Floor
	 	 	New York, NY 10019 

 

[Signature Page to Credit Agreement]

 

    

     

    

 

Schedule I

 

Lenders/Commitments

 

	Lender	 	Commitment	 
	Brightwood Loan Services LLC	 	$	32,500,000	 
	BCOF Capital, LP	 	$	17,500,000	 
	Brightwood Capital Fund III 2016-2, LLC	 	$	24,291,667	 
	Brightwood Capital Fund III-U, LP	 	$	708,333	 
	TOTAL	 	$	75,000,000	

    

     

    

 

Schedule 1.1

 
Consolidated EBITDA, Consolidated Fixed
Charges and

Fixed Charge Coverage Ratio Amounts

  

    

     

    

 

Schedule 4.1

 

List of Jurisdictions in which the Loan
Parties

and Subsidiaries Are Qualified to Do Business

  

    

     

    

 

Schedule 4.3

 

List of Subsidiaries

 

    

     

    

 

Schedule 4.6

 

Litigation

  

    

     

    

 

Schedule 4.8

 

ERISA

 

    

     

    

 

 

Schedule 4.9

 

Flood Zones

 

    	 	 	 

     

    

 

Schedule 4.16

 

Environmental Matters

  

    	 	 	 

     

    

 

Schedule 4.17

 

Labor Matters

  

    	 	 	 

     

    

 

Schedule 4.18

 

Intellectual Property

 

    	 	 	 

     

    

 

Schedule 4.23

 

Deposit Accounts

  

    

    

    

 

Schedule 6.2

 

Existing Indebtedness

 

    

    

    

 

Schedule 6.3

 

Existing Liens

 

    

    

    

 

Schedule 6.6

 

Permitted Investments

  

    

    

    

 

Schedule 6.7

 

Affiliate Transactions

  

    

    

    

 

Schedule 9.3

 

Administrative Agent’s Office

 

Brightwood Loan Services LLC

810 7th Avenue, 26th Floor

New York, NY 10019

Attn: Brightwood Finance

Fax: 646-537-2648

 

    

    

    

 

EXHIBIT A

 

LENDER:

PRINCIPAL AMOUNT: $

 

FORM OF NOTE

 

___________________,20__

 

FOR VALUE RECEIVED, each of HYDROFARM,
LLC, EHH HOLDINGS, LLC, SUNBLASTER LLC and WJCO LLC (each a “Borrower” and
collectively, the “Borrowers”) hereby promises to pay
to___________________, or its assigns
(“Lender”), in accordance with the provisions of the Credit Agreement (as hereinafter defined), the
principal amount of the Term Loan from time to time made by Lender to Borrowers under the Credit Agreement referred to below
or any other Loan Document, and interest thereon, in accordance with the terms of the Credit Agreement. All computations of
interest shall be as set forth in the Credit Agreement.

 

Each Borrower hereby unconditionally further
agrees to pay interest in like money at such office on the unpaid principal amount hereof from time to time outstanding, and on
any unpaid interest payable hereon, from the date such interest is due hereunder, at the applicable rates per annum and on the
dates set forth in the Credit Agreement until such principal amount is paid in full. Further, each Borrower hereby unconditionally
further agrees to pay principal hereof on the dates and pursuant to the terms set forth in the Credit Agreement.

 

Each Borrower shall make all payments hereunder
in lawful money of the United States and in same day or immediately available funds. If any payment is to be made on a day other
than a Business Day, such payment shall instead be made on the following Business Day, and such extension of time shall be included
in computing the interest payable hereunder in accordance with the terms of the Credit Agreement.

 

This Note (this “Note”)
is one of the Notes referred to in that certain Credit Agreement dated as of May 12, 2017 (as hereafter amended, restated,
modified or supplemented, from time to time, the “Credit Agreement”), among Hydrofarm Holdings LLC, a Delaware
limited liability company (“Initial Borrower”; immediately upon consummation of the Hydrofarm Acquisition and
execution of the Assumption Agreement, Initial Borrower shall be succeeded as a Borrower thereunder by Hydrofarm, LLC, a California
limited liability company, EHH Holdings, LLC, a Delaware limited liability company, SunBlaster LLC, a Delaware limited liability
company, and WJCO LLC, a Colorado limited liability company (collectively, the “Borrowers”)), the other Loan
Parties from time to time party thereto, the Lenders from time to time party thereto, and Brightwood Loan Services LLC, as Administrative
Agent, which is incorporated herein by reference, and is subject to the provisions of and entitled to the benefits of the Credit
Agreement, including the provisions regarding the interest rate, Default Rate, and principal payments, restrictions on and requirements
for prepayment, and rights of acceleration. This Note is entitled to the benefits of the Security Agreement, the Guaranty Agreement
and the other Loan Documents, and is secured by the Collateral. Terms used herein have the meanings assigned to those terms in
the Credit Agreement, unless otherwise defined herein.

 

    Exhibit A - Page 1

    

    

 

This Note is hereby expressly limited in
that in no event shall the interest payable under this Note exceed the highest lawful rate as applicable to the Borrowers. If for
any reason whatsoever, the provision of any Loan Document, at the time performance of such provision occurs, involves the payment
of interest in excess of that permitted by law, and if, under any circumstances, Lender receives as interest any amount which would
exceed the highest lawful rate applicable to the Borrowers, such amount which would be excessive interest shall be applied to reduce
the unpaid principal balance and not the payment of interest.

 

Should the indebtedness represented by
this Note or any part hereof be collected at law or in equity or in bankruptcy, receivership or other court proceeding, or should
this Note be placed in the hands of attorneys for collection after default, the Borrowers agree to pay, in addition to the principal,
interest due and payable hereon, all amounts due to Lender under Section 9.4 of the Credit Agreement.

 

Borrowers and all endorsers of this Note
hereby waive presentment, demand, notice, protest, stay of execution, and all other defenses to payment generally and assent to
the terms hereof. The assignment of this Note and any rights with respect thereto is subject to the provisions of the Credit Agreement,
including the provisions governing the Register.

 

This Note shall be governed by the internal
laws (and not the law of conflicts) of the State of New York.

 

TIME IS OF THE ESSENCE WITH RESPECT TO THIS NOTE.

 

[signature pages follow]

 

    Exhibit A - Page 2

    

    

 

IN WITNESS WHEREOF, the undersigned have
executed and delivered this Note as of the date and year first above written.

 

	 	BORROWERS:
	 	 
	 	HYDROFARM, LLC
	 	 
	 	By:	      
	 	Name:
	 	Title:

 

	 	EHH HOLDINGS, LLC
	 	 	 
	 	By:	      
	 	Name:	 
	 	Title:	 
	 	 	 
	 	SUNBLASTER LLC
	 	 	 
	 	By:	      
	 	Name:	 
	 	Title:	 
	 	 	 
	 	WJCO LLC
	 	 	 
	 	By:	      
	 	Name:	 
	 	Title:	 

 

    Exhibit A - Page 3

    

    

 

EXHIBIT B

 

FORM OF GUARANTY

 

GUARANTY

 

THIS GUARANTY,
dated as of______________________ (the
 “Guaranty”), is executed by each of the undersigned guarantors (each, a
 “Guarantor”), in favor of Brightwood Loan Services LLC, as Administrative Agent (in its capacity as such,
and together with any permitted successor administrative agent hereunder, the “Administrative Agent”) for
itself and on behalf of the Lenders from time to time party to the Credit Agreement (as defined below) and the other Secured
Parties.

 

RECITALS

 

A.            Pursuant
to that certain Credit Agreement dated as of May 12, 2017 (as amended, restated, modified or supplemented, from time to time
the “Credit Agreement”), among the Lenders from time to time party thereto, Administrative Agent, Hydrofarm
Holdings LLC, a Delaware limited liability company (“Initial Borrower”; immediately upon consummation of the
Hydrofarm Acquisition and execution of the Assumption Agreement, Initial Borrower shall be succeeded as a Borrower thereunder
by Hydrofarm, LLC, a California limited liability company, EHH Holdings, LLC, a Delaware limited liability company, SunBlaster
LLC, a Delaware limited liability company, and WJCO LLC, a Colorado limited liability company (collectively, the “Borrowers”))
and the other Loan Parties from time to time party thereto, Lenders have agreed to make extensions of credit to Borrowers upon
the terms and subject to the conditions set forth therein.

 

B.            Lenders’
obligation to extend Loans under the Credit Agreement is subject, among other conditions, to receipt by Administrative Agent for
the benefit of the Secured Parties of this Guaranty, duly executed by each Guarantor. Each Guarantor acknowledges that in consideration
for the Loans made by Lenders to Borrowers and as an inducement for Lenders to make the Loans to Borrowers, and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged by each Guarantor, each Guarantor has entered
into this Guaranty.

 

C.            Each
Guarantor will derive substantial direct and indirect benefits from the making of the extensions of credit under the Credit Agreement.

 

AGREEMENT

 

NOW, THEREFORE, in
consideration of the above recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, each Guarantor hereby agrees as follows:

 

Unless otherwise
defined herein, all capitalized terms used herein and defined in the Credit Agreement shall have the respective meanings
given to those terms in the Credit Agreement. The interpretive provisions set forth in Article I of the Credit Agreement
shall apply to this Guaranty and are hereby incorporated by reference. Each Guarantor acknowledges receipt of copies of the
Credit Agreement and the other Loan Documents.

 

    Exhibit B - Page 1

    

    

 

 

1.            Guaranty.
(a)   Each Guarantor unconditionally, jointly and severally, absolutely and irrevocably guarantees, as primary
obligor and not merely as surety, and promises to pay to Administrative Agent for the benefit of the Secured Parties, on
demand, in lawful money of the United States, the full and punctual payment when due of all Obligations of each Borrower
arising under the Loan Documents, whether existing on the date hereof or hereinafter incurred or created. The liability of
each Guarantor hereunder is independent of the Obligations of each Borrower and any other Guarantor, and a separate action or
actions may be brought and prosecuted against such Guarantor irrespective of whether action is brought against any Borrower
or any other guarantor of the Obligations or whether any Borrower or any other guarantor of the Obligations is joined in any
such action or actions. This Guaranty is a guaranty of payment and not of collection.

 

(b)            Anything
herein or in any other Loan Document to the contrary notwithstanding, the maximum liability of each Guarantor hereunder and under
the other Loan Documents shall in no event exceed the amount which can be guaranteed by such Guarantor under applicable federal
and state laws relating to the insolvency of debtors (after giving effect to the right of contribution established in Section 4).
The provisions of this Section 1(b) shall be implemented automatically without the need for any amendment or modification
to the Loan Documents.

 

(c)            Each
Guarantor agrees that the Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee contained in this Section 1 or affecting the rights and remedies of Administrative
Agent or any Secured Party hereunder.

 

2.            Amendments, etc.
with respect to the Obligations. Each Guarantor shall remain

 

obligated hereunder notwithstanding that,
without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, any demand for
payment of any of the Obligations made by Administrative Agent or any Secured Party may be rescinded by Administrative Agent or
such Secured Party and any of the Obligations continued, and the Obligations, or the liability of any other Person upon or for
any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time,
in whole or in part, be renewed, extended, amended, modified, accelerated, compromised, waived, surrendered or released by Administrative
Agent or any Secured Party, and the Credit Agreement and the other Loan Documents and any other documents executed and delivered
in connection therewith may be amended, modified, supplemented or terminated, in whole or in part, as Administrative Agent (or
the Required Lenders, as the case may be) may deem advisable from time to time, and any collateral security, guarantee or right
of offset at any time held by Administrative Agent or any Secured Party for the payment of the Obligations may be sold, exchanged,
waived, surrendered or released. Neither Administrative Agent nor any Secured Party shall have any obligation to protect, secure,
perfect or insure any Lien at any time held by it as security for the Obligations or for the guaranty contained in Section 1
or any Property subject thereto.

 

    	 	Exhibit B - Page 2	 

     

    

 

3.            Guarantee
Absolute and Unconditional. Each Guarantor waives, to the fullest extent permitted by applicable law, any and all
notice of the creation, renewal, extension or accrual of any of the Obligations and notice of or proof of reliance by
Administrative Agent or any Secured Party upon the guaranty contained in Section 1 or acceptance of the guaranty
contained in Section 1; the Obligations, and any of them, shall conclusively be deemed to have been created,
contracted or incurred, or renewed, extended, amended or waived, in reliance upon the guaranty contained in Section 1,
and all dealings between any Borrower and any of the Guarantors, on the one hand, and Administrative Agent and the Secured
Parties, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon the
guaranty contained in Section 1. Each Guarantor waives diligence, presentment, protest, demand for payment and
notice of default or nonpayment to or upon any Borrower or any of the Guarantors with respect to the Obligations. Each
Guarantor understands and agrees that the guaranty contained in Section 1 shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard, to the extent permitted by applicable law, to (a) the
validity or enforceability of the Credit Agreement or any other Loan Document (including any amendment, consent or waiver
thereto), any of the Obligations or any other collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by Administrative Agent or any Secured Party, (b) any defense, set-off or
counterclaim (other than a defense that the Obligations have been paid in full) which may at any time be available to or be
asserted by any Borrower or any other Person against Administrative Agent or any Secured Party, (c) any other
circumstance whatsoever (with or without notice to or knowledge of any Borrower or such Guarantor) which constitutes, or
might be construed to constitute, an equitable or legal discharge of any Borrower for the Obligations, or of such Guarantor
under the guaranty contained in Section 1, in bankruptcy, workout, insolvency, reorganization, arrangement,
liquidation or dissolution or in any other instance, (d) the absence of (i) any attempt to collect any Obligation
or any part thereof from any Borrower or any other Guarantor or other action to enforce the same or (ii) any action to
enforce any Loan Document or any Lien thereunder, (e) the failure by any Person to take any steps to perfect and
maintain any Lien on, or to preserve any rights with respect to, any Collateral, or (f) any foreclosure, whether or not
through judicial sale, and any other sale or other disposition of any Collateral or any election following the occurrence of
an Event of Default by any Secured Party to proceed separately against any Collateral in accordance with such Secured
Party’s rights under any applicable law. When making any demand hereunder or otherwise pursuing its rights and remedies
hereunder against any Guarantor Administrative Agent or any Secured Party may, but shall be under no obligation to, make a
similar demand on or otherwise pursue such rights and remedies as it may have against any Borrower, any other Guarantor or
any other Person or against any collateral security or guarantee for the Obligations or any right of offset with respect
thereto, and any failure by Administrative Agent or any Secured Party to make any such demand, to pursue such other rights or
remedies or to collect any payments from any Borrower, any other Guarantor or any other Person or to realize upon any such
collateral security or guarantee or to exercise any such right of offset, or any release of any Borrower, any other Guarantor
or any other Person or any such collateral security, guarantee or right of offset, shall not relieve any Guarantor of any
obligation or liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of Administrative Agent or any Secured Party against any Guarantor. For the purposes hereof
 “demand” shall include the commencement and continuance of any legal proceedings.

 

    	 	Exhibit B - Page 3	 

     

    

 

Each Guarantor authorizes
Administrative Agent, at the request of the Required Lenders, without notice to such Guarantor, irrespective of any change in the
financial condition of any Borrower, any Guarantor or any other guarantor of the Obligations since the date hereof, and without
affecting or impairing in any way the liability of any Guarantor hereunder, from time to time to (a) create new Obligations,
and, either before or after receipt of notice of revocation, renew, compromise, extend, accelerate or otherwise change the time
for payment or performance of, or otherwise change, amend or waive the terms of the Obligations or any part thereof, including
increase or decrease of the rate of interest thereon; (b) take and hold security for the payment or performance of the Obligations
and exchange, enforce, waive or release any such security; (c) apply such security and direct the order or manner of sale
thereof; (d) purchase such security at a public or private sale; (e) otherwise exercise any right or remedy it may have
against any Borrower, any Guarantor, any other guarantor of the Obligations or any security, including the right to foreclose upon
any such security by judicial or nonjudicial sale; (f) settle, compromise with, release or substitute any one or more makers,
endorsers or guarantors of the Obligations; and (g) assign the Obligations, this Guaranty, or the other Loan Documents in
whole or in part. Each Guarantor hereby agrees that none of the foregoing acts constitutes a material alteration of such Guarantor’s
liability hereunder and specifically waives any such defense to liability otherwise arising by reason of any such act.

 

Each Guarantor agrees
that this Guaranty shall continue to be effective or be reinstated, as the case may be, if at any time, payment of the Obligations
or any part thereof is rescinded or must otherwise be restored by the Secured Parties upon or as a result of the bankruptcy or
reorganization of any Borrower or otherwise. If after receipt of any payment of, or the proceeds of any Collateral for, all or
any part of the Obligations, the Secured Parties are compelled to surrender or voluntarily surrender such payment or proceeds to
any Person because such payment or application of proceeds is or may be avoided, invalidated, recaptured or set aside as a preference,
fraudulent conveyance, impermissible setoff, or for any other reason, whether or not such surrender is the result of: (i) any
judgment, decree or order of any court or administrative body having jurisdiction over the Secured Parties or Administrative Agent;
or (ii) any settlement or compromise by the Secured Parties of any claim as to any of the foregoing, with any Person (including
any Borrower), then the Obligations or affected part thereof shall be reinstated and continue and this Guaranty shall be reinstated
and continue in full force as to such Obligations or part thereof as if such payment or proceeds had not be received, notwithstanding
any previous cancellation of any instrument delivered to evidence the satisfaction thereof. The provisions hereof shall survive
the termination of this Guaranty and any satisfaction and discharge by any Borrower by virtue of any payment, court order, or any
federal or state law.

 

4.            Subordination.
Each Guarantor hereby subordinates any Indebtedness of any

 

Borrower to such Guarantor to the Obligations.
Each Guarantor agrees that Administrative Agent and the Secured Parties shall be entitled to receive payment of all Obligations
before any Guarantor receives payment of any Indebtedness of any Borrower to such Guarantor. Any payments on such Indebtedness
of any Borrower to any Guarantor after an Event of Default has occurred and is continuing, if Administrative Agent so requests,
shall be collected, enforced and received by such Guarantor as trustee for the Secured Parties and be paid over to Administrative
Agent for the benefit of itself and the other Secured Parties on account of the Obligations, but without reducing or affecting
in any manner the liability of such Guarantor under the other provisions of this Guaranty.

 

    	 	Exhibit B - Page 4	 

     

    

 

5.            Right
of Contribution. Each Guarantor hereby agrees that to the extent that a Guarantor shall
have paid more than its proportionate share of any payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder which has not paid its proportionate share of such payment. Each Guarantor's
right of contribution shall be subject to the terms and conditions of Section 6. The provisions of this Section 5
shall in no respect limit the obligations and liabilities of any Guarantor to Administrative Agent and the Secured Parties,
and each Guarantor shall remain liable to Administrative Agent and the Secured Parties for the full amount guaranteed by such
Guarantor hereunder.

 

6.            No
Subrogation. Notwithstanding any payment made by any Guarantor hereunder or any set-off
or application of funds of any Guarantor by Administrative Agent or any Secured Party, no Guarantor shall be entitled to be subrogated
to any of the rights of Administrative Agent or any Secured Party against any Borrower or any other Guarantor or any collateral
security or guarantee or right of offset held by Administrative Agent or any Secured Party for the payment of the Obligations,
nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from any Borrower or any other Guarantor
in respect of payments made by such Guarantor hereunder, until all of the Obligations are paid in full. If any amount shall be
paid to any Guarantor on account of such subrogation rights at any time when all of the Obligations shall not have been paid in
full, such amount shall be held by such Guarantor in trust for Administrative Agent, for the benefit of the Secured Parties, segregated
from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to Administrative Agent
in the exact form received by such Guarantor (duly indorsed by such Guarantor to Administrative Agent, if required), to be applied
against the Obligations, whether matured or unmatured, in such order as Administrative Agent may determine.

 

7.            Setoff.
Upon the occurrence and during the continuance of an Event of Default, each Secured Party and the Administrative Agent are hereby
authorized at any time and from time to time, without prior notice to any Guarantor (any such notice being expressly waived by
each Guarantor), to set off and apply any and all deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Secured Party or Administrative Agent to or for the credit or the account
of any Guarantor or any of its Subsidiaries, including specifically any amounts held in any account maintained at such Secured
Party or Administrative Agent, against any and all amounts then due and owing to the Administrative Agent or the Lenders, or any
of them, by such Guarantor, in connection with this Guaranty or any Loan Document; provided that no Secured Party shall
exercise any such right without the prior written consent of the Administrative Agent (at the direction of the Required Lenders).
The rights of the Secured Parties and the Administrative Agent under this Section 7 are in addition to other rights
and remedies (including other rights of set-off) which the Secured Parties and the Administrative Agent may have under applicable
law. Each Secured Party and the Administrative Agent agrees, severally and not jointly, to notify each Guarantor of any exercise
of its rights pursuant to this Section 7; provided, however, that failure to provide such notice shall
not affect any Secured Party’s or the Administrative Agent’s rights under this Section 7 or the effectiveness
of any action taken pursuant hereto; provided, that in the event that any Defaulting Lender shall exercise any such right
of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application
in accordance with the provisions of Section 2.9 of the Credit Agreement and, pending such payment, shall be segregated
by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent and the Secured
Parties, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable
detail the Obligations then due and owing to such Defaulting Lender as to which it exercised such right of setoff. Each Secured
Party agrees to notify any Guarantor and the Administrative Agent promptly after any such setoff and application; provided
that the failure to give such notice shall not affect the validity of such setoff and application.

 

    	 	Exhibit B - Page 5	 

     

    

 

8.            Nonwaiver.
No security interest or right of setoff shall be deemed to have been waived by any act or conduct on the part of the Secured Parties
or Administrative Agent or by any failure to exercise such right of setoff or to enforce such security interest, or by any delay
in so doing; and every right of setoff and security interest shall continue in full force and effect until such right of setoff
or security interest is specifically waived or released by an instrument in writing executed by Administrative Agent and the Secured
Parties.

 

9.            No
Reliance. Each Guarantor warrants and represents that the undersigned is fully aware
of the financial condition of each Borrower and is executing and delivering this Guaranty based solely upon such Guarantor’s
own independent investigation of all matters pertinent hereto, and that such Guarantor is not relying in any manner upon any representation
or statement of the Secured Parties or Administrative Agent. Each Guarantor warrants, represents and agrees that such Guarantor
is in a position to obtain, and such Guarantor hereby assumes full responsibility for obtaining, any additional information concerning
the financial condition of each Borrower and any other matter pertinent hereto, and that such Guarantor is not relying upon the
Secured Parties or the Administrative Agent to furnish, and shall have no right to require the Secured Parties or Administrative
Agent to obtain or disclose, any information with respect to the Indebtedness or Obligations guaranteed hereby, the financial
condition or character of each Borrower or the ability of each Borrower to pay the Obligations or perform the Obligations guaranteed
hereby, the existence of any Collateral or security for any or all of such Indebtedness or Obligations, the existence or nonexistence
of any other guaranties of all or any part of such Indebtedness or Obligations, any actions or non-action on the part of the Secured
Parties, Administrative Agent, each Borrower or any other person or entity, or any other matter, fact or occurrence whatsoever.

 

10.          Joinders.
Each Guarantor shall cause each of its Subsidiaries which, from time to time, after the date hereof shall be required to guaranty
any Obligations of each Borrower pursuant to Section 5.9 of the Credit Agreement, to become a party hereto by executing a
supplement or joinder hereto, in form and substance reasonably satisfactory to the Administrative Agent, and the execution and
delivery thereof shall not require the consent of such Guarantor. The rights and obligations of each Guarantor shall remain in
full force and effect notwithstanding the addition of any new Guarantor as a party to this Guaranty.

 

11.          Miscellaneous.

 

(a)            Amendments
and Waivers. This Guaranty may not be amended or modified, nor may any of its terms be waived, except by written
instruments signed by each Guarantor and Administrative Agent. No failure or delay on Administrative Agent and any Secured
Party’s part in exercising any right hereunder shall operate as a waiver thereof or of any other right nor shall any
single or partial exercise of any such right preclude any other further exercise thereof or of any other right. Unless
otherwise specified in any such waiver or consent, each waiver or consent under any provision hereof shall be effective only
in the specific instance and for the purpose for which given.

 

    	 	Exhibit B - Page 6	 

     

    

 

(b)            Assignments.
This Guaranty shall be binding upon and inure to the benefit of the Secured Parties and Administrative Agent, all holders of any
Note and their respective successors and permitted assigns. No Guarantor may sell, assign or delegate any of its rights or obligations
hereunder. This Guaranty is assignable by the Secured Parties with the Obligations which it guarantees and when so assigned, each
Guarantor shall be bound to the applicable permitted assignees without in any manner affecting such Guarantor’s liability
hereunder for any part of the Obligations retained by the Secured Parties. The obligations and liability of each Guarantor hereunder
and the validity and enforceability of this Guaranty shall not be terminated, impaired or otherwise affected by reason of the
transfer of the business of any Borrower or any part thereof or interest therein to any other Person.

 

(c)            Automatic
Release. Anything herein to the contrary notwithstanding, a Subsidiary of Borrower shall
automatically be released from its obligations hereunder upon the consummation of any transaction permitted pursuant to the Credit
Agreement as a result of which such Subsidiary ceases to be a Subsidiary of any Borrower (or becomes a Foreign Subsidiary).

 

(d)            Cumulative
Rights, etc. The rights, powers and remedies of the Secured Parties and Administrative Agent under this Guaranty shall
be in addition to all rights, powers and remedies given to the Secured Parties and Administrative Agent by virtue of any applicable
law, rule or regulation of any governmental authority, the Credit Agreement, any other Loan Document or any other agreement,
all of which rights, powers, and remedies shall be cumulative and may be exercised successively or concurrently without impairing
Lender’s or Administrative Agent’s rights hereunder.

 

(e)            Partial
Invalidity. If any paragraph or part thereof of this Guaranty shall for any reason be held or adjudged to be invalid, illegal
or unenforceable by any court of competent jurisdiction, such paragraph or part thereof so adjudicated invalid, illegal or unenforceable
shall be deemed separate, distinct and independent, and the remainder of this Guaranty shall remain in full force and effect and
shall not be affected by such holding or adjudication.

 

(f)             Entire
Agreement. This Guaranty and the other documents described or contemplated herein embody the entire agreement and understanding
among the parties hereto and thereto and supersede all prior agreements and understandings relating to the subject matter hereof
and thereof.(g) Counterparts. This Guaranty may be executed in any number of counterparts, each of which shall be
deemed to be an original, but all such separate counterparts shall together constitute but one and the same instrument. Delivery
of any executed counterpart of a signature page of this Guaranty by facsimile or other electronic transmission shall be effective
as delivery of a manually executed counterpart of this Agreement.(h)        Governing
Law. This Guaranty shall be deemed to be a contract made under, governed by and interpreted pursuant to the internal laws
(and not the law of conflicts) of the State of New York. Sections 9.15 and 9.16 of the Credit Agreement are incorporated
herein, mutatis mutandis, as if a part hereof.

 

    	 	Exhibit B - Page 7	 

     

    

 

(i)             Notices.
All notices and other communications required or permitted hereunder shall be in writing and shall be given in a
fashion prescribed in Section 9.3 of the

 

Credit                                       Agreement.[Signature                                   Page                                     Follows]

 

    	 	Exhibit B - Page 8	 

     

    

 

IN WITNESS WHEREOF, each Guarantor has caused this Guaranty
to be executed as of the day and year first above written.

 

	 	[___________________]	 	 	[___________________]
	 	 	 	 	 
	By: 	 	 	By:	 
	 
	Name: 	Name:
	 
	Title:	Title:

 

    	 		 

     

    

 

EXHIBIT C

 

 

FORM OF NOTICE OF BORROWING

 

as of________________,
20__

 

TO THE LENDERS AND THE ADMINISTRATIVE AGENT,
UNDER THE UNDERSIGNED’S CREDIT AGREEMENT DATED AS OF MAY 12, 2017

 

Re:         Credit
Loans to [_____]

 

Ladies and Gentlemen:

 

We refer to the Credit
Agreement dated as of May 12, 2017 (as amended, restated modified or supplemented from time to time, the “Credit
Agreement”) by and among Hydrofarm Holdings LLC, a Delaware limited liability company (“Initial Borrower”;
immediately upon consummation of the Hydrofarm Acquisition and execution of the Assumption Agreement, Initial Borrower shall
be succeeded as a Borrower thereunder by Hydrofarm, LLC, a California limited liability company, EHH Holdings, LLC, a Delaware
limited liability company, SunBlaster LLC, a Delaware limited liability company, and WJCO LLC, a Colorado limited liability company
(collectively, the “Borrowers”)), the other Loan Parties from time to time party thereto, the Lenders from time
to time party thereto, and Brightwood Loan Services LLC, as Administrative Agent. Unless otherwise defined herein, capitalized
terms used herein shall have the meanings given thereto in the Credit Agreement.

 

The Borrowers hereby
request a Term Loan in the aggregate amount of
$__________________ to be made
on________________,
under the Commitment. The Borrowers hereby elect that such Term Loan be a [LIBOR Rate Loan] [Base Rate Loan] [with an
Interest Period of_____________ months].
The proceeds of the Term Loan shall be wired to the
 Borrowers or, for the account of Borrowers, to other Persons, in each
case, as requested on Schedule A attached hereto. The foregoing instructions shall be irrevocable.

 

[Signature Follows]

 

    	 	Exhibit C - Page 1	 

     

    

 

IN WITNESS WHEREOF, the Initial Borrower
and each Borrower, acting through an authorized signatory, has executed this Notice of Borrowing as of the date above first written.

 

	 	HYDROFARM HOLDINGS LLC
	 	 
	 
	 	By:	 
	 	Name:
	 	Title:
	 
	 	HYDROFARM, LLC
	 
	 
	 	By:	 
	 	Name:
	 	Title:
	 
	 	EHH HOLDINGS, LLC
	 
	 
	 	By:	 
	 	Name:
	 	Title:
	 
	 	SUNBLASTER LLC
	 
	 
	 	By:	 
	 	Name:
	 	Title:
	 
	 	WJCO LLC
	 
	 
	 	By:	 
	 	Name:
	 	Title:

 

    	 	Exhibit C - Page 2	 

     

    

 

 

SCHEDULE A

 

Borrower’s Wire Transfer Instructions

 

    Exhibit C - Page 3

     

    

 

EXHIBIT D

 

FORM OF ASSIGNMENT AND ASSUMPTION
AGREEMENT

 

This Assignment and Assumption Agreement (this “Agreement”)
is made and entered into as of_____________, by and among ____________ (the “Assignor”),
________________________ (the “Assignee”), Brightwood Loan Services LLC, as administrative
agent (the “Administrative Agent”)[, and [                 ]
( “Borrower Agent”). ]

 

Recitals

 

A.            Reference
is made to that certain Credit Agreement dated as of May 12, 2017 (as amended, restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”) by and among Hydrofarm Holdings LLC, a Delaware limited liability
company (“Initial Borrower”; immediately upon consummation of the Hydrofarm Acquisition and execution of the
Assumption Agreement, Initial Borrower shall be succeeded as a Borrower thereunder by Hydrofarm, LLC, a California limited
liability company, EHH Holdings, LLC, a Delaware limited liability company, SunBlaster LLC, a Delaware limited liability company,
and WJCO LLC, a Colorado limited liability company (collectively, the “Borrowers”)), the other Loan Parties
from time to time party thereto, the Lenders from time to time party thereto and the Administrative Agent. Pursuant to the Credit
Agreement, certain of the Lenders have agreed to extend Loans to Borrowers (the “Commitment”) of which the Assignor’s
current portion of the Commitment is the amount specified in Item 1 of Schedule 1 attached hereto (the “Assignor’s
Commitment”). As of the date hereof, the aggregate principal amount of the outstanding Loans (as defined in the Credit
Agreement) made by the Assignor to Borrowers pursuant to the Assignor’s Commitment are specified in Item 2 of Schedule
1 attached hereto (the “Assignor’s Loans”). All capitalized terms used herein and not otherwise defined
herein shall have the meanings set forth in the Credit Agreement.

 

B.            The
Assignor wishes to sell and assign to the Assignee, and the Assignee wishes to purchase and assume from the Assignor, as applicable
and as specified on Schedule 1 attached hereto, (i) all of the Assignor’s Commitment specified in Item 3 of Schedule
1 hereto which is equivalent to the percentage (as a percentage of the Commitment) specified in Item 4 of Schedule 1
(the “Assigned Commitment”), and (ii) all of the Assignor’s Loan(s) under the Commitment, as
specified in Item 5 of Schedule 1  hereto (the “Assigned Loans”).

 

The parties agree as follows:

 

1.     Assignment.
Subject to the terms and conditions set forth herein, the Assignor hereby sells and assigns to the Assignee, and the Assignee hereby
purchases and assumes from the Assignor, without recourse to the Assignor, on the date first set forth above (the “Assignment
Date”) (a) all right, title and interest of the Assignor to the Assigned Loans and (b) all obligations of the
Assignor under the Credit Agreement with respect to the Assigned Commitment. As full consideration for the sale of the Assigned
Loans and the Assigned Commitment, the Assignee shall pay to the Assignor on the Assignment Date such amount as shall have been
agreed between the Assignee and the Assignor (the “Purchase Price”).

 

    Exhibit D - Page 1

     

    

 

2.     Consent
and Undertaking. The Administrative Agent and each Borrower hereby consent to the assignment made herein, and each Borrower
undertakes within ten (10) Business Days from the Assignment Date, if requested to do so by the Assignor or the Assignee,
to execute new Notes to the Administrative Agent or its designee, for the benefit of the Assignee and the Assignor, as appropriate,
to reflect the portion of the Commitment held by each of the Assignee and the Assignor after giving effect to the assignment contemplated
by this Agreement. Said new Notes shall be substantially identical to the prior Notes, replacing only the name of the Lender with
the name of the Assignee and reflecting the correct amount. If applicable, the Assignor agrees on the tenth (10th) Business Day
following receipt by the Administrative Agent of the new Notes, to return its superseded Notes to the Administrative Agent or
its designee, which shall thereupon transmit the new Notes to the Assignor and the Assignee, as appropriate, and the superseded
Notes to each Borrowers for cancellation.

 

3.     Representations
and Warranties. Each of the Assignor and the Assignee represents and warrants to the other, to the Administrative Agent and
to each Borrower that (a) it has full power and legal right to execute and deliver this Agreement and to perform the provisions
of this Agreement; (b) the execution, delivery and performance of this Agreement have been authorized by all necessary action,
corporate or otherwise, on its part and do not violate any provisions of its charter or by-laws or any contractual obligations
or requirement of law binding on it; (c), in the case of the Assignor, it is the legal and beneficial owner of the Assigned Loans;
(d) in the case of the Assignee, it is an Eligible Assignee and meets all requirements to be an assignee under Section 9.9
of the Credit Agreement; and (e) this Agreement constitutes its legal, valid and binding obligation, enforceable against
it in accordance with its terms, subject, as to enforcement of remedies, to the following qualifications: (i) an order of
specific performance and an injunction are discretionary remedies and, in particular, may not be available where damages are considered
an adequate remedy at law, (ii) enforcement may be limited by bankruptcy, insolvency, liquidation, reorganization, reconstruction
and other similar laws affecting enforcement of creditors’ rights generally (insofar as any such law relates to the bankruptcy,
insolvency or similar event of the Assignor and the Assignee) and (iii) enforcement may be subject to general principles
of equity (regardless of whether such enforcement is considered in a proceeding in equity or at law) and may be limited by public
policies which may affect the enforcement of certain rights or remedies provided for in this Agreement. In addition, the Assignee
represents and warrants to the Assignor that the Assignee satisfies any minimum capital and surplus, asset or assets under management
criteria set forth in the Credit Agreement.

 

4.     Condition
Precedent. The obligations of the Assignor and the Assignee hereunder shall be subject to the fulfillment of the condition
that (i) the Assignor shall have received payment in full of the Purchase Price and (ii) the Assignor and the Assignee
shall have complied with other applicable provisions of the Credit Agreement.

 

    Exhibit D - Page 2

     

    

 

5.     Notice
of Assignment. The Assignor hereby gives notice to the Administrative Agent of the assignment and assumption of the
Assigned Loans and the Assigned Commitments and hereby instructs Borrowers to make payments with respect to the Assigned
Loans and the Assigned Commitment directly to the Administrative Agent for the benefit of the Assignee as provided in the
Credit Agreement; provided, however, that Borrowers and the Administrative Agent shall be entitled to
continue to deal solely and directly with the Assignor in connection with the interests so assigned until (i) the
Administrative Agent shall have received counterparts of this Agreement duly executed by the Assignor, the Assignee and
Borrowers (if Borrowers’ consent hereto is required), and, unless receipt thereof is waived by the Administrative
Agent, shall have received the assignment fee described in the Credit Agreement and (ii) the Assignor shall have
delivered to the Administrative Agent any Notes that shall be subject to such assignment. From and after the date (the
 “Effective Date”) on which the Administrative Agent shall notify Borrowers, the Assignee, and the Assignor
that (i) and (ii) shall have occurred and all consents, if any, required shall have been given, the Assignee shall
be deemed to be a party to the Credit Agreement and shall have the rights and obligations of a Lender under the Credit
Agreement. After the Effective Date, and with respect to all such amounts accrued from the Assignment Date, (a) all
interest, principal, fees, and other amounts that would otherwise be payable to the Assignor in respect of the Assigned Loans
and the Assigned Commitments shall be paid to the Assignee, (b) if the Assignor receives any payment on account of the
Assigned Loans or the Assigned Commitment, the Assignor shall promptly deliver such payment to the Assignee, and (c) any
notices to the Assignee as a Lender under the Credit Agreement shall be sent to it at the address shown in Item 6 of Schedule
1 hereto. The Assignee agrees to deliver to Borrowers and the Administrative Agent such Internal Revenue Service forms as
may be required to establish that the Assignee is entitled to receive payments under the Credit Agreement without deduction
or withholding of tax.

 

6.     Independent
Investigation. The Assignee acknowledges that it is purchasing the Assigned Loans and the Assigned Commitment from the Assignor
without recourse and, except as provided in Section 3 hereof, without representation or warranty. The Assignee further
acknowledges that it has made its own independent investigation and credit evaluation of each Borrower in connection with its
purchase of the Assigned Loans and the Assigned Commitment, and has received copies of all Loan Documents that it has requested.
Except for the representations or warranties set forth in Section 3 hereof, the Assignee acknowledges that it is not
relying on any representation or warranty of the Assignor, expressed or implied, including, without limitation, any representation
or warranty relating to the legality, validity, genuineness, enforceability, collectibility, interest rate, repayment schedule
or accrual status of the Assigned Loans or the Assigned Commitment, the legality, validity, genuineness, or enforceability of
the Credit Agreement or any other Loan Document (including those which purport to provide Collateral for the Loans) referred to
in or delivered pursuant to the Credit Agreement, or the financial condition or creditworthiness of each Borrower. The Assignor
has not acted and will not be acting as either the representative, agent or trustee of the Assignee with respect to matters arising
out of or relating to the Credit Agreement or this Agreement. From and after the Effective Date, the Assignor shall have no rights
or obligations with respect to the Assigned Loans or the Assigned Commitment.

 

7.     Method
of Payment. All payments to be made by either party hereunder shall be in funds available at the place of payment on the same
day and shall be made by wire transfer to the account designated by the party to receive payment.

 

    Exhibit D - Page 3

     

    

 

8.     Integration.
This Agreement shall supersede any prior agreement or understanding between the parties (other than the Credit Agreement and
the other Loan Documents) as to the subject matter hereof.

 

9.     Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such separate
counterparts shall together constitute but one in the same instrument and shall be binding upon the parties, their successors
and assigns. Delivery of a counterpart hereof via facsimile transmission shall be effective as delivery of a manually executed
counterpart of this Agreement hereof.

 

10.   Governing
Law. This Agreement shall be deemed to be a contract made under, governed by and interpreted pursuant to the internal laws
(and not the law of conflicts) of the State of New York. Sections 9.15 and 9.16 of the Credit Agreement are incorporated herein,
mutatis mutandis, as if a part hereof.

 

[Remainder of this page intentionally
left blank.]

 

    Exhibit D - Page 4

     

    

 

WHEREAS, the parties hereto have executed
this Assignment as of the date first above written.

 

	 	[ASSIGNOR]
	 	 
	 	 
	 	By:	                    
	 	Name:
	 	Title:
	 	 
	 	[ASSIGNEE]
	 	 
	 	By:	 
	 	Name:
	 	Title:

 

[If required][Agreed, Accepted and Consented to:]

 

	[BORROWER AGENT:	 
	 	 
	By:	 	 
	 	Name:	 
	 	Title:	 

 

Address:       [                   ]

 

	[ADMINISTRATIVE
    AGENT:	 
	 	 
	BRIGHTWOOD
    LOAN SERVICES LLC	 
	 	 
	By:	                         	 
	Name:	 
	Title: ]	 

 

    Exhibit D - Page 5

     

    

 

SCHEDULE 1 

TO 

ASSIGNMENT AND ASSUMPTION AGREEMENT

 

Credit Agreement for [                  ]

 

	Item 1.	Assignor’s Commitment:	$_______________
	 	 	 
	Item 2.	Assignor’s Loans:	$_______________
	 	 	 
	Item 3.	Amount of Assigned Commitment:	$_______________
	 	 	 
	Item 4.	Percentage of Commitment Assigned:	_______________%
	 	 	 
	Item 5.	Amount of Assigned Loans:	$_______________
	 	 	 
	Item 6.	Lending Office of Assignee and Address	[_______________]
	 	for Notices under Credit Agreement:	[_____________]
	 	 	Attn: [_____________]
	 	 	Telecopy: [___________]

 

 

    Exhibit D - Page 6

     

    

 

EXHIBIT E

 

FORM OF COMPLIANCE CERTIFICATE

 

The undersigned, being
a Responsible Officer of Hydrofarm, LLC (the “Borrower Agent”) hereby certifies, pursuant to Section 5.1(d) of
the Credit Agreement dated as of May 12, 2017 (as in effect on the date hereof, the “Credit Agreement”)
by and among Hydrofarm Holdings LLC, a Delaware limited liability company (“Initial Borrower”; immediately upon
consummation of the Hydrofarm Acquisition and execution of the Assumption Agreement, Initial Borrower shall be succeeded as
a Borrower thereunder by the Borrower Agent, EHH Holdings, LLC, a Delaware limited liability company, SunBlaster LLC, a Delaware
limited liability company, and WJCO LLC, a Colorado limited liability company (collectively, the “Borrowers”)),
the other Loan Parties from time to time party thereto, the Lenders from time to time party thereto, and Brightwood Loan Services
LLC, as Administrative Agent (the “Administrative Agent”):

 

1.             The
accompanying [audited/unaudited] financial statements of Holdings as of _____, ____, for the [quarter/year] then
ended (the “Period”), complete and correct in all material respects and fairly present the financial
condition and results of operations of the Holdings and its Subsidiaries in accordance with GAAP for such Period [(subject to
year-end adjustments and the lack of GAAP footnotes)]1.

 

2.             Attached
hereto as Schedule 1 are calculations performed by the undersigned or under the undersigned’s supervision demonstrating
Borrowers’ compliance with each of the Financial Covenants set forth in Section 6.1 of the Credit Agreement, during
the Period and as of the end of the Period.

 

3.             [No
Default or Event of Default has occurred and is continuing] [A Default or an Event of Default has occurred and is continuing.
The following sets forth a description of the nature thereof and outlines the actions which the Borrowers propose to take
with respect thereto. [     ]].

 

4.             Attached
hereto as Schedule 2 is a list of all places where any Borrower and their Subsidiaries conduct business or at which Collateral
is kept that has not been previously disclosed to the Administrative Agent and all such locations that have been closed since the
delivery of the last Compliance Certificate provided to the Administrative Agent.

 

Capitalized terms used
herein and not otherwise defined are used as defined in the Credit Agreement.

 

[Remainder of page has been intentionally
left blank.]

 

 

 

1 To be added
to the certificate delivered with quarterly financial statements of the Borrowers.

 

    Exhibit E - Page 1

     

    

  

IN WITNESS WHEREOF, the undersigned
have signed this Compliance Certificate as of the___________ day
of                          ,
____.

 

	 	By:	 
	 	Name:
	 	Title:

 

    Exhibit E - Page 2

     

    

 

SCHEDULE 1

 

Calculations Demonstrating Compliance
with Financial Covenants (Section 6.1)

 

    Exhibit E - Page 3

     

    

 

SCHEDULE 2

 

New and Closed Locations

 

    Exhibit E - Page 4Exhibit 10.12

 

EXECUTION VERSION

 

FORBEARANCE AGREEMENT AND AMENDMENT TO
CREDIT AGREEMENT

 

This FORBEARANCE
AGREEMENT AND AMENDMENT TO CREDIT AGREEMENT, dated as of May 18, 2018 (this “Agreement”),
is made and entered into by and among Hydrofarm Holdings LLC, a Delaware limited liability company (“Holdings”),
Hydrofarm, LLC, a California limited liability company (“Hydrofarm”),
WJCO LLC, a Colorado limited liability company (“WJCO”),
EHH Holdings, LLC (“EHH”), a Delaware
limited liability company, and SunBlaster, LLC, a Delaware limited liability company (“SunBlaster”,
and together with Hydrofarm, WJCO and EHH, collectively, the “Borrowers”),
Hydrofarm Canada, LLC, a Delaware limited liability company, as a Guarantor, the lenders party to the Credit Agreement referred
to below (collectively, the “Lenders” and
each individually a “Lender”)
that are signatories hereto, and Brightwood Loan Services LLC, in its capacity as Administrative Agent for the Lenders. Capitalized
terms used but not otherwise defined herein shall have the respective meanings ascribed thereto in the Credit Agreement (as defined
below).

 

R E C I T A L S

 

WHEREAS,
the parties hereto have heretofore entered into that certain Credit Agreement, dated as of May 12, 2017 (as the same has heretofore
been, and may hereafter be, amended, modified, supplemented, extended, renewed, restated or replaced, the “Credit
Agreement”), by and among Holdings, the Borrowers, the Lenders and the Administrative
Agent;

 

WHEREAS,
the Loan Parties have heretofore entered into the Security Agreement and other Security Documents pursuant to which, among other
things, the Loan Parties have granted certain liens and security interests to the Administrative Agent for the benefit of the Secured
Parties (collectively, the “Secured Liens”)
in respect of each of the Loan Parties’ obligations arising under the Credit Agreement
and the other Loan Documents;

 

WHEREAS,
certain Defaults and Events of Default described on Schedule I attached hereto have occurred and continue to exist under
the Credit Agreement and the other Loan Documents (each a “Specified Default”,
and collectively, the “Specified Defaults”);
and

 

WHEREAS, the Loan Parties have requested
that the Lenders and the Administrative Agent temporarily forbear from exercising their rights and remedies under the Loan Documents
arising as a result of the occurrence of the Specified Defaults.

 

NOW THEREFORE, for good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

 

SECTION 1. Forbearance.

 

(a)       Acknowledgment
of Defaults and Rights and Remedies. Each of the Loan Parties, jointly and severally, acknowledges and agrees that (i) the
Specified Defaults have occurred and are continuing, and (ii) but for the terms of this Agreement, the Lenders and the Administrative
Agent may, if they so elect, exercise any and all rights and remedies that the Lenders or the Administrative Agent has under the
Loan Documents, applicable law or otherwise in respect of the Specified Defaults.

 

     

     

    

 

(b)       Forbearance.

 

(i)       For
purposes of this Agreement, the term “Forbearance Period” shall
mean the period commencing on the Forbearance Effective Date (as hereinafter defined) and ending on that date (the “Forbearance
Termination Date”) which is the earliest to occur of the following: (1) July 15,
2018; (2) the date on which the Administrative Agent or the Lenders determine that any Default or Event of Default other than the
Specified Defaults has occurred; (3) the date on which the forbearance of the Revolving Loan Agent and each Revolving Loan Lender
pursuant to the Revolving Loan Forbearance Agreement shall terminate, expire or otherwise cease to be effective for any reason;
(4) the date on which any Loan Party or any of their respective Subsidiaries initiates or has filed against it any bankruptcy,
insolvency, assignment, foreclosure or similar proceeding under state, federal or foreign law; (5) the date on which any Loan Party
breaches or fails to comply with any of the terms of this Agreement as determined by the Administrative Agent or the Lenders, including,
without limitation, (i) the failure by any Loan Party to comply with, or any breach or violation by any Loan Party of, any of the
agreements or covenants set forth herein, or (ii) the failure of any representation or warranty of any Loan Party set forth herein
to be true and correct in all material respects; (6) the date on which the Revolving Loan Agent or any Revolving Loan Lender takes
any action or initiates any action or proceeding to accelerate the obligations (including any Revolving Loan Obligations) or enforce
any of its rights or remedies under the Revolving Loan Agreement or any other Revolving Loan Document or any right or remedy with
respect to any collateral (including the Revolving Loan Priority Collateral) in respect of the Revolving Loan Obligations; or (7)
the date on which any person or entity (including the Revolving Loan Agent or any Revolving Loan Lender) initiates any action or
proceeding (including, without limitation, the initiation of any advertisement for foreclosure under a power of sale in any deed
of trust, mortgage, deed to secure debt, or similar instrument) to foreclose or otherwise enforce any rights or remedies in connection
with any lien, claim of lien, deed to secure debt, mortgage, security agreement or other encumbrance (including, without limitation,
any judgment) on any assets or properties of any Loan Party or any of their respective Subsidiaries. Each of the Loan Parties hereby
acknowledges and agrees that the execution and delivery of this Agreement has not established any course of dealing between the
parties hereto and that the parties hereto do not contemplate, and, in entering into this Agreement, the Loan Parties have not
relied upon, any potential extension of the Forbearance Period.

 

(ii)       In
reliance upon the representations, covenants, agreements and acknowledgments of each of the Loan Parties contained in this Agreement
and subject to the terms and conditions contained herein, during the Forbearance Period, each of the Lenders and the Administrative
Agent agrees to forbear from exercising its rights and remedies under the Loan Documents that are based solely on the occurrence
of the Specified Defaults; provided, that, since the occurrence of the first Specified Default, and continuing after the
date hereof, the Obligations shall have borne and accrued interest, and shall continue to bear and accrue interest following the
date hereof, at the Default Rate in accordance with Section 2.01(e)(2) of the Credit Agreement.

 

(iii)       Each
of the Loan Parties, jointly and severally, acknowledges and agrees that, on and after the Forbearance Termination Date, each
of the Lenders and the Administrative Agent may proceed, without any requirement for notice to any Loan Party or any other
Loan Party, to enforce any or all of its rights and remedies under or in respect of the Term Loan, the Obligations, the
Credit Agreement, the Loan Documents, this Agreement or applicable law, including, without limitation, the right to require
that the Loan Parties repay immediately all Obligations and any and all other amounts then owing under or pursuant to the
Loan, the Credit Agreement and the other Loan Documents and the right to exercise any and all remedies in respect of the
Secured Liens.

 

    2

     

    

 

SECTION 2. Additional Agreements. In
connection with the agreements of the Lenders and the Administrative Agent hereunder, each of the Loan Parties, jointly and severally,
agrees to the following additional terms and conditions and expressly acknowledges and agrees that the failure to comply with the
provisions of this Agreement (including the provisions of this Section 2) shall constitute an Event of Default (without
need for notice of any kind or any passage of time) under the Credit Agreement and each of the other Loan Documents. Each of the
Loan Parties hereby covenants and agrees that:

 

(a)       On
April 13, 2018 the Loan Parties retained Carl Marks & Co., Inc. as a financial advisor (the “Financial
Advisor”), and have delivered to the Administrative Agent and the Lenders a copy
of the engagement letter entered into between the Loan Parties and the Financial Advisor. The Loan Parties shall continue to retain
the Financial Advisor at all times during the Forbearance Period.

 

(b)       On
or before June 15, 2018 prior to 5:00 p.m. (New York City time), the Loan Parties shall, and shall cause Financial Advisor to,
deliver to the Administrative Agent and the Lenders:

 

(i)       Revised
Forecast. A revised forecast and financial model for the 2018 and 2019 calendar years for the Loan Parties in form and substance
acceptable to the Lenders. The 2018 report is to be provided on a monthly basis and the 2019 report on a fiscal quarter basis;

 

(ii)       FA
Report. A report on the Financial Advisor’s findings and potential cost savings
and reductions for the Loan Parties in form and substance acceptable to each Lender; and

 

(iii)       Financing
Proposal. A comprehensive financial proposal, which proposal shall, at a minimum, outline in reasonable detail the Loan Parties’
plan for obtaining increased liquidity, deleveraging the Loan Parties through a capital raise or
other method, and financing options to right size the capital structure, which financial proposal shall be in form and substance
acceptable to each Lender.

 

(c)       On
or before June 30, 2018 prior to 5:00 p.m. (New York City time), the Loan Parties shall, and shall cause Financial Advisor to,
deliver to the Administrative Agent and the Lenders a draft of the consolidated and consolidating audited financial statements,
including balance sheet, related statements of operations, and statements of cash flows, of Loan Parties and their Subsidiaries
as of and for the fiscal year ended December 31, 2017 and on or before July 15, 2018 prior to 5:00 p.m. (New York City time), the
Loan Parties shall, and shall cause Financial Advisor to, deliver to the Administrative Agent and the Lenders a final draft of
such report.

 

    3

     

    

 

(d)       The
Loan Parties’ senior management shall, and shall cause Financial Advisor to, hold
and participate in bi-weekly conference calls or in-person meetings with the Administrative Agent and the Lenders during which
(i) the Loan Parties’ senior management shall, and shall cause Financial Advisor to,
provide the Administrative Agent with a reasonably detailed update of the Loan Parties’ operations
and financial position and (ii) the Administrative Agent and the Lenders shall be permitted to ask questions of, and to obtain
any requested information from the Loan Parties’ senior management and the Financial
Advisor with respect to the Loan Parties’ operations and financial position. In connection
with each such bi-weekly conference call or in-person meeting, the Loan Parties shall deliver to the Lenders, at least one Business
Day prior to such call or meeting, an agenda and summary of the update of the Loan Parties’ operations
and financial position to be discussed at such call or meeting.

 

(e)       The
Loan Parties shall, and shall cause Financial Advisor to, (a) meet, separately or collectively as Administrative Agent may request,
with Administrative Agent and the Lenders and their representatives, including telephonic meetings, at such reasonable times during
normal business hours as may be requested by Administrative Agent, to answer questions, provide updates and deliver such materials
as may be reasonably requested by Administrative Agent or the Lenders relating to the financial condition or the actual or projected
financial or operating results of the business operations or property of the Loan Parties and (b) answer questions, provide updates
and deliver such materials as may be further reasonably requested from time to time by Administrative Agent relating to the foregoing.

 

(f)       Loan
Parties shall simultaneously deliver to each Lender any report delivered to any Revolving Loan Lender or the Revolving Loan Agent
by any Loan Party or representative of any Loan Party, including, without limitation, any inventory appraisal report prepared by
Hilco as provided in Section 4(i) of the Revolving Loan Forbearance Agreement and any field exam prepared as provided in Section
4(j) of the Revolving Loan Forbearance Agreement.

 

(g)       On
or prior to the date that is three Business Days after the Forbearance Effective Date, (the “Debt
Financing Deadline”), (A) Holdings shall obtain the proceeds of a subordinated
debt financing (the “Debt Financing”)
from PBCO, Inc. (the “Debt Investor”)
in an amount not less than $4,000,000, which Debt Financing shall (i) provide that the only obligor in respect of such Debt Financing
shall be Holdings, (ii) be unsecured, (iii) be fully and completely subordinated to the prior payment in full of the Obligations
for the benefit of, and to, the Lenders pursuant to a subordination agreement, which shall be in form and substance acceptable
to each Lender in its sole discretion, (iv) have a maturity date no earlier than 6 months after the Maturity Date, (v) provide
for no scheduled payments of principal, prepayments or voluntary payments of principal nor mandatory redemption obligations prior
to the Maturity Date, (vi) accrue interest at a rate no greater than 8.24% per annum, which interest shall compound annually in
arrears on the 1st calendar day of each year, (vii) provide that no payment of interest may be made in cash prior to
6 months after the Maturity Date, (viii) not be cross-defaulted to the Loan Documents, (ix) be subject to permanent standstill
provisions (other than filing a proof of claim in connection with a Proceeding), (x) provide that neither the Debt Financing, nor
any interest therein, may be assigned by the Debt Investor to any person or entity without the prior written consent of each Lender,
and (xi) otherwise be on terms and conditions, and pursuant to documentation, acceptable to each Lender in its sole discretion.

 

    4

     

    

 

(h)       The
Loan Parties hereby agree that the proceeds of the Debt Financing shall not be used for any purpose other than for the purpose
of funding the working capital needs of the Loan Parties. For the avoidance of doubt, the Loan Parties shall not use, or permit
or suffer the use of, any of the proceeds of the Debt Financing for the purposes of making any payment in respect of the Obligations
or the Revolving Loan Obligations. The proceeds of the Debt Financing shall be deposited into a separate account at Revolving Loan
Agent shall only be used for working capital purposes and only if Loan Parties are not able to draw on the Revolving Loans at such
time.

 

(i)       The
Loan Parties shall deliver to the Administrative Agent and the Lenders each of the audited and unaudited annual, quarterly and
month financial statements and other reports and information required to be delivered under Section 5.1 of the Credit Agreement,
in each case, (x) on or prior to the date such audited and unaudited annual, quarterly or month financial statements or other reports
and information is required to be so delivered under Section 5.1 of the Credit Agreement, and (y) in form and substance acceptable
to the Administrative Agent in its sole discretion; provided, that, with respect to the monthly financial statements and
other deliveries required under Section 5.1 of the Credit Agreement, such monthly financial statements and other deliveries shall
include a report on the net sales by state of the Loan Parties in the same form as shall have previously been delivered to the
Administrative Agent and, in each case, in form and substance acceptable to the Administrative Agent in its sole discretion.

 

(j)       Beginning
May 10, 2018, the Loan Parties shall deliver to the Administrative Agent and the Lenders, as soon as available, but in any event
no later than the Wednesday following the end of each week, a thirteen (13)-week cash forecast prepared by the Financial Advisor
(which at a minimum will include (i) weekly variance reporting, comparing actual amounts to forecasted amounts; (ii) weekly cash
receipts; (iii) expenditures detailed category; and (iv) ending Book Cash (as defined below)), sales invoice reports, accounts
receivables and accounts payable aging reports by top ten customers and suppliers and months in inventory reports of inventory
by location and staleness, in each case, in the same form as shall have previously been delivered to the Administrative Agent and,
in each case, in form and substance acceptable to the Administrative Agent in its sole discretion.

 

(k)       From
and after May 22, 2018, the Loan Parties shall not permit (A) the sum of (i) the U.S. Availability (as defined in the Revolving
Loan Agreement), plus (ii) the aggregate amount of Book Cash and cash equivalents on hand of the Loan Parties that are located
in a deposit account at Bank of America in the United States and which are subject to a perfected lien in favor of the Administrative
Agent for the benefit of the Secured Parties to be less than $2,000,000 or (B) the sum of (i) the Global Availability (as defined
in the Revolving Loan Agreement), plus (ii) the aggregate amount of Book Cash and cash equivalents on hand of the Loan Parties
that are located in a deposit account at Bank of America in the United States and Canada and which are subject to a perfected
lien in favor of the Administrative Agent for the benefit of the Secured Parties to be less than $3,000,000. For the purposes
hereof, “Book Cash” shall mean
the amount on deposit in the Borrowers’ bank accounts located in the United States
and/or Canada, as applicable, that are subject to a control agreement to the extent required under Section 8.2(d) of the Revolving
Loan Agreement, at 5:00 p.m. (Eastern Time) on any date of determination less (i) all checks that have been written or otherwise
distributed but not yet cashed as of such date of determination and (ii) all automated clearing house transfers that have been
initiated by the depository bank and not funded by the Borrowers, provided, that the amount of such cash shall have been reconciled
to the books and records (including bank statements) of the Borrowers in a manner reasonably acceptable to the Administrative
Agent.

 

    5

     

    

 

(l)       None
of the Loan Parties nor any of their respective Subsidiaries shall enter into, or otherwise consent to or permit to exist, any
amendment, restatement, supplement, waiver or other modification to the Revolving Loan Agreement or any other Revolving Loan Document
(including, without limitation, the Revolving Loan Forbearance Agreement) without the prior written consent of the Administrative
Agent, which the Administrative Agent may grant, decline or withhold in its sole discretion. Notwithstanding the foregoing, the
Revolving Loan Agent and Revolving Loan Lenders may waive or extend the due date for deliveries required pursuant to the Revolving
Loan Agreement, the Revolving Loan Documents and the Revolving Loan Forbearance Agreement, but no such waiver or extension shall
be binding on the Administrative Agent or the Lenders with respect to deliveries required under the Term Loan Agreement or this
Agreement.

 

(m)       Notwithstanding
anything set forth in the Credit Agreement or any Loan Document to the contrary, during the Forbearance Period, no Loan Party shall
(and no Loan Party shall permit any of their respective Subsidiaries to):

 

(i)       make
or pay any Restricted Payment other than Tax Distributions permitted to be made pursuant to Section 6.1 of the Credit Agreement;

 

(ii)       pay
any Permitted Management Fees or pay any other management fees to the Manager, the Sponsor, the Co-Investor, any of their respective
Affiliates or any other person or entity;

 

(iii)       form,
establish, create or invest in any Subsidiary or any other Person;

 

(iv)       liquidate
or dissolve, or consolidate or merge with any Person;

 

(v)       pay
any earnout or any similar obligation, including, without limitation, any Asset Acquisition Earnout Obligation;

 

(vi)       make
or receive any Equity Cure Contribution or otherwise exercise any right under Section 6.1(c) of the Credit Agreement;

 

(vii)       declare,
make or pay any intercompany loans, investments or other transfer of assets (including any Permitted Intercompany Loans) from the
Borrowers or any of their domestic Subsidiaries to any Canadian Subsidiaries;

 

(viii)       prepay
or repay any Indebtedness other than to repay on the Revolver Loans; or

 

(ix)       make
any Investment, including any Permitted Investment.

 

    6

     

    

 

(n)       In
addition to the other agreements set forth herein and in the Credit Agreement, during the Forbearance Period:

 

(i)       none
of the Loan Parties, their respective Subsidiaries or their respective direct or indirect equityholders, or any affiliate of any
of the foregoing, will join in, assist, cooperate or participate as an adverse party or adverse witness in any suit or other proceeding
against any Lender or the Administrative Agent relating to the Credit Agreement or any other Loan Document or any of the Obligations
or the Secured Liens, or in connection with or related to any of the transactions contemplated by the Credit Agreement, any other
Loan Document, this Agreement or any document, agreement or instrument executed in connection with any Loan Document or this Agreement;
and

 

(ii)       no
Loan Party will be subject to any order of any court enjoining it from complying with any of the terms or conditions of this Agreement.

 

(o)       Notwithstanding
anything set forth in the Credit Agreement or any Loan Document to the contrary, during the Forbearance Period, the Loan Parties
shall not (and the Loan Parties shall not permit their respective Subsidiaries to) permit (x) the aggregate amount of accounts
payable of the Loan Parties and their Subsidiaries that are overdue by more than 60 days following the date due to exceed $2,500,000
or (y) the DPO to be greater than 55. For the purposes of the foregoing, the “DPO”
shall mean, as of any date, the product of (i) a quotient, (A) the numerator of which is equal
to the aggregate amount of outstanding trade payables of the Loan Parties and their Subsidiaries as of such date, and (B) the denominator
of which is equal to the average cost of goods sold of the Loan Parties and their Subsidiaries for the last three full calendar
months ending on or prior to such date, times (ii) thirty (30).

 

SECTION 3.
Conditions Precedent. This Agreement shall become effective and be deemed effective as of the date when, and only when,
all of the following conditions have been satisfied as determined in the Administrative Agent’s
sole discretion (the date of such effectiveness being herein called the “Forbearance
Effective Date”):

 

(a)       the
Administrative Agent shall have received an executed counterpart of this Agreement duly executed by each of the Loan Parties and
each of the Lenders;

 

(b)       the
Administrative Agent shall have received from the Loan Parties a forbearance fee (the “Forbearance
Fee”) for the benefit of each of the Lenders in an amount equal to 0.25% of the
outstanding principal amount of the Term Loans held by each such Lender, which fee shall be for each such Lender’s
own account and shall be fully earned and due and payable on the Forbearance Effective Date; provided, that, the
Forbearance Fee payable pursuant to this clause (b) shall be paid by the Borrower on the Forbearance Effective Date by adding,
effective as of the Forbearance Effective Date, the amount of the Forbearance Fee payable to each Lender to the outstanding principal
amount of the Term Loans held by each such Lender on the Forbearance Effective Date;

 

(c)       the
Revolving Loan Agent and each Revolving Loan Lender shall have entered into the Forbearance Agreement and First Amendment to
Amended and Restated Loan and Security Agreement (the “Revolving Loan
Forbearance Agreement”), and such Revolving Loan Forbearance
Agreement shall be in form and substance acceptable to the Administrative Agent in its sole discretion;

 

    7

     

    

 

(d)       all
representations and warranties contained in this Agreement shall be true and correct in all material respects, except to the extent
such representations and warranties speak as to an earlier date, in which case the same are true, correct and complete as to such
earlier date;

 

(e)       no
Default or Event of Default (other than the Specified Defaults) shall have occurred and be continuing under the Credit Agreement
or any of the other Loan Documents;

 

(f)       the
Loan Parties shall have paid all costs and expenses of the Administrative Agent (including legal fees and expenses) incurred in
connection with the preparation and execution of this Agreement and incident to all proceedings in connection with the transactions
contemplated by, and documents relating to, this Agreement and the Loan Documents, which payment shall be nonrefundable; and

 

(g)       the
Administrative Agent shall have received a closing certificate executed by a Responsible Officer of the Borrower Agent, certifying
in the name of and on behalf of the Borrower Agent that the conditions set forth in this Section 3 have been satisfied.

 

SECTION 4. Amendment to Credit Agreement.
Effective as of the Forbearance Effective Date:

 

(a)       The
definition of “Consolidated EBITDA” in
Section 1.1 of the Credit Agreement is hereby amended to add the following clause (xiii):

 

“(xiii) fees,
costs and expenses incurred in such period in connection with the Forbearance Agreement and Amendment to Credit Agreement, dated
as of May 18, 2018 (the “Forbearance Agreement”),
among the Borrowers, the Administrative Agent and the Lenders, the Revolving Loan Forbearance Agreement (as defined in the Forbearance
Agreement) and the actions contemplated thereby, including without limitation forbearance fees, legal fees and expenses, fees and
expenses paid to consultants, accountants and other professionals,”

 

(b)       The
definition of “Financial Covenants” in
Section 1.1 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

 

““Financial
Covenants” the covenants, agreements and obligations set forth in Sections
6.1(a), 6.1(b) and 6.1(d).”

 

(c)       Section
2.1(d)(1) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

 

“Amortization.
Commencing September 30, 2017, and continuing on the last day of each fiscal quarter of the Borrowers thereafter, the Borrowers
shall make quarterly repayments of the principal amount of the Term Loans in the aggregate principal amount equal to 0.625% of
the original principal amount of the Term Loans on the Closing Date; provided, that the quarterly payment due on June 30, 2018
shall instead be due and payable on the later of (i) the Forbearance Termination Date (as defined in the Forbearance Agreement),
and (ii) June 30, 2018.”

 

    8

     

    

 

(d)       Section
2.1(e)(3) of the Credit Agreement is hereby amended to insert the following clause at the end of clause (C) of such Section 2.1(e)(3):

 

“provided, that,
with respect to any Interest Payment Date that would otherwise occur during the continuation of the Forbearance Period (as defined
in the Forbearance Agreement), the interest that would otherwise be required to be paid hereunder on such Interest Payment Date
shall instead be due and payable hereunder on the Forbearance Termination Date (as defined in the Forbearance Agreement).”

 

(e)       Section
6.1 of the Credit Agreement is hereby amended by inserting a new clause (d) therein to read in its entirety as follows:

 

“(d) Minimum
EBITDA. The Borrowers shall not permit Adjusted Consolidated EBITDA for the previous four-month period ending as of the last
day of any calendar month to be less than Negative One Million Five Hundred Thousand Dollars ($-1,500,000). As soon as practicable
and in any event within 30 days after the end of each month, the Borrowers shall deliver to Administrative Agent a certificate
in form and substance acceptable to Administrative Agent, completed and signed by a Responsible Officer of the Borrower Agent,
setting forth the calculation of EBITDA for the previous month and certifying whether or not the Borrowers are in compliance with
the foregoing covenant.”

 

(f)       Article
VI of the Credit Agreement is hereby amended by inserting a new Section 6.21 therein to read in its entirety as follows:

 

    9

     

    

 

“6.21
Board Observer. Commencing on the Forbearance Effective Date (as defined in the Forbearance Agreement), each Loan Party shall
allow (i) one (1) non-voting representative designated by the Administrative Agent (such representative, the “Attending
Observer”) to attend either in person or telephonically, in the capacity of an
observer and not a member, all meetings and all calls of the board of directors, board of managers or similar governing body of
each of the Loan Parties, including all committees and sub-committees thereof (each, a “Governing
Body”), and (ii) one (1) non-voting representative designated by each Lender
(each such representative, a “Call-In Observer”,
and the Call-In Observers and the Attending Observer, collectively, the “Observers”)
to attend telephonically, in the capacity of an observer and not a member, all meetings and all calls of each Governing Body.
Each Loan Party shall (a) give each Observer prior written notice of all such meetings and calls of each Governing Body at the
same time as notice is furnished to the members of the applicable Governing Body, but, in any event, no later than forty eight
(48) hours prior to such meeting or call, (b) provide each Observer with all notices, documents and information furnished to the
members of the Governing Body in connection with each such meeting or call, whether at or in anticipation of such meeting or call,
an action by written consent or otherwise, at the same time as such materials are furnished to the members of the applicable Governing
Body, and (c) provide to each Observer copies of the minutes and resolutions of all such meetings and calls at the same time as
such minutes and resolutions are furnished to the members of the applicable Governing Body. Presence of any Observer in a meeting
of a Governing Body shall not be considered in determining a quorum for any meeting of such Governing Body or for any other purpose
in connection with the validity or otherwise of any action taken by such Governing Body. A majority of the members of the applicable
Governing Body may exclude any Observer from any meeting or portion thereof, or from receiving any materials if, it believes that
(i) such exclusion is necessary to preserve attorney-client privilege or confidentiality or (ii) there exists, with respect to
any such meeting or materials, an actual or potential conflict of interest between Holdings or the Governing Body, and the Administrative
Agent, the Lenders or their affiliates or such Observer (including as to discussion or materials regarding the Term Loans or any
Loan Documents). The Loan Parties hereby consent to the disclosure by an Observer to the Administrative Agent or any Lender, and
the disclosure by the Administrative Agent to each of the Lenders, of all materials and other information received by an Observer
in his or her capacity an Observer or otherwise pursuant to, or in connection with, this Section 6.21 subject to the confidentiality
provisions of the Credit Agreement. The Loan Parties will pay, or will cause one of its Subsidiaries to pay, the reasonable out-of-pocket
costs and expenses incurred by an Observer in the course of his or her service hereunder, including in connection with attending
regular and special meetings of a Governing Body, or any of its committees, in each case, subject to the Loan Parties’ policies
and procedures with respect thereto (including the requirement of reasonable documentation thereof).”

 

SECTION 5. Representations and Warranties.
Each of the Loan Parties, jointly and severally, represents and warrants (which representations and warranties shall survive the
execution and delivery hereof) to the Lenders and the Administrative Agent that:

 

(a)       this
Agreement and each other agreement to be executed and delivered in connection herewith has been duly authorized, executed and delivered
by all necessary action on the part of each Loan Party which is a party hereto or thereto and, if necessary, their respective members
or stockholders, as the case may be, and is in full force and effect as of the Forbearance Effective Date and the agreements and
obligations of Loan Parties contained herein and therein constitute (or when executed and delivered, will constitute) legal, valid
and binding obligations of Loan Parties enforceable against them in accordance with their terms, except as such enforceability
may be limited by bankruptcy, insolvency, fraudulent transfer or conveyance, moratorium, or other similar laws relating to the
enforcement of creditors’ rights generally and by general equitable principles;

 

    10

     

    

 

(b)       neither
the execution, delivery and performance of this Agreement nor the consummation of any of the transactions contemplated hereby (i)
are in contravention of any applicable law or any indenture, agreement or undertaking to which any Loan Party is a party or by
which any Loan Party or its property is bound, or (ii) violates any provision of the certificate of incorporation, certificate
of formation, by-laws, operating agreement or other governing documents of such Loan Party;

 

(c)       no
consent of any person or entity (including, without limitation, any of its equity holders or creditors), and no action of, or filing
with, any governmental or public body or authority is required to authorize, or is otherwise required in connection with, the execution,
delivery and performance of this Agreement;

 

(d)       as
of the date hereof and after giving effect to this Agreement, each of the representations and warranties of the Loan Parties set
forth in the Credit Agreement and the other Loan Documents are true and correct in all material respects, except to the extent
such representations and warranties speak as to an earlier date, in which case the same are true, correct and complete as to such
earlier date; and

 

(e)       no
Default or Event of Default exists under the Credit Agreement or any of the other Loan Documents other than the Specified Defaults.

 

SECTION 6. Acknowledgment of Debts; Guaranties
and Liens.

 

(a)       Each
of the Loan Parties, jointly and severally, hereby acknowledges, agrees, confirms, reaffirms and stipulates that:

 

(i)       as
of the date hereof, the aggregate outstanding principal balance of the Obligations under the Loan Documents is $73,593,750.00;

 

(ii)       as
of the date hereof, the aggregate outstanding interest in respect of the Obligations under the Loan Documents is $545,468.29;

 

(iii)       interest
(including Default Interest) has accrued on the Obligations since October 1, 2017 under the Loan Documents and shall continue to
accrue and be payable pursuant to the Loan Documents and such interest shall continue to accrue at the Default Rate following the
date hereof and the Forbearance Effective Date; provided, that, notwithstanding the provisions of the Credit Agreement,
the parties hereto acknowledge and agree that all Default Interest accruing as a result of the Specified Defaults (x) shall compound
on each Interest Payment Date and (y) shall not be payable in cash until the earliest of (A) the Maturity Date, (B) the date on
which the Obligations shall be accelerated in accordance with the Credit Agreement and (C) the first date following the Forbearance
Effective Date on which the Loan Parties shall be in compliance with Section 6.1(b) of the Credit Agreement;

 

(iv)       fees,
late fees, reimbursable and indemnifiable amounts, and other amounts have accrued under each of the Loan Documents and shall continue
to accrue and be payable pursuant to the Loan Documents;

 

    11

     

    

 

(v)       effective
as of the Forbearance Effective Date, the Forbearance Fee will be paid by the Borrower by adding the amount of the Forbearance
Fee payable to each Lender to the outstanding principal amount of the Term Loans held by each such Lender on the Forbearance Effective
Date; and

 

(vi)       all
of the Obligations, including, without limitation, the Obligations described in the foregoing clauses (i) through (v),
are (or, in the case of clause (v), from and after the Forbearance Effective Date will be) unconditionally owing by the
Loan Parties to the Lenders and the Administrative Agent without offset, defense or counterclaim of any kind, nature or description
whatsoever.

 

(b)       Each
of the Loan Parties, jointly and severally, hereby acknowledges, agrees, confirms, reaffirms and stipulates:

 

(i)       (x)
to the validity, legality and enforceability of each of the guarantees of the Obligations set forth in the Loan Documents; (y)
that the reaffirmation of each of the guarantees of the Obligations set forth in the Loan Documents is a material inducement to
the Lenders and the Administrative Agent; and (z) that it has no defense to the enforcement of each of the guarantees of the Obligations
set forth in the Loan Documents and its obligations under each such guarantee shall remain in full force and effect until all the
Obligations have been paid in full;

 

(ii)       (x)
to the validity, legality and enforceability of each of the Secured Liens on the assets and property of each of the Loan Parties
pursuant to the Loan Documents; (y) that the reaffirmation of each of the Secured Liens is a material inducement to the Lenders
and the Administrative Agent; and (z) that it has no defense to the enforcement of the Secured Liens and the Secured Liens shall
remain in full force and effect until all the Obligations have been paid in full;

 

(iii)       that
each Loan Party hereby waives and releases any and all defenses, affirmative defenses, setoffs, claims, counterclaims, and causes
of action of any kind or nature which he has asserted, or might assert, against any Lender, the Administrative Agent or any of
their respective subsidiaries or affiliates, or any of the past, present or future officers, directors, contractors, employees,
attorneys or agents of any Lender, the Administrative Agent or any such subsidiary or affiliate, which in any way relate to or
arise out of the Obligations, the Secured Liens or any of the Loan Documents;

 

(iv)       that
each Loan Party consents to the execution and delivery of this Agreement and agrees and acknowledges that the liability of each
Loan Party under each of the Loan Documents, and the existence, creation, perfection or enforceability of any of the Secured Liens,
shall not be diminished in any way by the execution and delivery of this Agreement or by the consummation of any of the transactions
contemplated hereby or thereby;

 

(v)       that
all notices required under the Loan Documents to be given by the Lenders or the Administrative Agent have been given by the Lenders
or the Administrative Agent or validly waived, including, without limitation, all notices of default, and all rights and/or opportunities
to cure related thereto have expired or lapsed;

 

    12

     

    

 

(vi)       except
as expressly set forth herein, neither any Lender nor the Administrative Agent has agreed to (and has no obligation whatsoever
to discuss, negotiate or agree to) any restructuring, modification, amendment, waiver or forbearance with respect to the Obligations
or any of the terms of the Loan Documents;

 

(vii)       no
understanding with respect to any other restructuring, modification, amendment, waiver or forbearance with respect to the Obligations
or any of the terms of the Loan Documents shall constitute a legally binding agreement or contract, or have any force or effect
whatsoever, unless and until reduced to writing and signed by authorized representatives of each Loan Party, each Lender and the
Administrative Agent;

 

(viii)       the
execution and delivery of this Agreement has not established any course of dealing between the parties hereto or created any obligation
or agreement of any Lender or the Administrative Agent with respect to any future restructuring, modification, amendment, waiver
or forbearance with respect to the Obligations or any of the terms of the Loan Documents; and

 

(ix)       neither
any Lender nor the Administrative Agent is required to make any loan advance to any Loan Party under the Loan Documents or otherwise,
and any further loan advances made shall be made in the sole discretion of each such Lender and the Administrative Agent and subject
to such conditions and the payment of such fees as each such Lender and the Administrative Agent requires in their sole discretion.

 

SECTION 7. Ratification; Waiver of Defenses;
Indemnity and Release.

 

(a)       The
Loan Documents remain in full force and effect and are hereby ratified and affirmed by each of the Loan Parties. Each of the Loan
Parties, jointly and severally, (i) confirms and agrees that it is truly and justly indebted to the Lenders and the Administrative
Agent in the aggregate amount of the Obligations without defense, counterclaim or offset of any kind whatsoever; and (ii) reaffirms
and admits the validity and enforceability of the Loan Documents.

 

(b)       Each
of Loan Parties, jointly and severally, on behalf of itself and each of its Subsidiaries and affiliates, hereby waives, releases
and discharges each Lender and the Administrative Agent, and all of the directors, officers, employees, attorneys, agents, successors
and assigns of each Lender and the Administrative Agent, from any and all claims, demands, actions, causes of action, damages,
costs, expenses and liabilities, known or unknown, anticipated or unanticipated, suspected or unsuspected, asserted or unasserted,
fixed, contingent or conditional, at law or in equity, arising out of or in any way relating to the Loan Documents or any documents,
agreements, dealings or other matters connected with the Loan Documents, in each case to the extent arising (x) on or prior to
the date hereof or (y) out of, or relating to, any actions, dealings or matters occurring on or prior to the date hereof. The waivers,
releases, and discharges in this Section 7 shall be effective on the Forbearance Effective Date regardless of whether any
post-Forbearance Effective Date conditions to this Agreement are satisfied and regardless of any other event that may occur or
not occur after the date hereof.

 

(c)       Each
of the Loan Parties, jointly and severally, agrees to defend, protect, indemnify and hold harmless each Lender and the Administrative
Agent and all of their respective officers, directors, employees, attorneys, consultants and agents (collectively called the “Indemnitees”)
from and against any and all losses, damages, liabilities, obligations, penalties, fees, reasonable costs and expenses (including,
without limitation, reasonable fees, costs and expenses of outside counsel) incurred by such Indemnitees, whether direct, indirect
or consequential, as a result of or arising from or relating to or in connection with any of the following: (i) the execution
or performance or enforcement of this Agreement, any other Loan Document or any other document executed in connection with the
transactions contemplated by this Agreement; or (ii) any claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto. This indemnity shall survive the repayment of the Obligations and
the discharge of the liens granted under the Loan Documents.

 

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(d)       This
Agreement shall be limited precisely as written and, except as expressly provided herein, shall not be deemed (i) to be a consent
granted pursuant to, or a (other than as set forth in Section 4) waiver, modification or forbearance of, any term or condition
of any of the Loan Documents or a waiver of any Default or Event of Default under any of the Loan Documents (including, without
limitation, the Specified Defaults), whether or not known to a Lender or the Administrative Agent, or (ii) to prejudice any right
or remedy which a Lender or the Administrative Agent may now have or have in the future under or in connection with the Loan Documents
or any of the instruments or agreements referred to therein. Subject to the forbearance in respect of the Specified Defaults set
forth in Section 1(b) and the amendments set forth in Section 4, the Loan Documents shall continue in full force
and effect and are hereby ratified and confirmed.

 

(e)       Each
of Loan Parties expressly acknowledges the occurrence and continued existence of the Specified Defaults. The Loan Parties, jointly
and severally, agree that each Lender and the Administrative Agent has no obligation (i) to grant the forbearance contemplated
by this Agreement, (ii) to enter into discussions with the Loan Parties with regard to waiving the Specified Defaults, or (iii)
to enter into any amendment or modification of the terms and provisions of any Loan Document, and any of the same shall be within
the sole discretion of each Lender and the Administrative Agent. Each of the Loan Parties, jointly and severally, acknowledge and
agree, as a condition of the Lenders and the Administrative Agent entering into this Agreement, that it shall not raise any claim,
cause of action or defense based upon any allegations of failure of any Lender or the Administrative Agent to do or agree to do
any of the foregoing, or failure of any Lender or the Administrative Agent to negotiate in good faith to accomplish any of the
same.

 

SECTION 8. No Waiver; No Novation; Reservation
of Rights.

 

(a)       Neither
any Lender nor the Administrative Agent has waived, nor is any Lender or the Administrative Agent by this Agreement waiving, and
neither any Lender nor the Administrative Agent has any present intention of waiving, any Specified Default, any other Events of
Default arising under the Loan Documents which may be continuing on the Forbearance Effective Date or any Events of Default arising
under the Loan Documents which may occur after the Forbearance Effective Date (whether the same or similar to any Specified Default
or otherwise), and nothing contained herein shall be deemed or constitute any such waiver.

 

    14

     

    

 

(b)       This
Agreement is not intended to be, and shall not be deemed or construed to be, a satisfaction, reinstatement, novation, or release
of the Loan Documents or any of the Obligations. Neither this Agreement nor any payments made or other actions taken pursuant to
this Agreement shall be deemed to cure any defaults under any of the Loan Documents, it being the intention of the parties hereto
that the Loan Parties are and shall remain in default and all Obligations are and shall remain immediately due and payable in full
notwithstanding this Agreement.

 

(c)       Subject
to Section 1(b) and Section 4, each Lender and the Administrative Agent reserves the right, in their sole discretion,
to exercise any or all rights or remedies under the Loan Documents, applicable law and otherwise as a result of any Specified Default,
any other Events of Default arising under the Loan Documents that may be continuing on the Forbearance Effective Date or any Default
or Event of Default arising under the Loan Documents that may occur after the Forbearance Effective Date, and neither any Lender
nor the Administrative Agent has waived any of such rights or remedies and nothing in this Agreement, and no delay on any Lender’s
or the Administrative Agent’s part in exercising such rights or remedies, should be
construed as a waiver of any such rights or remedies. Upon the termination of the Forbearance Period, the agreement of the Lenders
and the Administrative Agent to forbear and the other agreements of the Lenders and the Administrative Agent hereunder, in each
case as set forth in Section 1(b) above, shall automatically and without further action terminate and be of no force and
effect, it being understood and agreed that the effect of such termination will be to permit the Lenders and the Administrative
Agent to exercise any and all of its rights and remedies at any time and from time to time thereafter, including, without limitation,
the right to accelerate all or any portion of the Obligations, enforce the Secured Liens and exercise any other rights and remedies
set forth in the Loan Documents, applicable law or otherwise.

 

(d)       Notwithstanding
anything to the contrary set forth herein (including, without limitation, the provisions of Section 1(b)), nothing in this
Agreement shall prohibit, restrict or otherwise limit the right or ability of any Lender or the Administrative Agent to take any
actions that a Lender or the Administrative Agent may take under the Loan Documents, at law, in equity or otherwise to preserve
and protect any assets or properties of any Loan Party that are subject to the Secured Liens or the interests (including the Secured
Liens) of the Lenders and the Administrative Agent in any such assets or properties, including, without limiting the generality
of the foregoing, (i) the filing of actions, or the defending of or intervention in actions (such as foreclosure proceedings) brought
by any person or entity (including any Loan Party), relating to any such assets or properties or the interests of the Lenders and
the Administrative Agent therein, (ii) the sending of notices to any persons or entities concerning the existence of security interests
or liens in favor of the Lenders and the Administrative Agent relating to any such assets or properties or (iii) the filing of
financing statements, and the taking of any other required actions, to perfect or continue the perfection of the Secured Liens
in such assets or properties.

 

    15

     

    

 

(e)       The
Loan Parties acknowledge and agree that it shall be an immediate Event of Default under the Loan Documents if the Administrative
Agent or the Lenders determine that (i) any Loan Party fails to comply with, or otherwise breaches, any of the obligations or
undertakings of such Loan Party set forth in this Agreement or (ii) any representation or warranty of any Loan Party set forth
herein fails to be true and correct in all respects.

 

SECTION 9. Further Assurances. Each
Loan Party hereby agrees that each Loan Party shall take such further action and shall execute and deliver such additional documents
and instruments (in recordable form, if requested) as the Lenders or the Administrative Agent may reasonably request to effectuate
the purposes and terms of this Agreement and each of the other Loan Documents, including, without limitation, any such instruments,
assignments, conveyances or other documents as the Lenders or the Administrative Agent reasonably requests to perfect or continue
the Secured Liens on any assets or properties of any Loan Party.

 

SECTION 10. Counterparts. This Agreement
may be executed by the parties hereto individually or in combination, in one or more counterparts, each of which shall be an original
and all of which shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page to this Agreement
by telecopier or electronic transmission (in pdf format) shall be effective as delivery of a manually executed counterpart of this
Agreement.

 

SECTION 11. Successors and Assigns.
The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors
and assigns.

 

SECTION 12. Severability. If any provision
of this Agreement shall be held invalid or unenforceable in whole or in part in any jurisdiction, such provision shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or enforceability without in any manner affecting the validity or
enforceability of such provision in any other jurisdiction or the remaining provisions of this Agreement in any jurisdiction.

 

SECTION 13. Governing Law. THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK. ANY DISPUTE ARISING OUT OF OR CONCERNING THE TERMS OF THIS AGREEMENT SHALL BE
RESOLVED IN A COURT OF COMPETENT JURISDICTION LOCATED IN NEW YORK COUNTY, NEW YORK, USA, WHICH SHALL BE THE EXCLUSIVE FORUM FOR
THE RESOLUTION OF ANY SUCH DISPUTE.

 

SECTION 14. Expenses. The Loan Parties,
joint and severally, agree to pay, or reimburse, the Administrative Agent for all expenses incurred in connection with the preparation
and negotiation of this Agreement and related agreements and instruments and the transactions contemplated hereby, including, but
not limited to, the fees and expenses of counsel to the Administrative Agent.

 

SECTION 15. Miscellaneous. The parties
hereto shall, at any time and from time to time following the execution of this Agreement, execute and deliver all such further
instruments and take all such further action as may be reasonably necessary or appropriate in order to carry out the provisions
of this Agreement.

 

    16

     

    

 

SECTION 16. Headings. Section headings
in this Agreement are included for convenience of reference only and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.

 

SECTION 17. Entire Agreement. This
Agreement embodies the entire agreement of the parties hereto with respect to the subject matter hereof and supersedes all prior
agreement and understandings relating to the subject matter hereof. All prior statements, representations and warranties, if any,
of any Lender or the Administrative Agent in respect of the subject matter hereof, and all prior drafts of this Agreement, are
totally superseded and merged into this Agreement, which represents the final and sole agreement of the parties hereto with respect
to the matters which are the subject hereof. Each of the Loan Parties hereby acknowledges and agrees that the execution and delivery
of this Agreement has not established any course of dealing between the parties hereto and that the parties hereto do not contemplate,
and, in entering into this Agreement, the Loan Parties have not relied upon, any potential extension of the Forbearance Period.

 

[The remainder of this page left blank
intentionally]

 

    17

     

    

 

IN WITNESS WHEREOF, the Administrative Agent,
the Lenders and each of the Loan Parties have caused this Agreement to be duly executed by its authorized officers as of the day
and year first above written.

 

	 	HOLDINGS:
	 	 	 
	 	HYDROFARM HOLDINGS LLC
	 	 	 
	 	By:	/s/ Peter Wardenburg
	 	Name:	Peter Wardenburg
	 	Title:	Manager
	 	 	 
	 	BORROWERS:
	 	 	 
	 	HYDROFARM, LLC
	 	 	 
	 	By:	/s/ Peter Wardenburg
	 	Name:	Peter Wardenburg
	 	Title:	President and Chief Executive Officer
	 	 	 
	 	WJCO LLC
	 	 	 
	 	By:	/s/ Peter Wardenburg
	 	Name:	Peter Wardenburg
	 	Title:	Manager
	 	 	 
	 	EHH HOLDINGS, LLC
	 	 	 
	 	By:	/s/ Peter Wardenburg
	 	Name:	Peter Wardenburg
	 	Title:	Manager
	 	 	 
	 	SUNBLASTER, LLC
	 	 	 
	 	By:	/s/ Peter Wardenburg
	 	Name:	Peter Wardenburg
	 	Title:	President
	 	 	 
	 	GUARANTOR:
	 	 	 
	 	HYDROFARM CANADA, LLC
	 	 	 
	 	By:	/s/ Peter Wardenburg
	 	Name:	Peter Wardenburg
	 	Title:	President

 

[signature Page to Forbearance Agreement]

 

     

     

    

 

	 	ADMINISTRATIVE AGENT:
	 	 	 
	 	BRIGHTWOOD LOAN SERVICES LLC, as
	 	Administrative Agent
	 	 	 
	 	By:	/s/ Damien Dwin
	 	Name:	Damien Dwin
	 	Title:	Authorized Person
	 	 	 
	 	By:	/s/ Phil Daniele
	 	Name:	Phil Daniele
	 	Title:	Chief Risk Officer

 

[signature Page to Forbearance Agreement]

 

     

     

    

 

	 	LENDER:
	 	 	 
	 	BRIGHTWOOD CAPITAL FUND IV, LP, as Lender
	 	 	 
	 	By:	Brightwood Capital Fund Managers IV, LLC,
	 	 	as its General Partner
	 	 	 
	 	By:	/s/ Damien Dwin
	 	Name:	Damien Dwin
	 	Title:	Managing Member
	 	 	 
	 	By:	/s/ Phil Daniele
	 	Name:	Phil Daniele
	 	Title:	Chief Risk Officer

 

[signature Page to Forbearance Agreement]

 

     

     

    

 

	 	LENDER:
	 	 	 
	 	BRIGHTWOOD
    CAPITAL FUND III
	 	2016-2,
    LLC, as Lender
	 	 	 
	 	By:	Brightwood Capital
    Fund Managers
	 	 	III, LLC, as its Manager
	 	 	 
	 	By:	/s/ Damien
    Dwin
	 	Name:	Damien Dwin
	 	Title:	Managing Member
	 	 	 
	 	By:	/s/
    Phil Daniele
	 	Name:	Phil Daniele
	 	Title:	Chief Risk Officer

 

[signature Page to Forbearance Agreement]

 

     

     

    

 

	 	LENDER:
	 	 	 
	 	BRIGHTWOOD CAPITAL FUND III-U,
	 	LP, as Lender
	 	 	 
	 	By:	Brightwood Capital Fund Managers
	 	 	III, LLC, as its General Partner
	 	 	 
	 	By:	/s/ Damien Dwin
	 	Name:	Damien Dwin
	 	Title:	Managing Member
	 	 	 
	 	By:	/s/ Phil Daniele
	 	Name:	Phil Daniele
	 	Title:	Chief Risk Officer

 

[signature Page to Forbearance Agreement]

 

     

     

    

 

	 	LENDER:
	 	 	 
	 	BRIGHTWOOD CAPITAL FUND IV
	 	HOLDINGS SPV-2, LLC as Lender
	 	 	 
	 	By:	Brightwood Capital Fund Managers
	 	 	IV, LLC, as its General Partner
	 	 	 
	 	By:	/s/ Damien Dwin
	 	Name:	Damien Dwin
	 	Title:	Managing Member
	 	 	 
	 	By:	/s/ Phil Daniele
	 	Name:	Phil Daniele
	 	Title:	Chief Risk Officer

 

[signature Page to Forbearance Agreement]

 

     

     

    

 

	 	LENDER:
	 	 	 
	 	BRIGHTWOOD CAPITAL FUND III
	 	HOLDINGS SPV-3, LLC, as Lender
	 	 	 
	 	By:	Brightwood Capital Fund Managers
	 	 	III, LLC, as its General Partner
	 	 	 
	 	By:	/s/ Damien Dwin
	 	Name:	Damien Dwin
	 	Title:	Managing Member
	 	 	 
	 	By:	/s/ Phil Daniele
	 	Name:	Phil Daniele
	 	Title:	Chief Risk Officer

 

     

     

    

 

	 	LENDER:
	 	 	 	 
	 	BRIGHTWOOD CAPITAL OFFSHORE FUND IV, LP, as Lender
	 	 
	 	 	By:	Brightwood Capital Fund Managers IV, LLC,
	 	 	 	as its General Partner
	 	 	 	 
	 	 	By:	/s/ Damien Dwin
	 	 	Name:	Damien Dwin
	 	 	Title:	Managing Member
	 	 	 	 
	 	 	By	/s/ Phil Daniele
	 	 	Name:	Phii Daniele
	 	 	Title:	Chief Risk Officer

 

[signature Page to Forbearance Agreement]

 

     

     

    

 

	 	LENDER:
	 	 	 	 
	 	BRIGHTWOOD CAPITAL OFFSHORE FUND IV-U, LP,
	 	as Lender	 
	 	 	 
	 	 	By:	Brightwood Capital Fund Managers IV, LLC,
	 	 	 	as its General Partner
	 	 	 	 
	 	 	By	/s/ Damien Dwin
	 	 	Name:	Damien Dwin
	 	 	Title:	Managing Member
	 	 	 	 
	 	 	By	/s/ Phil Daniele
	 	 	Name:	Phil Daniele
	 	 	Title:	Chief Risk Officer

 

[signature Page to Forbearance Agreement]

 

     

     

    

 

	 	LENDER:
	 	 	 
	 	CARLYLE GMS FINANCE MM CLO 2015-1
	 	LLC, as Lender
	 	 	 
	 	By:	/s/ Mark Tamburello
	 	Name:	Mark Tamburello
	 	Title:	Principal

 

[signature Page to Forbearance Agreement]

 

     

     

    

 

	 	LENDER:
	 	 	 
	 	TCG BDC, INC., as Lender
	 	 	 
	 	By:	/s/ Mark Tamburello
	 	Name:	Mark Tamburello
	 	Title:	Principal

 

[signature Page to Forbearance Agreement]

 

     

     

    

 

	 	LENDER:
	 	 	 
	 	MAIN STREET CAPITAL CORPORATION,
	 	as Lender
	 	 	 
	 	By:	/s/ Nick Meserve
	 	Name: 	Nick Meserve
	 	Title: 	Managing Director

 

[signature Page to Forbearance Agreement]

 

     

     

    

 

	 	LENDER:
	 	 	 
	 	HMS INCOME FUND, INC., as Lender
	 	 
	 	 	DocuSigned by:
	 	By:	/s/ Alejandro Palomo
	 	 	AFC3401F0B05403
	 	Name:	Alejandro Palomo
	 	Title:	Authorized Agent

 

[signature Page to Forbearance Agreement]

 

     

     

    

 

SCHEDULE I

 

Specified Defaults

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