Document:

Exhibit 10.31

 

HYDROFARM HOLDINGS GROUP, INC.

 

January 1, 2019

 

William Toler

 

	Re:	 Employment Terms

 

Dear Bill:

 

On behalf of Hydrofarm Holdings Group,
Inc. (the “Company”), I am pleased to offer you employment at the Company on the terms set forth in this offer
letter agreement (the “Agreement”), which will govern your employment with the Company. As you know, the Company
is currently undergoing a registration of its securities with the U.S. Securities and Exchange Commission pursuant to which the
Company will become a public reporting company under the Securities Exchange Act of 1934, as amended (the “Registration”).

 

It is anticipated that your employment will commence on the
date hereof (the “Start Date”).

 

1.             Employment
by the Company. 

 

(a)           Position.
You will serve as the Company’s Chairman and Chief Executive Officer. During the term of your employment with the Company,
you will devote your reasonable best efforts and substantially all of your business time and attention to the business of the
Company, except for approved vacation periods and reasonable periods of illness or other incapacities permitted by the Company’s
general employment policies.

 

(b)           Duties
and Location. You will perform those duties and responsibilities as are customary for your position, and as may be directed
by Company’s Board of Directors (the “Board”), to whom you will report. Your primary office location
will be your home office (or other remote office location reasonably chosen by you) in Florida. Notwithstanding the foregoing,
the Company reserves the right to reasonably require you to perform your duties at places other than your primary office location
from time to time, including, without limitation, at the Company’s offices in Petaluma, California, and to require reasonable
business travel.

 

(c)           Service
on the Board. Effective on the Start Date, you will be appointed to serve as a member and Chairman of the Board and you agree
to serve in such capacity without additional compensation. At each meeting of the Company’s stockholders prior to the end
of the Term at which your director term is expiring, the Company will nominate you to serve as a member of the Board, subject
to required stockholder approval and compliance with the Company’s policies and procedures regarding service as a member
of the Board. Upon the termination of your employment for any reason, unless otherwise requested by the Board, you agree to resign
from the Board (and all other positions held at the Company and its affiliates), and you will execute any documents necessary
to reflect your resignation.

 

2.             Base
Salary and Employee Benefits. 

 

(a)           Salary.
From the Start Date until the earlier to occur of (i) completion of the Registration or (ii) September 30, 2019 (such earlier
date the “Salary Change Date”), you will receive for services to be rendered hereunder base salary paid at
the annualized rate of $150,000. Commencing on the day following the Salary Change Date, your base salary will be increased to
the annualized rate of $500,000. Your base salary may be increased (but not decreased below $500,000 following the Salary Change
Date without your written consent) by the Board in its sole discretion. Your base salary will be paid, less standard payroll deductions
and tax withholdings, on the Company’s ordinary payroll cycle. As an exempt salaried employee, you are expected to work
the Company’s normal business hours, and such additional time as appropriate for your work assignments and position, and
you will not be entitled to overtime compensation.

 

     

     

    

 

William Toler 

January 1, 2019

Page 2

 

(b)           Benefits.
As a regular full-time employee, you will be eligible to participate in the Company’s standard employee benefits (pursuant
to the terms and conditions of the benefit plans and applicable policies) that are available to the Company’s employees
from time to time.

 

(c)          
Equity Awards. 

 

(i)                Restricted
Stock Unit Awards. On the Start Date, you will be granted an award of restricted stock units (the “Sign-On RSU Award”)
pursuant to the Restricted Stock Unit Award Notice and Restricted Stock Unit Agreement attached hereto as Exhibit C.
Prior to completion of the Registration and subject to approval by the Board at the time and in accordance with the terms of this
Agreement, in the event that the Company issues additional shares of common stock with a value at the time of issuance up to an
aggregate of $225,000,000 in connection with any merger or acquisition, you will be granted additional restricted stock units
(each, a “Follow-On RSU Award,” and together with the Sign-On RSU Award, the “RSU Awards”)
in an amount equal to 5% of any such newly issued shares of common stock, in substantially similar form to Exhibit C,
with the Start Date as the vesting commencement date of each Follow-On RSU Award. For the avoidance of doubt, in no event
shall the Company be required to grant you additional restricted stock units pursuant to the immediately preceding sentence with
respect to any shares of the Company’s common stock newly issued in connection with any merger or acquisition that are in
excess of $225,000,000 in value at the time of issuance.

 

(ii)              
Stock Options. On (A) the date on which the Registration is completed and (B) if the Registration is not completed
as of October 1, 2019, on October 1, 2019, subject to approval by the Board at the time and in accordance with the terms of this
Agreement the Company will grant you an award of stock options (the “Options”) to purchase that number of shares
of the Company’s common stock equal to the difference between the number of shares of the Company’s common stock underlying
the RSU Awards and 5% of the Company’s total outstanding common stock on each such date. The specific terms and conditions
(including the vesting schedule and the exercise price for the Options (which will be the fair market value of the Company’s
common stock on the date of grant, as determined by the Board in accordance with the Company’s 2018 Equity Incentive Plan))
will be set forth in a Stock Option Grant Notice and Stock Option Agreement in substantially the form attached hereto as Exhibit
D.

 

(d)           Salary
True-Up Bonus. If you are actively employed by the Company from the Start Date through the Salary Change Date, you will receive
a cash bonus (the “Salary True-Up Bonus”) in an amount equal to (i) $350,000, multiplied by (ii) a fraction,
the numerator of which is the number of calendar days that have elapsed between the Start Date and the Salary Change Date, and
the denominator of which is 365. The Salary True-Up Bonus will be paid in a lump sum payment, less standard payroll deductions
and tax withholdings, no later than October 31, 2019.

 

3.             Annual
Bonus. For each calendar year during the term of this Agreement, you will be eligible to earn an annual performance and
retention bonus of up to fifty percent (50%) of your base salary rate (which, for the 2019 calendar year, shall be deemed to
be $500,000) (the “Annual Bonus”). The Annual Bonus will be based upon the Board’s assessment of
your performance and the Company’s attainment of goals, including annual EBITDA versus target EBITDA, as determined by
the Board in consultation with you. Bonus payments, if any, will be subject to applicable payroll deductions and
withholdings. Following the close of each calendar year, the Board will determine whether you have earned an Annual Bonus,
and the amount of any such bonus, based on the achievement of such goals. You must remain an active employee through the end
of any given calendar year in order to earn an Annual Bonus for that year and any such bonus will be paid no later than March
15th of the year following the year in which your right to such amount became vested.

 

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William Toler

January 1, 2019

Page 3

 

4.             Expenses.
The Company will reimburse you for reasonable business travel, entertainment or other expenses incurred by you in furtherance
or in connection with the performance of your duties hereunder, in accordance with the Company’s expense reimbursement policy
as in effect from time to time.

 

5.             Compliance with Confidentiality and Invention Assignment Agreement and Company Policies. 

 

(a)           Confidentiality
and Invention Assignment Agreement. You acknowledge that the Confidentiality and Invention Assignment Agreement (the “Confidentiality
Agreement,” a copy of which is attached hereto as Exhibit A) executed in connection herewith is an integral
component of your employment by the Company and is made a part of this Agreement by incorporation.

 

(b)           Non-Disclosure
and Non-Use of Confidential Information. At all times both during your employment with the Company, and after your employment
relationship with the Company has ended for any reason, you agree that you will not, either directly or indirectly, and you will
not permit any Covered Entity which you control to, either directly or indirectly, (i) divulge, use, disclose (in any way or in
any manner, including by posting on the Internet), reproduce, distribute, or reverse engineer or otherwise provide Confidential
Information to any person or entity; (ii) take any action that would make available Confidential Information to the general public
in any form; or (iii) take any action that uses Confidential Information for solicitation or marketing for any service or product
on your behalf or on behalf of any person or entity other than the Company or any of its Affiliates, except (A) as required in
connection with the performance of your duties to the Company, (B) as required to be included in any report, statement or testimony
requested by any municipal, state or national regulatory body having jurisdiction over you or any Covered Entity which is controlled
by you, (C) as required in response to any summons or subpoena or in connection with any litigation, (D) to the extent necessary
in order to comply with any law, order, regulation, ruling or governmental request applicable to you or any Covered Entity which
is controlled by you, (E) as required in connection with an audit by any taxing authority, or (F) as permitted by the express
written consent of the Board. In the event that you or any such Covered Entity that is controlled by you are required to disclose
Confidential Information pursuant to the foregoing exceptions, you shall promptly notify the Company of such pending disclosure
and assist the Company (at the Company’s expense) in seeking a protective order or in objecting to such request, summons
or subpoena with regard to the Confidential Information. If the Company does not obtain such relief prior to the time that you
(or such Covered Entity) are legally compelled to disclose such Confidential Information, you (or such Covered Entity) may disclose
that portion of the Confidential Information that your counsel advises you are legally compelled to disclose or else stand liable
for contempt or suffer censure or penalty. In such cases, you shall promptly provide the Company with a copy of the Confidential
Information so disclosed. This provision applies without limitation to unauthorized use of Confidential Information in any medium,
including film, videotape, audiotape and writings of any kind (including books, articles, e-mails, texts, blogs and websites).

 

(c)           Compliance
with Company Policies. In addition, you are required to abide by the Company’s policies and procedures, as modified
from time to time within the Company’s discretion including without limitation such policies with respect to legal
compliance, conflicts of interest, confidentiality, compensation recovery (clawback), professional conduct and business
ethics as are from time to time in effect; provided, however, that in the event the terms of this Agreement
differ from or are in conflict with the Company’s general employment policies or practices, this Agreement shall
control. Nothing in this Agreement, or your Confidentiality Agreement, is intended to or will be used in any way to limit
your rights to communicate with a government agency, as provided for, protected under or warranted by applicable law.
Notwithstanding any other provision in this Agreement to the contrary and without limiting the foregoing sentence, pursuant
to 18 USC Section 1833(b), you shall not be held criminally or civilly liable under any federal or state trade secret law for
the disclosure of a trade secret that is made (i) in confidence to a federal, state, or local government official, either
directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of
law; or (ii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An
individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the
trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the
individual files any document containing the trade secret under seal and does not disclose the trade secret, except pursuant
to a court order. 18 USC Section 1833(b) does not preclude the trade secret owner from seeking breach of contract
remedies.

 

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William Toler

January 1, 2019

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6.             Protection of Third Party Information. In your work for the Company, you will be expected not to make any unauthorized
use or disclosure of any confidential or proprietary information, including trade secrets, of any former employer or other third
party to whom you have contractual obligations to protect such information. Rather, you will be expected to use only that information
which is generally known and used by persons with training and experience comparable to your own, which is common knowledge in
the industry or otherwise legally in the public domain, or which is otherwise provided or developed by the Company. You represent
that you are able to perform your job duties within these guidelines, and you are not in unauthorized possession of any unpublished
documents, materials, electronically-recorded information, or other property belonging to any former employer or other third party
to whom you have a contractual obligation to protect such property. In addition, you represent and warrant that your employment
by the Company will not conflict with any prior employment or consulting agreement or other agreement with any third party, that
you will perform your duties to the Company without violating any such agreement(s), and that you have disclosed to the Company
in writing any contract you have signed that may restrict your activities on behalf of the Company.

 

7.             Term. The initial term of this Agreement shall be two (2) years commencing on the Start Date, unless terminated earlier
pursuant to the terms herein (the “Initial Term”). This Agreement shall remain in force after the end of the
Initial Term unless either party gives notice of non-renewal at least ninety (90) days prior to the end of the Initial Term or
at any time after the end of the Initial Term, as applicable. The Initial Term or, in the event that your employment hereunder
is terminated earlier pursuant to the terms hereof or continues thereafter pursuant to this Section 7, such shorter or longer period,
as the case may be, is referred to herein as the “Term.” Notwithstanding the foregoing, your employment relationship
with the Company is at-will. Accordingly, subject to the terms set forth in this Agreement, you may terminate your employment with
the Company at any time and for any reason whatsoever simply by notifying the Company; and the Company may terminate your employment
at any time, with or without Cause or advance notice.

 

8.             Severance.
If, at any time, the Company terminates your employment without Cause (other than as a result of your death or disability),
you resign for Good Reason, or your employment hereunder terminates due to the Company’s non-renewal of this Agreement (whether
at or after the end of the Initial Term) (each such termination referred to as a “Qualifying Termination”),
provided such termination or resignation constitutes a Separation from Service (as defined under Treasury Regulation Section 1.409A-1(h),
without regard to any alternative definition thereunder, a “Separation from Service”), then you will receive
the Accrued Amounts (as defined in Section 9) and subject to Sections 10 and 11 below and your continued compliance with the terms
of this Agreement (including without limitation Section 5 above), the Company will provide you with the following severance benefits
(the “Severance Benefits”):

 

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William Toler

January 1, 2019

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(a)           Cash
Severance. The Company will pay you, as cash severance, an amount equal to the greater of $250,000 or six (6) months of your
base salary in effect as of your Separation from Service date (provided that if your employment termination is due to your
resignation for Good Reason in connection with the reduction of your base salary, then the cash severance payment herein will
be based upon your base salary rate as of immediately prior to such reduction) (collectively, the “Severance”).
The Severance will be paid, less standard payroll deductions and tax withholdings, in a lump sum payment on or before the day
that is sixty (60) days following your Separation from Service date.

 

(b)           COBRA Severance. As an additional Severance Benefit, if you timely (and properly) elect to continue your coverage
under the Company’s group health plan pursuant to Code Section 4980B(f) (“COBRA”), the Company will reimburse
you for (or will pay directly, in the discretion of the Company) the premium charged for such coverage until the earliest to occur
of (i) the six (6) month anniversary of your Separation from Service date, (ii) the date on which you obtain health care coverage
from another source (e.g., a new employer or spouse’s benefit plan), and (iii) the date on which you cease to be entitled
to COBRA continuation coverage under the Company’s group health plan; provided, however, that the Company may unilaterally
amend or eliminate the benefit provided under this Section 8(b) to the extent it deems necessary to avoid imposition of excise
taxes, penalties or similar charges on the Company or any of its Affiliates (or any of their respective successors), including,
without limitation, under Code Section 4680D or 4980H. You must notify the Company within two (2) weeks if you obtain coverage
from a new source.

 

(c)           Salary
True-Up Bonus. If your employment terminates before September 30, 2019 (for the avoidance of doubt as a result of the Company
terminating your employment without Cause (other than as a result of your death or disability) or your resignation for Good Reason),
the Company will pay you an amount equal to (i)   $350,000, multiplied by (ii)
a fraction, the numerator of which is the number of calendar days that have elapsed between the Start Date and your Separation
from Service date, and the denominator of which is 365. This amount will be paid, less standard payroll deductions and tax withholdings,
in a lump sum payment on or before the day that is sixty (60) days following your Separation from Service date.

 

(d)           Accelerated Vesting. All unvested time-based RSU Awards and all Stock Options held by you that by their terms vest
over the twelve month period immediately following your Qualifying Termination shall immediately and automatically vest in full
and, in the case of the Stock Options, shall remain exercisable for the period of time set forth in the applicable award agreements.
All unvested time-based RSU Awards and all Stock Options held by you that by their terms vest following such twelve month period
shall immediately terminate and be forfeited.

 

9.             Resignation Without Good Reason;
Termination for Cause; Death or Disability. If, at any time, you resign your employment without Good Reason, or the Company
terminates your employment for Cause, or if either party terminates your employment as a result of your death or disability, you
will receive (a) your base salary accrued through your last day of employment, (b) any unused vacation (if applicable) accrued
through your last day of employment, (c) any earned but unpaid Annual Bonus for the calendar year ended immediately prior to your
Separation from Service date (provided that any such Annual Bonus will be paid at the same time it would have been paid had your
employment not terminated), and (d) reimbursement of any unreimbursed business expenses (collectively, the “Accrued Amounts”).
Under these circumstances, you will not be entitled to any other form of compensation from the Company, including any Severance
Benefits, other than any rights to which you are entitled under the Company’s benefit programs,
stock option plan or equity grant documents between you and the Company.

 

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William Toler

January 1, 2019

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10.           Conditions
to Receipt of Severance Benefits. Prior to and as a condition to your receipt of the Severance Benefits described above, you
shall execute and deliver to the Company an effective release of claims in favor of the Company, in substantially the form attached
hereto as Exhibit B (the “Release”) within the timeframe set forth therein, but not later than
forty-five (45) days following your Separation from Service date, and allow the Release to become effective according to its terms
(by not invoking any legal right to revoke it) within any applicable time period set forth therein (such latest permitted effective
date, the “Release Deadline”). Receipt of Severance Benefits is further subject to Section 11(d) below. Notwithstanding
anything in this Agreement to the contrary, in no event will any Severance Benefits be paid prior to the first business day of
the calendar year in which the Release Deadline occurs.

 

11.          Restrictive
Covenants. In recognition of the consideration set forth herein, the sufficiency of which is hereby acknowledged, and to protect
the Confidential Information, goodwill and Customer and business relationships of the Company, you hereby covenant and agree that:

 

(a)           Non-Competition. While employed and for six months after termination of your employment for any reason (the “Restricted
Term”), you shall not, either directly or indirectly, individually or by or through any Covered Entity, whether for consideration
or otherwise: (1) engage in (except on behalf of the Company or any of its Affiliates), or compete with the Company or any of its
Affiliates in, a Competing Business anywhere in the Territory; or (2) form or assist others in forming, be employed by, perform
services for, become an officer, director, member or partner of, or participant in, or consultant or independent contractor to,
invest in or own any interest in (whether through equity or debt securities), assist (financially or otherwise) or lend your name,
counsel or assistance to any entity engaged in a Competing Business anywhere in the Territory.

 

(b)           Non-Solicitation.
While employed and during the Restricted Term, you shall not, either directly or indirectly, individually or by or through
any Covered Entity, whether for consideration or otherwise: (A) knowingly solicit or actually accept business from any Customer
or Prospective Customer, in each case, for the purpose of providing goods or services on behalf of a Competing Business, (B) knowingly
solicit or induce any Customer to terminate, reduce or alter, in a manner adverse to the Company or any of its Affiliates, any
existing or potential business arrangement or agreement with the Company or any of its Affiliates, or (C) solicit, hire, attempt
to solicit or attempt to hire any person who is or was an employee, third party consultant or independent contractor of the Company
or any of its Affiliates at any time during the 12 months prior to such solicitation or hiring. The restrictions set forth in
this Section 11(b) shall not prohibit any form of general advertising or solicitation that is not directed at a specific person
or entity and does not relate to a Competing Business.

 

(c)           Non-Disparagement. You will not, in any manner, directly or indirectly, on your own behalf or in conjunction with
or for the benefit of any other person or entity, disparage, defame, or denigrate the Company or any of its Affiliates or their
respective officers, directors, employees, stockholders, products or services in any manner harmful to their business reputation.
The Company agrees that its officers and directors will not, in any manner, directly or indirectly, disparage, defame, or denigrate
you in any manner harmful to your business or personal reputation. Notwithstanding the foregoing, nothing in this Section 11(c)
shall prohibit any person from making truthful statements when required by order of a court or other governmental or regulatory
body having jurisdiction or to enforce any legal right including, without limitation, the terms of this Agreement.

 

(d)           Conditional
Severance Benefits. You agree that the payment of any Severance Benefits is conditioned on your compliance with Sections 11(a),
(b) and (c) and that, if you breach any of those sections, you (A) forfeit your rights to receive any Severance Benefits, and
(B) will repay, or cause to be repaid, to the Company the full amount of any Severance Benefits paid by the Company to you prior
to the date of such breach.

 

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William Toler

January 1, 2019

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(e)           Enforcement. You
acknowledge that the covenants set forth in Sections 5, 6 and 11(a), (b) and (c)   impose
a reasonable restraint on you in light of the business and activities of the Company and its Affiliates. You acknowledge that
your expertise is of a special and unique character which gives this expertise a particular value, and that a breach of
Sections 5, 6 or 11(a), (b) or (c) by you will cause serious and potentially irreparable harm to the Company and its
Affiliates. You therefore acknowledge that a breach of Sections 5, 6 or 11(a), (b) or (c)   by
you cannot be adequately compensated in an action for damages at law, and equitable relief would be necessary to protect the
Company and its Affiliates from a violation of this Agreement and from the harm which this Agreement is intended to prevent.
By reason thereof, you acknowledge that, notwithstanding any provision contained herein to the contrary, the Company and its
Affiliates are entitled, in addition to any other remedies they may have under this Agreement or otherwise, to temporary,
preliminary and permanent injunctive and other equitable relief (without the necessity of showing economic loss or other
actual damages) to prevent or curtail any breach of this Agreement in any court of competent jurisdiction, in addition to any
other legal or equitable remedies they may have. You acknowledge, however, that no specification in this Agreement of a
specific legal or equitable remedy may be construed as a waiver of or prohibition against pursuing other legal or equitable
remedies in the event of a breach of this Agreement by you. In the event of a breach or violation by you of any of the
provisions of Section 11(a) or (b), the running of the Restricted Term shall be tolled during the continuance of any actual
breach or violation. Other than with respect to a Company violation of Section 11(c) above, your sole and exclusive remedy in
the event of a breach of this Agreement by the Company shall be payment of Severance Benefits.

 

(f)            Modification.
In the event that any provision or term of Section 11(a) or (b), or any word, phrase, clause, sentence or other portion thereof
(including, without limitation, the geographic and temporal restrictions and provisions contained in Section 11(a) or (b)) is
held to be unenforceable or invalid for any reason, such provision or portion thereof will be modified or deleted in such a manner
as to be effective for the maximum period of time for which it/they may be enforceable and over the maximum geographical area
as to which it/they may be enforceable and to the maximum extent in all other respects as to which it/they may be enforceable.
Such modified restriction(s) shall be enforced by the court or adjudicator. In the event that modification is not possible, because
each of your obligations in Section 11 is a separate and independent covenant, any unenforceable obligation shall be severed and
all remaining obligations shall be enforced.

 

12.           Return
of Company Property. Upon the termination of your employment for any reason, as a precondition to your receipt of the Severance
Benefits (if applicable), within five (5) days after your Separation from Service Date (or earlier if requested by the Company),
you will return to the Company all Company documents (and all copies thereof) and other Company property within your possession,
custody or control, including, but not limited to, Company files, notes, financial and operational information, Customer lists
and contact information, product and services information, research and development information, drawings, records, plans, forecasts,
reports, payroll information, spreadsheets, studies, analyses, compilations of data, proposals, agreements, sales and marketing
information, personnel information, specifications, code, software, databases, computer-recorded information, tangible property
and equipment (including, but not limited to, computers, facsimile machines, mobile telephones, tablets, handheld devices, and
servers), credit cards, entry cards, identification badges and keys, and any materials of any kind which contain or embody any
proprietary or confidential information of the Company, and all reproductions thereof in whole or in part and in any medium. You
further agree that you will make a diligent search to locate any such documents, property and information and return them to the
Company within the timeframe provided above. In addition, if you have used any personally-owned computer, server, or e-mail system
to receive, store, review, prepare or transmit any confidential or proprietary data, materials or information of the Company,
then within five (5) days after your Separation from Service date you must permanently delete and expunge such confidential or
proprietary information from those systems without retaining any reproductions (in whole or in part). You shall deliver to the
Company a signed statement certifying compliance with this Section 12 prior to the receipt of the Severance Benefits.

 

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William Toler

January 1, 2019

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13.          Definitions.
For purposes of this Agreement, the following terms shall have the following meanings:

 

“Affiliate” means with
respect to any party, any corporation, limited liability company, partnership, joint venture, firm and/or other entity that directly
or indirectly controls, is controlled by or is under common control with such party, including any subsidiaries.

 

“Cause” for
termination will mean your: (a) willful and continued failure to substantially perform your duties (other than as a result of
incapacity due to physical or mental illness or other approved leave of absence); (b) gross negligence or willful misconduct
in the course of your employment with the Company that causes or is likely to cause material harm to the Company; (c)
engagement in conduct that discriminates or harasses another employee or contractor of the Company or any of its Affiliates
on the basis of gender, race, color, creed, religion or sexual orientation; (d) conviction of, or plea of guilty or nolo
contendere to, a crime involving moral turpitude; (e)  intentional, material
breach of this Agreement that causes or is likely to cause material harm to the Company; (f)  intentional,
material violation of the written policies of the Company, to the extent you have reasonable notice of such policies, that
causes or is likely to cause material harm to the Company; or (g) material fraud with respect to, or embezzlement of material
funds or property belonging to, the Company. Notwithstanding the foregoing, “Cause” shall not exist with respect
to the events or circumstances described in sections (a), (b), (e), (f) or (g) of this paragraph unless and until the Company
has given you written notice of the applicable event or circumstance within sixty (60) days of the date the Company has
actual knowledge thereof, which notice specifically delineates such claimed misconduct or breach and informs you that you are
required to cure such misconduct or breach (if curable) within thirty (30) days (the “Executive Cure
Period”) of the date of such notice, and such breach is not cured to the extent curable within the Executive Cure
Period. If Cause exists pursuant to the preceding sentence in respect of an event described in sections (a), (b), (e), (f) or
(g) of this paragraph, the Company may terminate your employment for Cause within forty-five (45) days after the end of the
Executive Cure Period. If such curable misconduct or breach is cured within the Executive Cure Period, Cause shall be deemed
not to exist. The Company shall not be permitted to terminate your employment for Cause in respect of an event described in
sections (a), (b), (e), (f) or (g) of this paragraph if the Company fails to either (x) provide written notice of the
applicable event or circumstance within sixty (60) days of the date the Board (other than you, if you are a member of the
Board) has actual knowledge thereof, or (y) terminate your employment within the forty-five (45)-day period following the end
of the applicable Executive Cure Period.

 

“Competing Business”
means (i) any business involving or relating to the sale, distribution, marketing, wholesaling or manufacturing of hydroponic and
similar products, including the acquisition and operation of any wholesaler or distributor of hydroponic equipment or any subsidiaries
or Affiliates thereof, and (ii) any other business in which the Company or any of its Affiliates is engaged during the Term (as
defined in Section 7).

 

“Confidential Information”
means confidential or proprietary information and/or techniques of the Company or any of its Affiliates entrusted to, developed
by, or made available to you, whether in writing, in computer form, reduced to a tangible form in any medium, or conveyed orally,
that is not generally known by others in the form in which it is or was used by the Company or any of its Affiliates. Examples
of Confidential Information include, without limitation: (i) sales, sales volume, sales methods, sales proposals, business plans
or statements of work; (ii) Customers, Prospective Customers, and Customer records, including contact, preference and other Customer
information; (iii) costs and general price lists and prices charged to specific Customers; (iv) the names, addresses, contact
information and other information concerning any and all brokers, vendors and suppliers and prospective brokers, vendors and suppliers;
(v) terms of contracts; (vi) non-public information and materials describing or relating to the business or financial affairs
of the Company or any of its Affiliates, including but not limited to, financial statements, budgets, projections, financial and/or
investment performance information, research reports, personnel matters, products, services, operating procedures, organizational
responsibilities and marketing matters, policies or procedures; (vii) information and materials describing existing or new processes,
products and services of the Company or any of its Affiliates, including marketing materials, analytical data and techniques,
and product, service or marketing concepts under development by or for the Company or any of its Affiliates, and the status of
such development; (viii) the business or strategic plans of the Company or any of its Affiliates; (ix) the information technology
systems, network designs, computer program code, and application practices of the Company or any of its Affiliates; and (x) acquisition
candidates of the Company or any of its Affiliates or any studies or assessments relating thereto. Confidential Information does
not include information that becomes generally known to and available for use by the public other than as a result of your acts
or omissions to act, including any breach of this Agreement.

 

    Page 8 

     

    

 

William Toler

January 1, 2019

Page 9

 

“Covered Entity” means
all of your Affiliates, and every business, association, trust, corporation, partnership, limited liability company, proprietorship
or other entity in or to which you have an investment (whether through debt or equity securities), maintain any capital contribution
or have made any advances, or in which any Affiliate of you has an ownership interest or profit sharing percentage. Your agreements
contained herein specifically apply to each entity which is presently a Covered Entity or which becomes a Covered Entity subsequent
to the date of this Agreement. Notwithstanding the foregoing, nothing contained in this Agreement prohibits you from owning less
than 3% of any class of voting securities, publicly held and quoted on a recognized securities exchange or inter-dealer quotation
system, of any issuer, and no such issuer shall be considered a Covered Entity solely by virtue of such ownership or the incidents
thereof.

 

“Customer” means any
person or entity for whom the Company or any of its Affiliates (i) provides (or is contracted to provide) goods or services as
of the date hereof or at any time during the Term, or (ii) has provided goods or services at any time during the one-year period
prior to the date hereof.

 

“Good Reason” for resigning
from employment with the Company shall exist if any of the following actions are taken by the Company without your prior written
consent: (a) a material reduction in your base salary which the parties agree is a reduction of at least ten percent (10%) of your
base salary; (b) a material reduction in your duties, responsibilities and/or authority; or (c) any material breach of this Agreement
by the Company. In order to resign for Good Reason, you must provide written notice to the Board within sixty (60) days after the
first occurrence of the event giving rise to Good Reason setting forth the basis for your resignation, allow the Company at least
thirty (30) days from receipt of such written notice to cure such event, and if such event is not cured within such period, you
must resign from all positions you then hold with the Company not later than forty-five (45) days after the expiration of the cure
period.

 

“Prospective Customer”
means any person or entity with whom the Company or any of its Affiliates has communicated or whom the Company or any of its Affiliates
has solicited for the purposes of obtaining such person or entity as a Customer and/or whom the Company or any of its Affiliates
has analyzed concerning the potential of such person or entity to become a Customer, at any time during the one-year period prior
to the date hereof or at any time during the Term.

 

“Territory” means anywhere in the world.

 

    Page 9 

     

    

 

William Toler

January 1, 2019

Page 10

 

 

14.          Compliance
with Section 409A. It is intended that the payments and benefits set forth in this Agreement (including, without limitation,
the Severance Benefits) satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Internal
Revenue Code of 1986, as amended, (the “Code”) (Section 409A, together with any state law of similar effect,
 “Section 409A”). For purposes of Section 409A (including, without limitation, for purposes of Treasury Regulations
1.409A-2(b)(2)(iii)), your right to receive any installment payments under this Agreement (whether severance payments, reimbursements
or otherwise) shall be treated as a right to receive a series of separate payments and, accordingly, each installment payment
hereunder shall at all times be considered a separate and distinct payment. Notwithstanding any provision to the contrary in this
Agreement, (a) except to the extent any expense or reimbursement provided pursuant to this Agreement does not constitute a “deferral
of compensation” within the meaning of Section 409A, (i) the amount of expenses eligible for reimbursement during any calendar
year will not affect the amount of expenses eligible for reimbursement in any other calendar year, (ii) the reimbursements for
expenses for which you are entitled to be reimbursed will be made on or before the last day of the calendar year following the
calendar year in which the applicable expense is incurred, and (iii) the right to payment or reimbursement hereunder may not be
liquidated or exchanged for any other benefit and (b) if the Company (or, if applicable, the successor entity thereto) determines
that the Severance Benefits constitute “deferred compensation” under Section 409A and you are, on the date of your
Separation from Service, a “specified employee” of the Company or any successor entity thereto, as such term is defined
in Section 409A(a)(2)(B)(i) of the Code, then, solely to the extent necessary to avoid the incurrence of adverse personal tax
consequences under Section 409A, the timing of the Severance Benefits shall be delayed until the earliest of: (i) the date that
is six (6) months and one (1) day after your Separation from Service date, (ii) the date of your death, or (iii) such earlier
date as permitted under Section 409A without the imposition of adverse taxation. Upon the first business day following the expiration
of such applicable Code Section 409A(a)(2)(B)(i) period, all payments or benefits deferred pursuant to this Section 14 shall be
paid in a lump sum or provided in full by the Company (or the successor entity thereto, as applicable), and any remaining payments
due shall be paid as otherwise provided herein. No interest shall be due on any amounts so deferred. If the Severance Benefits
are not covered by one or more exemptions from the application of Section 409A and the Release could become effective in the calendar
year following the calendar year in which you have a Separation from Service, the Release will not be deemed effective any earlier
than the Release Deadline. The Severance Benefits are intended to qualify for an exemption from application of Section 409A or
comply with its requirements to the extent necessary to avoid adverse personal tax consequences under Section 409A, and any ambiguities
herein shall be interpreted accordingly.

 

15.           Section
280G; Parachute Payments. 

 

(a)           If
any payment or benefit you will or may receive from the Company or otherwise (a “280G Payment”) would (i) constitute
a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to
the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then any such 280G Payment shall be
equal to the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the 280G Payment
that would result in no portion of the 280G Payment (after reduction) being subject to the Excise Tax or (y) the largest portion,
up to and including the total, of the 280G Payment, whichever amount (i.e., the amount determined by clause (x) or by clause (y)),
after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax, results
in your receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the 280G Payment
may be subject to the Excise Tax. If a reduction in a 280G Payment is required pursuant to the preceding sentence and the Reduced
Amount is determined pursuant to clause (x) of the preceding sentence, the reduction shall occur in the manner (the “Reduction
Method”) that results in the greatest economic benefit for you. If more than one method of reduction will result in
the same economic benefit, the items so reduced will be reduced pro rata (the “Pro Rata Reduction Method”).

 

    Page 10 

     

    

 

William Toler

January 1, 2019

Page 11

 

(b)           Notwithstanding any provision of subsection (a) above to the contrary, if the Reduction Method or the Pro Rata Reduction
Method would result in any portion of the 280G Payment being subject to taxes pursuant to Section 409A that would not otherwise
be subject to taxes pursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be,
shall be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows: (A) as a first priority, the modification
shall preserve to the greatest extent possible, the greatest economic benefit for you as determined on an after-tax basis; (B)
as a second priority, 280G Payments that are contingent on future events (e.g., being terminated without Cause), shall be reduced
(or eliminated) before 280G Payments that are not contingent on future events; and (C) as a third priority, 280G Payments that
are "deferred compensation" within the meaning of Section 409A shall be reduced (or eliminated) before 280G Payments
that are not deferred compensation within the meaning of Section 409A.

 

(c)           Unless you and the Company agree on an alternative accounting firm or law firm, the accounting firm engaged by the Company
for general tax compliance purposes as of the day prior to the effective date of the change in control transaction shall perform
the foregoing calculations. If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual,
entity or group effecting the change in control transaction, the Company shall appoint a nationally recognized accounting or law
firm to make the determinations required by this Section 15. For purposes of making the determinations required by this Section
15, the accounting or law firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable,
good faith interpretations concerning the application of Sections 280G and 4999 of the Code. Executive and the Company agree to
furnish such information and documents as the accounting or law firm may reasonably request in order to make a determination under
this Section 15. The Company shall bear all expenses with respect to the determinations by such accounting or law firm required
to be made hereunder. The Company shall use commercially reasonable efforts to cause the accounting or law firm engaged to make
the determinations hereunder to provide its calculations, together with detailed supporting documentation, to you and the Company
within fifteen (15) calendar days after the date on which your right to a 280G Payment becomes reasonably likely to occur (if requested
at that time by you or the Company) or such other time as requested by you or the Company.

 

(d)           If
you receive a 280G Payment for which the Reduced Amount was determined pursuant to clause (x) of Section 15(a) and the
Internal Revenue Service determines thereafter that some portion of the 280G Payment is subject to the Excise Tax, you agree
to promptly return to the Company a sufficient amount of the 280G Payment (after reduction pursuant to clause (x) of Section
15(a)) so that no portion of the remaining 280G Payment is subject to the Excise Tax. For the avoidance of doubt, if the
Reduced Amount was determined pursuant to clause (y) of Section 15(a), you shall have no obligation to return any portion of
the 280G Payment pursuant to the preceding sentence.

 

16.          Dispute
Resolution. To ensure the timely and economical resolution of disputes that may arise in connection with your employment with
the Company, you and the Company agree that any and all disputes, claims, or causes of action arising from or relating to the
enforcement, breach, performance, negotiation, execution, or interpretation of this Agreement, your employment, or the termination
of your employment, including but not limited to statutory claims (including, without limitation, discrimination, harassment,
wrongful termination or wage claims under the Labor Code), will be resolved to the fullest extent permitted by law by final, binding
and confidential arbitration, by a single arbitrator, in Florida, conducted by JAMS, Inc. (“JAMS”) under the
then-applicable JAMS rules (available at the following web address: http://www.jamsadr.com/rulesclauses, and which will be provided
to you on request). By agreeing to this arbitration procedure, both you and the Company waive the right to resolve any such
dispute through a trial by jury or judge or administrative proceeding. You will have the right to be represented by legal
counsel at any arbitration proceeding. The arbitrator shall: (a) have the authority to compel adequate discovery for the resolution
of the dispute and to award such relief as would otherwise be permitted by law; and (b) issue a written arbitration decision,
to include the arbitrator’s essential findings and conclusions and a statement of the award. The arbitrator shall be authorized
to award any or all remedies that you or the Company would be entitled to seek in a court of law. The prevailing party in the
arbitration may be entitled to an award of reasonable attorneys’ fees incurred in connection with the arbitration in such
amount, if any, as determined by the arbitrator. The costs of the arbitration shall be borne equally by the parties unless otherwise
determined by the arbitrator in its award. Nothing in this letter is intended to prevent either you or the Company from obtaining
injunctive relief in court to prevent irreparable harm pending the conclusion of any such arbitration. Any awards or orders in
such arbitrations may be entered and enforced as judgments in the federal and state courts of any competent jurisdiction.

 

    Page 11 

     

    

 

William Toler

January 1, 2019

Page 12

 

17.          Clawback.
You hereby acknowledge and agree that any payment hereunder will be subject to recovery by the Company pursuant to applicable
law and any applicable Company compensation recovery policy as may be from time to time in effect.

 

18.          Reimbursement
of Legal Expenses. The Company shall pay directly, or reimburse you for, all reasonable legal expenses incurred by you in
the negotiation and execution of this Agreement (including any exhibits hereto). Such payments and/or reimbursements shall occur
within ten business days after you provide documentation to the Company of the legal expenses incurred.

 

19.           Confidentiality
of this Agreement. You agree to keep confidential the terms of this Agreement, unless and until such terms have been disclosed
publicly other than through a breach by you of this covenant. This provision does not prohibit you from providing this information
on a confidential and privileged basis to your attorneys or accountants for purposes of obtaining legal or tax advice or as otherwise
required by law.

 

20.           Miscellaneous.
This Agreement (including exhibits), together with your Confidentiality Agreement, forms the complete and exclusive statement
of your employment agreement with the Company. It supersedes any other agreements or promises made to you by anyone, whether oral
or written. Changes in your employment terms, other than those changes expressly reserved to the Company’s or Board’s
discretion in this Agreement, require a written modification approved by the Company and signed by a duly authorized officer of
the Company. This Agreement will bind the heirs, personal representatives, successors and assigns of both you and the Company,
and inure to the benefit of both you and the Company, their heirs, successors and assigns. If any provision of this Agreement
is determined to be invalid or unenforceable, in whole or in part, this determination shall not affect any other provision of
this Agreement and the provision in question shall be modified so as to be rendered enforceable in a manner consistent with the
intent of the parties insofar as possible under applicable law. The Company represents and warrants that it is free to enter into
this Agreement and has taken all corporate action necessary to authorize the execution and delivery of this Agreement and the
performance of all of its obligations under this Agreement. This Agreement shall be construed and enforced in accordance with
the laws of the State of Florida without regard to conflicts of law principles. Any ambiguity in this Agreement shall not be construed
against either party as the drafter. Any waiver of a breach of this Agreement, or rights hereunder, shall be in writing and shall
not be deemed to be a waiver of any successive breach or rights hereunder. This Agreement may be executed in counterparts which
shall be deemed to be part of one original, and facsimile and electronic image copies of signatures shall be equivalent to original
signatures.

 

    Page 12 

     

    

 

William Toler

January 1, 2019

Page 13

 

Please sign and date this Agreement and the enclosed Confidentiality
Agreement and return them to me. I would be happy to discuss any questions that you may have about these terms.

 

[SIGNATURE PAGE FOLLOWS]

 

    Page 13 

     

    

 

William Toler

January 1, 2019

Page 14

 

We are delighted to be making
this offer and the Company looks forward to your favorable reply and to a productive and enjoyable work relationship.

 

	Sincerely,	 
	 	 
	/s/ Jeffrey Peterson	 

Jeffrey Peterson,
Chief Financial Officer, Secretary and Treasurer

Hydrofarm Holdings Group, Inc.

 

Reviewed, Understood,
and Accepted:

 

	 /s/ William Toler	 	Feb 11, 2019 	 
	William Toler	 	Date	 

 

Exhibit A: Confidentiality
and Invention Assignment Agreement

Exhibit B: Release

Exhibit C: Restricted Stock Unit
Award Notice and Restricted Stock Unit Agreement

Exhibit D: Form of Stock Option
Grant Notice and Stock Option Agreement

 

    Page 14 

     

    

 

EXHIBIT
A

 

PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

 

This PROPRIETARY INFORMATION
AND INVENTION ASSIGNMENT AGREEMENT (this “Agreement”), dated as of April _____, 2017 (the “Effective
Date”), is made and entered into by and between (i) Hydrofarm, Inc., a California corporation (“Company”),
and (ii) _______________________, an individual resident in the State of _______________________ (“Employee”).

 

AGREEMENT

 

In consideration of
Employee’s employment with Company, Employee’s receipt of the compensation paid to Employee by Company and other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

		1.	Employment; Compensation 

 

(a)               
Employee understands and acknowledges that Employee’s employment with the Company is for an unspecified duration and
constitutes "at-will" employment. Employee acknowledges that this employment relationship may be terminated at any time,
with or without good cause or for any or no cause, at the option either of the Company or employee, with or without notice.

 

(b)               
During the term of Employee’s employment with the Company, Employee will not engage in any other employment, occupation,
consulting or other business activity related to the business in which the Company is now involved or becomes involved during the
term of Employee’s employment; and, Employee will not engage in any other activities that conflict with Employee’s
obligations to the Company.

 

(c)               
In consideration for the covenants and obligations set forth herein, the Company will pay Employee the compensation set
forth on Appendix A.

 

		2.	Confidential Information 

 

(a)                Company
Information. During the term of Employee’s employment (Employee’s "Relationship with the
Company"), Employee will have access to Confidential Information and Trade Secrets of the Company (collectively, the
 “Proprietary Information”). Employee acknowledges that all Proprietary Information that may exist from
time to time is a valuable, special and unique asset of the Company, and access to and knowledge of which is essential to the
performance of Employee’s employment duties. Employee will keep confidential and not disclose (during the period of
employment and thereafter, except that Employee is only required to hold any Proprietary Information that is not a Trade
Secret in confidence for the maximum extent permitted by applicable law) to any other person or entity and will not use for
Employee’s own benefit or the benefit of any other person or entity (other than the Company) any Proprietary
Information, except in a manner that has been expressly authorized by the formal written policies of the Company.
 "Confidential Information" means any Company proprietary information, technical data, or know-how,
including, but not limited to, research, business plans, product plans, products, services, customer lists and customers
(including, but not limited to, customers of the Company on whom Employee called or with whom Employee became acquainted
during the term of Employee’s Relationship with the Company), market research, works of original authorship,
intellectual property (including, but not limited to, unpublished works and undisclosed patents), photographs, negatives,
digital images, software, computer programs, ideas, developments, inventions (whether or not patentable), processes,
formulas, technology, designs, drawings and engineering, hardware configuration information, forecasts, strategies,
marketing, finances or other business information disclosed to Employee by the Company either directly or indirectly in
writing, orally or by drawings or observation or inspection of parts or equipment. Confidential Information does not include
any of the foregoing items that has become publicly known and made generally available through no wrongful act of Employee or
of others who were under confidentiality obligations as to the item or items involved. “Trade Secrets”
means, collectively, information, including a formula, pattern, compilation, program, device, method, technique or process,
that: (i) derives independent economic value, actual or potential, from not being generally known to the public or to other
persons who can obtain economic value from its disclosure or use; and (ii) is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy.

 

    

     

    

 

(b)               
Other Employer Information. Employee will not improperly use or disclose to any member of the Company, or to any
employee, officer, director, manager, equityholder, financing source, lender, partner, agent, contractor or representative of any
member of the Company, any confidential or proprietary information (including unpublished patent applications or invention disclosures)
belonging to any former employer of Employee or to any other person or entity to which Employee owes a duty of nondisclosure, unless
consented to in writing by such employer, person or entity.

 

(c)               
Third Party Information. Employee recognizes that the Company has received and in the future will receive from third
parties their confidential or proprietary information subject to a duty on the Company's part to maintain the confidentiality of
such information and to use it only for certain limited purposes. Employee will hold all such confidential or proprietary information
in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying
out Employee’s duties to the Company consistent with the Company's agreement with such third party.

 

(d)               
Defend Trade Secrets Act. Notwithstanding any other provision of this Agreement to the contrary, pursuant to 18 USC
Section 1833(b), Employee shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure
of a trade secret that is made: (i) in confidence to a federal, state, or local government official, either directly or indirectly,
or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (ii) in a complaint
or other document filed in a lawsuit or other proceeding, if such filing is made under seal. 18 USC Section 1833(b) does not, however,
preclude the trade secret owner from seeking breach of contract remedies.

 

		3.	Intellectual Property 

 

(a)                Assignment
of Intellectual Property. Employee will promptly make full written disclosure to the Company, will hold in trust for the
sole right and benefit of the Company, and hereby assigns to the Company, or its designee, all of Employee’s right,
title and interest in and to any original works of authorship, trademarks, domain names, inventions (including the right to
claim priority), concepts, improvements, processes, methods or Proprietary Information , whether or not patentable or
registrable under copyright or similar laws that Employee may solely or jointly conceive or develop or reduce to practice, or
cause to be conceived or developed or reduced to practice, during the period of Employee’s Relationship with the
Company, including such intellectual property developed by Employee for the Company prior to the Effective Date (collectively
referred to as "Intellectual Property") and that (i) are developed using the equipment, supplies, facilities
or Confidential Information of the Company, (ii) result from or are suggested by work performed by Employee for the Company,
or (iii) relate to the Company business or to the actual or demonstrably anticipated research or development of the Company.
All original works of authorship that are created by Employee (solely or jointly with others) within the scope of and during
the period of Employee’s Relationship with the Company and that are protectable by copyright are "works made for
hire," as that term is defined in the United States Copyright Act. Any assignment of copyright hereunder includes all
rights of paternity, integrity, disclosure and withdrawal, and any other rights that may be known as or referred to as
 “moral rights” (collectively, “Moral Rights”). To the extent such Moral Rights cannot be
assigned under applicable law and to the extent the following is allowed by the laws in the various countries where Moral
Rights exist, Employee hereby waives such Moral Rights and consents to any action of Company that would violate such Moral
Rights in the absence of such consent.

 

    -2-

     

    

 

(b)               Patent and Copyright
Registrations. Employee will assist the Company, or its designee, at the Company's expense, in every proper way to secure the
Company's rights in the Intellectual Property and any copyrights, patents, trademarks, domain names or other intellectual property
rights relating thereto in any and all countries, including the disclosure to the Company of all pertinent information and data
with respect thereto and the execution of all applications, specifications, oaths, assignments and other instruments that the Company
deems necessary in order to apply for and obtain such rights and in order to assign and convey to the Company and its successors,
assigns and nominees the sole and exclusive right, title and interest in and to such Intellectual Property and any copyrights,
patents, trademarks, domain names or other intellectual property rights relating thereto. Employee’s obligation to execute
or cause to be executed, when it is in Employee’s power to do so, any such instrument or papers continues after the termination
of this Agreement. In the event the Company is unable because of Employee’s mental or physical incapacity or for any other
reason to secure Employee’s assistance in perfecting the rights transferred in this Agreement, Employee hereby irrevocably
designates and appoints the Company and its duly authorized officers and agents as Employee’s agent and attorney in fact,
to act for and in Employee’s behalf and stead to execute and file any such applications and to do all other lawfully permitted
acts to further the prosecution and issuance of letters patent and copyright, trademark or domain name registrations thereon with
the same legal force and effect as if executed by Employee. The designation and appointment of the Company and its duly authorized
officers and agents as Employee’s agent and attorney in fact is deemed to be coupled with an interest and therefore irrevocable.

 

(c)               
Maintenance of Records. Employee will keep and maintain adequate and current written records of all Intellectual
Property created by Employee (solely or jointly with others) during the term of Employee’s Relationship with the Company.
The records will be in the form of notes, sketches, drawings, works of original authorship, photographs, negatives or digital images
or in any other format that may be specified by the Company. The records will be available to and remain the sole property of the
Company at all times.

 

(d)                Intellectual
Property Retained and Licensed. To the extent permitted by Section 2(b), Employee has accurately identified on Schedule 1
all ideas, methodologies, processes, inventions, discoveries and works of authorship, and all rights in any trademarks,
service marks, trade secrets, copyrights, and patents, that Employee created prior to Employee’s employment with the
Company (collectively “Pre-Existing Work Product”) that may reasonably relate to the current or future
business of the Company. Except as provided herein, Employee will retain all right, title and interest in and to such
Pre-Existing Work Product. Employee will promptly disclose to the Company any modifications or improvements to any
Pre-Existing Work Product that fall within the definition of Intellectual Property (and hereby assigns rights thereto to the
Company pursuant to Section 3(a)). If Employee, during the course of or resulting from employment with the Company, uses,
creates, or otherwise provides Confidential Information, Intellectual Property or other works that incorporate or reasonably
require the use of any of Employee’s Pre-Existing Work Product, then Employee will promptly disclose such and hereby
grants the Company an unrestricted, royalty-free, perpetual, irrevocable, transferable, license to make, have made, use,
market, import, distribute, copy, modify, prepare derivative works, perform, display, disclose, sublicense and otherwise
exploit any and all such Pre-Existing Work Product, to the extent such grant of rights does not conflict with any contractual
obligations of Employee existing prior to the Effective Date.

 

    -3-

     

    

 

(e)                Exception to
Assignments. The foregoing provisions of this Agreement requiring assignment of Intellectual Property to the Company do not
apply to any invention or Intellectual Property that cannot be assigned to the Company under the laws of the state in which Employee
resides, and the notices set forth as Appendix B pertaining to Employee’s state of residence applies to Employee and
any such inventions and Intellectual Property.

 

(f)                Return of Company
Documents. At the time of leaving the employ of the Company and at other times as requested by Company, Employee will deliver
to the Company (and will not keep in Employee’s possession, recreate or deliver to anyone else) any and all works of original
authorship, domain names, original registration certificates, photographs, negatives, digital images, devices, records, data, notes,
reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment or other documents
or property, or reproductions of any aforementioned items, developed by Employee pursuant to Employee’s Relationship with
the Company or otherwise belonging to the Company or its successors or assigns. In the event of the termination of Employee’s
Relationship with the Company, Employee agrees to execute and deliver the "Termination Certificate" attached hereto
as Appendix C.

 

4.       Notification
of New Employer

 

In the event that
Employee leaves the employ of the Company, Employee hereby grants consent to notification by the Company to Employee’s new
employer or consulting client of Employee’s rights and obligations under this Agreement.

 

5.       No
Solicitation of Employees

 

In consideration for
Employee’s Relationship with the Company and other valuable consideration, receipt of which is hereby acknowledged, Employee
agrees that, during the period of Employee’s Relationship with the Company as an employee, consultant, officer and/or director
and for a period of twelve (12) months thereafter, Employee will not solicit the employment of any person who is then employed
by the Company (as an employee or consultant), on behalf of Employee or any other person, firm, corporation, association or other
entity, directly or indirectly.

 

6.       Representations
and Warranties

 

Employee represents
and warrants that Employee’s performance of all the terms of this Agreement will not breach any agreement to keep in confidence
proprietary information acquired by Employee in confidence or in trust prior to Employee’s Relationship with the Company.
Employee has not entered into, and Employee will not enter into, any oral or written agreement in conflict herewith. Employee agrees
to execute any proper oath or verify any proper document required to carry out the terms of this Agreement.

 

7.       Equitable
Relief

 

Any disputes
relating to or arising out of a breach of the covenants contained in this Agreement may cause the Company or Employee, as
applicable, to suffer irreparable harm and to have no adequate remedy at law. In the event of any such breach or default by a
party, or any threat of such breach or default, the other party will be entitled to injunctive relief, specific performance
and other equitable relief. No bond or other security is required in obtaining such equitable relief (unless such bond or
security is otherwise required by law, in which event, Company and Employee hereby agree that a $5,000 US bond will be
sufficient) and hereby consents to the issuance of such injunction and to the ordering of specific performance.

 

    -4-

     

    

 

8.
       General Provisions 

 

(a)               
Governing Law; Consent to Personal Jurisdiction. This Agreement and any controversy related to or arising, directly
or indirectly, out of, caused by or resulting from this Agreement will be governed by and construed in accordance with the domestic
laws of Employee’s residence as of the Effective Date of this Agreement (as identified in the caption of this Agreement),
without giving effect to any choice or conflict of law provision or rule (whether of such state or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than such state. Employee hereby expressly consents to the nonexclusive
personal jurisdiction and venue of the state and federal courts located in the federal Northern District of California for any
lawsuit filed there by either party arising from or relating to this Agreement.

 

(b)               
Entire Agreement. This Agreement sets forth the entire agreement and understanding between the Company and Employee
relating to the subject matter herein and merges all prior discussions between the parties. No modification of or amendment to
this Agreement, or any waiver of any rights under this Agreement, will be effective unless in writing signed by the party to be
charged. Any subsequent change or changes in Employee’s duties, salary or compensation will not affect the validity or scope
of this Agreement.

 

(c)               
Severability. If one or more of the provisions in this Agreement are deemed void by law, then the remaining provisions
will continue in full force and effect.

 

(d)               
Successors and Assigns. Employee may not assign any of Employee’s rights or delegate any of its obligations
under this Agreement without the prior written consent of the Company. The Company may freely assign any of the Company’s
rights or delegate any of its obligations under this Agreement. Subject to the preceding sentence, this Agreement will apply to,
be binding in all respects upon and inure to the benefit of the successors, heirs and permitted assigns of the parties

 

[Signature Page Follows]

 

    -5-

     

    

 

IN WITNESS WHEREOF, the undersigned has
executed this Proprietary Information and Inventions Agreement as of the date first set forth above.

 

	 	By:	 
	 	Name:	 
	 	 
	 	Address:
	 	 
	 	 
	 	 

 

	WITNESS:	 
	 	 
	By:	         	 
	Name:	 	 
	 	 
	Address:	 
	 	 
	 	 
	 	 

 

[SIGNATURE PAGE TO PROPRIETARY INFORMATION AND INVENTIONS
AGREEMENT]

 

    

     

    

 

APPENDIX A

 

Compensation Disclosure

 

In considerations for the covenants and
obligations set forth in the Agreement, Employee expressly acknowledge the receipt and sufficiency of the following compensation
(check all that apply):

 

		  ̈	New, revised, or renewed compensation package. 

 

		  ̈	The sum of one hundred dollars ($100).
	 	 	 
	 	  ̈	Other (_____________________________________________________________________).

 

    A-1

     

    

 

APPENDIX B

 

Invention Notice Schedule

 

California

The following notice applies to
employees who live in the State of California (and this Agreement does not apply to, and You have no obligation to assign to the
Company any invention that fully qualifies with the following):

 

(a) Any provision
in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention
to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using
the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either:

 

(1)  
Relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably
anticipated research or development of the employer; or 

 

 (2)   Result from any work performed by the employee for the employer. 

 

(b) To the extent
a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required
to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable. (California
Labor Code Section 2870) 

 

Delaware

The following notice applies to employees who live
in the State of Delaware:

 

In accordance with Delaware
law, this Agreement does not apply to, and Employee has no obligation to assign to the Company, an invention that Employee developed
entirely on Employee’s own time without using the Company’s equipment, supplies, facility, or trade secret information,
except for those inventions that (i) relate to the Company’s business or actual or demonstrably anticipated research and
development, or (ii) results from any work performed by Employee for the Company. (Delaware Code Annotated, Title 19, Section 805)

 

Illinois

The following notice applies to employees who live
in the State of Illinois:

 

In accordance with Illinois law,
this Agreement does not apply to, and Employee has no obligation to assign to the Company, an invention for which no equipment,
supplies, facility, or trade secret information of the Company was used and which was developed entirely on Employee’s own
time, unless (a) the invention relates (i) to the business of the Company, or (ii) to the Company's actual or demonstrably anticipated
research and development, or (b) the invention results from any work performed by Employee for the Company. (Illinois Compiled
Statutes, Chapter 765, Section 1060)

 

    B-1

     

    

 

Kansas

The following notice applies to employees who live
in the State of Kansas:

 

In accordance with Kansas law, this Agreement
does not apply to an invention for which no equipment, supplies, facility or trade secret information of the Company was used and
which was developed entirely Employee’s own time, unless: (a) the invention relates directly to the business of the Company
or to the Company's actual or demonstrably anticipated research or development; or (b) the invention results from any work performed
by Employee for the Company. (Kansas Statutes Annotated §§ 44-130)

 

Minnesota

 

The following notice applies to employees who live
in the State of Minnesota:

 

In accordance with Minnesota
law, this Agreement does not apply to an invention for which no equipment, supplies, facility or trade secret information of the
Company was used and which was developed entirely on Employee’s own time, and (a) which does not relate (i) directly to the
business of the Company or (ii) to the Company's actual or demonstrably anticipated research or development, or (b) which does
not result from any work performed by Employee for the Company. (Minnesota Statutes Annotated § 181.78)

 

North Carolina

 

The following notice applies to employees who live
in the State of North Carolina:

 

In accordance with North
Carolina law, this Agreement does not apply to an invention that Employee developed entirely on Employee’s own time
without using the Company's equipment, supplies, facility or trade secret information except for those inventions that (a)
relate to the Company's business or actual or demonstrably anticipated research or development, or (b) result from any work
performed by Employee for the Company. (North Carolina General Statutes §§ 66-57.1, 66-57.2)

 

Utah

The following notice applies to employees who live
in the State of Utah:

 

Employee acknowledges and agrees that
this Agreement is not an employment agreement under Utah law or otherwise. However, if and only to the extent this Agreement is
deemed to be covered by the restrictions set forth in Utah Code Ann. § 34-39-3, this Agreement will not apply to an invention
that is created by Employee entirely on Employee’s own time and is not an employment invention as defined in Utah Code Ann.
 § 34-39-2(1), except as permitted under Utah Code Ann. § 34-39-3.

 

    B-2

     

    

 

Washington

The following notice applies to employees who live
in the State of Washington:

 

Notwithstanding any other provision of
this Agreement to the contrary, this Agreement does not obligate Employee to assign or offer to assign to the Company any of Employee’s
rights in an invention for which no equipment, supplies, facilities or trade secret information of the Company was used and which
was developed entirely on Employee’s own time, unless (a) the invention relates (i) directly to the business of the Company
or (ii) to the Company's actual or demonstrably anticipated research or development, or (b) the invention results from any work
performed by Employee for the Company. This satisfies the written notice and other requirements of RCW 49.44.140.

 

    B-3

     

    

 

APPENDIX C

 

TERMINATION CERTIFICATE

 

 

This is to certify
that I do not have in my possession, nor have I failed to return, any and all works of original authorship, domain names, original
registration certificates, photographs, negatives, digital images, devices, records, data, notes, reports, proposals, lists, correspondence,
specifications, drawings, blueprints, sketches, materials, equipment, or other documents or property, or reproductions of any aforementioned
items, belonging to Hydrofarm, LLC and its subsidiaries, affiliates, successors or assigns (collectively, the "Company").

 

I further certify that
I have complied with all the terms of the Company's Proprietary Information and Inventions Agreement signed by me (the "Agreement"),
including the reporting of any Intellectual Property (as defined therein) conceived or made by me (solely or jointly with others)
covered by the Agreement.

 

I further agree that,
in compliance with the Agreement, I will preserve as confidential all trade secrets, confidential knowledge, data or other proprietary
information relating to products, processes, methods, know-how, designs, formulas, developmental or experimental work, computer
programs, databases, other original works of authorship, customer lists, business plans, financial information or other subject
matter pertaining to any business of the Company or any of its employees, clients, consultants or licensees.

 

I agree that for twelve
(12) months from this date, I will not to divert or attempt to divert from the Company any business the Company enjoyed or solicited
from its customers during the prior twelve (12)-month period, nor will I solicit or attempt to induce any customer, supplier, partner
or other person or entity with whom the Company has, or is attempting to establish, a commercial relationship to cease or refrain
from doing business with the Company or to alter its relationship with the Company in any way adverse to the Company.

 

I agree that for twelve
(12) months from this date, I will not (a) make any false, misleading or disparaging representations or statements with regard
to the Company or the products or services of the Company to any third party or (b) make any statement to any third party that
may impair or otherwise adversely affect the goodwill or reputation of the Company.]

 

I further agree that
for twelve (12) months from this date, I will not solicit the employment of any person who will then be employed by the Company
(as an employee or consultant) or who will have been employed by the Company (as an employee or consultant) within the prior twelve
(12) month period, on behalf of myself or any other person, firm, corporation, association or other entity, directly or indirectly,
all as provided more fully in the Agreement.

 

	Dated:	 	 	By:	 
	 	 	 	Name:	 

 

    C-1

     

    

 

SCHEDULE 1

 

PRE-EXISTING WORK PRODUCT

 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

 

    S-1

     

    

 

EXHIBIT B

 

RELEASE

 

In exchange for
good and valuable consideration set forth in that certain Offer Letter (the “Offer Letter”), dated as of
[  ] between the undersigned, ______________ (“Employee”) and Hydrofarm, LLC, a
California limited liability company (“Hydrofarm”), the sufficiency of which is hereby acknowledged,
Employee, on behalf of himself, his executors, heirs, administrators, assigns and anyone else claiming by, through or under
Employee, irrevocably and unconditionally, releases, and forever discharges Hydrofarm, its predecessors, successors and
related and affiliated entities, including parents and subsidiaries, and each of their respective directors, officers,
managers, shareholders, members, employees, attorneys, insurers, agents and representatives (collectively, the
 “Company”), from, and with respect to, any and all debts, demands, actions, causes of action, suits,
covenants, contracts, wages, bonuses, damages and any and all claims, demands, liabilities, and expenses (including
attorneys’ fees and costs) whatsoever of any name or nature both in law and in equity that Employee now has, ever had
or may in the future have against the Company with respect to Employee’s employment with, or service as an officer,
director or manager of, the Company (severally and collectively, “Claims”), including but not limited to,
any and all Claims in tort or contract, whether by statute or common law, and any Claims relating to salary, wages, bonuses
and commissions, incentive units, equity interests, the breach of any oral or written contract, unjust enrichment, promissory
estoppel, misrepresentation, defamation, interference with prospective economic advantage, interference with contract,
wrongful termination, intentional or negligent infliction of emotional distress, negligence, or breach of the covenant of
good faith and fair dealing, and Claims arising out of, based on, or connected with the termination of Employee’s
employment, including any Claims for unlawful employment discrimination of any kind, whether based on age, race, sex,
disability or otherwise, including specifically and without limitation, claims arising under or based on: Title VII of the
Civil Rights Act of 1964, as amended; the Age Discrimination in Employment Act, as amended; the Civil Rights Act of 1991; the
Family and Medical Leave Act; the Americans with Disabilities Act; the Fair Labor Standards Act; the Employee Retirement
Income Security Act of 1974; the Equal Pay Act of 1963; the Older Workers Benefits Protection Act; or any other local, state
or federal equal employment opportunity or anti-discrimination law, statute, policy, order, ordinance or regulation affecting
or relating to Claims that Employee ever had, now has, or claims to have against the Company; provided, however,
that Employee does not release the Company with respect to claims arising out of or relating to its fraud, gross negligence
or willful misconduct. This Release (this “Release”) is not intended to release Claims which, as a matter
of law or public policy, cannot be released.

 

By signing below, Employee
expressly waives any benefits of Section 1542 of the Civil Code of the State of California (and any other federal, state, or local
law of similar effect) if and to the extent applicable. Section 1542 of the Civil Code of the State of California provides as follows:

 

“A GENERAL RELEASE DOES NOT EXTEND
TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

 

Employee warrants and
represents that Employee has not assigned or transferred to any person or entity any of the Claims released by this Release, and
Employee agrees to defend (by counsel of the Company’s choosing), and to indemnify and hold harmless, the Company from and
against any claims based on, in connection with, or arising out of any such assignment or transfer made, purported or claimed.

 

     

     

    

 

As further consideration
for Employee’s entering into the Offer Letter and this Release, the Company covenants and agrees that for one year after
the date of this Release, the Company will not disparage Employee in any manner harmful to Employee’s business or personal
reputation. As further consideration for the Company entering into the Offer Letter and this Release, Employee covenants and agrees
that for one year after the date of this Release, Employee will not disparage the Company in any manner harmful to the Company’s
business reputation; provided, that the foregoing restriction shall not be construed to limit or restrict any provision
of the Offer Letter that prohibits Employee from disparaging the Company. Nothing set forth herein shall prevent Employee or the
Company from providing accurate responses to requests for information if required by legal process, in connection with a government
investigation, or as protected under the whistleblower provisions of federal or state law or regulation.

 

Notwithstanding anything
to the contrary in this Release or the Offer Letter, the foregoing release shall not cover, and Employee does not intend to release,
any rights of indemnification under the Company’s Charter Documents (defined below) or rights to directors and officers liability
insurance. The Company’s charter documents include, as applicable, Articles of Incorporation, Articles of Organization, Certificate
of Formation, Bylaws or Limited Liability Company Agreement (collectively the “Charter Documents”). Employee
further acknowledges that the Company’s obligations under the Charter Documents with respect to indemnification are, to the
extent required therein, conditioned upon receipt by the Company of an undertaking by Employee to repay any advanced or received
amounts if it shall be determined by a court of competent jurisdiction by final judicial determination that Employee is not entitled
to be indemnified by the Company under the Charter Documents.

 

EMPLOYEE HAS READ
THIS RELEASE AND BEEN PROVIDED A FULL AND AMPLE OPPORTUNITY TO STUDY IT, AND EMPLOYEE UNDERSTANDS THAT THIS IS A FULL AND COMPREHENSIVE
RELEASE AND INCLUDES ANY CLAIM UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT. EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS BEEN ADVISED
IN WRITING TO CONSULT WITH LEGAL COUNSEL BEFORE SIGNING THIS RELEASE AND THE OFFER LETTER, AND EMPLOYEE HAS CONSULTED WITH AN ATTORNEY.
EMPLOYEE WAS GIVEN A PERIOD OF AT LEAST 21 DAYS TO CONSIDER SIGNING THIS RELEASE, AND EMPLOYEE HAS SEVEN DAYS FROM THE DATE OF
SIGNING TO REVOKE EMPLOYEE’S ACCEPTANCE BY DELIVERING TIMELY NOTICE OF HIS REVOCATION TO THE COMPANY’S HUMAN RESOURCES
DEPARTMENT AT ITS PRINCIPAL PLACE OF BUSINESS. EMPLOYEE IS SIGNING THIS RELEASE VOLUNTARILY, WITHOUT COERCION, AND WITH FULL KNOWLEDGE
THAT IT IS INTENDED, TO THE MAXIMUM EXTENT PERMITTED BY LAW, AS A COMPLETE AND FINAL RELEASE AND WAIVER OF ANY AND ALL CLAIMS.
EMPLOYEE ACKNOWLEDGES AND AGREES THAT CERTAIN PAYMENTS SET FORTH IN THE OFFER LETTER ARE CONTINGENT UPON EMPLOYEE SIGNING THIS
RELEASE AND WILL BE PAYABLE ONLY IF AND AFTER THE REVOCATION PERIOD HAS EXPIRED.

 

[SIGNATURE
PAGE FOLLOWS]

 

    - 2 -

     

    

 

Employee has read this
Release, fully understands it and freely and knowingly agrees to its terms.

 

Dated this _____ day of ____________, 20___.

 

	 	 
	 	[Employee]

 

	AGREED AND ACCEPTED:	 
	 	 
	HYDROFARM, LLC	 
	 	 
	By:	                            	 
	 	 
	Title:	 	 
	 	 
	Date:	 	 

 

[SIGNATURE PAGE TO RELEASE]

 

    

     

    

 

APPENDIX
B

 

TERMINATION CERTIFICATE

 

This
is to certify that I do not have in my possession, nor have I failed to return, any and all works of original authorship, domain
names, original registration certificates, photographs, negatives, digital images, devices, records, data, notes, reports, proposals,
lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment, or other documents or property, or
reproductions of any aforementioned items, belonging to Hydrofarm Holdings Group, Inc. and its subsidiaries, affiliates, successors
or assigns (collectively, the "Company").

 

I
further certify that I have complied with all the terms of the Company's Proprietary Information and Inventions Agreement signed
by me (the "Agreement"), including the reporting of any Intellectual Property (as defined therein) conceived or
made by me (solely or jointly with others) covered by the Agreement.

 

I
further agree that, in compliance with the Agreement, I will preserve as confidential all trade secrets, confidential knowledge,
data or other proprietary information relating to products, processes, methods, know-how, designs, formulas, developmental or experimental
work, computer programs, databases, other original works of authorship, customer lists, business plans, financial information or
other subject matter pertaining to any business of the Company or any of its employees, clients, consultants or licensees.

 

I
agree that for twelve (12) months from this date, I will not to divert or attempt to divert from the Company any business the Company
enjoyed or solicited from its customers during the prior twelve (12)-month period, nor will I solicit or attempt to induce any
customer, supplier, partner or other person or entity with whom the Company has, or is attempting to establish, a commercial relationship
to cease or refrain from doing business with the Company or to alter its relationship with the Company in any way adverse to the
Company.

 

I
agree that for twelve (12) months from this date, I will not (a) make any false, misleading or disparaging representations or statements
with regard to the Company or the products or services of the Company to any third party or (b) make any statement to any third
party that may impair or otherwise adversely affect the goodwill or reputation of the Company.

 

I
further agree that for twelve (12) months from this date, I will not solicit the employment of any person who will then be employed
by the Company (as an employee or consultant) or who will have been employed by the Company (as an employee or consultant) within
the prior twelve (12) month period, on behalf of myself or any other person, firm, corporation, association or other entity, directly
or indirectly, all as provided more fully in the Agreement.

 

	Dated:	2/11/19	 	By:	/s/ William Toler

	 	Name:	William Toler

 

    B-1

     

    

  

CONFIDENTIAL

  

EXHIBIT C

 

HYDROFARM HOLDINGS LLC

 

UNIT AWARD AGREEMENT

 

This UNIT AWARD AGREEMENT
(this “ Agreement”) is entered into as of [_________], 2017 (the “Effective Date”), by and
between Hydrofarm Holdings LLC, a Delaware limited liability company (the “Company”), and [__________] (the
 “Participant”). Capitalized terms that are used but not defined herein have the meanings ascribed to them in
the LLC Agreement (as defined below).

 

WHEREAS, the Company
is governed by that certain Limited Liability Company Agreement of Hydrofarm Holdings LLC, dated as of [________], 2017, by and
among the Company and the Members from time to time party thereto, a copy of which is attached hereto as Exhibit A (as amended,
supplemented or otherwise modified from time to time, the “LLC Agreement”);

 

WHEREAS, pursuant to
the LLC Agreement, the Company is authorized to grant Class P Units (“Class P Units”) that are intended to constitute
 “profits interests” for applicable income tax purposes;

 

WHEREAS, this Agreement
is intended to qualify for the exemption from registration under Section 4(2) or Rule 701 under the Securities Act or such other
exemptions as may be available under the Securities Act; and

 

WHEREAS, as additional
compensation for services provided by the Participant to the Company, the Company desires to grant Class P Units of the Company
to the Participant on the terms and subject to the conditions set forth in this Agreement.

 

NOW, THEREFORE, the parties hereto hereby agree as
follows:

 

1.       Defined
Terms.

 

“Fair
Market Value ” means the fair market value of the Class P Units, as determined in the good faith discretion of the Board
as of the last day of the month completed most recently before any notice to repurchase the Class P Units is delivered.

 

“Net Return”
means, as of the applicable date of determination, the return on investment realized by Hydrofarm Investment Corp., a Delaware
corporation (“Hawthorn”) with respect to all Units (regardless of class) held by Hawthorn, equal to the quotient
of (a) the aggregate amount actually realized by Hawthorn and (b) the aggregate amount paid by Hawthorn for all Units held. The
Net Return shall be calculated after taking into account the Class P Units, if any, which will vest pursuant to Section 4.
Additionally, if contingent payments are to be received in connection with a Sale Event, the Net Return shall be calculated once
such contingent payments are received; provided, however, that the Board in its good faith determination may, in
its sole discretion, estimate such contingent payments and include such estimated contingent payments in its calculations of Net
Return at the time of the Sale Event. For the avoidance of doubt, to the extent that Hawthorn owns Units indirectly through one
or more other entities, such other entities shall be included within the definition of “Hawthorn” hereunder and any
payment in respect of the Units owned by them shall be included for purposes of calculating Net Return.

 

“Sale Event”
means any Approved Sale or, if not an Approved Sale, then any (a) Sale Transaction, (b) Corporate Conversion (provided such
Corporate Conversion actually results in an initial Public Offering pursuant to Section 9.11 of the LLC Agreement) or (c) dissolution
of the Company pursuant to Section 12.1 of the LLC Agreement.

 

    

     

    

 

2.
        Grant of Units. Upon the terms and conditions set forth in this Agreement, the Company hereby grants to the Participant
effective as of the Effective Date (the “Grant Date”), [_________] Class P Units of the Company (the “Granted
Units”). Such Granted Units are subject to the restrictions provided in this Agreement.

 

3.
        Profits Interests; Initial Capital Account. The Granted Units are each intended to constitute a “profits interest”
in the Company within the meaning of Internal Revenue Service Revenue Procedures 93-27 and 2001-43. On the Grant Date, the Capital
Account attributable to the Granted Units shall be zero.

 

4.
        Vesting Conditions for Class P Units. The Granted Units will vest and no longer be subject to forfeiture, in each case
subject to the Participant’s continued employment through the applicable vesting dates, as follows:

 

(a) fifty percent (50%)
of the Granted Units will vest over a four -year period (the “Time Vesting Units”), whereby twenty-five percent
(25%) of the Time Vesting Units will vest on the one (1) year anniversary of the Grant Date, with the remaining Time Vesting Units
vesting in thirty-six (36) equal monthly installments thereafter, in each case subject to the Participant’s continued employment
through the applicable vesting dates; and

 

(b) fifty percent (50%)
of the Granted Units will vest based on the following Company performance thresholds (the “Performance Vesting Units”)
measured as of the occurrence of a Sale Event:

 

(i) If the
Net Return is less than 2.0:1.0, none of the Performance Vesting Units held by the Participant will vest.

 

(ii) If the
Net Return is greater than or equal to 2.0:1.0, but less than 3.0:1.0, a portion of the Performance Vesting Units held by the Participant
shall vest, which portion shall be determined by the following formula:

 

		(A)	the Net Return minus 2.0; multiplied by

 

		(B)	the total Performance Vesting Units held by the Participant.

 

(iii) If the Net Return is greater
than or equal to 3.0:1.0, all of the Performance Vesting Units held by the Participant shall vest.

 

All of the Time Vesting
Units will vest immediately prior to a Sale Event; provided that, in the case of each of clause (a) and (b) above, the Participant
has provided continuous employment or service to the Company or any Related Company through such vesting date (the “ Vesting
Schedule”). The Board, in its sole discretion, at any time may accelerate vesting of the Granted Units. The Granted Units
that have vested and are no longer subject to forfeiture according to the Vesting Schedule are referred to herein as “Vested
Units.” Granted Units that have not vested and remain subject to forfeiture under the Vesting Schedule are referred to
herein as “Unvested Units.”

 

    2

     

    

 

5.        Forfeiture;
Termination.

 

(a)
Treatment of Units on Termination.

  

(i) Unvested Units.
If the Participant’s employment with the Company or any of its Subsidiaries is terminated by the Company or any such Subsidiary,
if the Participant terminates employment with the Company or any of its Subsidiaries, or if the Participant dies or becomes disabled,
the Participant shall immediately forfeit all of the Unvested Units previously granted to the Participant pursuant to this Agreement.

 

(ii) Vested Units.
If the Participant’s employment with the Company or any of its Subsidiaries is terminated by the Company or any such Subsidiary
without Cause (as defined in such Participant’s employment agreement with the Company), if the Participant terminates employment
with the Company or any of its Subsidiaries for Good Reason (as defined in such Participant’s employment agreement with the
Company) or if the Participant dies or becomes disabled, the Company may, in its sole discretion, within ninety (90) days following
such termination, purchase any of the Vested Units for a price equal to the Fair Market Value on the date of termination. If the
Company does not so purchase a Vested Unit, the Participant shall retain such Vested Unit. If the Participant resigns without Good
Reason or the Company terminates the Participant’s employment for Cause, all Vested Units previously granted to the Participant
pursuant to this Agreement will be forfeited.

 

(b)
Effect of Forfeiture. Upon the forfeiture of any Granted Units pursuant to this Agreement, the Participant (and the
Participant’s heirs, successors and assigns) shall thereafter have no right, title or interest whatsoever in such forfeited
Granted Units and, if the Company does not have custody of any and all certificates representing such Granted Units, then the Participant
shall immediately return to the Company any and all certificates representing the Granted Units so forfeited. The Participant will
receive no payment from the Company in connection with the forfeiture of any Granted Units, including no distribution or payment
in respect of the Participant’s Capital Account or as a result of the Participant withdrawing or resigning as a Member of
the Company. If the Granted Units granted hereunder have been forfeited, and the Participant owns no other Units of the Company,
then the Participant will be automatically deemed to have withdrawn and resigned as a Member of the Company.

 

6.        LLC Agreement; Participation Threshold. The terms and conditions of the Granted Units shall be as set forth herein and
in the LLC Agreement. As a condition to the grant of the Granted Units pursuant to this Agreement, the Participant shall execute
a counterpart signature page to the LLC Agreement, attached hereto as Exhibit B, agreeing to become a Member of the Company
on the terms and subject to the conditions set forth in the LLC Agreement. If the Participant has a spouse, such spouse shall execute
a spousal consent, attached hereto as Exhibit C. The Participation Threshold with respect to the Granted Units will be $[0]
per Granted Unit.

 

7.        Limitations on Transfer. In addition to the restrictions on transfer set forth in the LLC Agreement, the Participant
may not Transfer any rights under this Agreement and the Participant’s rights hereunder shall not be subject to pledge, encumbrance,
hypothecation, execution, attachment or similar process, in each case whether voluntarily or involuntarily, by operation of law
or otherwise. Any attempt to Transfer any of the rights under this Agreement or any of the Granted Units contrary to the provisions
hereof and the levy of any attachment or similar process upon the Participant’s rights hereunder or the Granted Units will
be null and void.

 

8.        Representations and Warranties of the Participant. The Participant hereby represents and warrants to the Company as
of this date as follows:

 

(a) The Participant’s
residence and domicile is the State set forth on the signature page hereof and all discussions related to this Agreement and the
Granted Units, and the offer and acceptance of this Agreement and the Granted Units, occurred in such State.

 

    3

     

    

 

(b) The Participant
is acquiring the Granted Units for the Participant’s own account for investment and not with any view to, or for resale in
connection with, any distribution or public offering thereof within the meaning of the Securities Act. The Participant hereby consents
to an appropriate legend on the certificates, if any, evidencing such Granted Units to such effect and to the effect that Granted
Units may not be disposed of except in compliance with all federal and state securities laws. The Participant acknowledges and
agrees that the Company shall have no obligation to register Granted Units granted to the Participant under federal or state securities
laws either at the time the Granted Units are issued and delivered to the Participant or are proposed to be disposed of by the
Participant unless otherwise expressly provided to the contrary in written agreements to which the Company and the Participant
are parties.

 

(c) The Participant
understands that (i) the Granted Units have not been registered under the Securities Act or applicable state securities laws, in
reliance on exemptions from registration under the Securities Act and applicable state securities laws and (ii) no federal or state
agency has made any finding or determination as to the fairness for investment, nor any recommendation or endorsement, of the Granted
Units.

 

(d) The Participant
acknowledges and agrees that (i) except as expressly provided for in this Agreement, no representations or warranties with respect
to the Granted Units have been made to the Participant by the Company, any manager, officer, agent, employee, Subsidiary or Affiliate
of the Company, or any other Persons, (ii) except for this Agreement and the LLC Agreement, there are no agreements, contracts,
understandings or commitments between the Participant, on the one hand, and the Company, any Manager, Officer, agent, employee,
Subsidiary or Affiliate of the Company, on the other hand, with respect to the Granted Units, (iii) in entering into this transaction
the Participant is not relying upon any information, other than that contained in the LLC Agreement, this Agreement and the results
of the Participant’s own independent investigation, (iv) any future economic return with respect to the Granted Units is
speculative and subject to a high degree of risk, and (v) the Granted Units are subject to forfeiture as set forth herein, are
subject to dilution by the issuance of additional Units by the Company, and the Participant is not entitled to any preemptive,
tag-along, information or other minority investor rights with respect to either the Granted Units, other than as expressly set
forth in the LLC Agreement or as otherwise provided under applicable law.

 

(e) The Participant
is fully informed and aware of the circumstances under which the Granted Units must be held and the restrictions upon the resale
of the Granted Units under the LLC Agreement and the Securities Act and any applicable state securities laws. The Participant acknowledges
that (i) the Granted Units have not been registered under the Securities Act and, therefore, cannot be sold unless they are registered
under the Securities Act and any applicable state securities laws or unless an exemption from such registration is available, (ii)
the availability of an exemption may depend on factors over which the Participant or the Company has no control, (iii) unless so
registered or exempt from registration the Granted Units may be required to be held for an indefinite period and (iv) the reliance
of the Company and others upon the exemptions from registration referred to in the recitals is predicated in part upon this representation
and warranty. The Participant understands that an exemption from registration is not presently available pursuant to Rule 144 promulgated
under the Securities Act by the U.S. Securities and Exchange Commission, that there is no assurance that such exemption will ever
become available to the Participant and that even if it were to become available, sales pursuant to Rule 144 would be limited in
amount and could only be made in full compliance with the provisions of Rule 144.

 

    4

     

    

 

(f) The
Participant has full authority to enter into this Agreement and the LLC Agreement and perform the Participant’s
obligations hereunder and thereunder. This Agreement has been, and the LLC Agreement, upon the execution and delivery of the
counterpart signature pages referred to in Section 6, will have been, duly and validly executed and delivered by the
Participant and constitute or will constitute legal, valid and binding obligations of the Participant, enforceable against
the Participant in accordance with their terms, subject, as to the enforcement of remedies, to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or other similar law of general application affecting creditors and
general principles of equity. The execution, delivery and performance of this Agreement does not and will not, and the
execution and delivery of the LLC Agreement will not, conflict with, violate or cause a breach of any agreement, contract or
instrument to which the Participant is a party or any judgment, order, decree or law to which the Participant is subject.

 

(g) The Participant
understands that the Company’s agreement to grant the Granted Units to the Participant is predicated, in part, on the representations,
warranties and covenants of the Participant contained herein.

 

9.       Section
83(b) Election for Granted Units.

 

(a) The Participant
understands that under Section 83(a) of the Code, the excess (if any) of the Fair Market Value of the unvested Granted Units on
the date the unvested Granted Units become vested over the purchase price, if any, paid for such Granted Units could be taxed as
ordinary income subject to employment or self-employment taxes and tax reporting, as applicable. The unvested Granted Units are
intended to qualify as “profits interests” in the Company for income tax purposes. Provided that the unvested Granted
Units qualify as profits interests, the Fair Market Value of the unvested Granted Units on the Grant Date is deemed to be zero
($0) (and thus no tax generally would be payable by reason of the filing of the election). By filing a protective election within
the 30-day period described below, the Participant should avoid the risk of adverse tax consequences in the future. The Participant
understands that the Participant may elect under Section 83(b) of the Code to recognize income (in the amount of zero ($0)) at
the time the unvested Granted Units are acquired, rather than when and as the unvested Granted Units vest. Such election (an “83(b)
Election”) must be filed with the Internal Revenue Service within thirty (30) days from the Grant Date of the Granted
Units.

 

(b) THE FORM FOR MAKING
AN 83(b) ELECTION IS ATTACHED TO THIS AGREEMENT AS EXHIBIT D. THE PARTICIPANT UNDERSTANDS THAT FAILURE TO FILE SUCH AN ELECTION
WITHIN THE THIRTY (30)-DAY PERIOD MAY RESULT IN THE RECOGNITION OF ORDINARY INCOME BY THE PARTICIPANT AS THE FORFEITURE RESTRICTIONS
LAPSE. THE PARTICIPANT FURTHER UNDERSTANDS THAT AN ADDITIONAL COPY OF SUCH ELECTION FORM SHOULD BE FILED WITH THE PARTICIPANT’S
FEDERAL INCOME TAX RETURN FOR THE CALENDAR YEAR IN WHICH THE DATE OF THIS AGREEMENT FALLS. THE PARTICIPANT ACKNOWLEDGES THAT THE
FOREGOING IS ONLY A SUMMARY OF THE FEDERAL INCOME TAX LAWS THAT APPLY TO THE RECEIPT OF THE UNVESTED UNITS UNDER THIS AGREEMENT
AND DOES NOT PURPORT TO BE COMPLETE. THE PARTICIPANT FURTHER ACKNOWLEDGES THAT THE COMPANY HAS DIRECTED THE PARTICIPANT TO SEEK
INDEPENDENT ADVICE REGARDING THE APPLICABLE PROVISIONS OF THE CODE, THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY
IN WHICH PARTICIPANT MAY RESIDE, AND THE TAX CONSEQUENCES OF THE PARTICIPANT’S DEATH.

 

(c) The Participant
agrees that the Participant will execute and deliver to the Company with this Agreement a copy of the 83(b) Election attached hereto
as Exhibit D.

 

    5

     

    

 

10.
Survival of Representations and Warranties; Indemnification. All representations and warranties contained herein shall
survive the execution of this Agreement and the grant of the Granted Units contemplated hereby. Each party agrees to indemnify
and hold harmless the other from any liability, loss or expense (including reasonable attorneys’ fees) if such party has
breached any representation, warranty or agreement hereunder.

 

11.
Governing Law. This Agreement is entered into under the laws of the State of Delaware and this Agreement (and any controversy
or action arising out of or relating hereto) shall be construed and interpreted in accordance therewith.

 

12. Discontinuance
of Employment. Neither this Agreement nor the issuance of the Granted Units shall give the Participant any right to continued
employment by the Company or any of its Subsidiaries, or any of their respective Affiliates, and subject to the terms of any employment
agreement among such parties, the Company, any of its Subsidiaries, and their Affiliates may terminate the Participant’s
employment for any reason whatsoever, with or without Cause, and otherwise deal with the Participant as an employee without regard
to the effect any such action may have on the Participant’s rights under this Agreement or the LLC Agreement. The Participant
represents that the Participant is acquiring the Granted Units without any expectation that the ownership of any Granted Units
will entitle the Participant to any rights as an employee of the Company, any of its Subsidiaries, or any of their Affiliates that
would not exist if the Participant were not the owner of the Granted Units. The Participant further agrees that no change in his
expectations concerning employment will have a reasonable basis unless set forth in a written agreement expressly giving the Participant
additional rights as to such matters.

 

13.
Additional Securities. Any additional securities issued to the Participant in respect of the Granted Units, will be
subject to the terms and conditions contained herein in the same manner as the Granted Units, including forfeiture under Section
5.

 

14.
Review of Agreement; Complete Agreement. The Participant confirms that the Participant has carefully reviewed this Agreement
and the LLC Agreement and understands their terms. The Participant confirms that the Participant has consulted with legal counsel,
or had ample opportunity to consult with legal counsel, representing Participant concerning this Agreement, the LLC Agreement and
any other agreements between or among the Participant, the Company, and any of its or their present or prospective members, managers,
officers or employees. This Agreement, together with the LLC Agreement, contains the complete agreement among the parties with
respect to the grant of the Granted Units or any other incentive arrangement and supersedes all prior agreements and understandings
among the parties hereto with respect hereto and thereto.

 

15.
Tax Acknowledgement. Participant will pay to the Company, or the Company may deduct from any amounts payable to Participant,
the amount of any applicable federal, state, local or foreign taxes that the Company determines is required to be withheld in connection
with the issuance, vesting, forfeiture or purchase of the Granted Units, the distribution of any cash or other property on account
of the Granted Units, or otherwise as a result of Participant’s relationship with the Company. The Participant acknowledges
and agrees that none of the Company, any of its Subsidiaries or any of their respective Affiliates has made any representations
or warranties hereunder with respect to the economic or tax effect of the grant of the Granted Units (or any other incentive arrangements).
The Participant has made his or her own independent evaluation of the Granted Units, including the economic and tax effect of them,
either through his or her own analysis or through representatives such as legal counsel or accountants.

 

    6

     

    

 

16.
Miscellaneous. This Agreement shall be binding upon and inure to the benefit of the parties hereto and, except as otherwise
expressly provided herein, their respective heirs, executors, administrators, representatives, successors and permitted assigns.
This Agreement may not be assigned, transferred or otherwise disposed of by the Participant, whether voluntarily or involuntarily,
by operation of law or otherwise, without the prior written consent of the Company. No waiver of any provision of this Agreement
is valid unless in writing and signed by the party against whom or which enforcement is sought and any such waiver is effective
only in the specific instance described and for the purpose for which the waiver was given. The failure of any party to this Agreement
to insist upon or enforce strict performance by any other party to this Agreement of any provision of this Agreement shall not
be construed as a waiver or relinquishment of such right or related remedy. Whenever the context of this Agreement requires, the
gender of all words herein shall include the masculine, feminine, and neuter, and the number of all words herein shall include
the singular and plural. The word “including” and words of similar import when used in this Agreement will mean “including,
without limitation,” unless otherwise specified. The word “or” will not be exclusive.

 

[The remainder of this page is intentionally left
blank]

 

    7

     

    

 

IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be executed as of the day and year first written above.

 

	 	COMPANY:
	 	 
	 	HYDROFARM HOLDINGS LLC
	 	 
	 	By:	                                                    
	 	Name:	 
	 	Title:	 
	 	 
	 	PARTICIPANT:
	 	   
	 	[                                     ] 

 

	 	Address of Participant: 	
	 	 

 

    8

     

    

  

EXHIBIT
D

 

FORM OF

 

HYDROFARM
HOLDINGS GROUP, INC.

2018 EQUITY INCENTIVE PLAN

 

STOCK
OPTION GRANT NOTICE

 

Hydrofarm
Holdings Group, Inc. (the "Company") hereby grants to you a stock option (the "Option")
to purchase shares of the Company’s Common Stock under the Company's 2018 Equity Incentive Plan (the "Plan").
The Option is subject to all the terms and conditions set forth in this Stock Option Grant Notice (this "Grant
Notice") and in the Stock Option Agreement and in the Plan, which are attached to and incorporated into this Grant
Notice in their entirety.

 

	Participant:	William
Toler	 
	 	 
	Grant Date:	1	 
	 	 
	Vesting Commencement Date:	2	 
	 	 
	Number of Shares Subject to Option:	3	 
	 	 
	Exercise Price (per Share):	 	 
	 	 
	Option Expiration Date:	                                               (subject to
earlier termination in accordance with the terms of the Plan and the Stock Option Agreement)  
	 	 
	Type of Option:	  ̈
Incentive Stock Option*    ̈ Nonqualified Stock Option
	 	 
	Vesting and Exercisability Schedule (subject to continued employment or service):	[1/16th of the shares
subject to the Option will vest and become exercisable quarterly thereafter over the next four years such that the Option is fully
vested and exercisable on the fourth anniversary of the Grant Date; provided, however, that the unvested portion of the Option
shall become fully vested and excisable immediately prior to the occurrence of a Change in Control (as defined in the Plan as
of the date hereof) and the unvested Options that by their terms vest over the twelve month period immediately following Participant's
Qualifying Termination (as defined in Participant's employment agreement dated January__, 2019 (the “Employment
Agreement”)) shall become vested and exercisable upon Participant's Qualifying Termination, provided that Participant complies
with the terms of the Employment Agreement.]  

 

Additional Terms/Acknowledgement: You acknowledge
receipt of, and understand and agree to, this Grant Notice, the Stock Option Agreement and the Plan. You further acknowledge that
as of the Grant Date, this Grant Notice, the Stock Option Agreement and the Plan set forth the entire

 

		 

 

1 To be on or as soon as practicable following completion of the Registration, provided that if the
Registration is not completed as of October 1, 2019, an option will be granted on October 1, 2019, and a subsequent true-up
option will be granted upon completion of the Registration.

2 To be Participant start date with Company.

3 To be a number of shares of the Company's common stock equal to the difference between the number of
shares of the Company's common stock held by Participant or subject to equity incentive awards or other convertible
securities held by Participants and 5% of the Company's total outstanding common stock on the date of grant.

* See Sections 3, 4 and 5 of the Stock Option Agreement.

 

     

     

    

 

On the date the Performance-Based
Vesting Requirement is satisfied, you will become vested in the number of RSUs that have satisfied the Time-Based Vesting Requirement,
if any. If the Performance-Based Vesting Requirement is not satisfied, all your RSUs will expire, unvested (regardless of your
satisfaction of the Time-Based Vesting Requirement), on the earlier of (x) the date of your Termination of Service and (y) the
Expiration Date.

 

In addition, in the event
that the Liquidity Event that occurs is a Change of Control (as defined in the Plan (as in effect on the Grant Date), but only
if that transaction is also a change in ownership of the Company or a substantial portion of the Company's assets, per Treasury
Regulation Section 1.409A 3(i)(5)(v) and (vii)) that satisfies the Performance-Based Vesting Requirement, then if and to the extent
that the Successor Company does not convert, assume, substitute for or replace the Award, the Time-Based Vesting of the RSUs shall
be accelerated and the RSUs shall be fully vested effective immediately prior to the Change of Control.

 

"Liquidity
Event" means the earlier to occur of (a) a Change of Control (as defined in the Plan as in effect on the
Grant Date) or (b) an IPO. A Liquidity Event is a bona fide organizational goal of the Company, the occurrence of which prior
to the Expiration Date the Board has determined is substantially uncertain as of the Grant Date.

 

"IPO" means
the effective date of the registration statement filed with the U.S. Securities and Exchange Commission relating to the initial
public offering of a class of the Company's equity securities.

 

Settlement Schedule:
With respect to any portion of the RSUs that satisfies both the Time-Based Vesting and Performance-Based Vesting conditions,
the Company will settle the vested RSUs in shares of Common Stock as soon as practicable after the applicable vesting date, but
in any event not later than March 15 of the year following the calendar year in which the RSUs became vested (that is, the expiration
of the period determined under Treasury Regulation Section 1.409A-1(b)(4)).

 

Additional Terms/Acknowledgement:
By accepting your Award, you acknowledge receipt of, and understand and agree to, the Award Notice, the RSU Agreement and the
Plan, which together form the entire agreement between the parties on the matters set forth herein. You further acknowledge that
the vesting of the RSUs pursuant to this Award Notice and the RSU Agreement is conditioned on the occurrence of Liquidity Event
as well as your continued service. You further acknowledge that as of the Grant Date, the Award Notice, the RSU Agreement and the
Plan set forth the entire understanding between Participant and the Company regarding the Award and supersede all prior oral and
written agreements on the subject.

 

	HYDROFARM HOLDINGS GROUP, INC.	PARTICIPANT

 

	By:		 	 
	Its:	CFO	 	Signature
	 	 	Date: 

 

	 	 	 	Address: 	
	 	 	 	 	

 

Attachments:

1.      Restricted Stock Unit Award Agreement

2.      2018 Equity Incentive Plan

 

    2Exhibit 10.32

 

HYDROFARM HOLDINGS GROUP, INC.

 

March 4, 2019 

 

Terry Fitch

 

Re:    Employment
Terms

 

Dear Terry:

 

On behalf of Hydrofarm Holdings Group,
Inc. (the “Company”), I am pleased to offer you employment at the Company on the terms set forth in this offer
letter agreement (the “Agreement”), which will govern your employment with the Company. As you know, the Company
is currently undergoing a registration of its securities with the U.S. Securities and Exchange Commission pursuant to which the
Company will become a public reporting company under the Securities Exchange Act of 1934, as amended (the “Registration”).

 

It is anticipated that your employment will commence on the
date hereof (the “Start Date”).

 

1.             Employment by the Company. 

 

(a)               
Position. You will serve as the Company’s President. During the term of your employment with the Company, you
will devote your reasonable best efforts and substantially all of your business time and attention to the business of the Company,
except for approved vacation periods and reasonable periods of illness or other incapacities permitted by the Company’s general
employment policies.

 

(b)               
Duties and Location. You will perform those duties and responsibilities as are customary for your position, and as
may be directed by Chief Executive Officer (“CEO”), to whom you will report. Your primary office location will be the
Company’s Denver, Colorado location. Notwithstanding the foregoing, the Company reserves the right to reasonably require
you to perform your duties at places other than your primary office location from time to time, including, without limitation,
at the Company’s offices in Petaluma, California, and to require reasonable business travel.

 

2.             Base Salary and Employee Benefits. 

 

(a)               
Salary. From the Start Date until the earlier to occur of (i) completion of the Registration or (ii) September 30,
2019 (such earlier date the “Salary Change Date”), you will receive for services to be rendered hereunder base
salary paid at the annualized rate of $150,000. Commencing on the day following the Salary Change Date, your base salary will be
increased to the annualized rate of $300,000. Your base salary may be increased (but not decreased below $300,000 following the
Salary Change Date without your written consent) by the Board in its sole discretion. Your base salary will be paid, less standard
payroll deductions and tax withholdings, on the Company’s ordinary payroll cycle. As an exempt salaried employee, you are
expected to work the Company’s normal business hours, and such additional time as appropriate for your work assignments and
position, and you will not be entitled to overtime compensation.

 

(b)               
Benefits. As a regular full-time employee, you will be eligible to participate in the Company’s standard employee
benefits (pursuant to the terms and conditions of the benefit plans and applicable policies) that are available to the Company’s
employees from time to time.

 

     

     

    

 

Terry Fitch 

March 4, 2019

Page 2

 

(c)               
Equity Awards. 

 

(i)                
Restricted Stock Unit Awards. On the Start Date, you will be granted an award of restricted stock units (the “Sign-On
RSU Award”) pursuant to the Restricted Stock Unit Award Notice and Restricted Stock Unit Agreement attached hereto as
Exhibit C. Prior to completion of the Registration and subject to approval by the Board at the time and in accordance
with the terms of this Agreement, in the event that the Company issues additional shares of common stock with a value at the time
of issuance up to an aggregate of $225,000,000 in connection with any merger or acquisition, you will be granted additional restricted
stock units (each, a “Follow-On RSU Award,” and together with the Sign-On RSU Award, the “RSU Awards”)
in an amount equal to 1.8% of any such newly issued shares of common stock, in substantially similar form to Exhibit C,
with the Start Date as the vesting commencement date of each Follow-On RSU Award. For the avoidance of doubt, in no event shall
the Company be required to grant you additional restricted stock units pursuant to the immediately preceding sentence with respect
to any shares of the Company’s common stock newly issued in connection with any merger or acquisition that are in excess
of $225,000,000 in value at the time of issuance.

 

(ii)              
Stock Options. On (A) the date on which the Registration is completed and (B) if the Registration is not completed
as of October 1, 2019, on October 1, 2019, subject to approval by the Board at the time and in accordance with the terms of this
Agreement the Company will grant you an award of stock options (the “Options”) to purchase that number of shares
of the Company’s common stock equal to the difference between the number of shares of the Company’s common stock underlying
the RSU Awards and 1.8% of the Company’s total outstanding common stock on each such date. The specific terms and conditions
(including the vesting schedule and the exercise price for the Options (which will be the fair market value of the Company’s
common stock on the date of grant, as determined by the Board in accordance with the Company’s 2018 Equity Incentive Plan))
will be set forth in a Stock Option Grant Notice and Stock Option Agreement in substantially the form attached hereto as Exhibit
D.

 

(d)               
Salary True-Up Bonus. If you are actively employed by the Company from the Start Date through the Salary Change Date,
you will receive a cash bonus (the “Salary True-Up Bonus”) in an amount equal to (i) $150,000, multiplied by
(ii) a fraction, the numerator of which is the number of calendar days that have elapsed between the Start Date and the Salary
Change Date, and the denominator of which is 365. The Salary True-Up Bonus will be paid in a lump sum payment, less standard payroll
deductions and tax withholdings, no later than October 31, 2019.

 

3.             Annual Bonus. For each calendar year during the term of this Agreement, you will be eligible to earn an annual performance
and retention bonus of up to fifty percent (50%) of your base salary rate (which, for the 2019 calendar year, shall be deemed to
be $300,000) (the “Annual Bonus”). The Annual Bonus will be based upon the Board’s assessment of your
performance and the Company’s attainment of goals, including annual EBITDA versus target EBITDA, as determined by the Board
in consultation with you. Bonus payments, if any, will be subject to applicable payroll deductions and withholdings. Following
the close of each calendar year, the Board will determine whether you have earned an Annual Bonus, and the amount of any such bonus,
based on the achievement of such goals. You must remain an active employee through the end of any given calendar year in order
to earn an Annual Bonus for that year and any such bonus will be paid no later than March 15th of the year following the year in
which your right to such amount became vested.

 

    2

     

    

 

Terry Fitch 

March 4, 2019

Page 3

 

4.             Expenses.
The Company will reimburse you for reasonable business travel, entertainment or other expenses incurred by you in furtherance
or in connection with the performance of your duties hereunder, in accordance with the Company’s expense reimbursement policy
as in effect from time to time.

 

5.             Compliance with Confidentiality and Invention Assignment Agreement and Company Policies. 

 

(a)               
Confidentiality and Invention Assignment Agreement. You acknowledge that the Confidentiality and Invention Assignment
Agreement (the “Confidentiality Agreement,” a copy of which is attached hereto as Exhibit A) executed
in connection herewith is an integral component of your employment by the Company and is made a part of this Agreement by incorporation.

 

(b)               
Non-Disclosure and Non-Use of Confidential Information. At all times both during your employment with the Company,
and after your employment relationship with the Company has ended for any reason, you agree that you will not, either directly
or indirectly, and you will not permit any Covered Entity which you control to, either directly or indirectly, (i) divulge, use,
disclose (in any way or in any manner, including by posting on the Internet), reproduce, distribute, or reverse engineer or otherwise
provide Confidential Information to any person or entity; (ii) take any action that would make available Confidential Information
to the general public in any form; or (iii) take any action that uses Confidential Information for solicitation or marketing for
any service or product on your behalf or on behalf of any person or entity other than the Company or any of its Affiliates, except
(A) as required in connection with the performance of your duties to the Company, (B) as required to be included in any report,
statement or testimony requested by any municipal, state or national regulatory body having jurisdiction over you or any Covered
Entity which is controlled by you, (C) as required in response to any summons or subpoena or in connection with any litigation,
(D) to the extent necessary in order to comply with any law, order, regulation, ruling or governmental request applicable to you
or any Covered Entity which is controlled by you, (E) as required in connection with an audit by any taxing authority, or (F) as
permitted by the express written consent of the Board. In the event that you or any such Covered Entity that is controlled by you
are required to disclose Confidential Information pursuant to the foregoing exceptions, you shall promptly notify the Company of
such pending disclosure and assist the Company (at the Company’s expense) in seeking a protective order or in objecting to
such request, summons or subpoena with regard to the Confidential Information. If the Company does not obtain such relief prior
to the time that you (or such Covered Entity) are legally compelled to disclose such Confidential Information, you (or such Covered
Entity) may disclose that portion of the Confidential Information that your counsel advises you are legally compelled to disclose
or else stand liable for contempt or suffer censure or penalty. In such cases, you shall promptly provide the Company with a copy
of the Confidential Information so disclosed. This provision applies without limitation to unauthorized use of Confidential Information
in any medium, including film, videotape, audiotape and writings of any kind (including books, articles, e-mails, texts, blogs
and websites).

 

(c)               
Compliance with Company Policies. In addition, you are required to abide by the Company’s policies and procedures,
as modified from time to time within the Company’s discretion including without limitation such policies with respect to
legal compliance, conflicts of interest, confidentiality, compensation recovery (clawback), professional conduct and business ethics
as are from time to time in effect; provided, however, that in the event the terms of this Agreement differ from
or are in conflict with the Company’s general employment policies or practices, this Agreement shall control. Nothing in
this Agreement, or your Confidentiality Agreement, is intended to or will be used in any way to limit your rights to communicate
with a government agency, as provided for, protected under or warranted by applicable law. Notwithstanding any other provision
in this Agreement to the contrary and without limiting the foregoing sentence, pursuant to 18 USC Section 1833(b), you shall not
be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made
(i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely
for the purpose of reporting or investigating a suspected violation of law; or (ii) in a complaint or other document filed in a
lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit for retaliation by an employer
for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret
information in the court proceeding, if the individual files any document containing the trade secret under seal and does not disclose
the trade secret, except pursuant to a court order. 18 USC Section 1833(b) does not preclude the trade secret owner from seeking
breach of contract remedies.

 

    3

     

    

 

Terry Fitch 

March 4, 2019

Page 4

 

6.             Protection
of Third Party Information. In your work for the Company, you will be expected not to make any unauthorized use or disclosure
of any confidential or proprietary information, including trade secrets, of any former employer or other third party to whom you
have contractual obligations to protect such information. Rather, you will be expected to use only that information which is generally
known and used by persons with training and experience comparable to your own, which is common knowledge in the industry or otherwise
legally in the public domain, or which is otherwise provided or developed by the Company. You represent that you are able to perform
your job duties within these guidelines, and you are not in unauthorized possession of any unpublished documents, materials, electronically-recorded
information, or other property belonging to any former employer or other third party to whom you have a contractual obligation
to protect such property. In addition, you represent and warrant that your employment by the Company will not conflict with any
prior employment or consulting agreement or other agreement with any third party, that you will perform your duties to the Company
without violating any such agreement(s), and that you have disclosed to the Company in writing any contract you have signed that
may restrict your activities on behalf of the Company.

 

7.              Term. The initial term of this Agreement shall be three (3) years commencing on the Start Date, unless terminated earlier
pursuant to the terms herein (the “Initial Term”). This Agreement shall remain in force after the end of the
Initial Term unless either party gives notice of non-renewal at least ninety (90) days prior to the end of the Initial Term or
at any time after the end of the Initial Term, as applicable. The Initial Term or, in the event that your employment hereunder
is terminated earlier pursuant to the terms hereof or continues thereafter pursuant to this Section 7, such shorter or longer period,
as the case may be, is referred to herein as the “Term.” Notwithstanding the foregoing, your employment relationship
with the Company is at-will. Accordingly, subject to the terms set forth in this Agreement, you may terminate your employment with
the Company at any time and for any reason whatsoever simply by notifying the Company; and the Company may terminate your employment
at any time, with or without Cause or advance notice.

 

8.             Severance. If, at any time, the Company terminates your employment without Cause (other than as a result of your death
or disability), you resign for Good Reason, or your employment hereunder terminates due to the Company’s non-renewal of this
Agreement (whether at or after the end of the Initial Term) (each such termination referred to as a “Qualifying Termination”),
provided such termination or resignation constitutes a Separation from Service (as defined under Treasury Regulation Section 1.409A-1(h),
without regard to any alternative definition thereunder, a “Separation from Service”), then you will receive
the Accrued Amounts (as defined in Section 9) and subject to Sections 10 and 11 below and your continued compliance with the terms
of this Agreement (including without limitation Section 5 above), the Company will provide you with the following severance benefits
(the “Severance Benefits”):

 

(a)               
Cash Severance. The Company will pay you, as cash severance, an amount equal to the greater of $150,000 or six (6)
months of your base salary in effect as of your Separation from Service date (provided that if your employment termination
is due to your resignation for Good Reason in connection with the reduction of your base salary, then the cash severance
payment herein will be based upon your base salary rate as of immediately prior to such reduction) (collectively, the “Severance”).
The Severance will be paid, less standard payroll deductions and tax withholdings, in a lump sum payment on or before the day that
is sixty (60) days following your Separation from Service date.

 

    4

     

    

 

Terry Fitch 

March 4, 2019

Page 5

 

(b)               
COBRA Severance. As an additional Severance Benefit, if you timely (and properly) elect to continue your coverage
under the Company’s group health plan pursuant to Code Section 4980B(f) (“COBRA”), the Company will reimburse
you for (or will pay directly, in the discretion of the Company) the premium charged for such coverage until the earliest to occur
of (i) the six (6) month anniversary of your Separation from Service date, (ii) the date on which you obtain health care coverage
from another source (e.g., a new employer or spouse’s benefit plan), and (iii) the date on which you cease to be entitled
to COBRA continuation coverage under the Company’s group health plan; provided, however, that the Company may unilaterally
amend or eliminate the benefit provided under this Section 8(b) to the extent it deems necessary to avoid imposition of excise
taxes, penalties or similar charges on the Company or any of its Affiliates (or any of their respective successors), including,
without limitation, under Code Section 4680D or 4980H. You must notify the Company within two (2) weeks if you obtain coverage
from a new source.

 

(c)               
Salary True-Up Bonus. If your employment terminates before September 30, 2019 (for the avoidance of doubt as a result
of the Company terminating your employment without Cause (other than as a result of your death or disability) or your resignation
for Good Reason), the Company will pay you an amount equal to (i)   $150,000, multiplied
by (ii) a fraction, the numerator of which is the number of calendar days that have elapsed between the Start Date and your Separation
from Service date, and the denominator of which is 365. This amount will be paid, less standard payroll deductions and tax withholdings,
in a lump sum payment on or before the day that is sixty (60) days following your Separation from Service date.

 

(d)               
Accelerated Vesting. All unvested time-based RSU Awards and all Stock Options held by you that by their terms vest
over the twelve month period immediately following your Qualifying Termination shall immediately and automatically vest in full
and, in the case of the Stock Options, shall remain exercisable for the period of time set forth in the applicable award agreements.
All unvested time-based RSU Awards and all Stock Options held by you that by their terms vest following such twelve month period
shall immediately terminate and be forfeited.

 

9.             Resignation
Without Good Reason; Termination for Cause; Death or Disability. If, at any time, you resign your employment without Good
Reason, or the Company terminates your employment for Cause, or if either party terminates your employment as a result of your
death or disability, you will receive (a) your base salary accrued through your last day of employment, (b) any unused vacation
(if applicable) accrued through your last day of employment, (c) any earned but unpaid Annual Bonus for the calendar year ended
immediately prior to your Separation from Service date (provided that any such Annual Bonus will be paid at the same time it would
have been paid had your employment not terminated), and (d) reimbursement of any unreimbursed business expenses (collectively,
the “Accrued Amounts”). Under these circumstances, you will not be entitled to any other form of compensation
from the Company, including any Severance Benefits, other than any rights to which you are entitled under the Company’s
benefit programs, stock option plan or equity grant documents between you and the Company.

 

10.          Conditions to Receipt of Severance Benefits. Prior to and as a condition to your receipt of the Severance Benefits described
above, you shall execute and deliver to the Company an effective release of claims in favor of the Company, in substantially the
form attached hereto as Exhibit B (the “Release”) within the timeframe set forth therein, but
not later than forty-five (45) days following your Separation from Service date, and allow the Release to become effective
according to its terms (by not invoking any legal right to revoke it) within any applicable time period set forth therein (such
latest permitted effective date, the “Release Deadline”). Receipt of Severance Benefits is further subject to
Section 11(d) below. Notwithstanding anything in this Agreement to the contrary, in no event will any Severance Benefits be paid
prior to the first business day of the calendar year in which the Release Deadline occurs.

 

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Terry Fitch 

March 4, 2019

Page 6

 

11.          Restrictive Covenants. In recognition
of the consideration set forth herein, the sufficiency of which is hereby acknowledged, and to protect the Confidential Information,
goodwill and Customer and business relationships of the Company, you hereby covenant and agree that:

 

(a)               
Non-Competition. While employed and for six months after termination of your employment for any reason (the “Restricted
Term”), you shall not, either directly or indirectly, individually or by or through any Covered Entity, whether for consideration
or otherwise: (1) engage in (except on behalf of the Company or any of its Affiliates), or compete with the Company or any of its
Affiliates in, a Competing Business anywhere in the Territory; or (2) form or assist others in forming, be employed by, perform
services for, become an officer, director, member or partner of, or participant in, or consultant or independent contractor to,
invest in or own any interest in (whether through equity or debt securities), assist (financially or otherwise) or lend your name,
counsel or assistance to any entity engaged in a Competing Business anywhere in the Territory.

 

(b)               
Non-Solicitation. While employed and during the Restricted Term, you shall not, either directly or indirectly, individually
or by or through any Covered Entity, whether for consideration or otherwise: (A) knowingly solicit or actually accept business
from any Customer or Prospective Customer, in each case, for the purpose of providing goods or services on behalf of a Competing
Business, (B) knowingly solicit or induce any Customer to terminate, reduce or alter, in a manner adverse to the Company or any
of its Affiliates, any existing or potential business arrangement or agreement with the Company or any of its Affiliates, or (C)
solicit, hire, attempt to solicit or attempt to hire any person who is or was an employee, third party consultant or independent
contractor of the Company or any of its Affiliates at any time during the 12 months prior to such solicitation or hiring. The restrictions
set forth in this Section 11(b) shall not prohibit any form of general advertising or solicitation that is not directed at a specific
person or entity and does not relate to a Competing Business.

 

(c)               
Non-Disparagement. You will not, in any manner, directly or indirectly, on your own behalf or in conjunction with
or for the benefit of any other person or entity, disparage, defame, or denigrate the Company or any of its Affiliates or their
respective officers, directors, employees, stockholders, products or services in any manner harmful to their business reputation.
The Company agrees that its officers and directors will not, in any manner, directly or indirectly, disparage, defame, or denigrate
you in any manner harmful to your business or personal reputation. Notwithstanding the foregoing, nothing in this Section 11(c)
shall prohibit any person from making truthful statements when required by order of a court or other governmental or regulatory
body having jurisdiction or to enforce any legal right including, without limitation, the terms of this Agreement.

 

(d)               
Conditional Severance Benefits. You agree that the payment of any Severance Benefits is conditioned on your compliance
with Sections 11(a), (b) and (c) and that, if you breach any of those sections, you (A) forfeit your rights to receive any Severance
Benefits, and (B) will repay, or cause to be repaid, to the Company the full amount of any Severance Benefits paid by the Company
to you prior to the date of such breach.

 

(e)               
Enforcement. You acknowledge that the covenants set forth in Sections 5, 6 and 11(a), (b) and (c) impose a reasonable
restraint on you in light of the business and activities of the Company and its Affiliates. You acknowledge that your expertise
is of a special and unique character which gives this expertise a particular value, and that a breach of Sections 5, 6 or 11(a),
(b) or (c) by you will cause serious and potentially irreparable harm to the Company and its Affiliates. You therefore acknowledge
that a breach of Sections 5, 6 or 11(a), (b) or (c) by you cannot be adequately compensated in an action for damages at law, and
equitable relief would be necessary to protect the Company and its Affiliates from a violation of this Agreement and from the
harm which this Agreement is intended to prevent. By reason thereof, you acknowledge that, notwithstanding any provision contained
herein to the contrary, the Company and its Affiliates are entitled, in addition to any other remedies they may have under this
Agreement or otherwise, to temporary, preliminary and permanent injunctive and other equitable relief (without the necessity of
showing economic loss or other actual damages) to prevent or curtail any breach of this Agreement in any court of competent jurisdiction,
in addition to any other legal or equitable remedies they may have. You acknowledge, however, that no specification in this Agreement
of a specific legal or equitable remedy may be construed as a waiver of or prohibition against pursuing other legal or equitable
remedies in the event of a breach of this Agreement by you. In the event of a breach or violation by you of any of the provisions
of Section 11(a) or (b), the running of the Restricted Term shall be tolled during the continuance of any actual breach or violation.
Other than with respect to a Company violation of Section 11(c) above, your sole and exclusive remedy in the event of a breach
of this Agreement by the Company shall be payment of Severance Benefits.

 

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Terry Fitch 

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(f)           Modification.
In the event that any provision or term of Section 11(a) or (b), or any word, phrase, clause, sentence or other portion thereof
(including, without limitation, the geographic and temporal restrictions and provisions contained in Section 11(a) or (b)) is held
to be unenforceable or invalid for any reason, such provision or portion thereof will be modified or deleted in such a manner as
to be effective for the maximum period of time for which it/they may be enforceable and over the maximum geographical area as to
which it/they may be enforceable and to the maximum extent in all other respects as to which it/they may be enforceable. Such modified
restriction(s) shall be enforced by the court or adjudicator. In the event that modification is not possible, because each of your
obligations in Section 11 is a separate and independent covenant, any unenforceable obligation shall be severed and all remaining
obligations shall be enforced.

 

12.          Return of Company Property. Upon
the termination of your employment for any reason, as a precondition to your receipt of the Severance Benefits (if applicable),
within five (5) days after your Separation from Service Date (or earlier if requested by the Company), you will return to the Company
all Company documents (and all copies thereof) and other Company property within your possession, custody or control, including,
but not limited to, Company files, notes, financial and operational information, Customer lists and contact information, product
and services information, research and development information, drawings, records, plans, forecasts, reports, payroll information,
spreadsheets, studies, analyses, compilations of data, proposals, agreements, sales and marketing information, personnel information,
specifications, code, software, databases, computer-recorded information, tangible property and equipment (including, but not limited
to, computers, facsimile machines, mobile telephones, tablets, handheld devices, and servers), credit cards, entry cards, identification
badges and keys, and any materials of any kind which contain or embody any proprietary or confidential information of the Company,
and all reproductions thereof in whole or in part and in any medium. You further agree that you will make a diligent search to
locate any such documents, property and information and return them to the Company within the timeframe provided above. In addition,
if you have used any personally-owned computer, server, or e-mail system to receive, store, review, prepare or transmit any confidential
or proprietary data, materials or information of the Company, then within five (5) days after your Separation from Service date
you must permanently delete and expunge such confidential or proprietary information from those systems without retaining any reproductions
(in whole or in part). You shall deliver to the Company a signed statement certifying compliance with this Section 12 prior to
the receipt of the Severance Benefits.

 

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Terry Fitch 

March 4, 2019

Page 8

 

 

13.          Definitions.
For purposes of this Agreement, the following terms shall have the following meanings:

 

“Affiliate” means with
respect to any party, any corporation, limited liability company, partnership, joint venture, firm and/or other entity that directly
or indirectly controls, is controlled by or is under common control with such party, including any subsidiaries.

 

“Cause” for termination
will mean your: (a) willful and continued failure to substantially perform your duties (other than as a result of incapacity due
to physical or mental illness or other approved leave of absence); (b) gross negligence or willful misconduct in the course of
your employment with the Company that causes or is likely to cause material harm to the Company; (c) engagement in conduct that
discriminates or harasses another employee or contractor of the Company or any of its Affiliates on the basis of gender, race,
color, creed, religion or sexual orientation; (d) conviction of, or plea of guilty or nolo contendere to, a crime involving
moral turpitude; (e)  intentional, material breach of this Agreement that causes or
is likely to cause material harm to the Company; (f)  intentional, material violation
of the written policies of the Company, to the extent you have reasonable notice of such policies, that causes or is likely to
cause material harm to the Company; or (g) material fraud with respect to, or embezzlement of material funds or property belonging
to, the Company. Notwithstanding the foregoing, “Cause” shall not exist with respect to the events or circumstances
described in sections (a), (b), (e), (f) or (g) of this paragraph unless and until the Company has given you written notice of
the applicable event or circumstance within sixty (60) days of the date the Company has actual knowledge thereof, which notice
specifically delineates such claimed misconduct or breach and informs you that you are required to cure such misconduct or breach
(if curable) within thirty (30) days (the “Executive Cure Period”) of the date of such notice, and such breach
is not cured to the extent curable within the Executive Cure Period. If Cause exists pursuant to the preceding sentence in respect
of an event described in sections (a), (b), (e), (f) or (g) of this paragraph, the Company may terminate your employment for Cause
within forty-five (45) days after the end of the Executive Cure Period. If such curable misconduct or breach is cured within the
Executive Cure Period, Cause shall be deemed not to exist. The Company shall not be permitted to terminate your employment for
Cause in respect of an event described in sections (a), (b), (e), (f) or (g) of this paragraph if the Company fails to either
(x) provide written notice of the applicable event or circumstance within sixty (60) days of the date the Board (other than you,
if you are a member of the Board) has actual knowledge thereof, or (y) terminate your employment within the forty-five (45)-day
period following the end of the applicable Executive Cure Period.

 

“Competing Business”
means (i) any business involving or relating to the sale, distribution, marketing, wholesaling or manufacturing of hydroponic and
similar products, including the acquisition and operation of any wholesaler or distributor of hydroponic equipment or any subsidiaries
or Affiliates thereof, and (ii) any other business in which the Company or any of its Affiliates is engaged during the Term (as
defined in Section 7).

 

“Confidential Information”
means confidential or proprietary information and/or techniques of the Company or any of its Affiliates entrusted to, developed
by, or made available to you, whether in writing, in computer form, reduced to a tangible form in any medium, or conveyed orally,
that is not generally known by others in the form in which it is or was used by the Company or any of its Affiliates. Examples
of Confidential Information include, without limitation: (i) sales, sales volume, sales methods, sales proposals, business plans
or statements of work; (ii) Customers, Prospective Customers, and Customer records, including contact, preference and other Customer
information; (iii) costs and general price lists and prices charged to specific Customers; (iv) the names, addresses, contact information
and other information concerning any and all brokers, vendors and suppliers and prospective brokers, vendors and suppliers; (v)
terms of contracts; (vi) non-public information and materials describing or relating to the business or financial affairs of the
Company or any of its Affiliates, including but not limited to, financial statements, budgets, projections, financial and/or investment
performance information, research reports, personnel matters, products, services,
operating procedures, organizational responsibilities and marketing matters, policies or procedures; (vii) information and materials
describing existing or new processes, products and services of the Company or any of its Affiliates, including marketing materials,
analytical data and techniques, and product, service or marketing concepts under development by or for the Company or any of its
Affiliates, and the status of such development; (viii) the business or strategic plans of the Company or any of its Affiliates;
(ix) the information technology systems, network designs, computer program code, and application practices of the Company or any
of its Affiliates; and (x) acquisition candidates of the Company or any of its Affiliates or any studies or assessments relating
thereto. Confidential Information does not include information that becomes generally known to and available for use by the public
other than as a result of your acts or omissions to act, including any breach of this Agreement.

 

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Terry Fitch

March 4, 2019

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“Covered Entity” means
all of your Affiliates, and every business, association, trust, corporation, partnership, limited liability company, proprietorship
or other entity in or to which you have an investment (whether through debt or equity securities), maintain any capital contribution
or have made any advances, or in which any Affiliate of you has an ownership interest or profit sharing percentage. Your agreements
contained herein specifically apply to each entity which is presently a Covered Entity or which becomes a Covered Entity subsequent
to the date of this Agreement. Notwithstanding the foregoing, nothing contained in this Agreement prohibits you from owning less
than 3% of any class of voting securities, publicly held and quoted on a recognized securities exchange or inter-dealer quotation
system, of any issuer, and no such issuer shall be considered a Covered Entity solely by virtue of such ownership or the incidents
thereof.

 

“Customer” means any
person or entity for whom the Company or any of its Affiliates (i) provides (or is contracted to provide) goods or services as
of the date hereof or at any time during the Term, or (ii) has provided goods or services at any time during the one-year period
prior to the date hereof.

 

“Good Reason” for resigning
from employment with the Company shall exist if any of the following actions are taken by the Company without your prior written
consent: (a) a material reduction in your base salary which the parties agree is a reduction of at least ten percent (10%) of your
base salary; (b) a material reduction in your duties, responsibilities and/or authority; or (c) any material breach of this Agreement
by the Company. In order to resign for Good Reason, you must provide written notice to the Board within sixty (60) days after the
first occurrence of the event giving rise to Good Reason setting forth the basis for your resignation, allow the Company at least
thirty (30) days from receipt of such written notice to cure such event, and if such event is not cured within such period, you
must resign from all positions you then hold with the Company not later than forty-five (45) days after the expiration of the cure
period.

 

“Prospective Customer”
means any person or entity with whom the Company or any of its Affiliates has communicated or whom the Company or any of its Affiliates
has solicited for the purposes of obtaining such person or entity as a Customer and/or whom the Company or any of its Affiliates
has analyzed concerning the potential of such person or entity to become a Customer, at any time during the one-year period prior
to the date hereof or at any time during the Term.

 

“Territory” means anywhere in the world.

 

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Terry Fitch 

March 4, 2019

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14.          Compliance
with Section 409A. It is intended that the payments and benefits set forth in this Agreement (including, without limitation,
the Severance Benefits) satisfy, to the greatest extent possible, the exemptions from the application of Section 409A of the Internal
Revenue Code of 1986, as amended, (the “Code”) (Section 409A, together with any state law of similar effect,
 “Section 409A”). For purposes of Section 409A (including, without limitation, for purposes of Treasury Regulations
1.409A-2(b)(2)(iii)), your right to receive any installment payments under this Agreement (whether severance payments, reimbursements
or otherwise) shall be treated as a right to receive a series of separate payments and, accordingly, each installment payment
hereunder shall at all times be considered a separate and distinct payment. Notwithstanding any provision to the contrary in this
Agreement, (a) except to the extent any expense or reimbursement provided pursuant to this Agreement does not constitute a “deferral
of compensation” within the meaning of Section 409A, (i) the amount of expenses eligible for reimbursement during any calendar
year will not affect the amount of expenses eligible for reimbursement in any other calendar year, (ii) the reimbursements for
expenses for which you are entitled to be reimbursed will be made on or before the last day of the calendar year following the
calendar year in which the applicable expense is incurred, and (iii) the right to payment or reimbursement hereunder may not be
liquidated or exchanged for any other benefit and (b) if the Company (or, if applicable, the successor entity thereto) determines
that the Severance Benefits constitute “deferred compensation” under Section 409A and you are, on the date of your
Separation from Service, a “specified employee” of the Company or any successor entity thereto, as such term is defined
in Section 409A(a)(2)(B)(i) of the Code, then, solely to the extent necessary to avoid the incurrence of adverse personal tax
consequences under Section 409A, the timing of the Severance Benefits shall be delayed until the earliest of: (i) the date that
is six (6) months and one (1) day after your Separation from Service date, (ii) the date of your death, or (iii) such earlier
date as permitted under Section 409A without the imposition of adverse taxation. Upon the first business day following the expiration
of such applicable Code Section 409A(a)(2)(B)(i) period, all payments or benefits deferred pursuant to this Section 14 shall be
paid in a lump sum or provided in full by the Company (or the successor entity thereto, as applicable), and any remaining payments
due shall be paid as otherwise provided herein. No interest shall be due on any amounts so deferred. If the Severance Benefits
are not covered by one or more exemptions from the application of Section 409A and the Release could become effective in the calendar
year following the calendar year in which you have a Separation from Service, the Release will not be deemed effective any earlier
than the Release Deadline. The Severance Benefits are intended to qualify for an exemption from application of Section 409A or
comply with its requirements to the extent necessary to avoid adverse personal tax consequences under Section 409A, and any ambiguities
herein shall be interpreted accordingly.

 

15.         
Section 280G; Parachute Payments. 

 

(a)               
If any payment or benefit you will or may receive from the Company or otherwise (a “280G Payment”) would
(i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence,
be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then any such 280G Payment
shall be equal to the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the 280G
Payment that would result in no portion of the 280G Payment (after reduction) being subject to the Excise Tax or (y) the largest
portion, up to and including the total, of the 280G Payment, whichever amount (i.e., the amount determined by clause (x) or by
clause (y)), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax,
results in your receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the
280G Payment may be subject to the Excise Tax. If a reduction in a 280G Payment is required pursuant to the preceding sentence
and the Reduced Amount is determined pursuant to clause (x) of the preceding sentence, the reduction shall occur in the manner
(the “Reduction Method”) that results in the greatest economic benefit for you. If more than one method of reduction
will result in the same economic benefit, the items so reduced will be reduced pro rata (the “Pro Rata Reduction Method”).

 

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Terry Fitch 

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(b)                Notwithstanding
any provision of subsection (a) above to the contrary, if the Reduction Method or the Pro Rata Reduction Method would result
in any portion of the 280G Payment being subject to taxes pursuant to Section 409A that would not otherwise be subject to
taxes pursuant to Section 409A, then the Reduction Method and/or the Pro Rata Reduction Method, as the case may be, shall be
modified so as to avoid the imposition of taxes pursuant to Section 409A as follows: (A) as a first priority, the
modification shall preserve to the greatest extent possible, the greatest economic benefit for you as determined on an
after-tax basis; (B) as a second priority, 280G Payments that are contingent on future events (e.g., being terminated without
Cause), shall be reduced (or eliminated) before 280G Payments that are not contingent on future events; and (C) as a third
priority, 280G Payments that are "deferred compensation" within the meaning of Section 409A shall be reduced (or
eliminated) before 280G Payments that are not deferred compensation within the meaning of Section 409A.

 

(c)               
Unless you and the Company agree on an alternative accounting firm or law firm, the accounting firm engaged by the Company
for general tax compliance purposes as of the day prior to the effective date of the change in control transaction shall perform
the foregoing calculations. If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual,
entity or group effecting the change in control transaction, the Company shall appoint a nationally recognized accounting or law
firm to make the determinations required by this Section 15. For purposes of making the determinations required by this Section
15, the accounting or law firm may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable,
good faith interpretations concerning the application of Sections 280G and 4999 of the Code. Executive and the Company agree to
furnish such information and documents as the accounting or law firm may reasonably request in order to make a determination under
this Section 15. The Company shall bear all expenses with respect to the determinations by such accounting or law firm required
to be made hereunder. The Company shall use commercially reasonable efforts to cause the accounting or law firm engaged to make
the determinations hereunder to provide its calculations, together with detailed supporting documentation, to you and the Company
within fifteen (15) calendar days after the date on which your right to a 280G Payment becomes reasonably likely to occur (if requested
at that time by you or the Company) or such other time as requested by you or the Company.

 

(d)               
If you receive a 280G Payment for which the Reduced Amount was determined pursuant to clause (x) of Section 15(a) and the
Internal Revenue Service determines thereafter that some portion of the 280G Payment is subject to the Excise Tax, you agree to
promptly return to the Company a sufficient amount of the 280G Payment (after reduction pursuant to clause (x) of Section 15(a))
so that no portion of the remaining 280G Payment is subject to the Excise Tax. For the avoidance of doubt, if the Reduced Amount
was determined pursuant to clause (y) of Section 15(a), you shall have no obligation to return any portion of the 280G Payment
pursuant to the preceding sentence.

 

16. Dispute Resolution. To ensure
the timely and economical resolution of disputes that may arise in connection with your employment with the Company, you and the
Company agree that any and all disputes, claims, or causes of action arising from or relating to the enforcement, breach, performance,
negotiation, execution, or interpretation of this Agreement, your employment, or the termination of your employment, including
but not limited to statutory claims (including, without limitation, discrimination, harassment, wrongful termination or wage claims
under the Labor Code), will be resolved to the fullest extent permitted by law by final, binding and confidential arbitration,
by a single arbitrator, in California, conducted by JAMS, Inc. (“JAMS”) under the then-applicable JAMS rules
(available at the following web address: http://www.jamsadr.com/rulesclauses, and which will be provided to you on request). By
agreeing to this arbitration procedure, both you and the Company waive the right to resolve any such dispute through a trial by
jury or judge or administrative proceeding. You will have the right to be represented by legal counsel at any arbitration proceeding.
The arbitrator shall: (a) have the authority to compel adequate discovery for the resolution of the dispute and to award such relief
as would otherwise be permitted by law; and (b) issue a written arbitration decision, to include the arbitrator’s essential
findings and conclusions and a statement of the award.

 

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Terry Fitch 

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The arbitrator shall be authorized to award
any or all remedies that you or the Company would be entitled to seek in a court of law. The prevailing party in the arbitration
may be entitled to an award of reasonable attorneys’ fees incurred in connection with the arbitration in such amount, if
any, as determined by the arbitrator. The costs of the arbitration shall be borne equally by the parties unless otherwise determined
by the arbitrator in its award. Nothing in this letter is intended to prevent either you or the Company from obtaining injunctive
relief in court to prevent irreparable harm pending the conclusion of any such arbitration. Any awards or orders in such arbitrations
may be entered and enforced as judgments in the federal and state courts of any competent jurisdiction.

 

17.           Clawback.
You hereby acknowledge and agree that any payment hereunder will be subject to recovery by the Company pursuant to applicable
law and any applicable Company compensation recovery policy as may be from time to time in effect.

 

18.           Reimbursement of Legal Expenses. The Company shall pay directly, or reimburse you for, all reasonable legal expenses
incurred by you in the negotiation and execution of this Agreement (including any exhibits hereto). Such payments and/or reimbursements
shall occur within ten business days after you provide documentation to the Company of the legal expenses incurred.

 

19.           Confidentiality of this Agreement. You agree to keep confidential the terms of this Agreement, unless and until such
terms have been disclosed publicly other than through a breach by you of this covenant. This provision does not prohibit you from
providing this information on a confidential and privileged basis to your attorneys or accountants for purposes of obtaining legal
or tax advice or as otherwise required by law.

 

20.           Miscellaneous. This Agreement (including exhibits), together with your Confidentiality Agreement, forms the complete
and exclusive statement of your employment agreement with the Company. It supersedes any other agreements or promises made to you
by anyone, whether oral or written. Changes in your employment terms, other than those changes expressly reserved to the Company’s
or Board’s discretion in this Agreement, require a written modification approved by the Company and signed by a duly authorized
officer of the Company. This Agreement will bind the heirs, personal representatives, successors and assigns of both you and the
Company, and inure to the benefit of both you and the Company, their heirs, successors and assigns. If any provision of this Agreement
is determined to be invalid or unenforceable, in whole or in part, this determination shall not affect any other provision of this
Agreement and the provision in question shall be modified so as to be rendered enforceable in a manner consistent with the intent
of the parties insofar as possible under applicable law. The Company represents and warrants that it is free to enter into this
Agreement and has taken all corporate action necessary to authorize the execution and delivery of this Agreement and the performance
of all of its obligations under this Agreement. This Agreement shall be construed and enforced in accordance with the laws of the
State of California without regard to conflicts of law principles. Any ambiguity in this Agreement shall not be construed against
either party as the drafter. Any waiver of a breach of this Agreement, or rights hereunder, shall be in writing and shall not be
deemed to be a waiver of any successive breach or rights hereunder. This Agreement may be executed in counterparts which shall
be deemed to be part of one original, and facsimile and electronic image copies of signatures shall be equivalent to original signatures.

 

Please sign and date this Agreement and the enclosed Confidentiality
Agreement and return them to me. I would be happy to discuss any questions that you may have about these terms.

 

[SIGNATURE PAGE FOLLOWS]

 

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Terry Fitch

March
4, 2019

Page 14

 

We are delighted to be making
this offer and the Company looks forward to your favorable reply and to a productive and enjoyable work relationship.

 

Sincerely,

 

	/s/ Jeffrey Peterson	 

Jeffrey Peterson, Chief
Financial Officer, Secretary and Treasurer

Hydrofarm Holdings Group, Inc.

 

Reviewed, Understod, and Accepted:

	/s/ Terry Fitch	 	3/4/19	 
	Terry Fitch	 	Date	 

 

Exhibit A: Confidentiality
and Invention Assignment Agreement

Exhibit B: Release

Exhibit C: Restricted
Stock Unit Award Notice and Restricted Stock Unit Agreement

Exhibit D: Form of Stock
Option Grant Notice and Stock Option Agreement

 

     

     

    

 

EXHIBIT A

  

PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

 

This PROPRIETARY INFORMATION
AND INVENTION ASSIGNMENT AGREEMENT (this “Agreement”), dated as of April _____, 2017 (the “Effective
Date”), is made and entered into by and between (i) Hydrofarm, Inc., a California corporation (“Company”),
and (ii) _______________________, an individual resident in the State of _______________________ (“Employee”).

 

AGREEMENT

 

In consideration of
Employee’s employment with Company, Employee’s receipt of the compensation paid to Employee by Company and other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

 

		1.	Employment; Compensation 

 

(a)               
Employee understands and acknowledges that Employee’s employment with the Company is for an unspecified duration and
constitutes "at-will" employment. Employee acknowledges that this employment relationship may be terminated at any time,
with or without good cause or for any or no cause, at the option either of the Company or employee, with or without notice.

 

(b)               
During the term of Employee’s employment with the Company, Employee will not engage in any other employment, occupation,
consulting or other business activity related to the business in which the Company is now involved or becomes involved during the
term of Employee’s employment; and, Employee will not engage in any other activities that conflict with Employee’s
obligations to the Company.

 

(c)               
In consideration for the covenants and obligations set forth herein, the Company will pay Employee the compensation set
forth on Appendix A.

 

		2.	Confidential Information 

 

(a)                Company
Information. During the term of Employee’s employment (Employee’s "Relationship with the
Company"), Employee will have access to Confidential Information and Trade Secrets of the Company (collectively, the
 “Proprietary Information”). Employee acknowledges that all Proprietary Information that may exist from
time to time is a valuable, special and unique asset of the Company, and access to and knowledge of which is essential to the
performance of Employee’s employment duties. Employee will keep confidential and not disclose (during the period of
employment and thereafter, except that Employee is only required to hold any Proprietary Information that is not a Trade
Secret in confidence for the maximum extent permitted by applicable law) to any other person or entity and will not use for
Employee’s own benefit or the benefit of any other person or entity (other than the Company) any Proprietary
Information, except in a manner that has been expressly authorized by the formal written policies of the Company.
 "Confidential Information" means any Company proprietary information, technical data, or know-how,
including, but not limited to, research, business plans, product plans, products, services, customer lists and customers
(including, but not limited to, customers of the Company on whom Employee called or with whom Employee became acquainted
during the term of Employee’s Relationship with the Company), market research, works of original authorship,
intellectual property (including, but not limited to, unpublished works and undisclosed patents), photographs, negatives,
digital images, software, computer programs, ideas, developments, inventions (whether or not patentable), processes,
formulas, technology, designs, drawings and engineering, hardware configuration information, forecasts, strategies,
marketing, finances or other business information disclosed to Employee by the Company either directly or indirectly in
writing, orally or by drawings or observation or inspection of parts or equipment. Confidential Information does not include
any of the foregoing items that has become publicly known and made generally available through no wrongful act of Employee or
of others who were under confidentiality obligations as to the item or items involved. “Trade Secrets”
means, collectively, information, including a formula, pattern, compilation, program, device, method, technique or process,
that: (i) derives independent economic value, actual or potential, from not being generally known to the public or to other
persons who can obtain economic value from its disclosure or use; and (ii) is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy.

 

    

     

    

 

(b)               
Other Employer Information. Employee will not improperly use or disclose to any member of the Company, or to any
employee, officer, director, manager, equityholder, financing source, lender, partner, agent, contractor or representative of any
member of the Company, any confidential or proprietary information (including unpublished patent applications or invention disclosures)
belonging to any former employer of Employee or to any other person or entity to which Employee owes a duty of nondisclosure, unless
consented to in writing by such employer, person or entity.

 

(c)               
Third Party Information. Employee recognizes that the Company has received and in the future will receive from third
parties their confidential or proprietary information subject to a duty on the Company's part to maintain the confidentiality of
such information and to use it only for certain limited purposes. Employee will hold all such confidential or proprietary information
in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying
out Employee’s duties to the Company consistent with the Company's agreement with such third party.

 

(d)               
Defend Trade Secrets Act. Notwithstanding any other provision of this Agreement to the contrary, pursuant to 18 USC
Section 1833(b), Employee shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure
of a trade secret that is made: (i) in confidence to a federal, state, or local government official, either directly or indirectly,
or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (ii) in a complaint
or other document filed in a lawsuit or other proceeding, if such filing is made under seal. 18 USC Section 1833(b) does not, however,
preclude the trade secret owner from seeking breach of contract remedies.

 

		3.	Intellectual Property 

 

(a)                Assignment
of Intellectual Property. Employee will promptly make full written disclosure to the Company, will hold in trust for the
sole right and benefit of the Company, and hereby assigns to the Company, or its designee, all of Employee’s right,
title and interest in and to any original works of authorship, trademarks, domain names, inventions (including the right to
claim priority), concepts, improvements, processes, methods or Proprietary Information , whether or not patentable or
registrable under copyright or similar laws that Employee may solely or jointly conceive or develop or reduce to practice, or
cause to be conceived or developed or reduced to practice, during the period of Employee’s Relationship with the
Company, including such intellectual property developed by Employee for the Company prior to the Effective Date (collectively
referred to as "Intellectual Property") and that (i) are developed using the equipment, supplies, facilities
or Confidential Information of the Company, (ii) result from or are suggested by work performed by Employee for the Company,
or (iii) relate to the Company business or to the actual or demonstrably anticipated research or development of the Company.
All original works of authorship that are created by Employee (solely or jointly with others) within the scope of and during
the period of Employee’s Relationship with the Company and that are protectable by copyright are "works made for
hire," as that term is defined in the United States Copyright Act. Any assignment of copyright hereunder includes all
rights of paternity, integrity, disclosure and withdrawal, and any other rights that may be known as or referred to as
 “moral rights” (collectively, “Moral Rights”). To the extent such Moral Rights cannot be
assigned under applicable law and to the extent the following is allowed by the laws in the various countries where Moral
Rights exist, Employee hereby waives such Moral Rights and consents to any action of Company that would violate such Moral
Rights in the absence of such consent.

 

    -2-

     

    

 

(b)                Patent and Copyright
Registrations. Employee will assist the Company, or its designee, at the Company's expense, in every proper way to secure the
Company's rights in the Intellectual Property and any copyrights, patents, trademarks, domain names or other intellectual property
rights relating thereto in any and all countries, including the disclosure to the Company of all pertinent information and data
with respect thereto and the execution of all applications, specifications, oaths, assignments and other instruments that the Company
deems necessary in order to apply for and obtain such rights and in order to assign and convey to the Company and its successors,
assigns and nominees the sole and exclusive right, title and interest in and to such Intellectual Property and any copyrights,
patents, trademarks, domain names or other intellectual property rights relating thereto. Employee’s obligation to execute
or cause to be executed, when it is in Employee’s power to do so, any such instrument or papers continues after the termination
of this Agreement. In the event the Company is unable because of Employee’s mental or physical incapacity or for any other
reason to secure Employee’s assistance in perfecting the rights transferred in this Agreement, Employee hereby irrevocably
designates and appoints the Company and its duly authorized officers and agents as Employee’s agent and attorney in fact,
to act for and in Employee’s behalf and stead to execute and file any such applications and to do all other lawfully permitted
acts to further the prosecution and issuance of letters patent and copyright, trademark or domain name registrations thereon with
the same legal force and effect as if executed by Employee. The designation and appointment of the Company and its duly authorized
officers and agents as Employee’s agent and attorney in fact is deemed to be coupled with an interest and therefore irrevocable.

 

(c)               
Maintenance of Records. Employee will keep and maintain adequate and current written records of all Intellectual
Property created by Employee (solely or jointly with others) during the term of Employee’s Relationship with the Company.
The records will be in the form of notes, sketches, drawings, works of original authorship, photographs, negatives or digital images
or in any other format that may be specified by the Company. The records will be available to and remain the sole property of the
Company at all times.

 

(d)                Intellectual
Property Retained and Licensed. To the extent permitted by Section 2(b), Employee has accurately identified on Schedule 1
all ideas, methodologies, processes, inventions, discoveries and works of authorship, and all rights in any trademarks,
service marks, trade secrets, copyrights, and patents, that Employee created prior to Employee’s employment with the
Company (collectively “Pre-Existing Work Product”) that may reasonably relate to the current or future
business of the Company. Except as provided herein, Employee will retain all right, title and interest in and to such
Pre-Existing Work Product. Employee will promptly disclose to the Company any modifications or improvements to any
Pre-Existing Work Product that fall within the definition of Intellectual Property (and hereby assigns rights thereto to the
Company pursuant to Section 3(a)). If Employee, during the course of or resulting from employment with the Company, uses,
creates, or otherwise provides Confidential Information, Intellectual Property or other works that incorporate or reasonably
require the use of any of Employee’s Pre-Existing Work Product, then Employee will promptly disclose such and hereby
grants the Company an unrestricted, royalty-free, perpetual, irrevocable, transferable, license to make, have made, use,
market, import, distribute, copy, modify, prepare derivative works, perform, display, disclose, sublicense and otherwise
exploit any and all such Pre-Existing Work Product, to the extent such grant of rights does not conflict with any contractual
obligations of Employee existing prior to the Effective Date.

 

    -3-

     

    

 

(e)                Exception to
Assignments. The foregoing provisions of this Agreement requiring assignment of Intellectual Property to the Company do not
apply to any invention or Intellectual Property that cannot be assigned to the Company under the laws of the state in which Employee
resides, and the notices set forth as Appendix B pertaining to Employee’s state of residence applies to Employee and
any such inventions and Intellectual Property.

 

(f)                Return of Company
Documents. At the time of leaving the employ of the Company and at other times as requested by Company, Employee will deliver
to the Company (and will not keep in Employee’s possession, recreate or deliver to anyone else) any and all works of original
authorship, domain names, original registration certificates, photographs, negatives, digital images, devices, records, data, notes,
reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, materials, equipment or other documents
or property, or reproductions of any aforementioned items, developed by Employee pursuant to Employee’s Relationship with
the Company or otherwise belonging to the Company or its successors or assigns. In the event of the termination of Employee’s
Relationship with the Company, Employee agrees to execute and deliver the "Termination Certificate" attached hereto
as Appendix C.

 

4.       Notification
of New Employer

 

In the event that
Employee leaves the employ of the Company, Employee hereby grants consent to notification by the Company to Employee’s new
employer or consulting client of Employee’s rights and obligations under this Agreement.

 

5.       No
Solicitation of Employees

 

In consideration for
Employee’s Relationship with the Company and other valuable consideration, receipt of which is hereby acknowledged, Employee
agrees that, during the period of Employee’s Relationship with the Company as an employee, consultant, officer and/or director
and for a period of twelve (12) months thereafter, Employee will not solicit the employment of any person who is then employed
by the Company (as an employee or consultant), on behalf of Employee or any other person, firm, corporation, association or other
entity, directly or indirectly.

 

6.       Representations
and Warranties

 

Employee represents
and warrants that Employee’s performance of all the terms of this Agreement will not breach any agreement to keep in confidence
proprietary information acquired by Employee in confidence or in trust prior to Employee’s Relationship with the Company.
Employee has not entered into, and Employee will not enter into, any oral or written agreement in conflict herewith. Employee agrees
to execute any proper oath or verify any proper document required to carry out the terms of this Agreement.

 

7.       Equitable
Relief

 

Any disputes
relating to or arising out of a breach of the covenants contained in this Agreement may cause the Company or Employee, as
applicable, to suffer irreparable harm and to have no adequate remedy at law. In the event of any such breach or default by a
party, or any threat of such breach or default, the other party will be entitled to injunctive relief, specific performance
and other equitable relief. No bond or other security is required in obtaining such equitable relief (unless such bond or
security is otherwise required by law, in which event, Company and Employee hereby agree that a $5,000 US bond will be
sufficient) and hereby consents to the issuance of such injunction and to the ordering of specific performance.

 

    -4-

     

    

 

 8.       General Provisions 

 

(a)               
Governing Law; Consent to Personal Jurisdiction. This Agreement and any controversy related to or arising, directly
or indirectly, out of, caused by or resulting from this Agreement will be governed by and construed in accordance with the domestic
laws of Employee’s residence as of the Effective Date of this Agreement (as identified in the caption of this Agreement),
without giving effect to any choice or conflict of law provision or rule (whether of such state or any other jurisdiction) that
would cause the application of the laws of any jurisdiction other than such state. Employee hereby expressly consents to the nonexclusive
personal jurisdiction and venue of the state and federal courts located in the federal Northern District of California for any
lawsuit filed there by either party arising from or relating to this Agreement.

 

(b)               
Entire Agreement. This Agreement sets forth the entire agreement and understanding between the Company and Employee
relating to the subject matter herein and merges all prior discussions between the parties. No modification of or amendment to
this Agreement, or any waiver of any rights under this Agreement, will be effective unless in writing signed by the party to be
charged. Any subsequent change or changes in Employee’s duties, salary or compensation will not affect the validity or scope
of this Agreement.

 

(c)               
Severability. If one or more of the provisions in this Agreement are deemed void by law, then the remaining provisions
will continue in full force and effect.

 

(d)               
Successors and Assigns. Employee may not assign any of Employee’s rights or delegate any of its obligations
under this Agreement without the prior written consent of the Company. The Company may freely assign any of the Company’s
rights or delegate any of its obligations under this Agreement. Subject to the preceding sentence, this Agreement will apply to,
be binding in all respects upon and inure to the benefit of the successors, heirs and permitted assigns of the parties

 

[Signature Page Follows]

 

    -5-

     

    

 

IN WITNESS WHEREOF, the undersigned has
executed this Proprietary Information and Inventions Agreement as of the date first set forth above.

 

	 	By:	 
	 	Name:	 
	 	 
	 	Address:
	 	 
	 	 
	 	 

 

	WITNESS:	 
	 	 
	By:	         	 
	Name:	 	 
	 	 
	Address:	 
	 	 
	 	 
	 	 

 

[SIGNATURE PAGE TO PROPRIETARY INFORMATION AND INVENTIONS
AGREEMENT]

 

    

     

    

 

APPENDIX A

 

Compensation Disclosure

 

In considerations for the covenants and
obligations set forth in the Agreement, Employee expressly acknowledge the receipt and sufficiency of the following compensation
(check all that apply):

 

		  ̈	New, revised, or renewed compensation package. 

 

		  ̈	The sum of one hundred dollars ($100).
	 	 	 
	 	  ̈	Other (_____________________________________________________________________).

 

    A-1

     

    

 

APPENDIX B

 

Invention Notice Schedule

 

California

The following notice applies to
employees who live in the State of California (and this Agreement does not apply to, and You have no obligation to assign to the
Company any invention that fully qualifies with the following):

 

(a) Any provision
in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention
to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using
the employer's equipment, supplies, facilities, or trade secret information except for those inventions that either:

 

(1)  
Relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably
anticipated research or development of the employer; or 

 

 (2)   Result from any work performed by the employee for the employer. 

 

(b) To the extent
a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required
to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable. (California
Labor Code Section 2870) 

 

Delaware

The following notice applies to employees who live
in the State of Delaware:

 

In accordance with Delaware
law, this Agreement does not apply to, and Employee has no obligation to assign to the Company, an invention that Employee developed
entirely on Employee’s own time without using the Company’s equipment, supplies, facility, or trade secret information,
except for those inventions that (i) relate to the Company’s business or actual or demonstrably anticipated research and
development, or (ii) results from any work performed by Employee for the Company. (Delaware Code Annotated, Title 19, Section 805)

 

Illinois

The following notice applies to employees who live
in the State of Illinois:

 

In accordance with Illinois law,
this Agreement does not apply to, and Employee has no obligation to assign to the Company, an invention for which no equipment,
supplies, facility, or trade secret information of the Company was used and which was developed entirely on Employee’s own
time, unless (a) the invention relates (i) to the business of the Company, or (ii) to the Company's actual or demonstrably anticipated
research and development, or (b) the invention results from any work performed by Employee for the Company. (Illinois Compiled
Statutes, Chapter 765, Section 1060)

 

    B-1

     

    

 

Kansas

The following notice applies to employees who live
in the State of Kansas:

 

In accordance with Kansas law, this Agreement
does not apply to an invention for which no equipment, supplies, facility or trade secret information of the Company was used and
which was developed entirely Employee’s own time, unless: (a) the invention relates directly to the business of the Company
or to the Company's actual or demonstrably anticipated research or development; or (b) the invention results from any work performed
by Employee for the Company. (Kansas Statutes Annotated §§ 44-130)

 

Minnesota

 

The following notice applies to employees who live
in the State of Minnesota:

 

In accordance with Minnesota
law, this Agreement does not apply to an invention for which no equipment, supplies, facility or trade secret information of the
Company was used and which was developed entirely on Employee’s own time, and (a) which does not relate (i) directly to the
business of the Company or (ii) to the Company's actual or demonstrably anticipated research or development, or (b) which does
not result from any work performed by Employee for the Company. (Minnesota Statutes Annotated § 181.78)

 

North Carolina

 

The following notice applies to employees who live
in the State of North Carolina:

 

In accordance with North
Carolina law, this Agreement does not apply to an invention that Employee developed entirely on Employee’s own time
without using the Company's equipment, supplies, facility or trade secret information except for those inventions that (a)
relate to the Company's business or actual or demonstrably anticipated research or development, or (b) result from any work
performed by Employee for the Company. (North Carolina General Statutes §§ 66-57.1, 66-57.2)

 

Utah

The following notice applies to employees who live
in the State of Utah:

 

Employee acknowledges and agrees that
this Agreement is not an employment agreement under Utah law or otherwise. However, if and only to the extent this Agreement is
deemed to be covered by the restrictions set forth in Utah Code Ann. § 34-39-3, this Agreement will not apply to an invention
that is created by Employee entirely on Employee’s own time and is not an employment invention as defined in Utah Code Ann.
 § 34-39-2(1), except as permitted under Utah Code Ann. § 34-39-3.

 

    B-2

     

    

 

Washington

The following notice applies to employees who live
in the State of Washington:

 

Notwithstanding any other provision of
this Agreement to the contrary, this Agreement does not obligate Employee to assign or offer to assign to the Company any of Employee’s
rights in an invention for which no equipment, supplies, facilities or trade secret information of the Company was used and which
was developed entirely on Employee’s own time, unless (a) the invention relates (i) directly to the business of the Company
or (ii) to the Company's actual or demonstrably anticipated research or development, or (b) the invention results from any work
performed by Employee for the Company. This satisfies the written notice and other requirements of RCW 49.44.140.

 

    B-3

     

    

 

APPENDIX C

 

TERMINATION CERTIFICATE

 

 

This is to certify
that I do not have in my possession, nor have I failed to return, any and all works of original authorship, domain names, original
registration certificates, photographs, negatives, digital images, devices, records, data, notes, reports, proposals, lists, correspondence,
specifications, drawings, blueprints, sketches, materials, equipment, or other documents or property, or reproductions of any aforementioned
items, belonging to Hydrofarm, LLC and its subsidiaries, affiliates, successors or assigns (collectively, the "Company").

 

I further certify that
I have complied with all the terms of the Company's Proprietary Information and Inventions Agreement signed by me (the "Agreement"),
including the reporting of any Intellectual Property (as defined therein) conceived or made by me (solely or jointly with others)
covered by the Agreement.

 

I further agree that,
in compliance with the Agreement, I will preserve as confidential all trade secrets, confidential knowledge, data or other proprietary
information relating to products, processes, methods, know-how, designs, formulas, developmental or experimental work, computer
programs, databases, other original works of authorship, customer lists, business plans, financial information or other subject
matter pertaining to any business of the Company or any of its employees, clients, consultants or licensees.

 

I agree that for twelve
(12) months from this date, I will not to divert or attempt to divert from the Company any business the Company enjoyed or solicited
from its customers during the prior twelve (12)-month period, nor will I solicit or attempt to induce any customer, supplier, partner
or other person or entity with whom the Company has, or is attempting to establish, a commercial relationship to cease or refrain
from doing business with the Company or to alter its relationship with the Company in any way adverse to the Company.

 

I agree that for twelve
(12) months from this date, I will not (a) make any false, misleading or disparaging representations or statements with regard
to the Company or the products or services of the Company to any third party or (b) make any statement to any third party that
may impair or otherwise adversely affect the goodwill or reputation of the Company.]

 

I further agree that
for twelve (12) months from this date, I will not solicit the employment of any person who will then be employed by the Company
(as an employee or consultant) or who will have been employed by the Company (as an employee or consultant) within the prior twelve
(12) month period, on behalf of myself or any other person, firm, corporation, association or other entity, directly or indirectly,
all as provided more fully in the Agreement.

 

	Dated:	 	 	By:	 
	 	 	 	Name:	 

 

    C-1

     

    

 

SCHEDULE 1

 

PRE-EXISTING WORK PRODUCT

 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

 

    S-1

     

    

 

EXHIBIT B

 

RELEASE

 

In exchange for
good and valuable consideration set forth in that certain Offer Letter (the “Offer Letter”), dated as of
[  ] between the undersigned, ______________ (“Employee”) and Hydrofarm, LLC, a
California limited liability company (“Hydrofarm”), the sufficiency of which is hereby acknowledged,
Employee, on behalf of himself, his executors, heirs, administrators, assigns and anyone else claiming by, through or under
Employee, irrevocably and unconditionally, releases, and forever discharges Hydrofarm, its predecessors, successors and
related and affiliated entities, including parents and subsidiaries, and each of their respective directors, officers,
managers, shareholders, members, employees, attorneys, insurers, agents and representatives (collectively, the
 “Company”), from, and with respect to, any and all debts, demands, actions, causes of action, suits,
covenants, contracts, wages, bonuses, damages and any and all claims, demands, liabilities, and expenses (including
attorneys’ fees and costs) whatsoever of any name or nature both in law and in equity that Employee now has, ever had
or may in the future have against the Company with respect to Employee’s employment with, or service as an officer,
director or manager of, the Company (severally and collectively, “Claims”), including but not limited to,
any and all Claims in tort or contract, whether by statute or common law, and any Claims relating to salary, wages, bonuses
and commissions, incentive units, equity interests, the breach of any oral or written contract, unjust enrichment, promissory
estoppel, misrepresentation, defamation, interference with prospective economic advantage, interference with contract,
wrongful termination, intentional or negligent infliction of emotional distress, negligence, or breach of the covenant of
good faith and fair dealing, and Claims arising out of, based on, or connected with the termination of Employee’s
employment, including any Claims for unlawful employment discrimination of any kind, whether based on age, race, sex,
disability or otherwise, including specifically and without limitation, claims arising under or based on: Title VII of the
Civil Rights Act of 1964, as amended; the Age Discrimination in Employment Act, as amended; the Civil Rights Act of 1991; the
Family and Medical Leave Act; the Americans with Disabilities Act; the Fair Labor Standards Act; the Employee Retirement
Income Security Act of 1974; the Equal Pay Act of 1963; the Older Workers Benefits Protection Act; or any other local, state
or federal equal employment opportunity or anti-discrimination law, statute, policy, order, ordinance or regulation affecting
or relating to Claims that Employee ever had, now has, or claims to have against the Company; provided, however,
that Employee does not release the Company with respect to claims arising out of or relating to its fraud, gross negligence
or willful misconduct. This Release (this “Release”) is not intended to release Claims which, as a matter
of law or public policy, cannot be released.

 

By signing below, Employee
expressly waives any benefits of Section 1542 of the Civil Code of the State of California (and any other federal, state, or local
law of similar effect) if and to the extent applicable. Section 1542 of the Civil Code of the State of California provides as follows:

 

“A GENERAL RELEASE DOES NOT EXTEND
TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

 

Employee warrants and
represents that Employee has not assigned or transferred to any person or entity any of the Claims released by this Release, and
Employee agrees to defend (by counsel of the Company’s choosing), and to indemnify and hold harmless, the Company from and
against any claims based on, in connection with, or arising out of any such assignment or transfer made, purported or claimed.

 

     

     

    

 

As further consideration
for Employee’s entering into the Offer Letter and this Release, the Company covenants and agrees that for one year after
the date of this Release, the Company will not disparage Employee in any manner harmful to Employee’s business or personal
reputation. As further consideration for the Company entering into the Offer Letter and this Release, Employee covenants and agrees
that for one year after the date of this Release, Employee will not disparage the Company in any manner harmful to the Company’s
business reputation; provided, that the foregoing restriction shall not be construed to limit or restrict any provision
of the Offer Letter that prohibits Employee from disparaging the Company. Nothing set forth herein shall prevent Employee or the
Company from providing accurate responses to requests for information if required by legal process, in connection with a government
investigation, or as protected under the whistleblower provisions of federal or state law or regulation.

 

Notwithstanding anything
to the contrary in this Release or the Offer Letter, the foregoing release shall not cover, and Employee does not intend to release,
any rights of indemnification under the Company’s Charter Documents (defined below) or rights to directors and officers liability
insurance. The Company’s charter documents include, as applicable, Articles of Incorporation, Articles of Organization, Certificate
of Formation, Bylaws or Limited Liability Company Agreement (collectively the “Charter Documents”). Employee
further acknowledges that the Company’s obligations under the Charter Documents with respect to indemnification are, to the
extent required therein, conditioned upon receipt by the Company of an undertaking by Employee to repay any advanced or received
amounts if it shall be determined by a court of competent jurisdiction by final judicial determination that Employee is not entitled
to be indemnified by the Company under the Charter Documents.

 

EMPLOYEE HAS READ
THIS RELEASE AND BEEN PROVIDED A FULL AND AMPLE OPPORTUNITY TO STUDY IT, AND EMPLOYEE UNDERSTANDS THAT THIS IS A FULL AND COMPREHENSIVE
RELEASE AND INCLUDES ANY CLAIM UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT. EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS BEEN ADVISED
IN WRITING TO CONSULT WITH LEGAL COUNSEL BEFORE SIGNING THIS RELEASE AND THE OFFER LETTER, AND EMPLOYEE HAS CONSULTED WITH AN ATTORNEY.
EMPLOYEE WAS GIVEN A PERIOD OF AT LEAST 21 DAYS TO CONSIDER SIGNING THIS RELEASE, AND EMPLOYEE HAS SEVEN DAYS FROM THE DATE OF
SIGNING TO REVOKE EMPLOYEE’S ACCEPTANCE BY DELIVERING TIMELY NOTICE OF HIS REVOCATION TO THE COMPANY’S HUMAN RESOURCES
DEPARTMENT AT ITS PRINCIPAL PLACE OF BUSINESS. EMPLOYEE IS SIGNING THIS RELEASE VOLUNTARILY, WITHOUT COERCION, AND WITH FULL KNOWLEDGE
THAT IT IS INTENDED, TO THE MAXIMUM EXTENT PERMITTED BY LAW, AS A COMPLETE AND FINAL RELEASE AND WAIVER OF ANY AND ALL CLAIMS.
EMPLOYEE ACKNOWLEDGES AND AGREES THAT CERTAIN PAYMENTS SET FORTH IN THE OFFER LETTER ARE CONTINGENT UPON EMPLOYEE SIGNING THIS
RELEASE AND WILL BE PAYABLE ONLY IF AND AFTER THE REVOCATION PERIOD HAS EXPIRED.

 

[SIGNATURE
PAGE FOLLOWS]

 

    - 2 -

     

    

 

Employee has read this
Release, fully understands it and freely and knowingly agrees to its terms.

 

Dated this _____ day of ____________, 20___.

 

	 	 
	 	[Employee]

 

	AGREED AND ACCEPTED:	 
	 	 
	HYDROFARM, LLC	 
	 	 
	 	 
	By:	                            	 
	 	 
	Title:	 	 
	 	 
	Date:	 	 

 

[SIGNATURE PAGE TO RELEASE]

 

    

     

    

 

EXHIBIT C

CONFIDENTIAL

HYDROFARM HOLDINGS LLC

 

UNIT AWARD AGREEMENT

 

This UNIT AWARD AGREEMENT
(this “ Agreement”) is entered into as of [ _________], 2017 (the “Effective Date”), by and
between Hydrofarm Holdings LLC, a Delaware limited liability company (the “Company”), and [__________] (the
 “Participant”). Capitalized terms that are used but not defined herein have the meanings ascribed to them in
the LLC Agreement (as defined below).

 

WHEREAS, the Company
is governed by that certain Limited Liability Company Agreement of Hydrofarm Holdings LLC, dated as of [________], 2017, by and
among the Company and the Members from time to time party thereto, a copy of which is attached hereto as Exhibit A (as amended,
supplemented or otherwise modified from time to time, the “LLC Agreement”);

 

WHEREAS, pursuant to
the LLC Agreement, the Company is authorized to grant Class P Units (“Class P Units”) that are intended to constitute
 “profits interests” for applicable income tax purposes;

 

WHEREAS, this Agreement
is intended to qualify for the exemption from registration under Section 4(2) or Rule 701 under the Securities Act or such other
exemptions as may be available under the Securities Act; and

 

WHEREAS, as additional
compensation for services provided by the Participant to the Company, the Company desires to grant Class P Units of the Company
to the Participant on the terms and subject to the conditions set forth in this Agreement.

 

NOW, THEREFORE, the parties hereto hereby agree as
follows:

 

1.       Defined
Terms.

 

“Fair
Market Value ” means the fair market value of the Class P Units, as determined in the good faith discretion of the Board
as of the last day of the month completed most recently before any notice to repurchase the Class P Units is delivered.

 

“Net Return”
means, as of the applicable date of determination, the return on investment realized by Hydrofarm Investment Corp., a Delaware
corporation (“Hawthorn”) with respect to all Units (regardless of class) held by Hawthorn, equal to the quotient
of (a) the aggregate amount actually realized by Hawthorn and (b) the aggregate amount paid by Hawthorn for all Units held. The
Net Return shall be calculated after taking into account the Class P Units, if any, which will vest pursuant to Section 4.
Additionally, if contingent payments are to be received in connection with a Sale Event, the Net Return shall be calculated once
such contingent payments are received; provided, however, that the Board in its good faith determination may, in
its sole discretion, estimate such contingent payments and include such estimated contingent payments in its calculations of Net
Return at the time of the Sale Event. For the avoidance of doubt, to the extent that Hawthorn owns Units indirectly through one
or more other entities, such other entities shall be included within the definition of “Hawthorn” hereunder and any
payment in respect of the Units owned by them shall be included for purposes of calculating Net Return.

 

“Sale Event”
means any Approved Sale or, if not an Approved Sale, then any (a) Sale Transaction, (b) Corporate Conversion (provided such
Corporate Conversion actually results in an initial Public Offering pursuant to Section 9.11 of the LLC Agreement) or (c) dissolution
of the Company pursuant to Section 12.1 of the LLC Agreement.

 

    

     

    

 

2.
        Grant of Units. Upon the terms and conditions set forth in this Agreement, the Company hereby grants to the Participant
effective as of the Effective Date (the “Grant Date”), [_________] Class P Units of the Company (the “Granted
Units”). Such Granted Units are subject to the restrictions provided in this Agreement.

 

3.
        Profits Interests; Initial Capital Account. The Granted Units are each intended to constitute a “profits interest”
in the Company within the meaning of Internal Revenue Service Revenue Procedures 93-27 and 2001-43. On the Grant Date, the Capital
Account attributable to the Granted Units shall be zero.

 

4.
        Vesting Conditions for Class P Units. The Granted Units will vest and no longer be subject to forfeiture, in each case
subject to the Participant’s continued employment through the applicable vesting dates, as follows:

 

(a) fifty percent (50%)
of the Granted Units will vest over a four -year period (the “Time Vesting Units”), whereby twenty-five percent
(25%) of the Time Vesting Units will vest on the one (1) year anniversary of the Grant Date, with the remaining Time Vesting Units
vesting in thirty-six (36) equal monthly installments thereafter, in each case subject to the Participant’s continued employment
through the applicable vesting dates; and

 

(b) fifty percent (50%)
of the Granted Units will vest based on the following Company performance thresholds (the “Performance Vesting Units”)
measured as of the occurrence of a Sale Event:

 

(i) If the
Net Return is less than 2.0:1.0, none of the Performance Vesting Units held by the Participant will vest.

 

(ii) If the
Net Return is greater than or equal to 2.0:1.0, but less than 3.0:1.0, a portion of the Performance Vesting Units held by the Participant
shall vest, which portion shall be determined by the following formula:

 

		(A)	the Net Return minus 2.0; multiplied by

 

		(B)	the total Performance Vesting Units held by the Participant.

 

(iii) If the Net Return is greater
than or equal to 3.0:1.0, all of the Performance Vesting Units held by the Participant shall vest.

 

All of the Time Vesting
Units will vest immediately prior to a Sale Event; provided that, in the case of each of clause (a) and (b) above, the Participant
has provided continuous employment or service to the Company or any Related Company through such vesting date (the “ Vesting
Schedule”). The Board, in its sole discretion, at any time may accelerate vesting of the Granted Units. The Granted Units
that have vested and are no longer subject to forfeiture according to the Vesting Schedule are referred to herein as “Vested
Units.” Granted Units that have not vested and remain subject to forfeiture under the Vesting Schedule are referred to
herein as “Unvested Units.”

 

		5.	Forfeiture; Termination.

 

		(a)	Treatment of Units on Termination.

 

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(i) Unvested Units.
If the Participant’s employment with the Company or any of its Subsidiaries is terminated by the Company or any such Subsidiary,
if the Participant terminates employment with the Company or any of its Subsidiaries, or if the Participant dies or becomes disabled,
the Participant shall immediately forfeit all of the Unvested Units previously granted to the Participant pursuant to this Agreement.

 

(ii) Vested Units.
If the Participant’s employment with the Company or any of its Subsidiaries is terminated by the Company or any such Subsidiary
without Cause (as defined in such Participant’s employment agreement with the Company), if the Participant terminates employment
with the Company or any of its Subsidiaries for Good Reason (as defined in such Participant’s employment agreement with the
Company) or if the Participant dies or becomes disabled, the Company may, in its sole discretion, within ninety (90) days following
such termination, purchase any of the Vested Units for a price equal to the Fair Market Value on the date of termination. If the
Company does not so purchase a Vested Unit, the Participant shall retain such Vested Unit. If the Participant resigns without Good
Reason or the Company terminates the Participant’s employment for Cause, all Vested Units previously granted to the Participant
pursuant to this Agreement will be forfeited.

 

(b)
Effect of Forfeiture. Upon the forfeiture of any Granted Units pursuant to this Agreement, the Participant (and the
Participant’s heirs, successors and assigns) shall thereafter have no right, title or interest whatsoever in such forfeited
Granted Units and, if the Company does not have custody of any and all certificates representing such Granted Units, then the Participant
shall immediately return to the Company any and all certificates representing the Granted Units so forfeited. The Participant will
receive no payment from the Company in connection with the forfeiture of any Granted Units, including no distribution or payment
in respect of the Participant’s Capital Account or as a result of the Participant withdrawing or resigning as a Member of
the Company. If the Granted Units granted hereunder have been forfeited, and the Participant owns no other Units of the Company,
then the Participant will be automatically deemed to have withdrawn and resigned as a Member of the Company.

 

6.
LLC Agreement; Participation Threshold. The terms and conditions of the Granted Units shall be as set forth herein and
in the LLC Agreement. As a condition to the grant of the Granted Units pursuant to this Agreement, the Participant shall execute
a counterpart signature page to the LLC Agreement, attached hereto as Exhibit B, agreeing to become a Member of the Company
on the terms and subject to the conditions set forth in the LLC Agreement. If the Participant has a spouse, such spouse shall execute
a spousal consent, attached hereto as Exhibit C. The Participation Threshold with respect to the Granted Units will be $[0]
per Granted Unit.

 

7.
Limitations on Transfer. In addition to the restrictions on transfer set forth in the LLC Agreement, the Participant
may not Transfer any rights under this Agreement and the Participant’s rights hereunder shall not be subject to pledge, encumbrance,
hypothecation, execution, attachment or similar process, in each case whether voluntarily or involuntarily, by operation of law
or otherwise. Any attempt to Transfer any of the rights under this Agreement or any of the Granted Units contrary to the provisions
hereof and the levy of any attachment or similar process upon the Participant’s rights hereunder or the Granted Units will
be null and void.

 

8.
Representations and Warranties of the Participant. The Participant hereby represents and warrants to the Company as
of this date as follows:

 

(a) The Participant’s
residence and domicile is the State set forth on the signature page hereof and all discussions related to this Agreement and the
Granted Units, and the offer and acceptance of this Agreement and the Granted Units, occurred in such State.

 

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(b) The Participant
is acquiring the Granted Units for the Participant’s own account for investment and not with any view to, or for resale in
connection with, any distribution or public offering thereof within the meaning of the Securities Act. The Participant hereby consents
to an appropriate legend on the certificates, if any, evidencing such Granted Units to such effect and to the effect that Granted
Units may not be disposed of except in compliance with all federal and state securities laws. The Participant acknowledges and
agrees that the Company shall have no obligation to register Granted Units granted to the Participant under federal or state securities
laws either at the time the Granted Units are issued and delivered to the Participant or are proposed to be disposed of by the
Participant unless otherwise expressly provided to the contrary in written agreements to which the Company and the Participant
are parties.

 

(c) The Participant
understands that (i) the Granted Units have not been registered under the Securities Act or applicable state securities laws, in
reliance on exemptions from registration under the Securities Act and applicable state securities laws and (ii) no federal or state
agency has made any finding or determination as to the fairness for investment, nor any recommendation or endorsement, of the Granted
Units.

 

(d) The Participant
acknowledges and agrees that (i) except as expressly provided for in this Agreement, no representations or warranties with respect
to the Granted Units have been made to the Participant by the Company, any manager, officer, agent, employee, Subsidiary or Affiliate
of the Company, or any other Persons, (ii) except for this Agreement and the LLC Agreement, there are no agreements, contracts,
understandings or commitments between the Participant, on the one hand, and the Company, any Manager, Officer, agent, employee,
Subsidiary or Affiliate of the Company, on the other hand, with respect to the Granted Units, (iii) in entering into this transaction
the Participant is not relying upon any information, other than that contained in the LLC Agreement, this Agreement and the results
of the Participant’s own independent investigation, (iv) any future economic return with respect to the Granted Units is
speculative and subject to a high degree of risk, and (v) the Granted Units are subject to forfeiture as set forth herein, are
subject to dilution by the issuance of additional Units by the Company, and the Participant is not entitled to any preemptive,
tag-along, information or other minority investor rights with respect to either the Granted Units, other than as expressly set
forth in the LLC Agreement or as otherwise provided under applicable law.

 

(e) The Participant
is fully informed and aware of the circumstances under which the Granted Units must be held and the restrictions upon the resale
of the Granted Units under the LLC Agreement and the Securities Act and any applicable state securities laws. The Participant acknowledges
that (i) the Granted Units have not been registered under the Securities Act and, therefore, cannot be sold unless they are registered
under the Securities Act and any applicable state securities laws or unless an exemption from such registration is available, (ii)
the availability of an exemption may depend on factors over which the Participant or the Company has no control, (iii) unless so
registered or exempt from registration the Granted Units may be required to be held for an indefinite period and (iv) the reliance
of the Company and others upon the exemptions from registration referred to in the recitals is predicated in part upon this representation
and warranty. The Participant understands that an exemption from registration is not presently available pursuant to Rule 144 promulgated
under the Securities Act by the U.S. Securities and Exchange Commission, that there is no assurance that such exemption will ever
become available to the Participant and that even if it were to become available, sales pursuant to Rule 144 would be limited in
amount and could only be made in full compliance with the provisions of Rule 144.

 

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(f) The
Participant has full authority to enter into this Agreement and the LLC Agreement and perform the Participant’s
obligations hereunder and thereunder. This Agreement has been, and the LLC Agreement, upon the execution and delivery of the
counterpart signature pages referred to in Section 6, will have been, duly and validly executed and delivered by the
Participant and constitute or will constitute legal, valid and binding obligations of the Participant, enforceable against
the Participant in accordance with their terms, subject, as to the enforcement of remedies, to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or other similar law of general application affecting creditors and
general principles of equity. The execution, delivery and performance of this Agreement does not and will not, and the
execution and delivery of the LLC Agreement will not, conflict with, violate or cause a breach of any agreement, contract or
instrument to which the Participant is a party or any judgment, order, decree or law to which the Participant is subject.

 

(g) The Participant
understands that the Company’s agreement to grant the Granted Units to the Participant is predicated, in part, on the representations,
warranties and covenants of the Participant contained herein.

 

9.       Section
83(b) Election for Granted Units.

 

(a) The Participant
understands that under Section 83(a) of the Code, the excess (if any) of the Fair Market Value of the unvested Granted Units on
the date the unvested Granted Units become vested over the purchase price, if any, paid for such Granted Units could be taxed as
ordinary income subject to employment or self-employment taxes and tax reporting, as applicable. The unvested Granted Units are
intended to qualify as “profits interests” in the Company for income tax purposes. Provided that the unvested Granted
Units qualify as profits interests, the Fair Market Value of the unvested Granted Units on the Grant Date is deemed to be zero
($0) (and thus no tax generally would be payable by reason of the filing of the election). By filing a protective election within
the 30-day period described below, the Participant should avoid the risk of adverse tax consequences in the future. The Participant
understands that the Participant may elect under Section 83(b) of the Code to recognize income (in the amount of zero ($0)) at
the time the unvested Granted Units are acquired, rather than when and as the unvested Granted Units vest. Such election (an “83(b)
Election”) must be filed with the Internal Revenue Service within thirty (30) days from the Grant Date of the Granted
Units.

 

(b) THE FORM FOR MAKING
AN 83(b) ELECTION IS ATTACHED TO THIS AGREEMENT AS EXHIBIT D. THE PARTICIPANT UNDERSTANDS THAT FAILURE TO FILE SUCH AN ELECTION
WITHIN THE THIRTY (30)-DAY PERIOD MAY RESULT IN THE RECOGNITION OF ORDINARY INCOME BY THE PARTICIPANT AS THE FORFEITURE RESTRICTIONS
LAPSE. THE PARTICIPANT FURTHER UNDERSTANDS THAT AN ADDITIONAL COPY OF SUCH ELECTION FORM SHOULD BE FILED WITH THE PARTICIPANT’S
FEDERAL INCOME TAX RETURN FOR THE CALENDAR YEAR IN WHICH THE DATE OF THIS AGREEMENT FALLS. THE PARTICIPANT ACKNOWLEDGES THAT THE
FOREGOING IS ONLY A SUMMARY OF THE FEDERAL INCOME TAX LAWS THAT APPLY TO THE RECEIPT OF THE UNVESTED UNITS UNDER THIS AGREEMENT
AND DOES NOT PURPORT TO BE COMPLETE. THE PARTICIPANT FURTHER ACKNOWLEDGES THAT THE COMPANY HAS DIRECTED THE PARTICIPANT TO SEEK
INDEPENDENT ADVICE REGARDING THE APPLICABLE PROVISIONS OF THE CODE, THE INCOME TAX LAWS OF ANY MUNICIPALITY, STATE OR FOREIGN COUNTRY
IN WHICH PARTICIPANT MAY RESIDE, AND THE TAX CONSEQUENCES OF THE PARTICIPANT’S DEATH.

 

(c) The Participant
agrees that the Participant will execute and deliver to the Company with this Agreement a copy of the 83(b) Election attached hereto
as Exhibit D.

 

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10.
Survival of Representations and Warranties; Indemnification. All representations and warranties contained herein shall
survive the execution of this Agreement and the grant of the Granted Units contemplated hereby. Each party agrees to indemnify
and hold harmless the other from any liability, loss or expense (including reasonable attorneys’ fees) if such party has
breached any representation, warranty or agreement hereunder.

 

11.
Governing Law. This Agreement is entered into under the laws of the State of Delaware and this Agreement (and any controversy
or action arising out of or relating hereto) shall be construed and interpreted in accordance therewith.

 

12. Discontinuance
of Employment. Neither this Agreement nor the issuance of the Granted Units shall give the Participant any right to continued
employment by the Company or any of its Subsidiaries, or any of their respective Affiliates, and subject to the terms of any employment
agreement among such parties, the Company, any of its Subsidiaries, and their Affiliates may terminate the Participant’s
employment for any reason whatsoever, with or without Cause, and otherwise deal with the Participant as an employee without regard
to the effect any such action may have on the Participant’s rights under this Agreement or the LLC Agreement. The Participant
represents that the Participant is acquiring the Granted Units without any expectation that the ownership of any Granted Units
will entitle the Participant to any rights as an employee of the Company, any of its Subsidiaries, or any of their Affiliates that
would not exist if the Participant were not the owner of the Granted Units. The Participant further agrees that no change in his
expectations concerning employment will have a reasonable basis unless set forth in a written agreement expressly giving the Participant
additional rights as to such matters.

 

13.
Additional Securities. Any additional securities issued to the Participant in respect of the Granted Units, will be
subject to the terms and conditions contained herein in the same manner as the Granted Units, including forfeiture under Section
5.

 

14.
Review of Agreement; Complete Agreement. The Participant confirms that the Participant has carefully reviewed this Agreement
and the LLC Agreement and understands their terms. The Participant confirms that the Participant has consulted with legal counsel,
or had ample opportunity to consult with legal counsel, representing Participant concerning this Agreement, the LLC Agreement and
any other agreements between or among the Participant, the Company, and any of its or their present or prospective members, managers,
officers or employees. This Agreement, together with the LLC Agreement, contains the complete agreement among the parties with
respect to the grant of the Granted Units or any other incentive arrangement and supersedes all prior agreements and understandings
among the parties hereto with respect hereto and thereto.

 

15.
Tax Acknowledgement. Participant will pay to the Company, or the Company may deduct from any amounts payable to Participant,
the amount of any applicable federal, state, local or foreign taxes that the Company determines is required to be withheld in connection
with the issuance, vesting, forfeiture or purchase of the Granted Units, the distribution of any cash or other property on account
of the Granted Units, or otherwise as a result of Participant’s relationship with the Company. The Participant acknowledges
and agrees that none of the Company, any of its Subsidiaries or any of their respective Affiliates has made any representations
or warranties hereunder with respect to the economic or tax effect of the grant of the Granted Units (or any other incentive arrangements).
The Participant has made his or her own independent evaluation of the Granted Units, including the economic and tax effect of them,
either through his or her own analysis or through representatives such as legal counsel or accountants.

 

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16.
Miscellaneous. This Agreement shall be binding upon and inure to the benefit of the parties hereto and, except as otherwise
expressly provided herein, their respective heirs, executors, administrators, representatives, successors and permitted assigns.
This Agreement may not be assigned, transferred or otherwise disposed of by the Participant, whether voluntarily or involuntarily,
by operation of law or otherwise, without the prior written consent of the Company. No waiver of any provision of this Agreement
is valid unless in writing and signed by the party against whom or which enforcement is sought and any such waiver is effective
only in the specific instance described and for the purpose for which the waiver was given. The failure of any party to this Agreement
to insist upon or enforce strict performance by any other party to this Agreement of any provision of this Agreement shall not
be construed as a waiver or relinquishment of such right or related remedy. Whenever the context of this Agreement requires, the
gender of all words herein shall include the masculine, feminine, and neuter, and the number of all words herein shall include
the singular and plural. The word “including” and words of similar import when used in this Agreement will mean “including,
without limitation,” unless otherwise specified. The word “or” will not be exclusive.

 

[The remainder of this page is intentionally left
blank]

 

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IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be executed as of the day and year first written above.

 

	 	COMPANY:
	 	 
	 	HYDROFARM HOLDINGS LLC
	 	 
	 	By:	                                                    
	 	Name:	 
	 	Title:	 
	 	 
	 	PARTICIPANT:
	 	   
	 	[                                     ] 
	 	 
	 	Address of Participant:                                                                                 
	 	 

 

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EXHIBIT
D 

Option No.________

HYDROFARM HOLDINGS GROUP, INC.

 

Stock Option Grant Notice

Stock Option Grant under the Company’s

2019 Employee, Director and Consultant Equity
Incentive Plan

 

		1.	Name and Address of Participant:	 

 

		2.	Date of Option Grant:	 

 

		3.	Type of Grant:	Non-Qualified Option

 

		4.	Maximum Number of Shares for which this Option is exercisable:	 

 

		5.	Exercise (purchase) price per share:	 

 

		6.	Option Expiration Date:	 

 

		7.	Vesting Start Date:	 

 

		8.	Vesting Schedule: This Option shall become exercisable (and the Shares issued upon exercise shall
be vested) as follows provided the Participant is an Employee, director or Consultant of the Company or of an Affiliate on the
applicable vesting date:

 

[Insert
Vesting Schedule]

 

The foregoing rights
are cumulative and are subject to the other terms and conditions of this Agreement and the Plan.

 

The Company and the
Participant acknowledge receipt of this Stock Option Grant Notice and agree to the terms of the Stock Option Agreement attached
hereto and incorporated by reference herein, the Company’s 2019 Employee, Director and Consultant Equity Incentive Plan and
the terms of this Option Grant as set forth above.

 

	 	HYDROFARM
    HOLDINGS
	 	GROUP,
    INC.
	 	 
	 	By:	 
	 	 	Name:	 
	 	 	Title:	 
	 	 
	 	 
	 	Participant

 

    D-1

     

    

 

HYDROFARM HOLDINGS GROUP, INC.

 

STOCK OPTION AGREEMENT- INCORPORATED
TERMS AND CONDITIONS 

 

AGREEMENT made as of
the date of grant set forth in the Stock Option Grant Notice by and between (the “Company”), a Delaware corporation,
and the individual whose name appears on the Stock Option Grant Notice (the “Participant”).

 

WHEREAS, the Company
desires to grant to the Participant an Option to purchase shares of its common stock, $.0001 par value per share (the “Shares”),
under and for the purposes set forth in the Company’s 2019 Employee, Director and Consultant Equity Incentive Plan (the “Plan”);

 

WHEREAS, the Company
and the Participant understand and agree that any terms used and not defined herein have the same meanings as in the Plan; and

 

WHEREAS, the Company
and the Participant each intend that the Option granted herein shall be a Non-Qualified Stock Option.

 

NOW, THEREFORE, in
consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto agree
as follows:

 

1.                 
GRANT OF OPTION.

 

The Company hereby grants
to the Participant the right and option to purchase all or any part of an aggregate of the number of Shares set forth in the Stock
Option Grant Notice, on the terms and conditions and subject to all the limitations set forth herein, under United States securities
and tax laws, and in the Plan, which is incorporated herein by reference. The Participant acknowledges receipt of a copy of the
Plan.

 

2.                 
EXERCISE PRICE.

 

The exercise price of
the Shares covered by the Option shall be the amount per Share set forth in the Stock Option Grant Notice, subject to adjustment,
as provided in the Plan, in the event of a stock split, reverse stock split or other events affecting the holders of Shares after
the date hereof (the “Exercise Price”). Payment shall be made in accordance with Paragraph 9 of the Plan.

 

3.                 
EXERCISABILITY OF OPTION.

 

Subject to the terms
and conditions set forth in this Agreement and the Plan, the Option granted hereby shall become vested and exercisable as set forth
in the Stock Option Grant Notice and is subject to the other terms and conditions of this Agreement and the Plan.

 

    

     

    

 

4.                 
TERM OF OPTION.

 

This Option shall terminate
on the Option Expiration Date as specified in the Stock Option Grant Notice but shall be subject to earlier termination as provided
herein or in the Plan.

 

If the Participant ceases
to be an Employee, director or Consultant of the Company or of an Affiliate for any reason other than the death or Disability of
the Participant, or termination of the Participant for Cause (the “Termination Date”), the Option to the extent then
vested and exercisable pursuant to Section 3 hereof as of the Termination Date, and not previously terminated in accordance with
this Agreement, may be exercised within three months after the Termination Date, or on or prior to the Option Expiration Date as
specified in the Stock Option Grant Notice, whichever is earlier, but may not be exercised thereafter except as set forth below.
In such event, the unvested portion of the Option shall not be exercisable and shall expire and be cancelled on the Termination
Date.

 

Notwithstanding the foregoing,
in the event of the Participant’s death within three (3) months after the Termination Date, the Participant’s Survivors
may exercise the Option within one (1) year after the Termination Date, but in no event after the Option Expiration Date as specified
in the Stock Option Grant Notice, and this Option shall thereupon terminate.

 

In the event the Participant’s
service is terminated by the Company or an Affiliate for Cause, the Participant’s right to exercise any unexercised portion
of this Option even if vested shall cease immediately as of the time the Participant is notified his or her service is terminated
for Cause, and this Option shall thereupon terminate. Notwithstanding anything herein to the contrary, if subsequent to the Participant’s
termination, but prior to the exercise of the Option, the Administrator determines that, either prior or subsequent to the Participant’s
termination, the Participant engaged in conduct which would constitute Cause, then the Participant shall immediately cease to have
any right to exercise the Option and this Option shall thereupon terminate.

 

In the event of the Disability
of the Participant while an Employee, director or Consultant of the Company or of an Affiliate, as determined in accordance with
the Plan, the Option shall be exercisable within one (1) year after the Participant’s termination of service due to Disability
or, if earlier, on or prior to the Option Expiration Date as specified in the Stock Option Grant Notice. In such event, the Option
shall be exercisable:

 

		(a)	to the extent that the Option has become exercisable but has not been exercised as of the date
of the Participant’s termination of service due to Disability; and

 

		(b)	in the event rights to exercise the Option accrue periodically, to the extent of a pro rata portion
through the date of the Participant’s termination of service due to Disability of any additional vesting rights that would
have accrued on the next vesting date had the Participant not become Disabled. The proration shall be based upon the number of
days accrued in the current vesting period prior to the date of the Participant’s termination of service due to Disability.

 

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In the event of the death
of the Participant while an Employee, director or Consultant of the Company or of an Affiliate, the Option shall be exercisable
by the Participant’s Survivors within one year after the date of death of the Participant or, if earlier, on or prior to
the Option Expiration Date as specified in the Stock Option Grant Notice. In such event, the Option shall be exercisable:

 

		(x)	to the extent that the Option has become exercisable but has not been exercised as of the date
of death; and

 

		(y)	in the event rights to exercise the Option accrue periodically, to the extent of a pro rata portion
through the date of death of any additional vesting rights that would have accrued on the next vesting date had the Participant
not died. The proration shall be based upon the number of days accrued in the current vesting period prior to the Participant’s
date of death.

 

5.                 
METHOD OF EXERCISING OPTION.

 

Subject to the terms
and conditions of this Agreement, the Option may be exercised by written notice to the Company or its designee, in substantially
the form of Exhibit A attached hereto (or in such other form acceptable to the Company, which may include electronic
notice). Such notice shall state the number of Shares with respect to which the Option is being exercised and shall be signed by
the person exercising the Option (which signature may be provided electronically in a form acceptable to the Company). Payment
of the Exercise Price for such Shares shall be made in accordance with Paragraph 9 of the Plan. The Company shall deliver such
Shares as soon as practicable after the notice shall be received, provided, however, that the Company may delay issuance of such
Shares until completion of any action or obtaining of any consent, which the Company deems necessary under any applicable law (including,
without limitation, state securities or “blue sky” laws). The Shares as to which the Option shall have been so exercised
shall be registered in the Company’s share register in the name of the person so exercising the Option (or, if the Option
shall be exercised by the Participant and if the Participant shall so request in the notice exercising the Option, shall be registered
in the Company’s share register in the name of the Participant and another person jointly, with right of survivorship) and
shall be delivered as provided above to or upon the written order of the person exercising the Option. In the event the Option
shall be exercised, pursuant to Section 4 hereof, by any person other than the Participant, such notice shall be accompanied by
appropriate proof of the right of such person to exercise the Option. All Shares that shall be purchased upon the exercise of the
Option as provided herein shall be fully paid and nonassessable.

 

6.                 
PARTIAL EXERCISE.

 

Exercise of this Option
to the extent above stated may be made in part at any time and from time to time within the above limits, except that no fractional
share shall be issued pursuant to this Option.

 

    3

     

    

 

7.                 
NON-ASSIGNABILITY.

 

The Option shall not
be transferable by the Participant otherwise than by will or by the laws of descent and distribution, or as otherwise provided
in the Plan and approved by the Administrator. Except as provided above in this paragraph, the Option shall be exercisable, during
the Participant’s lifetime, only by the Participant (or, in the event of legal incapacity or incompetency, by the Participant’s
guardian or representative) and shall not be assigned, pledged or hypothecated in any way (whether by operation of law or otherwise)
and shall not be subject to execution, attachment or similar process. Any attempted transfer, assignment, pledge, hypothecation
or other disposition of the Option or of any rights granted hereunder contrary to the provisions of this Section 7, or the levy
of any attachment or similar process upon the Option shall be null and void.

 

8.                 
NO RIGHTS AS STOCKHOLDER UNTIL EXERCISE.

 

The Participant shall
have no rights as a stockholder with respect to Shares subject to this Agreement until registration of the Shares in the Company’s
share register in the name of the Participant. Except as is expressly provided in the Plan with respect to certain changes in the
capitalization of the Company, no adjustment shall be made for dividends or similar rights for which the record date is prior to
the date of such registration.

 

9.                 
ADJUSTMENTS.

 

The Plan contains provisions
covering the treatment of Options in a number of contingencies such as stock splits and mergers. Provisions in the Plan for adjustment
with respect to stock subject to Options and the related provisions with respect to successors to the business of the Company are
hereby made applicable hereunder and are incorporated herein by reference.

 

10.             
TAXES.

 

The Participant acknowledges
and agrees that (i) any income or other taxes due from the Participant with respect to this Option or the Shares issuable upon
exercise of this Option shall be the Participant’s responsibility; (ii) the Participant was free to use professional advisors
of his or her choice in connection with this Agreement, has received advice from his or her professional advisors in connection
with this Agreement, understands its meaning and import, and is entering into this Agreement freely and without coercion or duress;
(iii) the Participant has not received and is not relying upon any advice, representations or assurances made by or on behalf of
the Company or any Affiliate or any Employee of or counsel to the Company or any Affiliate regarding any tax or other effects or
implications of the Option, the Shares or other matters contemplated by this Agreement and (iv) neither the Administrator, the
Company, its Affiliates, nor any of its officers or directors, shall be held liable for any applicable costs, taxes, or penalties
associated with the Option if, in fact, the Internal Revenue Service were to determine that the Option constitutes deferred compensation
under Section 409A of the Code.

 

This Option is designated
in the Stock Option Grant Notice as a Non-Qualified Option and when such Non-Qualified Option is exercised, the Participant agrees
that the Company may withhold from the Participant’s remuneration, if any, the minimum statutory amount of federal, state
and local withholding taxes attributable to such amount that is considered compensation includable in such person’s gross
income. At the Company’s discretion, the amount required to be withheld may be withheld in cash from such remuneration, or
in kind from the Shares otherwise deliverable to the Participant on exercise of the Option. The Participant further agrees that,
if the Company does not withhold an amount from the Participant’s remuneration sufficient to satisfy the Company’s
income tax withholding obligation, the Participant will reimburse the Company on demand, in cash, for the amount under-withheld.

 

    4

     

    

 

11.             
PURCHASE FOR INVESTMENT.

 

Unless the offering and
sale of the Shares to be issued upon the particular exercise of the Option shall have been effectively registered under the Securities
Act of 1933, as now in force or hereafter amended (the “1933 Act”), the Company shall be under no obligation to issue
the Shares covered by such exercise unless the Company has determined that such exercise and issuance would be exempt from the
registration requirements of the 1933 Act and until the following conditions have been fulfilled:

 

		(a)	The person(s) who exercise the Option shall warrant to the Company, at the time of such exercise,
that such person(s) are acquiring such Shares for their own respective accounts, for investment, and not with a view to, or for
sale in connection with, the distribution of any such Shares, in which event the person(s) acquiring such Shares shall be bound
by the provisions of the following legend which shall be endorsed upon any certificate(s) evidencing the Shares issued pursuant
to such exercise:

 

“The shares represented
by this certificate have been taken for investment and they may not be sold or otherwise transferred by any person, including a
pledgee, unless (1) either (a) a Registration Statement with respect to such shares shall be effective under the Securities Act
of 1933, as amended, or (b) the Company shall have received an opinion of counsel satisfactory to it that an exemption from registration
under such Act is then available, and (2) there shall have been compliance with all applicable state securities laws;” and

 

		(b)	If the Company so requires, the Company shall have received an opinion of its counsel that the
Shares may be issued upon such particular exercise in compliance with the 1933 Act without registration thereunder. Without limiting
the generality of the foregoing, the Company may delay issuance of the Shares until completion of any action or obtaining of any
consent, which the Company deems necessary under any applicable law (including without limitation state securities or “blue
sky” laws).

 

12.             
RESTRICTIONS ON TRANSFER OF SHARES.

 

12.1         
The Shares acquired by the Participant pursuant to the exercise of the Option granted hereby shall not be transferred by
the Participant except as permitted [herein] [in the Stockholders Agreement dated ________ between the Company and its stockholders
(the “Stockholders Agreement”)] [if the Participant becomes a party thereto, as set forth in the in the Stockholders
Agreement dated ________ between the Company and its stockholders (the “Stockholders Agreement”)]. If the Participant
becomes a party to the Stockholders’ Agreement by executing a signature page thereto and the terms of this Agreement and
the Stockholders’ Agreement conflict, the terms contained in the Stockholders’ Agreement shall govern and supersede
any conflicting provision contained in this Section 12].1

 

 

1 The
first bracket should be used if the Participant is not a party to and not expected to become a party to a stockholders’
agreement containing transfer restrictions and/or buyback provisions. The second bracket should be used if the Participant is
or will become a party to a stockholders’ agreement. In such case other portions of this section 12 should be deleted so
that there is no conflict between the stockholders’ agreement and the terms of this agreement. The third bracket and additional
language regarding conflicting provisions should be used, together with the “herein” language if the Company wants
to use a generic option agreement and some Participants are or will become a party to the stockholders agreement.

 

    5

     

    

 

12.2         
In the event of the Participant’s termination of service for any reason, the Company shall have the option, but not
the obligation, to repurchase all or any part of the Shares issued pursuant to this Agreement (including, without limitation, Shares
purchased after termination of service, Disability or death in accordance with Section 4 hereof). In the event the Company does
not, upon the termination of service of the Participant (as described above), exercise its option pursuant to this Section 12.2,
the restrictions set forth in the balance of this Agreement shall not thereby lapse, and the Participant for himself or herself,
his or her heirs, legatees, executors, administrators and other successors in interest, agrees that the Shares shall remain subject
to such restrictions. The following provisions shall apply to a repurchase under this Section 12.2:

 

		(i)	The per share repurchase price of the Shares to be sold to the Company upon exercise of its option
under this Section 12.2 shall be equal to the Fair Market Value of each such Share determined in accordance with the Plan as of
the date of repurchase provided, however, in the event of a termination by the Company for Cause, the per share repurchase price
of the Shares to be sold to the Company upon exercise of its option under this Section 12.2 shall be equal to [the lesser of
the Exercise Price and the Fair Market Value on the date of the repurchase] OR [par value]].2

 

		(ii)	The Company’s option to repurchase the Participant’s Shares in the event of termination
of service shall be valid for a period of [twelve]([12]) months commencing with the date of such termination of service.3

 

		(iii)	In the event the Company shall be entitled to and shall elect to exercise its option to repurchase
the Participant’s Shares under this Section 12.2, the Company shall notify the Participant, or in case of death, his or her
Survivor, in writing of its intent to repurchase the Shares. Such written notice may be mailed or sent by email by the Company
up to and including the last day of the time period provided for in Section 12.2(ii) above for exercise of the Company’s
option to repurchase.

 

 

2
Consider alternate price for termination for Cause.

3 If the Company repurchases a participant’s
shares within six months of their issuance the company will incur a variable accounting charge. Therefore the repurchase period
should be not less than nine months so the repurchase can occur after the participant has held the shares for six months.

 

    6

     

    

 

		(iv)	The notice to the Participant shall specify the address at, and the time and date on, which payment
of the repurchase price is to be made (the “Closing”). The date specified shall not be less than ten (10) days nor
more than sixty (60) days from the date of the mailing of the notice, and the Participant or his or her successor in interest with
respect to the Shares shall have no further rights as the owner thereof from and after the date specified in the notice. At the
Closing, the repurchase price shall be delivered to the Participant or his or her successor in interest and the Shares being purchased,
duly endorsed for transfer, shall, to the extent that they are not then in the possession of the Company, be delivered to the Company
by the Participant or his or her successor in interest.

 

12.3         
[Alternative 1 – As a condition precedent to the exercise of the Option, the Participant agrees to become a
party to the Stockholders Agreement.] [Alternative 2] It shall be a condition precedent to the validity of any sale or other
transfer of any Shares by the Participant that the following restrictions be complied with (except as otherwise provided in this
Section 12)4:

 

		(i)	No Shares owned by the Participant may be sold, pledged or otherwise transferred (including by
gift or devise) to any person or entity, voluntarily, or by operation of law, except in accordance with the terms and conditions
hereinafter set forth.

 

		(ii)	Before selling or otherwise transferring all or part of the Shares, the Participant shall give
written notice of such intention to the Company, which notice shall include the name of the proposed transferee, the proposed purchase
price per share, the terms of payment of such purchase price and all other matters relating to such sale or transfer and shall
be accompanied by a copy of the binding written agreement of the proposed transferee to purchase the Shares of the Participant.
Such notice shall constitute a binding offer by the Participant to sell to the Company such number of the Shares then held by the
Participant as are proposed to be sold in the notice at the monetary price per share designated in such notice, payable on the
terms offered to the Participant by the proposed transferee (provided, however, that the Company shall not be required to meet
any non-monetary terms of the proposed transfer, including, without limitation, delivery of other securities in exchange for the
Shares proposed to be sold). The Company shall give written notice to the Participant as to whether such offer has been accepted
in whole by the Company within sixty (60) days after its receipt of written notice from the Participant. The Company may only accept
such offer in whole and may not accept such offer in part. Such acceptance notice shall fix a time, location and date for the Closing
on such purchase (“Closing Date”) which shall not be less than ten (10) nor more than sixty (60) days after the giving
of the acceptance notice, provided, however, if any of the Shares to be sold pursuant to this Section 12.3 have been held by the
Participant for less than six (6) months, then the Closing Date may be extended by the Company until no more than ten (10) days
after such Shares have been held by the Participant for six (6) months if required under applicable accounting rules in effect
at the time.5. The place for such Closing shall
be at the Company’s principal office. At such Closing, the Participant shall accept payment as set forth herein and shall
deliver to the Company in exchange therefor certificates for the number of Shares stated in the notice accompanied by duly executed
instruments of transfer.

 

 

4 Conform with Section 12.1.

5 If the Company repurchases
a Participant’s shares within six months of their issuance, the Company will incur a variable accounting charge. Accordingly,
the Company should have the option to extend the Closing to avoid the variable accounting charge if it so desires.

 

    7

     

    

 

		(iii)	If the Company shall fail to accept any such offer, the Participant shall be free to sell all,
but not less than all, of the Shares set forth in his or her notice to the designated transferee at the price and terms designated
in the Participant’s notice, provided that (i) such sale is consummated within six (6) months after the giving of notice
by the Participant to the Company as aforesaid, and (ii) the transferee first agrees in writing to be bound by the provisions of
this Section 12 so that such transferee (and all subsequent transferees) shall thereafter only be permitted to sell or transfer
the Shares in accordance with the terms hereof, and the Company’s right of repurchase set forth in Section 12.2 above shall
continue in accordance with its terms. After the expiration of such six (6) months, the provisions of this Section 12.3 shall again
apply with respect to any proposed voluntary transfer of the Participant’s Shares.

 

		(iv)	The restrictions on transfer contained in this Section 12.3 shall not apply to (a) transfers by
the Participant to his or her spouse or children or to a trust for the benefit of his or her spouse or children, (b) transfers
by the Participant to his or her guardian or conservator, and (c) transfers by the Participant, in the event of his or her death,
to his or her executor(s) or administrator(s) or to trustee(s) under his or her will (collectively, “Permitted Transferees”);
provided however, that in any such event the Shares so transferred in the hands of each such Permitted Transferee shall remain
subject to this Agreement, and each such Permitted Transferee shall so acknowledge in writing as a condition precedent to the effectiveness
of such transfer.

 

		(v)	The provisions of this Section 12.3 may be waived by the Company. Any such waiver may be unconditional
or based upon such conditions as the Company may impose.

 

12.4         
In the event that the Participant or his or her successor in interest fails to deliver the Shares to be repurchased by the
Company under this Agreement, the Company may elect (a) to establish a segregated account in the amount of the repurchase
price, such account to be turned over to the Participant or his or her successor in interest upon delivery of such Shares, and
(b) immediately to take such action as is appropriate to transfer record title of such Shares from the Participant to the
Company and to treat the Participant and such Shares in all respects as if delivery of such Shares had been made as required by
this Agreement. The Participant hereby irrevocably grants the Company a power of attorney which shall be coupled with an interest
for the purpose of effectuating the preceding sentence.

 

    8

     

    

 

12.5         
[In the event that (i) the Board of Directors and (ii) the holders of a majority of the then outstanding shares of Common
Stock approve a Sale of the Company (as defined below), specifying that this Section 12.5 shall apply, then the Participant hereby
agrees as follows with respect to the Shares and any other equity securities of the Company which the Participant holds or otherwise
exercises dispositive power (the “Drag Along Shares”):

 

		(i)	in the event such Sale of the Company requires the approval of stockholders, (1) if the matter
is to be brought to a vote at a stockholder meeting, after receiving proper notice of any meeting of stockholders of the Company
to vote on the approval of a Sale of the Company, to be present, in person or by proxy, as a holder of Shares, at all such meetings
and be counted for the purposes of determining the presence of a quorum at such meetings; and (2) to vote (in person, by proxy
or by action by written consent, as applicable) all Shares in favor of such Sale of the Company and in opposition of any and all
other proposals that could reasonably be expected to delay or impair the ability of the Company to consummate such Sale of the
Company;

 

		(ii)	to refrain from exercising any dissenters’ rights or rights of appraisal under applicable
law at any time with respect to such Sale of the Company; and

 

		(iii)	to sell to such third party on the terms offered by such third party the Drag Along Shares, or
if such Sale of the Company involves less than all of the outstanding capital stock of the Company, the Participant’s pro
rata share of the Drag Along Shares, and to execute and deliver all related documentation and take such other action in support
of the Sale of the Company as shall reasonably be requested by the Company.

 

As used herein, the following
terms shall have the following respective meanings:

 

“Sale
of the Company” means:

 

		(i)	a merger or consolidation in which (A) the Company is a constituent party or (B) a subsidiary of
the Company is a constituent party and the Company issues shares of its capital stock pursuant to such merger or consolidation,
except any such merger or consolidation involving the Company or a subsidiary in which the shares of capital stock of the Company
outstanding immediately prior to such merger or consolidation continue to represent, or are converted into or exchanged for shares
of capital stock that represent, immediately following such merger or consolidation, at least a majority, by voting power, of the
capital stock of (1) the surviving or resulting corporation or (2) if the surviving or resulting corporation is a wholly owned
subsidiary of another corporation immediately following such merger or consolidation, the parent corporation of such surviving
or resulting corporation (provided that, for the purpose of this clause (i) all shares of Common Stock issuable upon exercise of
options or warrants outstanding immediately prior to such merger or consolidation or upon conversion of convertible securities
immediately prior to such merger or consolidation shall be deemed to be outstanding immediately prior to such merger or consolidation
and, if applicable, converted or exchanged in such merger or consolidation on the same terms as the actual outstanding shares of
Common Stock are converted or exchanged);

 

    9

     

    

 

		(ii)	the sale, lease, transfer, exclusive license (other than an exclusive license approved by the Board
of Directors) or other disposition of all or substantially all the assets of the Company and its subsidiaries taken as a whole,
in a single transaction or series of related transactions, by the Company or any subsidiary of the Company, or the sale or disposition
(whether by merger or otherwise) of one or more subsidiaries of the Company if substantially all of the assets of the Company and
its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive
license (other than an exclusive license approved by the Board of Directors) or other disposition is to a wholly owned subsidiary
of the Company[; or

 

		(iii)	any transaction or series of related transactions to which the Company is a party in which in excess
of fifty percent (50%) of the Company’s voting power is transferred such that the stockholders of the Company immediately
prior to the transaction or series of related transactions do not own a majority of the voting power of the surviving or acquiring
entity following such transaction or series of transactions; other than any transaction or series of transactions principally for
bona fide equity financing purposes in which cash is received by the Company or any successor or indebtedness of the Company is
cancelled or converted or a combination thereof].]

 

12.6         
If the Company shall pay a stock dividend or declare a stock split on or with respect to any of its Common Stock, or otherwise
distribute securities of the Company to the holders of its Common Stock, the number of shares of stock or other securities of the
Company issued with respect to the shares then subject to the restrictions contained in this Agreement shall be added to the Shares
subject to the Company’s rights to repurchase pursuant to this Agreement. If the Company shall distribute to its stockholders
shares of stock of another corporation or equity in another entity, the shares of stock of such other corporation or equity in
such other entity, distributed with respect to the Shares then subject to the restrictions contained in this Agreement, shall be
added to the Shares subject to the Company’s rights to repurchase pursuant to this Agreement.

 

    10

     

    

 

12.7         
If the outstanding shares of Common Stock of the Company shall be subdivided into a greater number of shares or combined
into a smaller number of shares, or in the event of a reclassification of the outstanding shares of Common Stock of the Company,
or if the Company shall be a party to a merger, consolidation or capital reorganization, there shall be substituted for the Shares
then subject to the restrictions contained in this Agreement such amount and kind of securities as are issued in such subdivision,
combination, reclassification, merger, consolidation or capital reorganization in respect of the Shares subject immediately prior
thereto to the Company’s rights to repurchase pursuant to this Agreement.

 

12.8         
The Company shall not be required to transfer any Shares on its books which shall have been sold, assigned or otherwise
transferred in violation of this Agreement, or to treat as owner of such Shares, or to accord the right to vote as such owner or
to pay dividends to, any person or organization to which any such Shares shall have been so sold, assigned or otherwise transferred,
in violation of this Agreement.

 

12.9         
The provisions of Sections 12.1, 12.2 and 12.3 shall terminate upon the effective date of the registration of the Shares
pursuant to the Securities Exchange Act of 1934.

 

12.10     
The Participant agrees that in the event the Company proposes to offer for sale to the public any of its equity securities
and such Participant is requested by the Company and any underwriter engaged by the Company in connection with such offering to
sign an agreement restricting the sale or other transfer of Shares, then it will promptly sign such agreement and will not transfer,
whether in privately negotiated transactions or to the public in open market transactions or otherwise, any Shares or other securities
of the Company held by him or her during such period as is determined by the Company and the underwriters, not to exceed 180 days
following the closing of the offering, plus such additional period of time as may be required to comply with FINRA Rules or similar
rules promulgated by another regulatory authority (such period, the “Lock-Up Period”). Such agreement shall be in writing
and in form and substance reasonably satisfactory to the Company and such underwriter and pursuant to customary and prevailing
terms and conditions. Notwithstanding whether the Participant has signed such an agreement, the Company may impose stop-transfer
instructions with respect to the Shares or other securities of the Company subject to the foregoing restrictions until the end
of the Lock-Up Period.

 

12.11     
The Participant acknowledges and agrees that neither the Company, its shareholders nor its directors and officers, has any
duty or obligation to disclose to the Participant any material information regarding the business of the Company or affecting the
value of the Shares before, at the time of, or following a termination of the service of the Participant by the Company, including,
without limitation, any information concerning plans for the Company to make a public offering of its securities or to be acquired
by or merged with or into another firm or entity.

 

12.12     
All certificates representing the Shares to be issued to the Participant pursuant to this Agreement shall have endorsed
thereon a legend substantially as follows: “The shares represented by this certificate are subject to restrictions set forth
in a Stock Option Agreement dated [Date] with this Company, a copy of which Agreement is available for inspection at the offices
of the Company or will be made available upon request.”

 

    11

     

    

 

13.             
NO OBLIGATION TO MAINTAIN RELATIONSHIP.

 

The Participant acknowledges
that: (i) the Company is not by the Plan or this Option Agreement obligated to continue the Participant as an Employee, director
or Consultant of the Company or an Affiliate; (ii) the Plan is discretionary in nature and may be suspended or terminated by the
Company at any time; (iii) the grant of the Option is a one-time benefit which does not create any contractual or other right to
receive future grants of options, or benefits in lieu of options; (iv) all determinations with respect to any such future grants,
including, but not limited to, the times when options shall be granted, the number of shares subject to each option, the option
price, and the time or times when each option shall be exercisable, will be at the sole discretion of the Company; (v) the Participant’s
participation in the Plan is voluntary; (vi) the value of the Option is an extraordinary item of compensation which is outside
the scope of the Participant’s employment or consulting contract, if any; and (vii) the Option is not part of normal or expected
compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service
awards, pension or retirement benefits or similar payments.

 

14.             
NOTICES.

 

Any notices required
or permitted by the terms of this Agreement or the Plan shall be given by recognized courier service, facsimile, registered or
certified mail, return receipt requested, or by email addressed as follows:

 

If to the Company:

 

Hydrofarm Holdings Group, Inc.

2249 South McDowell Boulevard Ext

Petaluma, California 94954

Attention: [_____]

Email: [_______]

 

If to the Participant at the address set forth on the
Stock Option Grant Notice or such address as the Company may then have in its records for the Participant or to such other
address or addresses of which notice in the same manner has previously been given. Any such notice shall be deemed to have
been given upon the earlier of receipt, one business day following delivery to a recognized courier service or three business
days following mailing by registered or certified mail.

 

15.             
GOVERNING LAW.

 

This Agreement shall
be governed by and construed in accordance with the laws of the Delaware, without giving effect to its internal principles governing
the conflict of law. For the purpose of litigating any dispute that arises under this Agreement, the parties hereby consent to
exclusive jurisdiction in California and agree that such litigation shall be conducted in the state courts of Sonoma County, California
or the federal courts of the United States for the District of California.

 

    12

     

    

 

16.             
BENEFIT OF AGREEMENT.

 

Subject to the provisions
of the Plan and the other provisions hereof, this Agreement shall be for the benefit of and shall be binding upon the heirs, executors,
administrators, successors and assigns of the parties hereto.

 

17.             
ENTIRE AGREEMENT.

 

This Agreement, together
with the Plan, embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof
and supersedes all prior oral or written agreements and understandings relating to the subject matter hereof. No statement, representation,
warranty, covenant or agreement not expressly set forth in this Agreement shall affect or be used to interpret, change or restrict,
the express terms and provisions of this Agreement, provided, however, in any event, this Agreement shall be subject to and governed
by the Plan.

 

18.             
MODIFICATIONS AND AMENDMENTS.

 

The terms and provisions
of this Agreement may be modified or amended as provided in the Plan.

 

19.             
WAIVERS AND CONSENTS.

 

Except as provided in
the Plan, the terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by written
document executed by the party entitled to the benefits of such terms or provisions. No such waiver or consent shall be deemed
to be or shall constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether or not similar.
Each such waiver or consent shall be effective only in the specific instance and for the purpose for which it was given, and shall
not constitute a continuing waiver or consent.

 

20.             
DATA PRIVACY.

 

By entering into this
Agreement, the Participant: (i) authorizes the Company and each Affiliate, and any agent of the Company or any Affiliate administering
the Plan or providing Plan recordkeeping services, to disclose to the Company or any of its Affiliates such information and data
as the Company or any such Affiliate shall request in order to facilitate the grant of options and the administration of the Plan;
(ii) to the extent permitted by applicable law waives any data privacy rights he or she may have with respect to such information;
and (iii) authorizes the Company and each Affiliate to store and transmit such information in electronic form for the purposes
set forth in this Agreement.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

    13

     

    

 

Exhibit A

 

NOTICE OF EXERCISE OF STOCK OPTION

 

[Form for Unregistered Shares]

 

 

To:      Hydrofarm Holdings Group, Inc.

 

Ladies and Gentlemen:

 

I hereby exercise my
Stock Option to purchase [#] shares (the “Shares”) of the common stock, $.0001 par value, of Hydrofarm Holdings Group,
Inc. (the “Company”), at the exercise price of $[_____] per share, pursuant to and subject to the terms of that certain
Stock Option Agreement between the undersigned and the Company dated [Date].

 

I am aware that the
Shares have not been registered under the Securities Act of 1933, as amended (the “1933 Act”), or any state securities
laws. I understand that the reliance by the Company on exemptions under the 1933 Act is predicated in part upon the truth and accuracy
of the statements by me in this Notice of Exercise.

 

I hereby represent
and warrant that (1) I have been furnished with all information which I deem necessary to evaluate the merits and risks of the
purchase of the Shares; (2) I have had the opportunity to ask questions concerning the Shares and the Company and all questions
posed have been answered to my satisfaction; (3) I have been given the opportunity to obtain any additional information I deem
necessary to verify the accuracy of any information obtained concerning the Shares and the Company; and (4) I have such knowledge
and experience in financial and business matters that I am able to evaluate the merits and risks of purchasing the Shares and to
make an informed investment decision relating thereto.

 

I hereby represent
and warrant that I am purchasing the Shares for my own personal account for investment and not with a view to the sale or distribution
of all or any part of the Shares.

 

I understand that because
the Shares have not been registered under the 1933 Act, I must continue to bear the economic risk of the investment for an indefinite
time and the Shares cannot be sold unless the Shares are subsequently registered under applicable federal and state securities
laws or an exemption from such registration requirements is available.

 

I agree that I will
in no event sell or distribute or otherwise dispose of all or any part of the Shares unless (1) there is an effective registration
statement under the 1933 Act and applicable state securities laws covering any such transaction involving the Shares or (2) the
Company receives an opinion of my legal counsel (concurred in by legal counsel for the Company) stating that such transaction is
exempt from registration or the Company otherwise satisfies itself that such transaction is exempt from registration.

 

    Exhibit A-1

     

    

 

I consent to the placing
of a legend on my certificate for the Shares stating that the Shares have not been registered and setting forth the restrictions
on transfer contemplated hereby and to the placing of a stop transfer order on the books of the Company and with any transfer agents
against the Shares until the Shares may be legally resold or distributed without restriction.

 

I understand that at
the present time Rule 144 of the Securities and Exchange Commission (the “SEC”) may not be relied on for the resale
or distribution of the Shares by me. I understand that the Company has no obligation to me to register the sale of the Shares with
the SEC and has not represented to me that it will register the sale of the Shares.

 

I understand the terms
and restrictions on the right to dispose of the Shares set forth in the 2019 Employee, Director and Consultant Equity Incentive
Plan and the Stock Option Agreement, both of which I have carefully reviewed. I consent to the placing of a legend on my certificate
for the Shares referring to such restriction and the placing of stop transfer orders until the Shares may be transferred in accordance
with the terms of such restrictions.

 

[I
understand and agree that the Shares are subject to the NAME OF Stockholders’ Agreement dated _______ between the Company
and its stockholders (the “Stockholders’ Agreement”), and if I am not already a party to the Stockholders’
Agreement [and if the Company so requests] I agree to become a party to such agreement by execution of the counterpart signature
page enclosed herewith. I acknowledge that I have read and understand the Stockholders’ Agreement which sets forth certain
restrictions and limitations on the Shares, including the ability to transfer or sell them in the future.][I further
acknowledge and agree that to the extent the terms of Section 12 of the Option Agreement conflict with the Stockholders’
Agreement, the terms contained in the Stockholders’ Agreement shall govern.]6

 

I have considered the
Federal, state and local income tax implications of the exercise of my Option and the purchase and subsequent sale of the Shares.

 

I am paying the option exercise price for
the Shares as follows:

 

 

 

Please issue the Shares (check one):

 

 ̈ to me; or

 

 ̈ to
me and ________________, as joint tenants with right of survivorship and mail the certificate to me at the following
address:

 

 

6 Conform with Sections 12.1 and 12.3 of the Option Agreement.

 

    Exhibit A-2

     

    

 

	 
	 
	 

 

My mailing address for shareholder communications,
if different from the address listed above is:

 

	 
	 
	 

 

	 	Very truly yours,
	 	 
	 	
	 	Participant (signature)
	 	 
	 	
	 	Print Name
	 	 
	 	
	 	Date
	 	
	 	Social Security Number

 

    Exhibit A-3

     

    

 

Exhibit B

 

 

NOTICE OF EXERCISE OF STOCK OPTION

 

[Form for Shares Registered in
the United States]

 

To:     Hydrofarm Holdings Group, Inc.

 

IMPORTANT
NOTICE: This form of Notice of Exercise may only be used at such time as the Company has filed a Registration Statement
with the Securities and Exchange Commission under which the issuance of the Shares for which this exercise is being made is registered
and such Registration Statement remains effective.

 

Ladies and Gentlemen:

 

I hereby exercise my
Stock Option to purchase _________ shares (the “Shares”) of the common stock, $.0001 par value, of Hydrofarm Holdings
Group, Inc. (the “Company”), at the exercise price of $________ per share, pursuant to and subject to the terms of
that Stock Option Grant Notice dated _______________, 201_.

 

I understand the nature
of the investment I am making and the financial risks thereof. I am aware that it is my responsibility to have consulted with competent
tax and legal advisors about the relevant national, state and local income tax and securities laws affecting the exercise of the
Option and the purchase and subsequent sale of the Shares.

 

I am paying the option
exercise price for the Shares as follows:

 

 

 

 

Please issue the Shares (check one):

 

 ̈ to me; or

 

 ̈ to me and ____________________________, as joint tenants with right of survivorship, at the following address:

 

	 
	 
	 

 

    Exhibit B-1

     

    

 

My mailing address
for shareholder communications, if different from the address listed above, is:

 

	 
	 
	 

 

	 	Very truly yours,
	 	 
	 	
	 	Participant (signature)
	 	 
	 	
	 	Print Name
	 	 
	 	
	 	Date
	 	
	 	Social Security Number

 

    Exhibit B-2

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