Exhibit 10.1

SEPARATION AGREEMENT AND GENERAL RELEASE

The parties to this Separation Agreement and General Release (the “Agreement”)
are Paul Melkus (“Employee”) and Highlands REIT, Inc. (“Highlands” or
“Employer”), collectively referred to as the “Parties.” In consideration of the
promises, mutual covenants and agreements contained in this Agreement, Employee
and Employer agree as follows:

1.Termination Date. Effective October 30, 2020 (the “Separation Date”), Employee
shall be terminated from, and voluntarily cease to hold, any and all offices and
positions with Highlands, its parent, affiliates and related companies or
entities (the “Employer Entities”). Employee’s separation from Highlands shall
be deemed to be, and shall be called, a mutual separation without Cause or Good
Reason, as either term is defined in the Amended and Restated Executive
Employment Agreement dated November 17, 2018 (the “Employment Agreement”).

2.Severance Pay. Subject to the condition that Employee has not revoked this
Agreement during the Revocation Period (as defined below) and subject to
Employee’s compliance with this Agreement, Employer agrees to make payments to
Employee in the total gross amount of $2,000,000, subject to all applicable
withholding and other employment taxes (collectively, the “Severance Pay”). The
Severance Pay will be paid out in two installments: (a) $1,000,000, within 14
days after expiration of the revocation period set forth in paragraph 21, below,
provided that the revocation period has expired without revocation by Employee,
to be paid as follows: (i) $80,652 to be paid to Salvatore Prescott Porter &
Porter, PLLC, as attorneys’ fees, with Form 1099s sent for that portion to
Employee and to Salvatore Prescott Porter & Porter, PLLC, and (ii) $919,348 to
be paid to Employee; and (b) $1,000,000 on or before May 31, 2022, provided that
the revocation period expired without revocation by Employee (the “Second
Payment”). Employer’s obligation to make the Second Payment will be accelerated
to the closing date of any transaction in which all or substantially all of the
assets or equity of Employer is sold, if such date precedes May 31, 2022.
Employee acknowledges and agrees that the payments specified in paragraphs 2-4
of this Agreement are in full and complete satisfaction of any and all
liabilities or obligations the Employer Entities have or may have to Employee,
under the Employment Agreement or otherwise, including but not limited to any
and all obligations with respect to salary, bonuses, holiday pay, vacation pay,
severance pay, insurance, and any other benefits or claims, at any time in the
past, present, or future. The Parties further agree the payments provided in
this Agreement are provided by the Employer Entities solely under this Agreement
on the Employer Entities’ own accord, subject to Employee’s compliance with the
terms herein, and that Employee was not legally entitled to the payments
provided herein and will not receive the payments unless Employee executes this
Agreement, does not revoke this Agreement, and complies with this Agreement.

3.Vacation Pay. Employer will pay out Employee’s accrued vacation pay in the
amount of $44,399.27 (subject to withholding and employment taxes) on or before
November 13, 2020.

4.Benefit Continuation. Provided that Employee does not revoke this agreement
and completes and timely files all necessary COBRA election documentation,
Employer will reimburse Employee for his COBRA premium costs for a period that
begins on the Separation Date and ends on the earlier of (a) 18 months following
the Separation Date; or (b) the date Employee becomes eligible to be covered
under any other group health plan (as an employee or otherwise) that does not
contain any exclusion or limitation with respect to any preexisting condition
which would actually limit Employee’s coverage under such plan. In the event
such premium reimbursements, by reason of change in the applicable law, may, in
the reasonable view of the Company, result in tax or other penalties on the
Company or in the event that the Company is otherwise unable to continue to
cover Employee under its group health plan or ceases to maintain or participate
in a group health plan, this provision shall terminate and Employee and the
Company shall, in good faith, negotiate for a substitute provision that would
not result in such tax or other penalties or would provide Executive with a
comparable benefit or value, as applicable.

5.Confidentiality; Non-Assistance; Non-Solicitation.

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(a)    Employee acknowledges that the Employer Entities’ business is highly
specialized and utilizes information which Employee has had access to, is not
generally known, is highly confidential and constitutes trade secrets, including
proprietary information relating to any Employer Entity’s plans, analysis or
strategies; financial information or data; research and development; personnel
information; investor, customer and client lists and information; information
about the Employer Entities’ actual and targeted assets; non-public information
acquired by Employee concerning the requirements and specifications of any
Employer Entity’s employees, agents, vendors, contractors, customers and
potential customers; other non-public financial information, business and
marketing plans; and any other information which is confidential to the Employer
Entities (the “Confidential Information”).

(b)     Prior to, and at any time on or after the Separation Date, Employee
shall maintain in the strictest confidence and will not, directly or indirectly,
use, intentionally or inadvertently publish or otherwise disclose to any third
party, any Confidential Information or other non-public information of or
belonging to any Employer Entity, regardless of its form, without the prior
written explicit consent of the General Counsel of Employer. Employee will not
create, or provide information to, cooperate with or otherwise assist any person
who he knows, or has reason to know, is creating or preparing to create any
article, book, movie, internet posting or any other work depicting Highlands or
any officer, director, or employee thereof in any medium. Employee understands
that he may always communicate directly with a regulatory authority about a
possible violation of an applicable law or rule. Employee also understands and
agrees that, without prior written authorization from Employer’s General
Counsel, Employee is not authorized to disclose to anyone a communication that
is covered by Highlands’s attorney-client privilege.

(c)    Employee further acknowledges that Employer and Employer Entities expend
significant resources to develop and maintain their base of investors, lenders,
customers and employees, that these relationships are long-standing and have
been developed and maintained over a long period of years, that the Employer
Entities alone placed Employee in a position to interact with their investors,
clients and employees, and that the Employer Entities would be irreparably
harmed if their relationships were destroyed or tampered with because such
relationships are a significant asset of the Employer Entities.

(d)    In light of Employee’s acknowledgments regarding Confidential
Information, investor, lender, and customer relationships and the payments being
made hereunder, Employee agrees that, through May 31, 2022, Employee will not,
directly or indirectly:

(i) approach, engage with, work with, or contact, any bidder or potential bidder
for the Employer’s assets or equity who could benefit, to the detriment of any
other bidder or potential bidder, from Employee’s knowledge, experience, and
exposure to the confidential information, trade secrets, and relationships with
the Employer’s investors and lenders;
(ii) recruit, hire, retain or attempt to recruit, hire, or retain, any
then-current employee or independent contractor of Employer, or any former
employee who was employed by Employer within the prior six months, for
employment or engagement with an entity other than Employer; or
(iii) entice or attempt to persuade Employer’s then-current employees or
independent contractors to leave employment or engagement with Employer.

(e)    Tolling. The running of the time periods applicable in Paragraph 4(d)
hereof shall be suspended during the period of any violation of these provisions
by Employee.

(f)     Reasonableness of Covenants. Employee acknowledges that the duration and
scope of each of the above restrictions and limitations (including, but not
limited to, the time periods, geographic, and customer scopes of restriction)
are fair, reasonable, and necessary to protect the Employer Entities’ legitimate
protectable interests, including their interests in Confidential Information and
investor, customer and employee relationships set forth above. Employee
acknowledges that the above restrictions will not prevent Employee from earning
a livelihood or obtaining gainful employment.

(g)    Additional Duties Under Applicable Law. All of Employee’s obligations set
forth in this Agreement shall be in addition to those which exist under statute
and at common law.

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6.    Company Property. Employee will turn over to Employer within one business
day of the Separation Date, all memoranda, records, documents, Employer manuals,
credit cards, pass keys, and all other Highlands information or property
(whether in hard copy or electronic form), no matter how produced, reproduced or
maintained, which is in Employee’s possession.

7.    Non-Disparagement. Employee agrees that neither he, nor anyone else on his
behalf, will disparage, defame, or demean Employer or any other Employer Entity
or any of their directors, officers, shareholders, members, employees,
attorneys, or agent. Employee further agrees that neither he, nor anyone else on
his behalf will take any other action which is intended to, or should be
reasonably expected to, harm any Employer Entity or its reputation, or to
otherwise lead to unfavorable or unwanted publicity for such entity or any of
their directors, officers, shareholders, members, employees, attorneys, or
agents. Likewise, Employer agrees that its officers and directors will not
disparage, defame, or demean Employee and will not take any other action which
is intended to, or should be reasonably expected to, harm Employee or his
reputation. If Employer receives an inbound call asking for a reference for
Employee, Employer shall provide his dates of employment only and shall provide
no additional information. The foregoing shall not be violated by truthful
statements in response to legal process, required governmental testimony or
filings, or administrative or arbitral proceedings.

8.    Cooperation. Following the Separation Date, in further consideration of
the payments that are being made to Employee pursuant to this Agreement,
Employee will cooperate with Employer Entities, regarding any investigation, or
threatened or actual legal proceeding, by or against any Employer Entity or by
any private person or government agency, but agrees not to disclose or to
discuss with anyone who is not directing or assisting in any Employer Entity
investigation or case, other than Employee’s attorney, the fact of or the
subject matter of any investigation, except as required by law. Employee also
agrees, to the extent legally permitted, to promptly inform Employer if Employee
is asked to assist in any investigation of Employer or its affiliates (or their
actions), regardless of whether a lawsuit or other proceeding has then been
filed against Employer with respect to such investigation, and shall not do so
unless legally required.

9.    Share Repurchase. Employee is currently the owner of 2,304,547 shares of
common stock in Employer (the “Shares”). Conditioned on Employee’s execution of
this Agreement, Employee’s not revoking this Agreement, and Employee’s full
compliance with this Agreement, Employer will repurchase all Shares for
$0.36/share, for an aggregate purchase price equal to $829,636.92 (the “Purchase
Price”). Within fourteen days of passage of the expiration of the deadline for
Employee revoking this Agreement, if he does not do so, Highlands or its
designee shall deliver to Employee the Purchase Price by wire transfer of
immediately available funds to the account(s) designated by Employee. Employee
represents and warrants that he holds of record and owns beneficially the Shares
and Employee will transfer to Highlands hereunder good and marketable title to
such Shares, free and clear of all liens, encumbrances, restrictions on transfer
(other than any restrictions under applicable securities laws (both state and
federal)), taxes, options, warrants, rights, calls, commitments, proxies or
other contract rights. Employee acknowledges and agrees that the Shares have
been repurchased by Highlands as of the Separation Date, all right, title and
interest in the Shares are now owned by Highlands, and Employee no longer has
any rights as a holder of the Shares or pursuant to any agreement relating to
the Shares. Furthermore, from and after the date hereof, and when requested by
the Employer, Employee will, without further consideration, execute and deliver
all such instruments of conveyance and transfer and will take such further
actions as the Employer may reasonably deem necessary or desirable in order to
transfer the Shares to the Employer and to carry out fully the provisions and
purposes of this Agreement.

10.    Release. In consideration for the payments under this Agreement, EMPLOYEE
HEREBY RELEASES, FOREVER DISCHARGES THE EMPLOYER ENTITIES AND ANY PREDECESSOR,
SUCCESSOR, JOINT VENTURE AND PARENT OF ANY EMPLOYER ENTITY, AND ANY AND ALL OF
THEIR RESPECTIVE PAST OR PRESENT OFFICERS, DIRECTORS, PARTNERS, INSURERS,
AGENTS, ATTORNEYS, EMPLOYEES, TRUSTEES, ADMINISTRATORS, FIDUCIARIES, SUCCESSORS
AND ASSIGNS (COLLECTIVELY, THE “RELEASED PARTIES”), FROM ANY AND ALL MANNER OF
ACTIONS, CAUSES OF ACTIONS, DEMANDS, CLAIMS, AGREEMENTS, PROMISES, DEBTS,
COMPENSATORY, LIQUIDATED, PUNITIVE OR OTHER DAMAGES, LAWSUITS, ANY LIABILITIES
OF ANY NATURE WHATSOEVER, RIGHTS, DUES, CONTROVERSIES, COSTS, EXPENSES AND FEES
(COLLECTIVELY, “CLAIMS”), WHETHER ARISING IN CONTRACT (INCLUDING UNDER THE
EMPLOYMENT

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AGREEMENT OR ANY OTHER WRITTEN OR ORAL AGREEMENT), TORT OR ANY OTHER THEORY OF
ACTION, WHETHER ARISING IN LAW OR EQUITY, WHETHER KNOWN OR UNKNOWN, CHOATE OR
INCHOATE, MATURED OR UNMATURED, CONTINGENT OR FIXED, LIQUIDATED OR UNLIQUIDATED,
ACCRUED OR UNACCRUED, ASSERTED OR UNASSERTED, FROM THE BEGINNING OF TIME UP TO
THE END OF THE RESTRICTED PERIOD, THAT EMPLOYEE (OR EMPLOYEE’S SPOUSE, HEIRS,
EXECUTORS, ADMINISTRATORS OR ASSIGNS) MAY HAVE, EXCEPT FOR THOSE OBLIGATIONS
CREATED BY THIS AGREEMENT AND THOSE OBLIGATIONS SPECIFICALLY EXCLUDED UNDER
PARAGRAPH 3 OF THIS AGREEMENT. The Released Parties are intended to be
third-party beneficiaries of this Agreement, and this Agreement may be enforced
by each of them in accordance with the terms hereof. EMPLOYEE EXPRESSLY WAIVES
THE BENEFIT OF ANY STATUTE OR RULE OF LAW WHICH, IF APPLIED TO THIS AGREEMENT,
WOULD OTHERWISE PRECLUDE FROM ITS BINDING EFFECT ANY CLAIM AGAINST ANY RELEASED
PARTY NOT NOW KNOWN BY EMPLOYEE TO EXIST. THIS AGREEMENT IS INTENDED TO BE A
GENERAL RELEASE THAT EXTINGUISHES ALL CLAIMS AGAINST ANY RELEASED PARTY.

Without in any way limiting the generality of the foregoing, this Agreement
constitutes a full release and disclaimer of any and all Claims arising out of
or relating in any way to Employee’s employment, continued employment,
retirement, resignation, termination of employment with Employer or otherwise,
whether arising under or out of any contract (including but not limited to the
Employment Agreement) or any statute including, but not limited to, Title VII of
the Civil Rights Act of 1964, 42 U.S.C. § 1981, the Age Discrimination in
Employment Act of 1967 (“ADEA”), the Older Workers Benefit Protection Act of
1990 (“OWBPA”), the Family and Medical Leave Act, the National Labor Relations
Act, the Worker Adjustment and Retraining Notification Act, the Americans With
Disabilities Act, and any county, municipal, and any other federal, state or
local statute, ordinance or regulation, all as may be amended from time to time,
or common law claims or causes of action relating to alleged discrimination,
breach of contract or public policy, wrongful or retaliatory discharge, tortious
action, inaction, or interference of any sort, defamation, libel, slander,
personal or business injury, including attorneys’ fees and costs, and all claims
for salary, bonus, vacation pay, and reimbursement. Employee acknowledges and
agrees that Employee’s separation from employment with the Employer Entities in
compliance with the terms herein shall not serve as the basis for any claim or
action (including, without limitation, any claim under the Age Discrimination in
Employment Act of 1967, or any other statute, or the Employment Agreement or any
other contract). Employee further acknowledges and agrees that this Agreement
constitutes a full release of any and all claims related to the Shares.

Prior to the Separation Date, Employee, through counsel, suggested that he may
claim to have been terminated by Employer in an effort to evade certain
Change-in-Control provisions in his Employment Agreement, claiming that he
believed Employer would experience a Change In Control as defined in Paragraph
12(d) of the Employment Agreement. Employer denies any such effort or intent and
denies that Employee would be entitled to any compensation even if there was a
Change In Control following his termination, given that under Paragraph 5(b) of
the Employment Agreement, any such entitlement would only exist were he
terminated after a Change in Control. Nevertheless, for the avoidance of doubt,
Employee is waiving in this Agreement any claims that he is entitled to
additional compensation from Employer for any reason, including the occurrence
of a Change in Control after the Separation Date. Employee acknowledges and
agrees that following the execution of this Agreement, Employer’s sole
obligations and responsibilities to Employee are those defined in and limited by
this Agreement.

Prior to the Separation Date, Employer, through counsel, suggested that Employee
may have violated the terms of his Employment Agreement by improperly providing
information about Employer to a third party. For the avoidance of doubt, nothing
that has occurred prior to the Separation Date shall be grounds for Employer not
to make the payments to Employee that are provided in Paragraphs 2-4 above.

11.    Employee represents that Employee has not assigned or transferred, or
purported to assign or transfer, to any person or entity, any Claim or any
portion thereof or interest therein.

12.    Employee further acknowledges that, to the fullest extent legally
permitted, Employee has specifically waived Employee’s right to any monetary
recovery or injunctive relief in any lawsuit, including the right to any
monetary recovery or injunctive relief in any lawsuit brought by any agency,
entity or person on Employee’s behalf,

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with respect to any claims released herein, or resulting from the prosecution of
any administrative charge, investigation or proceeding. Employee understand that
by signing this Agreement, Employee does not waive any rights that cannot be
waived under law, including the right to file a charge with or participate in
any administrative investigation or proceeding by the EEOC or any comparable
federal, state or local agency. However, Employee waives and releases, to the
fullest extent legally permissible, all entitlement to any form of personal
relief arising from a charge Employee or others may file. Employee understands
that this waiver and release of personal relief would not affect an agency’s
ability to investigate a charge or to pursue relief on behalf of others.
Employer acknowledges that Employee does not waive or release any claims or
other matters that, by operation of law, Employee cannot waive or release
unilaterally. The provisions of this Agreement should not be construed to
interfere with Employee’s right to file charges with the EEOC or other
administrative agency or otherwise communicate or cooperate with such agency,
notwithstanding the waiver of monetary and other relief.

13.    Voluntariness. Employee warrants that no promise or inducement to enter
into this Agreement has been offered or made except as set forth in this
Agreement, that Employee is entering into this Agreement knowingly and
voluntarily, without any force, threat or coercion and without reliance on any
statement or representation made on behalf of any Employer Entity or by any
person employed by or representing any Employer Entity, except for the written
promises contained in this Agreement.

14.    Entire Agreement. This Agreement constitutes the entire agreement and
understanding between the Parties with regard to all matters, including but not
limited to Employee’s employment, termination, stock ownership, any other
payments owed to Employee and the other subject matters addressed in this
Agreement, and supersedes and replaces all prior commitments, negotiations and
agreements, whether written or oral, concerning the subject matters contained in
this Agreement. This Agreement is an integrated document; the consideration in
it is the sole consideration for this Agreement.

15.    Equitable Relief and Other Remedies. The Parties agree that damages
incurred as a result of a breach of this Agreement will be difficult to measure.
Furthermore, Employee acknowledges and agrees that the Employer Entities’
remedies at law for a breach or threatened breach of the provisions of Paragraph
4 would be inadequate. In recognition of this fact, it is, therefore, further
agreed that, in addition to any other remedies, equitable relief will be
available to the Employer in the case of a breach or threatened breach of this
Agreement. It is also agreed that, in addition to any other remedies, in the
event of a material breach of this Agreement, Employer may withhold and retain
all or any portion of the remaining Severance Pay, and any Severance Pay
previously paid to Employee shall immediately be repaid to Employer.

16.    Attorneys’ Fees. In the event of litigation in connection with or
concerning the subject matter of this Agreement, the prevailing party shall be
entitled to recover all costs and expenses of litigation incurred by it,
including such party’s reasonable attorneys’ fees.

17.    Severability and Reformation. If any provision, paragraph, subsection or
other portion of this Agreement shall be determined by any court of competent
jurisdiction in any state to be invalid, illegal or unenforceable in whole or in
part, and such determination shall become final, such provision or portion shall
be deemed to be severed or limited, but only to the extent required to render
the remaining provisions and portion of this Agreement enforceable to the
maximum extent permitted by the laws of that state. In addition, the Parties
expressly empower a court of competent jurisdiction to modify any term or
provision of this Agreement, but only to the extent necessary to comply with
existing law and to enforce this Agreement as modified.

18.    No Admission. Nothing in this Agreement shall be construed as an
admission of any wrongdoing by any person or entity.

19.    Governing Law. This Agreement was executed and delivered within the State
of Illinois, and the rights and obligations of the Parties shall be construed
and enforced in accordance with, and governed by, the laws of the State of
Illinois without regard to any rules regarding conflict of laws.

20.    Jurisdiction. The Parties agree that any dispute relating to this
Agreement or Employee’s employment with Employer or the termination thereof
shall be exclusively submitted by the Parties to, and decided by, the courts in
Chicago, Illinois. Employee voluntarily and willingly subjects himself to the
personal jurisdiction of the state and

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federal courts located in Chicago, Illinois, for any and all disputes related to
this Agreement. Employee also agrees to waive any requirement of personal
service in any such dispute, and agrees that service of process in any such
dispute may be effectuated by mailing a copy of such process to Employee at the
address provided underneath Employee’s signature block on this Agreement.

21.    Revocation Period. The Parties acknowledge that Employee shall have the
right to revoke and cancel this Agreement if Employee, at any time within the
seven calendar days following its execution (the “Revocation Period”), revokes
it. If Employee desires to revoke and cancel this Agreement, Employee must do so
in writing and return this document to the General Counsel of Highlands REIT,
Inc. within the Revocation Period, and all terms of the Agreement shall
thereafter be void and of no effect. If this Agreement is canceled and revoked
by Employee, Employer shall have no obligations under this Agreement.

Employee has been hereby advised in writing and encouraged by Employer to
consult with an attorney before signing this Agreement and that Employee has at
least twenty-one (21) days to consider it. Employee has carefully read and fully
understands this Agreement, has had sufficient time to consider it, has had an
opportunity to ask questions and have it explained, and is entering into this
Agreement freely, knowingly and voluntarily, with an understanding that the
general release contained herein will have the effect of waiving any action or
recovery Employee might pursue for any claims arising on or prior to the date of
the execution of this Agreement. Employee understands that Employee has seven
(7) days after the execution of this Agreement to revoke it and that this
Agreement shall not become effective and enforceable until the Revocation Period
has expired. The Parties agree that the provisions contained in this Agreement
may not be amended, waived, changed or modified, except in writing and signed by
an authorized representative of each of the Parties.

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IN WITNESS WHEREOF, the Parties have executed this Agreement.

Date: November 4, 2020/s/ Robert J. Lange Name: Robert J. LangeTitle: Executive
Vice President, General Counsel and Secretary/s/ Paul MelkusEmployee