Exhibit 10.18.3

THE SECURITIES REPRESENTED BY THIS INSTRUMENT OR CERTIFICATE AND ANY SECURITIES
ISSUABLE UPON ITS CONVERSION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “ACT”), OR SECURITIES LAWS OF ANY STATE AND MAY NOT BE
OFFERED, SOLD, ASSIGNED, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION
UNDER THE ACT OR SUCH LAWS AND, IF REQUESTED BY THE COMPANY, UPON DELIVERY OF AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT THE PROPOSED
TRANSFER IS EXEMPT FROM THE ACT OR SUCH LAWS.

HC2 HOLDINGS, INC.

OPTION TO PURCHASE SHARES OF COMMON STOCK

(CONTINGENT OPTION)

Date of Issuance:                 , 2014

[                ] Shares

For value received, the receipt and sufficiency of which is hereby acknowledged,
this Option (this “Option”) is issued to Philip Falcone (the “Holder”), by HC2
Holdings, Inc., a Delaware corporation (together with any successor thereto, the
“Company”). This Option is issued pursuant to the terms of that certain Option
agreement, dated as of May 12, 2014 (as reformed and clarified as of September
    , 2014) (the “Master Option”), between the Company and the Holder, and
entitles the Holder to subscribe for and purchase from the Company, at the
Exercise Price, the number of Exercise Shares of the Common Stock of the
Company, subject to vesting and exercisability as provided herein. Capitalized
terms used herein and not otherwise defined shall have the meanings given to
them in the Master Option.

The Exercise Shares are being issued to the Holder pursuant to Section 9 of the
Master Option as a result of the Company’s grant of Rights consisting of
[options to subscribe for and purchase from the Company an aggregate of
                 shares of the Company’s Common Stock] [[restricted stock units]
[shares of [Series A-1] [Series A] Preferred Stock ] ] convertible into an
aggregate of                  shares of the Company’s Common Stock] which grant
constitutes an “Adjustment Event” under Section 9 of the Master Option. The
Exercise Shares being issued pursuant to this Option constitute “Contingent
Options” within the meaning of Section 9 of the Master Option.

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

(a) “Affiliate” of any specified Person means any other Person, directly or
indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
“control” when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
“controlling” and “controlled” have meanings correlative to the foregoing.

(b) “Board” means the Board of Directors of the Company.

(c) “Business Day” means any day, except a Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or obligated to
close.

(d) “Capital Stock” shall mean, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of such
Person’s capital stock or partnership, limited liability company or other equity
interests at any time outstanding, and any and all rights, warrants or options
exchangeable for or convertible or exercisable into such capital stock or other
interests, including any Preferred Stock.

(e) “Common Stock” means the common stock, par value $0.001 per share, of the
Company, and any other Capital Stock into which the Common Stock shall have been
converted, exchanged or reclassified following the date and that is issuable
pursuant to the terms hereof.

(f) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(g) “Excluded Issuance” shall mean any of the following: (i) the issuance of any
shares of Common Stock or Rights pursuant to any employee benefit plan or
program, incentive compensation plan or program, executive compensation
agreement or directors’ compensation program, in each case approved by the Board
or a committee thereof, or pursuant to this Option, (ii) the issuance of any
shares of Common Stock upon exercise of any of the Class A Options and/or Class
B Options of the Company outstanding as of the date of this Option, and
(iii) the issuance of any shares of Common Stock or Rights pursuant to a
Fundamental Change Transaction.

(h) “Exercise Price” means $[        ] per share, subject to adjustment pursuant
to Section 9.

(i) “Exercise Shares” means the shares of Common Stock issuable upon exercise of
this Option, in an original amount of up to                  shares of the
Company’s Common Stock, subject to vesting and exercisability restrictions and
adjustment pursuant to the terms herein, including but not limited to adjustment
pursuant to Section 9 below.

 

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(j) “Fair Market Value” means, with respect to the Common Stock or any other
security or property as of any date of determination, the fair market value
thereof as determined in good faith by the Company, in accordance with the
following rules:

(i) for Common Stock or any other security listed or admitted to trading on a
national securities exchange for at least ten (10) consecutive Trading Days
immediately preceding such date of determination, the Fair Market Value will be
the volume-weighted average price of such security for the ten (10) consecutive
Trading Days immediately preceding such date of determination as reported by
Bloomberg, L.P.;

(ii) for any security that is not listed or admitted to trading on any national
securities exchange for at least ten (10) consecutive Trading Days immediately
preceding such date of determination or the Fair Market Value of which cannot be
determined in accordance with clause (i) above, the Fair Market Value of such
security shall be its fair market value as of such date of determination as
reasonably determined by the Board in good faith on the basis of such
information as it considers appropriate; or

(iii) for any other property, the Fair Market Value shall be as reasonably
determined by the Board in good faith on the basis of such information as it
considers appropriate, including an estimation of the fair market value of such
property assuming a willing buyer and a willing seller in an arms’-length
transaction.

(k) “Fundamental Change Transaction” means the occurrence of any of the
following: (i) any Person or group of related Persons for purposes of
Section 13(d) of the Exchange Act (a “Group”), other than one or more Principal
Stockholders, has, directly or indirectly, become the “beneficial owner” (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act) of more than 50% of the
total voting power of all shares of Capital Stock of the Company that are
entitled to vote generally in the election of directors; (ii) any merger,
consolidation, stock or asset purchase, recapitalization or other business
combination transaction (or series of related transactions) as a result of which
any Person or Group, other than one or more Principal Stockholders, is or
becomes the “beneficial owner” (as defined above) of more than 50% of the total
voting power of all shares of Capital Stock that are entitled to vote generally
in the election of directors of the entity surviving or resulting from such
transaction (and, if such surviving or resulting entity is a subsidiary of a
parent Person, the ultimate parent thereof); (iii) the sale, transfer or
disposition, including but not limited to any spin-off or in-kind distribution,
of all or substantially all of the assets of the Company (on a consolidated
basis) to any Person or Group (other than the Company or one or more of its
wholly-owned subsidiaries or one or more Principal Stockholders), or (iv) the
dissolution, liquidation or winding up of the Company.

(l) “Harbinger Persons” means, collectively, Philip Falcone, Harbinger Group
Inc., HGI Funding, LLC, Harbinger Capital Partners Master Fund I, Ltd.,
Harbinger Capital Partners LLC, Harbinger Holdings, LLC, Harbinger Capital
Partners Special Situations Fund, L.P., Harbinger Capital Partners Special
Situations GP, LLC, Global Opportunities Breakaway Ltd. and Harbinger Capital
Partners II LP.

 

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(m) “Person” means any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.

(n) “Piggyback Registration” means a proposed registration by the Company of any
shares of its securities under the Act (other than a registration effected
solely to implement an employee benefit plan or a transaction to which Rule 145
of the Act is applicable, or pursuant to a Registration Statement on Form S-4,
S-8 or any successor form thereto or another form not available for registering
the issued or issuable Exercise Shares for sale to the public), whether for its
own account or for the account of one or more stockholders of the Company, and
the form of registration statement to be used may be used for any registration
of issued or issuable Exercise Shares.

(o) “Preferred Stock” as applied to the Capital Stock of any corporation means
Capital Stock of any class or classes (however designated) that by its terms is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such
corporation.

(p) “Principal Stockholders” means (i) any of the Harbinger Persons and their
respective Affiliates, (ii) any investment fund or vehicle managed, sponsored or
advised by any of the Harbinger Persons or any Affiliate thereof, and any
Affiliate of or successor to any such investment fund or vehicle; and (iii) any
limited or general partners of, or other investors in, any of the Harbinger
Persons or any Affiliate thereof, or any such investment fund or vehicle.

(q) “Trading Day” means (i) if the Common Stock is traded on a national
securities exchange, a day on which the Common Stock is traded on the principal
securities exchange on which the Common Stock is then listed or admitted to
trading, or (ii) if the Common Stock is not listed on a national securities
exchange, a Business Day.

2. Purchase of Shares.

(a) Exercise Shares and Exercise Price. Subject to the terms and conditions set
forth herein, including the vesting schedule for the Option set forth in
Section 2(b), the Holder shall be entitled, at any time and from time to time,
to exercise this Option in whole or in part to purchase Exercise Shares at the
Exercise Price; provided, however, that if and to the extent it is determined
that any Consent is required in connection with the exercise of this Option, in
whole or in part, pursuant to Section 6(b) hereof, this Option (or portion
thereof that is the subject of such required Consent) shall be unexercisable
pending the making or delivery of such Consent in accordance with Section 6(b).
The term “Option” as used herein shall be deemed to include any options issued
upon transfer or partial exercise of this Option unless the context clearly
requires otherwise.

(b) Vesting of Exercise Shares. Except as otherwise provided in Section 9(b)
with respect to accelerated vesting of unvested tranches of this Option in
connection with a Fundamental Change Transaction, this Option shall become
vested in three (3) equal

 

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installments on each of (i) the issuance date set forth above and (ii) the first
and second anniversaries of the issuance date set forth above, subject in the
case of clause (ii) above to the continuous employment of the Holder with the
Company as of the applicable vesting date.

3. Exercise.

(a) Exercise Period. This Option shall be exercisable, in whole or in part but
subject to the vesting and exercisability conditions set forth herein, during
the term commencing on the date of issuance set forth above and ending on
May 11, 2024, after which date it shall be null and void.

(b) Exercise Requirements. The Exercise Shares shall become exercisable in
accordance with and subject to Section 2(a) with respect to the Exercise Shares
on the later of (x) the date upon which the Exercise Shares vest pursuant to
Section 2(b) and (y) the date that the Rights have resulted in the issuance of
additional shares of Common Stock as the result of exercise, conversion,
exchange or otherwise in accordance with the terms applicable to such Rights
(each such issuance of shares of Common Stock pursuant to Rights is referred to
herein as a “Rights Shares Issuance”) and then only in the same proportion as
the proportion of the shares issued on the Rights Shares Issuance date bear to
the total number of shares issuable upon the exercise of the related Rights.

4. Method of Exercise.

(a) Vested and exercisable rights represented by this Option may be exercised
during the exercise period set forth in Section 3(a) by:

(i) the delivery to the Company of a duly executed copy of the Notice of
Exercise attached hereto, directed to the attention of the Secretary of the
Company at its principal office (or at such other place as the Company shall
notify the Holder in writing); and

(ii) except in connection with a Net Exercise (as defined below) pursuant to
Section 5, the payment to the Company by wire transfer to an account designated
by the Company of an amount equal to the aggregate Exercise Price for the number
of Exercise Shares being purchased.

(b) Each exercise, in whole or in part, of this Option shall be deemed to have
been effected immediately prior to the close of business on the day on which
this Option is exercised as provided in Section 4(a). At such time, the Person
or Persons in whose name or names any certificate for the Exercise Shares shall
be issuable upon such exercise as provided in Section 4(c) shall be deemed to
have become the holder or holders of record of the Exercise Shares represented
by such certificate.

 

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(c) As soon as reasonably practicable after the exercise of this Option, in
whole or in part, the Company at its expense will cause to be issued in the name
of, and delivered to, the Holder, or as the Holder may direct:

(i) a certificate or certificates (with appropriate restrictive legends) for the
number of Exercise Shares to which the Holder shall be entitled in such
denominations as may be requested by the Holder; and

(ii) in case such exercise is in part only, a new option or options of like
tenor, for the aggregate number of Exercise Shares equal to the number of
Exercise Shares described in this Option minus the number of such Exercise
Shares purchased by the Holder upon all exercises made in accordance with
Section 4(a) or Section 5.

(d) Notwithstanding any other provisions hereof, if an exercise of any portion
of this Option is to be made in connection with the consummation of a Piggyback
Registration or a Fundamental Change Transaction, the exercise of any portion of
this Option may, at the election of the Holder hereof, be conditioned upon the
consummation of the Public Offering or Fundamental Change Transaction, in which
case such exercise shall not be deemed to be effective until immediately prior
to the consummation of such transaction.

(e) Exercised Exercise Shares shall be deducted from the earliest vesting
tranches of this Option, to the extent available.

5. Net Exercise. In lieu of exercising this Option for cash, the Holder may
elect to receive, without the payment by the Holder of any additional
consideration, Common Stock equal to the value of this Option (or the portion
thereof being exercised) (a “Net Exercise”). Upon a Net Exercise, the Holder
shall have the rights described in Sections 4(b) and 4(c), and the Company shall
issue to the Holder a number of shares of Common Stock computed using the
following formula:

 

X =  

 Y (A - B)

     A   

Where:

 

X =    The number of shares of Common Stock to be issued to the Holder. Y =   
The number of Exercise Shares purchasable under this Option or, if only a
portion of the Option is being exercised, the portion of the Option being
exercised (at the date of such calculation). A =    The Fair Market Value of one
(1) share of Common Stock (at the date of such calculation). B =    The Exercise
Price (as adjusted to the date of such calculation).

6. Regulatory Requirements.

(a) Hart-Scott-Rodino. If any filing or notification becomes necessary pursuant
to the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
“HSR Act”), based upon the planned exercise of this Option or any portion
hereof, the Holder shall notify the Company of such requirement, and the Holder
and the Company shall file with the

 

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proper authorities all forms and other documents necessary to be filed pursuant
to the HSR Act as promptly as possible and shall cooperate with each other in
promptly producing such additional information as those authorities may
reasonably require to allow early termination of the notice period provided by
the HSR Act or as otherwise necessary to comply with requirements of the Federal
Trade Commission or the Department of Justice. The Holder and the Company agree
to cooperate with each other in connection with such filings and notifications,
and to keep each other informed of the status of the proceedings and
communications with the relevant authorities.

(b) Other Regulatory Requirements. If the Holder or the Company determines that
the exercise of this Option would require prior notice to, a filing with, or the
consent, approval or order by, the Federal Communications Commission or any
other federal, state or local regulatory agency or other governmental entity
that is vested with jurisdiction over the Company (each, a “Consent”), the
Holder and the Company shall have made or received all necessary Consents, to
the reasonable satisfaction of both parties, prior to effecting the exercise of
this Option.

7. Representations, Warranties and Covenants of the Company. In connection with
the transactions provided for herein, the Company hereby represents and warrants
and covenants and agrees, as applicable, to the Holder that:

(a) Organization; Authority. The Company is duly incorporated, validly existing
and in good standing under the laws of the State of Delaware, with the requisite
corporate power and authority to own and use its properties and assets and to
carry on its business and to execute and deliver this Option and to consummate
the transactions contemplated hereby. The Company is not in violation of, nor
will the consummation of the transactions contemplated by this Option violate,
any provisions of the certificate of incorporation or by-laws of the Company.

(b) Authorization; Enforceability. The execution and delivery of this Option by
the Company and the consummation by it of the transactions contemplated hereby
have been duly authorized by all necessary action on the part of the Company and
no further consent or action with respect thereto is required by the Company or
its Board or stockholders. This Option has been duly executed and delivered by
the Company and is a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by general principles of equity or to applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation and other similar laws
relating to, or affecting generally, the enforcement of applicable creditors’
rights and remedies.

(c) Valid Issuance of Common Stock. The Common Stock of the Company issuable
upon exercise of this Option has been duly authorized and when issued upon
exercise in accordance with this Option will be validly issued, fully paid and
nonassessable. None of the Common Stock of the Company issuable upon exercise of
this Option will be issued in violation of any preemptive or other similar
rights of any securityholder of the Company.

(d) Reservation of Shares. The Company covenants and agrees that during the
period within which the rights represented by this Option may be exercised, the

 

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Company will at all times have authorized and reserved, for the purpose of issue
or transfer upon exercise of this Option, a sufficient number of shares of
authorized but unissued Common Stock of the Company, when and as required to
provide for the exercise of the rights represented by this Option. The Company
will take all such action as may be necessary to assure that such Common Stock
may be validly issued as provided herein without violation of any applicable law
or regulation.

(e) Piggyback Registration. Whenever the Company proposes to register any shares
of its securities by means of a Piggyback Registration, the Company shall give
prompt written notice (in any event no later than thirty (30) days prior to the
filing of the applicable registration statement) to the Holder of its intention
to effect such a Piggyback Registration and will, subject to customary
provisions for the priority of registered securities, afford such Holder the
opportunity to include its registrable and issued or issuable Exercise Shares in
the registration statement, to the extent the Holder has provided to the Company
a written request (the “Registration Election”) for inclusion of such
registrable Exercise Shares within fifteen (15) days after the Company’s notice
has been given to the Holder, as well as a duly executed copy of a Notice of
Exercise with respect to any Exercise Shares issuable upon exercise of this
Option to be included in the applicable Piggyback Registration, specifying the
number of such Exercise Shares to be so included. The Company may postpone or
withdraw the filing or the effectiveness of a Piggyback Registration at any time
in its sole discretion.

8. Representations and Warranties of the Holder. In connection with the
transactions provided for herein, the Holder hereby represents and warrants to
the Company that:

(a) Authority. The Holder has the requisite legal capacity and authority to
execute and deliver this Option and to consummate the transactions contemplated
hereby.

(b) Enforceability. This Option has been duly executed and delivered by the
Holder and is a valid and binding obligation of the Holder, enforceable against
the Holder in accordance with its terms, except as such enforceability may be
limited by general principles of equity or to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors’ rights and
remedies.

(c) Investment Intent. The Holder is a financially sophisticated institutional
investor and is an “accredited investor” (as defined in Rule 501 of Regulation D
under the Act) that is experienced in financial matters and is acquiring this
Option and any Exercise Shares issuable upon exercise of this Option for his own
account for investment and with no present intention of, or view to,
distributing this Option or any Exercise Shares issuable upon exercise of this
Option except in compliance with the Act, but without prejudice to the Holder’s
right at all times to sell or otherwise dispose of all or any part of this
Option or any Exercise Shares issuable upon exercise of this Option under a
registration statement filed under the Act, or in a transaction exempt from the
registration requirements of the Act, including a transaction pursuant to Rule
144 under the Act.

 

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(d) Legends. The Holder acknowledges that, to the extent applicable, each
certificate evidencing Exercise Shares issued upon exercise of this Option shall
be endorsed with the legend substantially in the form set forth below, as well
as any additional legend imposed or required by applicable state securities
laws:

THE SECURITIES REPRESENTED BY THIS INSTRUMENT OR CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR
SECURITIES LAWS OF ANY STATE AND MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED,
TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT OR SUCH LAWS AND, IF
REQUESTED BY HC2 HOLDINGS, INC., OR ANY SUCCESSOR THERETO (THE “COMPANY”), UPON
DELIVERY OF AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT
THE PROPOSED TRANSFER IS EXEMPT FROM THE ACT OR SUCH LAWS.

9. Adjustment of Exercise Price and Number of Exercise Shares. The Exercise
Price of this Option and the number of Exercise Shares issuable upon the
exercise of this Option shall be adjusted from time to time as set forth in this
Section 9, and which adjustment may be in the form of the issuance of a new
option, which new option shall be subject to substantially the same terms as
this Option, but with the modifications provided for in this Section 9.

(a) Corporate Transactions. In case (i) the Company shall hereafter pay a
dividend or make a distribution to all holders of the outstanding Common Stock
in shares of Common Stock, (ii) the outstanding shares of Common Stock shall be
subdivided into a greater number of shares of Common Stock, or combined into a
smaller number of shares of Common Stock, (iii) the Company shall, by dividend
or otherwise, distribute to all holders of Common Stock shares of any class of
Capital Stock of the Company, debt securities, assets or other property of the
Company, (iv) the Company shall make an extraordinary cash dividend to all
holders of Common Stock or (v) the Company shall engage in any other transaction
that would constitute a corporate transaction within the meaning of Section 424
of the Internal Revenue Code of 1986, as amended, or any successor statute
thereto (“Code Section 424”), the number of shares of Common Stock to be
received by the Holder and the Exercise Price payable upon exercise of this
Option shall be appropriately adjusted in a manner that would satisfy the
requirements of Code Section 424 (without regard to the requirement that an
eligible corporation be the employer of the optionee) if the Option were a
statutory stock option.

(b) Fundamental Change Transaction. If, at any time while any portion of this
Option is outstanding there occurs a Fundamental Change Transaction, then (i) as
of immediately prior to the occurrence of such Fundamental Change Transaction,
this Option shall be deemed fully vested, and (ii) the Holder, from and after
the occurrence of such Fundamental Change Transaction, shall have the right upon
exercise of all or any portion of this Option (and payment of the applicable
Exercise Price) to receive (but only out of legally

 

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available funds, to the extent required by applicable law) the kind and amount
of stock, other securities, cash and/or assets (the “Alternate Consideration”)
that the Holder would have received if this Option (or portion thereof being
exercised) had been exercised pursuant to the terms hereof immediately prior to
such Fundamental Change Transaction (assuming for this purpose that the Holder
did not exercise any applicable rights of election, if any, as to the kind or
amount of stock, securities, cash, assets or other property receivable upon such
Fundamental Change Transaction). For purposes of any such exercise, the
determination of the Exercise Price shall be appropriately adjusted to apply to
such Alternate Consideration based on the amount of Alternate Consideration
issuable in respect of one share of Common Stock in such Fundamental Change
Transaction, and the Company shall apportion the Exercise Price among the
Alternate Consideration in a reasonable manner reflecting the relative value of
any different components of the Alternate Consideration, but in all events in
accordance with the requirements of Code Section 424. Any successor to the
Company or surviving Person in such Fundamental Change Transaction shall issue
to the Holder a new option substantially in the form of this Option and
consistent with the foregoing provisions and evidencing the Holder’s right to
purchase the Alternate Consideration for the aggregate Exercise Price upon
exercise thereof and, upon such issuance, this Option shall be automatically
cancelled and shall cease to be of further force or effect. The terms of any
agreement pursuant to which a Fundamental Change Transaction is effected shall
include terms requiring any such successor or surviving Person to comply with
the foregoing provisions.

(c) Calculations. The number of shares of Common Stock outstanding at any given
time shall not include shares owned or held by or for the account of the
Company. No adjustment need be made for:

(i) any Excluded Issuances;

(ii) a change in the par value of the Common Stock; or

(iii) any event for which an adjustment has already been provided under any
subsection of this Section 9; provided, however, that if any event occurs that
would result in an adjustment under more than one subsection of this Section 9,
the subsection that results in the most favorable adjustment to the Holder shall
control.

To the extent this Option becomes exercisable into cash, no adjustment need be
made thereafter as to the cash. Interest will not accrue on the cash. Any
adjustments to the number of Exercise Shares hereunder shall be apportioned
among the three vesting tranches of the Option as nearly equal as possible.

(d) Form of Option After Adjustment. Except as otherwise provided in
Section 9(b), the form of this Option need not be changed because of any
adjustments in the Exercise Price or the number of Exercise Shares issuable upon
exercise of this Option, and Options theretofore or thereafter issued may
continue to express the same price and number and kind of shares as are stated
in this Option, as initially issued.

 

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10. No Fractional Shares. No fractional shares of Common Stock shall be issued
in connection with any exercise hereunder, but in lieu of such fractional shares
the Company shall, at its sole option, (a) round up such fraction to the nearest
whole number of shares of Common Stock or (b) make a cash payment therefor based
on the Fair Market Value thereof.

11. Notices to Holder. Upon any adjustment of the number of Exercise Shares
issuable upon exercise of this Option or the Exercise Price of this Option,
including any adjustment pursuant to Section 9, the Company, within twenty
(20) calendar days thereafter, shall prepare and deliver, or cause to be
prepared and delivered, to the Holder a certificate signed by an officer setting
forth the event giving rise to such adjustment, such Exercise Price and the
number of Exercise Shares (as divided into each vesting tranche of the Option)
after such adjustment and setting forth in reasonable detail the method of
calculation and the facts upon which such adjustment was made, which certificate
shall be conclusive evidence of the correctness of the matters set forth
therein. Where appropriate, such notice may be given in advance and included as
a part of the notice required to be mailed under the other provisions of this
Section 11. In the event of:

(a) a Rights Shares Issuance; or

(b) any taking by the Company of a record of the holders of any class of
securities for the purpose of determining the holders thereof who are entitled
to receive any dividend or other distribution, or any right to subscribe for,
purchase or otherwise acquire any shares of Capital Stock of any class or any
other securities or property, or to receive any other right; or

(c) any Fundamental Change Transaction;

then, and in each such event, the Company shall cause written notice to be
provided to the Holder of, respectively, (i) the date on which any such Rights
Share Issuance is to occur and the number of Rights the applicable Rights
holder(s) intends to exercise, convert or exchange and the total number of
shares issuable upon the exercise of the related Rights, (ii) the date on which
any such record is to be taken for the purpose of such dividend, distribution or
right, and stating the amount and character of such dividend, distribution or
right, and (iii) the date on which any such Fundamental Change Transaction is
anticipated to take place, and the time, if any is to be fixed, as of which the
holders of record of Common Stock (or other securities) shall be entitled to
exchange their shares of Common Stock (or other securities) for securities or
other property deliverable on such Fundamental Change Transaction. Such notice
shall be delivered by the Company as set forth above as soon as reasonably
practicable prior to the date specified in such notice on which any such action
is to be taken; provided, however, that in no event shall the Company be
required to deliver such notice (x) more than ten (10) Business Days prior to
such specified date or (y) prior to the time the Company publicly discloses or
is required by law (if required by law) to publicly disclose such event. Failure
to give such notice shall not affect the validity of any action taken in
connection therewith.

12. No Stockholder Rights. Prior to exercise of this Option, the Holder shall
not be entitled to any rights of a stockholder with respect to the Exercise
Shares, including (without limitation) the right to vote such Exercise Shares,
receive dividends or other

 

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distributions thereon, exercise preemptive rights or be notified of stockholder
meetings, and, except as otherwise provided in this Option, such Holder shall
not be entitled to any stockholder notice or other communication concerning the
business or affairs of the Company.

13. Transfer of Vested Portions of Option. Subject to compliance with applicable
federal and state securities laws and any other contractual restrictions between
the Company and the Holder contained herein, vested portions of this Option and
all rights hereunder with respect thereto are transferable, in whole or in part,
by the Holder upon prior written consent of the Company, not to be unreasonably
withheld, conditioned or delayed, and upon receipt of an assignment agreement in
form and substance satisfactory to the Company, pursuant to which the transferee
will agree to be bound by the terms and conditions of this Option. Any such
transfer shall be recorded on the books of the Company upon the surrender of
this Option, properly endorsed, to the Company at its principal offices, and the
payment to the Company of all transfer taxes and other governmental charges
imposed on such transfer. In the event of a partial transfer, the Company shall
issue to the new holders one or more appropriate new options.

14. Governing Law. This Option shall be governed by and construed in accordance
with the laws of the State of New York, without giving effect to any choice or
conflict of law provision or rule (whether of the State of New York or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of New York.

15. Submission to Jurisdiction. Any legal suit, action or proceeding arising out
of or based upon this Option or the transactions contemplated hereby may be
instituted in the federal courts of the United States of America or the courts
of the State of New York in each case located in the city of New York, and each
party irrevocably submits to the exclusive jurisdiction of such courts in any
such suit, action or proceeding. Service of process, summons, notice or other
document by certified or registered mail to such party’s address set forth
herein shall be effective service of process for any suit, action or other
proceeding brought in any such court. The parties irrevocably and
unconditionally waive any objection to the laying of venue of any suit, action
or any proceeding in such courts and irrevocably waive and agree not to plead or
claim in any such court that any such suit, action or proceeding brought in any
such court has been brought in an inconvenient forum.

16. Waiver of Jury Trial. Each party acknowledges and agrees that any
controversy which may arise under this Option is likely to involve complicated
and difficult issues and, therefore, each such party irrevocably and
unconditionally waives any right it may have to a trial by jury in respect of
any legal action arising out of or relating to this Option or the transactions
contemplated hereby.

17. Successors and Assigns. The terms and provisions of this Option shall inure
to the benefit of, and be binding upon, the Company and the Holder and their
respective successors and permitted assigns. This Option shall be binding upon
any Person succeeding the Company by merger, consolidation or acquisition of all
or substantially all of the Company’s assets.

 

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18. Headings. Headings and subheadings in this Option are for convenience and
identification only and are in no way intended to describe, interpret, define or
limit the scope, extent or intent of this Option or any provision hereof.

19. Notices. All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be delivered personally, by commercial
overnight courier, or by facsimile, directed to the addresses set forth below.
Notices and other communications are deemed properly given as follows: (a) if
delivered personally, on the date delivered, (b) if delivered by a commercial
overnight courier, one (1) Business Day after such notice is sent, and (c) if
delivered by facsimile, on the date of transmission, with confirmation of
transmission.

If to the Company, at:

HC2 Holdings, Inc.

460 Herndon Parkway, Suite 150

Herndon, VA 20170

Attn: Andrea Mancuso, Acting General Counsel

Fax: (703) 650-4295

If to the Holder, at:

Philip Falcone

450 Park Avenue, 30th Floor

New York, NY 10022

Fax: 212-339-5101

or at such other address as may be substituted by notice given as herein
provided.

20. Entire Agreement; Amendments and Waivers. This Option and the documents
delivered pursuant hereto constitute the entire agreement, and supersede all
other prior agreements and understandings, both written and oral, between the
parties with respect to the subject matter hereof. Any provision of this Option
may be amended or waived if, and only if, such amendment or waiver is in writing
and signed. No waiver by any party shall operate or be construed as a waiver in
respect of any failure, breach or default not expressly identified by such
written waiver. No failure or delay on the part of any party in exercising any
right, power or remedy hereunder shall operate as a suspension or waiver
thereof, nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy hereunder.

21. Severability. Any term or provision of this Option which is invalid or
unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective
to the extent of such invalidity or unenforceability without rendering invalid
or unenforceable the remaining terms and provisions of this Option in any other
jurisdiction. If any provision of this Option is so broad as to be
unenforceable, such provision shall be interpreted to be only so broad as is
enforceable.

 

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22. Issue Tax. The issuance of certificates for Exercise Shares upon the
exercise of this Option shall be made without charge to the Holder of this
Option for any issue tax in respect thereof; provided, however, that the Company
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any certificate in a name
other than that of the then holder of this Option being exercised.

23. Third-Party Beneficiaries. Nothing in this Option shall be construed to give
to any Person other than the Company and the Holder any legal or equitable
right, remedy or claim under this Option, and this Option shall be for the sole
and exclusive benefit of the Company and the Holder.

24. Counterparts. This Option may be executed in any number of counterparts
(including by facsimile or portable document format (PDF) signatures) and each
of such counterparts shall for all purposes be deemed to be an original, and
such counterparts shall together constitute but one and the same instrument.

25. Headings. The headings of sections of this Option have been inserted for
convenience of reference only, are not to be considered a part hereof and in no
way modify or restrict any of the terms or provisions hereof.

26. Remedies. Each party stipulates that the remedies at law of the other party
in the event of any default or threatened default in the performance of or
compliance with any of the terms of this Option are not and will not be
adequate, and that such terms may be specifically enforced by a decree for the
specific performance of any agreement contained herein or by an injunction
against a violation of any terms hereof or otherwise. The remedies herein
provided are in addition to and not exclusive of any other remedies provided at
law or in equity.

[Signature appears on next page]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Option to be executed as
of the date first set forth above.

 

HC2 HOLDINGS, INC. By:  

 

Name:   Andrea L. Mancuso Title:   Acting General Counsel PHILIP FALCONE

 

Signature Page to Option

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NOTICE OF EXERCISE

HC2 HOLDINGS, INC.

(1) The undersigned hereby elects to (check one box only):

¨ purchase                  shares of the Common Stock (as defined in the
Option) of HC2 Holdings, Inc. (together with any successor thereto, the
“Company”) pursuant to the terms of the Option, dated as of October     , 2014
(the “Option”), between the Company and the Holder (as defined therein) thereof,
and tenders herewith payment of the Exercise Price (as defined in the Option) in
full for such Exercise Shares (as defined in the Option), together with any
applicable transfer taxes with respect thereto.

¨ purchase the number of shares of Common Stock of the Company by Net Exercise
(as defined in the Option) pursuant to the terms of the Option as shall be
issuable upon Net Exercise of the portion of the Option relating to
                 Exercise Shares.

(2) Please issue a certificate or certificates representing said shares of
Common Stock in the name of the undersigned or in such other name as is
specified below:

 

 

(Name)

 

(Address)

 

      HOLDER: Date:  

 

    By:  

 

      Name:         Title: