Document:

Exhibit

 
Exhibit 10.5

	
		
	Cross-Reference:

Official Record Book 12865, Page 1464 (Mortgage)
Official Record Book 12865, Page 1511 (ALR)
Hamilton County, Ohio records.

	

NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER
ASSUMPTION AND MODIFICATION AGREEMENT
This ASSUMPTION AND MODIFICATION AGREEMENT (this "Agreement") dated this 6th day of January, 2017 by and among NATIONWIDE LIFE INSURANCE COMPANY, an Ohio corporation ("Lender"), CLP-SPF ROOKWOOD COMMONS LLC, a Delaware limited liability company ("Original Borrower"), and HGREIT II EDMONDSON ROAD LLC, a Delaware limited liability company ("Borrower").
W I T N E S S E T H:
WHEREAS, Lender made a loan (the "Loan") to Original Borrower in the original principal amount of $67,000,000.00, and in connection with the Loan, Original Borrower executed and delivered to Lender (a) one certain Promissory Note, dated April 1, 2015, payable to the order of Lender, in the original principal sum of $67,000,000.00, with interest and principal payable as therein provided ("Note"), the payment of which Note is secured by, inter alia, an Open-End Mortgage and Security Agreement, dated April 1, 2015, recorded as Document No. 15-0035175, Official Record Book 12865, Page 1464 in the Real Property Records of Hamilton County, Ohio, encumbering certain real and personal property described therein (all real and personal property rights so encumbered collectively being the "Property") including, without limitation, the land described in Exhibit A attached hereto and made a part hereof (the "Original Mortgage"), as affected by that certain Letter Agreement dated April 1, 2015 executed and delivered by Lender and acknowledged by Original Borrower (the "Side Letter" and the Original Mortgage, as modified by the Side Letter, the "Mortgage"), reference being here made to the Mortgage and the record thereof for all purposes;
WHEREAS, Original Borrower also executed (i) an Assignment of Leases, Rents and Profits, dated April 1, 2015, recorded as Document No. 15-0035176, Official Record Book 12865, Page 1511 in the Real Property Records of Hamilton County, Ohio (the "Assignment of Leases"), reference being here made to the 

Rookwood Commons
10830166v11    Loan No. 00-1102347

Assignment of Leases and the record thereof for all purposes, and (ii) an Indemnity Agreement, dated April 1, 2015, (the "Original Indemnity"); 
WHEREAS, in connection herewith, Borrower has executed and delivered to Lender that certain Indemnity Agreement of even date herewith in form and substance satisfactory to Lender (the "Indemnity");
WHEREAS, the Note, the Mortgage, the Assignment of Leases, the Original Indemnity and all other documents executed by Original Borrower in connection with or securing or evidencing the Loan are collectively referred to as the "Loan Documents";
WHEREAS, this Agreement, the Indemnity and all other documents executed and delivered in connection with Borrower's assumption of the Loan are collectively referred to as the "Assumption Documents";
WHEREAS, the Mortgage provides that the indebtedness secured by the Mortgage may, at the option of the holder of the same, be accelerated if Original Borrower or any assignee of Original Borrower sells or conveys any or all of the Property without the consent of Lender;
WHEREAS, Lender has been requested to consent to the transfer and conveyance of the Property from Original Borrower to Borrower and to the assumption of Original Borrower's obligations under the Loan Documents by Borrower and Lender is willing to so consent upon compliance with the terms and provisions of this Agreement; and
WHEREAS, Lender is the owner and holder of the Note, and Original Borrower is the owner of the legal and equitable title to the Property;
NOW, THEREFORE, for and in consideration of the mutual covenants contained herein and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.Conveyance of Property.  Original Borrower is concurrently herewith conveying the Property to Borrower.  For purposes of this Agreement, the transfer and conveyance of the Property shall be deemed to have occurred simultaneously with the recordation in the appropriate real property records of Hamilton County, Ohio, of the deed or deeds by which title to the Property is conveyed by Original Borrower to Borrower.  Borrower hereby acknowledges and agrees that title to the Property and Borrower's interest therein, is encumbered by and subject to the liens, security interests, assignments and other terms, covenants, restrictions and provisions of the Loan Documents.
2.    Assumption by Borrower. Borrower hereby acknowledges and agrees that it hereby (i) assumes and promises to keep and perform all covenants and obligations on Original Borrower's part to be performed under all of the Loan Documents to the same extent as if Borrower were the original signatory thereto, and (ii) assumes and promises to pay the outstanding principal balance of the Note, with interest thereon, and all other sums required to be paid to Lender in accordance with the provisions of the Note and other Loan Documents, and to perform, comply with and abide by each and every one of the covenants, agreements and conditions contained and set forth in the Loan Documents.
3.    Conditions Precedent to Lender's Consent to Assumption by Borrower .  Lender's consent and approval as set forth in Paragraph 4 below is conditioned upon the satisfaction of the following conditions precedent and, by execution and delivery of this Agreement, Lender hereby acknowledges and agrees that, subject to Section 7 hereof, such conditions precedent have been satisfied:

(a)    Original Borrower and Borrower shall have executed and delivered this Agreement to Lender.
(b)    Borrower shall have executed and delivered the Indemnity to Lender.
(c)    Original Borrower or Borrower shall have paid a total transfer fee for the transfer contemplated by this Agreement equal to one-half percent (0.5%) of the outstanding principal balance of the Note at the time of such transfer to Lender in connection with the transfer of the Property and the assumption of the Loan by Borrower less the $3,000 processing fee and shall have reimbursed Lender for any and all reasonable out-of-pocket costs and expenses and third-party costs incurred by Lender for the processing of said transfer, including, without limitation, counsel fees, recording and transfer fees, and title insurance costs and premiums. Original Borrower, Borrower and Lender agree that should the Loan Documents contain any provision defining or limiting a transfer fee or assumption fee, this Paragraph 3(c) shall control and supersede such provision. 
(d)    Borrower shall have established an escrow with Lender for real estate taxes, assessments and insurance premiums in amounts determined by Lender to be held by Lender pursuant to Section 17 of the Mortgage.
(e)    Lender shall have received and approved such ownership documents and organizational documents as are requested by Lender.
(f)    Borrower shall have, at its sole cost and expense, obtained and delivered to Lender endorsements to Lender's title policy in accordance with Paragraph 9 below.
(g)    Borrower shall have executed and delivered to Lender a Certification of Non-Foreign Status in a form acceptable to Lender.
(h)    Borrower shall have delivered to Lender financing statements and/or financing statement amendments in form and substance reasonably satisfactory to Lender in all places necessary in connection with the perfection of Lender's security interest in the fixtures and other property described in the Mortgage. 
(i)    Original Borrower shall have executed and contemporaneously filed of record, in the appropriate real property records of Hamilton County, Ohio, a deed or deeds in the form approved by Lender, pursuant to which title to the Property shall be conveyed to Borrower.
(j)    There shall be no secondary or subordinate financing of the Property in connection with the conveyance and transfer of the Property by Original Borrower to Borrower and no other changes to the status of title to the Property not approved by Lender.
(k)    Borrower shall deliver to Lender in form and substance satisfactory to Lender, an opinion of counsel to Borrower, stating, inter alia, that (i) Borrower is duly formed, legally existing and in good standing under the laws of the State of Delaware and is duly authorized to transact business in the State of Ohio; (ii) the execution of this Agreement and the other documents in connection with the assumption and modification of the Loan have been duly authorized by Borrower; (iii) Borrower has all requisite authority to own, lease and operate the Property; (iv) Borrower has all requisite authority to assume the obligations of Original Borrower pursuant to this Agreement; and (v) this Agreement and the other documents executed by Borrower in connection with the assumption and modification of the Loan have been duly executed and delivered by Borrower and that the Loan 

Documents, as modified by this Agreement, are the legal, valid and binding obligations of Borrower enforceable against Borrower in accordance with their terms.
(l)    Hines Interests Limited Partnership, a Delaware limited partnership ("HILP") shall manage the Property pursuant to that certain Property Management and Leasing Agreement dated as of January 6, 2017 between Borrower and HILP in form approved by Lender, and shall deliver an Acknowledgment of Property Manager in form and substance satisfactory to Lender.
(m)    Borrower shall have delivered to Lender evidence of insurance coverage for the Property in form and substance satisfactory to Lender.
4.    Consent to Assumption of Loan by Borrower.  Subject to the conditions set forth in Paragraph 3 above and pursuant to Section 32 of the Mortgage:
(a)    Lender hereby consents to Borrower's purchase of the Property from Original Borrower, the conveyance of the Property to Borrower, and the assumption by Borrower of Original Borrower's covenants and obligations under the Loan Documents.  Lender's consent to the transfer of the Property to Borrower is not intended to be and shall not be construed as consent to any subsequent transfer which requires Lender's consent pursuant to the terms of the Loan Documents.
(b)    From and after the date hereof, Lender hereby releases, remises, acquits and forever discharges Original Borrower, together with its employees, agents, representatives, consultants, attorneys, fiduciaries, servants, officers, directors, partners, predecessors, successors and assigns, subsidiary corporations, parent corporations, and related corporate divisions (all of the foregoing hereinafter called the "Original Borrower's Released Parties"), from any and all actions and causes of action, judgments, executions, suits, debts, claims, demands, liabilities, obligations, damages and expenses of any and every character, known or unknown, direct and/or indirect, at law or in equity, of whatsoever kind or nature, accruing under the Loan Documents, and/or for or because of any matter or things done, omitted or suffered to be done by any of the Original Borrower's Released Parties, and in any way directly or indirectly arising out of or in any way connected to the Note, the Mortgage, the Assignment of Leases, the Original Indemnity or any other Loan Document, or any of the transactions associated therewith, or the Property, provided, however, that the foregoing release shall not cover any obligation or liability of Original Borrower under the Loan Documents arising prior to the date hereof (other than the obligations to pay principal and interest due under the Note) or any of the representations, covenants and obligations of Original Borrower contained in Paragraph 6 of this Agreement.  The burden of proof under this subsection with regard to establishing the date upon which such obligations for payment, performance or indemnification arose shall be upon Original Borrower. 
(c)    Lender, Original Borrower and Borrower each hereby acknowledge and agree that the sale and transfer of the Property by Original Borrower to Borrower, and Lender's consent thereto pursuant to this Agreement, constitutes a transfer of the Property without a change in the terms of the Loan permitted by Section 32 of the Mortgage, and therefore, all permitted transfer rights thereunder have been extinguished.
(d)    Lender shall amend its records to indicate that Borrower is the owner of the Property.
5.    Modification of the Loan Documents. 

(a)    All references in the Loan Documents to the "Indemnity" shall mean the Original Indemnity executed and delivered by Original Borrower and the Indemnity executed and delivered by Borrower, as the context may require.
(b)    Sections 2 and 3 of the Side Letter are hereby deleted in their entirety and of no further force or effect.
(c)    Section 9(b) of the Note is hereby deleted in its entirety and replaced with the following:
"(b)    failure to pay any taxes which accrue prior to Lender taking control of the Property or to pay assessments, charges for labor or materials or any other charges that could result in liens on all or any portion of the Property; notwithstanding the foregoing, any such failure shall only trigger recourse liability if (A) at the time of such failure, Borrower had sufficient cash flow from the Property to pay such amounts but failed to do so; (B) Borrower had insufficient cash flow from the Property to pay any amounts owed prior to delinquency and failed to give Lender Written Notice thereof; or (C) Borrower escrows such amounts with Lender and Borrower has not made all required escrow deposits;"
(d)    Section 32 of the Mortgage is hereby amended to include the following subparagraph (f):
"(f)     Lender shall permit (i) the transfer, conveyance or pledge of direct or indirect limited partnership interests in the Fund LP, or (ii) the transfer, conveyance, or pledge of no more than forty-nine percent (49%) of the membership interests in Borrower, in the aggregate; provided, however, that for each such action all of the following conditions are satisfied:
		
	a.
	After giving effect to each and every such action, the following conditions shall be satisfied: 

		
	1.
	the Main Fund and Fund LP continue to own, directly or indirectly, at least fifty-one percent (51%) of the beneficial ownership interests of Borrower; 

		
	2.
	the Main Fund and Fund LP shall continue to directly or indirectly Control Borrower; and

		
	3.
	the Main Fund and Fund LP shall continue to be advised, directly or indirectly, by Hines Family in accordance with an Advisory Agreement; 

		
	b.
	Hines and/or its affiliates shall continue to hold a $2,200,000 investment in the Main Fund (subject to devaluation due to declines in market values);

		
	c.
	Each transferee of a direct interest in Borrower or  a direct interest in Fund LP complies with Lender's Patriot Act and OFAC requirements;

		
	d.
	Each transferee of an interest in the Main Fund (i) has been subject to commercially reasonable efforts taken by the Main 

Fund's transfer agent and independent sales network to comply with Patriot Act and OFAC requirements; and (ii) with respect to a transferee of a five percent (5%) or greater ownership interest, complies with Lender's Patriot Act and OFAC requirements;
		
	e.
	No Event of Default has occurred under the Loan Documents; 

		
	f.
	Borrower continues to hold title to the Property, and continues to be a single purpose entity after such transfer; and

		
	g.
	Borrower shall provide prompt written notice within thirty (30) days following (i) any transfer of five percent (5%) or more of any direct or indirect interest in the Main Fund or Fund LP to a single transferee and (ii) any transfer or pledge of five percent (5%) or more of the membership interests in Borrower.

The conditions to transfer described above shall not apply to the transfer, assignment, pledge, redemption or issuance of the publicly offered ownership interests in the Main Fund (collectively, the "Permitted Main Fund Transfers"), all of which shall be freely permitted without Lender's consent, provided that, after giving effect to each such action, an Advisory Agreement remains in full force and effect.  Notwithstanding the foregoing, in the event that the independent directors of the Board of Directors of the Main Fund remove Hines Global REIT II Advisors, LP (or a successor advisor Controlled by the Hines Family) for a failure to perform under an Advisory Agreement in fulfillment of the independent directors’ obligations under Section 9.2 of the Articles of Amendment and Restatement of the Main Fund (the “Charter”) to, among other things, annually review the performance of the Advisor (a "Permitted Removal"), then the Permitted Main Fund Transfers shall be freely permitted without Lender's consent so long as (A) a replacement advisory agreement has been entered into with a Qualified Advisor, (B) within ten (10) days of such replacement Lender has been provided written notice of such replacement Qualified Advisor together with a copy of the replacement advisory agreement and a copy of the minutes from the meeting of the Board of Directors of the Main Fund during which the Permitted Removal was approved (which minutes Lender agrees to keep confidential unless required to be disclosed by any governmental agency or applicable law), and (C) within fifteen (15) days of such replacement, the Qualified Advisor has complied with Lender's Patriot Act and OFAC requirements.  A Permitted Removal shall not include a termination of an Advisory Agreement under Section 9.5 of the Charter unless such termination is due to a failure of performance under Section 9.2 of the Charter.  The replacement of Hines Global REIT II Advisors, LP (or any successor advisor Controlled by the Hines Family) as advisor by an advisor which is not Controlled by the Hines Family in connection with the renewal of an Advisory Agreement or at any 

time other than pursuant to a Permitted Removal shall be an Event of Default under the Loan Documents unless Lender consents to such replacement advisor in its sole discretion, in which event Borrower shall pay to Lender an administrative fee in an amount equal to ten (10) basis points (0.10%) of the principal balance of the Loan outstanding as of the date of such replacement of the advisor.  Borrower shall be responsible for any costs or fees incurred by Lender in connection with its review of the replacement advisor.
As used herein, the following terms shall have the following meanings:
"Advisory Agreement" means either (i) that certain Advisory Agreement dated August 15, 2014 among Hines Global REIT II Advisors, LP, Fund LP, and Main Fund, as amended by that certain Amendment to Advisory Agreement dated as of December 4, 2014, and that certain Amendment No. 2 to Advisory Agreement dated as of April 13, 2016 and as affected by those certain Acknowledgment of Renewal and Extension of Advisory Agreement dated as of December 16, 2015 and December 8, 2016, subject to further renewals and modifications that do not change the advisor Controlling the day-to-day business and affairs of the Main Fund or (ii) an advisory agreement among the Main Fund, Fund LP and an entity Controlled by the Hines Family,  providing services substantially similar to those services provided by externally – advised non-listed public REITs at the time of any relevant transfer and which allows the advisor to control the day-to-day business and affairs of the Main Fund. 
"Control" means the power to direct the management, policies and day to day operations of a person or entity, directly or indirectly, whether through the ownership of voting securities or other beneficial interests, by contract or otherwise.  
"Main Fund" means Hines Global REIT II, Inc., a Maryland corporation.
"Fund LP" means Hines Global REIT II Properties, LP, a Delaware limited partnership.
"Hines" means Hines Global REIT II Investor LP, a Delaware limited partnership.
"Hines Family" means Jeffrey C. Hines, Gerald D. Hines, their spouses, children and grandchildren (including children and grandchildren by adoption), and/or entities Controlled, directly or indirectly, by any of them.
“Qualified Advisor” means a reputable third party advisor which satisfies the following conditions: (i) the proposed entity and/or entities Controlled by the proposed entity, just prior to the engagement, has real estate assets similar to the Property under management with a current market value of at least $500,000,000.00; (ii) neither the proposed entity, nor any principal, partner, member, or other entity with more than a 20% beneficial ownership interest in the proposed entity, is involved in any litigation, investigations, indictments, or convictions of any civil or criminal activities, the result of which could have a material adverse effect, nor are there any outstanding criminal convictions or material monetary judgments which could have a material adverse effect; and (iii) no prior negative borrowing history with Lender.
6.    Representations, Warranties and Covenants to Lender.

(a)    Intentionally Omitted.  
(b)    Original Borrower hereby represents, warrants, certifies and covenants to Lender that as of the date hereof: 
(i)    Original Borrower has not made an assignment for the benefit of creditors;
(ii)    No application or petition has been filed for the appointment of a custodian, trustee, receiver or agent to take possession of any property of Original Borrower;
(iii)    Original Borrower is generally paying its debts as such debts become due;
(iv)    Original Borrower is not "insolvent" as that term is defined in Section 101(31) of the "Bankruptcy Code" (Title 11 of the United States Code; 11 U.S.C. §§ 101, et seq.);
(v)    Execution and delivery of this Agreement by Original Borrower and compliance by Original Borrower with the provisions of the Assumption Documents to which it is a party will not (A) violate or result in any breach of any of the terms, conditions or provisions of or constitute a default under any deed of trust, loan agreement, indenture or other contract or agreement to which Original Borrower is a party or by which Original Borrower or any of Original Borrower's or properties may be bound (nor would such execution and delivery constitute such a default with the passage of time or the giving of notice or both) and does not violate or contravene any law, order, decree, rule or regulation to which Original Borrower is subject, (B) result in the creation of any lien, charge or encumbrance on the property or assets of Original Borrower or (C) violate the terms of (1) Original Borrower's organizational documents or (2) any order of any court or administrative agency entered in any proceeding to which Original Borrower was or is a party or, to the knowledge of Original Borrower, to which Original Borrower may be subject or be bound;
(vi)    The Note, Mortgage, the other Loan Documents and this Agreement constitute the legal, valid and binding obligations of Original Borrower enforceable, subject to bankruptcy, insolvency and other debtor relief laws, in accordance with their terms;
(vii)    The execution and delivery of, and the performance of the obligations under this Agreement and under the Loan Documents are within Original Borrower's power and authority without the joinder or consent of any other party and have been duly authorized by all requisite action;
(viii)    There exists no uncured default under the Loan Documents and to the knowledge of Original Borrower, no event which with the passage of time or the giving of notice, or both, would constitute such a default under the Note, the Mortgage, the Assignment of Leases or any of the other Loan Documents;
(ix)    Each person executing this Agreement as a representative of Original Borrower has been duly authorized and has full power to execute and deliver this Agreement for, on behalf of, and in the name of Original Borrower, and to bind Original Borrower to the terms and conditions hereof;

(x)    Original Borrower has disclosed to Lender all material facts and has not failed to disclose any material facts that could cause any representation or warranty made herein to be materially misleading; 
(xi)    The proceeds of the Loans have been fully disbursed and there is no requirement for future advances under the Note or other Loan Documents; and
(xii)    Original Borrower warrants, represents and covenants, as of the date hereof, that neither Original Borrower or any of its direct members, nor, to the knowledge of Original Borrower, any of its other affiliates is or will be an entity or person (i) that is listed in the Annex to, or is otherwise subject to the provisions of Executive Order 13224 issued on September 21, 2001 ("EO13224"), (ii) whose name appears on the United States Treasury Department's Office of Foreign Assets Control ("OFAC") most current list of "Specifically Designated Nationals and Blocked Persons" (which list may be published from time to time in various mediums including, but not limited to, the OFAC website, http:www.treas.gov/ofac/t11sdn.pdf), (iii) who commits, threatens to commit or supports "terrorism", as that term is defined in EO13224, or (iv) who is otherwise affiliated with any entity or person listed in subparts (i) – (iii) above (any and all parties or persons described in subparts [i] – [iv] above are herein referred to as a "Prohibited Person").   
(c)    Borrower hereby represents, warrants, certifies and covenants to Lender that as of the date hereof:  
(i)    There is not pending against Borrower any petition in bankruptcy, whether voluntary or otherwise, or any other action brought under bankruptcy laws, and Borrower has not made an assignment for benefit of creditors;
(ii)    No application or petition has been filed for the appointment of a custodian, trustee, receiver or agent to take possession of any property of Borrower;
(iii)    Borrower is generally paying its debts as such debts become due;
(iv)    Borrower is not "insolvent" as that term is defined in Section 101(31) of the "Bankruptcy Code" (Title 11 of the United States Code; 11 U.S.C. §§ 101, et seq.);
(v)    Execution and delivery of this Agreement by Borrower and compliance by Borrower with the provisions of the Loan Documents and Assumption Documents will not (A) violate or result in any breach of any of the terms, conditions or provisions of or constitute a default under any deed of trust, loan agreement, indenture or other contract or agreement to which Borrower is a party or by which Borrower or any of Borrower's properties may be bound (nor would such execution and delivery constitute such a default with the passage of time or the giving of notice or both) and does not violate or contravene any law, order, decree, rule or regulation to which Borrower is subject, (B) result in the creation of any lien, charge or encumbrance on the property or assets of Borrower (other than the liens on the Property created by the Loan Documents) or (C) violate the terms of (1) Borrower's organizational documents or (2) any order of any court or administrative agency entered in any proceeding to which Borrower was or is a party or to which Borrower may be subject or be bound;
(vi)    The Certificate of Formation of Borrower dated August 31, 2016, filed with the Delaware Secretary of State on August 31, 2016, and the Limited Liability Company 

Agreement dated August 31, 2016, as amended by First Amendment to Limited Liability company Agreement dated as of the date hereof (the "Borrower Governing Documents") have not been amended or altered and are in full force and effect as of the date hereof.  Notwithstanding the provisions of the Borrower Governing Documents regarding transfers of its respective shareholder's, partner's or member's interests in Borrower or the Property, Borrower acknowledges that the terms, conditions and restrictions regarding such transfers contained in the Mortgage shall govern and a violation thereof shall permit Lender to declare a default or otherwise exercise the remedies provided for in the Mortgage or the other Loan Documents or Assumption Documents;
(vii)    The Articles of Amendment and Restatement of Hines Global REIT II, Inc., a Maryland corporation (the "GP"), dated August 15, 2014, filed with the Maryland Secretary of State on August 15, 2014, as supplemented by the Articles of Supplementary dated December 12, 2014, filed with the Maryland Secretary of State on December 12, 2014, as further supplemented by the Articles Supplementary dated August 6, 2015, filed with the Maryland Secretary of State on August 6, 2015, and the Amended and Restated Bylaws dated August 30, 2014, as amended by Amendment No. 1 to Amended and Restated Bylaws dated September 23, 2015 (the "GP Governing Documents") have not been amended or altered and are in full force and effect as of the date hereof.  Notwithstanding the provisions of the GP Governing Documents regarding transfers of its respective shareholder's, partner's or member's interests in GP, Borrower or the Property, Borrower acknowledges that the terms, conditions and restrictions regarding such transfers contained in the Mortgage shall govern and a violation thereof shall permit Lender to declare a default or otherwise exercise the remedies provided for in the Mortgage or the other Loan Documents or Assumption Documents;
(viii)    The Certificate of Limited Partnership of Hines Global REIT II Properties, LP, a Delaware limited partnership ("Member"), dated July 30, 2013, filed with the Delaware Secretary of State on July 31, 2013, and the Second Amended and Restated Limited Partnership Agreement dated August 12, 2015  (the "Member Governing Documents") have not been amended or altered and are in full force and effect as of the date hereof.  Notwithstanding the provisions of the Member Governing Documents regarding transfers of its respective shareholder's, partner's or member's interests in Member, GP, Borrower or the Property, Borrower acknowledges that the terms, conditions and restrictions regarding such transfers contained in the Mortgage shall govern and a violation thereof shall permit Lender to declare a default or otherwise exercise the remedies provided for in the Mortgage or the other Loan Documents or Assumption Documents;
(ix)    The Note, Mortgage, the other Loan Documents, and the Assumption Documents constitute the legal, valid and binding obligations of Borrower, enforceable, subject to bankruptcy, insolvency and other debtor relief laws, in accordance with their terms;
(x)    The execution and delivery of, and the performance of the obligations under the Assumption Documents and Loan Documents, and the ownership of the Property are within Borrower's power and authority without the joinder or consent of any other party and have been duly authorized by all requisite action;
(xi)    Borrower understands and hereby acknowledges all of the terms and provisions of the Loan Documents and Assumption Documents and reaffirms to Lender each of the 

covenants and agreements set forth in the Loan Documents for the time period from and after the date hereof with the same force and effect as if each were separately stated herein;
(xii)    Borrower hereby remakes each and every warranty and representation of the "borrower" set forth in the Loan Documents (other than the Original Indemnity and that certain Borrower's Certificate dated April 1, 2015 executed by Original Borrower in favor of Lender) for the time period from and after the date hereof with the same force and effect as if each were separately stated herein, but subject to the limitations thereon as are set forth in all similar representations in that certain Borrower's Certificate dated of even date herewith delivered by Borrower to Lender; 
(xiii)    Each person executing this Agreement as a representative of  Borrower has been duly authorized and has full power to execute and deliver this Agreement for, on behalf of, and in the name of  Borrower, and to bind Borrower to the terms and conditions hereof;
(xiv)    The financial condition of Borrower as of the date of this Agreement has not adversely changed from the financial condition as indicated by the financial statements furnished to Lender and said financial statements are substantially true and accurate as of the date of this Agreement;
(xv)     Borrower has disclosed to Lender all material facts and have not failed to disclose any material facts that could cause any representation or warranty made herein to be materially misleading; 
(xvi)    Borrower understands and acknowledges that the proceeds of the Loan have been fully disbursed and there is no requirement for future advances under the Note or other Loan Documents;
(xvii)    The assumption of the Loan by Borrower does not violate the Trading with the Enemy Act, as amended, or any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or executive order relating thereto.  In addition, Borrower warrants, represents and covenants, as of the date hereof, that neither Borrower nor any of its respective affiliates is or will be a Prohibited Person.  Borrower covenants and agrees that neither Borrower nor any of its affiliated entities will (i) conduct any business, nor engage in any transaction or dealing, with any Prohibited Person, including, but not limited to, the making or receiving of any contribution of funds, goods, or services, to or for the benefit of a Prohibited Person, or (ii) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in EO13224.  Borrower further covenants and agrees to deliver to Lender any such certification or other evidence as may be requested by Lender in its sole discretion, confirming that (i) Borrower is not a Prohibited Person and (ii) Borrower has not engaged in any business, transaction or dealings with a Prohibited Person, including, but not limited to, the making or receiving of any contribution of funds, goods, or services, to or for the benefit of a Prohibited Person; 
(xviii)    Borrower shall not engage in any transaction which would cause any obligation, or action taken or to be taken, hereunder (or the exercise by Lender of any of its rights under the Note, the Mortgage and the other Loan Documents) to be a non-exempt (under a statutory or administrative class exemption) prohibited transaction under the Employee Retirement Income Security Act of 1974, as amended ("ERISA").  Borrower shall deliver to Lender such 

certifications or other evidence from time to time throughout the term of the Mortgage, as requested by Lender in its sole discretion, that (i) Borrower is not an "employee benefit plan" as defined in Section 3(3) of ERISA, which is subject to Title I of ERISA, or a "governmental plan" within the meaning of Section 3(32) of ERISA; (ii) Borrower is not subject to state statutes regulating investments and fiduciary obligations with respect to governmental plans; and (iii) one or more of the following circumstances is true:
(1)    Equity interests in Borrower are publicly offered securities, within the meaning of 29 C.F.R. § 2510.3-101(b)(2);
(2)    Less than twenty-five percent (25%) of each outstanding class of equity interests in Borrower are held by "benefit plan investors" within the meaning of 29 C.F.R. § 2510.3-101(f)(2); or
(3)    Borrower qualifies as an "operating company" or a "real estate operating company" within the meaning of 29 C.F.R. § 2510.3-101(c) or (e) or an investment company registered under The Investment Company Act of 1940; and
(xix)    Borrower is a duly organized, validly existing limited liability company, in good standing under the laws of the State of Delaware, and is qualified to do business under the laws of the State of Ohio. Borrower is not in violation of any Federal or State laws relating to its structure, including, but not limited to, federal securities laws, blue sky laws, and other laws, or the rules or regulations of the Securities and Exchange Commission.   
(d)    The representations, warranties and certifications made by Original Borrower and Borrower set forth herein are given to induce Lender to grant the consent set forth in Paragraph 4 above, with the knowledge that Lender will rely upon the truth of the statements made herein.
7.    Further Assurances.  Original Borrower and Borrower, upon request from Lender, agree to execute such other and further documents as may be reasonably necessary or appropriate to consummate the transactions contemplated herein or to perfect the liens and security interests intended to secure the payment of the Loan evidenced by the Note; provided that no such other and/or further documents shall increase the obligations of Original Borrower and/or Borrower or decrease the rights of Original Borrower and/or Borrower.  Borrower hereby authorizes Lender, at any time and from time to time, to file such financing statements and/or financing statement amendments on behalf of Borrower without Borrower's signature as Lender, in its sole discretion, deems necessary or desirable. 
8.    Remedies.  Original Borrower and Borrower each agree to indemnify, defend and hold Lender harmless against any loss, claim, damage, liability or expense (including without limitation reasonable attorneys' fees) incurred as a result of any representation or warranty made by Original Borrower or Borrower (each as to itself only) herein proving to be untrue in any material respect.  If Borrower shall fail to keep or perform any of the covenants or agreements contained herein or if any statement, representation or warranty by Borrower contained herein is false, misleading or erroneous in any material respect, Borrower shall be deemed to be in default under the Mortgage, and Lender shall be entitled at its option to exercise any and all of the rights and remedies granted pursuant to the Mortgage, the Assignment of Leases or any of the other Loan Documents or Assumption Documents or to which Lender may otherwise be entitled, whether at law or in equity.   
9.    Title Insurance.  Contemporaneously with the execution and delivery hereof, Borrower shall, at its sole cost and expense, obtain and deliver to Lender a (i) Modification Endorsement and (ii) Date Down 

Endorsement of Loan Policy of Title Insurance No. 102121 insuring the lien of the Mortgage and otherwise being in form and content acceptable to Lender. 
10.    Other Provisions Unchanged.  Except as specifically provided herein, the terms and provisions of the Loan Documents shall remain unchanged and shall remain in full force and effect.  Any modification herein of the Loan Documents shall in no way affect the security of the Mortgage, the Assignment of Leases and the other Loan Documents for the payment of the Note.  The Loan Documents as modified and amended hereby are hereby ratified and confirmed in all respects.  All liens, security interests, mortgages and assignments granted or created by or existing under the Mortgage, the Assignment of Leases and the other Loan Documents remain unchanged and continue, unabated, in full force and effect, to secure Borrower's obligation to repay the Note.
11.    Lien Status.  Original Borrower and Borrower each hereby acknowledge and agree that the security title, liens, security interests and assignments created and evidenced by the Mortgage and the assignment created by the Assignment of Leases are valid and subsisting and further acknowledge and agree that there are no offsets, claims or defenses to the Note, the Mortgage, the Assignment of Leases or any of the other Loan Documents.  This Agreement and the Indemnity shall each be deemed to be a Loan Document.  
12.    Acknowledgement of Assignment of Leases.  Original Borrower and Borrower each hereby acknowledge and agree that Lender may exercise its rights relating to the Rents (as defined in the Assignment of Leases), in Lender's sole discretion and without prejudice to any particular remedy, otherwise allowed by applicable law.
13.    Merger.  This Agreement supersedes and merges all prior and contemporaneous promises, representations and agreements with respect to the subject matter hereof.  No modification of this Agreement, the Note, the Mortgage, the Assignment of Leases, the Indemnity or any of the other Loan Documents or Assumption Documents, or any waiver of rights under any of the foregoing, shall be effective unless made by supplemental agreement, in writing, executed by Lender and Borrower.  Lender, Original Borrower and Borrower further agree that this Agreement may not in any way be explained or supplemented by a prior, existing or future course of dealings between the parties or by any prior, existing or future performance between the parties pursuant to this Agreement or otherwise.
14.    Notices.  All notices, reports, requests or other written instruments required or permitted hereunder shall be in writing, signed by the party giving or making the same, and shall be sent hand-delivered, effective upon receipt, sent by United States Express Mail or by a nationally recognized overnight courier, effective upon receipt, or sent by United States registered or certified mail, postage prepaid, with return receipt requested, deemed effective on the earlier of the day of actual delivery as shown by the addressee's return receipt or the expiration of three (3) business days after the date of mailing, addressed to the party intended to receive the same at the address set forth below or at such other address as shall be given in writing by any party to another:

		
	To Lender:
	Nationwide Life Insurance Company

One Nationwide Plaza, Fifth Floor
Columbus, Ohio  43215
Attention:  Real Estate Investments, 1-05-701
Loan No. 00-1102347

To Original Borrower:     CLP-SPF Rookwood Commons LLC

c/o Casto
250 Civic Center Drive, Suite 500
Columbus, Ohio 43215
Attention:  Lisa Boveine
With a courtesy     
   copy to:     ROOKWOOD ACQUISITION COMPANY LLC
c/o J.P. Morgan Investment Management Inc.
270 Park Avenue
New York, NY 10017
Attention: Jeff Pisano

With a courtesy
copy to:    STROOCK & STROOCK & LAVAN LLP
180 Maiden Lane
New York, NY 10038
Attention: Brian Diamond, Esq.

		
	To Borrower:
	HGREIT II Edmondson Road LLC 
2800 Post Oak Boulevard

Suite 4800
Houston, Texas 77056-618
Attention: Kevin L. McMeans 
Fax No: (713) 966-2075            
With a courtesy
		
	copy to:
	HGREIT II Edmondson Road LLC 
c/o Hines Advisors Limited Partnership

2800 Post Oak Boulevard
Suite 4800
Houston, Texas 77056-618
Attention: Jason P. Maxwell, Esq. 
Fax No: (713) 966-2075
With a courtesy
		
	copy to:
	Baker Botts L.L.P. 
910 Louisiana Street

Houston, Texas 77002
Attention: Connie Simmons Taylor, Esq. 
Fax No: (713) 229-7850
15.    Expenses of Lender.  Contemporaneously with the execution and delivery hereof, Borrower or Original Borrower shall pay, or cause to be paid (in each case, to the extent not previously deposited with Lender), all reasonable out-of-pocket costs and expenses of Lender incident to the preparation hereof and the consummation of the transactions specified herein, without duplication, including without limitation title insurance policy premiums or endorsement charges, fees and expenses of legal counsel to Lender and  recording fees.
16.    Release.  Original Borrower and Borrower hereby release, remise, acquit and forever discharge Lender, together with its employees, agents, representatives, consultants, attorneys, fiduciaries, trustees, substitute trustees, servants, officers, directors, partners, predecessors, successors and assigns, subsidiary corporations, parent corporations, and related corporate divisions (all of the foregoing are hereinafter referred to as the "Released Parties"), from any and all actions and causes of action, judgments, executions, suits, 

debts, claims, demands, liabilities, obligations, damages and expenses of any and every character, known or unknown, direct and/or indirect, at law or in equity, of whatsoever kind or nature, whether heretofore or hereafter accruing, but only for or because of any matter or things done, omitted or suffered to be done by any of the Released Parties prior to and including the date hereof, and in any way directly or indirectly arising out of or in any way connected to this Agreement, the Note, the Mortgage, the Assignment of Leases or any of the other Loan Documents or Assumption Documents, or any of the transactions associated therewith, or the Property, including specifically but not limited to claims of usury, which in whole or part is caused by or arises out of the NEGLIGENCE of Lender.  However, the foregoing release shall not apply to the extent that a matter covered thereby is caused by or arises out of the gross negligence or willful misconduct of any of the Released Parties.  Original Borrower and Borrower hereby agree that Lender has no fiduciary or similar obligations to Original Borrower or Borrower and that their relationship is strictly that of creditor and debtor.  This release is accepted by Lender pursuant to this Agreement and shall not be construed as an admission of liability on the part of Lender.  
17.    Counterparts.  This Agreement may be executed in any number of counterparts with the same effect as if all parties hereto had signed the same document.  All such counterparts shall be construed together and shall constitute one instrument, but in making proof hereof it shall only be necessary to produce one such counterpart.
18.    Severability of Provisions.  If any covenant, condition or provision herein contained is held to be invalid by final judgment of any court of competent jurisdiction, the invalidity of such covenant, condition or provision shall not in any way affect any other covenant, condition or provision herein contained.
19.    Time of the Essence.  It is expressly agreed by the parties hereto that time is of the essence with respect to this Agreement.
20.    Representation by Counsel.  The parties acknowledge and confirm that each of their respective attorneys has participated jointly in the review and revision of this Agreement and that it has not been written solely by counsel for one party.  The parties hereto therefore stipulate and agree that the rule of construction to the effect that any ambiguities are to or may be resolved against the drafting party shall not be employed in the interpretation of this Agreement to favor either party against the other.
21.    Governing Law.  The Note, Mortgage, this Agreement, the Indemnity and the other Loan Documents and Assumption Documents and the rights and duties of the parties thereunder and hereunder shall be governed for all purposes by the law of the State of Ohio and the law of the United States applicable to transactions within said State.
22.    Successors and Assigns.  The terms and provisions hereof shall be binding upon and inure to the benefit of the parties hereto, their representatives, successors and assigns.
23.    Paragraph Headings.  The paragraph headings set forth in this Agreement are for the convenience of the parties only, and shall in no way enlarge or limit the scope or meaning of the various and several paragraphs in this Agreement.
24.    Final Agreement.  Original Borrower and Borrower and Lender hereby take notice of and agree to the following:
(a)    THE NOTE, THE MORTGAGE, THE ASSIGNMENT OF LEASES, THE INDEMNITY, THE OTHER LOAN DOCUMENTS AND THIS AGREEMENT REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES THERETO AND MAY NOT BE CONTRADICTED BY 

EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES THERETO.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

[SIGNATURE PAGE TO FOLLOW]

SIGNATURE PAGE OF LENDER TO
ASSUMPTION AND MODIFICATION AGREEMENT

IN WITNESS WHEREOF, this Agreement is executed under seal as of the date first above written.
NATIONWIDE LIFE INSURANCE
COMPANY, an Ohio corporation
By:  /s/ Peter A. Lynch
Name: Peter A. Lynch
Title: Senior Investment Professional

STATE OF OHIO        §
§ ss:
COUNTY OF FRANKLIN    §
This instrument was acknowledged before me on January ___, 2017, by _______________, _________________________ of Nationwide Life Insurance Company, an Ohio corporation, on behalf of said corporation.
                                                
Notary Public
My Commission Expires:
    
 
Printed/Typed Name of Notary

SIGNATURE PAGE OF ORIGINAL BORROWER TO
ASSUMPTION AND MODIFICATION AGREEMENT

IN WITNESS WHEREOF, this Agreement is executed under seal as of the date first above written.
CLP-SPF ROOKWOOD COMMONS, LLC,
a Delaware limited liability company

		
	By:
	Rookwood Holding Company LLC, a Delaware limited liability company, its sole member

    
		
	By:
	Casto Lifestyle Properties, L.P., an Ohio limited partnership, its managing member

        
		
	By:
	CLP Management LLC, an Ohio limited liability company, its general partner

            
By:    /s/ Anthony A. Martin
Name: Anthony A. Martin
Title:   Manager

STATE OF             :
: ss:
COUNTY OF             :

Sworn to and acknowledged before me, a Notary Public in and for said state, by _____________________________, the _________________ of CLP Management LLC, an Ohio limited liability company, the general partner of Casto Lifestyle Properties, L.P., an Ohio limited partnership, the managing member of Rookwood Holding Company LLC, a Delaware limited liability company, the sole member of CLP – SPF Rookwood Commons, LLC, a Delaware limited liability company, for and on behalf of said limited liability company.

IN WITNESS WHEREOF, I have hereunder subscribed my name and affixed my notarial seal on this _____ day of ________________, 2016.

                        
Notary Public

SIGNATURE PAGE OF BORROWER TO
ASSUMPTION AND MODIFICATION AGREEMENT 

IN WITNESS WHEREOF, this Agreement is executed under seal as of the date first above written.
HGREIT II EDMONDSON ROAD LLC,
a Delaware limited liability company

By:  /s/ Janice Walker
Name: Janice Walker
Title: Authorized Agent

STATE OF _______________    §
§ ss:
COUNTY OF _____________    §
Sworn to and acknowledged before me, a Notary Public in and for said state, by __________________, the ___________________ of HGREIT II EDMONDSON ROAD LLC, a Delaware limited liability company, for and on behalf of said limited liability company.

IN WITNESS WHEREOF, I have hereunder subscribed my name and affixed my notarial seal on this _____ day of ________, 2016.

                        
Notary Public

Prepared by and
upon recordation return to:

Maxwell W. Gerwin, Esq.
Dinsmore & Shohl
255 East Fifth Street, Suite 1900
Cincinnati, Ohio  45202

EXHIBIT A

Legal DescriptionExhibit

Exhibit 10.1

SEPARATION AGREEMENT
This SEPARATION AGREEMENT (the “Agreement”) is entered into by and between Keith Hladek (“the Executive”) and HC2 Holdings, Inc., a Delaware corporation (the “Company”).
    
WHEREAS, the Executive has served as the Chief Operating Officer of the Company;
    
WHEREAS, the Company and the Executive are parties to an employment agreement dated as of May 21, 2014 (the “Employment Agreement”) that provides for certain notice and payments in the event of a termination without Cause, and are parties to two Employee Nonqualified Option Award Agreements (“Award Agreements”) that provide that vested options may be exercised for 90 days after the last date of employment when there is a termination without Cause; 

WHEREAS, the parties determined by mutual agreement on January 5, 2017, that the employment of Executive shall be terminated effective December 31, 2016, and that Executive will waive the notice and severance payment provisions of the Employment Agreement in exchange for the Company’s agreement, subject to the approval of the Compensation Committee of the Board of Directors of the Company (“Compensation Committee”), to extend the period for Executive to exercise vested options after December 31, 2016;

WHEREAS, the parties agree to resolve any and all issues or disputes which may presently exist, or which may later arise out of the circumstances surrounding the Executive’s employment with or termination from the Company.

NOW THEREFORE, in consideration of the premises and the covenants herein, the sufficiency of which is hereby acknowledged, the Executive and the Company agree as follows:

		
	1.
	Termination of Employment

The Executive’s employment with the Company shall cease effective as of December 31, 2016 (the “Termination Date”), unless such employment terminates prior to such date as a result of death, in which case the Termination Date will be the date of death.  Effective as of the Termination Date, the Executive shall have resigned from all his positions with the Company and its subsidiaries and affiliates (each entity individually, and collectively, the “Company Group”). From and after the Termination Date, the Executive shall not hold any office or title with the Company Group.

		
	2.
	Severance Payments and Benefits 

(a)Severance Payments and Benefits.  Executive agrees to waive any right to receive notice of a termination without Cause, and any right to severance payments and payment for COBRA continuation coverage, otherwise owed by the Company pursuant to the Employment Agreement in the event of a termination without Cause (“Employment Agreement Severance Benefits”).  Pursuant to the provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company will provide the required COBRA notification after the Termination Date and the COBRA benefit entitlement period of eighteen months shall commence beginning in January of 2017.  Executive, Executive’s spouse, and dependents, as applicable, may elect COBRA coverage under the provisions of COBRA, and if COBRA coverage is elected, the Executive is responsible for payment of all COBRA premium costs.
    

1

(b)    Equity Awards.  The Executive has previously been granted awards of restricted stock (the “Restricted Stock”) and stock options (the “Stock Options”) with respect to the common stock of the Company, pursuant to the terms of the HC2 Holdings, Inc. Omnibus Equity Award Plan (“Plan”) and respective award agreements.  Exhibit B hereto sets forth a list of the Executive’s Restricted Stock and Stock Options outstanding as of the date hereof.  Effective as of the Release Effective Date and subject to the approval of the Compensation Committee, all vested Stock Options shall remain exercisable for a period of eighteen (18) months following the Termination Date (notwithstanding the 90-day exercise period set forth in the applicable Award Agreements).  Except to the extent modified hereby, the Restricted Stock and the Stock Options shall continue to be subject to the terms and conditions of the Plan and the respective award agreements for each such award.  

(c)    No Additional Benefits.  The Executive acknowledges and agrees that, except as provided in this Section 2, the Executive’s participation as an active employee under any benefit plan, program, policy or arrangement sponsored or maintained by the Company Group shall cease and be terminated as of the Termination Date.  Without limiting the generality of the foregoing, the Executive’s eligibility for and active participation in any of the tax-qualified plans maintained by the Company Group will end on the Termination Date and the Executive will earn no additional benefits under those plans after that date.  The Executive shall be treated as a terminated employee for purposes of all such benefit plans and programs effective as of the Termination Date.      

(d)    Acknowledgement.  The Executive understands and agrees that absent this Agreement, he would not otherwise be entitled to the benefits as set forth in Section 2(b). 

		
	3.
	Release of Claims

Notwithstanding anything to the contrary in this Agreement, the Company shall not be obligated to provide any benefit to the Executive under this Agreement until (i) the Executive shall have executed and delivered to the Company the release of claims attached hereto as Exhibit A, and (ii) such release of claims shall have become effective and irrevocable by the Executive under all applicable law and its terms within thirty (30) days following the Termination Date (the date the release becomes effective and irrevocable, the “Release Effective Date”).

		
	4.
	Arbitration; Governing law; Employment Agreement Post-Employment Obligations 

Any dispute arising under, enforcing, or challenging the validity of this Agreement is subject to the Arbitration (Section 18) and Choice of Law (Section 19) provisions of the Employment Agreement, which are incorporated herein by reference.  Executive understands and agrees that Section 7 (Noncompetition and Nonsolicitation), Section 8 (Nondisclosure of Confidential Information), Section 9 (Return of Property), Section 10 (Intellectual property Rules Acknowledgments), Section 11 (Nondisparagement), Section 12 (Notification of Employment or Service Provider Relationship), Section 13 (Remedies and Injunctive Relief) and Section 15 (Cooperation) of the Employment Agreement remain in full force and effect after the Termination Date, and are incorporated herein by reference.    

		
	5.
	Return of Property  

Concurrently with the Termination Date, the Executive shall deliver to a designated Company representative all records, documents, hardware, software, and all other Company property and all copies thereof in the Executive’s possession.  The Executive acknowledges and agrees that all such materials are the sole property of the Company.  Notwithstanding anything to the contrary contained herein or Section 9 of the Employment Agreement, the Executive will be entitled to remove, transfer and retain (i) papers and 

2

other materials of a personal nature, including without limitation photographs, personal correspondence, personal diaries, personal calendars and rolodexes, personal phone books and files relating exclusively to his personal affairs, (ii) information the Executive reasonably believes may be needed for the planning and preparation of the Executive’s personal tax returns and (iii) copies of compensation and benefit plans and agreements relating to the Executive’s employment with or termination from the Company.

		
	6.
	Miscellaneous

(a)    Entire Agreement.  This Agreement and the Release set forth the entire agreement between the parties with respect to the subject matter hereof.  This Agreement supersedes any and all prior understandings and agreements between the parties and neither party shall have any obligation toward the other except as set forth herein.  Without limiting the generality of the foregoing, the Executive agrees that the execution of this Agreement and the payments made hereunder shall constitute satisfaction in full of the Company’s obligations to the Executive under any and all plans, programs or arrangements between of Company under which the Executive may be entitled to severance or similar payment and/or benefits.  This Agreement may not be superseded, amended, or modified except in writing signed by both parties.
(b)    Severability and Reformation.  Each of the provisions of this Agreement constitutes independent and separable covenants.  Any portion of this Agreement that is determined by a court of competent jurisdiction to be overly broad in scope, duration, or area of applicability or in conflict with any applicable statute or rule will be deemed, if possible, to be modified or altered so that it is not overly broad or in conflict or, if not possible, to be omitted from this Agreement.  The invalidity of any portion of the Agreement will not affect the validity of the remaining sections of this Agreement.
(a)No Waiver.  The failure of a party to insist upon strict adherence to any term of this Agreement on any occasion shall not be considered a waiver thereof or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

(b)Successors and Assigns.  This Agreement and any rights herein granted are personal to the parties hereto and will not be assigned, sublicensed, encumbered, pledged or otherwise transferred by either party without the prior written consent of the other party, and any attempt at violative assignment, sublicense, encumbrance or any other transfer, whether voluntary or by operation of law, will be void and of no force and effect, except that this Agreement may be assigned to by the Company to any successor in interest to the business of the Company.  This Agreement shall be binding upon and shall inure to the benefit of the Company, its successors, affiliates and any person or other entity that succeeds to all or substantially all of the business, assets or property of the Company.  This Agreement and all of the Executive’s rights hereunder shall inure to the benefit of and be enforceable by the Executive’s heirs and estate.  

(e)    Code Section 409A.  The intent of the parties is that payments and benefits under this Agreement comply with Internal Revenue Code Section 409A and applicable guidance promulgated thereunder (collectively “Code Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith.  In no event whatsoever shall the Company be liable for any additional tax, interest or penalties that may be imposed on the Executive by Code Section 409A or any damages for failing to comply with Code Section 409A.  To the extent any taxable expense reimbursement or in-kind benefits under this Agreement is subject to Code Section 409A, the amount thereof eligible in any calendar year shall not affect the amount eligible for any other calendar year, in no event shall any expenses be reimbursed after the last day of the calendar year following the year in which the Executive  incurred such expenses, and in no event shall any right to reimbursement or receipt of in-kind benefits be subject to liquidation or exchange for another benefit.  

3

9.    Confidential Agreement.  
The Executive agrees that, as a condition of this Agreement, the Executive will not disclose or in any other manner communicate the terms and provisions of this Agreement to or with any other person except to the Executive’s legal counsel, financial or tax advisor(s), or the Executive’s significant other (each, an “Authorized Person”).  The Executive also acknowledges and agrees that each Authorized Person must be informed by the Executive of, and agree to be bound by, the confidentiality provisions of this Agreement.  In the event that the Executive or an Authorized Person is required by law, court order, or subpoena to make any disclosure concerning the Company Group or this Agreement, the Executive will promptly notify the Company of the intended disclosure so as to afford the Company sufficient opportunity to protect and/or enforce the confidentiality provisions of this Agreement.
10.    Notices 
All notices and other communications hereunder shall be in writing.  Any notice or other communication hereunder shall be deemed duly given if it is sent by registered or certified mail, return receipt requested, postage prepaid, and addressed to the intended recipient at the addresses maintained in the Company’s records.  Notices sent to the Company should be directed to the attention of the Company’s Chief Legal Officer.

11.    Counterpart Agreements
This Agreement may be executed in multiple counterparts, whether or not all signatories appear on these counterparts, and each counterpart shall be deemed an original for all purposes.

12.    Captions and Headings
The captions and headings are for convenience of reference only and shall not be used to construe the terms or meaning of any provisions of this Agreement.

(signatures on following page)

4

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

HC2 HOLDINGS, INC.
           /s/ Philip Falcone                
By:      Philip Falcone
Title:    CEO
Dated: January 5, 2017
Effective as of:  December 31, 2016

KEITH HLADEK
/s/ Keith M. Hladek                
Dated: January 5, 2017
Effective as of:  December 31, 2016

5

EXHIBIT A
RELEASE OF CLAIMS

1.    Terms of Release. This general release is entered into by and between Keith Hladek (“the Executive”) and HC2 Holdings, Inc. (the “Company”), as of the date hereof (the “General Release”), pursuant to the terms of the Separation Agreement dated as of the date hereof, and to which this General Release is attached (the “Separation Agreement”), which provides the Executive with certain significant benefits, subject to the Executive’s executing this General Release.  Capitalized terms not defined in this General Release have the meanings defined in the Separation Agreement.
    
2.  General.  In exchange for and in consideration of the benefits described in Section 2(b) of the Separation Agreement, the Executive, on behalf of himself, his agents, representatives, administrators, receivers, trustees, estates, spouse, heirs, devisees, assignees, transferees, legal representatives and attorneys, past or present (as the case may be), hereby irrevocably and unconditionally releases, discharges, and acquits all of the Released Parties (as defined below) from any and all claims, promises, demands, liabilities, contracts, debts, losses, damages, attorneys’ fees and causes of action of every kind and nature, known and unknown, which the Executive may have against them up to the Effective Date of this General Release (as defined below), including but not limited to causes of action, claims or rights arising out of, or which might be considered to arise out of or to be connected in any way with: (i) the Executive’s employment with the Company or the termination thereof; (ii) any treatment of the Executive by any of the Released Parties, which shall include, without limitation, any treatment or decisions with respect to hiring, placement, promotion, work hours, discipline, transfer, termination, compensation, performance review or training; (iii) any damages or injury that the Executive may have suffered, including without limitation, emotional or physical injury, or compensatory damages; (iv) employment discrimination, which shall include, without limitation, any individual or class claims of discrimination on the basis of age, disability, sex, race, religion, national origin, citizenship status, marital status, sexual preference, or any other basis whatsoever; or (v) all such other claims that the Executive could assert against any, some, or all of the Released Parties in any forum, accrued or unaccrued, liquidated or contingent, direct or indirect.

3.  Broad Construction.  This General Release shall be construed as broadly as possible and shall also extend to release the Released Parties, without limitation, from any and all claims that the Executive has alleged or could have alleged, whether known or unknown, accrued or unaccrued, based on acts, omissions, transactions or occurrences which occurred up to the Effective Date against any Released Party for violation(s) of any of the following, in each case, as amended: the National Labor Relations Act; Title VII of the Civil Rights Act of 1964; the Age Discrimination in Employment Act; the Older Workers Benefit Protection Act of 1990; the Civil Rights Act of 1991; Sections 1981-1988 of Title 42 of the United States Code; the Equal Pay Act; the Executive Retirement Income Security Act of 1974; the Immigration Reform Control Act; the Americans with Disabilities Act of 1990; the Occupational Safety and Health Act; the Sarbanes-Oxley Act of 2002; the New York State Human Rights Law; the New York City Human Rights Law; the New York Labor Law; the New York City Sick Time Law; the anti-retaliation provisions of the New York Worker’s Compensation Law; any other applicable New York State or New York City law, ordinance or regulation prohibiting discrimination, harassment and/or retaliation in employment; any other federal, state, or local law or ordinance; the Employment Agreement, including without limitation the notice and Employment Agreement Severance Benefits provisions of the Employment Agreement; any other contract; public policy, whistleblower, tort, or common law; and any demand for costs or litigation expenses, including but not limited to attorneys’ fees (collectively, with the release of claims set forth in Section 2, the “Released Claims”).  The Equity Award provisions set forth in Section 2(b) and other rights of the Executive expressly provided for under the Separation Agreement, as well as any rights that the Executive may have to be indemnified by the 

1

Company pursuant to the Company’s Certificate of Incorporation, By-laws or directors and officers liability insurance policies, are excluded from this General Release.  

4.  Released Parties.  The term “Released Parties” or “Released Party” as used herein shall mean and include: (i) the Company; (ii) the Company’s former, current and future parents, subsidiaries, affiliates, shareholders and lenders; (iii) any predecessor or successor of any person listed in clauses (i), (ii), and (iii); each former, current, and future officer, director, agent, representative, employee, servant, owner, shareholder, partner, joint venturer, attorney, employee benefit plan, employee benefit plan administrator, insurer, administrator, and fiduciary of any of the persons listed in clauses (i) through (iii), and any other person acting by, through, under, or in concert with any of the persons or entities listed herein.

5.  OWBPA and ADEA Release.  Pursuant to the Older Workers Benefit Protection Act of 1990 (“OWBPA”), the Executive understands and acknowledges that by executing this General Release and releasing all claims against any of the Released Parties, he has waived any and all rights or claims that he has or could have against any Released Party under the Age Discrimination in Employment Act (“ADEA”), which includes any claim that any Released Party discriminated against the Executive on account of his age.  The Executive also acknowledges the following:

(a) The Company, by this General Release, has advised the Executive to consult with an attorney prior to executing this General Release;

(b) The Executive has had the opportunity to consult with his own attorney concerning this General Release;

(c) This General Release does not include claims arising from any act, omission, transaction or occurrence which happens on or after the Effective Date of this General Release, provided, however, that any claims arising after the Effective Date of this General Release from the then-present effect of acts or conduct occurring before the Effective Date of this General Release shall be deemed released under this General Release; and 

(d) The Company has provided Employee the opportunity to review and consider this General Release for 21 days (the “Review Period”).  At the Executive’s option and sole discretion, the Executive may waive the Review Period and execute this General Release before the expiration of 21 days.  In electing to waive the Review Period, the Executive acknowledges and admits that he was given a reasonable period of time within which to consider this General Release and his waiver is made freely and voluntarily, without duress or any coercion by any other person.

6.  ADEA Revocation Period. The Executive may revoke this General Release within a period of seven days after execution of this General Release.  The Executive agrees that any such revocation is not effective unless it is made in writing and delivered to the attention of the Secretary of the Company by the end of the seventh calendar day. Under any such valid revocation, the Executive shall not be entitled to any rights or benefits under the Separation Agreement. This General Release becomes effective on the eighth calendar day after it is executed by both parties (the “Effective Date”).

7.  Representations by the Executive.  The Executive confirms that no claim, charge, or complaint against any of the Released Parties, brought by him, exists before any federal, state, or local court or administrative agency.  The Executive represents and warrants that he has no knowledge of any improper or illegal actions or omissions by the Company, nor does he know of any basis on which any third party or governmental entity could assert such a claim. This expressly includes any and all conduct that potentially could give rise to claims under the Sarbanes-Oxley Act of 2002 (Public Law 107-204).

2

8.  No Right to File Action or Proceeding.  The Executive agrees that he will not, unless otherwise prohibited by law, at any time hereafter, voluntarily participate in as a party, or permit to be filed by any other person on his behalf or as a member of any alleged class of persons, any action or proceeding of any kind, against the Company or its past, present, or future parents, subsidiaries, divisions, affiliates, successors and assigns and any of their past, present or future directors, officers, agents, trustees, administrators, attorneys, employees or assigns (whether acting as agents for the Company or in their individual capacities), with respect to any Released Claims; in addition, the Executive agrees to have himself removed from any such action or proceeding with respect to which he has involuntarily become a party.  The Executive further agrees that he will not seek or accept any award or settlement from any source or proceeding with respect to any claim or right covered by this General Release and that this General Release shall act as a bar to recovery in any such proceedings.  This General Release shall not affect the Executive’s rights under the OWBPA to have a judicial determination of the validity of this General Release and does not purport to limit any right Employee may have to file a charge under the ADEA or other civil rights statute or to participate in an investigation or proceeding conducted by the Equal Employment Opportunity Commission or other investigative agency.  This General Release does, however, waive and release any right to recover damages under the ADEA or other civil rights statute.

9.  No Admission of Liability.  The Executive agrees that neither this General Release nor the furnishing of the consideration for the general release set forth in this General Release shall be deemed or construed at any time for any purpose as an admission by the Released Parties of any liability or unlawful conduct of any kind.  The Executive further acknowledges and agrees that the consideration provided for herein is adequate consideration for the Executive’s obligations under this General Release.

10.  Governing Law.  This General Release shall be governed by and construed in accordance with the laws of the State of New York without regard to its conflict of laws provisions.  If any provision of the General Release other than the general release set forth above, is declared legally or factually invalid or unenforceable by any court of competent jurisdiction and if such provision cannot be modified to be enforceable to any extent or in any application, then such provision immediately shall become null and void, leaving the remainder of this General Release in full force and affect.

11.  Prior Agreements.  This General Release sets forth the entire agreement between
the Executive and the Released Parties and it supersedes any and all prior agreements or understandings, whether written or oral, between the parties, except as otherwise specified in this General Release.  Notwithstanding the foregoing, this General Release shall not affect the obligations of the parties under the Separation Agreement.  The Executive acknowledges that he has not relied on any representations, promises, or agreements of any kind made to him in connection with his decision to sign this General Release, except for those set forth in this General Release.

12.  Amendment.  This General Release may not be amended except by a written agreement signed by both parties, which specifically refers to this General Release.

13.  Counterparts; Execution Signatures.  This General Release may be executed in any number of counterparts by the parties hereto and in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement.

THE EXECUTIVE ACKNOWLEDGES THAT HE CAREFULLY HAS READ THIS GENERAL RELEASE; THAT HE HAS HAD THE OPPORTUNITY TO THOROUGHLY DISCUSS ITS TERMS WITH COUNSEL OF HIS CHOOSING; THAT HE FULLY UNDERSTANDS ITS TERMS AND ITS FINAL AND 

3

BINDING EFFECT; THAT THE ONLY PROMISES MADE TO SIGN THIS GENERAL RELEASE ARE THOSE STATED AND CONTAINED IN THIS GENERAL RELEASE; AND THAT HE IS SIGNING THIS GENERAL RELEASE KNOWINGLY AND VOLUNTARILY.  THE EXECUTIVE STATES THAT HE IS IN GOOD HEALTH AND IS FULLY COMPETENT TO MANAGE HIS BUSINESS AFFAIRS AND UNDERSTANDS THAT HE MAY BE WAIVING SIGNIFICANT LEGAL RIGHTS BY SIGNING THIS GENERAL RELEASE.

(SIGNATURE PAGE TO FOLLOW)

4

IN WITNESS WHEREOF, the parties have executed this General Release as of the 5th day of January, 2017.

HC2 HOLDINGS, INC.

/s/ Philip Falcone                
By:      Philip Falcone
Title:    CEO

KEITH HLADEK

/s/ Keith M. Hladek                        

5

Exhibit B
List of outstanding 
Restricted Stock and Stock Options

Restricted Stock:
249,091 - Shares Beneficially owned outright 

Stock Options:
75,728 - Options (all vested and exercisable)

	
					
	Keith Hladek
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	Restricted Stock
	 
	 
	 
	 

	 
	 
	 
	 
	 

	9/16/14 Award
	125,000
	 
	 
	 

	9/16/14 Vesting
	 
	41,667
	 
	 

	5/21/15 Vesting
	 
	41,667
	 
	 

	5/21/16 Vest
	 
	41,666
	 
	 

	Total vested as of 11/29/16
	 
	 
	125,000
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	3/12/15 Award
	124,091
	 
	 
	 

	3/12/15 Vesting
	 
	72,217
	 
	 

	3/12/16 Vesting
	 
	51,874
	 
	 

	Total vested as of 11/29/16
	 
	 
	124,091
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	Total Awarded
	249,091
	 
	 
	 

	 
	 
	 
	 
	 

	Total Vested as of 11/29/16
	 
	 
	249,091
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	Options
	 
	 
	 
	 

	 
	 
	 
	 
	Strike Price

	9/16/14 Award
	25,000
	 
	 
	$3.99 

	9/16/14 Vesting
	 
	8,333
	 
	 

	5/21/15 Vesting
	 
	8,333
	 
	 

	5/21/16 Vest
	 
	8,334
	 
	 

	Total vested as of 11/29/16
	 
	 
	25,000
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	3/12/15 Award
	50,728
	 
	 
	$9.00 

	3/12/15 Vesting
	 
	25,364
	 
	 

	3/12/16 Vesting
	 
	25,364
	 
	 

	Total vested as of 11/29/16
	 
	 
	50,728
	 

	 
	 
	 
	 
	 

	 
	 
	 
	 
	 

	Total Awarded
	75,728
	 
	 
	 

	 
	 
	 
	 
	 

	Total Vested as of 11/29/16
	 
	 
	75,728
	 

1

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00265-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00265-of-00352.parquet"}]]