AMENDMENT NUMBER 1
TO
COMMON STOCK SUBSCRIPTION WARRANT, SERIES A No. 1
To Subscribe for and Purchase Shares
of Common Stock of
Highlands Insurance Group, Inc.
THIS AMENDMENT NUMBER 1, dated as of April 30, 1997 (this
"Amendment"), is entered into by and between Highlands Insurance Group, Inc., a
Delaware corporation (the "Company"), and the undersigned Holder of that certain
Common Stock Subscription Warrant, Series A, No. 1, dated January 23, 1996 (the
"Warrant"), to purchase from the Company up to TWO MILLION THREE HUNDRED
TWENTY-SEVEN THOUSAND FIVE HUNDRED NINE (2,327,509) fully paid and
non-assessable shares of the Common Stock of the Company pursuant to the terms
of the Warrant. Unless otherwise defined herein, capitalized terms shall have
the meanings ascribed thereto in the Warrant.
RECITALS
A. The Company has entered into that certain Amended and
Restated Agreement and Plan of Merger, dated as of February 13, 1997 (as amended
by Amendment Number 1 thereto, the "Merger Agreement"), by and among the
Company, Highlands Acquisition Corp. and Vik Brothers Insurance, Inc.
B. Section 6.9(a) of the Merger Agreement requires certain
amendments to be made to the terms of the Warrant.
C. Pursuant to Section 14(a) of the Warrant, the Company and
the Holder wish to amend the terms of the Warrant as set forth below in order to
comply with Section 6.9(a) of the Merger Agreement.
Now therefore, in consideration of the foregoing and good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each of the Company and the Holder agrees as follows:
AGREEMENT
1. Notwithstanding any provision of the Warrant to the
contrary, no adjustment shall be made to the number of shares of Common Stock
issuable upon exercise of the Warrant as a result of any Additional Adverse
Development.
2. Notwithstanding any provision of the Warrant to the
contrary, the issuance of Common Stock pursuant to, and in transactions entered
into in connection with, the Merger Agreement and the transactions contemplated
thereby shall not (i) result in an adjustment to the number of shares of Common
Stock issuable upon exercise of the Warrant and (ii) result in an adjustment of
the exercise or conversion price of the Warrant.
3. This Amendment may be executed in two or more counterparts
and each counterpart shall be deemed to be an original and which counterparts
together shall constitute one and the same agreement of the parties hereto.
4. All other provisions of the Warrant shall not be affected
by this Amendment and shall remain in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Amendment as of the date first written above.
HIGHLANDS INSURANCE GROUP, INC.
By: _______________________________________
Name:______________________________________
Title:_____________________________________
HOLDER: INSURANCE PARTNERS, L.P.
By: Insurance GenPar MGP, L.P.,
its general partner
By: Insurance GenPar MGP, Inc.,
its general partner
By: _____________________________
Name:____________________________
Title:___________________________
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