Subscription Agreement
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				  May 31, 2007
				

			 

 

	 
		To the Board of Directors of 
	 

	 
		Highlands Acquisition Corp.:
	 

	 
		Gentlemen:
	 

	 
		The undersigned hereby subscribes for and
		agrees to purchase ________ Warrants (“Sponsors’ Warrants”) at
		$1.00 per Sponsors’ Warrant, each to purchase one share of common stock,
		par value $0.0001 per share (“Common Stock”), of Highlands
		Acquisition Corp., a Delaware corporation (the “Corporation”), at
		$7.50 per share for an aggregate purchase price of $______ (“Purchase
		Price”). The purchase and issuance of the Sponsors’ Warrants shall
		occur simultaneously with the consummation of the Corporation’s initial
		public offering of securities (“IPO”) which is being underwritten by
		Citigroup Global Markets Inc. The Sponsors’ Warrants will be sold to the
		undersigned on a private placement basis and not as part of the IPO. 
	 

	 
		At least 24 hours prior to the effective
		date of the registration statement filed in connection with the IPO
		(“Registration Statement”), the undersigned shall deliver the
		Purchase Price to Graubard Miller (“GM”) to hold until the
		Corporation consummates the IPO. Simultaneously with the consummation of the
		IPO, GM shall deposit the Purchase Price into the trust account (“Trust
		Account”) established by the Corporation for the benefit of the
		Corporation’s public stockholders as described in the Corporation’s
		Registration Statement, pursuant to the terms of an Investment Management Trust
		Agreement to be entered into between the Corporation and Continental Stock
		Transfer & Trust Company. In the event that the IPO is not consummated
		within 14 days of the date the Purchase Price is delivered to GM, GM shall
		return the Purchase Price to the undersigned, including any interest thereon
		and without deduction or setoff.
	 

	 
		The undersigned represents and warrants that
		he has been advised that the Sponsors’ Warrants (including the underlying
		shares of Common Stock) have not been registered under the Securities Act of
		1933, as amended (the “Securities Act”); that he is acquiring the
		Sponsors’ Warrants (including the underlying shares of Common Stock) for
		his account for investment purposes only; that he has no present intention of
		selling or otherwise disposing of the Sponsors’ Warrants (including the
		underlying shares of Common Stock) in violation of the securities laws of the
		United States; that he is an “accredited investor” as defined by Rule
		501 of Regulation D promulgated under the Securities Act; and that he is
		familiar with the proposed business, management, financial condition and
		affairs of the Corporation.
	 

	 
		The undersigned agrees to not (i) offer,
		sell, contract to sell, hypothecate, grant any option to purchase or otherwise
		dispose of (or enter into any transaction which is designed to, or might
		reasonably be expected to, result in the disposition (whether by actual
		disposition or effective economic disposition due to cash settlement or
		otherwise) by the undersigned or any affiliate of the undersigned or any person
		in privity with the undersigned or any affiliate thereof), directly or
		indirectly, including the filing (or participation in the filing) of a
		registration statement (other than as provided for in that certain Registration
		Rights Agreement between the Company and the undersigned to be executed in
		connection with the IPO) with the Securities and Exchange Commission (the
		“Commission”) in respect of, any Sponsors’ Warrants (including
		the underlying shares of Common Stock), (ii) establish or increase a put
		equivalent position or liquidate or decrease a call equivalent position within
		the meaning of Section 16 of the Securities Exchange Act of 1934, as
		amended, and the rules and regulations of the Commission promulgated thereunder
		with respect to, any Sponsors’ Warrants (including the underlying shares
		of Common Stock), (iii) enter into any swap or other arrangement that transfers
		to another, in whole or in 
	 

	 
		 
	 

	 
		 
	 



	 
	 

	 

	 
		part, any of the economic consequences of
		ownership of the Sponsors’ Warrants (or underlying shares of Common Stock)
		or any securities convertible into or exercisable or exchangeable for Common
		Stock or such Warrants or other rights to purchase Common Stock or any such
		securities, whether any such transaction is to be settled by delivery of Common
		Stock or such other securities, in cash or otherwise or (iv) publicly announce
		an intention to effect any such transaction, until the Corporation consummates
		a merger, capital stock exchange, asset acquisition, stock purchase,
		reorganization or other similar business combination with an operating business
		(“Business Combination”) meeting the requirements set forth in the
		Registration Statement; provided, however, that the foregoing shall not apply
		to a disposition (i) to the undersigned’s members upon liquidation of the
		undersigned, if the undersigned is an entity, (ii) for estate planning purposes
		pursuant to a bona fide gift to a member of the undersigned’s immediate
		family or to a trust, the beneficiary of which is the undersigned or a member
		of the undersigned’s immediate family, (iii) by virtue of the laws of
		descent and distribution upon the death of the undersigned, (iv) pursuant to a
		qualified domestic relations order, (v) to the Corporation’s officers,
		directors and employees and persons affiliated with its founders; provided,
		further, however, that such transfers may be implemented only if the respective
		transferee agrees in writing to be bound by the terms and conditions of this
		Agreement and any other agreement affecting the transferability of the
		Sponsors’ Warrants (and the underlying shares of Common Stock) to which
		the undersigned is then bound. The undersigned acknowledges that the
		certificates for such Sponsors’ Warrants shall contain a legend indicating
		such restriction on transferability. 
	 

	 
		The Corporation hereby acknowledges and
		agrees that, in the event the Corporation calls the Warrants for redemption
		pursuant to that certain Warrant Agreement to be entered into between the
		Corporation and Continental Stock Transfer & Trust Company in connection
		with the Corporation’s IPO, the Sponsors’ Warrants shall not be
		redeemable by the Corporation so long as such Sponsors’ Warrants are held
		by the undersigned or permitted transferees of the undersigned.
	 

	 
		The terms of this agreement and the
		restriction on transfers with respect to the Sponsors’ Warrants may not be
		amended without the prior written consent of the undersigned and Citigroup
		Global Markets Inc.
	 

	 
		 
	 

	 
			
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				  Very truly yours,
				

			 
	
				
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				

			 
	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 

 

	 
		 
	 

	 
			
				
				  Agreed to:
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  
 Highlands Acquisition
				  Corp.
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  
 By: 
				

			 	
				
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				  Name: 
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				  Title: 
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 

 

	 
		Graubard Miller
	 

	 
		 
	 

	 
			
				
				  By: 
				

			 	
				
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				  Name: 
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				   
				

			 	
				
				  Title: 
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 
	
				
				  
 Citigroup Global Markets
				  Inc.
				

			 	
				
				   
				

			 	
				
				   
				

			 	
				
				   
				

			 

 

	 	
			 
				
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