exv4w2






Exhibit
4.2



THE WARRANT EVIDENCED OR CONSTITUTED HEREBY, AND ALL SHARES OF COMMON STOCK ISSUABLE
HEREUNDER, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), AND MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED WITHOUT
REGISTRATION UNDER THE SECURITIES ACT UNLESS EITHER (I) THE ISSUER HAS RECEIVED AN OPINION OF
COUNSEL, IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO THE ISSUER, TO THE EFFECT THAT
REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH DISPOSITION OR (II) THE SALE OF SUCH
SECURITIES IS MADE PURSUANT TO RULE 144 PROMULGATED PURSUANT TO THE SECURITIES ACT.




WARRANT TO PURCHASE COMMON STOCK




OF



IMPERIAL HOLDINGS, INC.



	 	 	 

	No. W-         

	 	                     , 2011






               THIS CERTIFIES THAT, the undersigned, or his permitted registered assigns, is entitled,
subject to the terms and conditions of this Warrant (as defined below), at any time or from time to
time after the issuance date of this Warrant (the “Effective Date”), and before 5:00 p.m. Eastern
Time on the seventh anniversary of the Effective Date (the “Expiration Date”), to purchase from
IMPERIAL HOLDINGS, INC., a Florida corporation (the “Company”), the vested portion of the Shares
(as defined below) at a per-share price equal to the Purchase Price (as defined below). Both the
number of shares of Common Stock (as defined below) purchasable upon exercise of this Warrant and
the Purchase Price are subject to adjustment and change as provided herein.


1. CERTAIN DEFINITIONS. As used in this Warrant the following terms shall have the following
respective meanings:




 









 






     a. “Common Stock” shall mean the common stock of the Company.




     b. “Company’s IPO” means the Company’s initial public offering of its Common Stock
pursuant to an effective registration statement filed in compliance with the Securities Act
of 1933, as amended.




     c. “Holder” shall mean any holder in whose name this Warrant is registered upon the
books and records maintained by the Company.




     d. “IPO Price Per Share” shall mean the actual price per share which shares of Common
Stock of the Company are sold in the Company’s IPO.




     e. “Market Price” of a share of Common Stock shall mean the closing price per share of
Common Stock on the principal market on which shares of the Common Stock are traded for the
five (5) trading days immediately preceding the date of the determination of the Market
Price. If shares of Common Stock are not traded on any public market (e.g. NYSE, AMEX,
NASDAQ, OTCBB or Pink Sheets), the Market Price of the Common Stock shall be determined, in
good faith, by the Board of Directors of the Company.




     f. “Purchase Price” shall mean a per share price equal to the ________________.




     g. “Shares” shall mean ________________ shares of the Company’s Common Stock.




     h. “Warrant” as used herein shall include this warrant and any warrant delivered in
substitution or exchange therefor as provided herein.




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	2.	 	EXERCISE OF WARRANT.






     a. Payment. Subject to compliance with the terms and conditions of this
Warrant, including, without limitation, the vesting schedule set forth in Section 2(d) and
applicable securities laws, this Warrant may be exercised, in whole or in part at any time
or from time to time, on or before the Expiration Date by the delivery (including, without
limitation, delivery by facsimile) of the form of notice of exercise attached hereto as
Exhibit A (the “Notice of Exercise”), duly executed by the Holder, at the principal office
of the Company, and as soon as practicable after such date, surrendering:




     i. this Warrant at the principal office of the Company, and




     ii. payment in cash (by check) or by wire transfer of an amount equal to the
product obtained by multiplying the number of shares of Common Stock being purchased
upon such exercise by the then effective Purchase Price (the “Exercise Amount”).




In addition, the Warrant may be exercised pursuant to a cashless exercise by providing
irrevocable instructions to the Company, through delivery of the Notice of Exercise and this
Warrant to the principal office of the Company with an appropriate reference to this Section
2(a) to issue the number of shares of Common Stock equal to the product of (a) the number of
shares as to which the Warrant is being exercised, multiplied by (b) a fraction, the
numerator of which is the Market Price of a share of the Common Stock on the last business
day preceding the Exercise Date less the Exercise Price therefor and the denominator of
which is such Market Price. For purposes hereof, “Exercise Date” shall



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mean the date on which all deliveries required to be made to the Company upon exercise of
the Warrant shall have been made.




     b. Stock Certificates; Fractional Shares. As soon as practicable on or after
the date of any exercise of this Warrant, the Company shall issue and deliver to the person
or persons entitled to receive the same a certificate or certificates for the number of
whole shares of Common Stock issuable upon such exercise, together with cash in lieu of any
fraction of a share equal to such fraction of the current fair market value of one whole
share of Common Stock as of such date of exercise as determined by the Company. No
fractional shares or scrip representing fractional shares shall be issued upon an exercise
of this Warrant.




     c. Partial Exercise; Effective Date of Exercise. Upon every partial exercise
of this Warrant, the Company shall cancel this Warrant upon surrender hereof and shall
execute and deliver a new Warrant of like tenor and date for the balance of the shares of
Common Stock purchasable hereunder. This Warrant shall be deemed to have been exercised
immediately prior to the close of business on the date of delivery of a Notice of Exercise
(provided that surrender of this Warrant and payment of the Exercise Amount occur as
provided above). The person entitled to receive the shares of Common Stock issuable upon
exercise of this Warrant shall be treated for all purposes as the holder of record of such shares as of the close of business on the date the Holder is deemed to have exercised this
Warrant.




     d. Vesting and Exercisability. This Warrant shall only be exercisable, in
whole or in part, according to the following vesting schedule.




A
portion of the warrant equal to 25% of the shares shall vest on the
day after each anniversary of the initial closing of the
Company’s IPO.


3. VALID ISSUANCE; TAXES.




     
          All shares of Common Stock issued upon the exercise of this Warrant shall be validly issued,
fully paid and non-assessable, and the Company shall pay all taxes and other governmental charges
that may be imposed in respect of the issue or delivery thereof. The



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Company shall not be required to pay any tax or other charge imposed in connection with any
transfer involved in the issuance of any certificate for shares of Common Stock in any name other
than that of the Holder of this Warrant, and in such case the Company shall not be required to
issue or deliver any stock certificate or security until such tax or other charge has been paid, or
it has been established to the Company’s reasonable satisfaction that no tax or other charge is
due.



4. ADJUSTMENT OF PURCHASE PRICE AND NUMBER OF SHARES.




               The number of shares of Common Stock issuable upon exercise of this Warrant (or any shares of
stock or other securities or property receivable or issuable upon exercise of this Warrant) and the
Purchase Price are subject to adjustment upon occurrence of the following events but no single
event can cause more than one adjustment to be made:




          a. Adjustment for Stock Splits, Stock Subdivisions or Combinations of Shares.
The Purchase Price of this Warrant shall be proportionally decreased and the number of
 shares of Common Stock issuable upon exercise of this Warrant (or any shares of stock or
other securities at the time issuable upon exercise of this Warrant) shall be
proportionally increased to reflect any stock split or subdivision of shares of Common
Stock. The Purchase Price of this Warrant shall be proportionally increased and the number
of shares of Common Stock issuable upon exercise of this Warrant (or any shares of stock or
other securities at the time issuable upon exercise of this Warrant) shall be
proportionally decreased to reflect any combination or reverse split of shares of Common
Stock.




          b. Adjustment for Dividends or Distributions of Stock or Other Securities or
Property. In case the Company shall make or issue, or shall fix a record date for the
determination of eligible holders entitled to receive, a dividend or other distribution
with respect to Common Stock (or any shares of stock or other securities at the time
issuable upon exercise of this Warrant) payable in (a) securities of the Company or (b)
assets (excluding cash dividends), then, in each such case, the Holder on exercise of this
Warrant at any time after the consummation, effective date or record date of such dividend
or other distribution, shall receive, in addition to the shares of Common Stock (or such
other stock or securities) issuable on such exercise prior to such date, and without the
payment of additional consideration therefor, the securities or such other assets of the
Company to which the Holder would have been entitled upon such date if the Holder had
exercised this Warrant on the date thereof and had thereafter, during the period from the
Effective Date to and including the date of such exercise, retained such shares and all
such additional securities or other assets distributed with respect to such shares as
aforesaid during such period giving effect to all adjustments called for by this Section 4.




          c. Reclassification. If the Company, by reclassification of securities or
otherwise, shall change any of the securities as to which purchase rights under this
Warrant exist into the same or a different number of securities of any other class or
classes, this Warrant shall thereafter represent the right to acquire such number and kind
of securities as would have been issuable as the result of such change with respect to the



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securities that were subject to the purchase rights under this Warrant immediately
prior to such reclassification or other change, and the Purchase Price therefor shall be
appropriately adjusted, all subject to further adjustment as provided in this Section 4.




          d. Adjustment for Capital Reorganization, Merger or Consolidation. In case of
any capital reorganization of the capital stock of the Company (other than a combination,
reclassification, exchange or subdivision of shares otherwise provided for herein), or any
merger or consolidation of the Company with or into another corporation, or the sale of all
or substantially all the assets of the Company (any such transaction a “Sale of the
Company”) then, and in each such case, as a part of such reorganization, merger,
consolidation, sale or transfer, lawful provision shall be made so that the Holder shall
thereafter be entitled to receive upon exercise of this Warrant, during the period
specified herein and upon payment of the Exercise Amount then in effect, the number of
 shares of stock or other securities or property of the successor corporation resulting from
such reorganization, merger, consolidation, sale or transfer that a holder of the shares
deliverable upon exercise of this Warrant would have been entitled to receive in such
reorganization, consolidation, merger, sale or transfer if this Warrant had been exercised
immediately before such reorganization, merger, consolidation, sale or transfer, all
subject to further adjustment as provided in this Section 4. The foregoing provisions of
this Section 4(d) shall similarly apply to successive reorganizations, consolidations,
mergers, sales and transfers and to the stock or securities of any other corporation that
are at the time receivable upon the exercise of this Warrant. If the per-share
consideration payable to the Holder hereof for shares in connection with any such
transaction is in a form other than cash or marketable securities, then the value of such
consideration shall be determined in good faith by the Company’s Board of Directors. In all
events, appropriate adjustment (as determined in good faith by the Company’s Board of
Directors) shall be made in the application of the provisions of this Warrant with respect
to the rights and interests of the Holder after the transaction, to the end that the
provisions of this Warrant shall be applicable after that event, as near as reasonably may
be, in relation to any shares or other property deliverable after that event upon exercise
of this Warrant.


5. CERTIFICATE AS TO ADJUSTMENTS.




               In each case of any adjustment in the Purchase Price, or number or type of shares issuable
upon exercise of this Warrant, the Chief Financial Officer of the Company shall compute such
adjustment in accordance with the terms of this Warrant and prepare a certificate setting forth
such adjustment and showing in detail the facts upon which such adjustment is based, including a
statement of the adjusted Purchase Price. The Company shall promptly send (by facsimile and by
either first class mail, postage prepaid or overnight delivery) a copy of each such certificate to
the Holder.


6. LOSS OR MUTILATION.




               Upon receipt of evidence reasonably satisfactory to the Company of the ownership of and the
loss, theft, destruction or mutilation of this Warrant, and of indemnity reasonably satisfactory to
the Company, and (in the case of mutilation) upon surrender and



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cancellation of this Warrant, the Company will execute and deliver in lieu thereof a new
Warrant of like tenor as the lost, stolen, destroyed or mutilated Warrant.



7. RESERVATION OF COMMON STOCK.




               The Company hereby covenants that at all times there shall be reserved for issuance and
delivery upon exercise of this Warrant such number of shares of Common Stock or other shares of
capital stock of the Company as are from time to time issuable upon exercise of this Warrant and,
from time to time, will take all steps necessary to amend its Articles of Incorporation to provide
sufficient reserves of shares of Common Stock issuable upon exercise of this Warrant. All such
shares shall be duly authorized, and when issued upon such exercise, shall be validly issued, fully
paid and non-assessable, free and clear of all liens, security interests, charges and other
encumbrances or restrictions on sale and free and clear of all preemptive rights, except
encumbrances or restrictions arising under federal or state securities laws. Issuance of this
Warrant shall constitute full authority to the Company’s officers who are charged with the duty of
executing stock certificates to execute and issue the necessary certificates for shares of Common
Stock upon the exercise of this Warrant.


8. TRANSFER AND EXCHANGE.




               Subject to the terms and conditions of this Warrant and compliance with all applicable
securities laws, this Warrant and all rights hereunder may be transferred to any Holder’s parent,
subsidiary or affiliate, or, if the Holder is a partnership, to any partner of such Holder, in
whole or in part, on the books of the Company maintained for such purpose at the principal office
of the Company, by the Holder hereof in person, or by duly authorized attorney, upon surrender of
this Warrant properly endorsed and upon payment of any necessary transfer tax or other governmental
charge imposed upon such transfer. Upon any permitted partial transfer, the Company will issue and
deliver to the Holder a new Warrant or Warrants with respect to the shares of Common Stock not so
transferred. Each taker and holder of this Warrant, by taking or holding the same, consents and
agrees that, when this Warrant shall have been so endorsed, the person in possession of this
Warrant may be treated by the Company, and all other persons dealing with this Warrant, as the
absolute owner hereof for any purpose and as the person entitled to exercise the rights represented
hereby, any notice to the contrary notwithstanding; provided, however, that, until a transfer of
this Warrant is duly registered on the books of the Company, the Company may treat the Holder
hereof as the owner for all purposes.


9. RESTRICTIONS ON TRANSFER.




               The Holder, by acceptance hereof, agrees that, absent an effective registration statement
filed with the Securities and Exchange Commission (the “SEC”) under the Securities Act, covering
the disposition or sale of this Warrant or shares of Common Stock issued or issuable upon exercise
hereof, as the case may be, and registration or qualification under applicable state securities
laws, the Holder will not sell, transfer, pledge, or hypothecate any or all of this Warrant or such
shares of Common Stock, as the case may be, unless either (i) the Company has received an opinion
of counsel, in form and substance reasonably satisfactory to the Company, to the effect that such
registration is not required in connection with such disposition, accompanied by such counsel’s
opinion that such transfer will be in accordance with



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applicable state securities laws or (ii) the sale of such securities is made pursuant to Rule
144 promulgated by the SEC pursuant to the Securities Act (“Rule 144”).



10. COMPLIANCE WITH SECURITIES LAWS.




               By acceptance of this Warrant, the Holder hereby represents, warrants and covenants that any
shares of stock purchased upon exercise of this Warrant shall be acquired for investment only and
not with a view to, or for sale in connection with, any distribution thereof; that the Holder has
had such opportunity as the Holder has deemed adequate to obtain from representatives of the
Company such information as is necessary to permit the Holder to evaluate the merits and risks of
its investment in the Company; that the Holder is able to bear the economic risk of holding such
shares as may be acquired pursuant to the exercise of this Warrant for an indefinite period; that
the Holder understands that the shares of stock acquired pursuant to the exercise of this Warrant
will not be registered under the Securities Act (unless otherwise required pursuant to exercise by
the Holder of the registration rights, if any, granted to the Holder) and will be “restricted
securities” within the meaning of Rule 144 and that the exemption from registration under Rule 144
may not be available for at least six (6) months from the date of exercise of this Warrant, and
even then will not be available unless a public market then exists for the stock, adequate
information concerning the Company is then available to the public, and other terms and conditions
of Rule 144 are complied with; and that all stock certificates representing shares of stock issued
to the Holder upon exercise of this Warrant or upon conversion of such shares may have affixed
thereto a legend substantially in the following form:




THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER
THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE
TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT
AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION
OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE
REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY
REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO
THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN
COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.


11. NO RIGHTS OR LIABILITIES AS SHAREHOLDERS.




               This Warrant shall not entitle the Holder to any voting rights or other rights as a
shareholder of the Company. In the absence of affirmative action by the Holder to purchase



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Common Stock by exercise of this Warrant or Common Stock upon conversion thereof, no
provisions of this Warrant, and no enumeration herein of the rights or privileges of the Holder
hereof shall cause any holder of this Warrant to be a shareholder of the Company for any purpose.



12. NOTICES.




               Except as may be otherwise provided herein, all notices, requests, waivers and other
communications made pursuant to this Warrant shall be in writing and shall be conclusively deemed
to have been duly given (a) when hand-delivered to the other party; (b) when received when sent by
facsimile at the address and number set forth below; (c) three business days after deposit in the
U.S. mail with first class or certified mail receipt requested postage prepaid and addressed to the
other party as set forth below; or (d) the next business day after deposit with a national
overnight delivery service, postage prepaid, addressed to the parties as set forth below with
next-business-day delivery guaranteed, provided that the sending party receives a confirmation of
delivery from the delivery service provider.



	 	 	 	 	 

	 

	 	To Holder:	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	To Company:	 	 
	 
	 	 	 	 
	 

	 	Imperial Holdings, Inc.	 	 
	 

	 	701 Park of Commerce Boulevard — Suite 301	 	 
	 

	 	Boca Raton, Florida 33487	 	 
	 

	 	Facsimile: 561-995-4389	 	 
	 

	 	Attn: Andrew S. Hillman — General Counsel	 	 





Each person making a communication hereunder by facsimile shall promptly confirm by telephone to
the person to whom such communication was addressed each communication made by it by facsimile
pursuant hereto but the absence of such confirmation shall not affect the validity of any such
communication. A party may change or supplement the addresses given above, or designate additional
addresses, for purposes of this Section 13 by giving the other party written notice of the new
address in the manner set forth above.



13. HEADINGS.




               The headings in this Warrant are for purposes of convenience in reference only, and shall not
be deemed to constitute a part hereof.



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14. GOVERNING LAW.




               This Warrant shall be governed by and construed in accordance with the internal laws of the
State of Florida, without regard to conflicts of law principles. With respect to any matters that
may be heard before a court of competent jurisdiction, the Holder and the Company consent to the
jurisdiction and venue of the state and federal courts located in Palm Beach County, Florida.


15. NO IMPAIRMENT.




               The Company will not, by amendment of its Certificate of Incorporation or bylaws, or through
reorganization, consolidation, merger, dissolution, issue or sale of securities, sale of assets or
any other voluntary action, avoid or seek to avoid the observance or performance of any of the
terms of this Warrant, but will at all times in good faith assist in the carrying out of all such
terms and in the taking of all such action as may be necessary or appropriate in order to protect
the rights of the Holder of this Warrant against impairment. Without limiting the generality of the
foregoing, the Company (a) will not increase the par value of any shares of stock issuable upon the
exercise of this Warrant above the amount payable therefor upon such exercise, and (b) will take
all such action as may be necessary or appropriate in order that the Company may validly and
legally issue fully paid and non-assessable shares of Common Stock upon exercise of this Warrant.


16. SEVERABILITY.




               If any term, provision, covenant or restriction of this Warrant is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Warrant shall remain in full force and effect and
shall in no way be affected, impaired or invalidated.


17. COUNTERPARTS.




               For the convenience of the parties, any number of counterparts of this Warrant may be executed
by the parties hereto and each such executed counterpart shall be, and shall be deemed to be, an
original instrument.


18. SATURDAYS, SUNDAYS AND HOLIDAYS.




               If the Expiration Date falls on a Saturday, Sunday or legal holiday, the Expiration Date shall
automatically be extended until 5:00 p.m., Eastern Time, the next business day.


19. ENTIRE AGREEMENT.




               This Warrant, together with all the exhibits attached hereto, contains the sole and entire
agreement and understanding of the parties with respect to the entire subject matter of this
Warrant, and any and all prior discussions, negotiations, commitments and understandings, whether
oral or otherwise, related to the subject matter of this Warrant are hereby merged herein.



[Signature Page Follows]






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          IN WITNESS WHEREOF, the parties hereto have executed this Warrant as of the Effective Date.




	 	 	 	 	 	 	 

	 	 	IMPERIAL HOLDINGS, INC.	 	 
	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Name:

	 	 
	 	 	Its:

	 	 
	 
	 	 	 	 	 	 
	 

	 	HOLDER	 	 	 	 
	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 	 	Name:

	 	 






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EXHIBIT A




NOTICE OF EXERCISE



(To be executed upon exercise of Warrant)



     The undersigned, pursuant to the provisions set for the in the attached Warrant, hereby
irrevocably elects to:



               o purchase _____ shares of Common Stock covered by such Warrant and herewith makes a
cash payment of $_____________, representing the full purchase price for such shares at the price
per share provided for in such Warrant.



               o acquire in a cashless exercise _____ shares of Common Stock pursuant to the terms of
Section 2 of such Warrant.



               Please issue a certificate or certificates representing such shares of Common Stock in the
name of the undersigned or in such other name as is specified below.



	 	 	 

	 

	 	Signature:


	 
	 	 
	 

	 	Name (print):


	 
	 	 
	 

	 	Title (if applicable):


	 
	 	 
	 

	 	Company (if
applicable):