Document:

Exhibit 10.3

Exhibit 10.3

TRANSDEL PHARMACEUTICALS, INC.

RESTRICTED STOCK GRANT NOTICE

(2007 INCENTIVE STOCK OPTION AND AWARDS PLAN)

Transdel Pharmaceuticals, Inc. (the “Company”), pursuant to its 2007 Incentive Stock Option
and Awards Plan (the “Plan”), hereby awards to Participant the number of shares of the Company’s
Common Stock set forth below (“Award”). This Award is subject to all of the terms and conditions
as set forth herein and in the Restricted Stock Agreement, the Plan, the form of Assignment
Separate from Certificate and the form of Joint Escrow Instructions, all of which are attached
hereto and incorporated herein in their entirety.

	 	 	 	 	 

	Participant:

	 	Dr. John Bonfiglio

	Date of Grant:

	 	October 20, 2010

	Vesting Commencement Date:

	 	October 20, 2010

	Number
of Shares Subject to Award:

	 	 	50,000	 

Vesting Schedule: The Shares shall vest on and after the following dates, provided the Participant
has not terminated his service as of the applicable vesting date:

(a) 25% of the Common Shares shall vest immediately upon Vesting Commencement Date; and

(b) the balance of the Common Shares shall vest in equal monthly installments over the next 36
months beginning 30 days after the Vesting Commencement Date;

(c) provided, however, that Participant shall gain a vested interest in an additional 10% of
the Shares upon the closing of a Qualified Transaction.

A “Qualified Transaction” shall mean (i) a debt or equity financing in which the gross proceeds to
the Company equals or exceeds $3 million; or (ii) a corporate partnership transaction that includes
gross proceeds to the Company of at least $3 million to support the Company’s general and
administrative expenses.

Additional Terms/Acknowledgements: The undersigned Participant acknowledges receipt of, and
understands and agrees to, this Restricted Stock Grant Notice, the Restricted Stock Agreement and
the Plan. Participant further acknowledges that as of the Date of Grant, this Restricted Stock
Grant Notice, the Restricted Stock Agreement and the Plan set forth the entire understanding
between Participant and the Company regarding the acquisition of stock in the Company and supersede
all prior oral and written agreements on that subject.

 

 

 

	 	 	 	 	 	 	 	 	 	 	 

	TRANSDEL PHARMACEUTICALS, INC.	 	 	 	PARTICIPANT:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ John Lomoro
 	 	 	 	/s/ John Bonfiglio
 	 	 
	Name:

	 	John Lomoro
	 	 	 	Signature: Dr. John Bonfiglio	 	 
	 

	 	 	 	 	 	 	 	 	 
	Title:

	 	Chief Financial Officer
	 	 	 	Title: 
	 	Chief Executive Officer	 	 
	 

	 	 
	 	 	 	 	 	 	 
	Date:  October 20, 2010	 	 	 	Date: October 20, 2010	 	 

	 	 	 
	ATTACHMENTS:  	 	 	Restricted Stock Agreement, 2007 Incentive Stock Option and Awards Plan, form of
Assignment Separate from Certificate and form of Joint Escrow Instructions

 

 

 

TRANSDEL PHARMACEUTICALS, INC.

2007 INCENTIVE STOCK OPTION AND AWARDS PLAN

Restricted Stock Agreement

Pursuant to the Restricted Stock Grant Notice (“Grant Notice”) and this Restricted Stock
Agreement (collectively, the “Award”) and in consideration of your services as a member of the
Board of Directors, Transdel Pharmaceuticals, Inc. (the “Company”) has awarded you under its 2007
Incentive Stock Option and Awards Plan (the “Plan”) that number of shares of the Company’s Common
Stock as indicated in the Grant Notice. Defined terms not explicitly defined in this Restricted
Stock Agreement but defined in the Plan shall have the same definitions as in the Plan.

The details of your Award are as follows:

1. Vesting.

(a) Normal Vesting. Subject to the limitations contained herein, your Award will vest
as provided in the Grant Notice, provided that vesting will cease upon the termination of your
Continuous Service.

(b) Acceleration of Vesting under Certain Circumstances.

(i) In the event of your death or Disability, then 100% of the shares issued under this Award
shall be automatically deemed vested and no longer subject to any Reacquisition Right (as defined
below).

(ii) Upon an Involuntary Termination of Participant’s employment within twelve (12)
months following a Change of Control, Participant shall automatically gain a vested interest in all
then remaining unvested Shares (and the Company’s Reacquisition Right shall automatically
terminate).

For purposes of this Award,

(a) “Cause” shall mean Participant’s: (i) acts of theft, embezzlement, fraud,
material dishonesty or misappropriation of any of the Company’s (or a surviving entity’s following
a Change of Control) property, or conviction for, or the entry of a plea of guilty or nolo
contendere to, any felony, or to any other crime involving dishonesty, moral turpitude, fraud or
embezzlement; (ii) breach of Company’s confidentiality agreement, which shall not be subject to any
cure; (iii) breach of any material provision of any written agreement between Participant and the
Company (or the surviving entity following a Change of Control), other than a breach as described
in subsection (ii) above, and failure of Participant to cure such beach, if susceptible to cure,
within ten (10) days following Participant’s receipt of written notice of such breach; (iv) failure
or refusal to perform, or material negligence in the performance of, duties to the Company (or the
surviving entity following a Change of Control), or refusal or failure to follow or carry out any
reasonable direction of the board of directors of the Company (or of the applicable supervisory
personnel of the surviving entity following a Change of Control), which failure or refusal, if
susceptible to cure, remains uncured or continues or recurs after ten (10)
days following Participant’s receipt of written notice specifying the nature of such failure or
refusal; (v) inability to perform the essential functions of Participant’s position, with or
without reasonable accommodation, due to a mental or physical disability; or (vi) death.

 

 

 

(b) “Change of Control” shall mean the occurrence of any of the following: (i) the sale,
lease, conveyance or other disposition of all or substantially all of the Company’s assets to any
“person” (as such term is used in Section 13(d) of the Exchange Act of 1934, as amended), entity or
group of persons acting in concert; (ii) any person or group of persons becoming the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
the Company representing 50% or more of the total voting power represented by the Company’s then
outstanding voting securities; (iii) a merger, consolidation or other transaction of the Company
with or into any other corporation, entity or person, other than a transaction in which the holders
of at least 50% of the shares of capital stock of the Company outstanding immediately prior thereto
continue to hold (either by voting securities remaining outstanding or by their being converted
into voting securities of the surviving entity or its controlling entity) at least 50% of the total
voting power represented by the voting securities of the Company or such surviving entity (or its
controlling entity) outstanding immediately after such transaction; or (iv) a contest for the
election or removal of members of the Board of Directors of the Company that results in the removal
from the Board of at least 50% of the incumbent members of the Board; provided, however,
in no event shall the securities issued by the Company in connection with a financing transaction
(i.e., the primary purpose of which is to raise funds to support the Company’s operations) shall be
deemed to be a Change of Control.

(c) “Good Reason” shall mean Participant’s resignation within sixty (60) days after the
occurrence of any of the following events without Participant’s consent: (i) a material reduction
in the aggregate level of Participant’s base salary and incentive compensation opportunity (other
than Company-wide reductions or reductions generally applicable to positions of comparable
management authority within the surviving entity following a Change of Control); (ii) a material
reduction of Participant’s duties, responsibilities and requirements so that Participant’s duties
are no longer consistent with Participant’s position immediately prior to a Change of Control; or
(iii) relocation of Participant’s primary place of employment by the Company (or the surviving
entity following a Change of Control) to a facility or location more than fifty (50) miles from
Participant’s primary place of employment immediately prior to the Change in Control.

(d) “Involuntary Termination” shall mean (i) the termination of Participant’s employment by
the Company (or the surviving entity following a Change of Control) for reasons other than for
Cause or (ii) Participant’s resignation for Good Reason, as those terms are defined herein.

2. Number of Shares and Consideration. The number of shares subject to your Award is
set forth in your Grant Notice and may be adjusted from time to time for capitalization
adjustments, as provided in the Plan. As reflected in your Grant Notice, the Award is granted to
you in consideration of your services as a member of the Board of Directors. Accordingly, you are
not required to make any payment to the Company in order to receive the shares subject to the
Award.

 

 

 

3. Securities Law Compliance. You may not be issued any shares under your Award
unless the shares are either (i) then registered under the Securities Act or (ii) the Company has
determined that such issuance would be exempt from the registration requirements of the Securities
Act. Your Award must also comply with other applicable laws and regulations governing the Award,
and you will not receive such shares if the Company determines that such receipt would not be in
material compliance with such laws and regulations.

4. Right of Reacquisition.

(a) The Company shall have a Reacquisition Right as to the shares you received pursuant to
your Award that have not as yet vested in accordance with the Vesting Schedule on the Grant Notice
(“Unvested Shares”) on the following terms and conditions:

(i) The Company, shall simultaneously with termination of your Continuous Service
automatically reacquire for no consideration (that is, for $0.00) all of the Unvested Shares,
unless the Company agrees to waive its Reacquisition Right as to some or all of the Unvested
Shares. Any such waiver shall be exercised by the Company by written notice to you or your
representative (with a copy to the Escrow Holder as defined below) within ninety (90) days after
the termination of your Continuous Service, and the Escrow Holder may then release to you the
number of Unvested Shares not being reacquired by the Company. If the Company does not waive its
Reacquisition Right as to all of the Unvested Shares, then upon such termination of your Continuous
Service, the Escrow Holder shall transfer to the Company the number of shares the Company is
reacquiring.

(ii) The Company’s right to reacquire the shares issued under your Award shall lapse at the
rate set forth in your Grant Notice.

(iii) The shares issued under your Award shall be held in escrow pursuant to the terms of the
Joint Escrow Instructions attached to the Grant Notice as Attachment IV. You agree to execute two
(2) Assignment Separate From Certificate forms (with date and number of shares blank) substantially
in the form attached to the Grant Notice as Attachment III and deliver the same, along with the
certificate or certificates evidencing the shares, for use by the escrow agent pursuant to the
terms of the Joint Escrow Instructions.

(iv) Subject to the provisions of your Award, you shall, during the term of your Award,
exercise all rights and privileges of a shareholder of the Company with respect to the shares
deposited in escrow. You shall be deemed to be the holder of the shares for purposes of receiving
any dividends which may be paid with respect to such shares and for purposes of exercising any
voting rights relating to such shares, even if some or all of such shares have not yet vested and
been released from the Company’s Reacquisition Right.

(v) If, from time to time, there is any stock dividend, stock split or other change in the
character or amount of any of the outstanding stock of the corporation the stock of which is
subject to the provisions of your Award, then in such event any and all new, substituted or
additional securities to which you is entitled by reason of your ownership of the shares acquired
under your Award shall be immediately subject to the Reacquisition Right with the same force and
effect as the shares subject to this Reacquisition Right immediately before
such event.

 

 

 

5. Restrictive Legends. The Company may at any time place legends referencing the
Reacquisition Right and any applicable federal, state or foreign securities law restrictions on all
certificates representing the shares issued under your Award. You shall, at the request of the
Company, promptly present to the Company any and all certificates representing the shares under
your Award in your possession in order to carry out the provisions of this Section. Unless
otherwise specified by the Company, legends placed on such certificates may include, but shall not
be limited to, the following:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS SET FORTH IN AN
AGREEMENT BETWEEN THIS CORPORATION AND THE REGISTERED HOLDER, OR HIS PREDECESSOR IN
INTEREST, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THIS CORPORATION.”

6. Transfers in Violation of Agreement. No shares under your Award may be sold,
exchanged, transferred, assigned, pledged, hypothecated or otherwise disposed of, including by
operation of law, in any manner that violates any of the provisions of this Award until the date on
which such shares are no longer Unvested Shares, and any such attempted disposition shall be void.
The Company shall not be required (a) to transfer on its books any shares under your Award that
will have been transferred in violation of any of the provisions set forth in this Award or (b) to
treat as owner of such shares under your Award or to accord the right to vote as such owner or to
pay dividends to any transferee to whom such shares will have been so transferred. In order to
enforce its rights under this Section, the Company shall be authorized to give a stop transfer
instruction with respect to the shares to the Company’s transfer agent.

7. Award not a Service Contract. Your Award is not an employment or service contract,
and nothing in your Award shall be deemed to create in any way whatsoever any obligation on your
part to continue in the employ of the Company or an Affiliate, or on the part of the Company or an
Affiliate to continue your employment. In addition, nothing in your Award shall obligate the
Company or an Affiliate, their respective shareholders, boards of directors, officers or employees
to continue any relationship that you might have as a director or consultant for the Company or an
Affiliate.

 

 

 

8. Adjustments for Changes in Capital Structure. Subject to any required action by
the stockholders of the Company, in the event of any change in the stock effected without receipt
of consideration by the Company, whether through merger, consolidation, reorganization,
reincorporation, recapitalization, reclassification, stock dividend, stock split, reverse stock
split, split-up, split-off, spin-off, combination of shares, exchange of shares, or similar change
in the capital structure of the Company, or in the event of payment of a dividend or distribution
to the stockholders of the Company in a form other than stock (excepting normal cash dividends)
that has a material effect on the fair market value of shares of stock, appropriate adjustments
shall be made in the number and kind of shares subject to this Award, in order to prevent dilution
or enlargement of your rights under this Award.

9. Withholding Obligations.

(a) At the time your Award is made, or at any time thereafter as requested by the Company, you
hereby authorize withholding from payroll and any other amounts payable to you, and otherwise agree
to make adequate provision for any sums required to satisfy the federal, state, local and foreign
tax withholding obligations of the Company or an Affiliate, if any, which arise in connection with
your Award.

(b) Unless the tax withholding obligations of the Company and/or any Affiliate are satisfied,
the Company shall have no obligation to issue a certificate for such shares or release such shares
from any escrow provided for herein.

10. Tax Consequences.

(a) You understand that Section 83 of the Internal Revenue Code, as amended (the “Code”) taxes
as ordinary income the difference between the amount paid for the shares subject to this Award, if
anything, and the fair market value of such shares as of the date on which the shares are
“substantially vested,” within the meaning of Section 83. In this context, “substantially vested”
means that the right of the Company to reacquire the shares pursuant to the Reacquisition Right has
lapsed. You understand that you may elect to have your taxable income determined at the time you
acquire the shares rather than when and as the Reacquisition Right lapses by filing an election
under Section 83(b) of the Code with the Internal Revenue Service attached hereto no later than
thirty (30) days after the date of acquisition of the shares. You understand that failure to make
a timely filing under Section 83(b) will result in your recognition of ordinary income, as the
Reacquisition Right lapses, on the difference between the purchase price, if anything, and the fair
market value of the shares issued under the Award at the time such restrictions lapse. You further
understand, however, that if such shares with respect to which an election under Section 83(b) has
been made are forfeited to the Company pursuant to its Reacquisition Right, such forfeiture will be
treated as a sale on which there is realized a loss equal to the excess (if any) of the amount paid
(if any) by you for the forfeited shares over the amount realized (if any) upon their forfeiture.
If you have paid nothing for the forfeited shares and have received no payment upon their
forfeiture, you understand that you will be unable to recognize any loss on the forfeiture of the
shares even though you incurred a tax liability by making an election under Section 83(b).

 

 

 

(b) You understand that you should consult with your tax advisor regarding the advisability of
filing with the Internal Revenue Service an election under Section 83(b) of the Code, which must be
filed no later than thirty (30) days after the date of the acquisition of the shares issued under
this Award. Failure to file an election under Section 83(b), if appropriate, may result in adverse
tax consequences to you. You acknowledge that you have been advised to consult with a tax advisor
regarding the tax consequences to you of the acquisition of shares hereunder. ANY ELECTION UNDER
SECTION 83(b) YOU WISH TO MAKE MUST BE FILED NO LATER THAN 30 DAYS AFTER THE DATE ON WHICH YOU
ACQUIRE THE SHARES. THIS TIME PERIOD CANNOT BE EXTENDED. YOU ACKNOWLEDGE THAT TIMELY FILING OF A
SECTION 83(b) ELECTION IS YOUR SOLE RESPONSIBILITY, EVEN IF YOU REQUEST THE COMPANY OR ITS
REPRESENTATIVE TO FILE SUCH ELECTION ON YOUR BEHALF.

(c) You will notify the Company in writing if you file an election pursuant to Section 83(b)
of the Code. The Company intends, in the event it does not receive your evidence of such filing,
to claim a tax deduction for any amount that would otherwise be taxable to you in the absence of
such an election.

11. Notices. Any notices provided for in your Award or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by
the Company to you, five (5) days after deposit in the United States mail, postage prepaid,
addressed to you at the last address you provided to the Company.

12. Miscellaneous.

(a) The rights and obligations of the Company under your Award shall be transferable to any
one or more persons or entities, and all covenants and agreements hereunder shall inure to the
benefit of, and be enforceable by the Company’s successors and assigns. Your rights and obligations
under your Award may only be assigned with the prior written consent of the Company.

(b) You agree upon request to execute any further documents or instruments necessary or
desirable in the sole determination of the Company to carry out the purposes or intent of your
Award.

(c) You acknowledge and agree that you have reviewed your Award in its entirety, have had an
opportunity to obtain the advice of counsel prior to executing and accepting your Award and fully
understand all provisions of your Award.

(d) The Company may terminate or amend the Plan or this Award at any time; provided, however,
that no such termination or amendment may adversely affect your rights under this Award without
your consent unless such termination or amendment is necessary to comply with applicable law or
government regulation. No amendment or addition to this Award shall be effective unless in
writing.

 

 

 

(e) By signing this Agreement, you acknowledge that your personal employment information
regarding participation in the Plan and information necessary to determine and pay, if applicable,
benefits under the Plan must be shared with other entities, including companies related to the
Company and persons responsible for certain acts in the administration of the Plan. By signing
this Agreement, you consent to such transmission of personal data as the Company believes is
appropriate to administer the Plan.

(f) To the extent not preempted by federal law, this Agreement shall be governed by, and
construed in accordance with, the laws of the State of California.

13. Governing Plan Document. Your Award is subject to all the provisions of the Plan,
the provisions of which are hereby made a part of your Award, and is further subject to all
interpretations, amendments, rules and regulations which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the provisions of your Award
and those of the Plan, the provisions of the Plan shall control.

 

 

 

IN WITNESS WHEREOF, the parties hereto have duly executed this Restricted Stock Agreement as
of the 20th day of October 2010.

	 	 	 	 	 	 	 	 	 	 	 

	TRANSDEL PHARMACEUTICALS, INC.	 	 	 	RECIPIENT:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	/s/ John Bonfiglio	 	 
	By:

	 	/s/ John Lomoro
	 	 	 	Signature:
	 	John Bonfiglio, Ph.D.	 	 
	 

	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Name:

	 	John Lomoro
	 	 	 	Address:
	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 
	Title:

	 	Chief Financial Officer	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 	 

 

 

 

FORM OF ASSIGNMENT SEPARATE FROM CERTIFICATE

For Value Received and pursuant to that certain Restricted Stock Grant Notice and Restricted
Stock Agreement (the “Award”), Dr. John Bonfiglio hereby sells, assigns and transfers unto Transdel
Pharmaceuticals, Inc., a Delaware corporation (“Assignee”)            
            shares of the common stock
of the Assignee, standing in the undersigned’s name on the books of said corporation represented by
Certificate No.                 
      herewith and do hereby irrevocably constitute and appoint
                    
                    
                    
as attorney-in-fact to transfer the said stock on the books of the
within named Company with full power of substitution in the premises. This Assignment may be used
only in accordance with and subject to the terms and conditions of the Award, in connection with
the reacquisition of shares of Common Stock of the Corporation issued to the undersigned pursuant
to the Award, and only to the extent that such shares remain subject to the Corporation’s
Reacquisition Right under the Award.

	 	 	 	 	 
	Dated: __________________	DR. JOHN BONFIGLIO

 	 
	 	
 	 
	 	Signature 	 
	 	 	 
	 

[Instruction: Please do not fill in any blanks other than the signature line. The purpose of this
Assignment is to enable the Company to exercise its Reacquisition Right set forth in the Award
without requiring additional signatures on your part.]

 

 

 

JOINT ESCROW INSTRUCTIONS

October 20, 2010

Corporate Secretary

Transdel Pharmaceuticals, Inc.

4275 Executive Square, Suite 230

La Jolla, California 92037

Dear Sir/Madam:

As Escrow Agent for both Transdel Pharmaceuticals, Inc., a Delaware corporation (the
“Company”), and the undersigned recipient of stock of the Company (“Recipient”), you are hereby
authorized and directed to hold the documents delivered to you pursuant to the terms of that
certain Restricted Stock Grant Notice (the “Grant Notice”), dated October 20, 2010 to which a copy
of these Joint Escrow Instructions is attached as Attachment IV, and pursuant to the terms of that
certain Restricted Stock Agreement (“Agreement”), which is Attachment I to the Grant Notice, in
accordance with the following instructions:

1. In the event Recipient ceases to render services to the Company or an affiliate of the
Company during the vesting period set forth in the Grant Notice, the Company or its assignee will
give to Recipient and you a written notice specifying that the shares of stock shall be transferred
to the Company. Recipient and the Company hereby irrevocably authorize and direct you to close the
transaction contemplated by such notice in accordance with the terms of said notice.

2. At the closing you are directed (a) to date any stock assignments necessary for the
transfer in question, (b) to fill in the number of shares being transferred, and (c) to deliver
same, together with the certificate evidencing the shares of stock to be transferred, to the
Company.

3. Recipient irrevocably authorizes the Company to deposit with you any certificates
evidencing shares of stock to be held by you hereunder and any additions and substitutions to said
shares as specified in the Grant Notice. Recipient does hereby irrevocably constitute and appoint
you as Recipient’s attorney-in-fact and agent for the term of this escrow to execute with respect
to such securities and other property all documents of assignment and/or transfer and all stock
certificates necessary or appropriate to make all securities negotiable and complete any
transaction herein contemplated.

4. This escrow shall terminate upon vesting of the shares or upon the earlier return of the
shares to the Company.

5. If at the time of termination of this escrow you should have in your possession any
documents, securities, or other property belonging to Recipient, you shall deliver all of same to
any pledgee entitled thereto or, if none, to Recipient and shall be discharged of all further
obligations hereunder.

 

 

 

6. Your duties hereunder may be altered, amended, modified or revoked only by a writing signed
by all of the parties hereto.

7. You shall be obligated only for the performance of such duties as are specifically set
forth herein and may rely and shall be protected in relying or refraining from acting on any
instrument reasonably believed by you to be genuine and to have been signed or presented by the
proper party or parties or their assignees. You shall not be personally liable for any act you may
do or omit to do hereunder as Escrow Agent or as attorney-in-fact for Recipient while acting in
good faith and any act done or omitted by you pursuant to the advice of your own attorneys shall be
conclusive evidence of such good faith.

8. You are hereby expressly authorized to disregard any and all warnings given by any of the
parties hereto or by any other person or corporation, excepting only orders or process of courts of
law, and are hereby expressly authorized to comply with and obey orders, judgments or decrees of
any court. In case you obey or comply with any such order, judgment or decree of any court, you
shall not be liable to any of the parties hereto or to any other person, firm or corporation by
reason of such compliance, notwithstanding any such order, judgment or decree being subsequently
reversed, modified, annulled, set aside, vacated or found to have been entered without
jurisdiction.

9. You shall not be liable in any respect on account of the identity, authority or rights of
the parties executing or delivering or purporting to execute or deliver the Grant Notice or any
documents or papers deposited or called for hereunder.

10. You shall not be liable for the outlawing of any rights under any statute of limitations
with respect to these Joint Escrow Instructions or any documents deposited with you.

11. You shall be entitled to employ such legal counsel, including but not limited to DLA Piper
LLP (US), and other experts as you may deem necessary properly to advise you in connection with
your obligations hereunder, may rely upon the advice of such counsel, and may pay such counsel
reasonable compensation therefor.

12. Your responsibilities as Escrow Agent hereunder shall terminate if you shall cease to be
Secretary of the Company or if you shall resign by written notice to each party. In the event of
any such termination, the Company may appoint any officer or assistant officer of the Company as
successor Escrow Agent and Recipient hereby confirms the appointment of such successor or
successors as his attorney-in-fact and agent to the full extent of your appointment.

13. If you reasonably require other or further instruments in connection with these Joint
Escrow Instructions or obligations in respect hereto, the necessary parties hereto shall join in
furnishing such instruments.

14. It is understood and agreed that should any dispute arise with respect to the delivery
and/or ownership or right of possession of the securities, you may (but are not obligated to)
retain in your possession without liability to anyone all or any part of said securities until such
dispute shall have been settled either by mutual written agreement of the parties concerned or by a
final order, decree or judgment of a court of competent jurisdiction after the time for appeal has
expired and no appeal has been perfected, but you shall be under no duty whatsoever
to institute or defend any such proceedings.

 

 

 

15. Any notice required or permitted hereunder shall be given in writing and shall be deemed
effectively given upon personal delivery or upon deposit in any United States Post Box, by
registered or certified mail with postage and fees prepaid, addressed to each of the other parties
hereunto entitled at the following addresses, or at such other addresses as a party may designate
by ten (10) days’ written notice to each of the other parties hereto:

	 	 	 

	COMPANY:

	 	Transdel Pharmaceuticals, Inc.

4275 Executive Square, Suite 230

La Jolla, California 92037

Attn: Chief Financial Officer
	 
	 	 
	RECIPIENT:

	 	Dr. John Bonfiglio
	 

	 	 
	 

	 	 
	 
	 	 
	ESCROW AGENT:

	 	 Transdel Pharmaceuticals, Inc.

4275 Executive Square, Suite 230

La Jolla, California 92037

Attn: Corporate Secretary

16. By signing these Joint Escrow Instructions you become a party hereto only for the purpose
of said Joint Escrow Instructions; you do not become a party to the Grant Notice.

 

 

 

17. This instrument shall be binding upon and inure to the benefit of the parties hereto, and
their respective successors and permitted assigns. It is understood and agreed that references to
“you” or “your” herein refer to the original Escrow Agent and to any and all successor Escrow
Agents. It is understood and agreed that the Company may at any time or from time to time assign
its rights under the Grant Notice and these Joint Escrow Instructions in whole or in part.

	 	 	 	 	 
	 	

Very truly yours,

TRANSDEL PHARMACEUTICALS, INC.

 	 
	 	By:  	/s/John Lomoro
 	 
	 	Name:	John Lomoro 	 
	 	Title:  	Chief Financial Officer 	 
	 
	 	RECIPIENT

 	 
	 	/s/ John Bonfiglio
 	 
	 	Signature 	 
	 	 	 
	 

	 	 	 	 	 
	ESCROW AGENT:

 	 	 
	/s/ John Lomoro
 	 	 
	Signature 	 	 
	 	 	 

 

 

 

	 	 	 	 	 

ELECTION UNDER SECTION 83(b)

OF THE INTERNAL REVENUE CODE OF 1986

The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue
Code, to include in taxpayer’s gross income or alternative minimum taxable income, as applicable,
for the current taxable year, the amount of any income that may be taxable to taxpayer in
connection with taxpayer’s receipt of the property described below:

	1.	 	The name, address, taxpayer identification number and taxable year of the undersigned
are as follows:
	 
	 	 	NAME OF TAXPAYER: Dr. John Bonfiglio
	 
	 	 	NAME OF SPOUSE: _____________________________________________________________
	 
	 	 	ADDRESS: ___________________________

              
      ___________________________
	 
	 	 	IDENTIFICATION NO. OF TAXPAYER:___________________________
	 
	 	 	IDENTIFICATION NO. OF SPOUSE: ___________________________
	 
	 	 	TAXABLE YEAR: 2010             
              
        
             
        
	 
	2.	 	The property with respect to which the election is made is described as follows:
	 
	 	 	50,000 shares of the Common Stock of Transdel Pharmaceuticals, Inc., a Delaware
corporation (the “Company”).
	 
	3.	 	The date on which the property was transferred is: October 20, 2010
	 
	4.	 	The property is subject to the following restrictions:
	 
	 	 	Repurchase option at cost in favor of the Company upon termination of taxpayer’s
employment or consulting relationship.
	 
	5.	 	The fair market value at the time of transfer, determined without regard to any
restriction other than a restriction which by its terms will never lapse, of such
property is: $0.80.
	 
	6.	 	The amount (if any) paid for such property: none.

The undersigned has submitted a copy of this statement to the person for whom the services were
performed in connection with the undersigned’s receipt of the above-described property. The
transferee of such property is the person performing the services in connection with the transfer
of said property.

The undersigned understands that the foregoing election may not be revoked except with the
consent of the Commissioner.

	 	 	 	 	 
	 	 	 
	Dated: __________________	
 	 
	 	Taxpayer 	 
	 	 	 
	Dated: __________________	
 	 
	 	Spouse of TaxpayerExhibit 10.18

Exhibit 10.18

O-25

WARRANT TO PURCHASE SHARES

OF COMMON STOCK

OF ACROSS AMERICA FINANCIAL SERVICES, INC. 

Warrant to Purchase 600,000 Shares

(subject to adjustment as set forth herein)

Exercise Price $0.50 Per Share

(subject to adjustment as set forth herein)

VOID AFTER 5 P.M., MST, April 7, 2016

THE SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE “ACT”) OR REGISTERED OR QUALIFIED UNDER ANY OTHER APPLICABLE FEDERAL OR STATE
SECURITIES LAWS. THESE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, OR OTHERWISE TRANSFERRED, IN
WHOLE OR IN PART, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR QUALIFICATION FILED IN
ACCORDANCE WITH THE ACT OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT.

ACROSS AMERICA FINANCIAL SERVICES, INC., 5350 South Roslyn, Suite 300, Greenwood Village, CO 80111,
(the “Company”), hereby certifies that, for a purchase price of $100 value received, Charles A.
Dinarello, 333 15th Boulder, CO 80302, (who, together with any subsequent holder of the
Warrant, is referred to as the “Holder”), is entitled, subject to the terms and conditions set
forth below, to purchase from the Company at any time before 5 p.m., MST time, on April 7, 2016
(“Expiration Date), up to Six Hundred Thousand (600,000) of the Company’s $.001 par value Common
Stock (the “Shares”) at a purchase price of $0.50 per Share (the “Exercise Price”).

This warrant vests in three segments, commencing with a total of Two Hundred Thousand
(200,000) warrants vesting immediately. A total of Two Hundred Thousand (200,000) warrants will
vest on October 5, 2009. The remaining Two Hundred Thousand (200,000) warrants will vest on April
7, 2010. With the exception of the first Two Hundred Thousand (200,000) warrants vesting
immediately, the remaining warrants will vest contingent upon the Holder being an employee of the
Company on the respective dates of the vesting of these warrants.

The term “Warrant” as used herein shall include this Warrant and any Warrants issued in
substitution for or replacement of this Warrant, or any Warrants into which this Warrant may be
divided or exchanged. The number and character of the securities purchasable upon exercise of this
Warrant and the Exercise Price are subject to adjustment as provided below.

This Warrant may be assigned, transferred, sold, offered for sale, or exercised, in whole or
in part, by the Holder upon compliance with all the pertinent provisions hereof.

 

 

 

	 	1.	 	Exercise of Warrant.

	 	(a)	 	Subject to the other terms and conditions of this Warrant, the purchase rights
evidenced by this Warrant may be exercised in whole or in part at any time, and from time to time before the Expiration Date, by the Holder’s presentation and surrender of
this Warrant to the Company at its principal office or at the office of the Company’s
stock transfer agent, if any, accompanied by a duly executed Notice of Exercise, in the
form attached to and by this reference incorporated in this Warrant as Exhibit A, and by
payment of the aggregate Exercise Price, in immediately available funds, for that number
of Warrant Securities specified in the Notice of Exercise. In the event this Warrant is
exercised in part only, as soon as is practicable after the presentation and surrender
of this Warrant to the Company for exercise, the Company shall execute and deliver to
the Holder a new Warrant, containing the same terms and conditions as this Warrant,
evidencing the right of the Holder to purchase that number of Warrant Securities as to
which this Warrant has not been exercised.

	 	(b)	 	Upon receipt of this Warrant by the Company as described in subsection (a)
above, the Holder shall be deemed to be the holder of record of the Warrant Securities
issuable upon such exercise, notwithstanding that the transfer books of the Company
may then be closed or that certificates representing such Warrant Securities may not
have been prepared or actually delivered to the Holder.

	 	2.	 	Exchange, Assignment or Loss of Warrant.

	 	(a)	 	This Warrant may be sold, transferred or assigned at any time, in whole or in
part, if (i) the transfer is by operation of law as a result of the death of any Holder
to whom all or a portion of this Warrant may be transferred, (ii) the transfer is to
any successor of the Holder’s business and (iii) to such other persons for which
transaction an exemption from the registration requirements of the Act can be
established to the satisfaction of the Company. All sales, transfers, assignments or
hypothecations of this Warrant must be in compliance with Section 8 hereof. Any
assignment or transfer of this Warrant shall be made by the presentation and surrender
of this Warrant to the Company at its principal office or the office of its transfer
agent, if any, accompanied by a duly executed Assignment Form, in the form attached to
and by this reference incorporated in this Warrant as Exhibit B. Upon the presentation
and surrender of these items to the Company, the Company, at its sole expense, shall
execute and deliver to the new Holder or Holders a new Warrant or Warrants, containing
the same terms and conditions as this Warrant, in the name of the new Holder or Holders
as named in the Assignment Form, and this Warrant shall at that time be canceled.

	 	(b)	 	This Warrant, alone or with other Warrants containing the same terms and
conditions and owned by the same Holder, is exchangeable at the option of the Holder
but at the Company’s sole expense, at any time prior to its expiration either by its
terms or by its exercise in full upon presentation and surrender to the Company at its
principal office or at the office of its transfer agent, if any, for another Warrant or
other Warrants, of different denominations but containing the same terms and conditions
as this Warrant, entitling the Holder to purchase the same aggregate number of Warrant
Securities that were purchasable pursuant to the Warrant or Warrants presented and
surrendered. At the time of presentation and surrender by the Holder to the Company,
the Holder also shall deliver to the Company a written notice, signed by the Holder,
specifying the denominations in which new Warrants are to be issued to the Holder.

 

2

 

	 	(c)	 	The Company will execute and deliver to the Holder a new Warrant containing the same terms and conditions as this Warrant upon receipt by the Company of evidence
reasonably satisfactory to it of the loss, theft, destruction, or mutilation of this
Warrant, provided that (i) in the case of loss, theft, or destruction, the Company
receives from the Holder a reasonably satisfactory indemnification, and (ii) in the case
of mutilation, the Holder presents and surrenders this Warrant to the Company for
cancellation. Any new Warrant executed and delivered shall constitute an additional
contractual obligation on the part of the Company regardless of whether the Warrant that
was lost, stolen, destroyed, or mutilated shall be enforceable by anyone at any time.

	 	3.	 	Anti-Dilution Provisions.

	 	3.1	 	Stock Splits, Dividends, Etc.

	 	(a)	 	If the Company shall at any time subdivide its outstanding
 shares of Common Stock (or other securities at the time receivable upon the
exercise of the Warrant) by recapitalization, reclassification or split-up
thereof, or if the Company shall declare a stock dividend or distribute shares
of Common Stock to its stockholders, the number of shares of Common Stock
subject to this Warrant immediately prior to such subdivision shall be
proportionately increased, and if the Company shall at any time combine the
outstanding shares of Common Stock by recapitalization, reclassification or
combination thereof, the number of shares of Common Stock subject to this
Warrant immediately prior to such combination shall be proportionately
decreased. Any such adjustment and adjustment to the Exercise Price pursuant
to this section shall be effective at the close of business on the effective
date of such subdivision or combination or if any adjustment is the result of a
stock dividend or distribution then the effective date for such adjustment
based thereon shall be the record date therefore.

	 	(b)	 	Whenever the number of shares of Common Stock purchasable upon
the exercise of this Warrant is adjusted, as provided in this section, the
Exercise Price shall be adjusted to the nearest cent by multiplying such
Exercise Price immediately prior to such adjustment by a fraction (x) the
numerator of which shall be the number of shares of Common Stock purchasable
upon the exercise immediately prior to such adjustment, and (y) the denominator
of which shall be the number of shares of Common Stock so purchasable
immediately thereafter.

	 	3.2	 	Adjustment for Reorganization, Consolidation, Merger, Etc. In case of
any reorganization of the Company (or any other corporation, the securities of which
are at the time receivable on the exercise of this Warrant) shall consolidate with or
merge into another corporation or convey all or substantially all of its assets to
another corporation, then, and in each such case, the Holder of this Warrant upon the
exercise at any time after the consummation of such reorganization, consolidation,
merger or conveyance, shall be entitled to receive, in lieu of the securities and
property receivable upon the exercise of this Warrant prior to such consummation, the
securities or property to which such Holder would have been entitled upon such
consummation if such Holder had exercised this Warrant immediately prior thereto; in
each such case, the terms of this Warrant shall be applicable to the securities or property received upon the exercise of this Warrant
after such consummation.

 

3

 

	 	3.3	 	Certificate as to Adjustments. In each case of an adjustment in the
number of shares of Common Stock receivable on the exercise of this Warrant, the
Company at its expense shall promptly compute such adjustment in accordance with the
terms of the Warrant and prepare a certificate executed by an officer of the Company
setting forth such adjustment and showing the facts upon which such adjustment is
based. The Company shall forthwith mail a copy of each such certificate to each
Holder. The failure to prepare or provide such certificate shall not modify the rights
of any party hereunder.

	 	3.4	 	Notices of Record Date, Etc. In case:

	 	(a)	 	the Company shall take a record of the holders of its Common
Stock (or other securities at the time receivable upon the exercise of the
Warrant) for the purpose of entitling them to receive any dividend (other than
a cash dividend at the same rate as the rate of the last cash dividend
theretofore paid) or other distribution, or any right to subscribe for,
purchase or otherwise acquire any shares of stock of any class or any other
securities, or to receive any other right; or

	 	(b)	 	of any voluntary or involuntary dissolution, liquidation or
winding-up of the Company, then, and in each such case, the Company shall mail
or cause to be mailed to each Holder a notice specifying, as the case may be,
(i) the date on which a record is to be taken for the purpose of such dividend,
distribution or right, and stating the amount and character of such dividend,
distribution or right, or (ii) the date on which such reorganization,
reclassification, consolidation, merger, conveyance, dissolution, liquidation
or winding-up is to take place, and the time, if any, to be fixed, as to which
the holders of record of Common Stock (or such other securities at the time
receivable upon the exercise of this Warrant) shall be entitled to exchange
their shares of Common Stock (or such other securities) for securities or other
property deliverable upon such reorganization, reclassification, consolidation,
merger, conveyance, dissolution, liquidation or winding-up. Such notice shall
be mailed at least twenty (20) days prior to the date therein specified, and
this Warrant may be exercised prior to said date during the term of the
Warrant.

	 	3.5	 	Threshold for Adjustments. Anything in this section to the contrary
notwithstanding, the Company shall not be required to give effect to any adjustment
until the cumulative resulting adjustment in the Exercise Price shall have required a
change of the Exercise Price by at least $.01, but when the cumulative net effect of
more than one adjustment so determined shall be to change the Exercise Price by at
least $.01, such full change in the Exercise Price shall thereupon be given effect. No
adjustment shall be made by reason of the issuance of shares upon conversion rights,
stock issuance rights or similar rights currently outstanding or any change in the
number of treasury shares held by the Company.

 

4

 

	 	4.	 	Reservation of Warrant Securities. The Company hereby agrees that at all times
prior to the Expiration Date, it will have authorized and will reserve and keep available for
issuance and delivery to the Holder that number of Warrant Securities that may be required
from time to time for issuance and delivery upon the exercise of the then unexercised
portion of this Warrant and all other similar Warrants then outstanding and unexercised and
upon the exercise of any Warrant Securities.

	 	5.	 	Transfer to Comply With the Securities Act of 1933.

	 	(a)	 	This Warrant, the Warrant Securities, and all other securities issued or
issuable upon exercise of this Warrant, may not be offered, sold or transferred, in
whole or in part, except in compliance with the Act, and except in compliance with all
applicable state securities statutes.

	 	(b)	 	The Company may cause the following legend, or its equivalent, to be set forth
on each certificate representing the Warrant Securities, or any other security issued
or issuable upon exercise of this Warrant, not theretofore distributed to the public or
sold to underwriters, as defined by the Act:

“The securities represented by this Certificate have not been registered under the
Securities Act of 1933 (“the Act”) and are ‘restricted securities’ as that term is
defined in Rule 144 under the Act. The securities may not be offered for sale, sold or
otherwise transferred except pursuant to an effective registration statement under the
Act or pursuant to an exemption from registration under the Act, the availability of
which is to be established to the satisfaction of the Company.”

	 	6.	 	Registration Under the Securities Act of 1933.

	 	(a)	 	If at any time prior to the Expiration Date, the Company files a registration
statement with the United States Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended (the “Act”), or pursuant to any other act passed
after the date of this Agreement, which filing provides for the sale of securities by
the Company to the public, or files a Regulation A Offering Statement under the Act,
the Company shall offer to the Holder or Holders of this Warrant and the holders of any
Warrant Securities the opportunity to register or qualify the Warrant (if prior to its
expiration), Warrant Securities and any Warrant Securities underlying the unexercised
portion of this Warrant, if any, at the Company’s sole expense; provided, however, that
in the case of a Regulation A offering, the opportunity to qualify shall be limited to
the amount of the available exemption after taking into account the securities that the
Company wishes to qualify. Notwithstanding anything to the contrary, this
subsection (a) shall not be applicable to a registration statement on Forms S-4, S-8 or
their successors or any other inappropriate forms filed by the Company with the United
States Securities and Exchange Commission.

	 
	 	 	 	The Company shall deliver written notice to the Holder or Holders of this Warrant and to
any holders of the Warrant Securities of its intention to file a registration statement
or Regulation A Offering Statement under the Act at least 60 days prior to the filing of
such registration statement or offering statement, and the Holder or Holders and holders
of Warrant Securities shall have 30 days thereafter to request in writing that the
Company register or qualify the Warrant, Warrant Securities, or the Warrant Securities
underlying the unexercised portion of this Warrant in accordance with this
subsection (a). Upon the delivery of such a  

 

5

 

	 	 	 	written request within the specified time,
the Company shall be obligated to include in its contemplated registration statement or
offering statement all information necessary or advisable to register or qualify the
Warrant, Warrant Securities or Warrant Securities underlying the unexercised portion of
this Warrant for a public offering, if the Company does file the contemplated
registration statement or offering statement; provided, however, that neither the
delivery of the notice by the Company nor the delivery of a request by a Holder or by a
holder of Warrant Securities shall in any way obligate the Company to file a
registration statement or offering statement. Furthermore, notwithstanding the filing
of a registration statement or offering statement, the Company may, at any time prior to
the effective date thereof, determine not to offer the securities to which the
registration statement or offering statement relates, other than the Warrant, Warrant
Securities and Warrant Securities underlying the unexercised portion of this Warrant.

	 
	 	 	 	The Company shall comply with the requirements of this subsection (a) and the related
requirements of subsection (g) at its own expense. That expense shall include, but not
be limited to, legal, accounting, consulting, printing, federal and state filing fees,
NASD fees, out-of-pocket expenses incurred by counsel, accountants and consultants
retained by the Company, and miscellaneous expenses directly related to the registration
statement or offering statement and the offering. However, this expense shall not
include the portion of any underwriting commissions, transfer taxes and the
underwriter’s accountable and nonaccountable expense allowances attributable to the
offer and sale of the Warrant, Warrant Securities and the Warrant Securities underlying
the unexercised portion of this Warrant, all of which expenses shall be borne by the
Holder or Holders of this Warrant and the holders of the Warrant Securities registered
or qualified.

	 	(b)	 	In the event that the Company registers or qualifies the Warrant, Warrant
Securities or the Warrant Securities underlying the unexercised portion of this Warrant
pursuant to subsection (a) above, the Company shall include in the registration
statement or qualification, and the prospectus included therein, all information and
materials necessary or advisable to comply with the applicable statutes and regulations
so as to permit the public sale of the Warrant, Warrant Securities or the Warrant
Securities underlying the unexercised portion of this Warrant. As used in
subsection (a) of this Section 7, reference to the Company’s securities shall include,
but not be limited to, any class or type of the Company’s securities or the securities
of any of the Company’s subsidiaries or affiliates.

	 	(c)	 	As to each registration statement or offering statement, the Company’s
obligations contained in this Section 6 shall be conditioned upon a timely receipt by
the Company in writing of the following:

	 	(i)	 	Information as to the terms of the contemplated public offering
furnished by and on behalf of each Holder or holder intending to make a public
distribution of the Warrant, Warrant Securities or Warrant Securities
underlying the unexercised portion of the Warrant; and

	 	(ii)	 	Such other information as the Company may reasonably require
from such Holders or holders, or any underwriter for any of them, for inclusion
in the registration statement or offering statement.

 

6

 

	 	(d)	 	In each instance in which the Company shall take any action to register or
qualify the Warrant, Warrant Securities or the Warrant Securities underlying the unexercised portion
of this Warrant, if any, pursuant to this Section 6, the Company shall do the following:

	 	(i)	 	supply to Holder, or any successor or assign whose Warrant and
Warrant Securities are being registered or qualified, two (2) manually signed
copies of each registration statement or offering statement, and all amendments
thereto, and a reasonable number of copies of the preliminary, final or other
prospectus or offering circular, all prepared in conformity with the
requirements of the Act and the rules and regulations promulgated thereunder,
and such other documents as Holder shall reasonably request;

	 	(ii)	 	cooperate with respect to (A) all necessary or advisable
actions relating to the preparation and the filing of any registration
statements or offering statements, and all amendments thereto, arising from the
provisions of this Section 7, (B) all reasonable efforts to establish an
exemption from the provisions of the Act or any other federal or state
securities statutes, (C) all necessary or advisable actions to register or
qualify the public offering at issue pursuant to federal securities statutes
and the state “blue sky” securities statutes of each jurisdiction that the
Holders of the Warrant or holders of Warrant Securities shall reasonably
request, and (D) all other necessary or advisable actions to enable the Holders
of the Warrant and holders of the Warrant Securities to complete the
contemplated disposition of their securities in each reasonably requested
jurisdiction;

	 	(iii)	 	keep all registration statements or offering statements to
which this Section 6 applies, and all amendments thereto, effective under the
Act for a period of at least nine (9) months after their initial effective date
and cooperate with respect to all necessary or advisable actions to permit the
completion of the public sale or other disposition of the securities subject to
a registration statement or offering statement; and

	 	(iv)	 	indemnify and hold harmless each Holder of the Warrant, each
holder of Warrant Securities, and each underwriter within the meaning of the
Act for each such Holder or holder, from and against all losses, claims,
damages, and liabilities, including, but not limited to, any and all expenses
reasonably incurred in investigating, preparing, defending or settling any
claim, arising from or relating to (A) any untrue or alleged untrue statement
of a material fact contained in any registration statement or offering
statement to which this Section 6 applies, or (B) any omission or alleged
omission to state a material fact necessary to make the statements contained in
a registration statement or offering statement to which this Section 6 applies
not misleading; provided, however, that the indemnification contained in this
provision (iv) shall not apply if the untrue statement or omission, or alleged
untrue statement or omission, was the result of information furnished in
writing to the Company by the Holder, holder or underwriter seeking
indemnification expressly for use in the registration statement or offering
statement at issue. To the extent that the indemnification contained in this
provision applies, the Company also shall indemnify and hold harmless each
officer, director, employee, controlling person or agent of an indemnified
Holder, holder or underwriter.

 

7

 

	 	(e)	 	In each instance in which pursuant to this Section 6 the Company shall take any
action to register or qualify the Warrant, Warrant Securities or the Warrant Securities
underlying the unexercised portion of this Warrant, prior to the effective date of any
registration statement or offering statement, the Company and each Holder or holder of
Warrants or Warrant Securities being registered or qualified shall enter into
reciprocal indemnification agreements, in the form customarily used by reputable
investment bankers with respect to public offerings of securities, containing
substantially the same terms as described in subsection (e)(iv) above. These
indemnification agreements also shall contain an agreement by the Holder or shareholder
at issue to indemnify and hold harmless the Company, its officers, directors from and
against any and all losses, claims, damages and liabilities, including, but not limited
to, all expenses reasonably incurred in investigating, preparing, defending or settling
any claim, directly resulting from any untrue statements of material facts, or
omissions to state a material fact necessary to make a statement not misleading,
contained in a registration statement or offering statement to which this Section 6
applies, if, and only if, the untrue statement or omission directly resulted from
information provided in writing to the Company by the indemnifying Holder or
shareholder expressly for use in the registration statement or offering statement at
issue.

	 	(f)	 	The term “Majority Holder” as used in this Section 6 shall include any Holder,
any holder of Warrant Securities, or any combination of Holders and such holders of
Warrant Securities, if they hold, in the aggregate, unexercised Warrants plus issued
and outstanding Warrant Securities equal to more than 50% of the total of (i) all
Warrant Securities issued and outstanding as a result of the exercise of the Warrant,
and (ii) all Warrant Securities that may at that time be purchased by exercising the
unexercised portion of the Warrant. For purposes hereof, a Warrant entitling the
Holder to purchase more than one Warrant Security shall be deemed to hold Warrants
equal to the number of Warrant Securities which may be acquired pursuant to any such
Warrant.

	 	(g)	 	The Company’s obligations described in this Section 6 shall continue in full
force and effect regardless of the exercise, surrender, cancellation or expiration of
this Warrant.

	 	7.	 	Fractional Shares. No fractional shares or scrip representing fractional
 shares shall be issued upon the exercise of all or any part of this Warrant. With respect
to any fraction of a share of any security called for upon any exercise of this Warrant,
the Company shall pay to the Holder an amount in money equal to that fraction multiplied by
the current market value of that share. The current market value shall be determined as
follows:

	 	(i)	 	if the security at issue is listed on a national securities exchange or
admitted to unlisted trading privileges on such an exchange or listed on the
National Association of Securities Dealers National Market System, the current
value shall be the last reported sale price of that security on such exchange or
system on the last business day prior to the date of the applicable exercise of
this Warrant or, if no such sale is made on such day, the average of the highest
closing bid and lowest asked price for such day on such exchange or system; or

 

8

 

	 	(ii)	 	if the security at issue is not so listed or admitted to unlisted
trading privileges, the current market value shall be the average of the last reported highest bid and
lowest asked prices quoted on the National Association of Securities Dealers
Automated Quotations System or, if not so quoted, then by the National Quotation
Bureau, Inc. on the last business day prior to the day of the applicable exercise of
this Warrant; or

	 	(iii)	 	if the security at issue is not so listed or admitted to unlisted
trading privileges and bid and asked prices are not reported, the current market
value shall be determined in such reasonable manner as may be prescribed from time
to time by the Board of Directors of the Company, subject to the arbitration
procedure as described in Section 15 below if a Holder delivers written notice to
the Company of an objection within thirty (30) days after the Board’s decision.

	 	8.	 	Rights of the Holder. The Holder shall not be entitled to any rights as a
shareholder in the Company by reason of this Warrant, either at law or equity, except as
specifically provided for herein. The Company covenants, however, that for so long as this
Warrant is at least partially unexercised, it will furnish any Holder of this Warrant with
copies of all reports and communications furnished to the shareholders of the Company.

	 	9.	 	Charges Due Upon Exercise. The Company shall pay any and all issue or transfer
taxes, including, but not limited to, all federal or state taxes, that may be payable with
respect to the transfer of this Warrant or the issue or delivery of Warrant Securities upon
the exercise of this Warrant.

	 	10.	 	Warrant Securities to be Fully Paid. The Company covenants that all Warrant
Securities that may be issued and delivered to a Holder of this Warrant upon the exercise
of this Warrant will be, upon such delivery, validly and duly issued, fully paid and
non-assessable.

	 	11.	 	Notices. All notices, certificates, requests, or other similar items provided
for in this Warrant shall be in writing and shall be personally delivered or deposited in
the United States mail, postage prepaid, addressed to the respective party as indicated in
the portions of this Warrant preceding Section 1. All notices shall be deemed to be
delivered upon personal delivery or upon the expiration of three (3) business days
following deposit in the United States mail, postage prepaid. The addresses of the parties
may be changed, and addresses of other Holders and holders of Warrant Securities may be
specified, by written notice delivered pursuant to this Section 13. The Company’s
principal office shall be deemed to be the address provided pursuant to this Section for
the delivery of notices to the Company.

	 	12.	 	Applicable Law. This Warrant shall be governed by and construed in accordance
with the laws of the State of Colorado, and courts located in Colorado shall have exclusive
jurisdiction over all disputes arising hereunder except as provided in Section 15 hereof.

 

9

 

	 	13.	 	Dispute Resolution. The parties shall attempt in good faith to resolve any
controversy or claim arising out of or relating to this Warrant, or the breach,
termination, or validity thereof (a “Dispute”) promptly by negotiation between the parties.
If a Dispute has not been resolved within thirty (30) days by negotiation, the parties
shall attempt to mediate the Dispute through the selection of a mutually agreeable mediator
who shall conduct such mediation in confidence. If a Dispute is not resolved by mediation,
then the Dispute shall be settled by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association, and governed by the United States Arbitration
Act, 9 U.S.C. §§ 1-16, except as otherwise provided herein. Judgment upon the award
rendered by the arbitrator may be entered by any court having jurisdiction thereof. The
place of arbitration shall be Denver, Colorado. Each party shall be responsible for his own
attorney fees incurred during any phase of dispute resolution. The arbitrator shall apply
the law to the dispute in the same manner as a judge as though the dispute was before a
court of law of the State of Colorado. The arbitrator shall have the authority to award any
remedy or relief that a court of the State of Colorado could order or grant, including,
without limitation, specific performance of any obligation created under the Agreement, the
issuance of an injunction, or the imposition of sanctions for abuse or frustration of the
arbitration process. Notwithstanding the foregoing, the arbitrator shall not have authority
to award punitive damages. The parties shall take all reasonable steps necessary to conduct
a hearing no later than forty-five (45) days after submission of the matter to arbitration.
The arbitrator shall render his decision within fifteen (15) days after the close of the
arbitration hearing. The arbitration award shall be in writing and shall specify the
factual and legal bases for the award.

	 	14.	 	Miscellaneous Provisions.

	 	(a)	 	Subject to the terms and conditions contained herein, this Warrant shall be
binding on the Company and its successors and shall inure to the benefit of the
original Holder, its successors and assigns and all holders of Warrant Securities and
the exercise of this Warrant in full shall not terminate the provisions of this Warrant
as it relates to holders of Warrant Securities.

	 	(b)	 	If the Company fails to perform any of its obligations hereunder, it shall be
liable to the Holder for all damages, costs and expenses resulting from the failure,
including, but not limited to, all reasonable attorney’s fees and disbursements.

	 	(c)	 	This Warrant cannot be changed or terminated or any performance or condition
waived in whole or in part except by an agreement in writing signed by the party
against whom enforcement of the change, termination or waiver is sought.

	 	(d)	 	If any provision of this Warrant shall be held to be invalid, illegal or
unenforceable, such provision shall be severed, enforced to the extent possible, or
modified in such a way as to make it enforceable, and the invalidity, illegality or
unenforceability shall not affect the remainder of this Warrant.

	 	(e)	 	The Company agrees to execute such further agreements, conveyances,
certificates and other documents as may be reasonably requested by the Holder to
effectuate the intent and provisions of this Warrant.

	 	(f)	 	Paragraph headings used in this Warrant are for convenience only and shall not
be taken or construed to define or limit any of the terms or provisions of this
Warrant. Unless otherwise provided, or unless the context shall otherwise require, the
use of the singular shall include the plural and the use of any gender shall include
all genders.

	 	 	 	 	 
	 	ACROSS AMERICA FINANCIAL SERVICES, INC.

 	 
	 	By:  	 	 
	 	 	Edward C. Larkin 	 
	 	 	Interim Chief Financial Officer 	 

 

10

 

EXHIBIT A

NOTICE OF EXERCISE

(To be executed by a Holder desiring to exercise the right to purchase Shares pursuant to a
Warrant.)

The undersigned Holder of a Warrant hereby

(a) irrevocably elects to exercise the Warrant to the extent of purchasing
 _____ 

Shares;

(b) makes payment in full of the aggregate Exercise Price for those Shares in the amount of
$                     by the delivery of immediately available funds in the amount of $                    ;

(c) requests that certificates evidencing the securities underlying such Shares be issued
in the name of the undersigned, or, if the name and address of some other person is specified
below, in the name of such other person:

 

 

 

(Name and address of person other than the

undersigned in whose name Shares are to be registered)

(d) requests, if the number of Shares purchased are not all the Shares purchasable pursuant
to the unexercised portion of the Warrant, that a new Warrant of like tenor for the remaining
Shares purchasable pursuant to the Warrant be issued and delivered to the undersigned at the
address stated below.

	 	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 

Signature
	 	 
	 

	 	 	 	 	(This signature must conform in all respects
to the name of the Holder as specified on the
face of the Warrant.)	 	 
	 
	 	 	 	 	 	 	 	 
	 

Social Security Number
or Employer ID Number
	 	 	 

Printed
Name
	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	Address: 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 

	 	 

 

11

 

EXHIBIT B

ASSIGNMENT FORM

FOR VALUE RECEIVED, the undersigned,                                         , hereby sells, assigns and transfers unto:

	 	 	 	 	 
	Name:
	 	 	 	 
	 

	 	 

(Please type or print in block letters)
	 	 

	 	 	 	 	 
	Address:
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 

the right to purchase                      Shares of ACROSS AMERICA FINANCIAL SERVICES, INC. (the “Company”) pursuant to
the terms and conditions of the Warrant held by the undersigned. The undersigned hereby authorizes
and directs the Company (i) to issue and deliver to the above-named assignee at the above address a
new Warrant pursuant to which the rights to purchase being assigned may be exercised, and (ii) if
there are rights to purchase Shares remaining pursuant to the undersigned’s Warrant after the
assignment contemplated herein, to issue and deliver to the undersigned at the address stated below
a new Warrant evidencing the right to purchase the number of Shares remaining after issuance and
delivery of the Warrant to the above-named assignee. Except for the number of Shares purchasable,
the new Warrants to be issued and delivered by the Company are to contain the same terms and
conditions as the undersigned’s Warrant. To complete the assignment contemplated by this
Assignment Form, the undersigned hereby irrevocably constitutes and appoints                                         
as the undersigned’s attorney-in-fact to transfer the Warrants and the rights there under on the
books of the Company with full power of substitution for these purposes.

	 	 	 	 	 	 	 	 	 
	Dated:
	 	 	 	 	 	 	 	 
	 

	 	 

	 	 	 

Signature
	 	 
	 

	 	 	 	 	(This signature must conform in all respects
to the name of the Holder as specified on the

face of the Warrant.)	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	Printed Name
 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	Address: 	 	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 

	 	 

 

12

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00180-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00180-of-00352.parquet"}]]