Document:

EX-10.1

 Exhibit 10.1 

AMENDMENT TO INVESTMENT MANAGEMENT TRUST AGREEMENT 

THIS AMENDMENT TO INVESTMENT MANAGEMENT TRUST AGREEMENT (this “Amendment Agreement”), dated as of December 15,
2022, is made by and between Gores Holdings VII, Inc., a Delaware corporation (the “Company”), and Computershare Trust Company, N.A., a federally chartered trust company (the “Trustee”), and amends that certain
Investment Management Trust Agreement, effective as of February 25, 2021 (the “Trust Agreement”), by and between the Company and the Trustee. Capitalized terms used but not defined in this Amendment Agreement have the meanings
assigned to such terms in the Trust Agreement. 
 WHEREAS, following the closing of the Company’s initial public offering of 55,000,000
units (the “Offering”) and as of February 25, 2021, a total of $550,000,000.00 of the net proceeds from the Offering was placed in the Trust Account; 

WHEREAS, Section 1(i) of the Trust Agreement provides that the Trustee is to liquidate the Trust Account and distribute the Property in
the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its regulatory compliance costs and its taxes (less up to $100,000 of interest that may be released to the Company
to pay dissolution expenses), (x) upon receipt of, and only in accordance with, the terms of a Termination Letter in a form substantially similar to that attached to the Trust Agreement as Exhibit A or Exhibit B, as applicable, or
(y) the date which is 24 months after the closing of the Offering, if a Termination Letter has not been received by the Trustee prior to such date, in which case the Trust Account shall be liquidated in accordance with the procedures set forth
in the Termination Letter attached as Exhibit B and the Property in the Trust Account, shall be distributed to the Public Stockholders of record as of such date; 

WHEREAS, Section 6(c) of the Trust Agreement provides that Section 1(i) of the Trust Agreement may not be modified, amended or
deleted without the affirmative vote of 65% of the then outstanding shares of the Company’s Class A common stock, par value $0.0001 per share (the “Common Stock”) and Class F common stock of the Company, par
value $0.0001 per share (the “Class F Common Stock”), voting together as a single class; and 
 WHEREAS,
at a meeting of the stockholders of the Company held on or about the date hereof (the “Special Meeting”), at least 65% of the voting power of all then outstanding shares of the Common Stock and the Company’s Class F
Common Stock have voted to approve this Amendment Agreement; 
 WHEREAS, at the Special Meeting, the stockholders of the Company also voted
to approve an amendment of the Company’s amended and restated certificate of incorporation (such amendment, the “Second Amendment to the Charter”); and 

WHEREAS, each of the Company and the Trustee desires to amend the Trust Agreement as provided herein. 

 NOW, THEREFORE, in consideration of the mutual agreements contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto agree as follows: 

1. Amendment to the Trust Agreement. Effective as of the execution hereof, Section 1(i) of the Trust Agreement is
hereby amended by deleting Section 1(i) in its entirety and inserting the following in lieu thereof: 

(i)    Commence liquidation of the Trust Account only after and promptly after (x) receipt of, and only in accordance
with, the terms of a letter from the Company (“Termination Letter”) in a form substantially similar to that attached hereto as either Exhibit A or Exhibit B, as applicable, signed on behalf of the Company by its
Chief Executive Officer, President, Chief Financial Officer, Secretary or Chairman of the board of directors of the Company (the “Board”) or other authorized officer of the Company, and complete the liquidation of the Trust
Account and distribute the Property in the Trust Account, including up to $900,000 per year of interest not previously released to the Company to fund its regulatory compliance requirements and other costs related thereto (a “Regulatory
Withdrawal”), plus additional amounts that may be released to us to pay our franchise and income tax obligations, if any (less up to $100,000 of interest that may be released to the Company to pay dissolution expenses), only as directed
in the Termination Letter and the other documents referred to therein, or (y) the End Date (as such term is defined in the Company’s amended and restated certificate of incorporation), if a Termination Letter has not been received by the
Trustee prior to such date, in which case the Trust Account shall be liquidated in accordance with the procedures set forth in the Termination Letter attached as Exhibit B and the Property in the Trust Account, including interest earned on
the funds held in the Trust Account and not previously released to the Company to pay its taxes (less up to $100,000 of interest that may be released to the Company to pay dissolution expenses) shall be distributed to the Public Stockholders of
record as of such date; 
 2. Amendment to Exhibit B. Effective as of the execution hereof, Exhibit B of the Trust Agreement is
hereby deleted and replaced in its entirety with Exhibit B attached hereto. 
 3. No Further Amendment. The parties
hereto agree that except as provided in this Amendment Agreement, the Trust Agreement shall continue unmodified, in full force and effect and constitute legal and binding obligations of all parties thereto in accordance with its terms. This
Amendment Agreement forms an integral and inseparable part of the Trust Agreement. 
 4. References. 

(a) All references to the “Trust Agreement” (including “hereof,” “herein,” “hereunder,”
“hereby” and “this Agreement”) in the Trust Agreement shall refer to the Trust Agreement as amended by this Amendment Agreement. Notwithstanding the foregoing, references to the date of the Trust Agreement (as amended hereby) and
references in the Trust Agreement to “the date hereof,” “the date of this Trust Agreement” and terms of similar import shall in all instances continue to refer to February 25, 2021. 

(b) All references to the “amended and restated certificate of incorporation” in the Trust Agreement (as amended by this Amendment
Agreement) and terms of similar import shall mean the Amended and Restated Certificate as amended by the Second Amendment to the Charter. 

5. Governing Law; Jurisdiction. This Amendment Agreement shall be governed by and construed and enforced in accordance with
the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The parties hereto consent to the jurisdiction and venue of any state or
federal court located in the City of New York, State of New York, for purposes of resolving any disputes hereunder. AS TO ANY CLAIM, CROSS-CLAIM OR COUNTERCLAIM IN ANY WAY RELATING TO THIS AGREEMENT, EACH PARTY WAIVES THE RIGHT TO TRIAL BY JURY.

 6. Counterparts. This Amendment Agreement may be executed in several original or facsimile counterparts, each one of
which shall constitute an original, and together shall constitute but one instrument 
 7. Other Miscellaneous Terms. The
provisions of Sections 6(f), 6(g) and 6(h) of the Trust Agreement shall apply mutatis mutandis to this Amendment Agreement, as if set forth in full herein. 

 [Signature Pages Follow] 

 IN WITNESS WHEREOF, the parties hereto have caused this Amendment Agreement to be duly
executed by their duly authorized representatives, all as of the day and year first above written. 
  

			
	COMPUTERSHARE TRUST COMPANY, N.A., as Trustee
		
	By:	 	/s/ Jaddiel Ramos
		 	Name: Jaddiel Ramos
		 	Title: Vice President
	
	GORES HOLDINGS VII, INC.
		
	By:	 	/s/ Andrew McBride
		 	Name: Andrew McBride
		 	Title: Chief Financial Officer and Secretary

 EXHIBIT B 

[Letterhead of Company] 

[Insert date] 
 Computershare Trust
Company, N.A. 
 6200 S. Quebec St. 
 Greenwood Village, CO
80111 
 Attn: Rose Stroud and/or Jay Ramos 
 Facsimile No.
(303) 262-0608 
 Email: corporate.trust@computershare.com 

rose.stroud@computershare.com, and 
 jay.ramos@computershare.com

 Re:    Trust Account No.             Termination
Letter 
 Dear [                ]: 

Pursuant to Section 1(i) of the Investment Management Trust Agreement between Gores Holdings VII, Inc. (the
“Company”) and Computershare Trust Company, N.A. (the “Trustee”), dated as of February 25, 2021 (as amended, the “Trust Agreement”), this is to advise you that the Company
has been unable to effect a business combination with a Target Business (the “Business Combination”) within the time frame specified in the Company’s amended and restated certificate of incorporation. Capitalized terms
used but not defined herein shall have the meanings set forth in the Trust Agreement. 
 In accordance with the terms of the Trust
Agreement, we hereby authorize you to liquidate all of the assets in the Trust Account on [●] and to transfer the total proceeds into the trust operating account at [Deutsche Bank Trust Company Americas] to await distribution to the Public
Stockholders. The Company has selected [●] as the effective date for the purpose of determining when the Public Stockholders will be entitled to receive their share of the liquidation proceeds. You agree to be the Paying Agent of record and,
in your separate capacity as Paying Agent, agree to distribute said funds directly to the Company’s Public Stockholders in accordance with the terms of the Trust Agreement and the amended and restated certificate of incorporation of the
Company. Upon the distribution of all the funds, net of any payments necessary for reasonable unreimbursed expenses related to liquidating the Trust Account, your obligations under the Trust Agreement shall be terminated, except to the extent
otherwise provided in Section 1(j) of the Trust Agreement. 
  

			
	Very truly yours,
	
	Gores Holdings VII, Inc.
		
	By:	 	    
		 	Name:
		 	Title:

 cc: [Deutsche Bank Trust Company Americas]ex_457161.htm

Exhibit 10.1

Execution Version

 

AGREEMENT

 

This Agreement, dated as of December 14, 2022 (this “Agreement”), is by and among the persons and entities listed on Schedule A (collectively, the “LifeSci Group”, and each individually a “member” of the LifeSci Group) and Diffusion Pharmaceuticals Inc. (the “Company”). In consideration of and reliance upon the mutual covenants and agreements contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

 

	
			1.

				
			Withdrawal of LifeSci Proxy Contest.

			

 

	 	
			(a)

				
			The LifeSci Group hereby irrevocably withdraws the notices (collectively, the “Notice”) submitted to the Company on November 7, 2022 and November 18, 2022 in which it nominated Jill Davidson, Tenzin Khangsar, Jeffrey Kimbell, Jessica M. Lockett, Jeffrey Max and John Ziegler (the “LifeSci Nominees”) as nominees for election at the annual meeting of Company stockholders scheduled to be held on December 30, 2022 (such meeting, as the same may be adjourned, postponed, recessed or otherwise delayed, the “2022 Annual Meeting”), and further covenants and agrees not to nominate, permit any LifeSci Nominee, any member of the LifeSci Group or any LifeSci Affiliate (as defined below) to nominate or otherwise encourage or facilitate the nomination of, the LifeSci Nominees or any other person at the 2022 Annual Meeting. The LifeSci Group acknowledges and agrees that the Board of Directors of the Company (the “Board”) shall be permitted to withdraw its nomination of the LifeSci Nominees for election at the 2022 Annual Meeting for purposes of a “Change in Control” under the Company’s employment agreements and 2015 Equity Plan, as described in the Company’s Current Report on Form 8-K filed with the SEC on December 1, 2022.

			

 

	 	
			(b)

				
			The LifeSci Group hereby irrevocably withdraws its demand pursuant to Section 220 of the Delaware General Corporation Law dated November 8, 2022 and shall promptly (and in any event within ten (10) business days after the date of this Agreement) return or certify that it has destroyed all materials and duplicates thereof that have been delivered by or on behalf of the Company to members of the LifeSci Group (or any of their respective advisors) under the confidentiality and non-disclosure agreement with the Company dated November 23, 2022 in response to the demand.

			

 

	 	
			(c)

				
			At the 2022 Annual Meeting, each member of the LifeSci Group shall (1) cause, in the case of all Voting Securities owned of record, and (2) instruct and cause, in the case of all shares of Voting Securities beneficially owned but not owned of record, directly or indirectly, by it, or by any LifeSci Affiliate (as defined below), in each case as of the record date of the applicable annual meeting or as to which the member of the LifeSci Group otherwise has the power to vote or direct the vote, in each case that are entitled to vote at such annual meeting, to be present for quorum purposes and to be voted at the 2022 Annual Meeting (A) for each director nominated by the Board for election at the 2022 Annual Meeting in its definitive proxy statement filed with the SEC (as defined below) on December 6, 2022, as the same may be amended or supplemented from time to time, (B) in favor of the ratification of KPMG LLP as the Company’s independent registered public accounting firm for the year ending December 31, 2022, and (C) for the approval, on an advisory basis, of the compensation of the Company’s named executive officers during the year ended December 31, 2021 (collectively, the “2022 Stockholder Proposals”). Except as provided in the foregoing sentence, the LifeSci Group shall not be restricted from voting “For”, “Against” or “Abstaining” from any other proposals at the 2022 Annual Meeting, if any.

			

 

 

 

 

 

	 	
			(d)

				
			The LifeSci Group shall immediately publicly announce this Agreement and its agreement to vote in favor of the 2022 Stockholder Proposals in the Joint Press Release (as defined below) in accordance with Section 5 of this Agreement. The LifeSci Group further agrees that it shall not take any further action to encourage or solicit any Company stockholders to vote in opposition to the 2022 Stockholder Proposals.

			

 

	 	
			(e)

				
			As used in this Agreement, (i) the term “Voting Securities” shall mean the Common Shares that such person has the right to vote or has the right to direct the vote, (ii) the term “Common Shares” shall mean shares of common stock, par value $0.001 per share, of the Company, (iii) the term “Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated by the Securities and Exchange Commission (“SEC”) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and (iv) the term “LifeSci Affiliate” shall mean such Affiliates that are controlled by any member of the LifeSci Group.

			

 

	
			2.

				
			Expense Reimbursement. Within five (5) business days of receipt by the Company of reasonably satisfactory documentation thereof, pursuant to wire instructions provided to the Company with such documentation, the Company shall reimburse the LifeSci Group for their actual reasonable out-of-pocket expenses incurred (including those of its service providers) in connection with, and related to, the Notice (including SEC filings and communications with Company stockholders prior thereto) and the negotiation and consummation of this Agreement in an aggregate amount not to exceed $50,000. Except as otherwise expressly provided in this Agreement, all attorneys’ fees, costs and expenses incurred by any party hereto shall be borne by such party.

			

 

2

 

 

	
			3.

				
			Board Representation and Board Matters.

			

 

	 	
			(a)

				
			The Company and the LifeSci Group further agree as follows:

			

 

	 	
			(i)

				
			As long as the LifeSci Group has not breached this Agreement and the Company has not consummated an Extraordinary Transaction by July 1, 2023, the Company agrees to (i) take or have taken all necessary action to increase the size of the Board by one (1) seat and (ii) to appoint one (1) of the LifeSci Nominees to fill the resulting vacancy, effective immediately, with a term expiring at the 2023 annual meeting of stockholders of the Company (the “LifeSci Designee”). The selection of the LifeSci Nominee to be appointed to the Board as the LifeSci Designee shall be in the sole discretion of the Company and/or the Nominating and Corporate Governance Committee of the Board (the “Nominating Committee”), provided that (1) such person qualifies as independent, as determined by the Nominating Committee, under the Board’s independence guidelines, the independence requirements of the Nasdaq Stock Market (the “Nasdaq Rules”), and the independence standards applicable to the Company under paragraph (a)(1) of Item 407 of Regulation S-K under the Exchange Act, (2) such person shall not be an employee or partner of any member of the LifeSci Group, (3) such person delivers a fully completed copy of the Nomination Documents and confirms his or her willingness to serve as a director and (4) such person delivers an irrevocable resignation in the form attached to this Agreement as Exhibit A (the “Irrevocable Resignation”) (clauses (1)-(4), the “Director Criteria”). If a LifeSci Nominee is unwilling or unable to serve as the LifeSci Designee for any reason, the Board shall continue to follow the procedures of this Section 3(a)(i) for each other LifeSci Nominee until a LifeSci Designee is appointed to the Board or all LifeSci Nominees are unwilling or unable to serve. The “Nomination Documents” with respect to a LifeSci Nominee shall mean such information and materials concerning such LifeSci Nominee that the Company routinely receives from other members of the Board or as is required to be disclosed in proxy statements under applicable law or as is otherwise reasonably requested by the Company from time to time from all members of the Board in connection with the Company’s legal, regulatory, auditor or stock exchange requirements, including, but not limited to, a completed D&O Questionnaire in the form separately provided by the Company to the LifeSci Group.

			

 

	 	
			(b)

				
			Any provision in this Agreement to the contrary notwithstanding, if at any time after the date of this Agreement, the LifeSci Group, together with any LifeSci Affiliates (as defined below), ceases collectively to beneficially own (for all purposes in this Agreement, the terms “beneficially own” and “beneficial ownership” shall have the meaning ascribed to such terms as defined in Rule 13d-3 (as in effect from time to time) promulgated by the SEC under the Exchange Act), an aggregate Net Long Position in at least 96,976 of the total outstanding Common Shares (as adjusted for any stock dividends, combinations, splits, recapitalizations and similar type events), (1) the Company’s obligations under this Section 3 shall immediately and automatically terminate, (2) the LifeSci Group shall cause the LifeSci Designee to resign as a member of the Board in accordance with the Irrevocable Resignation, and (3) the LifeSci Group shall not have the right to replace the LifeSci Designee.

			

 

3

 

 

The LifeSci Group, upon request, shall keep the Company regularly apprised of the Net Long Position of the LifeSci Group and the LifeSci Affiliates to the extent that such position differs from the ownership positions publicly reported on Amendment No. 2 to the LifeSci Group’s Preliminary Proxy Statement with respect to the 2022 Annual Meeting filed with the SEC on December 6, 2022.

 

For purposes of this Agreement, (x) the term “Net Long Position” shall mean such Common Shares beneficially owned, directly or indirectly, that constitute such person’s net long position as defined in Rule 14e-4 under the Exchange Act mutatis mutandis, provided that “Net Long Position” shall not include any shares as to which such person does not have the right to vote or direct the vote, or as to which such person has entered into a derivative or other agreement, arrangement or understanding that hedges or transfers, in whole or in part, directly or indirectly, any of the economic consequences of ownership of such shares; (y) the terms “person” or “persons” shall mean any individual, corporation (including not-for-profit), general or limited partnership, limited liability or unlimited liability company, joint venture, estate, trust, association, organization or other entity of any kind or nature and (z) the term “Extraordinary Transaction” means, collectively, any of the following involving the Company or any of its subsidiaries or its or their securities or all or substantially all of the assets or businesses of the Company and its subsidiaries: any tender offer or exchange offer, merger, acquisition, business combination, reorganization, restructuring, recapitalization, sale or acquisition of material assets, or liquidation or dissolution.

 

	
			4.

				
			LifeSci Group Restrictions.

			

 

	 	
			(a)

				
			From and after the date hereof until the earlier of (A) the consummation date of an Extraordinary Transaction or (B) December 31, 2024 (the “Standstill Period”), no member of the LifeSci Group shall, directly or indirectly, and each member of the LifeSci Group shall cause each of the LifeSci Affiliates and Associates not to, directly or indirectly:

			

 

	 	
			(i)

				
			(A) acquire, offer or propose to acquire (or agree or seek to acquire) any Voting Securities (or beneficial ownership thereof), or rights or options to acquire (whether through swap or hedging transactions or otherwise) any Voting Securities (or beneficial ownership thereof) of the Company if after any such case, immediately after the taking of such action the LifeSci Group, together with its respective LifeSci Affiliates and Associates, would own or control, or otherwise beneficially own, in the aggregate more than 4.9% of the then outstanding Common Shares or (B) sell Common Shares, other than in open market sale transactions where the identity of the purchaser is not known and in underwritten widely dispersed public offerings, to any third person that, to the LifeSci Group’s knowledge (after due inquiry in connection with a private, non-open market transaction, it being understood that such knowledge shall be deemed to exist with respect to any publicly available information, including information in documents filed with the SEC) would result in such third person (together with such third person’s Affiliates and Associates), owning, controlling or otherwise acquiring beneficial ownership of in the aggregate more than 4.9% of the then outstanding Common Shares (or would increase the beneficial ownership of any third person who, together with such third person’s Affiliates and Associates, has a beneficial or other ownership interest in the aggregate of more than 4.9% of the then outstanding Common Shares); provided that, for purposes of this Section 4(a)(i), no Person shall be, or be deemed to be, the “beneficial owner” of, or to “beneficially own,” or to otherwise own or control, any securities beneficially owned by any director of the Company to the extent such securities were acquired directly from the Company by such director as or pursuant to director compensation for serving as a director of the Company;

			

 

4

 

 

	 	
			(ii)

				
			form or join in a partnership, limited partnership, syndicate or a “group” as defined under Section 13(d) of the Exchange Act, with any persons who are not members of the LifeSci Group or LifeSci Affiliates with respect to the securities of the Company;

			

 

	 	
			(iii)

				
			present (or request to present) at any annual meeting or any special meeting of the Company’s stockholders, any proposal for consideration for action by shareholders or engage in any solicitation of proxies or consents or become a “participant” in a “solicitation” (as such terms are defined in Regulation 14A under the Exchange Act) of proxies or consents (including any solicitation of consents that seeks to call a special meeting of stockholders) or, except as provided in this Agreement, otherwise publicly propose (or publicly request to propose) any nominee for election to the Board or seek representation on the Board or the removal of any member of the Board;

			

 

	 	
			(iv)

				
			grant any proxy, consent or other authority to vote with respect to any matters (other than to the named proxies included in the Company’s proxy card for any annual meeting or special meeting of stockholders) or deposit any Voting Securities in a voting trust or subject them to a voting agreement or other arrangement of similar effect (excluding customary brokerage accounts, margin accounts, prime brokerage accounts and the like), in each case, except as provided in Section 1(c);

			

 

	 	
			(v)

				
			call or seek to call any special meeting of Company stockholders or action by written consent resolutions or make any request under Section 220 of the Delaware General Corporation Law or other applicable legal provisions regarding inspection of books and records or other materials (including stocklist materials) of the Company or any of its subsidiaries;

			

 

	 	
			(vi)

				
			institute, solicit, assist or join, as a party, any litigation, arbitration or other proceeding against or involving the Company or any of its subsidiaries; provided, however, that for the avoidance of doubt, the foregoing clause shall not prevent any of the members of the LifeSci Group from (i) bringing litigation against the Company to enforce any provision of this Agreement, (ii) making counterclaims with respect to any proceeding initiated by, or on behalf of, the Company or its subsidiaries against any of the members of the LifeSci Group in connection with this Agreement, or (iii) responding to or complying with validly issued legal process;

			

 

5

 

 

	 	
			(vii)

				
			separately or in conjunction with any other person in which it is or proposes to be either a principal, partner or financing source or is acting or proposes to act as broker or agent for compensation, submit a proposal for or offer of (with or without conditions), any Extraordinary Transaction; provided that the members of the LifeSci Group and LifeSci Affiliates and Associates shall be permitted to sell or tender their Common Shares, and otherwise receive consideration, pursuant to any Extraordinary Transaction; and provided further that (A) if a third party (other than the LifeSci Group or an LifeSci Affiliate or Associate) commences a tender offer or exchange offer for all of the outstanding Common Shares that is not rejected by the Board in its Recommendation Statement on Schedule 14D-9, then the LifeSci Group shall similarly be permitted to make an offer for the Company or commence a tender offer or exchange offer for all of the outstanding Common Shares at a higher consideration per share, provided that the foregoing (x) will not relieve the LifeSci Group of its obligations under the terms of any confidentiality agreement with the Company and (y) will not be deemed to require the Company to make any public disclosures and (B) the Company may waive the restrictions in this Section 4(a)(vii) with the approval of the Board;

			

 

	 	
			(viii)

				
			seek, or encourage any person, to submit nominations in furtherance of a “contested solicitation” for the election or removal of directors with respect to the Company or, except as expressly provided in this Agreement, seek, encourage or take any other action with respect to the election or removal of any directors;

			

 

	 	
			(ix)

				
			make any public communication in opposition to (A) any Extraordinary Transaction or (B) any financing transaction, in each case involving the Company or any of its subsidiaries;

			

 

	 	
			(x)

				
			seek to advise, encourage, support or influence any person with respect to the voting or disposition of any securities of the Company at any annual meeting or special meeting of stockholders of the Company, except in accordance with Section 1(c);

			

 

	 	
			(xi)

				
			make any request or submit any proposal to amend or waive the terms of this Agreement other than through non-public communications with the Company that would not be reasonably determined to trigger public disclosure obligations for any party;

			

 

	 	
			(xii)

				
			make any public proposal or request with respect to (A) controlling, changing or influencing the Board or management of the Company, including plans or proposals relating to any change in the number or term of directors or the filling of any vacancies on the Board, (B) any material change in the capitalization, stock repurchase programs and practices, capital allocation programs and practices or dividend policy of the Company, (C) any other material change in the Company’s management, business or corporate or governance structure or (D) any waiver, amendment or modification to the Company’s Certificate of Incorporation or Bylaws, operations, business, corporate strategy, corporate structure, capital structure or allocation, share repurchase or dividend policies or other policy (it being understood that this clause (xii) shall not restrict private discussions with the Board regarding such matters that would not require the Company or any member of the LifeSci Group to make any public disclosure);

			

 

6

 

 

	 	
			(xiii)

				
			publicly disclose any intention, plan or arrangement inconsistent with any provision of this Section 4;

			

 

	 	
			(xiv)

				
			encourage or support any other person to take any of the actions described in this Section 4 that the LifeSci Group is restricted from doing; or

			

 

	 	
			(xv)

				
			take any action challenging the validity or enforceability of this Section 4 unless the Company is challenging the validity or enforceability of this Section 4.

			

 

	 	
			(b)

				
			Subject to applicable law, from the date of this Agreement until the end of the Standstill Period, (i) neither a member of the LifeSci Group nor any of the LifeSci Affiliates or Associates (including such persons’ officers, directors and persons holding substantially similar positions however titled) (collectively, the “LifeSci Parties”) shall (and the LifeSci Group shall cause such persons not to) make, or cause to be made, by press release or similar public statement, including to the press or media (including social media), or in an SEC or other public filing, any public statement or announcement that criticizes, disparages, calls into disrepute, or otherwise defames or slanders the Company, its subsidiaries or any of their respective current or former officers or directors (including, in each case, in respect of any Extraordinary Transaction) and (ii) neither the Company nor any of its controlled Affiliates (including such persons’ officers, directors and persons holding substantially similar positions however titled) (collectively, the “Company Parties”) shall (and the Company shall cause such persons not to) make, or cause to be made, by press release or similar public statement, including to the press or media (including social media), or in an SEC or other public filing, any statement or announcement that criticizes, disparages, calls into disrepute, or otherwise defames or slanders any member of the LifeSci Group, LifeSci Nominees or LifeSci Affiliates or any of their respective current or former officers or directors. Notwithstanding the foregoing, nothing in this Section 4(b) shall be deemed to prevent either any of the LifeSci Parties or Company Parties from complying with his, her or its respective disclosure obligations under applicable law, legal process, subpoena, law, the rules of any stock exchange, or legal requirement or as part of a response to a request for information from any governmental authority with jurisdiction over the party from whom information is sought.

			

 

7

 

 

	 	
			(c)

				
			The LifeSci Group shall not, and shall cause the LifeSci Affiliates and Associates not to, enter into any agreement with, or compensate, the LifeSci Designee with respect to his or her role or service (including voting) as a director of the Company.

			

 

	 	
			(d)

				
			For purposes of this Agreement, the term “Associate” shall mean (i) any trust or other estate in which such person has a substantial beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity, and (ii) any relative or spouse of such person, or any relative of such spouse, who has the same home as such person or who is a director or officer of such person or of any of its parents or subsidiaries

			

 

	
			5.

				
			Public Announcements. Unless otherwise agreed, no earlier than 6:30 a.m., Eastern time, on the first trading day after the date of this Agreement, the Company shall announce the execution of this Agreement by means of a press release in the form attached to this Agreement as Exhibit B (the “Joint Press Release”). The LifeSci Group will not issue a separate press release. The LifeSci Group shall have an opportunity to review and comment in advance of the filing of the Current Report on Form 8-K to be made by the Company with respect to this Agreement and the Company shall consider in good faith any comments of the LifeSci Group.

			

 

	
			6.

				
			Representations and Warranties of All Parties. Each of the parties represents and warrants to the other party that: (a) such party has all requisite company power and authority to execute and deliver this Agreement and to perform its obligations hereunder; (b) this Agreement has been duly and validly authorized, executed and delivered by it and is a valid and binding obligation of such party, enforceable against such party in accordance with its terms; and (c) this Agreement will not result in a violation of any terms or conditions of any agreements to which such person is a party or by which such party may otherwise be bound or of any law, rule, license, regulation, judgment, order or decree governing or affecting such party.

			

 

	
			7.

				
			Representations and Warranties of LifeSci Group. Each member of the LifeSci Group jointly represents and warrants that, as of the date of this Agreement, (a) the LifeSci Group collectively beneficially own, an aggregate of 96,976 Common Shares, (b) except as set forth in the preceding clause (a), no member of the LifeSci Group, individually or in the aggregate with any LifeSci Affiliate or Associate, has any other beneficial ownership of, or economic exposure to, any Common Shares, nor does it currently have or have any right to acquire any interest in any other securities of the Company (or any rights, options or other securities convertible into or exercisable or exchangeable (whether or not convertible, exercisable or exchangeable immediately or only after the passage of time or the occurrence of a specified event) for such securities or any obligations measured by the price or value of any securities of the Company or any of its controlled Affiliates, including any swaps or other derivative arrangements designed to produce economic benefits and risks that correspond to the ownership of Common Shares, whether or not any of the foregoing would give rise to beneficial ownership (as determined under Rule 13d-3 promulgated under the Exchange Act), and whether or not to be settled by delivery of Common Shares, payment of cash or by other consideration, and without regard to any short position under any such contract or arrangement), (c) no member of the LifeSci Group has any knowledge of any other stockholder of the Company that intends to submit a notice to the Company to nominate directors at or bring other business before the 2022 Annual Meeting, and (d) each LifeSci Nominee has acknowledged and agreed to the withdrawal of his or her nomination for election as a director of the Company at the 2022 Annual Meeting. The LifeSci Group acknowledges and agrees that no LifeSci Designee shall be permitted to share the Company’s confidential information with any member of the LifeSci Group (or any LifeSci Affiliates or Associates) without the Board’s prior written consent.

			

 

8

 

 

	
			8.

				
			Miscellaneous. This Agreement shall thereafter terminate and be of no further force or effect upon the termination of the Standstill Period, provided, that no party hereto is released from any breach of this Agreement that occurred before its termination. The parties hereto recognize and agree that if for any reason any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached, immediate and irreparable harm or injury would be caused for which money damages would not be an adequate remedy. Accordingly, each party agrees that in addition to other remedies the other party shall be entitled to at law or equity, the other party shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the terms and provisions of this Agreement exclusively in Court of Chancery of the State of Delaware located in the County of New Castle and any state appellate court therefrom within the State of Delaware, or in the event (but only in the event) that such Court of Chancery declines to accept jurisdiction over such action or proceeding, any federal or state court located in New Castle County, Delaware (the “Chosen Courts”). In the event that any action shall be brought in equity to enforce the provisions of this Agreement, no party shall allege, and each party hereby waives the defense, that there is an adequate remedy at law. Furthermore, each of the parties hereto (i) consents to submit itself to the personal jurisdiction of the Chosen Courts in the event any dispute arises out of this Agreement or the transactions contemplated by this Agreement, (ii) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court, (iii) agrees that it shall not bring any action relating to this Agreement or the transactions contemplated by this Agreement in any court other than the Chosen Courts, and each of the parties irrevocably waives the right to trial by jury, (iv) agrees to waive any bonding requirement under any applicable law, in the case any other party seeks to enforce the terms by way of equitable relief, and (v) irrevocably consents to service of process by a reputable overnight mail delivery service, signature requested, to the address of such party’s principal place of business or as otherwise provided by applicable law. THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO CONTRACTS EXECUTED AND TO BE PERFORMED WHOLLY WITHIN SUCH STATE WITHOUT GIVING EFFECT TO THE CHOICE OF LAW PRINCIPLES OF SUCH STATE.

			

 

9

 

 

	
			9.

				
			No Waiver. Any waiver by any party of a breach of any provision of this Agreement shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Agreement. The failure of a party to insist upon strict adherence to any term of this Agreement on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Agreement.

			

 

	
			10.

				
			Entire Agreement. This Agreement contains the entire understanding of the parties with respect to the subject matter hereof and may be amended, waived or otherwise modified only by an agreement in writing executed by the parties hereto.

			

 

	
			11.

				
			Notices. All notices, consents, requests, instructions, approvals and other communications provided for herein and all legal process in regard hereto shall be in writing and shall be deemed validly given, made or served, if (a) given by email, when such email is transmitted to the email address set forth below (provided no “bounce back” or similar message of non-delivery is received with respect thereto; provided further that notice given by email shall not be effective until either (i) the receiving party’s receipt of a duplicate copy of such email notice by one of the other methods described in this Section 11 or (ii) the receiving party delivers a written confirmation of receipt of such notice by email or any other method described in this Section 11), (b) delivered by hand to the address specified in this Section 11, when actually received by hand providing proof of delivery, or (c) on the next business day if transmitted by national overnight courier (with confirmation of delivery) to the address specified in this Section 11:

			

 

	
			(a) if to the Company:

			
	 
	
			Diffusion Pharmaceuticals Inc.

			300 East Main Street, Suite 201

			Charlottesville, Virginia 22902

			
	
			Attention:

				
			William Elder, General Counsel and Corporate Secretary

			
	
			Email:

				
			welder@diffusionpharma.com

			
	 
	
			with a copy to (which shall not constitute notice):

			
	 
	
			Dechert LLP

			1095 Avenue of the Americas

			New York, New York 10036

			
	
			Attention:

				
			David S. Rosenthal

			
	
			Email:

				
			david.rosenthal@dechert.com

			
	 
	
			(b) if to the LifeSci Group:

			
	 
	
			LifeSci Special Opportunities Master Fund Ltd.

			c/o LifeSci Management Company LLC

			250 West 55th Street

			New York, NY 10019

			
	
			Attention:

				
			David Dobkin

			
	
			Email:

				
			ddobkin@lifesciopportunityfund.com

			
	 	 
	
			with a copy to (which shall not constitute notice):

			
	 
	
			Olshan Frome Wolosky LLP

			1325 Avenue of the Americas

			New York, NY 10019

			
	
			Attention:

				
			Andrew M. Freedman

			
	
			Email:

				
			AFreedman@olshanlaw.com

			

 

10

 

 

	
			12.

				
			Severability. If at any time subsequent to the date of this Agreement, any provision of this Agreement shall be held by any court of competent jurisdiction to be illegal, void or unenforceable, such provision shall be of no force and effect, but the illegality or unenforceability of such provision shall have no effect upon the legality or enforceability of any other provision of this Agreement.

			

 

	
			13.

				
			Counterparts. This Agreement may be executed (including by PDF) in two or more counterparts which together shall constitute a single agreement.

			

 

	
			14.

				
			Successors and Assigns. This Agreement shall not be assignable by any of the parties to this Agreement. This Agreement, however, shall be binding on and enforceable by successors of the parties hereto.

			

 

	
			15.

				
			No Third Party Beneficiaries. This Agreement is solely for the benefit of the parties hereto and is not enforceable by any other persons.

			

 

	
			16.

				
			Fees and Expenses. Except as expressly provided in Section 2 of this Agreement, neither the Company, on the one hand, nor the LifeSci Group, on the other hand, will be responsible for any fees or expenses of the other in connection with this Agreement.

			

 

	
			17.

				
			Interpretation and Construction. Each of the parties hereto acknowledges that it has been represented by counsel of its choice throughout all negotiations that have preceded the execution of this Agreement, and that it has executed the same with the advice of said independent counsel. Each party and its counsel cooperated and participated in the drafting and preparation of this Agreement and the documents referred to herein, and any and all drafts relating thereto exchanged among the parties shall be deemed the work product of all of the parties and may not be construed against any party by reason of its drafting or preparation. Accordingly, any rule of law or any legal decision that would require interpretation of any ambiguities in this Agreement against any party that drafted or prepared it is of no application and is hereby expressly waived by each of the parties hereto, and any controversy over interpretations of this Agreement shall be decided without regards to events of drafting or preparation. The section headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Unless context otherwise requires, references herein to Exhibits, Sections or Schedules mean the Exhibits, Sections or Schedules attached to this Agreement. The term “including” shall be deemed to mean “including without limitation” in all instances. In all instances, the term “or” shall not be deemed to be exclusive.

			

 

[Signature Pages Follow]

 

11

 

 

 

IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement, or caused the same to be executed by its duly authorized representative as of the date first above written.

 

	 	
			DIFFUSION PHARMACEUTICALS INC.

			
	 	 
	 	 
	 	
			By:

				
			/s/ William Elder

			
	 	
			Name:

				
			William Elder

			
	 	
			Title:

				
			General Counsel & Corporate Secretary

			

 

[Signature Page to Agreement between Diffusion Pharmaceuticals Inc. and the LifeSci Group]

 

 

	 	
			LIFESCI GROUP

			

 

	 	
			LifeSci Special Opportunities Master Fund Ltd.

			
	 	 	 
	 	
			By:

				
			LifeSci Special Opportunities Partners GP, LLC, its general partner

			
	 	 	 
	 	 	 
	 	
			By:

				
			/s/ David Dobkin

			
	 	
			Name:

				
			David Dobkin

			
	 	
			Title:

				
			Managing Member

			

 

	 	
			LifeSci Special Opportunities Partners LP

			
	 	 	 
	 	
			By:

				
			LifeSci Special Opportunities Partners GP, LLC, its general partner

			
	 	 	 
	 	 	 
	 	
			By:

				
			/s/ David Dobkin

			
	 	
			Name:

				
			David Dobkin

			
	 	
			Title:

				
			Managing Member

			

 

	 	
			LifeSci Special Opportunities Offshore Fund, Ltd.

			
	 	 	 
	 	 	 
	 	
			By:

				
			/s/ David Dobkin

			
	 	
			Name:

				
			David Dobkin

			
	 	
			Title:

				
			Authorized Signatory

			

 

	 	
			LifeSci Special Opportunities Partners GP, LLC

			
	 	 	 
	 	 	 
	 	
			By:

				 
	 	
			Name:

				
			David Dobkin

			
	 	
			Title:

				
			Managing Member

			

 

	 	
			LifeSci Management Company LLC

			
	 	 	 
	 	 	 
	 	
			By:

				
			/s/ David Dobkin

			
	 	
			Name:

				
			David Dobkin

			
	 	
			Title:

				
			Managing Member

			

 

[Signature Page to Agreement between Diffusion Pharmaceuticals Inc. and the LifeSci Group]

 

 

	 	
			Pirate Cove Capital Ltd.

			
	 	 	 
	 	 	 
	 	
			By:

				
			/s/ David Dobkin

			
	 	
			Name:

				
			David Dobkin

			
	 	
			Title:

				
			Authorized Signatory

			

 

 

 

	 	
			/s/ David Dobkin

			
	 	
			David Dobkin

			

 

[Signature Page to Agreement between Diffusion Pharmaceuticals Inc. and the LifeSci Group]

 

 

SCHEDULE A

	
			LifeSci Special Opportunities Master Fund Ltd.

			 

			LifeSci Special Opportunities Partners LP

			 

			LifeSci Special Opportunities Offshore Fund, Ltd.

			 

			LifeSci Special Opportunities Partners GP, LLC

			 

			LifeSci Management Company LLC

			 

			Pirate Cove Capital Ltd.

			 

			David Dobkin

			

 

 

 

 

EXHIBIT A

[FORM OF RESIGNATION]

 

[●]

 

Board of Directors

Diffusion Pharmaceuticals Inc.

300 East Main Street, Suite 201

Charlottesville, Virginia 22902

 

	
			Re:

				
			Resignation

			

 

Ladies and Gentlemen:

 

This irrevocable resignation is delivered pursuant to that certain Agreement, dated as of December 14, 2022 (the “Agreement”) among Diffusion Pharmaceuticals Inc. and the LifeSci Group. Capitalized terms used herein but not defined shall have the meaning set forth in the Agreement.

 

Pursuant to Section 3 of the Agreement, effective only upon, and subject to, such time as the LifeSci Group (together with the LifeSci Affiliates) ceases collectively to beneficially own (as defined in Rule 13d-3 (as in effect from time to time) promulgated by the SEC under the Exchange Act) an aggregate Net Long Position in at least 96,976 Common Shares, I hereby irrevocably resign from my position as a director of the Company and from any and all committees of the Board on which I serve.

 

Sincerely,

 

	 	 
	
			Name:

				 

 

A-1

 

 

EXHIBIT B

 

[PRESS RELEASE]

 

[Attached.]

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