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THIS AGREEMENT made as of the 25th day of August, 2021
a corporation con incorporated under the laws of the province of Ontario
2861435 ONTARIO INC.
a corporation incorporated under the laws of the province of Ontario
LUCID PSYCHECEUTICALS INC.
a corporation incorporated under the laws of the province of Ontario
NOW THEREFORE in consideration of the covenants and agreements contained in this Agreement the parties hereto agree as follows:
In this Agreement (including the recitals hereto) and each schedule hereto:
"Acquisition Proposal" means, other than the transactions contemplated by this Agreement, any offer, proposal, inquiry, agreement or understanding (written or
oral) from any Person or group of Persons other than FSD (or any affiliate of FSD) after the date of this Agreement relating to (i) any sale, disposition, alliance, partnership or joint venture (or any lease, license, long-term supply agreement or
other arrangement having the same economic effect as a sale or disposition), direct or indirect, of assets representing 20% or more of the consolidated assets or contributing 20% or more of the consolidated revenue of Lucid or any issuance by Lucid,
by any Lucid Subsidiary or by any entity formed by Lucid to hold any of its or its subsidiary's assets of 20% or more of its voting or equity securities (or rights or interests in such voting or equity securities, including securities or rights
convertible into, exercisable or exchangeable for, or that track the rights of, such voting or equity securities); (ii) any take-over bid, exchange offer, treasury issuance or other transaction that, if consummated, would result in such Person or
group of Persons (acting jointly or in concert) beneficially owning 20% or more of any class of voting or equity securities (including securities or rights convertible into, exercisable or exchangeable for, or that track the rights of, voting or
equity securities) of Lucid; (iii) any plan of arrangement, merger, amalgamation, consolidation, share exchange, business combination, reorganization, recapitalization, liquidation, dissolution, winding up, exclusive license or other similar
transaction involving Lucid and/or any of the Lucid Subsidiaries whose assets individually or in the aggregate constitute 20% or more of the consolidated assets of Lucid; or (iv) any other similar transaction or series of transactions involving Lucid
and/or any of the Lucid Subsidiaries;
"Act" means the Business Corporations Act (Ontario) and the regulations prescribed thereunder, as the same may be
varied, supplemented or amended from time to time;
"Action" means any claim, demand, charge, complaint, action, suit, proceeding, hearing, audit, investigation, interference, opposition, examination, citizen
suit, concurrent use, cancellation or other dispute resolution or proceeding, whether civil, criminal, judicial, administrative, investigative, arbitrative, information or other, at law or in equity, commenced, filed, brought, conducted or heard by,
against, to, of or before or otherwise involving, any Governmental Authority;
"Active Medical Records" means all medical records (maintained electronically and/or non-electronically) relating to patients who have been seen or treated by
Lucid or a Lucid Subsidiary in the two (2) year period prior to the Effective Date, but excluding records of terminated or deceased patients;
"Agreement" means this master agreement and the schedules hereto, as may be amended, modified, restated, supplemented or replaced from time to time;
"Amalco" means the entity formed by the Amalgamation of the Amalgamating Parties;
"Amalco Shares" means the common shares in the capital of Amalco;
"Amalgamating Parties" means Lucid and Subco;
"Amalgamation" means the amalgamation of Lucid and Subco under the provisions of Section 174 of the Act and otherwise on the terms and subject to the
conditions set forth in this Agreement;
"Amalgamation Resolution" means the special resolution of the Lucid Shareholders approving the Amalgamation;
"Amalgamation Agreement" means the form of amalgamation agreement to be entered into between Lucid, Subco and FSD in accordance with the terms hereof, in
substantially the form set forth in Schedule "A" hereto;
"Applicable Laws" means with respect to any Person, all laws, statutes, regulations, by-laws, statutory rules, orders, ordinances, protocols, codes,
guidelines, notices, directions (including all applicable Canadian securities laws), and terms and conditions of any grant of approval, permission, authority or license of any Governmental Authority or self-regulatory authority (including the CSE and
Nasdaq), whether federal, state, provincial, local, municipal or foreign, in each case, that is binding upon or applicable to such Person, as amended unless expressly specified otherwise;
"Assigned Lucid Share Value" means $0.1034;
"Articles of Amalgamation" means the articles of amalgamation of Amalco;
"Business Day" means a day other than a Saturday, Sunday or a civic or statutory holiday in the City of Toronto, Ontario or the City of Chicago, Illinois;
"Certificate" means the certificate of amalgamation issued by the Director under the Act in respect of the Amalgamation;
"Change in Lucid Recommendation" shall have the meaning ascribed thereto in Subsection 11(c)(ii);
"CSE" means the Canadian Securities Exchange;
"Director" means the Director appointed under section 278 of the Act;
"Dissent Rights" shall have the meaning ascribed thereto in Section 7;
"Effective Date" means the effective date of the Amalgamation as set forth in the Certificate;
"Effective Time" shall have the meaning ascribed thereto in Subsection 2(c)(ii);
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended;
"Exchange Ratio" means the number of FSD Shares to be issued for each one Lucid Share, which number shall be 0.0412 FSD Shares for each one Lucid Share,
subject to adjustment pursuant to Section 4(a)(ii);
"FSD Board" means the board of directors of FSD;
"FSD Broker Compensation Options" means options to acquire FSD Shares;
"FSD Disclosure Record" means, collectively, all of the documents which have been filed on www.sedar.com by or on behalf of FSD with the applicable Canadian
securities regulators pursuant to the requirements of Applicable Laws since December 31, 2020;
"FSD Financial Statements" means, together, the audited combined and consolidated financial statements of any FSD Subsidiary as at and for the financial years
ended December 31, 2020 and 2019, together with the notes thereto and the auditor's report thereon, and the unaudited condensed interim combined and consolidated financial statements of any FSD Subsidiary as at and for the six months ended June 30,
2021 and 2020, together with the notes thereto;
"FSD Material Adverse Effect" means any change, effect, event or occurrence that, individually or taken together with any other change, effect, event or
occurrence, is or would reasonably be expected to be materially adverse to the financial condition, operations, assets, liabilities, capitalization or business of FSD and the FSD Subsidiaries, considered on a consolidated basis, or would reasonably
be expected to prevent, materially delay or materially impair the ability of FSD to consummate the transactions contemplated by this Agreement; provided, however, that a FSD Material Adverse Effect shall not include an adverse change or adverse
effect resulting from a change, effect, event or occurrence: (i) resulting from general economic, financial, currency exchange, securities or commodity market conditions in Canada or the United States, or (ii) resulting from the COVID-19 pandemic or
any other pandemics, epidemics, diseases and health emergencies unless, with respect to clauses (i) and (ii), such matter has a materially disproportionate effect on FSD and the FSD Subsidiaries, considered on a consolidated basis, relative to
comparable entities operating in the industries in which FSD and the FSD Subsidiaries, considered on a consolidated basis, operate. References in certain sections of this Agreement to dollar amounts are not intended to be, and shall not be deemed to
be, illustrative or interpretative for purposes of determining whether a FSD Material Adverse Effect has occurred;
"FSD Options" means options to acquire FSD Shares;
"FSD Shares" means the Subordinate Voting Shares in the capital of FSD;
"FSD Subsidiary" means each of FSD Biosciences Inc. and Prismic Pharmaceuticals Inc. and FV Pharma Inc. and "FSD Subsidiaries" means all of them;
"FSD Warrants" means warrants to acquire FSD Shares. "Governmental Authority" means (i) any international,
multinational, national, federal, provincial, state, municipal, local or other governmental or public department, central bank, court, commission, board, bureau, agency or instrumentality, domestic or foreign, (ii) any subdivision or authority of any
of the above, (iii) any stock exchange, and (iv) any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the above;
"FSD VWAP Trading Price" means the volume-weighted average price of the FSD Shares, as reported on the CSE, over the ten (10) trading days immediately
preceding, but not including, the two (2) Business Days before the anticipated Effective Date;
"IFRS" means the international financial reporting standards as set out in the Handbook of the Canadian Institute of Chartered Accountants, at the relevant
time applied on a consistent basis;
"Information Systems" means all computer hardware, databases and data storage systems, computer, data, database and communications networks (other than the
Internet), architecture interfaces and firewalls (whether for data, voice, video or other media access, transmission or reception) and other apparatus used to create, store, transmit, exchange or receive information in any form;
"Intellectual Property" means any, and all, of the following in any jurisdiction throughout the world:
"Lock-Up Agreements" means the lock-up agreements between FSD and the Lucid Locked-Up Shareholders, in each case as entered into by the Lucid Locked-Up
Shareholders prior to the Effective Date, in the form of Lock-Up Agreement attached hereto as Schedule "B";
"Nasdaq" means Nasdaq Capital Market.
"Notice of Meeting" means the notice of the Lucid Meeting, including any schedules thereto and any documents incorporated by reference therein, to be sent to
Lucid Shareholders in connection with the Lucid Meeting, and includes any amendments thereto;
"Person" means any corporation, partnership, limited liability company or partnership, joint venture, trust, unincorporated association or organization,
business, enterprise or other entity; any individual; and any Governmental Authority;
"Lucid Board" means the board of directors of Lucid;
"Lucid Disclosure Letter" means the disclosure letter dated the date of this Agreement and delivered by Lucid to FSD with this Agreement;
"Lucid Financial Statements" means, collectively, the annual financial statements of Lucid as at and for the year ended June 30, 2021;
"Lucid Information" means all information disclosed in writing to FSD (or its representatives) by Lucid in connection with FSD's due diligence review process
"Lucid Locked-Up Shareholders" means Lakshmi Kotra and Joseph Romano, and their respective affiliates;
"Lucid Material Adverse Effect" means any change, effect, event or occurrence that, individually or taken together with any other change, effect, event or
occurrence, is or would reasonably be expected to be materially adverse to the financial condition, operations, assets, liabilities, capitalization or business of Lucid and the Lucid Subsidiaries, considered on a consolidated basis, or would
reasonably be expected to prevent, materially delay or materially impair the ability of Lucid to consummate the transactions contemplated by this Agreement; provided, however, that a Lucid Material Adverse Effect shall not include an adverse change
or adverse effect resulting from a change, effect, event or occurrence: (i) resulting from general economic, financial, currency exchange, securities or commodity market conditions in Canada or the United States; or (ii) resulting from the COVID-19
pandemic or any other pandemics, epidemics, diseases and health emergencies unless, with respect to clauses (i) and (ii), such matter has a materially disproportionate effect on Lucid and the Lucid
Subsidiaries, considered on a consolidated basis, relative to comparable entities operating in the industries in which Lucid and the Lucid Subsidiaries, considered on a consolidated basis, operate. References
in certain sections of this Agreement to dollar amounts are not intended to be, and shall not be deemed to be, illustrative or interpretative for purposes of determining whether a Lucid Material Adverse Effect has occurred;
"Lucid Material Contract" shall have the meaning ascribed thereto in Subsection 16(h);
"Lucid Meeting" means the annual and special meeting or the special meeting, as applicable, of the Lucid Shareholders, including any adjournments or
postponements thereof, to be held to, among other things, consider and, if deemed advisable, to approve the Amalgamation Resolution;
"Lucid Options" means the 3,761,000 options of Lucid to acquire the same number of Lucid Shares at a price of $0.07 per Lucid Share and 149,000 options of
Lucid to acquire the same number of Lucid Shares at a price of $0.12 per Lucid Share, outstanding as of the date hereof;