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LOAN AGREEMENT

THIS AGREEMENT made the 25nd day of July, 2016

AMONG:

C.A.B. Financial Services Ltd
156 Valleyview Road
Kelowna BC V1X 3M4

(herein called the “Lender”)

OF THE FIRST PART

AND:

LEXARIA BIOSCIENCE CORP., of
950 – 1130 West Pender Street,
Vancouver BC V6E 4A4,
Fax 604 602 1625

(herein called the “Company”)

OF THE SECOND PART

WHEREAS:

A.           This Loan Agreement (the “Loan Agreement”) is entered into this
date by and between the Lender and the Company on a fifteen month term, the
first 3 of which are interest free and payment free.

B.           The purpose of this Loan Agreement is to set out terms of the
arrangement by which Lender agrees to make a loan of US$50,000.00 (“Loan”)
available to the Company.

1.           DEFINITIONS

1.1          “Collateral” means the collateral in which the Lender is granted a
security interest by this Agreement proportionate to the loan extended by the
Lender and which shall include the property listed in Schedule “B”, and all
proceeds, products and accounts thereof, including, without limitation, all
proceeds from the sale or transfer of the Collateral and of insurance covering
the same and of any tort claims in connection therewith, and all dividends,
interest, cash, notes, securities, equity interest or other property at any time
and from time to time acquired, receivable or otherwise distributed in respect
of, or in exchange for the Collateral, subject only to any preferred interest in
this Collateral previously granted prior to the date of this Agreement.

1.2          “Indebtedness” means all loans and advances made or which may be
made by the Lender to the Company and Interest thereon and all costs, charges
and expenses of or incurred by the Lender in connection with any Securities and
in connection with any property covered by or comprised in the Securities,
whether in protecting, preserving, realizing or collecting any Securities or
property aforesaid or attempting so to do or otherwise and all other obligations
and liabilities, present or future, direct or indirect, absolute or contingent,
mature or not, of the Company to the Lender arising under or by virtue of this
Agreement, the Securities or otherwise howsoever.

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1.3          “Interest” will be simple interest at 8% per annum with a 3-month
interest-free period at the beginning of the Loan Agreement.

1.4          “Principal” means the aggregate principal amount of money loaned to
the Company by the Lender of US$50,000.00 dollars.

1.5          “Securities” means the securities referred to in Article 3 or any
renewal thereof or substitution therefore.

2.           TERMS OF THE LOAN

2.1          The Lender will lend to the Company, and the Company will borrow
from the Lender by way of one advance to be evidenced by a promissory note in
the form attached hereto as Schedule “A”, the Principal sum of fifty thousand
dollars (USD) subject to the terms and conditions of this Agreement and the
Securities.

2.2          For value received, Company promises to pay to Lender beginning on
the 15th day of the fourth month and continuing through to the 15th day of the
fifteenth month, twelve equal monthly payments of $4,500.00 to be applied
against the principal and interest amount outstanding from the date of the Loan
Agreement; interest understood to be calculated simply at the rate of 8% on the
outstanding principal balance. If not repaid before maturity, a total of
$4,000.00 in interest will be paid. The Company will use best efforts to repay
the Loan in full as quickly as possible, if in the sole judgement of the Company
it is able to do so without creating financing hardship for itself.

2.3          Notwithstanding the above the Company may repay at any time any or
all of the Principal then outstanding and accrued and unpaid Interest on giving
20 days notice to the Lender. In this event the Company may elect to repay the
Principal at any time in advance of the Maturity Date.

2.4          In the event the Company sells, pledges, or hypothecates more than
20% of its assets (measured by book value on the Company’s quarterly financial
statements) at any time while any principal balance remains unpaid, the entire
principal balance is then due and payable immediately.

3.           SECURITY FOR THE LOAN

3.1          As an inducement for the Lender to extend the loans as evidenced
herein and to secure their complete and timely payment, performance and
discharge in full, as the case may be, the Debtor hereby unconditionally and
irrevocably pledges, grants and hypothecates to the Lender a continuing and
perfected security interest in and to, a lien upon and a right of set-off
against all of their respective right, title and interest of whatsoever kind and
nature in and to, the Collateral (the “Security Interest”) as shown in Schedule
“B”.

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4.           AFFIRMATIVE COVENANTS OF THE COMPANY

4.1          At all times while any Principal or Interest on the Loan is
outstanding, the Company will:

  (a)

maintain the assets being the subject of the Securities in good repair;

        (b)

keep true records and books of account in which full, true and correct entries
will be made in accordance with generally accepted accounting principles
consistently applied throughout the period involved, and maintain adequate
accounts and reserves for all taxes, including taxes on income and profits, all
depreciation and amortization of his properties and assets and all such other
reserves for contingencies as would normally be required in accordance with
generally accepted accounting principles;

        (c)

permit any representative of the Lender to visit and inspect the properties
charged by the Securities and to examine the Company’s books, records, leases
and other documents relating thereto and to enquire from time to time as to
particulars of any of the foregoing, all at such times and so often as may
reasonably be requested; and

        (d)

forthwith upon request of the Lender execute and deliver to the Lender all such
further and other mortgages, deeds, documents, matters, acts, things and
insurances in law (collectively, the “Ancillary Items”) for the purpose of
record or otherwise which the Lender may reasonably require to perfect the
intentions and provisions of this Agreement; provided that the Company will not
be obligated to execute and deliver any Ancillary Items where the execution and
delivery of such Ancillary Items would breach the terms and conditions of any
lease of real property existing on the date hereof to which the Company is a
party.

5.           DEFAULT

5.1          Default by the Company. The occurrence of one or more of the
following events shall constitute an “event of default”, namely:

  (a)

if the Company fails to make payment of the Indebtedness or any part thereof as
and when the same comes due and payable;

        (b)

if any representation or warranty contained herein or otherwise made in writing
to the Lender in connection with any of the transactions contemplated by this
Agreement is found to be false or misleading or incorrect in any material
respect on the date which it was made;

        (c)

if the Company defaults in the performance of or compliance with any term,
covenant or agreement contained in this Agreement or in any of the Securities
and the default is not remedied within twenty (20) days after notice thereof has
been given to the Company;

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  (d)

the entry of a decree or order for relief by a court having jurisdiction in
respect of the Company in an involuntary case under the federal bankruptcy laws,
as now or hereafter constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar laws;

        (e)

the commencement by the Company of a voluntary case under the federal bankruptcy
laws, as now or hereafter constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar laws;

        (f)

the appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Company or for any material part of
the Company’s property;

        (g)

the consent by the Company to the appointment of, or taking possession by, a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of the Company or for any material part of the Company’s property;

        (h)

the issuance of an order for the winding up or liquidation of the affairs of the
Company and the continuance of such decree, order or appointment unstayed and in
effect for a period of sixty (60) consecutive days;

        (i)

the making by the Company of an assignment for the benefit of its creditors;

        (j)

the institution by or against the Company of any formal or informal proceeding
for the dissolution or liquidation of, settlement of claims against or
winding-up of the affairs of the Company;

        (k)

the threat by the Company of ceasing to carry on business or the Company ceasing
to carry on business;

        (l)

the entry of a decree or order or an effective resolution passed for winding-up
the Company;

        (m)

the entry by the Company into any reconstruction, reorganization, amalgamation,
merger or other similar arrangement with any other person; or

        (n)

if any encumbrancer takes possession of the properties being the subject of the
Securities or being financed with the Loan, unless the Company in good faith
disputes the encumbrancer’s claim and non-payment does not jeopardize the title
of the Company to any such property or any way impairs any of the Securities; or

5.2          Upon the occurrence of any one of these events of default, the
entire amount of the Principal and Interest then outstanding shall immediately
become due and payable.

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5.3          Lender’s delay or failure to insist upon the strict performance of
the Company’s obligations under this Loan Agreement or the Securities shall not
be construed as a waiver of Lender’s right to later require strict performance
nor as a waiver of any of Lender’s legal and equitable remedies.

6.           PAYMENT ON MATURITY

6.1          On the Maturity Date, the Company will deliver the Principal then
outstanding and any earned Interest due Lender by wire transfer to Lender’s
nominated bank account or in cash or certified cheque delivered to the address
of Lender.

7.           NOTICES

7.1          Any notice, request, demand, claim, instruction, or other document
to be given to any party pursuant to this Loan Agreement shall be in writing
delivered personally or sent by mail, registered or certified, postage fully
prepaid, as follows:

  (a)

If to, Lender to the address set forth on the first page of this Loan Agreement.

        (b)

If to Company, to the addresses set forth on the first page of this Loan
Agreement, with a copy to:

Madonald Tuskey, Corporate and Securities Lawyers
400-570 Granville Street
Vancouver, BC V6C 3P1
Attention: William L. Macdonald
Fax: 604 681 4760

7.2          Any party may give any notice, request, demand, claim, instruction,
or other document under this section using any other means (including expedited
courier, messenger service, telecopy, facsimile, telex, ordinary mail, or
electronic mail), but no such notice, request, demand, claim, instruction, or
other document shall be deemed to have been duly given unless and until it
actually is received by the individual for whom it is intended. Any party may
change its address for purposes of this section by giving notice of the change
of address to the other party in the manner provided in this section.

8.           TERMINATION

8.1          This Loan Agreement may, by written notice, be terminated as
follows:

  (a)

by either the Company or the Lender if a material breach of any provision of
this Loan Agreement has been committed by the other party and such breach has
not been waived; or

        (b)

by mutual written consent of the Company and Lender.

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8.2          Each Party’s right of termination is in addition to any other
rights it may have under this Loan Agreement or otherwise, and the exercise of a
right of termination will not be an election of remedies; provided, however,
that if this Loan Agreement is terminated by a party because of a breach of the
Loan Agreement by the other party or because one or more of the conditions to
the terminating party’s obligations under this Loan Agreement is not satisfied
as a result of the other party’s failure to comply with its obligations under
this Loan Agreement, the terminating party’s right to pursue all legal remedies
will survive such termination unimpaired. For greater certainty, termination of
this Loan Agreement does not release the Company from its obligations hereunder
in respect of any Principal then outstanding.

9.           INDEMNIFICATION

9.1          All representations, warranties, covenants, and obligations in this
Loan Agreement, and any other certificate or document delivered pursuant to this
Loan Agreement will survive the Loan Agreement. The right to indemnification,
payment of damages or other remedy based on such representations, warranties,
covenants, and obligations will not be affected by any investigation conducted
with respect to, or any knowledge acquired (or capable of being acquired) at any
time, whether before or after the execution and delivery of this Loan Agreement,
with respect to the accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant, or obligation. The waiver of any condition
based on the accuracy of any representation or warranty, or on the performance
of or compliance with any covenant or obligation, will not affect the right to
indemnification, payment of damages, or other remedy based on such
representations, warranties, covenants, and obligations.

9.2          The Company and the Lender mutually agree to indemnify and hold
each other harmless along with their respective representatives, stockholders,
controlling persons, and affiliates (collectively, the “Indemnified Persons”)
for, and will pay to the Indemnified Persons the amount of, any loss, liability,
claim, damage (including incidental and consequential damages), expense
(including costs of investigation and defense and reasonable attorneys’ fees) or
diminution of value, whether or not involving a third-party claim, arising,
directly or indirectly, from or in connection with any breach of any
representation, warrant, covenant or obligation made by the other Party in this
Loan Agreement.

10.           GENERAL PROVISIONS

10.1          The Parties agree to furnish upon request to each other such
further information, and to execute and deliver to each other such other
documents, and to do such other acts and things, all as the other party may
reasonably request for the purpose of carrying out the intent of this Loan
Agreement.

10.2          The rights and remedies of the parties to this Loan Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power, or privilege under this Loan Agreement or the
documents referred to in this Loan Agreement will operate as a waiver of such
right, power, or privilege, and no single or partial exercise of any such right,
power, or privilege will preclude any other or further exercise of such right,
power, or privilege or the exercise of any other right, power, or privilege. To
the maximum extent permitted by applicable law, (a) no claim or right arising
out of this Loan Agreement or the documents referred to in this Loan Agreement
can be discharged by one party, in whole or in part, by a waiver or renunciation
of the claim or right unless in writing signed by the other party; (b) no waiver
that may be given by a party will be applicable except in the specific instance
for which it is given; and (c) no notice to or demand on one party will be
deemed to be a waiver of any obligation of such party or of the right of the
party giving such notice or demand to take further action without notice or
demand as provided in this Loan Agreement or the documents referred to in this
Loan Agreement.

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10.3          This Loan Agreement supersedes all prior agreements between the
parties with respect to this loan and constitutes (along with the documents
referred to in this Loan Agreement) a complete and exclusive statement of the
terms of the agreement between the parties with respect to its subject matter.
This Loan Agreement may not be amended except by a written agreement executed by
the party to be charged with the amendment.

10.4          Neither party may assign any of its rights under this Loan
Agreement without the prior consent of the other parties. This Loan Agreement
will apply to, be binding in all respects upon, and inure to the benefit of the
successors and permitted assigns of the parties. Nothing expressed or referred
to in this Loan Agreement will be construed to give any Person other than the
parties to this Loan Agreement any legal or equitable right, remedy, or claim
under or with respect to this Loan Agreement or any provision of this Loan
Agreement. This Loan Agreement and all of its provisions and conditions are for
the sole and exclusive benefit of the parties to this Loan Agreement and their
successors and assigns.

10.5          If any provision of this Loan Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Loan Agreement will remain in full force and effect. Any provision of this
Loan Agreement held invalid or unenforceable only in part or degree will remain
in full force and effect to the extent not held invalid or unenforceable.

10.6          This Loan Agreement will be governed by the laws of the Province
of British Columbia.

10.7          This Loan Agreement may be signed in as many counterparts is as
necessary and all signatures so executed shall constitute one Agreement, binding
on all Parties as if each was a signatory on the original.

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11.          SIGNATURES

11.1          IN WITNESS WHEREOF, the parties have executed and delivered this
Loan Agreement as of the date first written above.

Per:     Chris Bunka, President of C.A.B. Financial Services Ltd.

LEXARIA BIOSCIENCE CORP.

Per:     John Docherty, President and Authorized Signatory

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SCHEDULE “A”

PROMISSORY NOTE

US$50,000.00 July 25, 2016

FOR VALUE RECEIVED, the undersigned (the “Borrower”) promise to pay to C.A.B.
Financial Services Ltd, 156 Valleyview Road, Kelowna, BC V1X 3M4, (the “Lender”)
the principal sum of fifty thousand USD dollars in lawful currency of the USD
(the “Principal Sum”), as herein provided.

The Principal Sum or such amount as shall remain outstanding from time to time
shall bear 8% interest thereon, both before and after each of maturity, default
and judgment commencing on the day the Principal Sum is advanced by the Lender
to the Borrower.

The Principal Sum with interest aforesaid will be paid in the amount of
$4,500.00 on the 15th of every month for twelve months, beginning after a
3-month payment and interest-free holiday.

Extension of time of payment of all or any part of the amount owing hereunder at
any time or times and failure of the Lender to enforce any of its rights or
remedies hereunder shall not release the Borrower from its obligations hereunder
or constitute a waiver of the rights of the Lender to enforce any rights and
remedies therein.

On default in payment of any sum due hereunder for the Principal Sum or Interest
or after 15 days’ notice of Default to the Borrower upon the occurrence of an
Event of Default as defined pursuant to the Loan Agreement, entered into between
the Borrower and the Lender and dated for reference July 25, 2016, or any
amendments thereto, the unpaid balance of the Principal Sum and all accrued
Interest thereon shall at the option of the Lender forthwith become due and
payable.

The undersigned, when not in default hereunder, will have the privilege of
prepaying in whole or in part the Principal Sum, upon 20 days’ notice to the
Lender.

Presentment, protest, notice of protest and notice of dishonour are hereby
waived.

LEXARIA BIOSCIENCE CORP.

Per:       John Docherty, President and Authorized Signatory

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SCHEDULE B

Collateral Security Interest

U.S. Provisional Patent Application No. 62/010,601, filed June 11, 2014; and

U.S. Provisional Patent Application No. 62/037,706, filed August 15, 2014; and

U.S. Provisional Patent Application No. 62/153,835, filed April 28, 2015; and

U.S. Provisional Patent Application No. 62/161,324, filed May 14, 2015; and

U.S. Utility Patent Application No. 14/735,844, filed June 10, 2015 (NOTE:
Claims under this application have received a Notice of Allowance from the USPTO
July 2016 Serial No. 14/735,844); and

U.S. Provisional Patent Application No. 62/264,959, filed December 9, 2015; and

U.S. Provisional Patent Appilcation No. 62/264,967, filed December 9, 2015; and

In addition, Lexaria has filed an international patent application under the
Patent Cooperation Treaty (PCT): PCT International Patent Application No.
PCT/US15/35128, filed June 10, 2015; and

The Intellectual Property License Agreement dated May 14, 2016 entered into
between Lexaria Biosciense and a Licensee; and

All Lexaria-owned Tea, Coffee, Hot Chocolate and protein bar inventory whether
located at Lexaria’s Phoenix warehouse or at any other location.

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