EXHIBIT 10.4

 

INDEPENDENT CONTRACTOR AGREEMENT

 

THIS AGREEMENT is made the 1st day of January, 2019.

 

BETWEEN:

 

Lexaria Nicotine LLC, a limited liability company formed under the laws of the
State of Delaware and having its office at #100 – 740 McCurdy Road, Kelowna,
British Columbia, Canada V1X 2P7

 

(hereinafter referred to as the “Company”)

 

AND:

 

C.A.B. Financial Services Ltd., a company duly incorporated under the laws of
British Columbia and having its office at [**]1

 

(hereinafter referred to as the “Consultant”)

 

WHEREAS:

 

A.The Company is a private corporation involved in the research and development
of licensed patented technology for use in the nicotine industry (“Work”).

 

 

B.The Consultant has certain specialized skills, which will benefit the Company
and its Work.

 

 

C.The Company wishes to engage the Consultant to provide to it the services
noted in the attached Schedule “A” (the “Services”) on the terms and conditions
hereinafter set forth.

 

 

D.The Consultant agrees to provide the Services to the Company on the terms and
conditions set out in this Agreement (the “Agreement”).

 

NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the premises and
of the covenants and agreements hereinafter contained the parties hereto have
agreed as follows:

 

1.ENGAGEMENT OF SERVICES

 

 

1.1. The Company hereby engages the Consultant to provide the Services and
assist the Company with its Work as an independent contractor to the Company.

 

 

1.2. The Consultant hereby represents and warrants to the Company that it and
its employees and contractors have the required skills and expertise to perform
the duties and exercise the responsibilities required in the performance of the
Services.

 

 

1.3. The Consultant shall be responsible for ensuring that it and its employees
and contractors have an appropriate workplace to conduct the Services and all
necessary tools to perform the Services.

 

 

1.4. The Consultant understands and agrees that, in the performance of the
Services, its and/or its employees and contractors’ names and/or likeness may be
announced and circulated via public disclosure documents, social media,
websites, meetings, appearances and public events of the Company.

_________________

1 Certain information has been redacted: the omitted text sets forth the private
residence of the consultant

 

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1.5. The Consultant represents and warrants that neither the Consultant’s
provision of Services under this Agreement nor any items delivered or provided
to the Company in connection with providing the Services under this Agreement
will infringe on any patents, copyrights, trademarks, trade secret rights, or
other intellectual property rights of any third party. The Consultant
additionally represents and warrants that by providing the Services under this
Agreement, the Consultant will not breach any other agreement to which the
Consultant is a party, including any non-competition or non-solicitation
provision that would prevent the Consultant from performing all or part of the
Services.

 

 

1.6. The Consultant represents and warrants that there are currently no
outstanding or anticipated claims or judgments against the Consultant by any
person (including any former employee or contractor of the Contractor).

 

2.

TERM

 

 

2.1. The term of this Agreement shall be for a period of one (1) year (the
“Term”), effective as of the 1st day of January, 2019, and will be renewable
automatically for further one year terms unless terminated earlier as
hereinafter provided (including termination any time before the end of the Term)
(the “Expiration Date”), subject to the terms and conditions herein. The parties
agree to have this agreement apply retroactive to January 1, 2019, even though
the agreement is signed after January 1, 2019, for the mutual benefit of both
parties.

 

3.STANDARD OF PERFORMANCE

 

 

3.1 The Consultant shall perform the Services honestly and in good faith, and in
an efficient, prompt, professional, skillful and careful manner in accordance
with industry methods, standards and practices. The Consultant shall be free to
determine the means and methods of the provision of the Services required under
this Agreement, subject however to satisfaction of the Company’s reasonable
standards in this regard;

 

 

3.2 The Consultant shall carry out the Services in a timely manner, and in
compliance with all legal, regulatory and stock exchange requirements, as
applicable;

 

 

3.3 The Consultant reserves the right to refuse any request from the Company
which may, in its reasonable opinion, violate any applicable United States of
America (“U.S.A”) or Canadian Federal laws, U.S.A State laws or Canadian
Provincial/Territorial laws.

 

 

3.4 The Company is aware that during the term of this Agreement, the Consultant
and/or its employees or contractors may have and may continue to provide
services to other companies and/or have financial or business interests in other
companies. The Company agrees that Consultant and/or its employees or
contractors may continue to devote time to such outside interests, provided that
such interests do not conflict with or hinder Consultant’s ability to perform
the Services under this Agreement.

 

 

3.5 The Consultant shall obtain, at its expense, all licenses, permits and
registrations required for it to provide the Services.

 

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4.NATURE OF RELATIONSHIP

 

 

4.1. The parties acknowledge that the relationship between the Consultant and
the Company is that of independent contractors. The Consultant is not an
employee, agent or dependent contractor of the Company, nor are the Company and
the Consultant partners or joint venturers with each other. Nothing in this
Agreement shall be construed as making the Consultant and the Company partners
or joint venturers, making the Consultant an employee, agent or dependent
contractor of the Company, or imposing any liability as partner, joint venture,
principal or agent on the Company or the Consultant, as the case may be. The
Consultant shall not use the name of the Company or any of its affiliates in any
advertisement, promotional or marketing material.

 

 

4.2. The Consultant may provide services for and on behalf of third parties
provided that the provision of such services by the Consultant, or employees or
contractors of the Consultant who are providing the Services are outside the
time such persons are required to be available to provide the Services and do
not conflict with the Consultant’s responsibilities and obligations to the
Company pursuant to this Agreement.

 

 

5.REMUNERATION

 

 

5.1. The Company shall pay the cash remuneration and provide the security
consideration (the “Equity Consideration”) as described in Schedule “B”
(collectively, the “Remuneration”) to the Consultant for the provision of the
Services.

 

 

5.2. In addition to the Remuneration, the Company shall also reimburse the
Consultant, on a monthly basis, for disbursements (the “Disbursements”)
associated with providing the Services upon receipt of an invoice or invoices,
or such other documents agreed to by the Company, evidencing the Disbursements.
The Disbursements will be limited to the foregoing:

 

 

(a)travelling and other costs actually and properly incurred by the Consultant
in connection with the Consultant’s duties hereunder, up to a maximum of
$20,000.00 per month, with such additional costs being subject to pre-approval
by the management of the Company prior to any reimbursement. Both parties
recognize that, as the financial condition of the Company improves or
deteriorates, this amount may be increased or decreased without making changes
to this document and without such changes constituting a termination of this
Agreement, provided the Company makes the Consultant aware of the changed
amount;

 

 

 

 

(b)specialized training and/or educational costs as authorized by the Company
for the enhancement of any Services, up to a maximum of $7,500.00 per year; and

 

 

 

 

(c)mileage allowance for personal vehicle use at $0.55/km when the Consultant is
required to use own vehicle for business purposes.

 

5.3. It is understood by the Consultant that any Equity Consideration issued by
the Company as part of the Remuneration will not be, and has not been,
registered under the U.S.A Securities Act of 1933, as amended, and may not be
offered or sold in the U.S.A absent registration or an applicable exemption from
registration requirements. Any Equity Consideration and all related share
issuances will be in compliance with all applicable regulations in the U.S.A and
Canada. The Equity Consideration issued will be subject to a hold period in
Canada of not less than four months and one day, or for any resales possible
into the U.S.A under Rule 144, not less than six months and one day. Hold
periods may be longer if regulations so stipulate.

 

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6.CONFIDENTIALITY

 

 

6.1. The Consultant shall not, either during the continuance of its contract
hereunder, or at any time thereafter, disclose the private affairs of the
Company and/or any affiliate of the Company (an “Affiliate”), or any trade
secrets or intellectual property of the Company and/or an Affiliate (together or
separately and as described below, “Proprietary Information”), to any person
other than the Managers of the Company or such other persons as authorized in
writing by the Managers of the Company and further shall not (either during the
continuance of its contract hereunder or at any time thereafter) use for its own
purposes or for any purpose other than those of the Company and/or an Affiliate
any information it may acquire in relation to the business and affairs of the
Company and/or an Affiliate, unless required by law or authorized in writing by
the Directors of the Company.

 

 

 

For the purposes of this Agreement, the term “Subsidiary” shall have the meaning
ascribed to that term in National Instrument 45-106 Prospectus Exemptions of the
Canadian Securities Administrators.

 

6.2. Proprietary Information as that term is used herein shall include the
following:

 

 

(a)all knowledge, data and information which the Consultant may acquire from the
documents and information disclosed to it by the Company, an Affiliate, their
respective employees, attorneys, consultants, independent contractors, clients
or representatives whether orally, in written or electronic form, or on
electronic media including, by way of example and not by limitation, any
products, customer lists, supplier lists, marketing techniques, technical
processes, formulae, inventions or discoveries (whether patentable or not),
innovations, suggestions, ideas, business models, industrial designs, reports,
data, patents, trademarks, trade secrets and copyrights, made or developed by
the Company or an Affiliate and related data and information related to the
conduct of the business of the Company or an Affiliate;

 

 

 

 

(b)all discussions with officers, directors, employees, independent contractors,
lawyers, consultants, clients, finance sources, customers or representatives of
the Company or an Affiliate and the fact that such discussions are taking place;
and

 

 

 

 

(c)for greater certainty, Proprietary Information shall not include matters of
general public knowledge, information legally received or obtained by the
Consultant from a third party or parties without a duty of confidentiality, and
information independently known or developed by the Consultant without the
assistance of the Company.

 

7.TERMINATION

 

 

7.1. This Agreement may be terminated immediately by the Company or the
Consultant without notice or any other obligation (except for the Monthly Fee
prorated to the day immediately before such termination) if either party
breaches the Agreement. A breach may include, but is not limited to, the
following:

 

 

(a)The Company or the Consultant shall commit any material breach of any of the
provisions herein contained; or

 

 

 

 

(b)The Company or the Consultant shall be guilty of any misconduct or neglect in
the discharge of its duties hereunder; or

 

 

 

 

(c)The Company or the Consultant shall become bankrupt or make any arrangements
or composition with its creditors; or

 

 

 

 

(d)The Company or the Consultant shall be convicted of any criminal offence
other than an offence which, in the reasonable opinion of the Managers of the
Company, does not affect the Company’s ability to continue to operate or the
Consultant’s ability to perform the Services, as applicable.

 

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7.2. This Agreement may be terminated by the Consultant at any time for
convenience by providing three (3) months’ prior written notice.

 

 

7.3. This Agreement may be terminated by the Company at any time for convenience
by:

 

 

(a)providing [**]2 prior written notice; or

 

 

 

 

(b)providing a lump sum termination break fee payment (“Termination Break Fee
Payment”) to the Consultant in the amount equal to one Monthly Fee (as defined
in Schedule “B” to this agreement) plus GST for the Term of the Agreement and
for each subsequent year that this Agreement has been renewed.

 

 

 

 

Provided the Company provides the above notice under 7.3(a) or Termination Break
Fee Payment under 7.3(b), the Company shall have no further obligation to the
Consultant and its employees and contractors.

 

7.4. Upon termination or expiration of this Agreement, for any reason, at the
request of the Managers of the Company, the Consultant and/or its employees or
consultant shall forthwith resign any position or office which it/he then holds
with the Company or any Affiliate of the Company. The provisions of sections on
Proprietary Information and on confidentiality shall survive the termination or
expiration of this Agreement.

 

 

7.5. Upon termination or expiration of this Agreement, for any reason, the
Consultant must immediately return to the Company all correspondence,
information, reports, emails, phone recordings or transcripts, notes, Consultant
contact information, and all other materials related to the work performed for
the Company including all Proprietary Information during the contract period.

 

 

(a)All such materials and information as referred to in section 6.2, above, are
the exclusive property of the Company. After returning, transmitting or
otherwise sending such information to the Company, Consultant must destroy any
and all remaining copy(ies) or records of same.

 

 

 

 

(b)All such materials and information as referred to in section 6.2 were
obtained during the time of the paid contract with the Company, and may not be
shown, lent, given, discussed or in any way disclosed with or to any other party
as per the terms of the contract. The Proprietary Information Consultant gained
or had access to during the period of the contract is the exclusive property of
the Company and section 6 of this Agreement, which governs such Proprietary
Information, shall survive the termination of this Agreement.

 

8.

NOTICE

 

 

8.1. Any notice to be given under this Agreement shall be in writing and shall
be deemed to have been given if delivered to, or sent by prepaid registered post
addressed to, the respective addresses of the parties appearing on the first
page of this Agreement (or to such other address as one party provides to the
other in a notice given according to this paragraph). Where a notice is given by
registered post it shall be conclusively deemed to be given and received on the
fifth day after its deposit in a Canada post office any place in Canada.

__________________ 

2 Certain information has been redacted: the omitted text sets forth the
severance payable for termination without cause

 

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8.2. The parties agree that any written notice may be given, in lieu of
registered post, by way of email, fax, scan or such other electronic
transmission if forwarded to the following contact particulars:

 

For the Company:

 

Address: 100 – 740 McCurdy Road, Kelowna, BC V1X 2P7

Email: jdocherty@lexariabioscience.com

Fax: 250-7695-2599

 

For the Consultant:

 

Address: [**]3

Email: cbunka@lexariabioscience.com

Fax: ________________________

 

9.PAYMENT OF TAXES AND OTHER CHARGES, AND INDEMNITY BY CONSULTANT

 

 

9.1. The Consultant shall be solely responsible for and shall indemnify the
Company from any and all taxes, governmental charges, interest, penalties and
other claims by a government entity or any other person (including current and
former employees and contractors of the Consultant) arising out of the
Consultant’s activities with respect to this Agreement, including, but not
limited to, harmonized sales tax, provincial sales tax, income tax, Canada
Pension Plan contributions, Employment Insurance premiums, employer health tax,
workers compensation contributions and any other taxes and statutory
withholdings payable by Consultant and/or that were not withheld, deducted or
remitted by the Company on behalf of the Consultant and/or its employees or
contractors. The Company shall not be required to make any payment or
contribution in respect of taxes payable by the Consultant or its employees or
contractors. The Consultant shall maintain records in respect of income taxes,
sales tax, employer health tax, employment insurance premiums, Canada Pension
Plan and workers compensation contributions relating to the provision of
Services hereunder, including for the Consultant’s employees and contractors.

 

 

9.2. The Consultant shall indemnify and save harmless the Company from and
against any and all claims, charges, demands, loss, damages, costs, penalties or
expenses arising as a result of (a) the Consultant’s failure to provide the
Services in a timely fashion, (b) a breach the Consultant’s representations,
warranties or covenants in this Agreement, (c) death or personal injury caused
by the Consultant’s negligence or wilful misconduct, (d) physical loss or damage
to the Company’s property or premises caused by the Consultant’s negligence or
wilful misconduct, and (e) the Consultant’s infringement or violation of the
proprietary or intellectual property rights of any third party.

 

 

10.INSURANCE

 

 

10.1. The Consultant assumes all risk and liability for personal injury or
damage to personal property in the carrying out of this Agreement and for which
adequate levels of insurance coverage is deemed to have been obtained by the
Consultant. Without limiting the generality of the foregoing, the Consultant is
responsible for automobile insurance in respect of any vehicle used by the
Consultant or its employees, and any applicable workers’ compensation or other
liability insurance.

_________________ 

3 Certain information has been redacted: the omitted text sets forth the private
residence of the consultant

 

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11.MISCELLANEOUS

 

 

11.1. This Agreement may not be assigned by either party without the prior
written consent of the other.

 

 

11.2. The titles of headings to the respective paragraphs of this agreement
shall be regarded as having been used for reference and convenience only.

 

 

11.3. This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective directors, officers, heirs, executors,
administrators, successors and permitted assigns. For this purpose, the terms
"successors" and "assigns" shall include any person, firm or corporation or
other entity which at any time, whether by merger, purchase or otherwise, shall
acquire all or substantially all of the assets or business of the Company.

 

 

11.4. This Agreement shall be governed by and interpreted in accordance with the
laws of the Province of British Columbia, Canada.

 

 

11.5. With the exception of any previously granted options or restricted stock,
the parties agree that any and all previous agreements, written or oral, entered
into between the parties hereto or on their behalf relating to the engagement of
the Consultant by the Company are hereby terminated and cancelled and each of
the parties hereto hereby releases and forever discharges the other party hereto
of and from all manner of actions, causes of action, claims and demands
whatsoever under or in respect of any such previous agreements.

 

 

11.6. Every provision of this Agreement is intended to be severable. If any term
or provision hereof is illegal or invalid for any reason whatsoever, such
illegality or invalidity shall not affect the validity of the remainder of the
provisions of this Agreement.

 

 

11.7. This Agreement may only be amended by an instrument in writing signed by
both parties.

 

 

11.8. This Agreement and the obligations of the Company herein are subject to
all applicable laws and regulations in force at the local, State/Province, and
Federal levels in both Canada and the United States. In the event that there is
a dispute between the Company and Consultant, Consultant agrees to allow such
dispute to be settled according to applicable Canadian law in an applicable
British Columbia jurisdiction.

 

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF the parties have executed this Agreement the day and year
first above written.

 

Lexaria Nicotine LLC

 

“John Docherty”                                                             

Authorized Signatory

 

 

“Allan Spissinger”                                                         

Authorized Signatory

 

C.A.B. Financial Services Ltd.

 

“Chris Bunka”                                                              

Authorized Signatory

 

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SCHEDULE “A”

 

The Services shall include the following:

 

 

(a)Developing and expanding the Company’s new and existing product pipeline
based on its current proprietary technologies, and implementing new technologies
as they become available with a continued focus on improving and optimizing
speed and extent of drug delivery and flavour profile;

 

 

 

 

(b)Maintaining and developing the Company’s marketing materials;

 

 

 

 

(c)Identifying, researching, evaluating and completing transactions for capital
raising and/or strategic collaborations with suitable third-parties, all of
which create value for the Company;

 

 

 

 

(d)Assisting in the management and development of the Company’s subsidiaries and
parent company including day-to-day operations, evaluating and implementing
supply chain efficiencies and facilitating distribution and sales growth;

 

 

 

 

(e)Serving the Company (and/or such subsidiary or subsidiaries of the Company as
the Company may from time to time require) in such consulting capacity or
capacities as may from time to time be determined by resolution of the Managers
or senior management of the Company and shall perform such duties and exercise
such powers as may from time be determined by resolution of the Managers, as an
independent contractor;

 

 

 

 

(f)Work as needed with lawyers, partners, shareholders and other stakeholders;
and

 

 

 

 

(g)Fulfill all duties expected of the Consultant for a biotechnology/bioscience
company and any other duties that should be reasonably expected by and at the
pleasure of the Managers.

 

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SCHEDULE “B”

 

The Remuneration issuable to the Consultant shall consist of the following:

 

1.the sum of CDN$5,666.67 plus Goods and Services Tax (GST) per month, payable
the last day of each calendar month (the “Monthly Fee”), together with any such
increments or performance based incentives thereto as the CEO or the Managers of
the Company may from time to time determine. The Consultant has the GST number
121887822RT0001;

 

 

2.an annual increase to the Monthly Fee equal to 1.25x the prior calendar rate
of inflation as published by the Bank of Canada, beginning January 1, 2020, and
on each subsequent anniversary thereafter until the end of the Term; and

 

 

3.options entitling the Consultant to purchase voting shares of the Company’s
publicly listed parent company at a price equal to the market price on the date
of issuance of such options, if and as determined appropriate by the Managers
upon annual review in January of each year.

 

The Consultant shall not be entitled to participate in, or receive any benefits
from, any employee benefit programs or plans operated by the Company (including
without limitation, vacation pay, statutory holidays and health benefits).

 

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