Lexaria Bioscience Corp.: Exhibit 10.7 - Filed by newsfilecorp.com







	
    	National Research Council 	Conseil national de recherches 	Master Collaborative 
	Canada
    	Canada
    	Research Agreement 



	BETWEEN: 	NATIONAL RESEARCH COUNCIL OF CANADA
  
	  	whose head office address is:




	 	1200 Montreal Road 	  
	 	Ottawa, Ontario K1A 0R6 	(called “NRC”) 



	AND: 	LEXARIA CANPHARM CORP. 
	  	a corporation under the laws of Canada 
	  	whose address is: 



	 	156 Valleyview Road 	  
	 	Kelowna, British Columbia V1X 3M4 	(called the “Collaborator”)
  


(Collectively known as the “Parties”) 

WHEREAS the Parties have common interests in the development of
specialty and functional ingredients for differentiated consumer markets
involving functional food, nutrition, and health and wellness applications; 

WHEREAS the Parties share expertise in fatty acid chemistry,
product formulation and functional ingredient characterization, most notably
cannabinoids and related active ingredients;

WHEREAS the Parties recognize that this common interest creates
a foundation for a strategic collaborative R&D relationship; and 

WHEREAS the Parties wish to enter into a Master Collaborative
Research Agreement (the “Agreement”) to establish the terms and
conditions which will govern the collaboration. 

NOW THEREFORE, in consideration of the mutual covenants
hereunder, the Parties agree as follows: 

	1. 	
      This Agreement concerns scientific research and
      development, called the "Collaboration", described as: Joint
      investigation of technical challenges and new opportunities associated
      with lipophilic active ingredient compositions. The Collaboration
      includes:




	 	(a) 	
      Development of specific Projects to explore solutions for
      the technical challenges surrounding commercialization of LAA-BEA
      formulations, both those common to the industry as a whole and those
      specific to Collaborator’s proprietary processes;

	 	 	 
	 	(b) 	
      Improvement of expertise and capacity in the area of
      ingredient formulation for improved function of cannabinoids and related
      high value bioactives; and

	 	 	 
	 	(c) 	
      Identification and exploration of innovative new
      technologies and applications of mutual interest to NRC and
      Collaborator.




	2. 	
      The Collaborator chooses to work with NRC because of
      NRC's unique capabilities, and does not expect NRC to perform work that
      would be in competition with Canadian firms. The name of NRC, or any
      reference to NRC, shall not be used in promotional activities of the
      Collaborator without NRC's prior written consent.

	 	 
	3. 	
      The Parties will contribute to the Collaboration by the
      performance of specific R&D projects (“Projects”) developed in
      line with the attached “ANNEX PO: Project Objectives and Overview”
      or by payments, or both.

	 	 
	4. 	
      Both Parties will contribute to the development of
      Projects based on mutual interest and objectives. Specific terms of each
      Project will be negotiated on a per Project basis; each Project shall be
      defined in a Project Annex (“PA”). Each PA will be in the form
      attached as Appendix 1 (“Project Annex”) and Appendix 2 (“Statement of
      Work and Deliverables”) and will be approved jointly by the Parties. Each
      PA is hereby incorporated herein by reference and made a part of this
      Agreement once duly signed by an authorized representative of each Party.
      A PA can only be amended by a written amendment signed by an authorized
      representative of each Party.

	 	 
	5. 	
      This Agreement is subject to the terms in the attached
      “Annex GC: General Conditions”.




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    	Research Agreement 



	6. 	
      The total price of the Collaboration is not to exceed
      $250,000 plus applicable taxes.

	 	 
	7. 	
      The Collaborator shall pay to NRC in cash a total sum not
      to exceed $125,000 to be paid in accordance with individual PA. The
      Collaborator shall also pay applicable taxes. *

	 	 
	8. 	
      NRC shall make a co-investment to the Collaboration by
      performing, at its own cost, work described in the Statement of Work and
      Deliverables of applicable PA at a total value not to exceed
      $125,000.

	 	 
	9. 	
      This Agreement shall become effective on the date the
      Agreement is signed by both Parties and expires on June 29, 2018
      (“Expiry Date”) unless terminated earlier. This Agreement shall remain
      in force relative to any PA in progress at the Expiry Date until those PA
      are completed or otherwise terminated. The following terms and conditions
      shall survive the termination or expiration of this
  Agreement:




	 	(a) 	
      payment obligations which accrued while this Agreement
      was in force, or upon its termination, and the interest provisions of this
      Agreement;

	 	 	 
	 	(b) 	
      the terms and conditions with respect to Intellectual
      Property which are found in the attached Annex IU entitled
      “Annex IU: Intellectual Property” that forms part of this
      Agreement; and

	 	 	 
	 	(c) 	
      terms and conditions with respect to exclusion of certain
      liability, limited warranties, and dispute resolution, all of which are
      found in the attached General Conditions that form part of this
      Agreement.




	10. 	
      This Agreement shall be interpreted according to the laws
      of the Province of Ontario and the laws of Canada in force there. Subject
      to Article GC-15, for any litigation concerning this Agreement, including
      litigation arising from arbitration, the parties hereby irrevocably and
      unconditionally attorn to the exclusive jurisdiction of the Courts of the
      Province of Ontario, and all courts competent to hear appeals therefrom.
      The parties expressly exclude any conflict of laws rules or principles
      that might refer disputes under this Agreement to the laws of another
      jurisdiction.

	 	 
	11. 	
      This Agreement may be executed in one or more
      counterparts and by the different parties hereto in separate counterparts,
      each of which when executed shall be deemed to be an original but all of
      which taken together shall constitute one valid and binding Agreement. A
      facsimile copy or portable document format (PDF) copy of an executed
      counterpart signature page will be as valid as an originally executed
      counterpart for purposes of signing this
Agreement.



SIGNED by the Collaborator in duplicate at
Kelowna, British Columbia, Canada 

	 	 	 	LEXARIA CANPHARMCORP. 
	 	 	 	 	 	 
	 	 	 	 	 	 
	Date: 	 	 	 	Per: 	
		(dd-month-yyyy) 	 	 	 	John Docherty, President 


SIGNED by NRC in duplicate at Ottawa, Ontario,
Canada 

	 	 	 	NATIONAL RESEARCH COUNCIL OF
      CANADA 
	 	 	 	 	 	 
	 	 	 	 	 	 
	Date: 	 	 	 	Per: 	
		(dd-month-yyyy) 	 	 	 	Dr. Roman Szumski, Vice-President, Life
      Sciences 


________________________________

	* 	
      Sales Tax (GST or similar) : NRC registration number 121
      491 807 

	 	Quebec Sales Tax : NRC registration number 1006 178
    088



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    	Research Agreement 


ANNEX GC: GENERAL CONDITIONS 

	GC-2 	
      INTERPRETATION OF AGREEMENT: This
      Agreement supersedes all prior communications, negotiations and agreements
      concerning the Collaboration. No amendment or waiver of terms in this
      Agreement, including the annexes thereto, is effective unless it is in
      writing, signed by all Parties. In case of inconsistency between this
      Agreement and any PA, this Agreement prevails. No forbearance by a Party
      implies any broader, continuing, or future forbearance. If a court finds
      part of this Agreement invalid, the remainder is valid in accordance with
      its most reasonable interpretation. This Agreement does not create a
      relationship of agency, employment, partnership, or joint venture.
  

	  	
       

	GC-3 	
      ASSIGNMENT: This Agreement, and any
      licence granted pursuant to it, is personal to the Parties, so that
      neither its assignment, nor its assumption by a corporation formed by
      amalgamation of a Party with a third party, is valid except by written
      consent of all Parties, which consent shall not be unreasonably withheld.
      

	  	
       

	GC-4 	
      EXCLUSION OF CERTAIN LIABILITY: No
      Party shall be liable for failure or delay in performance caused by
      circumstances beyond its reasonable control, or for incorrectness or
      inaccuracy of data supplied, advice given, or opinions expressed. No claim
      may be made for indirect, consequential, or incidental damages. 

	  	
       

	GC-5 	
      LIMITED WARRANTIES: Each Party
      warrants that it will conduct the Collaboration work in a professional
      manner conforming to generally accepted practices for scientific research
      and development. However, because of the nature of such work, no specific
      result is promised. 




	 	5.1 	
      No Party warrants that technical information conveyed in
      the deliverables does not infringe the rights of third parties under a
      present or future patent.

	 	 	 
	 	5.2 	
      No Party warrants the validity of patents under which
      rights may be granted pursuant to this Agreement, or makes any
      representation as to the scope of patents or that those inventions may be
      exploited without infringing the rights of
others.




	GC-6 	
      VISITS: Subject to reasonable notice
      of the number and names and status of personnel, including employees,
      students and other persons working on behalf of another Party and other
      requirements under this Agreement, a Party may, in its discretion, permit
      visits to its premises by one or more of another Party's personnel, if
      relevant to the Collaboration and not likely to interfere with regular
      operations. 

	  	  
	GC-7 	
      TERMINATION FOR COST OVERRUNS: Following
      notification by one Party that costs expressed as estimates for a specific
      PA will be exceeded by more than 10%, if the Parties do not amend the PA
      within sixty (60) days, then upon the expiration of that period the
      specific PA shall be terminated. Upon such termination:





	 	(a) 	
      each Party shall pay the other Party any costs pre-dating
      the effective date of the termination that were intended to be
      reimbursable under the PA;

	 	 	 
	 	(b) 	
      any licence or option granted under the PA to any Party
      is also terminated;

	 	 	 
	 	(c) 	
      confidentiality obligations of each Party regarding the
      information that is part of its Arising IP under the PA are terminated,
      both Parties continuing to be bound by all other confidentiality
      obligations under this Agreement.




	GC-7 	
      TERMINATION FOR CAUSE: This
      Agreement or any PA under this Agreement may be terminated for cause as
      follows: 




	 	(a) 	
      by either Party if the other Party defaults in
      performance of any obligation under this Agreement or any PA and fails to
      cure the default within thirty (30) days after receipt of written notice
      of default, and termination will take effect at the expiration of the cure
      period;

	 	 	 
	 	(b) 	
      by NRC forthwith if the other Party becomes bankrupt or
      has a receiver appointed to continue its operations, or passes a
      resolution for winding up;

	 	 	 
	 	(c) 	
      by NRC forthwith if the other Party has made a false or
      misleading representation or warranty;




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    	Research Agreement 



	 	(d) 	
      upon termination for cause:




	 	(i) 	
      in the case of termination of this Agreement, all PA
      shall terminate concurrently;

	 	 	 
	 	(ii) 	
      each Party shall pay the other Party any costs pre-dating
      the effective date of the termination that were intended to be
      reimbursable under this Agreement or a PA;

	 	 	 
	 	(iii) 	
      the defaulting Party shall also pay the terminating Party
      any incurred costs that result directly from the cancellation of
      obligations and from uncancellable obligations;

	 	 	 
	 	(iv) 	
      any licence or option granted under this Agreement or a
      PA to the defaulting Party is terminated;

	 	 	 
	 	(v) 	
      confidentiality obligations of each Party regarding the
      information that is part of its Arising IP are terminated, both Parties
      continuing to be bound by all other confidentiality obligations under this
      Agreement or a PA.




	GC-8 	
      EARLY TERMINATION OF A PA: Early
      termination of a PA by either Party shall not affect the ongoing validity
      of this Agreement or any other PA hereunder. 

	  	
       

	GC-9 	
      NOTICES: Any notice related to this
      Agreement, including a notice of change of address, must be sent to the
      addresses stated at the beginning of this Agreement, either by registered
      mail, which is deemed to be effective notice five days after mailing, or
      by courier or facsimile, which are effective notices only when
      acknowledged by a courier's delivery receipt or by a specific
      non-automatic return facsimile transmission. 

	  	
       

	GC-10 	
      CONDITIONS: The other Party agrees
      that if there is any research work in the Collaboration involving human
      subjects, human tissues, laboratory animals, or animal tissues, it shall
      not proceed without prior approval of NRC’s Human Subjects Research Ethics
      Committee or Animal Care Committee and shall not be conducted in
      contravention of the respective Committee’s conditions of approval.
  

	  	
       

	GC-11 	
      NO BRIBES: The other Party represents and
      warrants to NRC that no bribe, gift, reward, benefit or other inducement
      has been or will be paid, given, promised or offered directly or
      indirectly to any federal government official or employee or to a member
      of the family of such person, with a view to influencing the entry into
      this Agreement or the administration of this Agreement. 

	  	
       

	GC-12 	
      NO DIRECT BENEFIT: The other Party
      represents and warrants to NRC that the following individuals shall not
      derive a direct benefit from this Agreement: 




	 	(a) 	
      a current or former public office holder who is not in
      compliance with the Conflict of Interest Act, 2006, c.9,
  s.2;

	 	 	 
	 	(b) 	
      a current or former member of the House of Commons who is
      not in compliance with the Conflict of Interest Code for Members of the
      House of Commons;

	 	 	 
	 	(c) 	
      a current or former public servant who is not in
      compliance with the Values and Ethics Code for the Public
      Service;or

	 	 	 
	 	(d) 	
      a current or former NRC employee who is not in compliance
      with NRC’s Conflict of Interest Policy.




	GC-13 	NO MISREPRESENTATION: The
      other Party represents and warrants to NRC that it, including its
      Directors, officers, employees or agents, has made no
  material misrepresentation, whether by omission or commission, with a view to the obtaining of this Agreement.  
	  	  
	GC-14 	NO CONTINGENCY FEE: The
      other Party represents and warrants to NRC that it has not directly or
      indirectly paid or agreed to pay and that it will not
      directly or indirectly pay a contingency fee for the solicitation,
      negotiation or obtaining of this Agreement to any person,
      other than an employee acting in the normal course of the employee’s duties. In this section,
      “contingency fee” means any payment or other compensation that depends or is calculated based on the degree of success in soliciting,
negotiating or obtaining this Agreement and “person” includes any individual who
is required to file a return with the registrar pursuant to the Lobbying Act, R.S.C.,1985,c. 44 (4th Supplement) as amended.



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    	Research Agreement 



	GC-15 	
      PERSONNEL: The other Party shall be
      liable for the actions of its personnel, including its employees,
      contractors, agents or students and shall ensure that while working on NRC
      premises, they are required to comply with the following requirements:
    




	 	(a) 	
      regulations, policies and directives that NRC may adopt
      from time to time to address access to NRC facilities and activities
      thereon, and without limiting the generality of the foregoing,
      regulations, policies and directives
addressing:




	 	(i) 	
      protection of confidential information;

	 	 	 
	 	(ii) 	
      information management and information technology
      (IM/IT);

	 	 	 
	 	(iii) 	
      harassment and code of conduct in NRC
  facilities;

	 	 	 
	 	(iv) 	
      protection of safety and health of NRC employees, the
      other Party’s personnel and others; and

	 	 	 
	 	(v) 	
      security and emergency
procedures;




	 	(b) 	
      any and all security policies that the Government of
      Canada may promulgate from time to time
including:




	 	(i) 	
      any and all security conditions and requirements NRC may
      request from time to time including, without limitation, undergoing a
      security screening, which may include a fingerprint check and if,
      following a security screening, an employee of the Collaborator is unable
      to obtain or maintain a level of security clearance that, in the sole
      opinion of NRC, is adequate, such employee of the Collaborator will be
      denied access to NRC facilities and IT Resources;

	 	 	 
	 	(ii) 	
      the requirement to display an identification badge as a
      condition of access to NRC facilities with or without restrictions on
      hours of access;

	 	 	 
	 	(iii) 	
      restrictions on access to NRC’s IT Resources; “NRC’s IT
      Resources” include, but are not limited to, all computers,
      telecommunications systems, workstations, PCs, laptops, storage, software,
      peripheral devices, servers, network equipment, transmission equipment,
      Remote Access Systems, and internal and external communications systems --
      such as the Internet, e-mail and Intranet -- e-mail accounts, messages and
      associated files created, sent received, or stored on NRC IT resources;
      and

	 	 	 
	 	(iv) 	
      the requirement to follow security procedures at all
      times and not to do anything that may compromise the integrity of NRC
      facilities or NRC IT Resources, with NRC reserving the right to modify or
      terminate the access privileges of the Collaborator’s personnel at any
      time;




	 	(c) 	
      all confidentiality obligations under this
    Agreement.




		
      NRC shall provide the other Party with access to all
      relevant legislation, regulations, policies and procedures as well as
      notice of any changes, and shall provide security, health and safety
      training to the Collaborator’s personnel as soon as possible following
      permitted access to NRC facilities. 

	  	
       

	GC-16 	
      DISPUTE RESOLUTION: Disputes
      concerning this Agreement shall not be litigated. All disputes arising in
      connection with this Agreement which cannot be resolved through
      negotiations to the mutual satisfaction of both Parties within thirty (30)
      days, or such longer period as may be mutually agreed upon, may be
      submitted by either Party to arbitration in accordance with the
      Commercial Arbitration Act of Canada, R.S.C., 1985, c. 17 (2nd
      Supp.), as amended, and shall be subject to the following:
  




	 	(a) 	
      The Party requesting such arbitration shall do so by
      written notice to the other Party.

	 	 	 
	 	(b) 	
      The arbitration shall take place in Ottawa, Ontario
      before a single arbitrator to be chosen jointly by
the Parties. Failing agreement of the Parties on a single
arbitrator within thirty (30) days of such notice requesting arbitration, either
party may apply to a judge of a court having jurisdiction in Ottawa, Ontario for
the appointment of a single arbitrator. 




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	 	(c) 	
      Each Party shall pay its own costs and an equal share of
      all of the costs of the arbitration and the fees of the arbitrator, except
      for the exceptional circumstance in which an arbitral award may require
      the payment of all costs by a Party who has brought a plainly frivolous
      dispute.

	 	 	 
	 	(d) 	
      The arbitrator shall issue a written decision as soon as
      practicable after the conclusion of the final hearing, but in any event no
      later than sixty (60) days thereafter, unless that time period is extended
      for a fixed period by the Arbitrator on written notice to each Party
      because of illness or other cause beyond the Arbitrator’s control. The
      decision shall be rendered in such form that judgment may be entered
      thereon in any court having jurisdiction.

	 	 	 
	 	(e) 	
      The decision shall be final and binding on the Parties in
      accordance with the Commercial Arbitration Act of
  Canada.



Neither Party may request arbitration
in respect of a breach of this Agreement after the fourth anniversary of the day
on which the requesting Party first discovered that breach, unless the other
Party has agreed in writing to extend the period. 

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    	Research Agreement 


ANNEX PT: PAYMENT TERMS 

	PT-1 	
      Except for an amount expressed in a PA that is due upon
      signature of the PA, all amounts set out in a PA shall be due as invoiced
      by NRC, which invoice shall provide for payment due 30 days from the date
      the invoice is issued. An amount expressed in a PA to be due upon
      signature of the PA is due immediately upon execution of the PA by both
      Parties. 

	  	
       

	PT-2 	
      NRC may suspend its performance of any obligations under
      this Agreement until the specified prepayment or payment is received, and
      for as long as any payments are in arrears. 

	  	
       

	PT-3 	
      If a surplus of prepayment remains as a result of
      premature termination of a PA, it will be refunded. 

	  	
       

	PT-4 	
      A Party shall notify the other Party, and explain, if it
      appears at any time that costs expressed as estimates will be exceeded by
      more than 10%. The Parties shall then negotiate a further agreement on
      costs or payments, and either Party may suspend the performance of any
      obligations, other than accrued obligations to pay, until a further
      agreement is reached. 

	  	
       

	PT-5 	
      Payments must be made to: “Receiver General - National
      Research Council of Canada" and addressed to: 



Accounts Receivable 
National
Research Council of Canada 
1200 Montreal Road 
Ottawa, Ontario, K1A 0R6,
Canada

	PT-6 	
      Where an instrument tendered in payment or settlement of
      an amount due to NRC is, for any reason, dishonoured, an administrative
      charge of $25 is payable to NRC and is due as invoiced. 

	  	
       

	PT-7 	
      Interest is payable on all overdue amounts. Interest on
      overdue amounts is calculated and compounded monthly at the average bank
      rate plus 3% and accrues during the period beginning on the due date and
      ending on the day before the day on which payment is received by NRC. For
      purposes of this paragraph “bank rate” means the rate of interest
      established periodically by the Bank of Canada as the minimum rate at
      which the Bank of Canada makes short term advances to members of the
      Canadian Payments Association, and “average bank rate” means the
      weighted arithmetic average of the bank rates that are established during
      the month before the month in respect of which interest is being
      calculated. 



(Rate information may be found at
http://www.bankofcanada.ca/rates/exchange/exchange-rates-in-pdf/ .
This site provides information on the rate used by departments of the
Government of Canada to calculate the interest on overdue accounts payable and
is the same rate used by NRC to charge interest on overdue accounts receivable
under the Interest and Administrative Charges Regulations, SOR/96-188. This web
site address, and the information set out there, is provided here for
convenience. In case of rate discrepancy, the rates quoted by the Bank of Canada
shall prevail.) 

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ANNEX IU: INTELLECTUAL PROPERTY 

	IU-8 	
      NATURE OF THE PROJECT: By the nature
      of the Collaboration, Arising Intellectual Property that may arise is
      difficult to predict, and the Parties consider it desirable to defer
      settling the terms on which it will be available until the Arising
      Intellectual Property is known. 

	  	  
	IU-9 	DEFINITIONS OF FIXED
      TERMS: 



	 	2.1 	
      "Arising Intellectual Property" or “Arising
      IP” is Intellectual Property that is developed in the Collaboration
      and that is disclosed in the Deliverables of the individual PA. The
      possessive adjective “NRC’s” or “Collaborator’s” indicates ownership or
      control by a Party.

	 	 	 
	 	2.2 	
      "Commercially Exploit" is to use, reproduce and
      modify Arising IP, and to manufacture, use, import, and sell articles
      embodying or made by use of any Deliverables, and to provide services by
      use of any Deliverables.

	 	 	 
	 	2.3 	
      “Confidential Background Information” means any
      confidential or proprietary information, either of a business or technical
      nature, other than Arising IP, disclosed by one Party to the other Party
      pursuant to this Agreement.

	 	 	 
	 	2.4 	
      "Deliverables" are the tangible outcomes of the
      Collaboration, such as reports, physical models, samples, data records,
      drawings, and machine-readable software, that are specifically mentioned
      in the individual PA Statement of Work and Deliverables as being
      deliverable.

	 	 	 
	 	2.5 	
      “Intellectual Property” or “IP” is all
      rights in inventions (whether patentable or not), patents, copyright
      material, trade secrets, confidential information and bacterial, viral,
      plant, human, or animal material that has new genetic or other
      characteristics first produced by a Party.

	 	 	 
	 	2.6 	
      “Background Intellectual Property” or
      “Background IP” means any Intellectual Property existing prior to
      the commencement of this Agreement and/or developed outside the scope of
      the Collaboration.




	IU-3 	
      ARISING INTELLECTUAL PROPERTY: The
      Parties represent that, by law or contract, they will own any Arising IP
      created by their employees, contractors, agents or students. A Party who
      is the sole owner of Arising IP is responsible for patenting and licensing
      its Arising IP, but is not obliged by this Agreement to patent its Arising
      IP. However, a Party who is unwilling to patent its Arising IP shall
      diligently do so if the other Party undertakes to pay all expenses
      incurred in obtaining and maintaining the patent. 

	  	
       

	IU-4 	
      JOINTLY CREATED ARISING IP: In the
      case of Arising IP that was created by employees of both Parties, the
      Collaborator hereby assigns its entire rights in that Arising IP to NRC
      and agrees to execute and deliver any further documents and to give any
      further assurances that NRC may request. It will then be regarded as NRC’s
      Arising IP and that Arising IP shall be treated as NRC’s Arising IP for
      all purposes under this Agreement. 

	  	
       

	IU-5 	
      SHARING INFORMATION: The Parties
      shall keep each other promptly informed of Arising IP. Each Party shall
      give the other, for information only, a copy of any patent application for
      Arising IP immediately upon filing the application, and a copy of related
      correspondence with a patent office if requested, and the information
      contained in such documents and correspondence will be maintained in
      confidence. 

	  	
       

	IU-6 	
      LICENCE OF NRC’S ARISING IP: NRC,
      upon request by the Collaborator no later than (6) six months after the
      end of the applicable PA, agrees: 




	 	(a) 	
      For any Arising IP that could not be Commercially
      Exploited without use of the Collaborator’s Background IP, to grant to
      Collaborator a sole, worldwide, perpetual license (with the right to
      sublicense) of the Arising IP to use, modify, adapt, and make derivative
      works for any purpose and to permit others to do any of the
    foregoing.

	 	 	 
	 	(b) 	
      For all other Arising IP, to undertake to negotiate with
      the Collaborator in good faith to settle the terms of a sole licence which
      will allow the Collaborator to Commercially Exploit the Arising
  IP.

	 	 	 
	 	(c) 	
      In addition, subject to confidentiality requirements, NRC
      hereby licenses the Collaborator under Crown copyright, free and without time limit, to use and reproduce
all documents that are deliverable under the individual PA. 




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	IU-7 	
      LICENCE OF COLLABORATOR’S ARISING IP:
      Collaborator hereby grants to NRC a fully prepaid and royalty- free
      licence for all Collaborator’s Arising IP, solely for research purposes
      within NRC, for performing work under the Collaboration and for providing
      services to third parties while maintaining confidentiality as required
      under this Agreement. In addition, Collaborator, at NRC’s request, shall
      negotiate with NRC in good faith to settle the terms of a licence on terms
      financially and otherwise acceptable to the Collaborator, which will allow
      NRC to Commercially Exploit Collaborator’s Arising IP and to sub-licence
      third parties to Commercially Exploit Collaborator’s Arising IP only with
      the understanding that such exploitation or sub-licensing shall not
      compete against Collaborator’s commercial interests in the fields of
      cannabinoids, nicotine, non-steroidal anti-inflammatory drugs and
      vitamins. If the Parties cannot agree on such licence terms, the other
      Party agrees that it will not grant a licence to any third party under
      terms more favourable than those offered to NRC. Before entering into a
      licence, Collaborator shall promptly notify NRC of the proposed terms, and
      NRC shall have a right of first refusal to take a licence under such
      terms, which right must be exercised within 30 days of receipt of the
      proposed terms by NRC. 

	  	
       

	IU-8 	
      BACKGROUND TECHNOLOGY: If, in order
      to perform work in the course of the Collaboration, a Party needs another
      Party’s Background IP, a licence for that limited purpose is granted by
      this Agreement and terminates at the end of the applicable PA. Upon
      completion of the applicable PA, if the use of a Party’s Background IP is
      required by the other Party to Commercially Exploit the Arising IP, a
      separate license for its use must be negotiated. 

	  	
       

	IU-9 	
      CONFIDENTIAL BACKGROUND INFORMATION
      RESTRICTIONS: Unless otherwise stipulated in a separate
      agreement, the following provisions apply to Confidential Background
      Information that is in electronic, written, graphic or other tangible
      form, including a physical object, that is clearly marked “Proprietary” or
      “Confidential” or with an equivalent legend, or that is oral information
      provided that at the time of disclosure the disclosing Party clearly
      identifies the confidential nature of such information and confirms such
      confidential nature by transmitting the information, in a written version
      that is marked as above, to the receiving Party within 20 days of
      disclosure. The receiving Party agrees not to disclose any Confidential
      Background Information, including to any director, officer or employee of
      the receiving Party unless that individual needs the information to
      perform work in the course of the Collaboration and is legally bound to
      keep confidences. In protecting Confidential Background Information, the
      receiving Party must use at least the same degree of care as it uses to
      protect its own information of a similar nature, but not less than a
      reasonable degree of care. Unless specifically licensed, Confidential
      Background Information may only be used by the receiving Party to perform
      work in the course of a Project. These obligations of confidentiality and
      protection will initially apply to Confidential Background Information in
      the form of oral information but will cease to apply if the information is
      not provided in a written version within twenty (20) days of disclosure.
      Notwithstanding the foregoing, the receiving Party may disclose the
      particulars of this Agreement and its associated PA’s to others of its
      officers and employees for internal administrative and business purposes,
      to the extent that such disclosure does not result in a public release of
      such information. 

	  	
       

	IU-10 	
      END OF CONFIDENTIAL BACKGROUND INFORMATION
      RESTRICTIONS: Unless otherwise stipulated in a separate
      agreement, all obligations of confidentiality and restrictions on the use
      of Confidential Background Information in this Agreement cease to apply
      five (5) years after the expiration of this Agreement and such obligations
      and restrictions do not apply to information that can be proved to be:
    




	 	(a) 	
      independently developed by the receiving Party without
      reference to or use of the confidential information of the other
    Party;

	 	 	 
	 	(b) 	
      received from a third party without breach of any
      obligation of confidentiality;

	 	 	 
	 	(c) 	
      in the public domain at the time of its disclosure or
      that later enters the public domain without breach of this Agreement;
      or

	 	 	 
	 	(d) 	
      required to be disclosed by law, including, in the case
      of NRC, the Access to Information Act, provided that the receiving
      Party first provides the other Party with notice of such requirements and
      of its intent to disclose the information.




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	IU-11 	
      CONFIDENTIALITY AND USE OF ARISING IP:
      All Arising IP will be maintained in confidence and protected by both
      Parties with at least the same degree of care as they use to protect their
      own confidential information, but not less than a reasonable degree of
      care. Arising IP shall not be disclosed except:





	 	(a) 	
      as required for a patent application or for a license to
      a third party including disclosure to prospective licensees;

	 	 	 
	 	(b) 	
      if the Arising IP has entered the public domain without
      breach of this Agreement;

	 	 	 
	 	(c) 	
      as required to be disclosed by law, including, in the
      case of NRC, the Access to Information Act, provided that the
      receiving Party first provides the other Party with notice of such
      requirements and of its intent to disclose information; or

	 	 	 
	 	(d) 	
      as otherwise agreed to by the
Parties.




	IU-12 	
      PUBLICITY: A Party may publicize the
      results of the Collaboration, to the extent permitted by confidentiality,
      and in so doing will acknowledge each Party's contribution. No Party will
      publicly suggest that the other Party endorses or recommends any product
      or process or results of the Collaboration. 

	  	
       

	IU-13 	
      NO IMPLIED WARRANTIES: NRC’s Arising
      IP is supplied and licensed on a “as is” basis, and there are no
      representations, warranties or conditions, express or implied by statute,
      including without limitation any with respect to:





	 	(a) 	
      market readiness, merchantability, or fitness for any use
      or purpose;

	 	 	 
	 	(b) 	
      operational state, character, quality, or freedom from
      defects;

	 	 	 
	 	(c) 	
      validity of patents;

	 	 	 
	 	(d) 	
      non-infringement of rights of third parties under present
      or future patents.




	IU-14 	
      NO CONTESTATION OF VALIDITY: The
      Parties acknowledge the validity of the patents and copyright, if any
      licensed hereunder and agrees not to contest such validity, either
      directly or indirectly by assisting other parties. 

	  	
       

	IU-15 	
      INDEMNITY: NRC rejects all liability
      and responsibility relating to the consequences of Collaborator using
      NRC’s Arising IP. Collaborator shall indemnify and save harmless NRC, its
      employees and agents from and against, and be responsible for:
  




	 	(a) 	
      all claims, demands, losses, damages, costs including
      solicitor and client costs, actions, suits or proceedings brought by any
      third party, that are in any manner based upon, arising out of, related
      to, occasioned by, or attributable to:




	 	(i) 	
      the use by Collaborator of NRC’s Arising IP including
      without limitation, the manufacturing, distribution, shipment, offering
      for sale, sale, or use of products and services derived from NRC’s Arising
      IP; and

	 	 	 
	 	(ii) 	
      product liability and infringement of Intellectual
      Property rights other than copyright, if any, licensed
  hereunder.




	 	(b) 	
      other costs, including extra-judicial costs, of NRC
      defending such any action or proceeding, which NRC shall have the right to
      defend with counsel of its choice.



This clause shall survive expiration or
termination of this Agreement. 

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    	Research Agreement 


ANNEX PO: PROJECT OBJECTIVES AND OVERVIEW 

Background 
One strategy to increase the
bioavailability of hydrophobic molecules is to use fatty acids as solubility and
encapsulation agents. Long chain-alkyl groups of fatty acids interact with the
target molecule, leaving the hydrophilic carboxylic acid end of the fat molecule
to interact with aqueous media. Collaborator is a Canadian (BC) company focused
on a proprietary technology for producing formulations and compositions infused
with lipophilic active agents (LAAs) and bioavailability enhancing agents
(BEAs). Products formulated through this process are believed to confer
advantages beyond increased bioavailability, such as taste-masking properties.
Potential LAAs include a diverse range of specialty and functional ingredients,
such as cannabinoids, nicotine, non-steroidal anti-inflammatory drugs and
vitamins. Potential BEAs include any edible oil (e.g. sunflower oil), fat or
material (e.g. non-fat dry milk) capable of forming a protective colloid with an
LAA. Collaborator is currently most active in the delivery of hemp oil compounds
in food and beverage compositions under the Lexaria Energy and ViPova brands,
but has formed development agreements with other industry and commercialization
partners to explore other applications for their patented processes in nutrition
and health and wellness markets. A better understanding of the chemical nature
of the LAAs in the presence of BEAs would provide valuable insight into process
improvements and new product applications.

Collaboration Overview 
NRC and Collaborator have
common interests in the development of specialty and functional ingredients for
differentiated consumer markets involving functional food, nutrition, and health
and wellness applications. Both parties share expertise in fatty acid chemistry,
product formulation and functional ingredient characterization, most notably
cannabinoids and related active ingredients. This common interest creates a
foundation for a strategic R&D relationship with the broad objectives of:


	1. 	
      To develop specific Projects to explore solutions for the
      technical challenges surrounding commercialization of LAA- BEA
      formulations, both those common to the industry as a whole and those
      specific to Collaborator’s proprietary processes.

	 	 
	2. 	
      To improve expertise and capacity in the area of
      ingredient formulation for improved product function, most notably
      cannabinoids and related high value bioactives.

	 	 
	3. 	
      To identify and explore innovative new technologies and
      applications of mutual interest to NRC and
Collaborator.



Timeline 
The Collaboration will encompass 18 months
beginning in January 2017.

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    	Research Agreement 


APPENDIX 1 

PROJECT ANNEX (“PA”) # ___ 

	BETWEEN: 	NATIONAL RESEARCH COUNCIL OF CANADA
  
	  	whose head office address is:




	 	1200 Montreal Road 	  
	 	Ottawa, ON K1A 0R6 	(called “NRC”) 



	AND: 	LEXARIA CANPHARM CORP. 
	  	whose address is: 



	 	156 Valleyview Road 	  
	 	Kelowna, BC V1X 3M4 	(called the “Collaborator”)
  



	1. 	
      This PA is subject to the terms of the Master
      Collaborative Research Agreement (“Agreement”) between the Parties with an
      effective date of. 

	  	
      

	2. 	
      This PA concerns the following Project:
      ___________________________________________________________________________________________________________________________________________________

	  	
      

	 	
       

	  	
      

	3. 	
      The Parties shall contribute to the Project by the
      performance of work as described in the attached "Statement of Work and
      Deliverables”. 

	  	
      

	4. 	
      The total price of the Project is estimated to be $ ,
      which includes the following contributions from NRC and the Collaborator:
      




		4.1 	
      NRC shall make a co-investment in the Project by
      performing, at its own cost, work as described in the Statement of Work
      and Deliverables at an estimated value of $ ________________. 

	 	  	
		4.2 	
      The Customer shall pay to NRC in cash the sum of $
      _____________, in accordance with Schedule of Payments
      outlined in clause 4.4. In addition the Customer shall pay all
      applicable taxes.* 

	 	  	
		4.3 	
      The Collaborator shall make a co-investment in the
      Project by performing, at its own cost, work as described in the Statement
      of Work and Deliverables at an estimated value of $ ________________.
    

	 	  	
	 	4.4 	
      NRC will invoice the Collaborator for PA # ______ as
      follows: 





	SCHEDULE OF PAYMENTS 	AMOUNT DUE (CAD) 
Plus
      applicable taxes* 
	1. Invoice to be issued 	$______ 
	2. Invoice to be issued 	$______ 
	3. Invoice to be issued 	$______ 
	4. Invoice to be issued 	$______ 




	5. 	This PA shall become effective on
      ____________________________________ and expires on
      ____________________________________. If the Deliverables are not
      completed by the expiration date, the Parties shall negotiate an extension
      to this PA prior to its expiry. Such extension shall be in writing and shall be
signed by the authorized representatives of each Party. 


________________________________

	* 	
      Sales Tax (GST or similar) : NRC registration number 121
      491 807 

	 	Quebec Sales Tax : NRC registration number 1006 178
    088



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	6. 	
      Any rights and obligations under the Agreement or this PA
      which are intended to survive expiration or termination of a PA shall
      survive such expiration or termination.

	 	 
	7. 	
      In the event of any conflict between the Agreement and
      this PA, the Agreement shall take precedence.



IN WITNESS WHEREOF, the Parties have signed this PA in
duplicate copies. 

	NATIONAL RESEARCH COUNCIL OF CANADA 	LEXARIA CANPHARM CORP. 
	 	 
	 	 
	By: _____________________________________________________	By:
      _____________________________________________________
	 	 
	Name:
___________________________________________________	Name:
      ___________________________________________________
	 	 
	Title:
    ____________________________________________________	Title:
      ____________________________________________________
	 	 
	Date:
    ____________________________________________________	Date:
      ____________________________________________________



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APPENDIX 2

STATEMENT OF WORK AND DELIVERABLES 

Project Annex (PA) #: 

Objective of the Project 

Work Plan Description 

Materials, Equipment and Facilities Information 

Deliverables 

Project Estimated Budget 

Project Plan and Schedule 

Project Risks / Conditions 

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