Lexaria Bioscience Corp.: Exhibit 10.1 - Filed by newsfilecorp.com






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 







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 







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.