WHEN RECORDED, MAIL TO:
A5 Laboratories Inc.
Attn: Richard Azani
10300 Chemin Core de liesse
Lachina, Quebec, H8T 1A3
Canada
  

APN: 16-35-405-011

 
TRUST DEED

(with Assignment of Rents)

THIS TRUST DEED, made this 23rd day of February 2011, is given by John M. Fife,
an individual, whose address is 303 East Wacker Drive, Suite 1200, Chicago,
Illinois 60601, as “Trustor,” to Griffiths & Turner / GT Title Services, Inc., a
Utah corporation, having a mailing address of 512 East 4500 South, Suite 150,
Murray, Utah 84107, as “Trustee,” for the benefit of A5 Laboratories Inc., a
Nevada corporation, whose address is 10300 Chemin Core de liesse, Lachina,
Quebec, H8T 1A3, Canada, as “Beneficiary.”
  
WITNESSETH: That Trustor hereby CONVEYS AND WARRANTS TO TRUSTEE IN TRUST, WITH
POWER OF SALE, the following described property, situated in Salt Lake County,
State of Utah:

See Exhibit A attached hereto.

Together with all of the following (all of which, together with such real
property described on Exhibit A, is referred to herein collectively as the
“Property”):

(a)           all buildings, structures, and improvements of every nature
whatsoever now or hereafter situated thereon;

(b)           all rights of way, easements, tenements, hereditaments, privileges
and appurtenances thereunto belonging, now or hereafter used or enjoyed with
such property or any part thereof; SUBJECT, HOWEVER, to the right, power and
authority hereinafter given to and conferred upon Beneficiary to collect and
apply rents, issues, and profits;

(c)           all present and future right, title, and interest of Trustor in
and to all fixtures (as that term is defined in the Utah Uniform Commercial Code
(the “UCC”), and whether existing now or in the future) now or in the future
located at, upon, or about or affixed or attached to or installed in the real
property described on Exhibit A; and

 
 

--------------------------------------------------------------------------------

 
 

(d)           all insurance policies, insurance and condemnation awards and
proceeds, proceeds of the sale of promissory notes, and any other rights to the
payment of money with respect to the property; all advance payments of insurance
premiums made by Trustor with respect to such real property and improvements;
and all plans, drawings and specifications relating to such real property and
improvements, Trustor hereby granting to Beneficiary a security interest in and
to the same as a secured party under the UCC, in addition to and not in
limitation of Trustee’s rights and remedies hereunder.

FOR THE PURPOSE OF SECURING:

For a period of six (6) months and three (3) days from the date hereof (the date
of the conclusion of such period shall be referred to herein as the
“Reconveyance Date”), except as set forth in that certain Escrow Agreement of
even date herewith entered into by and among Beneficiary, Trustor, and Trustee
(the “Escrow Agreement”), (1) payment of the indebtedness evidenced by that
certain Buyer Trust Deed Note #1 of even date herewith in the original principal
sum of Two Hundred Thousand and No/100 Dollars ($200,000.00), together with
interest thereon, executed by Trustor in favor of Beneficiary, and any
extensions, revisions, modifications, substitutions, or renewals thereof (the
“Note”); (2) the performance of each agreement of Trustor herein contained; and
(3) the payment of all sums expended or advanced by Beneficiary under or
pursuant to the terms hereof, together with interest thereon as herein provided.

AND, Trustor hereby warrants, covenants and agrees that Trustor is the lawful
owner of the Property, with good and marketable title, free and clear of all
encumbrances, liens or charges, excepting only those matters currently of
record.

TO PROTECT THE SECURITY OF THIS TRUST DEED, TRUSTOR AGREES:
 
1.             To keep the Property in good condition and repair; not to remove
or demolish any building thereon; to materially comply with all laws, covenants
and restrictions affecting the Property; and not to commit or permit waste
thereof.

2.             To provide and maintain insurance, of such type or types and
amounts as Beneficiary may reasonably require in writing (but in any event not
to exceed the amount of the indebtedness secured hereby unless agreed to by
Trustor) on the improvements now existing or hereafter erected or placed on the
Property.

Trustor or any subsequent owner or purchaser of the Property shall have the
right to substitute for a then existing policy of insurance, a policy of
insurance issued by another insurance carrier at any time, provided Trustor
provides notice to Beneficiary of such new insurance carrier within sixty (60)
days of the issuance of a substitute insurance policy.

3.             To deliver to and maintain with Beneficiary until the earlier of
(a) the indebtedness secured hereby is paid in full, or (b) the Reconveyance
Date, such evidence of title as Beneficiary may reasonably require, including
abstracts of title.

4.             To pay at least ten (10) days before delinquency all taxes and
assessments affecting the Property; to pay, when due, all encumbrances, charges,
and liens, with interest, on the Property or any part thereof, which at any time
appear to be prior or superior hereto; and to pay all costs, fees, and expenses
of this trust.
 
 
2

--------------------------------------------------------------------------------

 
 
5.             To pay immediately and without demand all sums expended hereunder
by Beneficiary or Trustee, with interest from date of expenditure at the rate of
ten percent (10%) per annum until paid, and the repayment thereof shall be
secured hereby.

IT IS MUTUALLY AGREED THAT:

6.             Should the Property or any part thereof be taken or damaged by
reason of any public improvement or condemnation proceeding, or damaged by fire,
or earthquake, or in any other manner, Beneficiary shall be entitled to all
compensation, awards, and other payments or relief therefor, up to the full
amount of the indebtedness secured hereby.

7.             As additional security, Trustor hereby assigns Beneficiary,
during the continuance of these trusts, all rents, issues, royalties, and
profits of the Property affected by this Trust Deed and of any personal property
located thereon.  Until Trustor shall default in the payment of any indebtedness
secured hereby or in the performance of any agreement hereunder, Trustor shall
have the right to collect all such rents, issues, royalties, and profits earned
prior to default as they become due and payable.  If Trustor shall default as
aforesaid, Trustor’s right to collect any of such moneys shall cease and
Beneficiary shall have the right, with or without taking possession of the
Property affected hereby, to collect all rents, royalties, issues, and profits.

8.             Except as otherwise noted herein, if any default by Trustor
hereunder is curable, then such default may be cured (and no default will have
occurred) if Trustor, after receiving written notice from Beneficiary demanding
cure of such default, either (a) cures such default within thirty (30) days, or
(b) if the cure requires more than thirty (30) days, immediately initiates steps
that Beneficiary deems in Beneficiary’s reasonable discretion to be sufficient
to cure such default and thereafter diligently continues and completes all
reasonable and necessary steps sufficient to produce compliance as soon as
reasonably practical.

9.             Upon any uncured default by Trustor hereunder (after the
conclusion of any cure period set forth in Section 8 above), Beneficiary may at
any time upon not less than ten (10) days’ written notice to Trustor, either in
person, by agent, or by a receiver to be appointed by a court (Trustor hereby
consenting to the appointment of Beneficiary as such receiver), and without
regard to the adequacy of any security for the indebtedness hereby secured,
enter upon and take possession of the Property or any part thereof, in its own
name sue for or otherwise collect the rents, issues, and profits, including
those past due and unpaid, and apply the same, less costs and expenses of
operation and collection, including reasonable attorneys’ fees, upon any
indebtedness secured hereby, and in such order as Beneficiary may determine.

10.           The failure on the part of Beneficiary to promptly enforce any
right hereunder shall not operate as a waiver of such right and the waiver by
Beneficiary of any default shall not constitute a waiver of any other or
subsequent default.
 
 
3

--------------------------------------------------------------------------------

 
11.           Time is of the essence hereof.  Upon default by Trustor in the
payment of any indebtedness secured hereby or in the performance of any
agreement hereunder, all sums secured hereby shall immediately become due and
payable at the option of Beneficiary.  In the event of such default, Beneficiary
may execute or cause Trustee to execute a written notice of default and of
election to cause the Property to be sold to satisfy the obligations hereof, and
Trustee shall file such notice for record in each county wherein the Property or
some part or parcel thereof is situated.  Beneficiary also shall deposit with
Trustee, the Note and all documents evidencing expenditures secured hereby.

12.           After the lapse of such time as may then be required by law
following the recordation of such notice of default, and notice of default and
notice of sale having been given as then required by law, Trustee, without
demand on Trustor, shall sell the Property on the date and at the time and place
designated in the notice of sale, either as a whole or in separate parcels, and
in such order as it may determine (but subject to any statutory right of Trustor
to direct the order in which such Property, if consisting of several known lots
or parcels, shall be sold), at public auction to the highest bidder, the
purchase price payable in lawful money of the United States at the time of sale.
The person conducting the sale may, for any cause he deems expedient, postpone
the sale from time to time until it shall be completed and, in every case,
notice of postponement shall be given by public declaration thereof by such
person at the time and place last appointed for the sale; provided, if the sale
is postponed for longer than one day beyond the day designated in the notice of
sale, notice thereof shall be given in the same manner as the original notice of
sale.  Trustor agrees to surrender possession immediately after any such sale of
the Property, if possession has not previously been surrendered. Trustee shall
execute and deliver to the purchaser its Deed conveying said property so sold,
but without any covenant or warranty, express or implied.  Any person, including
Beneficiary, may bid at the sale.  Trustee shall apply the proceeds of the sale
to payment of (a) the costs and expenses of exercising the power of sale and of
the sale, including the payment of Trustee’s and attorneys’ fees; (b) cost of
any evidence of title procured in connection with such sale and revenue stamps
on Trustee’s Deed; (c) all sums expended under the terms hereof, not then
repaid, with accrued interest at ten percent (10%) per annum from date of
expenditure; (d) all other sums then secured hereby; and (e) the remainder, if
any, to the person or persons legally entitled thereto.

13.           From time to time, Beneficiary may require Trustee to reconvey,
release and discharge from the operation of this Trust Deed any part or parts of
the property described in this Trust Deed, given to secure payment of the
indebtedness evidence by the Note.  Trustee shall execute and deliver unto
Beneficiary a written reconveyance and release upon receiving from Beneficiary a
written request therefor.  Such written request shall be in the form attached
hereto as Exhibit B and shall include a description of the Property to be
reconveyed or released, a statement of the consideration, if any, received by
Beneficiary for such reconveyance or release, and a declaration that Beneficiary
is the owner and holder of the debt mentioned in this Trust Deed and that the
same has never been assigned or transferred. The partial reconveyance or release
executed by Trustee shall identify this Trust Deed and describe the property to
be reconveyed or released.  A partial reconveyance or release executed and
delivered by Trustee under authority of this paragraph shall not affect or
impair the security remaining under this Trust Deed. This Trust Deed need not
accompany any request for a partial reconveyance or release, but upon demand of
Trustee, Beneficiary will exhibit to Trustee the Note.  Successive partial
reconveyances or releases may be requested by Beneficiary.
 
 
4

--------------------------------------------------------------------------------

 
 
14.           Subject to the terms and conditions of the Escrow Agreement and
provided Trustor is not in default under the Note as of such date, Beneficiary,
by recording this Trust Deed, covenants to deliver to Trustee a Request for
Reconveyance in the form attached hereto as Exhibit B on the Reconveyance Date.

15.           Each abstract of title, title insurance policy, or all other
evidences of title, and all insurance policies placed or deposited with
Beneficiary shall be deemed an incident to the title of the Property herein
described and upon sale or foreclosure or otherwise shall pass to the purchaser,
and same are hereby pledged as additional security for payment of the
indebtedness secured hereby.

16.           In the event Beneficiary and Trustee or either of them shall
determine to foreclose this Trust Deed by court action, Trustor agrees to pay
all costs and expenses incurred therein and reasonable compensation for the
attorneys representing Beneficiary and Trustee, or either of them.

17.           This Trust Deed shall apply to, inure to the benefit of, and bind
all parties hereto, their heirs, legatees, devisees, administrators, executors,
successors and assigns.  In this Trust Deed, whenever the context requires, the
masculine gender includes the feminine and/or neuter, and the singular number
includes the plural.

18.           Any option, election, notice or right granted to Beneficiary may
be exercised only by written approval of Beneficiary.

19.           If the loan secured by this Trust Deed is subject to a law which
sets maximum loan charges, and that law is finally interpreted so that the
interest or other loan charges collected or to be collected in connection with
the loan exceed the permitted limits, then: (a) any such loan charge shall be
reduced by the amount necessary to reduce the charge to the permitted limit; and
(b) any sums already collected from Trustor which exceed permitted limits will
be refunded to Trustor.  Beneficiary may choose to make this refund by reducing
the principal owed under the Note or by making a direct payment to Trustor.

20.           If one or more riders are executed by Trustor and recorded
together with this Trust Deed, the covenants and agreements of each such rider
shall be incorporated into and shall amend and supplement the covenants and
agreements of this Trust Deed as if the rider(s) were part of this Trust Deed.

21.           If any provision of this Trust Deed is declared by a court of
competent jurisdiction to be invalid for any reason such invalidity shall not
affect the remaining provisions of this Trust Deed.  The remaining provisions
shall be fully severable, and this Trust Deed shall be construed and enforced as
if the invalid provision had never been included herein.
 
 
5

--------------------------------------------------------------------------------

 
 
22.           Trustee accepts this trust when this Trust Deed, duly executed and
acknowledged, is made a public record as provided by law.  Trustee is not
obligated to notify any party hereto of pending sale under any other Trust Deed
or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall
be a party, unless brought by Trustee.

23.           Trustee is authorized to reconvey or cause to be reconveyed this
Trust Deed without further action or consent by Beneficiary in accordance with
the terms of the Escrow Agreement.

24.           This Trust Deed shall be construed according to the laws of the
State of Utah.

25.           The undersigned Trustor requests that a copy of any notice of
default and of any notice of sale hereunder be mailed to Trustor at the address
hereinbefore set forth.

   
TRUSTOR:
         
  
   
John M. Fife, individually
     
STATE OF ___________
)
     
: ss.
   
COUNTY OF _________
)
         
On the ___ day of February 2011, personally appeared before me John M. Fife,
Trustor, who duly acknowledged to me that he executed the above instrument.
           
  
     
Notary Public

 
6

--------------------------------------------------------------------------------

 
 

EXHIBIT A

LEGAL DESCRIPTION OF THE PROPERTY

LOT 1, HAWKER HEIGHTS, ACCORDING TO THE OFFICIAL PLAT THEREOF, RECORDED IN BOOK
N OF PLATS AT PAGE 2, RECORDS OF SALT LAKE COUNTY, UTAH.

TAX ID: 16-35-405-011
 
 
 

--------------------------------------------------------------------------------

 

EXHIBIT B
 
REQUEST FOR RECONVEYANCE
 
 
 

--------------------------------------------------------------------------------