SECURITY AGREEMENT


 


THIS SECURITY AGREEMENT
(“Agreement”) is made as of this [—], 2012, by and
between AQUALIV TECHNOLOGIES, INC., a Nevada corporation (the “Company”), in favor of TCA GLOBAL
CREDIT MASTER FUND, LP, a Cayman Islands limited partnership (the “Secured Party”).


 


RECITALS


 


WHEREAS,
pursuant to a Securities Purchase Agreement dated of even date herewith between Company and the Secured Party (the “Purchase
Agreement”), Company has agreed to issue to the Secured Party and the Secured Party has agreed to purchase from Company
certain senior secured, redeemable, convertible debentures (the “Debentures”), as more specifically set
forth in the Purchase Agreement; and


WHEREAS,
in order to induce the Secured Party to purchase the Debentures, Company has agreed to execute and deliver to the Secured Party
this Agreement for the benefit of the Secured Party and to grant to it a continuing, first priority security interest and lien
in all of the assets and property of Company to secure the prompt payment, performance and discharge in full of all of Company’s
obligations under the Debentures, the Purchase Agreement and the other Transaction Documents;


NOW, THEREFORE,
in consideration of the mutual covenants and agreements of the parties hereinafter set forth and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties each intending to be legally bound, hereby do agree as
follows:


 


1.               
Recitals. The recitations set forth in the preamble of this Agreement are true and correct and incorporated herein
by this reference.


 


2.Construction and
Definition of Terms. In this Agreement, unless the express context otherwise requires: (i) the words “herein,”
“hereof” and “hereunder” and words of similar import refer to this Agreement as a whole and not to any
particular provision of this Agreement; (ii) references to the words “Section” or “Subsection” refer to
the respective Sections and Subsections of this Agreement, and references to “Exhibit” or “Schedule” refer
to the respective Exhibits and Schedules attached hereto; (iii) wherever the word “include,” “includes”
or “including” is used in this Agreement, it will be deemed to be followed by the words “without limitation.”
All capitalized terms used in this Agreement that are defined in the Purchase Agreement or otherwise defined in Articles 8 or 9
of the Code shall have the meanings assigned to them in the Purchase Agreement or the Code, respectively and as applicable, unless
the context of this Agreement requires otherwise. In addition to the capitalized terms defined in the Code and the Purchase Agreement,
unless the context otherwise requires, when used herein, the following capitalized terms shall have the following meanings (provided
that if a capitalized term used herein is defined in the Purchase Agreement and separately defined in this Agreement, the meaning
of such term as defined in this Agreement shall control for purposes of this Agreement):


 


(a)“Agreement”
means this Security Agreement and all amendments, modifications and supplements hereto.


 


(b)“Bankruptcy
Code” means the United States Bankruptcy Code, as amended from time to time, or any other similar laws, codes, rules
or regulations relating to bankruptcy, insolvency or the protection of creditors.


 


(c)“Business
Premises” shall mean the Company’s offices located at 4550 NW Newberry Hill Road, Suite 202, Silverdale, WA
98383.


 


(d)“Closing”
shall mean the date on which this Agreement is fully executed by both parties.


 


(e)“Code”
shall mean the Uniform Commercial Code as in effect from time to time in the State of Nevada, provided that terms used herein which
are defined in the Code as in effect in the State of Nevada on the date hereof shall continue to have the same meaning notwithstanding
any replacement or amendment of such statute, except as the Secured Party may otherwise agree.


 


(f)“Collateral”
shall mean any and all property of the Company, of any kind or description, tangible or intangible,
real, personal or mixed, wheresoever located and whether now existing or hereafter arising or acquired, including the following:
(i) all property of, or for the account of, the Company now or hereafter coming into the possession, control or custody of, or
in transit to, Secured Party or any agent or bailee for Secured Party or any parent, affiliate or subsidiary of Secured Party or
any participant with Secured Party in the Obligations (whether for safekeeping, deposit, collection, custody, pledge, transmission
or otherwise), including all cash, earnings, dividends, interest, or other rights in connection therewith and the products and
proceeds therefrom, including the proceeds of insurance thereon; (ii) the following additional property of the Company, whether
now existing or hereafter arising or acquired, and wherever now or hereafter located, together with all additions and accessions
thereto, substitutions, betterments and replacements therefor, products and Proceeds therefrom, and all of the Company’s
books and records and recorded data relating thereto (regardless of the medium of recording or storage), together with all of the
Company’s right, title and interest in and to all computer software required to utilize, create, maintain and process any
such records or data on electronic media, including all: (A) Accounts, and all goods whose sale, lease or other disposition by
the Company has given rise to Accounts and have been returned to, or repossessed or stopped in transit by, the Company, or rejected
or refused by an Account debtor; (B) As-extracted Collateral; (C) Chattel Paper (whether tangible or electronic); (D) Commodity
Accounts; (E) Commodity Contracts; (F) Deposit Accounts, including all cash and other property from time to time deposited therein
and the monies and property in the possession or under the control of the Secured Party or any affiliate, representative, agent,
designee or correspondent of the Secured Party; (G) Documents; (H) Equipment; (I) Farm Products; (J) Fixtures; (K) General Intangibles
(including all Payment Intangibles); (L) Goods, and all accessions thereto and goods with which the Goods are commingled; (M) Health-Care
Insurance Receivables; (N) Instruments; (O) Inventory, including raw materials, work-in-process and finished goods; (P) Investment
Property; (Q) Letter-of-Credit Rights; (R) Promissory Notes; (S) Software; (T) all Supporting Obligations; (U) all commercial tort
claims hereafter arising; (V) all other tangible and intangible personal property of the Company (whether or not subject to the
Code), including, all bank and other accounts and all cash and all investments therein, all proceeds, products, offspring, accessions,
rents, profits, income, benefits, substitutions and replacements of and to any of the property of the Company described within
the definition of Collateral (including, any proceeds of insurance thereon and all causes of action, claims and warranties now
or hereafter held by the Company in respect of any of the items listed within the definition of Collateral), and all books, correspondence,
files and other Records, including, all tapes, desks, cards, Software, data and computer programs in the possession or under the
control of the Company or any other Person from time to time acting for the Company, in each case, to the extent of the Company’s
rights therein, that at any time evidence or contain information relating to any of the property described or listed within the
definition of Collateral or which are otherwise necessary or helpful in the collection or realization thereof; (W) real estate
property owned by the Company, leasehold interests owned by the Company in real property and the interest of the Company in fixtures
or any other assets or property related to such real property or leasehold interests; and (X) Proceeds, including all Cash Proceeds
and Noncash Proceeds, and products of any or all of the foregoing, in each case howsoever the Company’s interest therein
may arise or appear (whether by ownership, security interest, claim or otherwise).


 


(g)“Event
of Default” shall mean any of the events described in Section 4 hereof.


 


(h)“Obligations”
shall mean any and all obligations of the Company to Secured Party, whether arising, existing or incurred under this Agreement,
the Purchase Agreement or any other Transaction Documents, or any other agreement between the Company and the Secured Party, in
each case, whether now or hereafter existing or incurred, voluntary or involuntary, direct or indirect, absolute or contingent,
liquidated or unliquidated, whether or not jointly owed with others, and whether or not from time to time decreased or extinguished
and later decreased, created or incurred, and all or any portion of such obligations or liabilities that are paid, to the extent
all or any part of such payment is avoided or recovered directly or indirectly from the Secured Party as a preference, fraudulent
transfer or otherwise as such obligations may be amended, supplemented, converted, extended or modified from time to time.





3.               
Security.


 


(a)Grant of Security
Interest. As security for the full payment and performance of all of the Obligations, whether or not any instrument or agreement
relating to any Obligation specifically refers to this Agreement or the security interest created hereunder, the Company hereby
assigns, pledges and grants to Secured Party an unconditional, continuing, first-priority security interest in all of the Collateral.
Secured Party’s security interest shall continually exist until all Obligations have been indefeasibly satisfied and/or paid
in full.


 


(b)Representations,
Warranties, Covenants and Agreement of the Company. With respect to all of the Collateral, Company covenants, warrants and
represents, for the benefit of the Secured Party, as follows:


 


(i)The Company has
the requisite corporate power and authority to enter into this Agreement and otherwise to carry out its obligations hereunder.
The execution, delivery and performance by the Company of this Agreement and the filings contemplated herein have been duly authorized
by all necessary action on the part of the Company and no further action is required by the Company. This Agreement constitutes
a legal, valid and binding obligation of the Company enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditor’s rights
generally.


 


(ii)The Company represents
and warrants that it has no place of business or offices where its respective books of account and records are kept or places where
Collateral is stored or located, except for the Business Premises.


 


(iii)The Company is
the sole owner of the Collateral (except for non-exclusive licenses granted by the Company in the Ordinary Course of Business),
free and clear of any and all Encumbrances. The Company is fully authorized to grant the security interests in and to pledge the
Collateral to Secured Party. There is not on file in any agency, land records or other office of any Governmental Authority, an
effective financing statement, security agreement, license or transfer or any notice of any of the foregoing (other than those
that have been filed in favor of the Secured Party pursuant to this Agreement) covering or affecting any of the Collateral. So
long as this Agreement shall be in effect, the Company shall not execute and shall not permit to be on file in any such agency,
land records or other office any such financing statement or other document or instrument (except to the extent filed or recorded
in favor of the Secured Party pursuant to the terms of this Agreement).


 


(iv)No part of the
Collateral has been judged invalid or unenforceable. No Claim, Proceeding or other notice or other similar item has been received
by the Company that any Collateral or the Company’s use of any Collateral violates the rights of any Person. There has been
no adverse decision or claim to the Company’s ownership rights in or exclusive rights to use the Collateral in any jurisdiction
or to the Company’s right to keep and maintain such Collateral in full force and effect, and there is no Claim or Proceeding
of any nature involving said rights pending or, to the best knowledge of the Company, threatened, before any Governmental Authority.


 


(v)The Company shall
at all times maintain its books of account and records relating to the Collateral and maintain the Collateral at the Business Premises,
and the Company shall not relocate such books of account and records or Collateral, except and unless: (A) Secured Party first
approves of such relocation, which approval may be withheld in Secured Party’s sole and absolute discretion; (B) evidence
that appropriate financing statements and other necessary documents have been filed and recorded and other steps have been taken
to create in favor of the Secured Party valid, perfected and continuing liens in the Collateral; or (C) Collateral is moved or
relocated in the ordinary course of the Company’s business, consistent with past practice, provided, however, that any permanent
relocation of any of the Collateral shall require Secured Party’s prior written approval in accordance with Subsection 3(b)(v)(A)
above.


 


(vi)Upon making the
filings described in the immediately following sentence, this Agreement creates, in favor of the Secured Party, a valid, perfected,
first-priority security interest in the Collateral. Except for the filing of financing statements on Form-1 under the Code with
the State of Nevada, no authorization or approval of, or filing with, or notice to any Governmental Authority is required either:
(A) for the grant by the Company of, or the effectiveness of, the security interest granted hereby or for the execution, delivery
and performance of this Agreement by the Company; or (B) for the perfection of or exercise by the Secured Party of its rights
and remedies hereunder.


 


(vii)Simultaneous with
the execution of this Agreement, the Company hereby authorizes the Secured Party to file one or more UCC financing statements,
and any continuations, amendments, or assignments thereof, with respect to the security interests on the Collateral granted hereby,
with the State of Nevada and in such other jurisdictions as may be requested or desired by the Secured Party.


 


(viii)The execution,
delivery and performance of this Agreement, and the granting of the security interests contemplated hereby, will not: (A) constitute
a violation of or conflict with the Certificate of Incorporation, Bylaws or any other organizational or governing documents of
the Company; (B) constitute a violation of, or a default or breach under (either immediately, upon notice, upon lapse of time,
or both), or conflicts with, or gives to any other Person any rights of termination, amendment, acceleration or cancellation of,
any provision of any Contract or agreement to which Company is a party or by which any of the Collateral may be bound; (C) constitute
a violation of, or a default or breach under (either immediately, upon notice, upon lapse of time, or both), or conflicts with,
any Judgment of any Governmental Authority; (D) constitute a violation of, or conflict with, any Law; or (E) result in the loss
or adverse modification of, or the imposition of any fine, penalty or other Encumbrance with respect to, any Permit granted or
issued to, or otherwise held by or for the use of, the Company or any of the Collateral. No Consent (including from stockholders
or creditors of the Company) is required for the Company to enter into and perform its obligations hereunder.


 


(ix)The Company shall
at all times maintain the liens and security interests provided for hereunder as valid and perfected first-priority liens and security
interests in the Collateral in favor of the Secured Party until this Agreement and the security interests hereunder shall terminate
pursuant to Section 8(o) below. The Company shall at all times safeguard and protect all Collateral, at its own expense, for the
account of the Secured Party. At the request of the Secured Party, the Company will sign and deliver to the Secured Party at any
time, or from time to time, one or more financing statements pursuant to the Code (or any other applicable statute) in form reasonably
satisfactory to the Secured Party and will pay the cost of filing the same in all public offices wherever filing is, or is deemed
by the Secured Party to be, necessary or desirable to effect the rights and obligations provided for herein. Without limiting the
generality of the foregoing, the Company shall pay all fees, taxes and other amounts necessary to maintain the Collateral and the
security interests granted hereunder, and the Company shall obtain and furnish to the Secured Party from time to time, upon demand,
such releases and/or subordinations of claims and liens which may be required to maintain the priority of the security interests
hereunder.


 


(x)The Company will
not transfer, pledge, hypothecate, encumber, license, sell or otherwise dispose of any of the Collateral without the prior written
consent of the Secured Party, which consent may be withheld in the Secured Party’s sole and absolute discretion, except for
transfers, sales or licenses made in the Ordinary Course of Business.


 


(xi)The Company shall
keep, maintain and preserve all of the Collateral in good condition, repair and order and the Company will use, operate and maintain
the Collateral in compliance with all Laws, and in compliance with all applicable insurance requirements and regulations.


 


(xii)The Company shall,
within five (5) days of obtaining knowledge thereof, advise the Secured Party promptly, in sufficient detail, of any substantial
or material change in the Collateral, and of the occurrence of any event which would have a Material Adverse Effect on the value
of the Collateral or on the Secured Party’s security interest therein.


 


(xiii)The Company shall
promptly execute and deliver to the Secured Party such further deeds, mortgages, assignments, security agreements, financing statements
or other instruments, documents, certificates and assurances and take such further action as the Secured Party may from time to
time request and may in its sole discretion deem necessary to perfect, protect or enforce its security interest in the Collateral,
including, placing legends on Collateral or on books and records pertaining to Collateral stating that Secured Party has a security
interest therein.


 


(xiv)The Company will
take all steps reasonably necessary to diligently pursue and seek to preserve, enforce and collect any rights, claims, causes of
action and accounts receivable in respect of the Collateral.


 


(xv)The Company shall
promptly notify the Secured Party in sufficient detail upon becoming aware of any litigation, attachment, garnishment, execution
or other legal process levied against any Collateral or of any litigation, attachment, garnishment, execution or other legal process
which Company knows or has reason to believe is pending or threatened against it or the Collateral, and of any other information
received by the Company that may materially affect the value of the Collateral, the security interests granted hereunder or the
rights and remedies of the Secured Party hereunder.


 


(xvi)All information
heretofore, herein or hereafter supplied to the Secured Party by or on behalf of the Company with respect to the Collateral is
accurate and complete in all material respects as of the date furnished.


 


(xvii)Company will
promptly pay when due all taxes and all transportation, storage, warehousing and all other charges and fees affecting or arising
out of or relating to the Collateral and shall defend the Collateral, at Company’s expense, against all claims of any Persons
claiming any interest in the Collateral adverse to Company or Secured Party.


 


(xviii)During normal
business hours and subject to prior reasonable notice from Secured Party to the Company (which notice may be e-mail or telephonic
notice), Secured Party and its agents and designees may enter the Business Premises and any other premises of the Company and inspect
the Collateral and all books and records of the Company (in whatever form), and the Company shall pay the reasonable costs of such
inspections; provided, however, that without in any manner limiting the number of site visits or inspections that Secured Party
may undertake, the Company’s obligation to reimburse Secured Party for the cost and expense of such visits or inspections
shall be limited to three (3) visits or inspections at $750.00 per visit or inspection.


 


(xix)The Company shall
maintain comprehensive casualty insurance on the Collateral against such risks, in such amounts, with such loss deductible amounts
and with such companies as may be reasonably satisfactory to the Secured Party, and each such policy shall contain a clause or
endorsement satisfactory to Secured Party naming Secured Party as loss payee and a clause or endorsement satisfactory to Secured
Party that such policy may not be canceled or altered and Secured Party may not be removed as loss payee without at least thirty
(30) days prior written notice to Secured Party. In all events, the amounts of such insurance coverages shall conform to prudent
business practices and shall be in such minimum amounts that Company will not be deemed a co-insurer under applicable insurance
laws, policies or practices. The Company hereby assigns to Secured Party and grants to Secured Party a security interest in any
and all proceeds of such policies and authorizes and empowers Secured Party to adjust or compromise any loss under such policies
and to collect and receive all such proceeds. The Company hereby authorizes and directs each insurance company to pay all such
proceeds directly and solely to Secured Party and not to the Company and Secured Party jointly. The Company authorizes and empowers
Secured Party to execute and endorse in Company’s name all proofs of loss, drafts, checks and any other documents or instruments
necessary to accomplish such collection, and any persons making payments to Secured Party under the terms of this subsection are
hereby relieved absolutely from any obligation or responsibility to see to the application of any sums so paid. After deduction
from any such proceeds of all costs and expenses (including attorney’s fees) incurred by Secured Party in the collection
and handling of such proceeds, the net proceeds shall be applied as follows: if no Event of Default shall have occurred and be
continuing, such net proceeds may be applied, at Company’s option, either toward replacing or restoring the Collateral, in
a manner and on terms satisfactory to Secured Party, or as a credit against such of the Obligations, whether matured or unmatured,
as Secured Party shall determine in Secured Party’s sole discretion. In the event that Company may and does elect to replace
or restore any of the Collateral as aforesaid, then such net proceeds shall be deposited in a segregated account opened in the
name and for the benefit of Secured Party, and such net proceeds shall be disbursed therefrom by Secured Party in such manner and
at such times as Secured Party deems appropriate to complete and insure such replacement or restoration; provided, however, that
if an Event of Default shall occur at any time before or after replacement or restoration has commenced, then thereupon Secured
Party shall have the option to apply all remaining net proceeds either toward replacing or restoring the Collateral, in a manner
and on terms satisfactory to Secured Party, or as a credit against such of the Obligations, whether matured or unmatured, as Secured
Party shall determine in Secured Party’s sole discretion. If an Event of Default shall have occurred prior to such deposit
of the net proceeds, then Secured Party may, in its sole discretion, apply such net proceeds either toward replacing or restoring
the Collateral, in a manner and on terms satisfactory to Secured Party, or as a credit against such of the Obligations, whether
matured or unmatured, as Secured Party shall determine in Secured Party’s sole discretion.


 


(xx)The Company shall
cooperate with Secured Party to obtain and keep in effect one or more control agreements in Deposit Accounts, Electronic Chattel
Paper, Investment Property and Letter-of-Credit Rights Collateral, or any other Collateral that may, in Secured Party’s sole
discretion, require any such control agreements. In addition, the Company, at the Company’s expense, shall promptly: (A) execute
all notices of security interest for each relevant type of Software and other General Intangibles in forms suitable for filing
with any United States or foreign office handling the registration or filing of patents, trademarks, copyrights and other intellectual
property and any successor office or agency thereto; and (B) take all commercially reasonable steps in any Proceeding before
any such office or any similar office or agency in any other country or any political subdivision thereof, to diligently prosecute
or maintain, as applicable, each application and registration of any Software, General Intangibles or any other intellectual property
rights and assets that are part of the Collateral, including filing of renewals, affidavits of use, affidavits of incontestability
and opposition, interference and cancellation proceedings.


 


(xxi)Company shall
not file any amendments, correction statements or termination statements concerning the Collateral without the prior written consent
of Secured Party.


 


(c)Collateral Collections.
After an Event of Default shall have occurred, Secured Party shall have the right at any and all times to enforce the Company’s
rights against all Persons obligated on any of the Collateral, including the right to: (i) notify and/or require the Company to
notify any or all Persons obligated on any of the Collateral to make payments directly to Secured Party or in care of a post
office lock box under the sole control of Secured Party established at Company’s expense, and to take any or all action with
respect to Collateral as Secured Party shall determine in its sole discretion, including, the right to demand, collect, sue for
and receive any money or property at any time due, payable or receivable on account thereof, compromise and settle with any Person
liable thereon, and extend the time of payment or otherwise change the terms thereof, without incurring any liability or responsibility
to the Company whatsoever; and/or (ii) require the Company to segregate and hold in trust for Secured Party and, on the day of
Company’s receipt thereof, transmit to Secured Party in the exact form received by the Company (except for such assignments
and endorsements as may be required by Secured Party), all cash, checks, drafts, money orders and other items of payment constituting
any portion of the Collateral or proceeds of the Collateral. Secured Party’s collection and enforcement of Collateral against
Persons obligated thereon shall be deemed to be commercially reasonable if Secured Party exercises the care and follows the procedures
that Secured Party generally applies to the collection of obligations owed to Secured Party.


 


(d)Care of Collateral.
Company shall have all risk of loss of the Collateral. Secured Party shall have no liability or duty, either before or after the
occurrence of an Event of Default, on account of loss of or damage to, to collect or enforce any of its rights against, the Collateral,
to collect any income accruing on the Collateral, or to preserve rights against Persons with prior interests in the Collateral.
If Secured Party actually receives any notices requiring action with respect to Collateral in Secured Party’s possession,
Secured Party shall take reasonable steps to forward such notices to the Company. The Company is responsible for responding to
notices concerning the Collateral, voting the Collateral, and exercising rights and options, calls and conversions of the Collateral.
Secured Party’s sole responsibility is to take such action as is reasonably requested by Company in writing, however, Secured
Party is not responsible to take any action that, in Secured Party’s sole judgment, would affect the value of the Collateral
as security for the Obligations adversely. While Secured Party is not required to take certain actions, if action is needed,
in Secured Party’s sole discretion, to preserve and maintain the Collateral, Company authorizes Secured Party to take such
actions, but Secured Party is not obligated to do so.


 


4.Events of Default.
The occurrence of any one or more of the following events shall constitute an “Event of Default” hereunder:


 


(a)Failure to Pay.
The failure of Company to pay any sum due under or as part of the Obligations as and when due and payable (whether by acceleration,
declaration, extension or otherwise).


 


(b)Covenants and Agreements.
The failure of Company to perform, observe or comply with any and all of the covenants, promises and agreements of the Company
in this Agreement, the Purchase Agreement or any other Transaction Documents, which such failure is not cured by the Company within
ten (10) days after receipt of written notice thereof from Secured Party, except that there shall be no notice or cure period with
respect to any failure to pay any sums due under or as part of the Obligations.


 


(c)Information, Representations
and Warranties. If any representation or warranty made herein, in the Purchase Agreement or any other Transaction Documents,
or if any information contained in any financial statement, application, schedule, report or any other document given by the Company
in connection with the Obligations, with the Collateral, or with any Transaction Document, is not in all respects true, accurate
and complete, or if the Company omitted to state any material fact or any fact necessary to make such information not misleading.


 


(d)Default on Other
Obligations. The occurrence of any default under any other borrowing or Obligation of the Company that is for an aggregate
amount of debt or consideration of Ten Thousand and No/100 Dollars ($10,000.00) or more, either with Secured Party or others, if
the result of such default would: (i) permit the acceleration of the maturity of any note, loan or other Contract between Company
and any Person other than Secured Party; or (ii) materially and adversely affect, as determined by Secured Party in good faith,
but in its sole discretion, any of the Collateral, the value thereof or Secured Party’s rights and remedies to realize upon
such Collateral as set forth herein.


 


(e)Insolvency.
Company shall be or become insolvent or unable to pay its debts as they become due, or admits in writing to such insolvency or
to such inability to pay its debts as they become due.


 


(f)Involuntary Bankruptcy.
There shall be filed against Company an involuntary petition or other pleading seeking the entry of a decree or order for relief
under the Bankruptcy Code or any similar foreign, federal or state insolvency or similar laws ordering: (i) the liquidation
of the Company; or (ii) a reorganization of Company or the business and affairs of Company; or (iii) the appointment
of a receiver, liquidator, assignee, custodian, trustee, or similar official for Company of the property of Company, and the failure
to have such petition or other pleading denied or dismissed within thirty (30) calendar days from the date of filing.


 


(g)Voluntary Bankruptcy.
The commencement by the Company of a voluntary case under the Bankruptcy Code or any foreign, federal or state insolvency or similar
laws or the consent by the Company to the appointment of or taking possession by a receiver, liquidator, assignee, trustee, custodian,
or similar official for Company of any of the property of the Company or the making by the Company of an assignment for the benefit
of creditors, or the failure by the Company generally to pay its debts as the debts become due.


 


(h)Judgments, Awards.
The entry of any final and non-appealable Judgment or other determination or adjudication against the Company and a determination
by Secured Party, in good faith but in its sole discretion, that any such Judgment or other determination or adjudication could
have a Material Adverse Effect on the prospect for Secured Party to fully and punctually realize the full benefits conferred on
Secured Party by this Agreement.


 


(i)Injunction.
The injunction or restraint of the Company in any manner from conducting its business in whole or in part and a determination by
Secured Party, in good faith but in its sole discretion, that the same could have a Material Adverse Effect on the prospect for
Secured Party to fully and punctually realize the full benefits conferred on Secured Party by this Agreement.


 


(j)Attachment by Other
Parties. Any Assets of the Company shall be attached, levied upon, seized or repossessed, or come into the possession of a
trustee, receiver or other custodian and a determination by Secured Party, in good faith but in its sole discretion, that the same
could have a Material Adverse Effect on the prospect for Secured Party to fully and punctually realize the full benefits conferred
on Secured Party by this Agreement.


 


(k)Adverse Change
in Financial Condition. The determination in good faith by Secured Party that a Material Adverse Change has occurred in the
financial condition or operations of the Company, or the Collateral, which change could have a Material Adverse Effect on the prospect
for Secured Party to fully and punctually realize the full benefits conferred on Secured Party by this Agreement.


 


(l)Adverse Change
in Value of Collateral. The determination in good faith by Secured Party that the security for the Obligations is or has become
inadequate.


 


(m)Prospect of Payment
or Performance. The determination in good faith by Secured Party that the prospect for payment or performance of any of the
Obligations is impaired for any reason.


 


5.Rights and Remedies.


 


(a)Rights and Remedies
of Secured Party. Upon and after the occurrence of an Event of Default, Secured Party may, without notice or demand, exercise
in any jurisdiction in which enforcement hereof is sought, the following rights and remedies, in addition to the rights and remedies
available to Secured Party under the Purchase Agreement and any other Transaction Documents, the rights and remedies of a secured
party under the Code, and all other rights and remedies available to Secured Party under applicable law or in equity, all such
rights and remedies being cumulative and enforceable alternatively, successively or concurrently:


 


(i)Take absolute control
of the Collateral, including transferring into the Secured Party’s name or into the name of its nominee or nominees (to the
extent the Secured Party has not theretofore done so) and thereafter receive, for the benefit of the Secured Party, all payments
made thereon, give all consents, waivers and ratifications in respect thereof and otherwise act with respect thereto as though
it were the outright owner thereof;


 


(ii)Require the Company
to, and the Company hereby agrees that it will at its expense and upon request of the Secured Party forthwith, assemble all or
part of the Collateral as directed by the Secured Party and make it available to the Secured Party at a place or places to be designated
by the Secured Party that is convenient to Secured Party, and the Secured Party may enter into and occupy the Business Premises
or any other premises owned or leased by the Company where the Collateral or any part thereof is located or assembled in order
to effectuate the Secured Party’s rights and remedies hereunder or under law, including removing such Collateral therefrom,
without any obligation or liability to the Company in respect of such occupation, the Company HEREBY WAIVING ANY AND ALL RIGHTS
TO PRIOR NOTICE AND TO JUDICIAL HEARING WITH RESPECT TO REPOSSESSION OF COLLATERAL AND THE COMPANY HEREBY GRANTING TO SECURED PARTY
AND ITS AGENTS AND REPRESENTATIVES FULL AUTHORITY TO ENTER SUCH PREMISES;


 


(iii)Without notice,
except as specified below, and without any obligation to prepare or process the Collateral for sale: (A) sell the Collateral
or any part thereof in one or more parcels at public or private sale, at any of the Secured Party’s offices or elsewhere,
for cash, on credit or for future delivery, and at such price or prices and upon such other terms as the Secured Party may deem
commercially reasonable; and/or (B) lease, license or dispose of the Collateral or any part thereof upon such terms as the
Secured Party may deem commercially reasonable. The Company agrees that, to the extent notice of sale or any other disposition
of the Collateral shall be required by law, at least ten (10) days’ notice to the Company of the time and place of any
public sale or the time after which any private sale or other disposition of the Collateral is to be made shall constitute reasonable
notification. The Secured Party shall not be obligated to make any sale or other disposition of any Collateral regardless of notice
of sale having been given. The Secured Party may adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor and such sale may, without further notice, be made at the time and place to which it was so adjourned.
The Company hereby waives any claims and actions against the Secured Party arising by reason of the fact that the price at which
any of the Collateral may have been sold at a private sale was less than the price which might have been obtained at a public sale
or was less than the aggregate amount of the Obligations, even if the Secured Party accepts the first offer received and does not
offer such Collateral to more than one offeree, and waives all rights that the Company may have to require that all or any part
of such Collateral be marshaled upon any sale (public or private) thereof. The Company hereby acknowledges that: (X) any such
sale of the Collateral by the Secured Party shall be made without warranty; (Y) the Secured Party may specifically disclaim
any warranties of title, possession, quiet enjoyment or the like; and (Z) such actions set forth in clauses (X) and (Y) above
shall not adversely affect the commercial reasonableness of any such sale of Collateral. In addition to the foregoing: (1) upon
written notice to the Company from the Secured Party after and during the continuance of an Event of Default, the Company shall
cease any use of any intellectual property or any trademark, patent or copyright similar thereto for any purpose described in such
notice; (2) the Secured Party may, at any time and from time to time after and during the continuance of an Event of Default,
license, whether general, special or otherwise, and whether on an exclusive or non-exclusive basis, any of the Company’s
intellectual property, throughout the universe for such term or terms, on such conditions, and in such manner, as the Secured Party
shall in its sole discretion determine; and (3) the Secured Party may, at any time, pursuant to the authority granted under
this Agreement (such authority being effective upon the occurrence and during the continuance of an Event of Default), execute
and deliver on behalf of the Company, one or more instruments of assignment of any intellectual property (or any application or
registration thereof), in form suitable for filing, recording or registration in any country.


 


(iv)Operate, manage
and control the Collateral (including use of the Collateral and any other property or assets of Company in order to continue or
complete performance of Company’s obligations under any contracts of Company), or permit the Collateral or any portion thereof
to remain idle or store the same, and collect all rents and revenues therefrom.


 


(v)Enforce the Company’s
rights against any Persons obligated upon any of the Collateral.


 


(vi)The Company hereby
acknowledges that if the Secured Party complies with any applicable foreign, state, provincial or federal law requirements in connection
with a disposition of the Collateral, such compliance will not adversely affect the commercial reasonableness of any sale or other
disposition of the Collateral.


 


(vii)The Secured Party
shall not be required to marshal any present or future collateral security (including, this Agreement and the Collateral) for,
or other assurances of payment of, the Obligations or any of them or to resort to such collateral security or other assurances
of payment in any particular order, and all of the Secured Party’s rights hereunder and in respect of such collateral security
and other assurances of payment shall be cumulative and in addition to all other rights, however existing or arising. To the extent
that the Company lawfully may, the Company hereby agrees that it will not invoke any law relating to the marshaling of collateral
which might cause delay in or impede the enforcement of the Secured Party’s rights under this Agreement or under any other
instrument creating or evidencing any of the Obligations or under which any of the Obligations is outstanding or by which any of
the Obligations is secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, the Company hereby
irrevocably waives the benefits of all such laws.


 


(b)Power of Attorney.
Effective upon the occurrence of an Event of Default, Company hereby designates and appoints Secured Party and its designees as
attorney-in-fact of and for the Company, irrevocably and with full power of substitution, with authority to endorse the Company’s
name on any notes, acceptances, checks, drafts, money orders, instruments or other evidences of payment or proceeds of the Collateral
that may come into Secured Party’s possession; to execute proofs of claim and loss; to adjust and compromise any claims under
insurance policies; and to perform all other acts necessary and advisable, in Secured Party’s sole discretion, to carry out
and enforce this Agreement and the rights and remedies conferred upon the Secured Party by this Agreement, the Purchase Agreement
or any other Transaction Documents. All acts of said attorney or designee are hereby ratified and approved by the Company and said
attorney or designee shall not be liable for any acts of commission or omission, nor for any error of judgment or mistake of fact
or law. This power of attorney is coupled with an interest and is irrevocable so long as any of the Obligations remain unpaid or
unperformed or there exists any commitment by Secured Party which could give rise to any Obligations.


 


(c)Costs and Expenses.
The Company agrees to pay to the Secured Party, upon demand, the amount of any and all costs and expenses, including the reasonable
fees, costs, expenses and disbursements of counsel for the Secured Party and of any experts and agents, which the Secured Party
may incur in connection with: (i) the preparation, negotiation, execution, delivery, recordation, administration, amendment,
waiver or other modification or termination of this Agreement; (ii) the custody, preservation, use or operation of, or the
sale of, collection from, or other realization upon, any Collateral; (iii) the exercise or enforcement of any of the rights
of the Secured Party hereunder; or (iv) the failure by the Company to perform or observe any of the provisions hereof. Included
in the foregoing shall be the amount of all expenses paid or incurred by Secured Party in consulting with counsel concerning any
of its rights hereunder, under the Purchase Agreement or under applicable law, as well as such portion of Secured Party’s
overhead as Secured Party shall allocate to collection and enforcement of the Obligations in Secured Party’s sole but reasonable
discretion. All such costs and expenses shall bear interest from the date of outlay until paid, at the highest rate set forth in
the Debenture, or if none is so stated, the highest rate allowed by law. The provisions of this Subsection shall survive the termination
of this Agreement and Secured Party’s security interest hereunder and the payment of all Obligations.


 


6.Security Interest
Absolute. All rights of the Secured Party and all Obligations of the Company hereunder, shall be absolute and unconditional,
irrespective of: (i) any lack of validity or enforceability of this Agreement, the Purchase Agreement, and any other Transaction
Documents or any agreement entered into in connection with the foregoing, or any portion hereof or thereof; (ii) any change
in the time, manner or place of payment or performance of, or in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from the terms and provisions of the Purchase Agreement, any other Transaction
Documents, or any other agreement entered into in connection with the foregoing; (iii)  any exchange, release or non-perfection
of any of the Collateral, or any release or amendment or waiver of or consent to departure from any other collateral for, or any
guaranty, or any other security, for all or any of the Obligations; (iv) any action by the Secured Party to obtain, adjust,
settle and cancel in its sole discretion any insurance claims or matters made or arising in connection with the Collateral; or
(v) any other circumstance which might otherwise constitute any legal or equitable defense available to the Company, or a
discharge of all or any part of the security interests granted hereby. Until the Obligations shall have been paid and performed
in full, the rights of the Secured Party shall continue even if the Obligations are barred for any reason, including, the running
of the statute of limitations or bankruptcy. In the event that at any time any transfer of any Collateral or any payment received
by the Secured Party hereunder shall be deemed by final order of a court of competent jurisdiction to have been a voidable preference
or fraudulent conveyance under the Bankruptcy Code or any other similar insolvency or bankruptcy laws of any jurisdiction, or shall
be deemed to be otherwise due to any party other than the Secured Party, then, in any such event, the Company’s obligations
hereunder shall survive cancellation of this Agreement, and shall not be discharged or satisfied by any prior payment thereof and/or
cancellation of this Agreement, but shall remain a valid and binding obligation enforceable in accordance with the terms and provisions
hereof. The Company waives all right to require the Secured Party to proceed against any other Person or to apply any Collateral
which the Secured Party may hold at any time, or to pursue any other remedy. The Company waives any defense arising by reason of
the application of the statute of limitations to any obligation secured hereby.


 


7.Indemnity.
The Company agrees to defend, protect, indemnify and hold the Secured Party forever harmless from and against any and all Claims
of any nature or kind (including reasonable legal fees, costs, expenses, and disbursements of counsel) to the extent that they
arise out of, or otherwise result from, this Agreement (including, enforcement of this Agreement). This indemnity shall survive
termination of this Agreement.


 


8.Miscellaneous.


 


(a)Performance for
Company. The Company agrees and hereby authorizes that Secured Party may, in Secured Party’s sole discretion, but Secured
Party shall not be obligated to, whether or not an Event of Default shall have occurred, advance funds on behalf of the Company,
without prior notice to the Company, in order to insure the Company’s compliance with any covenant, warranty, representation
or agreement of the Company made in or pursuant to this Agreement, the Purchase Agreement, or any other Transaction Documents,
to continue or complete, or cause to be continued or completed, performance of the Company’s obligations under any Contracts
of the Company, or to preserve or protect any right or interest of Secured Party in the Collateral or under or pursuant to this
Agreement, the Purchase Agreement or any other Transaction Documents, including, the payment of any insurance premiums or taxes
and the satisfaction or discharge of any Claim, Obligation, Judgment or any other Encumbrance upon the Collateral or other property
or Assets of Company; provided, however, that the making of any such advance by Secured Party shall not constitute a waiver by
Secured Party of any Event of Default with respect to which such advance is made, nor relieve the Company of any such Event of
Default. The Company shall pay to Secured Party upon demand all such advances made by Secured Party with interest thereon at the
highest rate set forth in the Debenture, or if none is so stated, the highest rate allowed by law. All such advances shall be deemed
to be included in the Obligations and secured by the security interest granted Secured Party hereunder; provided, however, that
the provisions of this Subsection shall survive the termination of this Agreement and Secured Party’s security interest hereunder
and the payment of all other Obligations.


 


(b)Applications of
Payments and Collateral. Except as may be otherwise specifically provided in this Agreement or the Purchase Agreement, all
Collateral and proceeds of Collateral coming into Secured Party’s possession and all payments made by any Person to Secured
Party with respect to any Collateral may be applied by Secured Party (after payment of any amounts payable to the Secured Party
pursuant to Section 5(c) hereof) to any of the Obligations, whether matured or unmatured, as Secured Party shall determine in its
sole, but reasonable discretion. Any surplus held by the Secured Party and remaining after the indefeasible payment in full in
cash of all of the Obligations shall be paid over to whomsoever shall be lawfully entitled to receive the same or as a court of
competent jurisdiction shall direct. Secured Party may defer the application of Noncash Proceeds of Collateral, to the Obligations
until Cash Proceeds are actually received by Secured Party. In the event that the proceeds of any such sale, collection or realization
are insufficient to pay all amounts to which the Secured Party is legally entitled, the Company shall be liable for the deficiency,
together with interest thereon at the highest rate specified in the Debenture for interest on overdue principal thereof or such
other rate as shall be fixed by applicable law, together with the costs of collection and the reasonable fees, costs, expenses
and other client charges of any attorneys employed by the Secured Party to collect such deficiency.


 


(c)Waivers by Company.
The Company hereby waives, to the extent the same may be waived under applicable law: (i) notice of acceptance of this Agreement;
(ii) all claims and rights of the Company against Secured Party on account of actions taken or not taken by Secured Party in the
exercise of Secured Party’s rights or remedies hereunder, under the Purchase Agreement, and other Transaction Documents or
under applicable law; (iii) all claims of the Company for failure of Secured Party to comply with any requirement of applicable
law relating to enforcement of Secured Party’s rights or remedies hereunder, under the Purchase Agreement, under any other
Transaction Documents or under applicable law; (iv) all rights of redemption of the Company with respect to the Collateral; (v)
in the event Secured Party seeks to repossess any or all of the Collateral by judicial proceedings, any bond(s) or demand(s) for
possession which otherwise may be necessary or required; (vi) presentment, demand for payment, protest and notice of non-payment
and all exemptions applicable to any of the Collateral or the Company; (vii) any and all other notices or demands which by applicable
law must be given to or made upon the Company by Secured Party; (viii) settlement, compromise or release of the obligations of
any Person primarily or secondarily liable upon any of the Obligations; (ix) all rights of the Company to demand that Secured Party
release account debtors or other Persons liable on any of the Collateral from further obligation to Secured Party; and (x) substitution,
impairment, exchange or release of any Collateral for any of the Obligations. The Company agrees that Secured Party may exercise
any or all of its rights and/or remedies hereunder, under the Purchase Agreement, the other Transaction Documents and under applicable
law without resorting to and without regard to any Collateral or sources of liability with respect to any of the Obligations. Upon
termination of this Agreement and Secured Party’s security interest hereunder and payment of all Obligations, within ten
(10) business days following the Company’s request to Secured Party, Secured Party shall release control of any security
interest in the Collateral perfected by control and Secured Party shall send Company a statement terminating any financing statement
filed against the Collateral.


 


(d)Waivers by Secured
Party. No failure or any delay on the part of Secured Party in exercising any right, power or remedy hereunder, under this
Agreement, the Purchase Agreement, and other Transaction Documents or under applicable law, shall operate as a waiver thereof.


 


(e)Secured Party’s
Setoff. Secured Party shall have the right, in addition to all other rights and remedies available to it, following an Event
of Default, to set off against any Obligations due Secured Party, any debt owing to the Company by Secured Party.


 


(f)Modifications,
Waivers and Consents. No modifications or waiver of any provision of this Agreement, the Purchase Agreement, or any other Transaction
Documents, and no consent by Secured Party to any departure by the Company therefrom, shall in any event be effective unless the
same shall be in writing, and then such waiver or consent shall be effective only in the specific instance and for the purpose
for which given, and any single or partial written waiver by Secured Party of any term, provision or right of Secured Party hereunder
shall only be applicable to the specific instance to which it relates and shall not be deemed to be a continuing or future waiver
of any other right, power or remedy. No notice to or demand upon the Company in any case shall entitle Company to any other or
further notice or demand in the same, similar or other circumstances.


 


(g)Notices. All
notices of request, demand and other communications hereunder shall be addressed to the parties as follows:


 


If to the Company:Aqualiv Technologies,
Inc.


4550 NW Newberry Hill Road,
Suite 202


Silverdale, WA 98383


Attn: Mr. William Wright,
CEO


Telephone: (360) 536-4220


Facsimile: (360) 473-1160


E-Mail: bwright@aqualivtech.com


 


With a copy to:Seth Brookman,
Esq.


(which shall not constitute notice)Lucosky
Brookman, LLP


33 Wood Avenue South, 6th
Floor


Iselin, New Jersey 08830


Phone: (732) 395-4400


Fax: (732) 395-4401


Email: sbrookman@lucbro.com


 


If to the Secured Party:TCA Global
Credit Master Fund, LP


1404 Rodman Street


Hollywood, FL 33020


Attn: Mr. Robert Press


Telephone: (786) 323-1650


Facsimile: (786) 323-1651


E-Mail: bpress@trafcap.com


 


With a copy to:David Kahan, P.A.


6420 Congress Ave., Suite
1800


Boca Raton, FL 33487


Attn: David Kahan, Esq.


Telephone: (561) 672-8330


Facsimile: (561) 672-8301


E-Mail: david@dkpalaw.com


 


unless the address is changed by the party
by like notice given to the other parties. Notice shall be in writing and shall be deemed delivered: (i) if mailed by certified
mail, return receipt requested, postage prepaid and properly addressed to the address below, then three (3) business days after
deposit of same in a regularly maintained U.S. Mail receptacle; or (ii) if mailed by Federal Express, UPS or other nationally recognized
overnight courier service, next business morning delivery, then one (1) business day after deposit of same in a regularly maintained
receptacle of such overnight courier; or (iii) if hand delivered, then upon hand delivery thereof to the address indicated on or
prior to 5:00 p.m., EST, on a business day. Any notice hand delivered after 5:00 p.m., EST, shall be deemed delivered on the following
business day. Notwithstanding the foregoing, notice, consents, waivers or other communications referred to in this Debenture may
be sent by facsimile, e-mail, or other method of delivery, but shall be deemed to have been delivered only when the sending party
has confirmed (by reply e-mail or some other form of written confirmation from the receiving party) that the notice has been received
by the other party.


 


(h)Applicable Law
and Consent to Jurisdiction. This Agreement shall be construed in accordance with the laws of the State of Nevada, without
regard to the principles of conflicts of laws, except to the extent that the validity and perfection or the perfection and the
effect of perfection or non-perfection of the security interest created hereby, or remedies hereunder, in respect of any particular
Collateral are governed under the Code by the law of a jurisdiction other than the State of Nevada, in which case such issues shall
be governed by the laws of the jurisdiction governing such issues under the Code. The parties further agree that any action between
them shall be heard in Clark County, Nevada and expressly consent to the jurisdiction and venue of the State Court sitting in Clark
County, Nevada and the United States District Court for the District of Nevada for the adjudication of any civil action asserted
pursuant to this Agreement, provided, however, that nothing herein shall prevent Secured Party from bringing suit or taking legal
action in any other jurisdiction. By its execution hereof, the Company hereby irrevocably waives any objection and any right of
immunity on the ground of venue, the convenience of the forum or the jurisdiction of such courts or from the execution of judgments
resulting therefrom. The Company hereby irrevocably accepts and submits to the jurisdiction of the aforesaid courts in any such
suit, action or proceeding.


 


(i)Survival: Successors
and Assigns. All covenants, agreements, representations and warranties made herein shall survive the execution and delivery
hereof, shall survive Closing and shall continue in full force and effect until all Obligations have been paid in full, there exists
no commitment by Secured Party which could give rise to any Obligations and all appropriate termination statements have been filed
terminating the security interest granted Secured Party hereunder. Whenever in this Agreement any of the parties hereto is referred
to, such reference shall be deemed to include the successors and assigns of such party. In the event that Secured Party assigns
this Agreement and/or its security interest in the Collateral, Secured Party shall give written notice to the Company of any such
assignment and such assignment shall be binding upon and recognized by the Company. All covenants, agreements, representations
and warranties by or on behalf of the Company which are contained in this Agreement shall inure to the benefit of Secured Party,
its successors and assigns. The Company may not assign this Agreement or delegate any of its rights or obligations hereunder, without
the prior written consent of Secured Party, which consent may be withheld in Secured Party’s sole and absolute discretion.


 


(j)Severability.
If any term, provision or condition, or any part thereof, of this Agreement shall for any reason be found or held invalid or unenforceable
by any court or governmental authority of competent jurisdiction, such invalidity or unenforceability shall not affect the remainder
of such term, provision or condition nor any other term, provision or condition, and this Agreement shall survive and be construed
as if such invalid or unenforceable term, provision or condition had not been contained therein.


 


(k)Merger and Integration.
This Agreement and the attached Schedules (if any), together with the Purchase Agreement and the other Transaction Documents, contain
the entire agreement of the parties hereto with respect to the matters covered and the transactions contemplated hereby and thereby,
and no other agreement, statement or promise made by any party hereto or thereto, or by any employee, officer, agent or attorney
of any party hereto, which is not contained herein or therein shall be valid or binding.


 


(l)WAIVER OF JURY
TRIAL. THE COMPANY HEREBY: (a) COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY A JURY;
AND (b) WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THE COMPANY AND SECURED PARTY MAY BE PARTIES, ARISING OUT OF,
IN CONNECTION WITH OR IN ANY WAY PERTAINING TO THIS AGREEMENT, THE PURCHASE AGREEMENT AND/OR ANY TRANSACTIONS, OCCURRENCES, COMMUNICATIONS,
OR UNDERSTANDINGS (OR THE LACK OF ANY OF THE FOREGOING) RELATING IN ANY WAY TO DEBTOR-CREDITOR RELATIONSHIP BETWEEN THE PARTIES.
IT IS UNDERSTOOD AND AGREED THAT THIS WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES TO SUCH ACTIONS
OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT PARTIES TO THIS SECURITY AGREEMENT. THIS WAIVER OF JURY TRIAL IS SEPARATELY
GIVEN, KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY THE COMPANY AND THE COMPANY HEREBY AGREES THAT NO REPRESENTATIONS OF FACT OR
OPINION HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT.
SECURED PARTY IS HEREBY AUTHORIZED TO SUBMIT THIS AGREEMENT TO ANY COURT HAVING JURISDICTION OVER THE SUBJECT MATTER AND THE COMPANY
AND SECURED PARTY, SO AS TO SERVE AS CONCLUSIVE EVIDENCE OF SUCH WAIVER OF RIGHT TO TRIAL BY JURY. THE COMPANY REPRESENTS AND WARRANTS
THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL, SELECTED
OF ITS OWN FREE WILL, AND/OR THAT IT HAS HAD THE OPPORTUNITY TO DISCUSS THIS WAIVER WITH COUNSEL.


 


(m)Execution.
This Agreement may be executed in one or more counterparts, all of which taken together shall be deemed and considered one and
the same Agreement, and same shall become effective when counterparts have been signed by each party and each party has delivered
its signed counterpart to the other party. In the event that any signature is delivered by facsimile transmission or by e-mail
delivery of a “.pdf” format file or other similar format file, such signature shall be deemed an original for all purposes
and shall create a valid and binding obligation of the party executing same with the same force and effect as if such facsimile
or “.pdf” signature page was an original thereof.


 


(n)Headings. The
headings and sub-headings contained in the titling of this Agreement are intended to be used for convenience only and shall not
be used or deemed to limit or diminish any of the provisions hereof.


 


(o)Termination.
This Agreement and the security interests hereunder shall terminate on the date on which all Obligations have been indefeasibly
paid or discharged in full. Upon such termination, the Secured Party, at the request and at the expense of the Company, will join
in executing any termination statement with respect to any financing statement executed and filed pursuant to this Agreement.


 


(p)Gender and Use
of Singular and Plural. All pronouns shall be deemed to refer to the masculine, feminine, neuter, singular or plural, as the
identity of the party or parties or their personal representatives, successors and assigns may require.


 


(q)Further Assurances.
The parties hereto will execute and deliver such further instruments and do such further acts and things as may be reasonably required
to carry out the intent and purposes of this Agreement.


 


(r)Time is of the
Essence. The parties hereby agree that time is of the essence with respect to performance of each of the parties’ obligations
under this Agreement. The parties agree that in the event that any date on which performance is to occur falls on a Saturday, Sunday
or state or national holiday, then the time for such performance shall be extended until the next business day thereafter occurring.


 


(s)Joint Preparation.
The preparation of this Agreement has been a joint effort of the parties and the resulting documents shall not, solely as a matter
of judicial construction, be construed more severely against one of the parties than the other.


 


(t)Increase in Obligations.
It is the intent of the parties to secure payment of the Obligations, as the amount of such Obligations may increase from time
to time in accordance with the terms and provisions of the Purchase Agreement, and all of the Obligations, as so increased from
time to time, shall be and are secured hereby. Upon the execution hereof, the Company shall pay any and all documentary stamp taxes
and/or other charges required to be paid in connection with the execution and enforcement of the Purchase Agreement and this Agreement,
and if, as and to the extent the Obligations are increased from time to time in accordance with the terms and provisions of the
Debenture, then the Company shall immediately pay any additional documentary stamp taxes or other charges in connection therewith.





 


[Signatures on the following page]


 



     

     

    

 


 


IN WITNESS WHEREOF, the
parties hereto have duly executed this Amendment as of the day and year first above written.


 


	 	COMPANY:
	 	 
	 	AQUALIV TECHNOLOGIES, INC.
	 	 
	 	By:________________________________
	 	Name:______________________________
	 	Title:_______________________________
	 	Date:_______________________________
	 	 
	 	 
	 	SECURED PARTY:
	 	 
	 	TCA GLOBAL CREDIT MASTER FUND, LP
	 	 
	 	By: TCA Global Credit Fund GP, Ltd., its general partner
	 	 
	 	By: ________________________________ 
	 	Name:_____________________________
	 	Title:______________________________
	 	Date:_______________________________