Senior Secured, Convertible, Redeemable
Debenture


Original Issue Date as of: April 27,
2012


Maturity Date: April 24, 2013 (subject
to adjustment as set forth below)


Amount: $200,000.00


 


This Senior Secured,
Convertible, Redeemable Debenture (the “Debenture”) is issued as of April 27, 2012 (the “Closing Date”)
by Aqualiv Technologies, Inc., a Nevada corporation (the “Company”), to TCA Global Credit Master Fund
LP, a Cayman Islands limited partnership (together with its permitted successors and assigns, the “Holder”)
pursuant to exemptions from registration under the Securities Act of 1933, as amended.


ARTICLE I. 


Section
1.01         Principal
and Interest. For value received, the Company hereby promises to pay to the order of the Holder, by no later than April
24, 2013, subject to adjustment as set forth below (the “Maturity Date”), in immediately available
and lawful money of the United States of America, Two Hundred Thousand and No/100 Dollars ($200,000.00), together with interest
on the outstanding principal amount under this Debenture, at the rate of twelve percent (12%) per annum simple interest (the “Interest
Rate”) from the date the proceeds hereof are initially funded, until paid, as more specifically provided below.


Section
1.02         Repayment.
The Company, at its option, shall have the right to repay principal, interest, fees and expenses due under this Debenture with
no penalty or premium in full and for cash, at any time prior to the Maturity Date, with three (3) business days advance written
notice to the Holder. On the Maturity Date, the Company shall repay all outstanding principal, interest, fees and expenses due
and payable to the Holder under this Debenture and all other Transaction Documents by no later than 2:00 P.M., EST, on the Maturity
Date.


Section
1.03         Payments.



(1) 
Payments from CEF. The Company hereby represents that it has entered into and executed
a Drawdown Equity Facility Agreement and Registration Rights Agreement, each by and between the Company and Auctus Private Equity
Fund, LLC (collectively, the “CEF”), pursuant to which the Company will have the right, upon the effectiveness
of its registration statement being filed with the SEC in accordance with the terms of the CEF, to sell its Common Stock to raise
capital for the Company. Upon such registration statement becoming effective, the Company shall: (i) send written notice thereof
to the Holder; and (ii) cause Auctus Private Equity Fund, LLC to pay directly to the Holder, for each advance taken by the Company
under the CEF, fifty percent (50%) of any net proceeds otherwise payable to the Company from any sale of its Common Stock under
the CEF, up to $25,000 per calendar month. So long as any part of this Debenture remains outstanding, the Company shall notify
the Holder in writing each time it requests an advance under the CEF. The Company hereby represents and warrants that the CEF is
in full force and effect as of the date hereof. In the event: (I) the Company fails to make a payment to the Holder through an
advance under the CEF as required hereunder by a date that is two hundred ten (210) days after the date hereof; or (II) the Company
makes an initial payment to the Holder through an advance under the CEF as required hereunder prior to a date that is two hundred
ten (210) days after the date hereof, but fails thereafter to make payments to the Holder through an advance under the CEF as required
hereunder at least one time per calendar month after said initial payment, then upon the occurrence of either of the foregoing
two events, the Maturity Date of this Debenture shall, without any further notice or demand from Holder and without the need for
any further amendment or other written instrument, automatically be modified and amended to a date that is as follows: (A) if the
event in Section 1.03(1)(I) occurs, then to a date that is fifteen (15) days from the end of such two hundred ten (210) day period;
or (B) if the event in Section 1.03(1)(II) occurs, then to a date that is fifteen (15) days after the end of the calendar month
in which the Company fails to make a monthly payment as required hereby. Notwithstanding anything which may be contained in this
Section 1.03(1) to the contrary, if the event in Section 1.03(1)(II) occurs, the Maturity Date shall not be accelerated and modified
as provided above so long as the Company pays a fee to Holder in the amount of $1,000 per month, for each month in which it is
not making payments as required hereby in order to satisfy the monthly requirements contained herein.


(2) 
Interest Calculations. Interest shall be calculated on the basis of a 360-day year,
and shall accrue daily on the outstanding principal amount outstanding from time to time for the actual number of days elapsed,
commencing on the date the proceeds hereof are initially funded, until payment in full of the outstanding principal, together with
all accrued and unpaid interest and other amounts which may become due hereunder, has been made. All payments hereunder shall be
applied first towards costs and expenses, if any, due under this Debenture or any other Transaction Documents, second towards the
payment of accrued and unpaid interest and third towards the principal amount outstanding hereby.


Section
1.04         Manner
of Payments. All sums payable to the order of Holder hereunder shall be payable by wire transfer of lawful dollars of the
United States of America to the wire instructions set forth below, or at such place as Holder, from time to time, may designate
in writing. Wire Instructions for all sums due and payable hereunder are as follows:


TCA Global
Credit Master Fund, LP (US Dollars)


Correspondent Bank:


Bank of New York


1 Wall Street


New York, New York 10286


ABA# 021-0000-18


SWIFT: IRVTUS3N


 


Beneficiary Bank:


Caledonian Bank Limited


A/C Number: 89-000-50977


SWIFT: CBTLKYKY


 


For Final Credit:


Account Name: Caledonian Fund Services (Cayman) Limited –
Client Bank Account


Account Number: 0201420308681001


 


Beneficiary Reference: TCA Global Credit Master Fund, LP
A/C # 0201420310849001


ARTICLE
II. 


Section
2.01         Secured
Nature of Debenture. This Debenture is being issued in connection with a Securities Purchase Agreement dated of even date
herewith by and between the Company and the Holder (the “SPA”). The indebtedness evidenced by this Debenture
is also secured by all of the assets and property of the Company, all of the assets and property of certain of the Company’s
subsidiaries, and various other instruments and documents referred to in the SPA as the “Transaction Documents.”
All of the agreements, conditions, covenants, provisions, representations, warranties and stipulations contained in any of the
Transaction Documents which are to be kept and performed by the Company are hereby made a part of this Debenture to the same extent
and with the same force and effect as if they were fully set forth herein, and the Company covenants and agrees to keep and perform
them, or cause them to be kept or performed, strictly in accordance with their terms.


ARTICLE
III. 


Section
3.01         Events
of Default. The occurrence of any of the following events shall constitute an “Event of Default”
hereunder: (i) the Company shall fail to pay any interest, principal or other charges due under this Debenture when any such payment
shall be due and payable; (ii) the Company makes an assignment for the benefit of creditors; (iii) any order or decree is rendered
by a court which appoints or requires the appointment of a receiver, liquidator or trustee for the Company, and the order or decree
is not vacated within thirty (30) days from the date of entry thereof; (iv) any order or decree is rendered by a court adjudicating
the Company insolvent, and the order or decree is not vacated within thirty (30) days from the date of entry thereof; (v) the Company
files a petition in bankruptcy under the provisions of any bankruptcy law or any insolvency act; (vi) the Company admits, in writing,
its inability to pay its debts as they become due; (vii) a proceeding or petition in bankruptcy is filed against the Company and
such proceeding or petition is not dismissed within thirty (30) days from the date it is filed; (viii) the Company files a petition
or answer seeking reorganization or arrangement under the bankruptcy laws or any law or statute of the United States or any other
foreign country or state; (ix) the Company shall fail to perform, comply with or abide by any of the stipulations, agreements,
conditions and/or covenants contained in this Debenture or any of the other Transaction Documents on the part of the Company to
be performed complied with or abided by, and such failure continues or remains uncured for ten (10) days following written notice
from the Holder to the Company; and (x) the occurrence of any default or breach by the Company under the CEF that is not cured
by the Company within any cure period applicable thereto.  


Section
3.02         Remedies.
Upon the occurrence of an Event of Default that is not timely cured within an applicable cure period hereunder, the interest on
this Debenture shall immediately accrue at an Interest Rate equal to the lesser of (i) eighteen percent (18%) or (ii) the maximum
rate permitted by applicable law, and, in addition to all other rights or remedies the Holder may have, at law or in equity, the
Holder may, in its sole discretion, accelerate full repayment of all principal amounts outstanding hereunder, together with accrued
interest thereon, together with all redemption premiums due hereunder, together with all attorneys’ fees, paralegals’
fees and costs and expenses incurred by the Holder in collecting or enforcing payment hereof (whether such fees, costs or expenses
are incurred in negotiations, all trial and appellate levels, administrative proceedings, bankruptcy proceedings or otherwise),
and together with all other sums due by the Company hereunder and under the Transaction Documents, all without any relief whatsoever
from any valuation or appraisement laws, and payment thereof may be enforced and recovered in whole or in part at any time by
one or more of the remedies provided to the Holder at law, in equity, or under this Debenture or any of the other Transaction
Documents. In connection with the Holder’s rights hereunder upon an Event of Default, the Holder need not provide, and the
Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately enforce any
and all of its rights and remedies hereunder and all other remedies available to it in equity or under applicable law.


ARTICLE
IV.


Section
4.01         Usury
Savings Clause. Notwithstanding any provision in this Debenture or the other Transaction Documents, the total liability
for payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions, or
other sums which may at any time be deemed to be interest, shall not exceed the limit imposed by the usury laws of the jurisdiction
governing this Debenture or any other applicable law. In the event the total liability of payments of interest and payments in
the nature of interest, including, without limitation, all charges, fees, exactions or other sums which may at any time be deemed
to be interest, shall, for any reason whatsoever, result in an effective rate of interest, which for any month or other interest
payment period exceeds the limit imposed by the usury laws of the jurisdiction governing this Debenture, all sums in excess of
those lawfully collectible as interest for the period in question shall, without further agreement or notice by, between, or to
any party hereto, be applied to the reduction of the outstanding principal balance due hereunder immediately upon receipt of such
sums by the Holder hereof, with the same force and effect as though the Company had specifically designated such excess sums to
be so applied to the reduction of the principal balance then outstanding, and the Holder hereof had agreed to accept such sums
as a penalty-free payment of principal; provided, however, that the Holder may, at any time and from time to time, elect, by notice
in writing to the Company, to waive, reduce, or limit the collection of any sums in excess of those lawfully collectible as interest,
rather than accept such sums as a prepayment of the principal balance then outstanding. It is the intention of the parties that
the Company does not intend or expect to pay, nor does the Holder intend or expect to charge or collect any interest under this
Debenture greater than the highest non-usurious rate of interest which may be charged under applicable law.


ARTICLE V. 


Section
5.01         No
Exemption. The Company hereby waives and releases all benefit that might accrue to the Company by virtue of any present
or future laws exempting any property that may serve as security for this Debenture, or any other property, real or personal, or
any part of the proceeds arising from any sale of any such property, from attachment, levy, or sale under execution, exemption
from civil process, or extension of time for payment; and the Company agrees that any property that may be levied upon pursuant
to a judgment obtained by virtue hereof, on any writ of execution issued thereon, may be sold upon any such writ in whole or in
part in any order or manner desired by Holder.


Section
5.02         Exercise
of Remedies. The remedies of the Holder as provided herein and in any of the other Transaction Documents shall be cumulative
and concurrent and may be pursued singly, successively or together, at the sole discretion of the Holder, and may be exercised
as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed
as a waiver or release thereof.


Section
5.03         Waivers.
The Company and all others who are, or may become liable for the payment hereof: (i) severally waive presentment for payment, demand,
notice of nonpayment or dishonor, protest and notice of protest of this Debenture or any other Transaction Documents, and all other
notices in connection with the delivery, acceptance, performance, default, or enforcement of the payment of this Debenture and
the other Transaction Documents, except as specifically provided in this Debenture or any other Transaction Document; (ii) expressly
consent to all extensions of time, renewals or postponements of time of payment of this Debenture and any other Transaction Documents
from time to time prior to or after the maturity of this Debenture without notice, consent or further consideration to any of the
foregoing; (iii) expressly agree that the Holder shall not be required first to institute any suit, or to exhaust its remedies
against the Company or any other person or party to become liable hereunder or against any collateral that may secure this Debenture
in order to enforce the payment of this Debenture; and (iv) expressly agree that, notwithstanding the occurrence of any of the
foregoing (except the express written release by the Holder of any such person), the undersigned shall be and remain, directly
and primarily liable for all sums due under this Debenture.


Section
5.04         No
Waiver. Holder shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies
hereunder unless such waiver is in writing and signed by Holder, and then only to the extent specifically set forth in the writing.
A waiver on one event shall not be construed as continuing or as a bar to or waiver of any right or remedy to a subsequent event.


ARTICLE
VI. 


Section
6.01         Notice.
Any notices, consents, waivers, or other communications required or permitted to be given under the terms of this Debenture
must be in writing and in each case properly addressed to the party to receive the same in accordance with the information below,
and will be deemed to have been 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.  The addresses and facsimile
numbers for such communications shall be as set forth below, unless such address or information is changed by a notice conforming
to the requirements hereof. 


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 Holder: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


 


Section
6.02         Governing
Law. This Debenture shall be deemed to be made under and shall be construed in accordance with the laws of the State of
Nevada without giving effect to the principals of conflict of laws thereof. Each of the parties consents to the jurisdiction of
the U.S. District Court sitting in the District of the State of Nevada or the state courts of the State of Nevada sitting
in Clark County, Nevada in connection with any dispute arising under this Debenture and hereby waives, to the maximum extent permitted
by law, any objection, including any objection based on forum non conveniens to the bringing of any such proceeding
in such jurisdictions, provided, however, nothing contained herein shall limit the Holder’s ability to bring suit or enforce
this Debenture or any other Transaction Documents in any other jurisdiction.


Section
6.03         Severability.
In the event any one or more of the provisions of this Debenture shall for any reason be held to be invalid, illegal, or unenforceable,
in whole or in part, in any respect, or in the event that any one or more of the provisions of this Debenture operates or would
prospectively operate to invalidate this Debenture, then and in any of those events, only such provision or provisions shall be
deemed null and void and shall not affect any other provision of this Debenture. The remaining provisions of this Debenture shall
remain operative and in full force and effect and shall in no way be affected, prejudiced, or disturbed thereby.


Section
6.04         Entire
Agreement and Amendments. This Debenture, together with the other Transaction Documents, represents the entire agreement
between the parties hereto with respect to the subject matter hereof and thereof, and there are no representations, warranties
or commitments, except as set forth herein and therein. This Debenture may be amended only by an instrument in writing executed
by the parties hereto.


Section
6.05         Binding
Effect. This Debenture shall be binding upon the Company and the successors and assigns of the Company and shall inure
to the benefit of the Holder and the successors and assigns of the Holder.


Section
6.06         Assignment.
The Holder may from time to time sell or assign, in whole or in part, or grant participations in, this Debenture and/or the obligations
evidenced hereby without the consent of the Company, provided that the Holder shall give written notice of the assignment to the
Company. The holder of any such sale, assignment or participation, if the applicable agreement between Holder and such holder so
provides, shall be: (i) entitled to all of the rights, obligations and benefits of Holder (to the extent of such holder’s
interest or participation); and (ii) deemed to hold and may exercise the rights of setoff or banker’s lien with respect to
any and all obligations of such holder to the Company (to the extent of such holder’s interest or participation), in each
case as fully as though the Company was directly indebted to such holder. Holder may in its discretion give notice to the Company
of such sale, assignment or participation; however, the failure to give such notice shall not affect any of Holder’s or such
holder’s rights hereunder.


Section
6.07         Lost
or Mutilated Debenture.  If this Debenture shall be mutilated, lost, stolen or destroyed, the Company shall execute
and deliver, in exchange and substitution for and upon cancellation of a mutilated Debenture, or in lieu of or in substitution
for a lost, stolen or destroyed Debenture, a new Debenture for the principal amount of this Debenture so mutilated, lost, stolen
or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Debenture, and of the ownership hereof,
reasonably satisfactory to the Company.


Section
6.08         Waiver
of Jury Trail. THE COMPANY HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION BASED ON THIS DEBENTURE, OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH, THIS DEBENTURE OR ANY OTHER TRANSACTION DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL
OR WRITTEN) OR ACTIONS OF OR BETWEEN ANY PARTY HERETO, AND THE COMPANY AGREES AND CONSENTS TO THE GRANTING TO HOLDER OF RELIEF
FROM ANY STAY ORDER WHICH MIGHT BE ENTERED BY ANY COURT AGAINST HOLDER AND TO ASSIST HOLDER IN OBTAINING SUCH RELIEF. THIS PROVISION
IS A MATERIAL INDUCEMENT FOR HOLDER ACCEPTING THIS DEBENTURE FROM THE COMPANY. THE COMPANY’S REASONABLE RELIANCE UPON SUCH
INDUCEMENT IS HEREBY ACKNOWLEDGED.


Section
6.09         Non-U.S.
Status. THE HOLDER IS A NON-U.S. PERSON AS THAT TERM IS DEFINED IN THE UNITED STATES INTERNAL REVENUE CODE.  IT IS
HEREBY AGREED AND UNDERSTOOD THAT THE OBLIGATIONS HEREUNDER MAY BE SOLD OR RESOLD ONLY TO NON-U.S. PERSONS.  THE INTEREST
PAYABLE HEREUNDER IS PAYABLE ONLY OUTSIDE THE UNITED STATES.  ANY U.S. PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAW.


ARTICLE VII. 


Section
7.01         Conversion
of Debenture. At any time and from time to time while this Debenture is outstanding on or after the Closing Date, this
Debenture may be, at the sole option of the Holder, convertible into shares of the Company’s common stock, par value $0.001
per share (the “Common Stock”), in accordance with the terms and conditions set forth in this Article
VII.


(1) 
Voluntary Conversion. At any time while this Debenture is outstanding on or after
the Closing Date, the Holder may convert all or any portion of the outstanding principal, accrued and unpaid interest, and any
other sums due and payable hereunder or under any of the other Transaction Documents (such total amount, the “Conversion
Amount”) into shares of Common Stock of the Company (the “Conversion Shares”) at a price
equal to: (i) the Conversion Amount (the numerator); divided by (ii) ninety percent (90%) of the lowest daily volume weighted
average price of the Company’s Common Stock during the five (5) trading days immediately prior to the Conversion Date (as
defined below) as indicated in the conversion notice (in the form attached hereto as Exhibit “A”, the
“Conversion Notice”) (the denominator) (the “Conversion Price”). The Holder
shall submit a Conversion Notice indicating the amount of the Debenture being converted, the number of Conversion Shares issuable
upon such conversion, and where the Conversion Shares should be delivered. 


(2) 
The Holder’s Conversion Limitations. The Company shall not affect any conversion
of this Debenture, and the Holder shall not have the right to convert any portion of this Debenture, to the extent that after giving
effect to the conversion set forth on the Conversion Notice submitted by the Holder, the Holder (together with the Holder’s
affiliates (as defined herein) and any Persons acting as a group together with the Holder or any of the Holder’s affiliates)
would beneficially own in excess of the Beneficial Ownership Limitation (as defined herein). To ensure compliance with this restriction,
prior to delivery of any Conversion Notice, the Holder shall have the right to request that the Company provide to the Holder a
written statement of the percentage ownership of the Company’s Common Stock that would by beneficially owned by the Holder
and its affiliates in the Company if the Holder converted such portion of this Debenture then intended to be converted by Holder.
The Company shall, within two (2) business days of such request, provide Holder with the requested information in a written statement,
and the Holder shall be entitled to rely on such written statement from the Company in issuing its Conversion Notice and ensuring
that its ownership of the Company’s Common Stock is not in excess of the Beneficial Ownership Limitation. The restriction
described in this Section may be waived by Holder, in whole or in part. For purposes of this Debenture, the “Beneficial
Ownership Limitation” shall be 4.99% of the number of shares of Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock issuable upon conversion of this Debenture.  The limitations contained in
this Section shall apply to a successor holder of this Debenture. For purposes of this Debenture, “Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated
organization or a government or any department or agency thereof.


(3) 
Mechanics of Conversion. The conversion of this Debenture shall be conducted in
the following manner:


                                                     
(a)         
Holder's Delivery Requirements. To convert this Debenture into shares of Common Stock
on any date set forth in the Conversion Notice by the Holder (the “Conversion Date”), the Holder shall:
(A) transmit by facsimile or electronic mail (or otherwise deliver) a copy of the fully executed Conversion Notice to the Company
(or, under certain circumstances as set forth below, by delivery of the Conversion Notice to the Company’s transfer agent);
and (B) upon receipt by the Holder of the Conversion Shares, surrender the original Debenture to a nationally recognized overnight
courier for delivery to the Company.


                                                    
(b)         
Company’s Response. Upon receipt by the Company of a copy of a Conversion Notice,
the Company shall as soon as practicable, but in no event later than five (5) business days after receipt of such Conversion
Notice, send, via facsimile or electronic mail (or otherwise deliver) a confirmation of receipt of such Conversion Notice (the
“Conversion Confirmation”) to the Holder indicating that the Company will process such Conversion
Notice in accordance with the terms herein. In the event the Company fails to issue its Conversion Confirmation within said five
(5) business day time period, the Holder shall have the absolute and irrevocable right and authority to deliver the fully executed
Conversion Notice to the Company’s transfer agent, and pursuant to the Irrevocable Transfer Agent Instructions and Transfer
Agent Acknowledge Agreement to be entered into simultaneously herewith between the Company, Holder and the Company’s transfer
agent (the “ITAI”), the Company’s transfer agent shall issue the applicable Conversion Shares to
Holder as hereby provided. Within five (5) business days after the date of the Conversion Confirmation (or the date of the Conversion
Notice, if the Company fails to issue the Conversion Confirmation), provided that the Company’s transfer agent is participating
in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”)
program, the Company shall cause the transfer agent to (or, if for any reason the Company fails to instruct or cause its transfer
agent to so act, then pursuant to the ITAI, the Holder may request and require the Company’s transfer agent to) electronically
transmit the applicable Conversion Shares to which the Holder shall be entitled by crediting the account of the Holder’s
prime broker with DTC through its Deposit Withdrawal Agent Commission (“DWAC”) system, and provide proof
satisfactory to the Holder of such delivery. In the event that the Company’s transfer agent is not participating in the DTC
FAST program and is not otherwise DWAC eligible, within five (5) business days after the date of the Conversion Confirmation (or
the date of the Conversion Notice, if the Company fails to issue the Conversion Confirmation), the Company shall instruct and cause
its transfer agent to (or, if for any reason the Company fails to instruct or cause its transfer agent to so act, then pursuant
to the ITAI, the Holder may request and require the Company’s transfer agent to) issue and surrender to a nationally recognized
overnight courier for delivery to the address specified in the Conversion Notice, a certificate, registered in the name of the
Holder, for the number of Conversion Shares to which the Holder shall be entitled. If less than the full principal and accrued
but unpaid interest amount of this Debenture is submitted for conversion, then the Company shall within five (5) business days
after receipt of the original Debenture, at its own expense, issue and deliver to the Holder a new Debenture for the outstanding
principal and interest amount not so converted; provided that such new Debenture shall be substantially in the same form
as this Debenture.


                                                     
(c)         
Record Holder. The Person(s) entitled to receive the shares of Common Stock issuable
upon a conversion of this Debenture shall be treated for all purposes as the record holder(s) of such shares of Common Stock as
of the Conversion Date.


                                                    
(d)         
Failure to Deliver Certificates. If in the case of any Conversion Notice, the certificate
or certificates are not delivered to or as directed by the Holder by the date required hereby, the Holder shall be entitled to
elect by written notice to the Company at any time on or before its receipt of such certificate or certificates, to rescind such
Conversion Notice, in which event the Company shall promptly return to the Holder any original Debenture delivered to the Company
and the Holder shall promptly return to the Company the Common Stock certificates representing the principal amount of this Debenture
unsuccessfully tendered for conversion to the Company.


                                                     
(e)         
Obligation Absolute; Partial Liquidated Damages. The Company’s obligations to
issue and deliver the Conversion Shares upon conversion of this Debenture in accordance with the terms hereof are absolute and
unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to
any provision hereof, the recovery of any judgment against any person or entity or any action to enforce the same, or any setoff,
counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other person or entity
of any obligation to the Company or any violation or alleged violation of law by the Holder or any other person or entity, and
irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with
the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the
Company of any such action the Company may have against the Holder. In the event the Holder of this Debenture shall elect to convert
any or all of the outstanding principal amount hereof and accrued but unpaid interest thereon in accordance with the terms of this
Debenture, the Company may not refuse conversion based on any claim that the Holder or anyone associated or affiliated with the
Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice
to Holder, restraining and or enjoining conversion of all or part of this Debenture shall have been sought and obtained, and the
Company posts a surety bond for the benefit of the Holder in the amount of 150% of the outstanding principal amount of this Debenture
being converted, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation
of the underlying dispute and the proceeds of which shall be payable to such Holder to the extent it obtains judgment. In the absence
of such injunction, the Company shall issue Conversion Shares upon a properly noticed conversion. If the Company fails for any
reason to deliver to the Holder such certificate or certificates representing Conversion Shares pursuant to timing and delivery
requirements of this Debenture, the Company shall pay to such Holder, in cash, as liquidated damages and not as a penalty, for
each $1,000 of principal amount being converted, $1.00 per day for each day after the date by which such certificates should have
been delivered until such certificates are delivered. Nothing herein shall limit a Holder’s right to pursue actual damages
or declare an Event of Default pursuant this Debenture or any agreement securing the indebtedness under this Debenture for the
Company’s failure to deliver Conversion Shares within the period specified herein and such Holder shall have the right to
pursue all remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance
and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant
to any other Section hereof or under applicable law. Nothing herein shall prevent the Holder from having the Conversion Shares
issued directly by the Company’s transfer agent in accordance with the ITAI, in the event for any reason the Company fails
to issue or deliver, or cause its transfer agent to issue and deliver, the Conversion Shares to the Holder upon exercise of Holder’s
conversion rights hereunder.


                                                     
(f)         
Transfer Taxes. The issuance of certificates for shares of the Common Stock on
conversion of this Debenture shall be made without charge to the Holder hereof for any documentary stamp or similar taxes, or any
other issuance or transfer fees of any nature or kind that may be payable in respect of the issue or delivery of such certificates,
any such taxes or fees, if payable, to be paid by the Company.


(4) 
Adjustments to Conversion Price. 


                                                     
(a)         
Stock Dividends and Stock Splits.  If the Company, at any time while this
Debenture is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common
Stock on outstanding shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares,
(iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares,
or (iv) issues, in the event of a reclassification of shares of Common Stock, any shares of capital stock of the Company, then
the Conversion Price shall be multiplied by a fraction, the numerator of which shall be the number of shares of Common Stock (excluding
any treasury shares of the Company) outstanding immediately before such event, and the denominator of which shall be the number
of shares of Common Stock outstanding immediately after such event.  Any adjustment made pursuant to this Section shall
become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution
and shall become effective immediately after the effective date in the case of a subdivision, combination, or re-classification.


                                                    
(b)         
Fundamental Transaction. If, at any time while this Debenture is outstanding: (i) the
Company effects any merger or consolidation of the Company with or into another Person, (ii) the Company effects any sale of all
or substantially all of its assets in one transaction or a series of related transactions, (iii) any tender offer or exchange offer
(whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange
their shares for other securities, cash or property, or (iv) the Company effects any reclassification of the Common Stock or any
compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash
or property (in any such case, a “Fundamental Transaction”), then upon any subsequent conversion of this
Debenture, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion
immediately prior to the occurrence of such Fundamental Transaction, the same kind and amount of securities, cash or property as
it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to
such Fundamental Transaction, the holder of one (1) share of Common Stock (the “Alternate Consideration”).  For
purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate
Consideration based on the amount of Alternate Consideration issuable in respect of one (1) share of Common Stock in such Fundamental
Transaction, and the Company shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting
the relative value of any different components of the Alternate Consideration.  If holders of Common Stock are given
any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the
same choice as to the Alternate Consideration it receives upon any conversion of this Debenture following such Fundamental Transaction.  To
the extent necessary to effectuate the foregoing provisions, any successor to the Company or surviving entity in such Fundamental
Transaction shall issue to the Holder a new note consistent with the foregoing provisions and evidencing the Holder’s right
to convert such note into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected
shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section and insuring
that this Debenture (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to
a Fundamental Transaction.


                                                     
(c)         
Adjustment to Conversion Price.  Whenever the Conversion Price is adjusted
pursuant to any provision of this Debenture, the Company shall promptly deliver to Holder a notice setting forth the Conversion
Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.


                                                    
(d)         
Notice to Allow Conversion by Holder.  If: (A) the Company shall declare
a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring
cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common
Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval
of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation
or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, of any
compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall
authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case,
the Company shall cause to be filed at each office or agency maintained for the purpose of conversion of this Debenture, and shall
cause to be delivered to the Holder at its last address as it shall appear upon the Company’s records, at least twenty (20)
calendar days prior to the applicable record or effective date hereinafter specified, a notice stating: (x) the date on which a
record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to
be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption,
rights or warrants are to be determined, or (y) the date on which such reclassification, consolidation, merger, sale, transfer
or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common
Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such
notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified
in such notice.  The Holder is entitled to convert this Debenture during the 10-day period commencing on the date of
such notice through the effective date of the event triggering such notice.


(5) 
Reservation of Common Stock. The Company shall keep available out of its authorized
but unissued shares of Common Stock, solely for the purpose of effecting the conversion of this Debenture, such number of shares
of Common Stock as shall from time to time be sufficient to effect such conversion, based upon the Conversion Price. If at any
time the Company does not have a sufficient number of Conversion Shares authorized and available, the Company shall immediately
take such action as is required to increase the number of Conversion Shares authorized and available to allow for the Holder to
effectuate a full conversion of this Debenture at the Conversion Price.


 


[Signatures on the following page]


 



     

     

    

 


 


IN WITNESS WHEREOF,
with the intent to be legally bound hereby, the Company as executed this Debenture as of the date first written above.


	 	AQUALIV TECHNOLOGIES, INC.
	 	 
	 	By:
	 	Name:_______________________________
	 	Title:________________________________


 


 


 


Signature page – Debenture