TERMINATION AGREEMENT


 


This Termination Agreement
(this “Agreement”) is entered into as of this 11th day of January, 2013, by and between AquaLiv
Technologies, Inc., a Nevada corporation (the “Company”), and Auctus Private
Equity Fund, LLC, Massachusetts corporation (the “Investor”). The
Investor and the Company are collectively referred to herein as the “Parties,” or each of them individually
as a “Party.”


 


WHEREAS, the Parties
have previously entered into that certain Drawdown Equity Financing Agreement, dated April 27, 2012 (the “Financing Agreement”),
and that certain Registration Rights Agreement, dated April 27, 2012 (the “Registration Agreement”);


 


WHEREAS, the Parties
desire to terminate the Financing Agreement and Registration Agreement, and each Party desires to fully release each other from
any and all obligations, responsibilities, liabilities and duties of performance under the Financing Agreement and Registration
Agreement.


 


NOW THEREFORE, in
consideration of these recitals, and for the promises, acts, releases and other good and valuable consideration hereinafter recited,
the receipt and sufficiency of which are hereby accepted and acknowledged, the Parties hereby agree as follows:


 


1.Termination.
Effective as of the date hereof, the Financing Agreement and Registration Agreement are hereby terminated in their entirety.
As a result of the termination, the Financing Agreement and Registration Agreement are forthwith void and there shall be no liability
on the part of any party to the Financing Agreement and Registration Agreement.


 


2. Commitment
Shares. The Company agrees to issue and the Investor agrees to accept Five Million (5,000,000) restricted shares of the
Company’s common stock, par value $0.001, as full satisfaction of the remaining commitment shares required to be issued to
the Investor by the Company pursuant to Section 12.4(c) of the Financing Agreement (the “Commitment Shares”).


 


3.Releases.


 


(a)Upon the issuance
of the Commitment Shares by the Company to the Investor, the Investor, on behalf of itself and its predecessors, successors, subsidiaries,
agents, affiliates, subrogees, insurers, representatives, personal representatives, legal representatives, transferees, assigns
and successors in interest of assigns, and any firm, trust, corporation, partnership, investment vehicle, fund or other entity
managed or controlled by the Investor or in which the Investor has or had a controlling interest (collectively, the “Investor
Releasors”), in consideration of the releases, agreements and covenants contained in this Agreement, hereby remises,
releases, acquits and forever discharges the Company and any and all of its respective direct or indirect affiliates, parent companies,
divisions, subsidiaries, agents, consultants, employees, legal counsel, officers, directors, managers, shareholders, stockholders,
stakeholders, owners, predecessors, successors, assigns, subrogees, insurers, trustees, trusts, administrators, fiduciaries and
representatives, if any (collectively, the “Company Releasees”), of and from any and all federal, state, local,
foreign and any other jurisdiction’s statutory or common law, self-regulatory organization or other regulatory entity’s
claims (including claims for contribution and indemnification), causes of action, complaints, actions, suits, defenses, debts,
sums of money, accounts, covenants, controversies, agreements, promises, losses, damages, orders, judgments and demands of any
nature whatsoever, in law or equity, known or unknown, of any kind, including, but not limited to, claims or other legal forms
of action arising from the Financing Agreement and/or the Registration Agreement, or from any other conduct, act, omission or failure
to act, whether negligent, intentional, with or without malice, that the Investor Releasors ever had, now have, may have, may claim
to have, or may hereafter have or claim to have, against the Company Releasees, from the beginning of time up to and including
the Effective Date (the “Released Investor Claims”). Nothing in the foregoing release shall release any claim
to enforce this Agreement.


 


(b)The
Company, on behalf of itself and its predecessors, successors, subsidiaries, agents, affiliates, subrogees, insurers, representatives,
personal representatives, legal representatives, transferees, assigns and successors in interest of assigns, and any firm, trust,
partnership, corporation, investment vehicle, fund or other entity managed or controlled by the Company or in which the Company
has or had a controlling interest (collectively, the “Company Releasors”), in consideration of the releases,
agreements and covenants contained in this Agreement, hereby remises, releases, acquits and forever discharges the Investor and
any and all of his/its respective direct or indirect affiliates, parent companies, divisions, subsidiaries, agents, consultants,
employees, legal counsel, officers, directors, managers, shareholders, stockholders, stakeholders, owners, predecessors, successors,
assigns, subrogees, insurers, trustees, trusts, administrators, fiduciaries and representatives, if any (collectively, the “Investor
Releasees”), of and from any and all federal, state, local, foreign and any other jurisdiction’s statutory or common
law, self-regulatory organization or other regulatory entity’s claims (including claims for contribution and indemnification),
causes of action, complaints, actions, suits, defenses, debts, sums of money, accounts, covenants, controversies, agreements, promises,
losses, damages, orders, judgments and demands of any nature whatsoever, in law or equity, known or unknown, of any kind, including,
but not limited to, claims or other legal forms of action arising from the Financing Agreement and/or the Registration Agreement,
or from any other conduct, act, omission or failure to act, whether negligent, intentional, with or without malice, that the Company
Releasors ever had, now have, may have, may claim to have, or may hereafter have or claim to have, against the Investor Releasees,
from the beginning of time up to and including the Effective Date (the “Released Company Claims”). Nothing in
the foregoing release shall release any claim to enforce this Agreement.


 


 


(c)The execution of
this Agreement, and the consideration and other terms and conditions thereof, do not constitute and shall not be construed as or
deemed to be evidence of an admission or concession of any fault, liability or wrongdoing, and this Agreement may not be used for
any purpose other than to effectuate this settlement.


 


4.Covenants
and Waivers.


 


(a)Each
of the Investor and the Company hereby agrees to promptly take such further actions as reasonably necessary, without additional
compensation (as long as the the Investor does not incur out-of-pocket expenses), to execute and deliver such certificates, instruments
or other documents as may be reasonably necessary to accomplish the purposes of this Agreement.


 


(c)The Investor
covenants and agrees not to commence or prosecute any action or proceeding against the Company Releasees based on the Released
Investor Claims.


 


(d)The Company
covenants and agrees not to commence or prosecute any action or proceeding against the Investor Releasees based on the Released
Company Claims.


 


5.Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Massachusetts,
without regard to conflict of law provisions. Should any dispute arise under this Agreement, the Parties consent to the personal
jurisdiction in the Commonwealth of Massachusetts, and agree that any lawsuit, claim, dispute, or action arising out of or concerning
this Agreement shall be adjudicated in Boston, Massachusetts.


 


6.Interpretation.
This Agreement shall be construed as if the Parties jointly prepared this Agreement and any uncertainty or ambiguity shall
not be interpreted against any Party.


 


7.Representations. 


 


(a)The Parties individually
represent and warrant that they have full power and authority to enter into this Agreement and to carry out the transactions contemplated
by this Agreement, and that all action, administrative, corporate or otherwise required to be taken by the Party to authorize the
execution, delivery, and performance of this Agreement has or will be taken prior to execution herein. The Parties further represent
that this Agreement constitutes a valid and binding obligation upon the Parties.


 


(b)Each of the Parties
hereby represents and warrants that the termination of the Financing Agreement and Registration Agreement is being made of their
respective own free will and volition and not being made under duress or compulsion.


 


8.Complete
Agreement. This Agreement contains the entire understanding by and between the Parties and supersedes any and all prior
agreements and understandings between any and all of the Parties, whether such agreements or understandings were oral or written,
and all of which prior agreements and understandings are hereby definitively terminated and of no further force or effect. The
Parties acknowledge and represent that they have not relied on any statements, agreements, representations, promises, warranties,
or other assurances, oral or written, other than those contained herein. Each Party agrees that this Agreement is intended to cover
any and all matters, claims or possible or contingent claims arising out of or related to any and all prior agreements and this
Agreement shall not be limited in scope to cover any and all prior matters, whether any such matters are known, unknown or hereafter
discovered or ascertained. Each of the Parties covenants and agrees that it will not, at any time hereafter, either directly or
indirectly, initiate, assign, maintain or prosecute, or in any way knowingly aid or assist in the initiation, maintenance or prosecution
of any claim, demand or cause of action at law or otherwise, against the Investor Releasees, or any of them, or the Company Releasees,
or any of them, as applicable, for damages, loss or injury of any kind arising from, related to, or in any way connected to any
activity with respect to which a release has been given pursuant to this Agreement, except to enforce this Agreement.


 


9.Dispute Resolution


 


Any controversy, claim,
or dispute arising out of or related to this Agreement or the interpretation, performance, or breach hereof, including, but not
limited to, alleged violations of state or federal statutory or common law rights or duties, shall be resolved as follows:


 


(a)             
The Party that asserts that there has been a breach of this Agreement, or that there exists
a controversy, claim or dispute arising out of or related to this Agreement or the interpretation or performance thereof, shall
notify the other Party of its assertions regarding same in writing, including the basis of the Party’s assertions and an
opportunity to cure;


 


(b)            
The Party receiving such notification shall have fourteen (14) days to respond in writing,
or longer if all Parties agree, and must state whether the receiving Party agrees or disagrees with the asserting Party’s
claim(s);


 


(c)             
If the receiving Party does not agree with the asserting Party’s claim, all Parties
shall have an informal meeting by telephone or other means within fourteen (14) days of the receiving Party’s written response,
or a longer period if all Parties agree, where all Parties shall meet in good faith in an effort to resolve the dispute;


 


(d)            
If the Parties fail to reach an agreement to resolve the dispute at the informal meeting despite
good faith efforts to do so, the dispute shall be resolved solely and exclusively by final and binding arbitration conducted according
to the JAMS/Endispute Comprehensive Arbitration Rules and Procedures in effect as of the date hereof, including the Optional Appeal
Procedure provided for in such rules (the “Arbitration Rules”). The arbitration shall be conducted exclusively
in Boston, Massachusetts before a panel of three neutral arbitrators chosen as follows: each Party will select one arbitrator and
the two selected arbitrators shall select the third arbitrator. The ruling of the arbitration panel shall be final and binding,
except as appealed pursuant to the Optional Appeal Procedure, in which case the ruling of the appellate panel shall be final and
binding. The cost of the arbitration shall be borne by the non-prevailing party, as determined by the arbitration panel or the
appellate panel, as applicable.


 


(e)             
In the event any legal action or proceeding is undertaken by one of the Parties hereto against
another as a result of an alleged breach of this Agreement, or this Agreement is asserted as a defense in a legal action or proceeding
brought by one of the Investor Releasees or the Company Releasees, the prevailing Party in such action or proceeding shall be entitled
to recover from the other Party all reasonable costs and expenses of said proceeding or action, including reasonable attorneys’
fees and expenses. 


 


10.Notices.
All notices and other communications hereunder shall be in writing and shall be deemed given when delivered by an internationally
recognized overnight courier to the respective Party at the following addresses (or at such other address for a Party as shall
be specified by like notice, provided that a notice of change of address(es) shall be effective only from the date of its receipt
by the other Party):


 


	 	If to the Investor, to:	Auctus Private Equity Fund, LLC
	 	 	101 Arch Street, Suite 2010
	 	 	Boston, Massachusetts 02110
	 	 	Attention: Lou Posner
	 	 	Telephone: (617) 532-6408
	 	 	Facsimile: (617) 532-6420
	 	 	 
	 	 	 
	 	 	 
	 	
         

        If to the Company, to:
	
         

        AquaLiv Technologies, Inc.

	 	 	4500 NW Newberry Hill Road, Suite 202
	 	 	Silverdale, WA 98383
	 	 	Attention: William Wright
	 	 	Telephone: (360) 473-1160
	 	 	Facsimile: 516-746-1288


 


With a copy to (which shall not constitute notice):


 


Lucosky Brookman LLP


33 Wood Avenue South, 6th Floor


Iselin, NJ 08830


Attn: Joseph Lucosky, Esq.


Fax: (732) 395-4400


Email: jlucosky@lucbro.com





 


11.Modification.
This Agreement shall not and cannot be modified by any Party by any oral promise or representation made before or after the
execution of this Agreement, and may only be modified by a writing signed by the Parties. This Agreement shall be binding upon
and inure to the benefit of the Parties' respective successors and assigns.


 


12.Construction. The
headings of paragraphs are used for convenience only and shall not affect the meaning or construction of the contents of this Agreement.
Should any portion (word, clause, phrase, sentence, paragraph or section) of this Agreement be declared void or unenforceable,
such portion shall be considered independent and severable from the remainder, the validity of which shall remain unaffected. This
Agreement shall survive indefinitely. The terms and conditions of this Agreement have been jointly negotiated by the parties and
this Agreement shall be deemed to have been jointly drafted by the Parties and in the event of any ambiguity or controversy it
shall not be construed against either Party as the draftsperson. Each Party has had ample opportunity to consult with counsel and
has independently determined to proceed with this Agreement with or without such counsel.


 


13.Counterparts. This
Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together
shall be deemed the same instrument. This Agreement may be executed and delivered via fax or scan which shall have the same full
force and effect as an original.


 


[Signature Page Follows]


 




    	(1)



    	 



    

 


 


IN WITNESS WHEREOF, the Parties have executed this Agreement as
of the day and year first above written.


 


 


	
         

         
	
         

        AQUALIV TECHHNOLOGIES, INC.

          

        By: /s/ William M. Wright 

        Name: William M. Wright

        Title: Executive Vice-President

         

         

        AUCTUS PRIVATE EQUTY FUND, LLC
	 
	 	 	 	 
	 	
         By:
	 /s/ Lou Posne
	 
	 	 	Name: Lou Posner	 
	 	 	Title: Managing Director