Document:

EXHIBIT
10.12

 

 

PLEDGE
AND ESCROW AGREEMENT

 

THIS
PLEDGE AND ESCROW AGREEMENT (“Agreement”) is made and entered into as of this 27th day of
April, 2012, by and between AQUALIV TECHNOLOGIES, INC., a Nevada corporation (the “Pledgor”)
and TCA GLOBAL CREDIT MASTER FUND, LP, a Cayman Islands limited partnership (the “Secured Party”),
with the joinder of DAVID KAHAN, P.A. (“Escrow Agent”).

 

RECITALS

 

WHEREAS,
the Secured Party has purchased certain debentures from the Pledgor (the “Debentures”) in the amount
of Two Hundred Thousand and No/100 Dollars ($200,000.00), all pursuant to a Securities Purchase Agreement between the Pledgor
and the Secured Party dated of even date herewith (the “SPA”); and

 

WHEREAS,
in order to secure the full and prompt payment when due (whether at the stated maturity, by acceleration or otherwise)
of all of the Pledgor’s obligations to the Secured Party, or any successor to the Secured Party, under this
Agreement, the Debentures or the SPA (this Agreement, the Debentures, the SPA and all other documents and instruments executed
in connection therewith hereinafter collectively referred to as the “Transaction Documents”), the Pledgor
has agreed to irrevocably pledge to the Secured Party its entire ownership interest in Aqualiv, Inc., a Washington corporation
(“Aqua Sub”), which entire ownership interest is represented by 50,000 shares of the common stock, $0.001
par value per share, of Aqua Sub (such shares hereinafter referred to as the “Pledged Shares”);

 

NOW,
THEREFORE, in consideration of the mutual covenants, agreements, warranties,
and representations herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto 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.                 
Pledge. In order to secure the full and timely payment and performance of all of the Company’s obligations to the
Secured Party under the Transaction Documents (the “Obligations”), the Pledgor hereby transfers, pledges,
assigns, sets over, delivers and grants to the Secured Party a continuing lien and security interest in and to all of the following
property of the Pledgor, both now owned and existing and hereafter created, acquired and arising (all being collectively hereinafter
referred to as the “Collateral”) and all right, title and interest of the Pledgor in and to the Collateral,
to-wit:

 

(a)the
Pledged Shares;

 

(b)any
certificates representing or evidencing the Pledged Shares;

 

(c)any
and all distributions thereon, and cash and non-cash proceeds and products thereof, including, but not limited to, all dividends,
cash, income, profits, instruments, securities, stock dividends, distributions of capital stock of the Pledgor and all other property
from time to time received, receivable or otherwise distributed in respect of, in exchange for or upon conversion of the Pledged
Shares, whether in connection with stock splits, recapitalizations, merger, conversions, combinations, reclassifications, exchanges
of securities or otherwise; and

 

(d)any
and all voting and other rights, powers and privileges accruing or incidental to an owner of the Pledged Shares and the other
property referred to in subsections 2(a) through 2(c) above.

 

3.Transfer
of Pledged Shares. Simultaneously with the execution of this Agreement, the Pledgor shall, or shall cause its transfer agent
to, deliver to the Escrow Agent: (i) the Pledged Shares and all certificates representing or evidencing the Pledged Shares in
the name of the Secured Party, or otherwise together with undated, irrevocable and duly executed stock powers executed in blank
by the Pledgor (including medallion guaranteed signatures, if required to duly and properly transfer the Pledged Shares); and
(ii) all other property, instruments, documents and papers comprising, representing or evidencing the Collateral, or any part
thereof, together with proper instruments of assignment or endorsement, as Secured Party may request or require, duly executed
by the Pledgor (collectively, the “Transfer Documents”). The Pledged Shares and other Transfer Documents
(collectively, the “Pledged Materials”) shall be held by the Escrow Agent pursuant to this Agreement
until the full payment and performance of all of the Obligations, the termination or expiration of this Agreement, or delivery
of the Pledged Materials in accordance with this Agreement. In addition, all non-cash dividends, dividends paid or payable in
cash or otherwise in connection with a partial or total liquidation or dissolution of the Pledgor, instruments, securities and
any other distributions, whether paid or payable in cash or otherwise, made on or in respect of the Pledged Shares, whether resulting
from a subdivision, combination, or reclassification of the outstanding capital stock of the Pledgor, or received in exchange
for the Pledged Shares or any part thereof, or in redemption thereof, as a result of any merger, consolidation, acquisition, or
other exchange of assets to which Pledgor may be a party or otherwise, or any other property that constitutes part of the Collateral
from time to time, shall be immediately delivered or cause to be delivered by Pledgor to the Escrow Agent in the same form as
so received, including, without limitation, any additional certificates representing any portion of the Collateral hereafter acquired
by Pledgor, together with proper instruments of assignment or endorsement duly executed by the Pledgor.

 

4.Security
Interest Only. The security interests in the Collateral granted to Secured Party hereunder are granted as security only and
shall not subject the Secured Party to, or transfer or in any way affect or modify, any obligation or liability of the Pledgor
with respect to any of the Collateral or any transaction in connection therewith.

 

5.Record
Owner of Collateral. Secured Party shall have the right, in its sole and absolute discretion, to hold any stock certificates,
notes, instruments or securities now or hereafter included in the Collateral in its own name or the name of its nominee. In addition,
the parties agree that the Pledged Shares, when issued in the name of the Secured Party and delivered to Escrow Agent, shall be
deemed issued and held in the name of Secured Party as of the date of issuance in the name of Secured Party. The Pledgor will
promptly give to the Secured Party copies of any notices or other communications received by and with respect to Collateral registered
in the name of the Pledgor.

 

6.Rights
Related to Pledged Shares. Subject to the terms of this Agreement, unless and until an “Event of Default” (as
hereinafter defined) under this Agreement shall occur:

 

(a)
Pledgor shall be entitled to exercise any and all voting and other rights, powers and privileges accruing to an owner of the
Pledged Shares, or any part thereof, for any purpose consistent with the terms of this Agreement; provided, however, such action
would not materially and adversely affect the rights inuring to Secured Party under any of the Transaction Documents, or adversely
affect the remedies of the Secured Party under any of the Transaction Documents, or the ability of the Secured Party to exercise
same; and

 

(b)the
Secured Party shall execute and deliver to the Pledgor, or cause to be executed and delivered to the Pledgor, all such proxies,
powers of attorney, and other instruments as the Pledgor may reasonably request for the purpose of enabling the Pledgor to exercise
the voting and other rights, powers and privileges which it is entitled to exercise pursuant to subsection 6(a) above.

 

Upon
the occurrence of an Event of Default, all rights of the Pledgor in and to the Pledged Shares and all other Collateral shall cease
and all such rights shall immediately vest in Secured Party, as may be determined by Secured Party, although Secured Party shall
not have any duty to exercise such rights or be required to sell or to otherwise realize upon the Collateral, as hereinafter authorized,
or to preserve the same, and Secured Party shall not be responsible for any failure to do so or delay in doing so. To effectuate
the foregoing, Pledgor hereby grants to Secured Party a proxy to vote the Pledged Shares for and on behalf of Pledgor, which proxy
is irrevocable and coupled with an interest and which proxy shall be effective upon any Event of Default. Such proxy shall remain
in effect so long as the Obligations remain outstanding. Pledgor hereby agrees that any vote by Pledgor in violation of this Section
6 shall be null, void and of no force or effect. Furthermore, all dividends or other distributions received by the Pledgor shall
be subject to delivery to Escrow Agent in accordance with Section 3 above, and until such delivery, any of such dividends and
other distributions shall be received in trust for the benefit of the Secured Party, shall be segregated from other property or
funds of the Pledgor and shall be forthwith delivered to Escrow Agent in accordance with Section 3 above.

 

    	(1)

    	 

    
  

7.Release
of Pledged Shares. Upon the timely payment in full of all of the Obligations in accordance with the terms thereof, Secured
Party shall notify the Escrow Agent in writing to such effect. Upon receipt of such written notice, the Escrow Agent shall return
all of the Pledged Materials in Escrow Agent’s possession to the Pledgor, whereupon any and all rights of Secured Party
in and to the Pledged Materials and all other Collateral shall be terminated.

 

8.Representations,
Warranties, and Covenants of the Pledgor. The Pledgor hereby covenants, warrants and represents, for the benefit of the Secured
Party, as follows (the following representations and warranties shall be made as of the date of this Agreement and as of each
date when Pledged Shares are delivered to Escrow Agent hereunder, as applicable):

 

(a)Pledgor
is the owner and holder of the Pledged Shares, free and clear of any liens, claims, charges or encumbrances of any nature whatsoever,
other than as created by this Agreement. The Pledge Shares represent a fifty percent (50%) ownership interest in Aqua Sub.

 

(b)The
Pledged Shares have been duly authorized and are validly issued, fully paid and non-assessable, and are subject to no options
to purchase, or any similar rights or to any restrictions on transferability.

 

(c)Each
certificate or document of title constituting the Pledged Shares is genuine in all respects and represents what it purports to
be.

 

(d)By
virtue of the execution and delivery of this Agreement and upon delivery to Escrow Agent of the Pledged Shares in accordance with
this Agreement, Secured Party will have a valid security interest in the Collateral, subject to no prior or other lien, claim,
charge, pledge, security interest or encumbrance of any nature whatsoever.

 

(e)Pledgor
covenants, that for so long as this Agreement is in effect, Pledgor will defend the Collateral and the priority of Secured Party’s
security interests therein, at its sole cost and expense, against the claims and demands of all persons at anytime claiming the
same or any interest therein.

 

(f)At
its option, Secured Party may pay, for Pledgor’s account, any taxes (including documentary stamp taxes), liens, security
interests, or other encumbrances at any time levied or placed on the Collateral. Pledgor agrees to reimburse Secured Party on
demand for any payment made or expense incurred by Secured Party pursuant to the foregoing authorization. Any such amount, if
not promptly paid upon demand therefor, shall accrue interest at the highest non-usurious rate permitted by applicable law from
the date of outlay, until paid, and shall constitute an Obligation secured hereby.

 

(g)The
Pledgor acknowledges, represents and warrants that Secured Party is not an “affiliate” of Pledgor, as such terms is
used and defined under Rule 144 of the federal securities laws.

 

(h)The
Company has the full right, power and authority to enter into this Agreement and to pledge the Pledge shares without the joinder
or consent of any other party. Specifically, there is no shareholders agreement, voting agreement or any other agreement of any
nature or kind affecting, restricting or encumbering the Pledge Shares or the Company’s right to pledge same as hereby contemplated.

 

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

 

(a)Default.
The occurrence of any breach, default or “Event of Default” (as such term may be defined in any Transaction Documents)
under any of the Transaction Documents.

 

(b)Covenants
and Agreements. The failure of Pledgor to perform, observe or comply with any and all of the covenants, promises and agreements
of the Pledgor in any of the Transaction Documents.

 

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

 

10.Rights
and Remedies. Subject, at all times, to the Uniform Commercial Code as then in effect in the State of Florida and/or the State
of Nevada (as applicable), the Secured Party shall have the following rights and remedies upon the occurrence and continuation
of an Event of Default:

 

(a)Upon
and anytime after the occurrence and continuation of an Event of Default, the Secured Party shall have the right acquire the Pledged
Shares and all other Collateral in accordance with the following procedure: (i) the Secured Party shall provide written notice
of such Event of Default (the “Default Notice”) to the Escrow Agent, with a copy to the Pledgor; (ii)
as soon as practicable after receipt of a Default Notice, the Escrow Agent shall deliver the Pledged Shares and all other Collateral,
along with the applicable Transfer Documents to the Secured Party.

 

(b)Upon
receipt of the Pledged Shares and other Collateral issued to the Secured Party, the Secured Party shall have the right to, without
notice or demand to Pledgor: (i) sell the Collateral and to apply the proceeds of such sales, net of any selling commissions,
to the Obligations owed to the Secured Party by the Pledgor under the Transaction Documents, including, without limitation, outstanding
principal, interest, legal fees, and any other amounts owed to the Secured Party; and (ii) exercise in any jurisdiction in which
enforcement hereof is sought, any rights and remedies available to Secured Party under the provisions of any of the Transaction
Documents, the rights and remedies of a secured party under the Uniform Commercial Code as then in effect in the State of Florida,
and all other rights and remedies available to the Secured Party, under equity or applicable law, all such rights and remedies
being cumulative and enforceable alternatively, successively or concurrently. In furtherance of the foregoing rights and remedies:

 

(i)Secured
Party may sell the Pledged Shares, or any part thereof, or any other portion of the Collateral, in one or more sales, at public
or private sale, conducted by any agent of, or auctioneer or attorney for Secured Party, at Secured Party’s place of business
or elsewhere, or at any broker’s board or on any securities exchange, for cash, upon credit or for future delivery, and
at such price or prices, all as Secured Party may deem appropriate. Secured Party may be a purchaser at any such sale of any or
all of the Collateral so sold. In the event Secured Party is a purchaser at any such sale, Secured Party may apply to such purchase
all or any portion of the sums then due and owing by the Pledgor to Secured Party under any of the Transaction Documents or otherwise,
and the Secured Party may, upon compliance with the terms of the sale, hold, retain and dispose of such property without further
accountability to the Pledgor therefore. Secured Party is authorized, in its absolute discretion, to restrict the prospective
bidders or purchasers of any of the Collateral at any public or private sale as to their number, nature of business and investment
intention, including, but not limited to, the restricting of bidders or purchasers to one or more persons who represent and agree,
to the satisfaction of Secured Party, that they are purchasing the Collateral, or any part thereof, for their own account, for
investment, and not with a view to the distribution or resale of any of such Collateral.

 

(ii)Upon
any such sale, Secured Party shall have the right to deliver, assign and transfer to each purchaser thereof the Collateral so
sold to such purchaser. Each purchaser (including Secured Party) at any such sale shall, to the full extent permitted by law,
hold the Collateral so purchased absolutely free from any claim or right whatsoever, including, without limitation, any equity
or right of redemption of the Pledgor, who, to the full extent that it may lawfully do so, hereby specifically waives all rights
of redemption, stay, valuation or appraisal which they now have or may have under any rule of law or statute now existing or hereafter
adopted.

 

(iii)At
any such sale, the Collateral may be sold in one lot as an entirety, in separate blocks or individually as Secured Party may determine,
in its sole and absolute discretion. Secured Party shall not be obligated to make any sale of any Collateral if it shall determine
in its sole and absolute discretion, not to do so, regardless of the fact that notice of sale of such Collateral shall have been
given. Secured Party may, without notice or publication, adjourn any public or private sale from time to time by announcement
at the time and place fixed for such sale, or any adjournment thereof, and any such sale may be made at any time or place to which
the same may be so adjourned without further notice or publication.

 

(iv)The
Pledgor acknowledges that compliance with applicable federal and state securities laws (including, without limitation, the Securities
Act of 1933, as amended, blue sky or other state securities laws or similar laws now or hereafter existing analogous in purpose
or effect) might very strictly limit or restrict the course of conduct of Secured Party if Secured Party were to attempt to sell
or otherwise dispose of all or any part of the Collateral, and might also limit or restrict the extent to which or the manner
in which any subsequent transferee of any such securities could sell or dispose of the same. The Pledgor further acknowledges
that under applicable laws, Secured Party may be held to have certain general duties and obligations to the Pledgor, as pledgor
of the Collateral, to make some effort toward obtaining a fair price for the Collateral even though the obligations of the Pledgor
may be discharged or reduced by the proceeds of sale at a lesser price. The Pledgor understands and agrees that, to the extent
allowable under applicable law, Secured Party is not to have any such general duty or obligation to the Pledgor, and the Pledgor
will not attempt to hold Secured Party responsible for selling all or any part of the Collateral at an inadequate price even if
Secured Party shall accept the first offer received or does not approach more than one possible purchaser. Without limiting their
generality, the foregoing provisions would apply if, for example, Secured Party were to place all or any part of such securities
for private placement by an investment banking firm, or if such investment banking firm purchased all or any part of such securities
for its own account, or if Secured Party placed all or any part of such securities privately with a purchaser or purchasers.

 

(c)To
the extent that the net proceeds received by the Secured Party are insufficient to satisfy the Obligations in full, the Secured
Party shall be entitled to a deficiency judgment against the Pledgor for such deficiency amount. The Secured Party shall have
the absolute right to sell or dispose of the Collateral, or any part thereof, in any manner it sees fit and shall have no liability
to the Pledgor or any other party for selling or disposing of such Collateral even if other methods of sales or dispositions would
or allegedly would result in greater proceeds than the method actually used. The Pledgor shall remain liable for all deficiencies
and shortfalls, if any, that may exist after the Secured Party has exhausted all remedies hereunder.

 

(d)Each
right, power and remedy of the Secured Party provided for in this Agreement or any other Transaction Document shall be cumulative
and concurrent and shall be in addition to every other such right, power or remedy. The exercise or beginning of the exercise
by the Secured Party of any one or more of the rights, powers or remedies provided for in this Agreement or any other Transaction
Document, or now or hereafter existing at law or in equity or by statute or otherwise, shall not preclude the simultaneous or
later exercise by the Secured Party of all such other rights, powers or remedies, and no failure or delay on the part of the Secured
Party to exercise any such right, power or remedy shall operate as a waiver thereof. No notice to or demand on the Pledgor in
any case shall entitle it to any other or further notice or demand in similar or other circumstances or constitute a waiver of
any of the rights of the Secured Party to any other further action in any circumstances without demand or notice. The Secured
Party shall have the full power to enforce or to assign or contract its rights under this Agreement to a third party.

 

(e)In
addition to all other remedies available to the Secured Party, upon the issuance of the Pledged Shares to the Secured Party after
an Event of Default, Pledgor agrees to: (i) take such action and prepare, distribute and/or file such documents and papers, as
are required or advisable in the opinion of Secured Party and/or its counsel, to permit the sale of the Pledged Shares, whether
at public sale, private sale or otherwise, including, without limitation, issuing, or causing its counsel to issue, any opinion
of counsel for Pledgor required to allow the Secured Party to sell the Pledged Shares or any other Collateral under Rule 144;
(ii) to bear all costs and expenses of carrying out its obligations under this Section 8(e), which shall be a part of the Obligations
secured hereby; and (iv) that there is no adequate remedy at law for the failure by the Pledgor to comply with the provisions
of this Section 8(e) and that such failure would not be adequately compensable in damages, and therefore agrees that its agreements
contained in this subsection may be specifically enforced.

 

    	(2)

    	 

    

 

11.Concerning
the Escrow Agent.

 

(a)The
Escrow Agent undertakes to perform only such duties as are expressly set forth herein and no implied duties or obligations shall
be read into this Agreement against the Escrow Agent. Escrow Agent agrees to release any property held by it hereunder (the “Escrowed
Property”) in accordance with the terms and conditions set forth in this Agreement.

 

(b)The
Escrow Agent may act in reliance upon any writing or instrument or signature which it, in good faith, believes to be genuine,
may assume the validity and accuracy of any statement or assertion contained in such a writing or instrument, and may assume that
any person purporting to give any writing, notice, advice or instructions in connection with the provisions hereof has been duly
authorized to do so. The Escrow Agent shall not be liable in any manner for the sufficiency or correctness as to form, manner,
and execution, or validity of any instrument deposited in this escrow, nor as to the identity, authority, or right of any person
executing the same; and its duties hereunder shall be limited to the safekeeping of the Escrowed Property, and for the disposition
of the same in accordance with this Agreement. Escrow Agent shall not be deemed to have knowledge of any matter or thing unless
and until Escrow Agent has actually received written notice of such matter or thing and Escrow Agent shall not be charged with
any constructive notice whatsoever.

 

(c)Escrow
Agent shall hold in escrow, pursuant to this Agreement, the Escrowed Property actually delivered and received by Escrow Agent
hereunder, but Escrow Agent shall not be obligated to ascertain the existence of (or initiate recovery of) any other property
that may be part or portion of the Collateral, or to become or remain informed with respect to the possibility or probability
of additional Collateral being realized upon or collected at any time in the future, or to inform any parties to this Agreement
or any third party with respect to the nature and extent of any Collateral realized and received by Escrow Agent (except upon
the written request of such party), or to monitor current market values of the Collateral. Further, Escrow Agent shall not be
obligated to proceed with any action or inaction based on information with respect to market values of the Collateral which Escrow
Agent may in any manner learn, nor shall Escrow Agent be obligated to inform the parties hereto or any third party with respect
to market values of any of the Collateral at any time, Escrow Agent having no duties with respect to investment management or
information, all parties hereto understanding and intending that Escrow Agent’s responsibilities are purely ministerial
in nature. Any reduction in the market value or other value of the Collateral while deposited with Escrow Agent shall be at the
sole risk of Pledgor and Secured Party. If all or any portion of the Escrowed Property is in the form of a check or in any other
form other than cash, Escrow Agent shall deposit same as required but shall not be liable for the nonpayment thereof, nor responsible
to enforce collection thereof.

 

(d)In
the event instructions from Secured Party, Pledgor, or any other party would require Escrow Agent to expend any monies or to incur
any cost, Escrow Agent shall be entitled to refrain from taking any action until it receives payment for such costs. It is agreed
that the duties of Escrow Agent are purely ministerial in nature and shall be expressly limited to the safekeeping of the Escrowed
Property and for the disposition of same in accordance with this Agreement. Secured Party and Pledgor, jointly and severally,
each hereby indemnifies Escrow Agent and holds it harmless from and against any and all claims, liabilities, damages, costs, penalties,
losses, actions, suits or proceedings at law or in equity, or any other expenses, fees or charges of any character or nature (collectively,
the “Claims”), which it may incur or with which it may be threatened, directly or indirectly, arising
from or in any way connected with this Agreement or which may result from Escrow Agent’s following of instructions from
Secured Party or Pledgor, and in connection therewith, indemnifies Escrow Agent against any and all expenses, including attorneys’
fees and the cost of defending any action, suit, or proceeding or resisting any Claim, whether or not litigation is instituted,
unless any such Claims arise as a result of Escrow Agent’s gross negligence or willful misconduct. Escrow Agent shall be
vested with a lien on all Escrowed Property under the terms of this Agreement, for indemnification, attorneys’ fees, court
costs and all other costs and expenses arising from any suit, interpleader or otherwise, or other expenses, fees or charges of
any character or nature, which may be incurred by Escrow Agent by reason of disputes arising between Pledgor, Secured Party, or
any third party as to the correct interpretation of this Agreement, and instructions given to Escrow Agent hereunder, or otherwise,
with the right of Escrow Agent, regardless of the instruments aforesaid and without the necessity of instituting any action, suit
or proceeding, to hold any property hereunder until and unless said additional expenses, fees and charges shall be fully paid.
Any fees and costs charged by the Escrow Agent for serving hereunder shall be paid by the Pledgor.

 

(e)In
the event Escrow Agent shall be uncertain as to its duties or rights hereunder or shall receive instructions, claims or demands
from Secured Party, Pledgor or from third persons with respect to the Escrowed Property, which, in Escrow Agent’s sole opinion,
are in conflict with each other or with any provision of this Agreement, Escrow Agent shall be entitled to refrain from taking
any action until it shall be directed otherwise in writing by Pledgor and Secured Party and said third persons, if any, or by
a final order or judgment of a court of competent jurisdiction. If any of the parties shall be in disagreement about the interpretation
of this Agreement, or about the rights and obligations, or the propriety of any action contemplated by the Escrow Agent hereunder,
the Escrow Agent may, at its sole discretion, deposit the Escrowed Property with a court having jurisdiction over this Agreement,
and, upon notifying all parties concerned of such action, all liability on the part of the Escrow Agent shall fully cease and
terminate. The Escrow Agent shall be indemnified by the Pledgor and Secured Party for all costs, including reasonable attorneys’
fees, in connection with the aforesaid proceeding, and shall be fully protected in suspending all or a part of its activities
under this Agreement until a final decision or other settlement in the proceeding is received. In the event Escrow Agent is joined
as a party to a lawsuit by virtue of the fact that it is holding the Escrowed Property, Escrow Agent shall, at its sole option,
either: (i) tender the Collateral in its possession to the registry of the appropriate court; or (ii) disburse the Collateral
in its possession in accordance with the court’s ultimate disposition of the case, and Secured Party and Pledgor hereby,
jointly and severally, indemnify and hold Escrow Agent harmless from and against any damages or losses in connection therewith
including, but not limited to, reasonable attorneys’ fees and court costs at all trial and appellate levels.

 

(f)The
Escrow Agent may consult with counsel of its own choice (and the costs of such counsel shall be paid by the Pledgor and Secured
Party) and shall have full and complete authorization and protection for any action taken or suffered by it hereunder in good
faith and in accordance with the opinion of such counsel. The Escrow Agent shall not be liable for any mistakes of fact or error
of judgment, or for any actions or omissions of any kind, unless caused by its willful misconduct or gross negligence.

 

(g)The
Escrow Agent may resign upon ten (10) days’ written notice to the parties in this Agreement. If a successor Escrow Agent
is not appointed by Secured Party and Pledgor within this ten (10) day period, the Escrow Agent may petition a court of competent
jurisdiction to name a successor.

 

(h)Conflict
Waiver. The Pledgor hereby acknowledges that the Escrow Agent is counsel to the Secured Party in connection with the
transactions contemplated and referred herein. The Pledgor agrees that in the event of any dispute arising in connection with
this Agreement or otherwise in connection with any transaction or agreement contemplated and referred herein, the Escrow Agent
shall be permitted to continue to represent the Secured Party and the Pledgor will not seek to disqualify such counsel and waives
any objection Pledgor might have with respect to the Escrow Agent acting as the Escrow Agent pursuant to this Agreement. Pledgor
and Secured Party acknowledge and agree that nothing in this Agreement shall prohibit Escrow Agent from: (i) serving in a similar
capacity on behalf of others; or (ii) acting in the capacity of attorneys for one or more of the parties hereto in connection
with any matter.

 

12.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 Transaction Documents, and all of the Obligations,
as so increased from time to time, shall be and are secured hereby. Upon the execution hereof, Pledgor 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 Debentures and the
Transaction Documents, and if, as and to the extent the Obligations are increased from time to time in accordance with the terms
and provisions of the Transaction Documents, then Pledgor shall immediately pay any additional documentary stamp taxes or other
charges in connection therewith.

 

13.Irrevocable
Authorization and Instruction. Pledgor hereby authorizes and instructs its transfer agent to comply with any instruction received
by it from Secured Party in writing that: (i) states that an Event of Default hereunder exists or has occurred; and (b) is
otherwise in accordance with the terms of this Agreement, without any other or further instructions from Pledgor, and Pledgor
agrees that its transfer agent shall be fully protected in so complying with any such instruction from Secured Party.

 

14.Appointment
as Attorney-in-Fact. Pledgor hereby irrevocably constitutes and appoints Secured Party and any officer or agent of Secured
Party, with full power of substitution, as its true and lawful attorney-in-fact, with full irrevocable power and authority in
the place and stead of Pledgor and in the name of Pledgor or in the name of Secured Party, from time to time in the discretion
of Secured Party, so long as an Event of Default hereunder exists, for the purpose of carrying out the terms of this Agreement,
to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable
to accomplish the purposes of this Agreement, including, without limitation, any financing statements, endorsements, assignments
or other instruments of transfer. Pledgor hereby ratifies all that said attorneys shall lawfully do or cause to be done pursuant
to the power of attorney granted in this Section 14. All powers, authorizations and agencies contained in this Agreement
are coupled with an interest and are irrevocable until the Obligations are paid and performed in full.

 

    	(3)

    	 

    

 

15.Continuing
Obligation of Pledgor. The obligations, covenants, agreements and duties of the Pledgor under this Agreement shall in no way
be affected or impaired by: (i) the modification or amendment (whether material or otherwise) of any of the obligations of the
Pledgor or any other person or entity, as applicable; (ii) the voluntary or involuntary bankruptcy, assignment for the benefit
of creditors, reorganization, or other similar proceedings affecting the Pledgor or any other person or entity, as applicable;
(iii) the release of the Pledgor or any other person or entity from the performance or observance of any of the agreements, covenants,
terms or conditions contained in any Transaction Documents, by the operation of law or otherwise, including, but not limited to,
the release of the Pledgor’s obligation to pay interest or attorney's fees.

 

Pledgor
further agrees that Secured Party may take other guaranties or collateral or security to further secure the Obligations, and consents
that any of the terms, covenants and conditions contained in any of the Transaction Documents may be, without Pledgor’s
consent, renewed, altered, extended, changed or modified by Secured Party or may be released by Secured Party, without in any
manner affecting this Agreement or releasing Pledgor herefrom, and without further consent of or notice to Pledgor, and Pledgor
shall continue to be liable hereunder to pay and perform pursuant hereto, notwithstanding any such release or the taking of such
other guaranties, collateral or security. This Agreement is additional and supplemental to any and all other guarantees, security
agreements or collateral heretofore and hereafter executed by Pledgor for the benefit of Secured Party, whether relating to the
indebtedness evidenced by any of the Transaction Documents or not, and shall not supersede or be superseded by any other document
or guaranty executed by Pledgor or any other person, firm or entity for any purpose. Pledgor hereby agrees that Pledgor and any
additional parties who may become liable for repayment of the sums due under the Transaction Documents, may hereafter be released
from their liability hereunder and thereunder; and Secured Party may take, or delay in taking or refuse to take, any and all action
with reference to any of the Transaction Documents (regardless of whether same might vary the risk or alter the rights, remedies
or recourses of Pledgor), including specifically the settlement or compromise of any amount allegedly due thereunder, all without
notice to, consideration to or the consent of the Pledgor, and without in any way releasing, diminishing or affecting in any way
the absolute nature of Pledgor’s obligations and liabilities hereunder.

 

No
delay on the part of the Secured Party in exercising any rights hereunder or failure to exercise the same shall operate as a waiver
of such rights. Pledgor hereby waives any and all legal requirements, statutory or otherwise, that Secured Party shall institute
any action or proceeding at law or in equity or exhaust its rights, remedies and recourses against Pledgor or anyone else with
respect to the Debentures or any other Transaction Documents, as a condition precedent to bringing an action against Pledgor upon
this Agreement or as a condition precedent to Secured Party’s rights to sell the Pledged Shares or any other Collateral.
Pledgor agrees that Secured Party may simultaneously maintain an action upon this Agreement and an action or proceeding upon the
Debentures or any other Transaction Documents. All remedies afforded by reason of this Agreement are separate and cumulative remedies
and may be exercised serially, simultaneously and in any order, and the exercise of any of such remedies shall not be deemed an
exclusion of the other remedies and shall in no way limit or prejudice any other contractual, legal, equitable or statutory remedies
which Secured Party may have in the Pledged Shares, any other Collateral, or under the Transaction Documents. Until the Obligations,
and all extensions, renewals and modifications thereof, are paid in full, and until each and all of the terms, covenants and conditions
of this Agreement are fully performed, Pledgor shall not be released by any act or thing which might, but for this provision of
this Agreement, be deemed a legal or equitable discharge of a surety, or by reason of any waiver, extension, modification, forbearance
or delay of Secured Party or any obligation or agreement between Pledgor or its successors or assigns, and the then holder of
the Debentures, relating to the payment of any sums evidenced or secured thereby or to any of the other terms, covenants and conditions
contained therein, and Pledgor hereby expressly waives and surrenders any defense to liability hereunder based upon any of the
foregoing acts, things, agreements or waivers, or any of them. Pledgor also waives any defense arising by virtue of any disability,
insolvency, bankruptcy, lack of authority or power or dissolution of Pledgor, even though rendering the Debentures or any of the
other Transaction Documents void, unenforceable or otherwise uncollectible, it being agreed that Pledgor shall remain liable hereunder,
regardless of any claim which Pledgor might otherwise have against Secured Party by virtue of Secured Party's invocation of any
right, remedy or recourse given to it hereunder, under the Debentures or any other Transaction Documents. In addition, Pledgor
waives and renounces any right of subrogation, reimbursement or indemnity whatsoever, and any right of recourse to security for
the Obligations of Pledgor to Secured Party, unless and until all of said Obligations have been paid in full to Secured Party.

 

16.Miscellaneous.

 

(a)Performance
for Pledgor. The Pledgor agrees and hereby acknowledges 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 Pledgor, without prior notice to the Pledgor, in order to insure the Pledgor’s compliance with any covenant, warranty,
representation or agreement of the Pledgor made in or pursuant to this Agreement or the other Transaction Documents, to continue
or complete, or cause to be continued or completed, performance of the Pledgor’s obligations under any contracts of the
Pledgor, or to preserve or protect any right or interest of Secured Party in the Collateral or under or pursuant to this Agreement
or the other Transaction Documents; 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 Pledgor of any such
Event of Default. The Pledgor 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 Debentures, 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 other Transaction Documents,
all Collateral and proceeds of Collateral coming into Secured Party’s possession may be applied by Secured Party (after
payment of any costs, fees and other amounts incurred by Secured Party in connection therewith) to any of the Obligations, whether
matured or unmatured, as Secured Party shall determine in its sole 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. 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 Pledgor shall be liable
for the deficiency, together with interest thereon at the highest rate specified in the Debentures 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 Pledgor. The Pledgor 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 Pledgor 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 any other Transaction Documents or
under applicable law; (iii) all claims of the Pledgor 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 other Transaction Documents or under
applicable law; (iv) all rights of redemption of the Pledgor 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 Pledgor; (vii) any and all other notices or demands which by applicable law must be given to or
made upon the Pledgor by Secured Party; (viii) settlement, compromise or release of the obligations of any person or entity primarily
or secondarily liable upon any of the Obligations; (ix) all rights of the Pledgor to demand that Secured Party release account
debtors or other persons or entities 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 Pledgor agrees that Secured Party may exercise
any or all of its rights and/or remedies hereunder and under any 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.

 

(d)Waivers
by Secured Party. No failure or any delay on the part of Secured Party in exercising any right, power or remedy hereunder
or under any 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 Pledgor by Secured Party.

 

(f)Modifications,
Waivers and Consents. No modifications or waiver of any provision of this Agreement or any other Transaction Documents, and
no consent by Secured Party to any departure by the Pledgor 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 Pledgor in any case shall entitle Pledgor 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 Buyer: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

 

If
to Escrow Agent: 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
received: (i) if mailed by certified mail, return receipt requested, postage prepaid and properly addressed to the address above,
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, requests or demands
or other communications referred to in this Agreement may be sent by facsimile, by e-mail or other method of delivery, but shall
be deemed to have been given only when the sending party has confirmed that the receiving party has received such notice.

 

    	(4)

    	 

    

 

(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 UCC or any other set of foreign, federal, state or local laws, rules and regulations, 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 UCC or such other set of foreign, federal, state or local laws, rules and regulations. 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 Pledgor 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 Pledgor 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, 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 Pledgor of any such
assignment and such assignment shall be binding upon and recognized by the Pledgor. All covenants, agreements, representations
and warranties by or on behalf of the Pledgor which are contained in this Agreement shall inure to the benefit of Secured Party,
its successors and assigns. The Pledgor 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 other Transaction Documents contain the entire agreement of the parties hereto with
respect to the matters covered and the transactions contemplated hereby, and no other agreement, statement or promise made by
any party hereto, or by any employee, officer, agent or attorney of any party hereto, which is not contained herein shall be valid
or binding.

 

(l)WAIVER
OF JURY TRIAL. THE PLEDGOR HEREBY: (i) COVENANTS AND AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT
BY A JURY; AND (ii) WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THE PLEDGOR AND SECURED PARTY MAY BE PARTIES, ARISING
OUT OF, IN CONNECTION WITH OR IN ANY WAY PERTAINING TO THIS AGREEMENT, THE NOTE 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 AGREEMENT. THIS WAIVER OF JURY TRIAL IS SEPARATELY
GIVEN, KNOWINGLY, WILLINGLY AND VOLUNTARILY MADE BY THE PLEDGOR AND THE PLEDGOR 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 PLEDGOR
AND SECURED PARTY, SO AS TO SERVE AS CONCLUSIVE EVIDENCE OF SUCH WAIVER OF RIGHT TO TRIAL BY JURY. THE PLEDGOR 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)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.

 

(p)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, including, but not limited to, the execution and
filing of UCC-1 Financing Statements in any jurisdiction as Secured Party may require.

 

(q)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.

 

(r)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.

 

(s)Prevailing
Party. If any legal action or other proceeding is brought for the enforcement of this Agreement or any other Transaction Documents,
or because of an alleged dispute, breach, default or misrepresentation in connection with any provisions of this Agreement or
any other Transaction Documents, the successful or prevailing party or parties shall be entitled to recover from the non-prevailing
party, reasonable attorneys’ fees, court costs and all expenses, even if not taxable as court costs (including, without
limitation, all such fees, costs and expenses incident to appeals), incurred in that action or proceeding, in addition to any
other relief to which such party or parties may be entitled.

 

(t)Costs
and Expenses. The Pledgor 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 Pledgor 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 Note or any other Transaction Documents 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 Note, 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. Notwithstanding anything which may be contained in this Section 16(t) to the contrary, the only cash
fees and expenses (other than stamp and UCC Financing Statement filing expenses) which shall be assessed by the Secured Party
or the Escrow Agent upon Closing under the SPA are provided in Sections 7.4(a), (b) and (c) of the SPA.

 

 

[Signatures
on the following page]

 

    	(5)

    	 

    

 

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

 

	 	 
	 	PLEDGOR:
	 	 
	 	AQUALIV
    TECHNOLOGIES, INC., a Nevada corporation
	 	 
	 	By:
    /s/ William M. Wright 
	 	Name: 
    William M. Wright
	 	Title:
    Chief Executive Officer
	 	 
	 	SECURED
    PARTY:
	 	 
	 	TCA
    GLOBAL CREDIT MASTER FUND, LP
	 	 
	 	By: TCA Global
    Credit Fund GP, Ltd., its general partner
	 	 
	 	 
	 	By:
    /s/ Robert Press
	 	      
    Robert Press, Director
	 	 
	 	 
	 	 

 

 

4849-8004-1745,
v. 1EXHIBIT 10.13

 

GUARANTY AGREEMENT

 

 

THIS GUARANTY AGREEMENT
is dated as of April 27, 2012 (together with any amendments or modifications hereto in effect from time to time, the “Guaranty”),
and is made by FOCUS SYSTEMS, INC., a Washington corporation (the “Guarantor”), in favor of TCA
GLOBAL CREDIT MASTER FUND, LP (“TCA”).

 

WHEREAS,
pursuant to a Securities Purchase Agreement dated of even date herewith between Aqualiv Technologies, Inc., a Nevada corporation
(“AQLV”) and TCA (the “Purchase Agreement”), AQLV has agreed to issue to TCA
and TCA has agreed to purchase from AQLV certain senior secured redeemable, convertible debentures (the “Debentures”),
as more specifically set forth in the Purchase Agreement; and

WHEREAS,
in order to induce TCA to purchase the Debentures, and with full knowledge that TCA would not purchase the Debentures without this
Guaranty, Guarantor has agreed to execute and deliver this Guaranty to TCA, for the benefit of TCA, as security for the “Liabilities”
(as hereinafter defined); and

WHEREAS,
Guarantor is a wholly owned subsidiary of AQLV and will substantially benefit from TCA’s purchase of the Debentures;

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.                 
LIABILITIES GUARANTEED.

 

Guarantor, jointly and
severally (if more than one), hereby guarantees and becomes surety to TCA for the full, prompt and unconditional payment of the
Liabilities, when and as the same shall become due, whether at the stated maturity date, by acceleration or otherwise, and the
full, prompt and unconditional performance of each term and condition to be performed by AQLV under the Purchase Agreement and
the other Transaction Documents. This Guaranty is a primary obligation of Guarantor and shall be a continuing inexhaustible Guaranty.
This is a guaranty of payment and not of collection. TCA may require Guarantor to pay and perform its liabilities and obligations
under this Guaranty and may proceed immediately against Guarantor without being required to bring any proceeding or take any action
against AQLV or any other Person prior thereto; the liability of Guarantor hereunder being independent of and separate from the
liability of AQLV, any other Person, and the availability of other collateral security for the Debentures and the other Transaction
Documents.

 

2.                 
DEFINITIONS.

 

All capitalized terms used
in this Guaranty that are defined in the Purchase Agreement shall have the meanings assigned to them in the Purchase Agreement,
unless the context of this Guaranty requires otherwise. In addition to the capitalized terms defined in 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 Guaranty, the meaning
of such term as defined in this Guaranty shall control for purposes of this Guaranty):

 

2.1.           
“Liabilities” means, collectively: (i) the repayment of all sums due under the Debentures (and
all extensions, renewals, replacements, future advances and amendments thereof) and the other Transaction Documents; and (ii) the
performance and observance of all terms, conditions, covenants representations and warranties set forth in the Transaction Documents.

 

3.                 
REPRESENTATION AND WARRANTIES. Guarantor represents and warrants to TCA as follows:

 

3.1.           
Organization, Powers. Guarantor: (i) is a corporation, duly organized, validly existing and in good standing
under the Laws of the State of Washington; (ii) has the power and authority to own its properties and Assets and to carry on its
business as now being conducted and as now contemplated; and (iii) has the power and authority to execute, deliver and perform
(and the officer executing this Guaranty on behalf of Guarantor has been duly authorized to so act and execute this Guaranty on
behalf of the Guarantor), and by all necessary action has authorized the execution, delivery and performance of, all of its obligations
under this Guaranty and any other Transaction Documents to which it is a party.

 

3.2.           
Execution of Guaranty. This Guaranty, and each other Transaction Document to which Guarantor is a party, have
been duly executed and delivered by Guarantor. Execution, delivery and performance of this Guaranty and each other Transaction
Document to which Guarantor is a party will not: (i) violate any provision of any Law, any Judgment of any Governmental Authority,
or any provision of any Contract or other instrument to which Guarantor is a party or by which Guarantor or any of its properties
or Assets are bound; (ii) result in the creation or imposition of any Encumbrance of any nature, other than the liens created by
the Transaction Documents; and (iii) require any Consent from, exemption of, or filing or registration with, any Governmental Authority
or any other Person.

 

3.3.           
Obligations of Guarantor. This Guaranty and each other Transaction Document to which Guarantor is a party
are the legal, valid and binding obligations of Guarantor, enforceable against Guarantor in accordance with their terms, except
as the same may be limited by bankruptcy, insolvency, reorganization or other laws or equitable principles relating to or affecting
the enforcement of creditors’ rights generally. The purchase of the Debentures by TCA and the assumption by Guarantor of
its obligations hereunder and under any other Transaction Document to which Guarantor is a party will result in material benefits
to Guarantor. This Guaranty was entered into by Guarantor for commercial purposes.

 

3.4.           
Litigation. There is no Proceeding at law or in equity or by or before any Governmental Authority now pending
or, to the knowledge of Guarantor, threatened, against or affecting Guarantor or any of its properties, assets or rights which,
if adversely determined, would materially impair or affect: (i) the value of any collateral securing the Liabilities; (ii) Guarantor’s
right to carry on its business substantially as now conducted (and as now contemplated); (iii) Guarantor’s financial condition;
or (iv) Guarantor’s capacity to consummate and perform its obligations under this Guaranty or any other Transaction Document
to which Guarantor is a party.

 

3.5.           
No Defaults. Guarantor is not in default beyond the expiration of any applicable grace or cure periods, in
the performance, observance or fulfillment of any of the obligations, covenants or conditions contained herein or in any Contract
or other instrument to which Guarantor is a party or by which Guarantor or any of its properties or Assets are bound.

 

3.6.           
No Untrue Statements. To the knowledge of Guarantor, no Transaction Document or other document, certificate
or statement furnished to TCA by or on behalf of AQLV or Guarantor contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained herein and therein not misleading. Guarantor acknowledges
that all such statements, representations and warranties shall be deemed to have been relied upon by TCA as an inducement to purchase
the Debentures.

 

    	(1)

    	 

    
 

4.                 
NO LIMITATION OF LIABILITY.

 

4.1.           
Guarantor acknowledges that the obligations undertaken herein involve the guaranty of obligations of a Person other than
Guarantor and, in full recognition of that fact, Guarantor consents and agrees that TCA may, at any time and from time to time,
without notice or demand, and without affecting the enforceability or continuing effectiveness of this Guaranty: (i) change the
manner, place or terms of payment of (including, without limitation, any increase or decrease in the principal amount of the Liabilities
or the interest rate), and/or change or extend the time for payment of, or renew, supplement or modify, any of the Liabilities,
any security therefor, or any of the Transaction Documents evidencing same, and the Guaranty herein made shall apply to the Liabilities
and the Transaction Documents as so changed, extended, renewed, supplemented or modified; (ii) sell, exchange, release, surrender,
realize upon or otherwise deal with in any manner and in any order, any property securing the Liabilities; (iii) supplement, modify,
amend or waive, or enter into or give any agreement, approval, waiver or consent with respect to, any of the Liabilities, or any
part thereof, or any of the Transaction Documents, or any additional security or guaranties, or any condition, covenant, default,
remedy, right, representation or term thereof or thereunder; (iv) exercise or refrain from exercising any rights against AQLV or
other Persons (including Guarantor) or against any security for the Liabilities; (v) accept new or additional instruments, documents
or agreements in exchange for or relative to any of the Transaction Documents or the Liabilities, or any part thereof; (vi) accept
partial payments on the Liabilities; (vii) receive and hold additional security or guaranties for the Liabilities, or any
part thereof; (viii) release, reconvey, terminate, waive, abandon, fail to perfect, subordinate, exchange, substitute, transfer
and/or enforce any security or guaranties, and apply any security and direct the order or manner of sale thereof as TCA, in its
sole and absolute discretion, may determine; (ix) add, release, settle, modify or discharge the obligation of any maker, endorser,
guarantor, surety, obligor or any other Person who is in any way obligated for any of the Liabilities, or any part thereof; (x)
settle or compromise any Liabilities, whether in a Proceeding or not, and whether voluntarily or involuntarily, dispose of any
security therefor (with or without consideration and in whatever manner TCA deems appropriate), and subordinate the payment of
any of the Liabilities, whether or not due, to the payment of liabilities owing to creditors of AQLV other than TCA and Guarantor;
(xi) consent to the merger, change or any other restructuring or termination of the corporate existence of AQLV or any other Person,
and correspondingly restructure the Liabilities, and any such merger, change, restructuring or termination shall not affect the
liability of Guarantor or the continuing effectiveness hereof, or the enforceability hereof with respect to all or any part of
the Liabilities; (xii) apply any sums it receives, by whomever paid or however realized, to any of the Liabilities and/or (xiii)
take any other action which might constitute a defense available to, or a discharge of, AQLV or any other Person (including Guarantor)
in respect of the Liabilities.

 

4.2.           
The invalidity, irregularity or unenforceability of all or any part of the Liabilities or any Transaction Document, or the
impairment or loss of any security therefor, whether caused by any action or inaction of TCA, or otherwise, shall not affect, impair
or be a defense to Guarantor’s obligations under this Guaranty.

 

4.3.           
Upon the occurrence and during the continuance of any Event of Default, TCA may enforce this Guaranty independently of any
other remedy, guaranty or security TCA at any time may have or hold in connection with the Liabilities, and it shall not be necessary
for TCA to marshal assets in favor of AQLV, any other guarantor of the Liabilities or any other Person or to proceed upon or against
and/or exhaust any security or remedy before proceeding to enforce this Guaranty. Guarantor expressly waives any right to require
TCA to marshal assets in favor of AQLV or any other Person, or to proceed against AQLV or any other guarantor of the Liabilities
or any collateral provided by any Person, and agrees that TCA may proceed against any obligor (including Guarantor) and/or the
collateral in such order as TCA shall determine in its sole and absolute discretion. TCA may file a separate action or actions
against Guarantor, whether action is brought or prosecuted with respect to any security or against any other Person, or whether
any other Person is joined in any such action or actions. Guarantor agrees that TCA and AQLV may deal with each other in connection
with the Liabilities or otherwise, or alter any contracts or agreements now or hereafter existing between them, in any manner whatsoever,
all without in any way altering or affecting the security of this Guaranty.

 

4.4.           
Guarantor expressly waives, to the fullest extent permitted by applicable law, any and all defenses which Guarantor shall
or may have as of the date hereof arising or asserted by reason of: (i) any disability or other defense of AQLV, or any other guarantor
for the Liabilities, with respect to the Liabilities; (ii) the unenforceability or invalidity of any security for or guaranty of
the Liabilities or the lack of perfection or continuing perfection or failure of priority of any security for the Liabilities;
(iii) the cessation for any cause whatsoever of the liability of AQLV, or any other guarantor of the Liabilities (other than
by reason of the full payment and performance of all Liabilities (other than contingent indemnification obligations)); (iv) any
failure of TCA to marshal assets in favor of AQLV or any other Person; (v) any failure of TCA to give notice of sale or other disposition
of collateral to AQLV or any other Person or any defect in any notice that may be given in connection with any sale or disposition
of collateral; (vi) any failure of TCA to comply with applicable laws in connection with the sale or other disposition of any collateral
or other security for any Liabilities, including, without limitation, any failure of TCA to conduct a commercially reasonable sale
or other disposition of any collateral or other security for any Liabilities; (vii) any act or omission of TCA or others that directly
or indirectly results in or aids the discharge or release of AQLV or any other guarantor of the Liabilities, or of any security
or guaranty therefor by operation of law or otherwise; (viii) any law which provides that the obligation of a surety or guarantor
must neither be larger in amount or in other respects more burdensome than that of the principal or which reduces a surety’s
or guarantor’s obligation in proportion to the principal obligation; (ix) any failure of TCA to file or enforce a claim in
any bankruptcy or other proceeding with respect to any Person; (x) the election by TCA, in any bankruptcy proceeding of any Person,
of the application or non-application of Section 1111(b)(2) of the United States Bankruptcy Code; (xi) any extension of credit
or the grant of any lien under Section 364 of the United States Bankruptcy Code; (xii) any use of collateral under Section 363
of the United States Bankruptcy Code; (xiii) any agreement or stipulation with respect to the provision of adequate protection
in any bankruptcy proceeding of any Person; (xiv) the avoidance of any lien or security interest in favor of TCA for any reason;
(xv) any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, liquidation or dissolution proceeding commenced
by or against any Person, including without limitation any discharge of, or bar or stay against collecting, all or any of the Liabilities
(or any interest thereon) in or as a result of any such proceeding; or (xvi) any action taken by TCA that is authorized by this
Section or any other provision of any Transaction Document. Guarantor expressly waives all setoffs and counterclaims and all presentments,
demands for payment or performance, notices of nonpayment or nonperformance, protests, notices of protest, notices of dishonor
and all other notices or demands of any kind or nature whatsoever with respect to the Liabilities, and all notices of acceptance
of this Guaranty or of the existence, creation or incurrence of new or additional Liabilities.

 

4.5.           
This is a continuing guaranty and shall remain in full force and effect as to all of the Liabilities until such date as
all amounts owing by AQLV to TCA shall have been paid in full and all obligations of AQLV with respect to any of the Liabilities
shall have terminated or expired (such date is referred to herein as the “Termination Date”).

 

5.                 
LIMITATION ON SUBROGATION. Until the Termination Date, Guarantor waives any present or future right to which
Guarantor is or may become entitled to be subrogated to TCA’s rights against AQLV or to seek contribution, reimbursement,
indemnification, payment or the like, or participation in any claim, right or remedy of TCA against AQLV or any security which
TCA now has or hereafter acquires, whether or not such claim, right or remedy arises under contract, in equity, by statute, under
common law or otherwise. If, notwithstanding such waiver, any funds or property shall be paid or transferred to Guarantor on account
of such subrogation, contribution, reimbursement, or indemnification at any time when all of the Liabilities have not been paid
in full, Guarantor shall hold such funds or property in trust for TCA and shall forthwith pay over to TCA such funds and/or property
to be applied by TCA to the Liabilities.

 

6.                 
COVENANTS.

 

6.1.           
Subordination of Other Debts. Guarantor hereby: (a) subordinates the obligations now or hereafter owed by
AQLV to Guarantor (“Subordinated Debt”) to any and all obligations of AQLV to TCA now or hereafter existing
while this Guaranty is in effect, and hereby agrees that Guarantor will not request or accept payment of or any security for any
part of the Subordinated Debt, and any proceeds of the Subordinated Debt paid to Guarantor, through error or otherwise, shall immediately
be forwarded to TCA by Guarantor, properly endorsed to the order of TCA, to apply to the Liabilities.

 

6.2.           
Security for Guaranty. All of Guarantor’s obligations and liability evidenced by this Guaranty is also
secured by all of the Assets and property of the Guarantor pursuant to that certain Security Agreement by and between the Guarantor
and TCA made of even date herewith (the “Security Agreement”). All of the agreements, conditions, covenants,
provisions, representations, warranties and stipulations contained in the Security Agreement or any other Transaction Documents
to which Guarantor is a party which are to be kept and performed by the Guarantor are hereby made a part of this Guaranty to the
same extent and with the same force and effect as if they were fully set forth herein, and the Guarantor covenants and agrees to
keep and perform them, or cause them to be kept or performed, strictly in accordance with their terms.

 

    	(2)

    	 

    
 

7.                 
EVENTS OF DEFAULT.

 

Each of the following shall
constitute a default (each, an “Event of Default”) hereunder:

 

7.1.           
Non-payment when due, and after all applicable grace periods, of any sum required to be paid to TCA under any of the Transaction
Documents or of any of the other Liabilities;

 

7.2.           
A breach by Guarantor of any other term, covenant, condition, obligation or agreement under this Guaranty;

 

7.3.           
Any representation or warranty made by Guarantor in this Guaranty or under the Purchase Agreement shall prove to be false,
incorrect or misleading in any material respect as of the date when made;

 

7.4.           
A default by AQLV or Guarantor, after all applicable grace or notice periods, under any of the Transaction Documents; or

 

7.5.           
The occurrence of any of the following events: (i) Guarantor makes an assignment for the benefit of creditors; (ii) any
order or decree is rendered by a court which appoints or requires the appointment of a receiver, liquidator or trustee for Guarantor,
and the order or decree is not vacated within thirty (30) days from the date of entry thereof; (iii) any order or decree is rendered
by a court adjudicating Guarantor insolvent, and the order or decree is not vacated within thirty (30) days from the date of entry
thereof; (iv) Guarantor files a petition in bankruptcy under the provisions of any bankruptcy law or any insolvency act; (v) Guarantor
admits, in writing, its inability to pay its debts as they become due; (vi) a proceeding or petition in bankruptcy is filed against
Guarantor and such proceeding or petition is not dismissed within thirty (30) days from the date it is filed; or (vii) Guarantor
files a petition or answer seeking reorganization or arrangement under the bankruptcy laws or any law or statute of the United
States or any state.

 

8.                 
REMEDIES.

 

8.1.           
Upon an Event of Default, all liabilities and obligations of Guarantor hereunder shall become immediately due and payable
without demand or notice and, in addition to any other remedies provided by law or in equity, TCA may:

 

8.1.1.     
Enforce the obligations of Guarantor under this Guaranty.

 

8.1.2.     
To the extent not prohibited by and in addition to any other remedy provided by law or equity, setoff against any of the
Liabilities any sum owed by TCA in any capacity to Guarantor whether due or not.

 

8.1.3.     
Perform any covenant or agreement of Guarantor in default hereunder (but without obligation to do so) and in that regard
pay such money as may be required or as TCA may reasonably deem expedient. Any costs, expenses or fees, including reasonable attorneys’
fees and costs, incurred by TCA in connection with the foregoing shall be included in the Liabilities guaranteed hereby, and shall
be due and payable on demand, together with interest at the highest non-usurious rate permitted by applicable law, such interest
to be calculated from the date of such advance to the date of repayment thereof. Any such action by TCA shall not be deemed to
be a waiver or release of Guarantor hereunder and shall be without prejudice to any other right or remedy of TCA.

 

8.2.           
Settlement of any claim by TCA against AQLV, whether in any Proceeding or not, and whether voluntary or involuntary, shall
not reduce the amount due under the terms of this Guaranty, except to the extent of the amount actually paid by AQLV or any other
obligated Person and legally retained by TCA in connection with the settlement (unless otherwise provided for herein).

 

9.                 
MISCELLANEOUS.

 

9.1.           
Disclosure of Financial Information. TCA is hereby authorized to disclose any financial or other information
about Guarantor to any Governmental Authority having jurisdiction over TCA or to any present, future or prospective participant
or successor in interest in the Debentures. The information provided may include, without limitation, amounts, terms, balances,
payment history, return item history and any financial or other information about Guarantor.

 

9.2.           
Remedies Cumulative. The rights and remedies of TCA, as provided herein and in any other Transaction Document,
shall be cumulative and concurrent, may be pursued separately, successively or together, may be exercised as often as occasion
therefor shall arise, and shall be in addition to any other rights or remedies conferred upon TCA at law or in equity. The failure,
at any one or more times, of TCA to exercise any such right or remedy shall in no event be construed as a waiver or release thereof.
TCA shall have the right to take any action it deems appropriate without the necessity of resorting to any collateral securing
this Guaranty.

 

9.3.           
Integration. This Guaranty and the other Transaction Documents constitute the sole agreement of the parties
with respect to the transaction contemplated hereby and thereby and supersede all oral negotiations and prior writings with respect
thereto.

 

9.4.           
Attorneys’ Fees and Expenses. If TCA retains the services of counsel by reason of a claim of an Event
of Default hereunder or under any of the other Transaction Documents, or on account of any matter involving this Guaranty, or for
examination of matters subject to TCA’s approval under the Transaction Documents, all costs of suit and all reasonable attorneys’
fees and such other reasonable expenses so incurred by TCA shall forthwith, on demand, become due and payable and shall be secured
hereby.

 

9.5.           
No Implied Waiver. TCA shall not be deemed to have modified or waived any of its rights or remedies hereunder
unless such modification or waiver is in writing and signed by TCA, and then only to the extent specifically set forth therein.
A waiver in one event shall not be construed as continuing or as a waiver of or bar to such right or remedy on a subsequent event.

 

9.6.           
Waiver. Except as otherwise provided herein or in any of the Transaction Documents, Guarantor waives notice
of acceptance of this Guaranty and notice of the Liabilities and waives notice of default, non-payment, partial payment, presentment,
demand, protest, notice of protest or dishonor, and all other notices to which Guarantor might otherwise be entitled or which might
be required by law to be given by TCA. Guarantor waives the right to any stay of execution and the benefit of all exemption laws,
to the extent permitted by law, and any other protection granted by law to guarantors, now or hereafter in effect with respect
to any action or proceeding brought by TCA against it. Guarantor irrevocably waives all claims of waiver, release, surrender, alteration
or compromise and the right to assert against TCA any defenses, set-offs, counterclaims, or claims that Guarantor may have at any
time against AQLV or any other party liable to TCA.

 

9.7.           
No Third Party Beneficiary. Except as otherwise provided herein, Guarantor and TCA do not intend the benefits
of this Guaranty to inure to any third party and no third party (including AQLV) shall have any status, right or entitlement under
this Guaranty.

 

9.8.           
Partial Invalidity. The invalidity or unenforceability of any one or more provisions of this Guaranty shall
not render any other provision invalid or unenforceable. In lieu of any invalid or unenforceable provision, there shall be added
automatically a valid and enforceable provision as similar in terms to such invalid or unenforceable provision as may be possible.

 

9.9.           
Binding Effect. The covenants, conditions, waivers, releases and agreements contained in this Guaranty shall
bind, and the benefits thereof shall inure to, the parties hereto and their respective heirs, executors, administrators, successors
and permitted assigns; provided, however, that this Guaranty cannot be assigned by Guarantor without the prior written consent
of TCA, and any such assignment or attempted assignment by Guarantor shall be void and of no effect with respect to the TCA.

 

9.10.       
Modifications. This Guaranty may not be supplemented, extended, modified or terminated except by an agreement
in writing signed by the party against whom enforcement of any waiver, change, modification or discharge is sought.

 

9.11.       
Sales or Participations. TCA may from time to time sell or assign the Debentures, in whole or in part, or
grant participations in the Debentures and/or the obligations evidenced thereby without the consent of AQLV or Guarantor, provided,
however, TCA shall provide written notice to AQLV and Guarantor of any such assignment or grant of participations. The holder of
any such sale, assignment or participation, if the applicable agreement between TCA and such holder so provides, shall be: (a)
entitled to all of the rights, obligations and benefits of TCA (to the extent of such holder’s interest or participation);
and (b) 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 Guarantor (to the extent of such holder’s interest or participation), in each case as fully as though Guarantor
was directly indebted to such holder. TCA may in its discretion give notice to Guarantor of such sale, assignment or participation;
however, the failure to give such notice shall not affect any of TCA’s or such holder’s rights hereunder.

 

9.12.       
Jurisdiction. Guarantor hereby consents that any action or proceeding against him be commenced and maintained
in Clark County, State of Nevada by service of process on them; and Guarantor agrees that the courts of such County shall have
jurisdiction with respect to the subject matter hereof and the person of Guarantor and all collateral securing the obligations
of Guarantor, provided, however, that nothing herein shall prevent TCA from bringing suit or taking legal action in any other jurisdiction.
Guarantor agrees not to assert any defense to any action or proceeding initiated by TCA based upon improper venue or inconvenient
forum.

 

9.13.       
Notices. All notices of request, demand and other communications hereunder shall be addressed to the parties
as follows:

 

If
to the Guarantor:Focus Systems, 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 TCA: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.

 

9.14.       
Governing Law. This Guaranty shall be governed by and construed in accordance with the substantive laws of
the State of Nevada without reference to conflict of laws principles.

 

9.15.       
Joint and Several Liability. The word “Guarantor” or “Guarantors” shall mean all of
the undersigned persons, if more than one, and their liability shall be joint and several. The liability of Guarantor shall also
be joint and several with the liability of any other guarantor under any other guaranty.

 

9.16.       
Continuing Enforcement. If, after receipt of any payment of all or any part of the Liabilities, TCA is compelled
or reasonably agrees, for settlement purposes, to surrender such payment to any person or entity for any reason (including, without
limitation, a determination that such payment is void or voidable as a preference or fraudulent conveyance, an impermissible setoff,
or a diversion of trust funds), then this Guaranty shall continue in full force and effect or be reinstated, as the case may be,
and Guarantor shall be liable for, and shall indemnify, defend and hold harmless TCA with respect to the full amount so surrendered.
The provisions of this Section shall survive the termination of this Guaranty and shall remain effective notwithstanding the payment
of the Liabilities, the cancellation or redemption of the Debentures, this Guaranty or any other Transaction Document, the release
of any security interest, lien or Encumbrance securing the Liabilities or any other action which TCA may have taken in reliance
upon its receipt of such payment. Any cancellation, release or other such action shall be deemed to have been conditioned upon
any payment of the Liabilities having become final and irrevocable.

 

    	(3)

    	 

    

 

9.17.       
WAIVER OF JURY TRIAL. GUARANTOR AGREES THAT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY SUIT, ACTION OR
PROCEEDING, WHETHER CLAIM OR COUNTERCLAIM, BROUGHT BY TCA OR GUARANTOR ON OR WITH RESPECT TO THIS GUARANTY OR ANY OTHER TRANSACTION
DOCUMENT OR THE DEALINGS OF THE PARTIES WITH RESPECT HERETO OR THERETO, SHALL BE TRIED ONLY BY A COURT AND NOT BY A JURY. TCA AND
GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND INTELLIGENTLY, AND WITH THE ADVICE OF THEIR RESPECTIVE COUNSEL, WAIVES,
TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING. FURTHER, GUARANTOR
WAIVES ANY RIGHT THEY MAY HAVE TO CLAIM OR RECOVER, IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE, CONSEQUENTIAL
OR OTHER DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. GUARANTOR ACKNOWLEDGES AND AGREES THAT THIS SECTION IS A SPECIFIC
AND MATERIAL ASPECT OF THIS GUARANTY AND THAT TCA WOULD NOT PURCHASE THE DEBENTURES IF THE WAIVERS SET FORTH IN THIS SECTION WERE
NOT A PART OF THIS GUARANTY. 

 

[Signatures on the following page]

 

    	(4)

    	 

    
 

IN WITNESS WHEREOF,
Guarantor, intending to be legally bound, has duly executed and delivered this Guaranty Agreement as of the day and year first
above written.

 

FOCUS SYSTEMS, INC.

 

 

By: /s/
William M. Wright

Name: William M. Wright

Title: Chief Executive Officer

 

 

 

 

4821-6271-4641, v. 1

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