EXHIBIT  10.4

                          REGISTRATION RIGHTS AGREEMENT
                          -------------------------------

      Registration   Rights   Agreement   dated  as  of  March  29,  2004  (this
"Agreement")  by and  between  Worldwater  Corp.,  a Delaware  corporation  (the
"Company"), and SBI Advisors, LLC ("SBI"), with reference to the following:

A. The  Company  has issued to SBI  warrants  (the  "Warrants")  to  purchase an
aggregate of 400,000  shares of the  Company's  Common  Stock,  pursuant to that
certain  Term Loan  Agreement  dated as of the date hereof  between the Company,
SBI, Hong Kong League  Central Credit Union and HIT Credit Union (the "Term Loan
Agreement").

B. The Company has agreed to provide with  respect to the Common Stock  issuable
to SBI upon  execution of the  Warrants  certain  registration  rights under the
Securities Act.

NOW,  THEREFORE,  in  consideration  of the  premises  and the mutual  covenants
contained  herein,  the parties  hereto,  intending to be legally bound,  hereby
agree as follows:

     1.     Definitions

      (A) As used  in  this  Agreement,  the  following  terms  shall  have  the
meanings:

            (1)  "AFFILIATE" of any specified  Person means any other Person who
directly, or indirectly through one or more intermediaries, is in control of, is
controlled  by, or is under common  control with,  such  specified  Person.  For
purposes of this  definition,  control of a Person means the power,  directly or
indirectly,  to direct or cause the direction of the  management and policies of
such Person  whether by contract,  securities,  ownership or otherwise;  and the
terms "controlling" and "controlled" have the respective meanings correlative to
the foregoing.

            (2) "COMMISSION" means the Securities and Exchange Commission.

            (3)  "EXCHANGE  ACT" means the  Securities  Exchange Act of 1934, as
amended,  and the rules and  regulations  of the Commission  thereunder,  or any
similar successor statute.

            (4)  "HOLDERS"   means  SBI  and  any   transferee  or  assignee  of
Registrable  Securities  which  agrees to  become  bound by all of the terms and
provisions of this Agreement in accordance with Section 8 hereof.

            (5) "PERSON" means any individual, partnership, corporation, limited
liability  company,  joint stock  company,  association,  trust,  unincorporated
organization, or a government or agency or political subdivision thereof.

            (6)   "PROSPECTUS"   means  the   prospectus   (including,   without
limitation,  any preliminary  prospectus and any final prospectus filed pursuant
to Rule 424(b) under the Securities Act, including any prospectus that discloses
information  previously  omitted from a prospectus filed as part of an effective
registration  statement  in  reliance  on Rule 430A  under the  Securities  Act)
included  in the  Registration  Statement,  as  amended or  supplemented  by any
prospectus  supplement  with respect to the terms of the offering of any portion
of the Registrable  Securities covered by the Registration  Statement and by all
other  amendments  and  supplements to such  prospectus,  including all material
incorporated  by reference in such  prospectus and all documents filed after the
date of such  prospectus by the Company under the Exchange Act and  incorporated
by reference therein.

            (7) "PUBLIC  OFFERING" means an offer registered with the Commission
and the appropriate  state  securities  commissions by the Company of its Common
Stock and made pursuant to the Securities Act.

            (8)  "REGISTRABLE  SECURITIES"  means the  shares  of  Common  Stock
issuable to SBI upon execution of the Warrants;  provided,  however,  a share of
Common  Stock  shall cease to be a  Registrable  Security  for  purposes of this
Agreement when it no longer is a Restricted Security.

            (9) "REGISTRATION  STATEMENT" means a registration  statement of the
Company filed on an appropriate  form under the Securities Act providing for the
registration  of, and the sale on a continuous  or delayed  basis by the holders
of, all of the Registrable  Securities pursuant to Rule 415 under the Securities
Act, including the Prospectus  contained therein and forming a part thereof, any
amendments to such  registration  statement and supplements to such  Prospectus,
and all  exhibits  to and  other  material  incorporated  by  reference  in such
registration statement and Prospectus.


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            (10)  "RESTRICTED  SECURITY"  means any share of Common Stock except
any  such  share  that  (i)  has  been  registered   pursuant  to  an  effective
registration   statement   under  the  Securities  Act  and  sold  in  a  manner
contemplated by the prospectus included in such registration statement, (ii) has
been transferred in compliance with the resale  provisions of Rule 144 under the
Securities Act (or any successor provision thereto) or is transferable  pursuant
to  paragraph  (k) of Rule  144  under  the  Securities  Act  (or any  successor
provision  thereto) or (iii)  otherwise has been  transferred and a new share of
Common Stock not subject to transfer  restrictions  under the Securities Act has
been delivered by or on behalf of the Company.

            (11)  "SECURITIES ACT" means the Securities Act of 1933, as amended,
and the rules and  regulations  of the  Commission  thereunder,  or any  similar
successor statute.

      2. Registration

            (A) PIGGYBACK RIGHTS. (i) If the Company proposes to register any of
its  warrants,  Common  Stock or any other shares of common stock of the Company
under the Securities  Act (other than a  registration  (A) on Form S-8 or S-4 or
any successor or similar forms, (B) relating to Common Stock or any other shares
of common stock of the Company  issuable upon exercise of employee share options
or in connection with any employee benefit or similar plan of the Company or (C)
in connection  with a direct or indirect  acquisition  by the Company of another
Person or any  transaction  with  respect  to which  Rule 145 (or any  successor
provision)  under the Securities  Act applies),  whether or not for sale for its
own account, it will each such time, give prompt written notice at least 20 days
prior to the anticipated  filing date of the registration  statement relating to
such  registration  to each Holder,  which notice shall set forth such  Holder's
rights under this Section  2(A) and shall offer such Holder the  opportunity  to
include in such registration  statement such number of Registrable Securities as
such Holder may request.  Upon the written  request of any Holder made within 10
days after the receipt of notice from the Company  (which  request shall specify
the number of Registrable Securities intended to be disposed of by such Holder),
the  Company  will use its best  efforts  to effect the  registration  under the
Securities  Act of all  Registrable  Securities  that  the  Company  has been so
requested  to register by each  Holder,  to the extent  requisite  to permit the
disposition  of  the  Registrable  Securities  so  to be  registered;  provided,
however, that (A) if such registration  involves a Public Offering,  each Holder
must sell its Registrable Securities to any underwriters selected by the Company
with the consent of such Holder on the same terms and conditions as apply to the
Company and (B) if, at any time after giving  written notice of its intention to
register any Registrable  Securities pursuant to this Section 2 and prior to the
effective  date of the  registration  statement  filed in  connection  with such
registration,  the Company  shall  determine for any reason not to register such
Registrable  Securities,  the Company  shall give written  notice to each Holder
and, thereupon,  shall be relieved of its obligation to register any Registrable
Securities in connection with such registration.

            (ii) If a  registration  pursuant to this  Section  2(A)  involves a
Public Offering and the managing  underwriter  thereof advises the Company that,
in its view,  the  number of shares of Common  Stock  that the  Company  and the
Holders  intend to include in such  registration  exceeds the largest  number of
shares of Common Stock that can be sold without having an adverse effect on such
Public Offering (the "Maximum Offering Size"),  the Company will include in such
registration  only such number of shares of Common  Stock as does not exceed the
Maximum  Offering  Size,  and the number of shares in the Maximum  Offering Size
shall be  allocated  among the  Company,  the Holders  and any other  sellers of
Common Stock in such Public  Offering  ("Third-Party  Sellers"),  first,  to the
Company until all the shares of Common Stock  originally  proposed to be offered
for sale by the  Company  have  been  allocated,  second,  if the  filing of the
Registration  Statement was made upon the demand of any Third Party Seller, then
pro rata among such Third Party Sellers,  and third,  pro rata among the Holders
and any other  Third-Party  Sellers,  in each case on the basis of the  relative
number of shares of Common  Stock  originally  proposed  to be offered  for sale
under such registration by each of the Holders and the Third-Party  Sellers,  as
the case may be.  If as a result of the  proration  provisions  of this  Section
2(A)(ii),  any Holder is not entitled to include all such Registrable Securities
in such  registration,  such Holder may elect to withdraw its request to include
any Registrable  Securities in such registration.  With respect to registrations
pursuant to this Section 2(A), the number of securities  required to satisfy any
underwriters'  over-allotment  option shall be allocated among the Company,  the
Holders and any Third Party Seller pro rata on the basis of the relative  number
of securities  offered for sale under such  registration by each of the Holders,
the  Company  and any such  Third  Party  Sellers  before the  exercise  of such
over-allotment option.


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      3. Obligations of the Company

      In connection with the  registration of the  Registrable  Securities,  the
Company shall:

      (A)  Promptly  (i) prepare and file with the  Commission  such  amendments
(including   post-effective   amendments)  to  the  Registration  Statement  and
supplements  to the  Prospectus  as may be  necessary  to keep the  Registration
Statement  continuously  effective and in compliance  with the provisions of the
Securities  Act applicable  thereto so as to permit the Prospectus  forming part
thereof to be current  and  useable by Holders  for  resales of the  Registrable
Securities for a period of one (1) year from the date on which the  Registration
Statement is first declared  effective by the Commission (the "Effective  Time")
or such shorter period that will terminate when all the  Registrable  Securities
covered  by the  Registration  Statement  have been  sold  pursuant  thereto  in
accordance with the plan of distribution provided in the Prospectus, transferred
pursuant to Rule 144 under the  Securities  Act or  otherwise  transferred  in a
manner that  results in the delivery of new  securities  not subject to transfer
restrictions under the Securities Act (the "Registration  Period") and (ii) take
all  lawful  action  such that each of (A) the  Registration  Statement  and any
amendment  thereto  does  not,  when it  becomes  effective,  contain  an untrue
statement  of a material  fact or omit to state a material  fact  required to be
stated therein or necessary to make the statements  therein,  not misleading and
(B) the Prospectus forming part of the Registration Statement, and any amendment
or  supplement  thereto,  does not at any time  during the  Registration  Period
include an untrue  statement of a material fact or omit to state a material fact
required to be stated  therein or necessary to make the statements  therein,  in
light of the circumstances under which they were made, not misleading;

      (B) During the  Registration  Period,  comply with the  provisions  of the
Securities Act with respect to the Registrable Securities of the Company covered
by the  Registration  Statement  until  such  time  as all of  such  Registrable
Securities  have been  disposed of in  accordance  with the intended  methods of
disposition  by the Holders as set forth in the  Prospectus  forming part of the
Registration Statement;

      (C) (i)  Prior to the  filing  with  the  Commission  of any  Registration
Statement (including any amendments thereto) and the distribution or delivery of
any Prospectus  (including any  supplements  thereto),  provide (A) draft copies
thereof to the Holders and reflect in such  documents  all such  comments as the
Holders (and their counsel) reasonably may propose and (B) to the Holders a copy
of the accountant's consent letter to be included in the filing and (ii) furnish
to each Holder whose  Registrable  Securities  are included in the  Registration
Statement and its legal counsel  identified to the Company,  (A) promptly  after
the same is prepared and publicly  distributed,  filed with the  Commission,  or
received  by  the  Company,  one  copy  of  the  Registration  Statement,   each
Prospectus,  and each  amendment  or  supplement  thereto and (B) such number of
copies of the Prospectus and all  amendments  and  supplements  thereto and such
other  documents,  as such Holder may reasonably  request in order to facilitate
the disposition of the Registrable Securities owned by such Holder;

      (D) (i)  Register or qualify  the  Registrable  Securities  covered by the
Registration  Statement  under  such  securities  or  "blue  sky"  laws  of such
jurisdictions as the Holders who hold a majority-in-interest  of the Registrable
Securities  being  offered  reasonably  request,  (ii)  prepare and file in such
jurisdictions  such  amendments   (including   post-effective   amendments)  and
supplements  to such  registrations  and  qualifications  as may be necessary to
maintain the effectiveness  thereof at all times during the Registration Period,
(iii) take all such other lawful  actions as may be  necessary to maintain  such
registrations and  qualifications in effect at all times during the Registration
Period and (iv) take all such  other  lawful  actions  reasonably  necessary  or
advisable to qualify the Registrable  Securities for sale in such jurisdictions;
provided,  however,  that  the  Company  shall  not be  required  in  connection
therewith  or as a  condition  thereto  to (A)  qualify  to do  business  in any
jurisdiction  where it would not  otherwise  be required to qualify but for this
Section 3(D), (B) subject itself to general taxation in any such jurisdiction or
(C) file a general consent to service of process in any such jurisdiction;

      (E) As promptly as practicable after becoming aware of such event,  notify
each Holder of the occurrence of any event,  as a result of which the Prospectus
included in the Registration  Statement,  as then in effect,  includes an untrue
statement of a material  fact or omits to state a material  fact  required to be
stated  therein or necessary  to make the  statements  therein,  in light of the
circumstances  under which they were made, not misleading,  and promptly prepare
an amendment to the  Registration  Statement and supplement to the Prospectus to
correct such untrue  statement  or  omission,  and deliver a number of copies of
such  supplement  and  amendment  to each Holder as such  Holder may  reasonably
request;


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      (F) As promptly as practicable after becoming aware of such event,  notify
each Holder who holds Registrable  Securities being sold (or, in the event of an
underwritten  offering,  the  managing  underwriters)  of  the  issuance  by the
Commission  of any stop order or other  suspension of the  effectiveness  of the
Registration  Statement at the earliest possible time and take all lawful action
to effect  the  withdrawal,  recession  or  removal  of such stop order or other
suspension;

      (G) Cause  all the  Registrable  Securities  covered  by the  Registration
Statement  to be listed  on the  principal  national  securities  exchange,  and
included in an inter-dealer quotation system of a registered national securities
association, on or in which securities of the same class or series issued by the
Company are then listed or included;

      (H) Maintain a transfer agent and registrar, which may be a single entity,
for  the  Registrable  Securities  not  later  than  the  effective  date of the
Registration Statement;

      (I)  Cooperate  with the Holders  who hold  Registrable  Securities  being
offered to facilitate the timely  preparation and delivery of  certificates  for
the Registrable  Securities to be offered pursuant to the registration statement
and  enable  such  certificates  for the  Registrable  Securities  to be in such
denominations  or  amounts,  as the case may be, as the Holders  reasonably  may
request and  registered  in such names as the Holder may  request;  and,  within
three  (3)  business  days  after  a  registration   statement   which  includes
Registrable  Securities  is declared  effective by the  Commission,  deliver and
cause legal counsel selected by the Company to deliver to the transfer agent for
the  Registrable  Securities  (with  copies  to the  Holders  whose  Registrable
Securities  are  included  in  such   registration   statement)  an  appropriate
instruction and, to the extent necessary, an opinion of such counsel;

      (J) Take all such other lawful  actions  reasonably  necessary to expedite
and facilitate the disposition by the Holders of their Registrable Securities in
accordance with the intended methods  therefor  provided in the Prospectus which
are customary under the circumstances;

      (K)  Make  generally   available  to  its  security  holders  as  soon  as
practicable,  but in any event not later  than  three (3)  months  after (i) the
effective  date (as  defined in Rule  158(c)  under the  Securities  Act) of the
Registration  Statement  and  (ii)  the  effective  date of each  post-effective
amendment  to the  Registration  Statement,  as the  case  may be,  an  earnings
statement of the Company and its  subsidiaries  complying with Section 11 (a) of
the  Securities Act and the rules and  regulations of the Commission  thereunder
(including, at the option of the Company, Rule 158);

      (L)  In  the  event  of an  underwritten  offering,  promptly  include  or
incorporate  in a  Prospectus  supplement  or  post-effective  amendment  to the
Registration  Statement such information as the managers reasonably agree should
be included therein and to which the Company does not reasonably object and make
all required filings of such Prospectus  supplement or post-effective  amendment
as soon as  practicable  after it is  notified  of the matters to be included or
incorporated in such Prospectus supplement or post-effective amendment;

      (M) (i) Make  reasonably  available  for  inspection  by the Holders,  any
underwriter  participating  in any  disposition  pursuant  to  the  Registration
Statement, and any attorney,  accountant or other agent retained by such Holders
or any such  underwriter  all relevant  financial and other  records,  pertinent
corporate documents and properties of the Company and its subsidiaries, and (ii)
cause the Company's officers,  directors and employees to supply all information
reasonably  requested  by  such  Holders  or  any  such  underwriter,  attorney,
accountant or agent in connection with the Registration Statement, in each case,
as is customary for similar due diligence examinations;  provided, however, that
all records,  information  and documents  that are  designated in writing by the
Company, in good faith, as confidential,  proprietary or containing any material
nonpublic  information  shall be kept  confidential  and  shall not be used as a
basis for any  market  transactions  in the  securities  of the  Company by such
Holders and any such underwriter,  attorney, accountant or agent (pursuant to an
appropriate  confidentiality agreement in the case of any such holder or agent),
unless  such  disclosure  is  made  pursuant  to  judicial  process  in a  court
proceeding  (after  first giving the Company an  opportunity  promptly to seek a
protective  order or otherwise limit the scope of the  information  sought to be
disclosed)  or is required by law, or such  records,  information  or  documents
become  available  to the  public  generally  or  through  a third  party not in
violation  of an  accompanying  obligation  of  confidentiality;  and  provided,
further,  that, if the foregoing  inspection  and  information  gathering  would
otherwise  disrupt the Company's  conduct of its business,  such  inspection and
information  gathering shall, to the maximum extent possible,  be coordinated on
behalf of the  Holders  and the other  parties  entitled  thereto by one firm of
counsel  designed  by and on behalf of the  majority  in interest of Holders and
other parties;


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      (N)  In   connection   with   any   underwritten   offering,   make   such
representations and warranties to the Holders participating in such underwritten
offering and to the managers,  in form,  substance and scope as are  customarily
made by the Company to underwriters in secondary underwritten offerings;

      (O) In  connection  with any  underwritten  offering,  obtain  opinions of
counsel  to the  Company  (which  counsel  and  opinions  (in  form,  scope  and
substance)  shall be reasonably  satisfactory to the managers)  addressed to the
underwriters,  covering  such  matters as are  customarily  covered in  opinions
requested in secondary  underwritten offerings (it being agreed that the matters
to be covered by such opinions shall include, without limitation, as of the date
of the opinion and as of the  Effective  Time of the  Registration  Statement or
most recent  post-effective  amendment thereto,  as the case may be, the absence
from the  Registration  Statement  and the  Prospectus,  including any documents
incorporated by reference therein,  of an untrue statement of a material fact or
the omission of a material  fact  required to be stated  therein or necessary to
make the  statements  therein  (in the case of the  Prospectus,  in light of the
circumstances  under which they were made) not misleading,  subject to customary
limitations);

      (P) In connection with any  underwritten  offering,  obtain "cold comfort"
letters and updates  thereof  from the  independent  public  accountants  of the
Company (and, if  necessary,  from the  independent  public  accountants  of any
subsidiary  of the Company or of any business  acquired by the Company,  in each
case for which  financial  statements and financial data are, or are required to
be,  included in the  Registration  Statement),  addressed  to each  underwriter
participating  in such  underwritten  offering (if such underwriter has provided
such letter,  representations  or documentation,  if any, required for such cold
comfort  letter to be so addressed),  in customary form and covering  matters of
the type  customarily  covered  in "cold  comfort"  letters in  connection  with
secondary underwritten offerings;

      (Q) In connection with any underwritten  offering,  deliver such documents
and certificates as may be reasonably required by the managers, if any, and

      (R) In the event that any broker-dealer  registered under the Exchange Act
shall  be an  "Affiliate"  (as  defined  in Rule  2729(b)(1)  of the  rules  and
regulations of the National  Association of Securities Dealers,  Inc. (the "NASD
Rules") (or any successor  provision thereto)) of the Company or has a "conflict
of interest" (as defined in Rule  2720(b)(7) of the NASD Rules (or any successor
provision  thereto)) and such broker-dealer  shall underwrite,  participate as a
member  of  an  underwriting  syndicate  or  selling  group  or  assist  in  the
distribution  of  any  Registrable   Securities   covered  by  the  Registration
Statement,  whether  as a  holder  of  such  Registrable  Securities  or  as  an
underwriter,  a  placement  or sales  agent or a broker  or  dealer  in  respect
thereof, or otherwise,  the Company shall assist such broker-dealer in complying
with the requirements of the NASD Rules, including,  without limitation,  by (A)
engaging a "qualified  independent  underwriter" (as defined in Rule 2720(b)(15)
of the NASD Rules (or any successor  provision  thereto)) to  participate in the
preparation  of  the  Registration   Statement   relating  to  such  Registrable
Securities,  to exercise usual standards of due diligence in respect thereof and
to recommend  the public  offering  price of such  Registrable  Securities,  (B)
indemnifying  such  qualified  independent  underwriter  to  the  extent  of the
indemnification  of underwriters  provided in Section 6 hereof and (C) providing
such  information  to such  broker-dealer  as may be  required in order for such
broker-dealer to comply with the requirements of the NASD Rules.

      4. Obligations of the Holders

In connection with the registration of the Registrable  Securities,  the Holders
shall have the following obligations:

      (A) It shall be a condition precedent to the obligations of the Company to
complete  the  registration  pursuant  to this  Agreement  with  respect  to the
Registrable  Securities of a particular Holder that such Holder shall furnish to
the Company such information  regarding itself, the Registrable  Securities held
by it and the intended method of disposition of the Registrable  Securities held
by it as shall  be  reasonably  required  to  effect  the  registration  of such
Registrable  Securities and shall execute such documents in connection with such
registration as the Company may reasonably request;

      (B) Each Holder by its acceptance of the Registrable  Securities agrees to
cooperate with the Company in connection  with the preparation and filing of the
Registration Statement hereunder, unless such Holder has notified the Company in
writing of its election to exclude all of its  Registrable  Securities  from the
Registration Statement; and

      (C) Each Holder  agrees that,  upon receipt of any notice from the Company
of the occurrence of any event of the kind described in Section 3(E) or 3(F), it
shall immediately discontinue its disposition of Registrable Securities pursuant
to the Registration  Statement  covering such Registrable  Securities until such
Holder's  receipt  of the  copies  of the  supplemented  or  amended  Prospectus
contemplated  by Section  3(E) and, if so directed by the  Company,  such Holder
shall  deliver to the Company (at the  expense of the  Company) or destroy  (and
deliver to the Company a certificate of destruction) all copies in such Holder's
possession,  of the Prospectus  covering such Registrable  Securities current at
the time of receipt of such notice.


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<PAGE>

      (D) In the  case  of an  underwritten  public  offering  of the  Company's
securities,  at the  request of the  underwriter,  each Holder will agree not to
publicly  sell that  amount  of  Registrable  Securities  as  designated  by the
underwriter  for such period (not to exceed 180 days) as also designated by such
underwriter.

      5. Expenses of Registration

      All expenses, other than underwriting discounts and commissions,  incurred
in connection with registrations,  filings or qualifications pursuant to Section
3,  but  including,   without  limitation,   all  registration,   listing,   and
qualifications fees, printing and engraving fees,  accounting fees, and the fees
and  disbursements of counsel for the Company and Holder,  shall be borne by the
Company.

      6. Indemnification and Contribution

      (A) The Company  shall  indemnify  and hold  harmless each Holder and each
underwriter,   if  any,  which   facilitates   the  disposition  of  Registrable
Securities,  and each of their respective officers and directors and each person
who controls such Holder or underwriter  within the meaning of Section 15 of the
Securities  Act or  Section  20 of the  Exchange  Act (each  such  person  being
sometimes  hereinafter referred to as an "INDEMNIFIED  PERSON") from and against
any losses,  claims,  damages or  liabilities,  joint or several,  to which such
Indemnified  Person may become  subject under the  Securities  Act or otherwise,
insofar as such losses,  claims,  damages or liabilities  (or actions in respect
thereof)  arise out of or are based upon an untrue  statement or alleged  untrue
statement  of a material  fact  contained  in any  Registration  Statement or an
omission or alleged  omission to state  therein a material  fact  required to be
stated therein or necessary to make the statements therein,  not misleading,  or
arise out of or are based upon an untrue  statement or alleged untrue  statement
of a  material  fact  contained  in any  Prospectus  or an  omission  or alleged
omission  to state  therein a material  fact  required  to be stated  therein or
necessary  to make the  statements  therein,  in the light of the  circumstances
under which they were made,  not  misleading;  and the Company  hereby agrees to
reimburse such  Indemnified  Person for all reasonable  legal and other expenses
incurred by them in connection with  investigating  or defending any such action
or claim as and when such expenses are  incurred;  provided,  however,  that the
Company shall not be liable to any such  Indemnified  Person in any such case to
the extent that any such loss,  claim,  damage or liability  arises out of or is
based upon (i) an untrue  statement or alleged  untrue  statement made in, or an
omission or alleged omission from, such Registration  Statement or Prospectus in
reliance  upon and in  conformity  with  written  information  furnished  to the
Company by such Indemnified Person expressly for use therein or (ii) in the case
of the  occurrence of an event of the type specified in Section 3(E), the use by
the Indemnified Person of an outdated or defective  Prospectus after the Company
has provided to such  Indemnified  Person an updated  Prospectus  correcting the
untrue  statement or alleged  untrue  statement or omission or alleged  omission
giving rise to such loss, claim, damage or liability.

      (B)  INDEMNIFICATION BY THE HOLDERS AND UNDERWRITERS.  Each Holder agrees,
as a  consequence  of the  inclusion of any of its  Registrable  Securities in a
Registration  Statement,  and each  underwriter,  if any, which  facilitates the
disposition  of  Registrable   Securities  shall  agree,  as  a  consequence  of
facilitating  such  disposition  of  Registrable  Securities,  severally and not
jointly,  to  (i)  indemnify  and  hold  harmless  the  Company,  its  directors
(including any person who, with his or her consent, is named in the Registration
Statement  as a director  nominee of the  Company),  its  officers  who sign any
Registration  Statement and each person, if any, who controls the Company within
the  meaning  of either  Section 15 of the  Securities  Act or Section 20 of the
Exchange Act,  against any losses,  claims,  damages or liabilities to which the
Company or such other persons may become  subject,  under the  Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect  thereof) arise out of or are based upon an untrue  statement or alleged
untrue statement of a material fact contained in such Registration  Statement or
Prospectus or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the  statements  therein  (in light of the  circumstances  under which they were
made,  in the  case of the  Prospectus),  not  misleading,  in each  case to the
extent,  but only to the extent,  that such untrue  statement or alleged  untrue
statement  or omission  or alleged  omission  was made in  reliance  upon and in
conformity with written  information  furnished to the Company by such holder or
underwriter  expressly  for use therein;  provided,  however,  that no Holder or
underwriter  shall be liable under this Section 6(B) for any amount in excess of
the net proceeds paid to such Holder or underwriter in respect of shares sold by
it and (ii)  reimburse the Company for any legal or other  expenses  incurred by
the Company in  connection  with  investigating  or defending any such action or
claim as such expenses are incurred. The obligations pursuant to this subsection
shall survive the transfer of the Registrable Securities.


                                       6
<PAGE>

      (C) NOTICE OF  CLAIMS,  ETC.  Promptly  after  receipt by a party  seeking
indemnification  pursuant to this Section 6 (an "Indemnified  Party") of written
notice of any  investigation,  claim,  proceeding  or other action in respect of
which  indemnification is being sought (each, a "Claim"),  the Indemnified Party
promptly  shall notify the party against whom  indemnification  pursuant to this
Section  6 is  being  sought  (the  "Indemnifying  Party")  of the  commencement
thereof;  but the omission to so notify the Indemnifying Party shall not relieve
it from any  liability  that it  otherwise  may have to the  Indemnified  Party,
except to the extent that the  Indemnifying  Party is materially  prejudiced and
forfeits  substantive  rights  and  defenses  by  reason  of  such  failure.  In
connection  with any  Claim as to which  both  the  Indemnifying  Party  and the
Indemnified  Party are  parties,  the  Indemnifying  Party  shall be entitled to
assume the defense thereof. Notwithstanding the assumption of the defense of any
Claim by the Indemnifying  Party, the Indemnified  Party shall have the right to
employ  separate  legal counsel and to participate in the defense of such Claim,
and the Indemnifying Party shall bear the reasonable fees,  out-of-pocket  costs
and expenses of such  separate  legal counsel to the  Indemnified  Party if (and
only if): (x) the  Indemnifying  Party shall have agreed to pay such fees, costs
and  expenses,  (y) the  Indemnified  Party  and the  Indemnifying  Party  shall
reasonably have concluded that  representation  of the Indemnified  Party by the
Indemnifying  Party by the same legal  counsel would not be  appropriate  due to
actual or, as reasonably  determined by legal counsel to the Indemnified  Party,
potentially  differing  interests  between  such  parties in the  conduct of the
defense  of such  Claim,  or if there  may be legal  defenses  available  to the
Indemnified  Party that are in addition to or disparate from those  available to
the Indemnifying Party or (z) the Indemnifying Party shall have failed to employ
legal  counsel  reasonably  satisfactory  to  the  Indemnified  Party  within  a
reasonable period of time after notice of the commencement of such Claim. If the
Indemnified Party employs separate legal counsel in circumstances  other than as
described in clauses (x), (y) or (z) above, the fees, costs and expenses of such
legal counsel shall be born  exclusively  by the  Indemnified  Party.  Except as
provided above, the  Indemnifying  Party shall not, in connection with any Claim
in the same  jurisdiction,  be liable for the fees and expenses of more than one
firm of counsel for the  Indemnified  Party  (together  with  appropriate  local
counsel).  The Indemnified Party shall not, without the prior written consent of
the  Indemnifying  Party (which  consent  shall not  unreasonably  be withheld),
settle or compromise any Claim or consent to the entry of any judgment that does
not  include  an  unconditional  release  of the  Indemnifying  Party  from  all
liabilities with respect to such Claim or judgment.

      (D) CONTRIBUTION. If the indemnification provided for in this Section 6 is
unavailable  to or  insufficient  to hold harmless an  Indemnified  Person under
subsection  (A) or (B)  above in  respect  of any  losses,  claims,  damages  or
liabilities  (or actions in respect  thereof)  referred  to  therein,  then each
Indemnifying  Party  shall  contribute  to the  amount  paid or  payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities (or
actions in respect  thereof) in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and the Indemnified Party in connection
with the statements or omissions which resulted in such losses,  claims, damages
or liabilities  (or actions in respect  thereof),  as well as any other relevant
equitable  considerations.  The relative  fault of such  Indemnifying  Party and
Indemnified  Party shall be  determined  by reference  to,  among other  things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged  omission to state a material  fact relates to  information  supplied by
such Indemnifying  Party or by such Indemnified Party, and the parties' relative
intent,  knowledge,  access to information and opportunity to correct or prevent
such  statement or omission.  The parties hereto agree that it would not be just
and equitable if  contribution  pursuant to this Section 6(D) were determined by
pro rata allocation (even if the Holders or any underwriters were treated as one
entity for such  purpose) or by any other  method of  allocation  which does not
take account of the equitable  considerations  referred to in this Section 6(D).
The amount  paid or payable by an  Indemnified  Party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
shall be  deemed  to  include  any legal or other  fees or  expenses  reasonably
incurred by such Indemnified Party in connection with investigating or defending
any such  action or  claim.  No person  guilty of  fraudulent  misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution   from  any  person   who  was  not   guilty  of  such   fraudulent
misrepresentation.  The obligations of the Holders and any  underwriters in this
Section 6(D) to contribute  shall be several in proportion to the  percentage of
Registrable  Securities registered or underwritten,  as the case may be, by them
and not joint.

      (E)  Notwithstanding  any other  provision  of this Section 6, in no event
shall any (i) Holder be required to undertake liability to any person under this
Section 6 for any amounts in excess of the dollar  amount of the  proceeds to be
received by such Holder from the sale of such  Holder's  Registrable  Securities
(after  deducting  any  fees,  discounts  and  commissions  applicable  thereto)
pursuant to any Registration  Statement under which such Registrable  Securities
are to be registered  under the Securities Act and (ii)  underwriter be required
to undertake  liability to any Person hereunder for any amounts in excess of the
aggregate discount, commission or other compensation payable to such underwriter
with respect to the  Registrable  Securities  underwritten by it and distributed
pursuant to the Registration Statement.


                                       7
<PAGE>

      (F) The  obligations  of the  Company  under  this  Section  6 shall be in
addition  to  any  liability  which  the  Company  may  otherwise  have  to  any
Indemnified  Person and the  obligations  of any  Indemnified  Person under this
Section 6 shall be in addition to any liability  which such  Indemnified  Person
may otherwise have to the Company.  The remedies  provided in this Section 6 are
not exclusive and shall not limit any rights or remedies  which may otherwise be
available to an indemnified party at law or in equity.

      7. RULE 144

      With a view to making  available  to the Holders the  benefits of Rule 144
under  the  Securities  Act or any  other  similar  rule  or  regulation  of the
Commission  that may at any time  permit the Holders to sell  securities  of the
Company to the public without  registration  ("Rule 144"), the Company agrees to
use its best efforts to:

      (1) comply with the provisions of paragraph (c) (1) of Rule 144 and

      (2) file with the  Commission  in a timely  manner all  reports  and other
documents  required to be filed by the  Company  pursuant to Section 13 or 15(d)
under the  Exchange  Act;  and,  if at any time it is not  required to file such
reports but in the past had been required to or did file such reports,  it will,
upon the request of any Holder, make available other information as required by,
and so long as necessary to permit sales of, its Registrable Securities pursuant
to Rule 144.

      8. Assignment

      The rights to have the Company register Registrable Securities pursuant to
this Agreement shall be  automatically  assigned by the Holders to any permitted
transferee of all or any portion of such Registrable  Securities only if (a) the
Holder agrees in writing with the  transferee or assignee to assign such rights,
and a copy of such  agreement is  furnished  to the Company  within a reasonable
time after such  assignment,  (b) the Company is, within a reasonable time after
such transfer or  assignment,  furnished with written notice of (i) the name and
address of such  transferee or assignee and (ii) the securities  with respect to
which  such  registration   rights  are  being  transferred  or  assigned,   (c)
immediately following such transfer or assignment, the securities so transferred
or assigned to the transferee or assignee constitute  Restricted  Securities and
(d) at or before the time the Company  received the written notice  contemplated
by clause (b) of this sentence the transferee or assignee agrees in writing with
the Company to be bound by all of the provisions contained herein.

      9. Amendment and Waiver

      Any provision of this Agreement may be amended and the observance  thereof
may  be  waived  (either  generally  or  in a  particular  instance  and  either
retroactively  or  prospectively),  only with the written consent of the Company
and Holders who hold a majority-in-interest of the Registrable  Securities.  Any
amendment or waiver  effected in accordance with this Section 9 shall be binding
upon each Holder and the Company.

      10. Changes in Common Stock

      If, and as often as,  there are any changes in the Common  Stock by way of
stock split, stock dividend, reverse split, combination or reclassification,  or
through merger,  consolidation,  reorganization or  recapitalization,  or by any
other means,  appropriate  adjustment shall be made in the provisions hereof, as
may be required, so that the rights and privileges granted hereby shall continue
with respect to the Common Stock as so changed.

      11. Miscellaneous

      (A) A person  or entity  shall be  deemed  to be a holder  of  Registrable
Securities  whenever  such  person or entity  owns of  record  such  Registrable
Securities.  If  the  Company  receives  conflicting  instructions,  notices  or
elections  from  two or more  persons  or  entities  with  respect  to the  same
Registrable  Securities,  the Company shall act upon the basis of  instructions,
notice  or  election  received  from the  registered  owner of such  Registrable
Securities.


                                       8
<PAGE>

      (B)  Except  as may be  otherwise  provided  herein,  any  notice or other
communication  or delivery  required or permitted  hereunder shall be in writing
and  shall  be  delivered  personally,  or sent by  telecopier  machine  or by a
nationally  recognized overnight courier service, and shall be deemed given when
so delivered  personally,  or by telecopier machine or overnight courier service
as follows:

          (1)     if to the Company, to:
                  Worldwater Corp.
                  Pennington Business Park
                  55 Route 31 South
                  Pennington, New Jersey
                  Attention:  President
                  Telecopier: 609-818-0720

            (2) if to any  Holder,  at such  address as such  Holder  shall have
provided in writing to the Company or as set forth on the  signature  page.  The
Company, or any Holder may change the foregoing address by notice given pursuant
to this Section 11(C).

      (C)  Failure  of any party to  exercise  any right or  remedy  under  this
Agreement or otherwise,  or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

      (D) This Agreement shall be governed by and interpreted in accordance with
the  laws of the  State  of  California.  Each of the  parties  consents  to the
jurisdiction  of the  federal  courts  or the  state  courts  of  the  State  of
California sitting in the City of Los Angeles, California in connection with any
dispute  arising under this Agreement and hereby  waives,  to the maximum extent
permitted by law,  any  objection  including  any  objection  based on forum non
conveniens, to the bringing of any such proceeding in such jurisdictions.

      (E)  The  remedies  provided  in this  Agreement  are  cumulative  and not
exclusive of any remedies provided by law. If any term,  provision,  covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants  and  restrictions  set forth  herein  shall  remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an  alternative  means to
achieve the same or substantially  the same result as that  contemplated by such
term, provision,  covenant or restriction.  It is hereby stipulated and declared
to be the  intention of the parties that they would have  executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

      (F) This  Agreement,  constitutes  the entire  agreement among the parties
hereto with respect to the subject  matter  hereof.  There are no  restrictions,
promises, warranties or undertakings,  other than those set forth or referred to
herein. This Agreement supersede all prior agreements and undertakings among the
parties hereto with respect to the subject matter hereof.

      (G) Subject to the requirements of Section 8 hereof,  this Agreement shall
inure to the benefit of and be binding upon the  successors  and assigns of each
of the parties hereto.

      (H) All  pronouns  and any  variations  thereof  refer  to the  masculine,
feminine or neuter, singular or plural, as the context may require.

      (I) The headings in this  Agreement are for  convenience of reference only
and shall not limit or otherwise affect the meaning thereof.

      (J) This Agreement may be executed in two (2) counterparts,  each of which
shall be deemed an original but both of which shall  constitute one and the same
agreement.  A facsimile transmission of this signed Agreement shall be legal and
binding on the parties hereto.

      (K) The  Company  shall not grant to any other party  registration  rights
which  are  superior  to or on  parity  with  the  registration  rights  granted
hereunder.


                                       9
<PAGE>

IN WITNESS WHEREOF, the parties hereto have duly caused this Agreement to be
executed and delivered on the date first above written.

     Worldwater  Corp.,  a  Delaware  corporation

                       By: ______________________________
                       Name: ____________________________
                       Title: ___________________________

Address:

          SBI  Advisory  LLC

          By:  ______________________________
          Name:  ____________________________
          Title:  ___________________________


                                       10