Exhibit 99.7


                         PRIVATE EQUITY CREDIT AGREEMENT



                                 BY AND BETWEEN


                                WATER CHEF, INC.

                                       AND


                       BRITTANY CAPITAL MANAGEMENT LIMITED




                                      Dated

                                September 7, 2007




      THIS PRIVATE EQUITY CREDIT  AGREEMENT is entered into as of the 7th day of
September,  2007 (this "AGREEMENT"),  by and between BRITTANY CAPITAL MANAGEMENT
LIMITED,  a  corporation  organized  and existing  under the laws of the Bahamas
("INVESTOR"), and WATER CHEF, INC., a Delaware corporation (the "COMPANY").

      WHEREAS,  the  parties  desire  that,  upon the terms and  subject  to the
conditions contained herein, the Company shall issue and sell to Investor,  from
time to time as provided herein, and Investor shall purchase, up to Five Million
Dollars ($5,000,000) of the Common Stock (as defined below) and

      WHEREAS,  such investments will be made in reliance upon the provisions of
Section 4(2) ("SECTION  4(2)") of the Securities Act of 1933,  Regulation D, and
the rules and regulations  promulgated thereunder (the "SECURITIES ACT"), and/or
upon such other exemption from the  registration  requirements of the Securities
Act as may be available with respect to any or all of the  investments in Common
Stock to be made hereunder.

      NOW, THEREFORE, the parties hereto agree as follows:

                                    ARTICLE I

                               CERTAIN DEFINITIONS

      Section 1.1 DEFINED TERMS as used in this  Agreement,  the following terms
shall have the following  meanings  specified or indicated  (such meanings to be
equally applicable to both the singular and plural forms of the terms defined)


            "AGREEMENT" shall have the meaning specified in the preamble hereof.

            "AVERAGE  DAILY  VOLUME"  shall mean the Average of the Daily Volume
for the relevant days.

            "BLACKOUT   NOTICE"   shall  have  the  meaning   specified  in  the
Registration Rights Agreement.

            "BLACKOUT SHARES" shall have the meaning specified in Section 2.6.

            "BYLAWS" shall have the meaning specified in Section 4.8.

            "CERTIFICATE" shall have the meaning specified in Section 4.8.

            "CLOSING"  shall mean one of the  closings of a purchase and sale of
shares of Common Stock pursuant to Section 2.3.

            "CLOSING  BID PRICE"  shall mean the closing bid price of the Common
Stock on the Principal Market.



            "CLOSING DATE" shall mean,  with respect to a Closing,  the [twelfth
(12h)] Trading Day following the Put Date related to a Closing,  or such earlier
date as the Company and Investor  shall  agree,  provided  all  conditions  to a
Closing have been satisfied on or before such Trading Day.

            "COMMITMENT   PERIOD"  shall  mean  the  period  commencing  on  the
Effective  Date,  and ending on the  earlier  of (i) the date on which  Investor
shall have  purchased  Put Shares  pursuant to this  Agreement  for an aggregate
Purchase Price of the Maximum Commitment Amount, (ii) the date this Agreement is
terminated pursuant to Section 2.5, or (iii) the date occurring  thirty-six (36)
months from the Effective Date.

            "COMMON  STOCK" shall mean the Company's  common  stock,  $0.001 par
value per share,  and any shares of any other class of common stock  whether now
or hereafter authorized,  having the right to participate in the distribution of
dividends (as and when declared) and assets (upon liquidation of the Company).

            "COMMON  STOCK  EQUIVALENTS"  shall  mean  any  securities  that are
convertible into or exchangeable for Common Stock or any options or other rights
to  subscribe  for  or  purchase  Common  Stock  or  any  such   convertible  or
exchangeable securities.

            "COMPANY"  shall have the meaning  specified in the preamble to this
Agreement.

            "CONDITION  SATISFACTION  DATE" shall have the meaning  specified in
Section 7.2.

            "DAMAGES" shall mean any loss, claim, damage,  liability,  costs and
expenses  (including,   without  limitation,   reasonable  attorneys'  fees  and
disbursements and costs and expenses of expert witnesses and investigation).

            "DISCOUNT" shall mean six percent (6%).

            "DTC" shall have the meaning specified in Section 2.3.

            "DWAC" shall have the meaning specified in Section 2.3.

            "EFFECTIVE DATE" shall mean the date on which the SEC first declares
effective  a  Registration  Statement  registering  resale  of  the  Registrable
Securities as set forth in Section 7.2(a).

            "EXCHANGE  ACT" shall mean the  Securities  Exchange Act of 1934, as
amended and the rules and regulations promulgated thereunder.

            "FAST" shall have the meaning specified in Section 2.3.

            "INVESTMENT  AMOUNT" shall mean the aggregate  dollar amount (within
the range  specified  in Section  2.2) to be  invested  by  Investor to purchase
Interim  Put Shares and Put Shares  with  respect to any Put as  notified by the
Company to Investor in accordance with Section 2.2.

            "INVESTOR" shall have the meaning  specified in the preamble to this
Agreement.

            "LEGEND" shall have the meaning specified in Section 8.1.



            "MARKET PRICE" in respect of given Put shall mean the average of the
three  lowest  Closing  Bid  Prices  (not  necessarily  consecutive)  during the
Valuation Period.

            "MATERIAL  ADVERSE  EFFECT"  shall mean any effect on the  business,
operations,  properties, prospects or financial condition of the Company that is
material  and adverse to the  Company or to the Company and such other  entities
controlling or controlled by the Company, and/or any condition, circumstance, or
situation that would prohibit or otherwise materially interfere with the ability
of the Company to enter into and perform its  obligations  under any of (a) this
Agreement and (b) the Registration Rights Agreement.

            "MAXIMUM   COMMITMENT   AMOUNT"  shall  mean  Five  Million  Dollars
($5,000,000).

            "MAXIMUM PUT AMOUNT" shall mean, with respect to any Put, the lesser
of (a)  $250,000.00,  or (b) Two Hundred Fifty (250%)  percent of the product of
(i)  Average  Daily  Volume,  and (ii) the  average of Closing Bid Price for the
three (3) trading days immediately preceding the Put Date.

            "MINIMUM  PUT AMOUNT"  shall mean,  with  respect to any Put,  Fifty
Thousand Dollars ($50,000).

            "NASD" shall mean the National  Association  of Securities  Dealers,
Inc.

            "NEW BID PRICE" shall have the meaning specified in Section 2.6.

            "OLD BID PRICE" shall have the meaning specified in Section 2.6.

            "OUTSTANDING"  shall mean,  with respect to the Common Stock, at any
date as of which the number of shares of Common Stock is to be  determined,  all
issued and  outstanding  shares of Common Stock,  including all shares of Common
Stock issuable in respect of outstanding  convertible  securities,  scrip or any
certificates  representing  fractional  interests  in shares  of  Common  Stock;
provided, however, that Outstanding shall not include any shares of Common Stock
then directly or indirectly owned or held by or for the account of the Company.

            "PERSON" shall mean an individual, a corporation, a partnership,  an
association, a trust or other entity or organization,  including a government or
political subdivision or an agency or instrumentality thereof.

            "PRINCIPAL  MARKET" shall mean the Nasdaq Global Select Market,  the
Nasdaq Global Market,  the Nasdaq Capital Market,  the Over the Counter Bulletin
Board, the American Stock Exchange or the New York Stock Exchange,  whichever is
at the time the principal trading exchange or market for the Common Stock.

            "PURCHASE PRICE" shall mean the Market Price less the product of the
Discount and the Market Price.

            "PUT" shall mean each occasion  that the Company  elects to exercise
its right to tender a Put Notice requiring Investor to purchase shares of Common
Stock, subject to the terms and conditions of this Agreement.



            "PUT DATE" shall mean the Trading Day during the  Commitment  Period
that a Put Notice is deemed delivered pursuant to Section 2.2(b).

            "PUT NOTICE" shall mean a written notice,  substantially in the form
of Exhibit B hereto,  to  Investor  setting  forth the  Investment  Amount  with
respect to which the Company  intends to require  Investor to purchase shares of
Common Stock pursuant to the terms of this Agreement.

            "PUT  SHARES"  shall be the  number of Put Shares  deliverable  on a
Closing Date equal to the Investment Amount divided by the Purchase Price.

            "REGISTRABLE  SECURITIES"  shall  mean the (a) Put  Shares,  (b) the
Blackout Shares and (c) any securities issued or issuable with respect to any of
the foregoing by way of exchange, stock dividend or stock split or in connection
with a combination of shares,  recapitalization,  merger, consolidation or other
reorganization or otherwise. As to any particular Registrable  Securities,  once
issued such  securities  shall  cease to be  Registrable  Securities  when (i) a
Registration  Statement  has  been  declared  effective  by  the  SEC  and  such
Registrable  Securities  have  been  disposed  of  pursuant  to  a  Registration
Statement,  (ii) such Registrable  Securities have been sold under circumstances
under which all of the  applicable  conditions  of Rule 144 are met,  (iii) such
time as such Registrable  Securities have been otherwise  transferred to holders
who may trade such shares without  restriction under the Securities Act, and the
Company has delivered a new  certificate or other evidence of ownership for such
securities not bearing a restrictive legend or (iv) in the opinion of counsel to
the Company,  which  counsel shall be  reasonably  acceptable to Investor,  such
Registrable  Securities  may be sold without  registration  under the Securities
Act, without the need for an exemption from any such  registration  requirements
or without any time,  volume or manner  limitations  pursuant to Rule 144(k) (or
any similar provision then in effect) under the Securities Act.

            "REGISTRATION  RIGHTS AGREEMENT" shall mean the registration  rights
agreement in the form of Exhibit A hereto.

            "REGISTRATION STATEMENT" shall mean a registration statement on Form
S-1 (if use of such form is then available to the Company  pursuant to the rules
of the SEC and, if not, on such other form  promulgated by the SEC for which the
Company then qualifies and which counsel for the Company shall deem  appropriate
and which form shall be available for the resale of the  Registrable  Securities
to be registered  thereunder in accordance with the provisions of this Agreement
and the Registration Rights Agreement and in accordance with the intended method
of  distribution  of such  securities),  for the  registration  of the resale by
Investor of the Registrable Securities under the Securities Act.

            "REGULATION  D" shall have the meaning  specified in the recitals of
this Agreement.

            "RULE  144"  shall  mean Rule 144 under  the  Securities  Act or any
similar provision then in force under the Securities Act.

            "SEC" shall mean the Securities and Exchange Commission.

            "SECTION  4(2)" shall have the meaning  specified in the recitals of
this Agreement.

            "SECURITIES ACT" shall have the meaning specified in the recitals of
this Agreement.



            "SEC DOCUMENTS" shall mean, as of a particular date, all reports and
other  documents  file by the Company  pursuant to Section 13(a) or 15(d) of the
Exchange Act since the beginning of the Company's  then most recently  completed
fiscal year as of the time in question (provided that if the date in question is
within ninety days of the beginning of the Company's fiscal year, the term shall
include all documents filed since the beginning of the second  preceding  fiscal
year).

            "SUBSCRIPTION  DATE" shall mean the date on which this  Agreement is
executed and delivered by the Company and Investor.

            "TRADING  CUSHION"  shall  mean a minimum of five (5)  Trading  Days
between Put Dates.

            "TRADING DAY" shall mean any day during which the  Principal  Market
shall be open for business.

            "TRANSACTION  DOCUMENTS" means the Private Equity Credit  Agreement,
the Registration Rights Agreement, and the Closing Certificate.

            "TRANSFER  AGENT" shall mean the transfer agent for the Common Stock
(and to any substitute or  replacement  transfer agent for the Common Stock upon
the Company's appointment of any such substitute or replacement transfer agent).

            "UNDERWRITER"  shall  mean  any  underwriter  participating  in  any
disposition of the  Registrable  Securities on behalf of Investor  pursuant to a
Registration Statement.

            "VALUATION  EVENT"  shall mean an event in which the  Company at any
time during a Valuation Period takes any of the following actions:

      (a)   subdivides or combines the Common Stock;

      (b)   pays a  dividend  in  shares  of  Common  Stock or makes  any  other
            distribution  of shares of Common Stock,  except for dividends  paid
            with respect to the Preferred Stock;

      (c)   issues any  options or other  rights to  subscribe  for or  purchase
            shares of Common Stock other than pursuant to this Agreement and the
            price per share  for  which  shares of Common  Stock may at any time
            thereafter  be  issuable  pursuant to such  options or other  rights
            shall be less than the Bid Price in effect immediately prior to such
            issuance;

      (d)   issues any securities convertible into or exchangeable for shares of
            Common  Stock and the  consideration  per share for which  shares of
            Common Stock may at any time thereafter be issuable  pursuant to the
            terms of such  convertible or exchangeable  securities shall be less
            than the Bid Price in effect immediately prior to such issuance;

      (e)   issues  shares of Common  Stock  otherwise  than as  provided in the
            foregoing subsections (a) through (d), at a price per share less, or
            for  other  consideration  lower,  than  the  Bid  Price  in  effect
            immediately prior to such issuance, or without consideration;



      (f)   makes a  distribution  of its assets or evidences of  indebtedness
            to the holders of Common Stock as a dividend in  liquidation or by
            way of return of capital or other than as a dividend  payable  out
            of earnings  or surplus  legally  available  for  dividends  under
            applicable  law  or any  distribution  to  such  holders  made  in
            respect of the sale of all or  substantially  all of the Company's
            assets  (other than under the  circumstances  provided  for in the
            foregoing  subsections (a) through (e); or

      (g)   takes any action  affecting the number of Outstanding  Common Stock,
            other than an action  described in any of the foregoing  subsections
            (a)  through  (f)  hereof,  inclusive,  which in the  opinion of the
            Company's Board of Directors, determined in good faith, would have a
            materially adverse effect upon the rights of Investor at the time of
            a Put.

            "VALUATION  PERIOD"  shall mean the period of five (5) Trading  Days
immediately  following the date on which the  applicable Put Notice is deemed to
be delivered and during which the Purchase  Price of the Common Stock is valued;
provided, however, that if a Valuation Event occurs during any Valuation Period,
a new  Valuation  Period  shall begin on the Trading Day  immediately  after the
occurrence  of such  Valuation  Event and end on the  fifth  (5th)  Trading  Day
thereafter.

                                   ARTICLE II

                        PURCHASE AND SALE OF COMMON STOCK

Section 2.1 INVESTMENTS.

(a)   PUTS. Upon the terms and conditions set forth herein  (including,  without
limitation,  the  provisions  of Article  VII),  on any Put Date the Company may
exercise a Put by the delivery of a Put Notice.

(b)   FLOOR PRICE. In the event that during a Valuation Period,  the Closing Bid
Price on any  Trading Day falls below  [seventy-five  percent  (75%)] of the Bid
Price for the three (3) Trading Days immediately prior to a Put Date (a "Low Bid
Price"),  for each such Trading Day the Company  shall be under no obligation to
sell one-tenth (1/10) of the Investment Amount specified in the Put Notice,  and
the Investment Amount shall accordingly be deemed reduced by such amount. In the
event that during a Valuation  Period  there exists Low Bid Prices for any three
(3) Trading Days--not necessarily  consecutive--then the balance of each party's
obligation  for the Investment  Amount under such Put Notice shall  terminate on
such third Trading Day  ("Termination  Day"), and the Investment Amount shall be
adjusted to include  only  one-tenth of the initial  Investment  Amount for each
Trading Day during the Valuation  Period prior to the  Termination  Day that the
Closing Bid Price equals or exceeds the Low Bid Price.

Section 2.2 MECHANICS.

(a)   PUT NOTICE.  At any time during the Commitment Period (and with respect to
any Put Notice  other than the first Put Notice after the prior  Closing  Date),
the Company may deliver a Put Notice to Investor,  subject to the conditions set
forth in Section 7.2; provided,  however,  the Investment Amount for each Put as
designated  by the Company in the  applicable  Put Notice  shall be neither less
than the Minimum Put Amount nor more than the Maximum Put Amount.

(b)   DATE OF DELIVERY OF PUT NOTICE.  A Put Notice shall be deemed delivered on
(i) the Trading Day it is received by facsimile or otherwise by Investor if such
notice  is  received  on or  prior to 12:00  noon  New  York  time,  or (ii) the



immediately  succeeding  Trading Day if it is received by facsimile or otherwise
after  12:00 noon New York time on a Trading Day or at anytime on a day which is
not a Trading Day.

Section  2.3  CLOSINGS.  On or prior  to each  Closing  Date for a Put,  (a) the
Company shall deliver to the Investor one or more certificates  representing the
Put  Shares  to be  purchased  by  Investor  pursuant  to  Section  2.1  herein,
registered in the name of Investor and (b) Investor shall deliver to the Company
the  Investment  Amount by wire transfer of  immediately  available  funds to an
account designated by the Company. In lieu of delivering  physical  certificates
representing  the Common Stock  issuable in  accordance  with clause (a) of this
Section 2.3, and provided that the Transfer Agent then is  participating  in the
Depository  Trust Company ("DTC") Fast Automated  Securities  Transfer  ("FAST")
program,  upon  request of  Investor,  the  Company  shall use its  commercially
reasonable efforts to cause the Transfer Agent to electronically transmit, prior
to the  applicable  Closing  Date the  applicable  Put Shares by  crediting  the
Investor's  account of the Investor's  prime broker with DTC through its Deposit
Withdrawal Agent Commission  ("DWAC") system,  and provide proof satisfactory to
the Investor of such  delivery.  In addition,  on or prior to such Closing Date,
each of the Company and Investor  shall deliver to the each other all documents,
instruments  and writings  required to be delivered or  reasonably  requested by
either of them  pursuant to this  Agreement in order to implement and effect the
transactions contemplated herein.

Section 2.4 [INTENTIONALLY OMITTED]

Section 2.5  TERMINATION  OF INVESTMENT  OBLIGATION.  The obligation of Investor
pursuant  to this  Agreement  to  purchase  shares of  Common  Stock  shall,  at
Investor's option,  terminate (including with respect to a Closing Date that has
not yet  occurred)  in the event  that (a) there  shall  occur any stop order or
suspension of the  effectiveness of any Registration  Statement for an aggregate
of thirty  (30)Trading Days during the Commitment  Period,  for any reason other
than  deferrals or suspension  during a Blackout  Period in accordance  with the
Registration Rights Agreement,  as a result of corporate developments subsequent
to the Subscription  Date that would require such  Registration  Statement to be
amended  to reflect  such event in order to  maintain  its  compliance  with the
disclosure  requirements  of the Securities Act, or (b) the Company shall at any
time fail to comply with the  requirements  of Section 6.3, 6.4, or 6.6 and such
failure shall continue for more than thirty (30) days.

Section 2.6 BLACKOUT SHARES.  In the event that, (a) within fifteen (15) Trading
Days following any Closing Date, the Company gives a Blackout Notice to Investor
of a Blackout Period in accordance with the Registration  Rights Agreement,  and
(b) the Closing Bid Price on the Trading Day immediately preceding such Blackout
Period  ("OLD BID  PRICE") is greater  than the  Closing  Bid Price on the first
Trading  Day  following  such  Blackout   Period  that  Investor  may  sell  its
Registrable Securities pursuant to an effective Registration Statement ("NEW BID
PRICE"),  then the  Company  shall issue to  Investor  the number of  additional
shares of Registrable Securities (the "BLACKOUT SHARES") equal to the difference
between (i) the product of the number of Put Shares held by Investor immediately
prior to the  Blackout  Period  that  were  issued  on the most  recent  Closing
Date(the "REMAINING PUT SHARES") multiplied by the Old Bid Price, divided by the
New Bid Price, and (ii) the Remaining Put Shares.

Section 2.7 [INTENTIONALLY OMITTED]

Section 2.8 LIQUIDATED DAMAGES. Each of the Company and Investor acknowledge and
agree that the requirement to issue Blackout Shares under Section 2.6 shall give
rise to liquidated  damages and not penalties.  Each of the Company and Investor
further acknowledge that (a) the amount of loss or damages likely to be incurred
is incapable or is difficult to precisely estimate, (b) the amounts specified in
such Sections bear a reasonable proportion and are not plainly or grossly



disproportionate  to the  probable  loss  likely to be  incurred  by Investor in
connection with a Blackout Period under the Registration  Rights Agreement,  and
(c) each of the Company and Investor are sophisticated business parties and have
been  represented  by  sophisticated  and able legal and  financial  counsel and
negotiated this Agreement at arm's length.

                                   ARTICLE III

                   REPRESENTATIONS AND WARRANTIES OF INVESTOR

Investor represents and warrants to the Company that:

Section 3.1 INTENT. Investor is entering into this Agreement for its own account
and Investor has no present arrangement  (whether or not legally binding) at any
time to sell the  Common  Stock to or through  any  person or entity;  provided,
however,  Investor reserves the right to dispose of the Common Stock at any time
in  accordance  with  federal  and  state  securities  laws  applicable  to such
disposition.

Section 3.2  SOPHISTICATED  INVESTOR.  Investor is a sophisticated  investor (as
described in Rule 506(b)(2)(ii) of Regulation D) and an accredited  investor (as
defined  in Rule 501 of  Regulation  D), and  Investor  has such  experience  in
business and financial  matters that it is capable of evaluating  the merits and
risks of an  investment  in the  Common  Stock.  Investor  acknowledges  that an
investment  in the Common  Stock is  speculative  and  involves a high degree of
risk.

Section 3.3  AUTHORITY.  (a) Investor has the  requisite  power and authority to
enter into and perform its obligations under this Agreement and the transactions
contemplated hereby in accordance with its terms; (b) the execution and delivery
of this Agreement and the Registration Rights Agreement, and the consummation by
it of the transactions contemplated hereby and thereby have been duly authorized
by all necessary  action and no further consent or  authorization of Investor or
its partners is required;  and (c) this  Agreement has been duly  authorized and
validly executed and delivered by Investor and is a valid and binding  agreement
of Investor  enforceable  against it in  accordance  with its terms,  subject to
applicable  bankruptcy,  insolvency,  or similar laws  relating to, or affecting
generally  the  enforcement  of,  creditors'  rights  and  remedies  or by other
equitable principles of general application.

Section  3.4  NOT  AN  AFFILIATE.  Investor  is  not  an  officer,  director  or
"affiliate"  (as that term is defined in Rule 405 of the Securities  Act) of the
Company.

Section 3.5 ORGANIZATION AND STANDING. Investor is a corporation duly organized,
validly existing and in good standing under the laws of the Bahamas, and has all
requisite  power and authority to own,  lease and operate its  properties and to
carry on its business as now being  conducted.  Investor is duly  qualified as a
foreign corporation to do business and is in good standing in every jurisdiction
in which the nature of the business conducted or property owned by it makes such
qualification  necessary,  other than  those in which the  failure so to qualify
would not have a material adverse effect on Investor.

Section 3.6 ABSENCE OF CONFLICTS.  The execution and delivery of this  Agreement
and any other document or instrument  contemplated  hereby, and the consummation
of the  transactions  contemplated  hereby and thereby,  and compliance with the
requirements hereof and thereof, will not (a) violate any law, rule, regulation,
order,  writ,  judgment,  injunction,  decree or award binding on Investor,  (b)
violate  any  provision  of any  indenture,  instrument  or  agreement  to which
Investor is a party or is subject,  or by which Investor or any of its assets is



bound, or conflict with or constitute a material default thereunder,  (c) result
in the  creation  or  imposition  of any lien  pursuant to the terms of any such
indenture, instrument or agreement, or constitute a breach of any fiduciary duty
owed by  Investor  to any  third  party,  or (d)  require  the  approval  of any
third-party  (that has not been  obtained)  pursuant to any  material  contract,
instrument,  agreement,  relationship  or legal  obligation to which Investor is
subject or to which any of its assets, operations or management may be subject.

Section  3.7  DISCLOSURE;  ACCESS TO  INFORMATION.  Investor  has  received  all
documents,  records,  books  and  other  information  pertaining  to  Investor's
investment  in the Company that has been  requested  by  Investor.  Investor has
reviewed or received copies of the SEC Documents.

Section 3.8 MANNER OF SALE. At no time was Investor  presented with or solicited
by or through any leaflet, public promotional meeting,  television advertisement
or any other form of general solicitation or advertising.

Section 3.9 FINANCIAL CAPABILITY.  Investor presently has the financial capacity
and the necessary capital to perform its obligations hereunder.

Section  3.10  Investor  shall  be  identified  as  an   "Underwriter"   in  the
Registration Statement.

                                   ARTICLE IV

                  REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Investor that, except as disclosed in the
SEC Documents:

Section 4.1  ORGANIZATION  OF THE  COMPANY.  The Company is a  corporation  duly
organized and validly  existing and in good standing under the laws of the State
of Delaware, and has all requisite power and authority to own, lease and operate
its properties and to carry on its business as now being conducted.  The Company
is  duly  qualified  as a  foreign  corporation  to do  business  and is in good
standing in every  jurisdiction in which the nature of the business conducted or
property  owned by it makes such  qualification  necessary,  other than those in
which the failure so to qualify would not have a Material Adverse Effect.

Section 4.2  AUTHORITY.  (a) The Company has the requisite  corporate  power and
authority to enter into and perform its obligations under this Agreement and the
Registration  Rights  Agreement  and to issue the Put  Shares  and the  Blackout
Shares,  if any;  (b) the  execution  and  delivery  of this  Agreement  and the
Registration  Rights  Agreement by the Company and the consummation by it of the
transactions  contemplated  hereby and thereby have been duly  authorized by all
necessary  corporate  action and no  further  consent  or  authorization  of the
Company or its Board of Directors or stockholders  is required;  and (c) each of
this Agreement and the Registration  Rights Agreement has been duly executed and
delivered by the Company and  constitute  valid and binding  obligations  of the
Company  enforceable  against the Company in  accordance  with their  respective
terms,  except as such  enforceability may be limited by applicable  bankruptcy,
insolvency,  or similar laws relating to, or affecting generally the enforcement
of, creditors'  rights and remedies or by other equitable  principles of general
application.

Section 4.3 CAPITALIZATION. The authorized capital stock of the Company consists
of (x) 340,000,000 shares of Common Stock,  $0.001 par value per share, of which
approximately  190,191,843  shares are outstanding as of August 7, 2007, and (y)
10,000,000  shares of  Preferred  Stock,  $.001 par value,  of which (1) 400,000



shares of the Series A Preferred  Stock, par value $0.001 per share and having a
State Value of $10.00 per share, are authorized and approximately  52,500 shares
are  outstanding  as of such  date;  and (2)  400,000  shares  of the  Series  D
Preferred  Stock,  par value $0.001,  are  authorized and  approximately  93,000
shares are  outstanding  as of such date,  and (3) 1,000,000  shares of Series F
Convertible  Preferred  Stock,  par value $0.001 per share,  are  authorized and
approximately 40,319 shares,  convertible into 1,612,760 shares of common stock,
are  outstanding  as of such date.  Of the  outstanding  shares of Common Stock,
approximately  3,881,700  shares  are,  to the best  knowledge  of the  Company,
beneficially owned by Affiliates of the Company.

Section 4.4 COMMON STOCK.  The Company has  registered the Common Stock pursuant
to Section 12(b) or 12(g) of the Exchange Act and is in full compliance with all
reporting  requirements  of the Exchange Act, and the Company has maintained all
requirements  for the continued  listing or quotation of the Common  Stock,  and
such Common Stock is currently listed or quoted on the Principal  Market.  As of
the date of this Agreement, the Principal Market is the OTCBB.

Section 4.5 SEC  DOCUMENTS.  The  Company has  delivered  or made  available  to
Investor  true and  complete  copies of the SEC  Documents  (including,  without
limitation,  proxy  information  and  solicitation  materials).  To the  best of
Company's  knowledge,  the Company has not provided to Investor any  information
that,  according  to  applicable  law,  rule or  regulation,  should  have  been
disclosed  publicly  prior to the date hereof by the Company,  but which has not
been so disclosed.  As of their respective dates, the SEC Documents  complied in
all  material  respects  with  the  requirements  of the  Securities  Act or the
Exchange Act, and none of the SEC Documents  contained any untrue statement of a
material fact or omitted to state a material fact required to be stated  therein
or  necessary  in  order  to  make  the  statements  therein,  in  light  of the
circumstances  under  which they were made,  not  misleading.  In the opinion of
management,  the  financial  statements  of the  Company  included  in  the  SEC
Documents  comply  as to  form  and  substance  in all  material  respects  with
applicable  accounting  requirements  and the published rules and regulations of
the SEC or other applicable  rules and regulations  with respect  thereto.  Such
financial  statements have been prepared in accordance  with generally  accepted
accounting  principles applied on a consistent basis during the periods involved
(except (a) as may be otherwise  indicated in such  financial  statements or the
notes thereto or (b) in the case of unaudited interim statements,  to the extent
they may not include  footnotes or may be condensed or summary  statements)  and
fairly present in all material respects the financial position of the Company as
of the dates  thereof  and the  results  of  operations  and cash  flows for the
periods  then ended  (subject,  in the case of unaudited  statements,  to normal
year-end audit adjustments).

Section  4.6  EXEMPTION  FROM  REGISTRATION;  VALID  ISSUANCES.  To the  best of
Company's  knowledge,  the sale and  issuance of the Put Shares and the Blackout
Shares,  if  any,  in  accordance  with  the  terms  and  on  the  bases  of the
representations  and  warranties set forth in this  Agreement,  may and shall be
properly issued by the Company to Investor pursuant to Section 4(2),  Regulation
D and/or any applicable  state law. When issued and paid for as herein provided,
the Put  Shares,  and the  Blackout  Shares,  if any,  shall be duly and validly
issued,  fully paid, and  nonassessable.  Neither the sales of the Put Shares or
the Blackout Shares, if any,  pursuant to, nor the Company's  performance of its
obligations under, this Agreement or the Registration Rights Agreement shall (a)
result in the  creation or  imposition  of any liens,  charges,  claims or other
encumbrances  upon the Put Shares or the Blackout Shares,  if any, or any of the
assets of the Company, or (b) entitle the holders of Outstanding Common Stock to
preemptive  or other rights to subscribe to or acquire the Common Stock or other
securities of the Company. The Put Shares and the Blackout Shares, if any, shall
not subject  Investor to personal  liability for  obligations  of the Company by
reason of the ownership thereof.



Section  4.7  NO  GENERAL   SOLICITATION   OR  ADVERTISING  IN  REGARD  TO  THIS
TRANSACTION. Neither the Company nor any of its affiliates nor any person acting
on  its  or  their  behalf  (a)  has  conducted  or  will  conduct  any  general
solicitation  (as that term is used in Rule 502(c) of  Regulation  D) or general
advertising  with  respect to any of the Put Shares or the Blackout  Shares,  if
any, or (b) made any offers or sales of any security or solicited  any offers to
buy any security under any circumstances that would require  registration of the
Common Stock under the Securities Act.

Section 4.8 CORPORATE DOCUMENTS.  The Company has furnished or made available to
Investor true and correct copies of the Company's  Certificate of Incorporation,
as  amended  and in  effect  on the date  hereof  (the  "CERTIFICATE"),  and the
Company's Bylaws, as amended and in effect on the date hereof (the "BYLAWS").

Section 4.9 NO  CONFLICTS.  The  execution,  delivery  and  performance  of this
Agreement by the Company and the consummation by the Company of the transactions
contemplated hereby, including without limitation the issuance of the Put Shares
and the Blackout  Shares,  if any, do not and will not (a) result in a violation
of the  Certificate  or Bylaws or (b) conflict  with,  or  constitute a material
default  (or an event that with  notice or lapse of time or both would  become a
material default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any material agreement,  indenture,  instrument
or any "lock-up" or similar  provision of any underwriting or similar  agreement
to which the Company is a party,  or (c) result in a violation  of any  federal,
state,  or local law, rule,  regulation,  order,  judgment or decree  (including
federal and state securities laws and regulations)  applicable to the Company or
by which any  property or asset of the Company is bound or affected  (except for
such conflicts, defaults, terminations, amendments, accelerations, cancellations
and violations as would not,  individually or in the aggregate,  have a Material
Adverse  Effect) nor is the Company  otherwise in violation of, conflict with or
in default under any of the foregoing.  The business of the Company is not being
conducted in violation of any law,  ordinance or regulation of any  governmental
entity, except for possible violations that either singly or in the aggregate do
not and will not have a Material  Adverse  Effect.  The Company is not  required
under  federal,  state or local law,  rule or  regulation to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental  agency in order for it to  execute,  deliver or perform any of its
obligations  under  this  Agreement  or  issue  and  sell  the  Common  Stock in
accordance  with the terms hereof (other than any SEC, NASD or state  securities
filings  that  may be  required  to be made  by the  Company  subsequent  to any
Closing,  any registration  statement that may be filed pursuant hereto, and any
shareholder  approval required by the rules applicable to companies whose common
stock trades on the American Stock Exchange); provided that, for purposes of the
representation  made in this sentence,  the Company is assuming and relying upon
the accuracy of the relevant representations and agreements of Investor herein.

Section 4.10 NO MATERIAL  ADVERSE CHANGE.  Since December 31, 2006, no event has
occurred  that would have a Material  Adverse  Effect on the Company,  except as
disclosed in the SEC Documents.

Section  4.11 NO  UNDISCLOSED  LIABILITIES.  The Company has no  liabilities  or
obligations  that are material,  individually or in the aggregate,  and that are
not disclosed in the SEC Documents or otherwise publicly  announced,  other than
those incurred in the ordinary course of the Company's  businesses  since August
31, 2006 and which, individually or in the aggregate, do not or would not have a
Material Adverse Effect on the Company.

Section 4.12 NO UNDISCLOSED EVENTS OR CIRCUMSTANCES. Since December 31, 2006, no
event or circumstance  has occurred or exists with respect to the Company or its
businesses,  properties,  prospects,  operations or financial  condition,  that,
under  applicable  law,  rule  or  regulation,  requires  public  disclosure  or
announcement  prior to the date  hereof by the Company but which has not been so
publicly announced or disclosed in the SEC Documents.



Section  4.13  NO  INTEGRATED  OFFERING.  Neither  the  Company,  nor any of its
affiliates,  nor any  person  acting on its or their  behalf  has,  directly  or
indirectly,  made any offers or sales of any security or solicited any offers to
buy any security,  other than pursuant to this  Agreement,  under  circumstances
that would require registration of the Common Stock under the Securities Act.

Section 4.14 LITIGATION AND OTHER PROCEEDINGS.  Except as may beset forth in the
SEC  Documents,  there are no  lawsuits  or  proceedings  pending or to the best
knowledge of the Company  threatened,  against the Company,  nor has the Company
received  any written or oral notice of any such  action,  suit,  proceeding  or
investigation,  which would have a Material Adverse Effect.  Except as set forth
in the SEC Documents,  no judgment,  order, writ,  injunction or decree or award
has been  issued  by or,  so far as is known by the  Company,  requested  of any
court,  arbitrator or  governmental  agency which would have a Material  Adverse
Effect.

Section 4.15 NO MISLEADING OR UNTRUE COMMUNICATION.  The Company, and any Person
representing the Company,  in connection with the  transactions  contemplated by
this Agreement, have not made, at any time, any oral communication in connection
with the offer or sale of the same which  contained  any untrue  statement  of a
material fact or omitted to state any material  fact  necessary in order to make
the statements,  in the light of the  circumstances  under which they were made,
not misleading.

Section 4.16 MATERIAL NON-PUBLIC  INFORMATION.  The Company is not in possession
of, nor has the  Company or its  agents  disclosed  to  Investor,  any  material
non-public  information  that (a) if disclosed,  would reasonably be expected to
have a  materially  adverse  effect  on the  price  of the  Common  Stock  or(b)
according to applicable  law,  rule or  regulation,  should have been  disclosed
publicly  by the  Company  prior to the date  hereof  but  which has not been so
disclosed.

                                    ARTICLE V

                              COVENANTS OF INVESTOR

Section 5.1 COMPLIANCE WITH LAW.  Investor's  trading activities with respect to
shares of the Common Stock will be in compliance  with all applicable  state and
federal  securities laws, rules and regulations and the rules and regulations of
the NASD and the Principal Market on which the Common Stock is listed.

Section 5.2 TRADING IN SECURITIES.  The Company specifically  acknowledges that,
except  to the  extent  specifically  provided  herein  or in  any of the  other
Transaction   Agreements  (but  limited  in  each  instance  to  the  extent  so
specified),  the Investor retains the right (but is not otherwise  obligated) to
buy, sell,  engage in hedging  transactions or otherwise trade in the securities
of the Company,  including,  but not necessarily limited to, the Securities,  at
any time before,  contemporaneous  with or after the execution of this Agreement
or from  time to time  and in any  manner  whatsoever  permitted  by  applicable
federal and state securities laws



                                   ARTICLE VI

                            COVENANTS OF THE COMPANY

Section 6.1 REGISTRATION RIGHTS. The Company shall use its best efforts to cause
the  Registration  Rights  Agreement  to remain in full force and effect and the
Company shall comply in all respects with the terms thereof.

Section 6.2 RESERVATION OF COMMON STOCK. As of the date hereof,  the Company has
available and the Company shall reserve and keep available at all times, free of
preemptive  rights,  shares of Common  Stock for the  purpose  of  enabling  the
Company  to satisfy  any  obligation  to issue the Put  Shares and the  Blackout
Shares,  if any;  such amount of shares of Common Stock to be reserved  shall be
80,000,000  for the Put Shares under the terms and  conditions of this Agreement
and a good faith  estimate by the Company in  consultation  with Investor of the
number of Blackout  Shares,  if any, that will need to be issued.  The number of
shares so reserved  from time to time,  as  theretofore  increased or reduced as
hereinafter provided,  may be reduced by the number of shares actually delivered
hereunder.

Section 6.3 LISTING OF COMMON  STOCK.  The Company shall use its best efforts to
maintain the listing of the Common Stock on a Principal  Market,  and will cause
the Put Shares and the Blackout  Shares,  if any, to be listed on the  Principal
Market.  The Company  further shall,  if the Company  applies to have the Common
Stock traded on any other Principal Market,  include in such application the Put
Shares and the Blackout  Shares,  if any, and shall take such other action as is
necessary  or desirable  in the  reasonable  opinion of Investor to use its best
efforts to cause the Common Stock to be listed on such other Principal Market as
promptly as possible. The Company shall use its commercially  reasonable efforts
to continue the listing and trading of the Common Stock on the Principal  Market
(including, without limitation,  maintaining sufficient net tangible assets) and
will  comply in all  respects  with the  Company's  reporting,  filing and other
obligations under the bylaws or rules of the NASD and the Principal Market.

Section 6.4 EXCHANGE ACT  REGISTRATION.  The Company shall take all commercially
reasonable  steps to cause the Common Stock to continue to be  registered  under
Section 12(g) or 12(b) of the Exchange Act, will use its commercially reasonable
efforts  to  comply in all  material  respects  with its  reporting  and  filing
obligations  under said Act,  and will not take any action or file any  document
(whether or not permitted by said Act or the rules  thereunder)  to terminate or
suspend such  registration  or to terminate or suspend its  reporting and filing
obligations under said Act.

Section 6.5 [INTENTIONALLY OMITTED]

Section  6.6  CORPORATE  EXISTENCE.  The  Company  shall  take all  commercially
reasonable  steps necessary to preserve and continue the corporate  existence of
the Company.

Section 6.7  ADDITIONAL  SEC  DOCUMENTS.  The Company shall deliver to Investor,
promptly after the originals thereof are submitted to the SEC for filing, copies
of all SEC  Documents  so  furnished  or  submitted  to the SEC,  unless  an SEC
document is filed using the EDGAR system in which case the Company  shall not be
required to deliver such SEC Document to the Investor.

Section 6.8 NOTICE OF CERTAIN EVENTS AFFECTING REGISTRATION; SUSPENSION OF RIGHT
TO MAKE A PUT. The Company shall promptly notify Investor upon the occurrence of
any of the following  events in respect of a  registration  statement or related
prospectus in respect of an offering of Registrable  Securities:  (a) receipt of
any request for additional  information by the SEC or any other federal or state
governmental  authority  during the period of  effectiveness of the registration
statement for amendments or supplements to the registration statement or related
prospectus;  (b)  the  issuance  by the  SEC  or  any  other  federal  or  state
governmental  authority of any stop order  suspending the  effectiveness  of any
Registration  Statement or the initiation of any  proceedings  for that purpose;



(c)  receipt  of  any  notification  with  respect  to  the  suspension  of  the
qualification  or  exemption  from  qualification  of  any  of  the  Registrable
Securities for sale in any  jurisdiction or the initiation or threatening of any
proceeding  for such  purpose;  (d) the  happening  of any event  that makes any
statement  made in such  Registration  Statement  or related  prospectus  or any
document  incorporated or deemed to be incorporated  therein by reference untrue
in any  material  respect  or that  requires  the  making of any  changes in the
registration statement,  related prospectus or documents so that, in the case of
a Registration Statement, it will not contain any untrue statement of a material
fact or omit to state  any  material  fact  required  to be  stated  therein  or
necessary to make the statements therein not misleading, and that in the case of
the related  prospectus,  it will not contain any untrue statement of a material
fact or omit to state  any  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 (e) the Company's  reasonable
determination  that a  post-effective  amendment to the  registration  statement
would be appropriate,  and the Company shall promptly make available to Investor
any such  supplement or amendment to the related  prospectus.  The Company shall
not deliver to Investor  any Put Notice  during the  continuation  of any of the
foregoing events.

Section 6.9 EXPECTATIONS  REGARDING PUT NOTICES.  Within ten (10) days after the
commencement of each calendar quarter  occurring  subsequent to the commencement
of the Commitment  Period,  the Company  undertakes to notify Investor as to its
reasonable  expectations as to the dollar amount it intends to raise during such
calendar quarter, if any, through the issuance of Put Notices. Such notification
shall  constitute  only the Company's  good faith  estimate with respect to such
calendar  quarter and shall in no way  obligate the Company to raise such amount
during  such  calendar  quarter or  otherwise  limit its  ability to deliver Put
Notices during such calendar quarter.  The failure by the Company to comply with
this provision can be cured by the Company's  notifying  Investor at any time as
to its reasonable expectations with respect to the current calendar quarter.

Section 6.10 CONSOLIDATION; MERGER. The Company shall not, at any time after the
date hereof,  effect any merger or consolidation of the Company with or into, or
a transfer of all or substantially  all of the assets of the Company to, another
entity unless the resulting  successor or acquiring  entity (if not the Company)
assumes by written  instrument the obligation to deliver to Investor such shares
of Common Stock and/or securities as Investor is entitled to receive pursuant to
this Agreement.

Section  6.11  ISSUANCE OF PUT SHARES AND BLACKOUT  SHARES.  The sale of the Put
Shares  and the  issuance  of the  Blackout  Shares,  if any,  shall  be made in
accordance  with  the  provisions  and  requirements  of  Regulation  D and  any
applicable state law.

Section 6.12 [INTENTIONALLY OMITTED]

Section  6.13  DILUTION.  The number of shares of Common  Stock  issuable as Put
Shares may increase substantially in certain circumstances,  including,  but not
necessarily limited to, the circumstance wherein the trading price of the Common
Stock  declines  during the period between the Effective Date and the end of the
Commitment Period.  The Company's  executive officers and directors have studied
and  fully  understand  the  nature  of the  transactions  contemplated  by this
Agreement and recognize that they have a potential dilutive effect. The board of
directors of the Company has  concluded,  in its good faith  business  judgment,
that  such  issuance  is in the  best  interests  of the  Company.  The  Company
specifically acknowledges that its obligation to issue the Put Shares is binding
upon the Company and  enforceable  regardless  of the dilution such issuance may
have on the ownership interests of other shareholders of the Company.



Section  6.14  USE OF  PROCEEDS.  The  Company  will use the  proceeds  received
hereunder  for internal  working  capital  purposes,  and,  unless  specifically
consented to in advance in each instance by the Investor, the Company shall not,
directly or  indirectly,  use such proceeds for any loan to or investment in any
other affiliated corporation, partnership enterprise or other affiliated person.

Section 6.15 CERTAIN  AGREEMENTS.  (a) (i) The Company covenants and agrees that
it will not,  without the prior written consent of the Investor,  enter into any
subsequent or further offer or sale of Common Stock or Common Stock  Equivalents
(collectively,   "New  Common  Stock")  with  any  third  party  pursuant  to  a
transaction  which in any manner permits the sale of the New Common Stock on any
date which is thirty (30) days prior or  subsequent  to any  Additional  Closing
Date.

(ii) The  provisions  of  subparagraph  6.15  (a)(i)  will  not  apply to (v) an
underwritten  public offering of shares of Common Stock or Preferred  Stock; (w)
an  offering  of  convertible  Preferred  Stock at market  or above;  or (x) the
issuance of securities  (other than for cash) in connection with an acquisition,
merger,  consolidation,  sale of  assets,  disposition  or the  exchange  of the
capital  stock for  assets,  stock or other  joint  venture  interests;  (y) the
issuance of up to $100,000 of securities of the Company per annum to one or more
investors in  satisfaction of bona fide  obligations of the company;  or (z) the
issuance through private placements by the Company of restricted securities that
will not be available for resale for a period of at least one year from the date
of issuance.

(iii) In the event the Company  breaches  the  provisions  of this Section , the
Discount (as defined in Section 1.1) shall be amended to be equal to (x)10%, and
the Investor may terminate its obligations under this Agreement.


(b) The Company covenants and agrees that it will not, without the prior written
consent of the  Investor,  enter into any  subsequent  or  further  Credit  Line
Agreement  (however  denominated)  with any third  party  during the  Commitment
Period.

Section 6.16. LOCK-UP. The Company agrees that it shall cause any and all of its
officers, insiders,  Affiliates or other related parties to refrain from selling
any Common  Stock  during any  Valuation  Period,  excluding  Common  Stock sold
pursuant  to a Rule  10b5-1  trading  plan,  which  was  executed  prior  to the
commencement of the Valuation Period.

                                   ARTICLE VII

                            CONDITIONS TO DELIVERY OF
                      PUT NOTICES AND CONDITIONS TO CLOSING

Section 7.1  CONDITIONS  PRECEDENT TO THE OBLIGATION OF THE COMPANY TO ISSUE AND
SELL COMMON STOCK. The obligation hereunder of the Company to issue and sell the
Put Shares to Investor  incident to each Closing is subject to the satisfaction,
at or before each such Closing, of each of the conditions set forth below.

(a) ACCURACY OF INVESTOR'S  REPRESENTATIONS AND WARRANTIES.  The representations
and warranties of Investor shall be true and correct in all material respects as
of the date of this  Agreement and as of the date of each such Closing as though
made at each such time, except for changes which have not had a Material Adverse
Effect.



(b)  PERFORMANCE  BY INVESTOR.  Investor  shall have  performed,  satisfied  and
complied in all respects with all covenants,  agreements and conditions required
by this Agreement to be performed,  satisfied or complied with by Investor at or
prior to such Closing.

Section 7.2  CONDITIONS  PRECEDENT  TO THE RIGHT OF THE COMPANY TO DELIVER A PUT
NOTICE AND THE  OBLIGATION OF INVESTOR TO PURCHASE PUT SHARES.  The right of the
Company to deliver a Put Notice and the  obligation  of  Investor  hereunder  to
acquire  and pay for the Put  Shares  incident  to a Closing  is  subject to the
satisfaction,  on (a)  the  date of  delivery  of such  Put  Notice  and (b) the
applicable Closing Date (each a "CONDITION  SATISFACTION  DATE"), of each of the
following conditions:

(a)  REGISTRATION  OF REGISTRABLE  SECURITIES  WITH THE SEC. As set forth in the
Registration  Rights  Agreement,  the Company  shall have filed with the SEC the
Registration  Statement with respect to the resale of the Registrable Securities
by Investor and such Registration  Statement shall have been declared  effective
by the SEC prior to the first Put Date.  For the purposes of any Put Notice with
respect to the Registrable Securities other than the Registrable Securities, the
Company shall have filed with the SEC a  Registration  Statement with respect to
the resale of such  Registrable  Securities  by  Investor  which shall have been
declared effective by the SEC prior to the Put Date therefore.

(b) EFFECTIVE  REGISTRATION  STATEMENT.  As set forth in the Registration Rights
Agreement,  a Registration  Statement shall have previously become effective for
the resale by Investor of the Registrable  Securities subject to such Put Notice
and  such  Registration  Statement  shall  remain  effective  on each  Condition
Satisfaction  Date and (i) neither the Company nor Investor  shall have received
notice that the SEC has issued or intends to issue a stop order with  respect to
such Registration Statement or that the SEC otherwise has suspended or withdrawn
the  effectiveness  of  such  Registration  Statement,   either  temporarily  or
permanently,  or intends or has  threatened to do so (unless the SEC's  concerns
have been addressed and Investor is reasonably  satisfied that the SEC no longer
is considering or intends to take such  action),and  (ii) no other suspension of
the use or withdrawal of the  effectiveness  of such  Registration  Statement or
related prospectus shall exist.

(c)   ACCURACY   OF  THE   COMPANY'S   REPRESENTATIONS   AND   WARRANTIES.   The
representations  and  warranties of the Company shall be true and correct in all
material respects as of each Condition  Satisfaction Date as though made at each
such time (except for representations  and warranties  specifically made as of a
particular  date)  with  respect  to  all  periods,  and as to  all  events  and
circumstances occurring or existing to and including each Condition Satisfaction
Date,   except   for  any   conditions   which  have   temporarily   caused  any
representations  or  warranties  herein  to be  incorrect  and  which  have been
corrected with no continuing impairment to the Company or Investor.

(d) PERFORMANCE BY THE COMPANY. The Company shall have performed,  satisfied and
complied in all material respects with all covenants,  agreements and conditions
required  by  this  Agreement  and  the  Registration  Rights  Agreement  to  be
performed,  satisfied  or  complied  with by the  Company  at or  prior  to each
Condition Satisfaction Date.

(e) NO INJUNCTION. No statute, rule, regulation, executive order, decree, ruling
or injunction  shall have been enacted,  entered,  promulgated or adopted by any
court or  governmental  authority of competent  jurisdiction  that  prohibits or
directly and materially  adversely affects any of the transactions  contemplated
by this Agreement, and no proceeding shall have been commenced that may have the
effect of prohibiting or materially  adversely affecting any of the transactions
contemplated by this Agreement.



(f) ADVERSE  CHANGES.  Since the date of filing of the Company's most recent SEC
Document,  no event that had or is reasonably  likely to have a Material Adverse
Effect has occurred.

(g) NO SUSPENSION OF TRADING IN OR DELISTING OF COMMON STOCK. The trading of the
Common Stock shall not have been  suspended by the SEC, the Principal  Market or
the NASD and the Common Stock shall have been  approved for listing or quotation
on and shall not have been delisted from the Principal Market.

(h) LEGAL OPINION. The Company shall have caused to be delivered to Investor and
to the Company's  transfer  agent,  the first Put Notice,  and an opinion of the
Company's legal counsel in the form of Exhibit C hereto, addressed to Investor.

(i) [INTENTIONALLY OMITTED]

(j) FIVE PERCENT LIMITATION. On each Closing Date, the number of Put Shares then
to be  purchased  by Investor  shall not exceed the number of such shares  that,
when  aggregated  with all other shares of Registrable  Securities then owned by
Investor beneficially or deemed beneficially owned by Investor,  would result in
Investor  owning  more  than  4.99%  of all of such  Common  Stock  as  would be
outstanding on such Closing Date, as determined in accordance with Section 16 of
the Exchange Act and the  regulations  promulgated  thereunder.  For purposes of
this Section 7.2(j), in the event that the amount of Common Stock outstanding as
determined in accordance with Section 16 of the Exchange Act and the regulations
promulgated  thereunder is greater on a Closing Date than on the date upon which
the Put Notice  associated with such Closing Date is given, the amount of Common
Stock  outstanding on such Closing Date shall govern for purposes of determining
whether  Investor,  when aggregating all purchases of Common Stock made pursuant
to this Agreement and Blackout Shares,  if any, would own more than 4.99% of the
Common Stock following such Closing Date.

(k) TWENTY  PERCENT  LIMITATION.  Notwithstanding  any other  provision  of this
Agreement,  the  maximum  aggregate  number of Put  Shares and  Blackout  Shares
issuable to Investor  under this  Agreement  shall not exceed the number of such
shares that,  when  aggregated  with all other shares of Registrable  Securities
then owned by Investor  beneficially or deemed  beneficially  owned by Investor,
would result in Investor  owning more than 19.99% of all of such Common Stock as
would be  outstanding  immediately  prior to the  execution and delivery of this
Agreement  by both  parties,  unless the  Company  has  obtained  all  necessary
approvals in accordance with the rules and requirements of the Principal Market,
which the  Company  may or may not seek in its  discretion.  Failure  to seek or
obtain  such  approval(s)  will not change any other term or  condition  of this
Agreement.

(l) NO  KNOWLEDGE.  The Company shall have no knowledge of any event more likely
than not to have  the  effect  of  causing  such  Registration  Statement  to be
suspended or otherwise ineffective (which event is more likely than not to occur
within the fifteen  Trading Days  following the Trading Day on which such Notice
is deemed delivered).

(m)  TRADING  CUSHION.   The  Trading  Cushion  shall  have  elapsed  since  the
immediately preceding Put Date



(n) SHAREHOLDER VOTE. The issuance of shares of Common Stock with respect to the
applicable  Closing,  if  any,  shall  not  violate  the  shareholder   approval
requirements of the Principal Market.

(o) NO VALUATION  EVENT.  No Valuation  Event shall have occurred  since the Put
Date.

(p) OTHER. On each Condition Satisfaction Date, Investor shall have received and
been reasonably  satisfied with such other  certificates  and documents as shall
have been reasonably  requested by Investor in order for Investor to confirm the
Company's  satisfaction  of the  conditions  set  forth  in  this  Section  7.2,
including,  without  limitation,  a certificate  in  substantially  the form and
substance of Exhibit D hereto,  executed by an executive  officer of the Company
and to the  effect  that all the  conditions  to such  Closing  shall  have been
satisfied as at the date of each such certificate.

Section 7.3 DUE DILIGENCE REVIEW; NON-DISCLOSURE OF NON-PUBLIC INFORMATION.

(a) The Company  shall make  available  for  inspection  and review by Investor,
advisors to and  representatives  of Investor  (who may or may not be affiliated
with  Investor  and  who  are  reasonably   acceptable  to  the  Company),   any
Underwriter,  any Registration  Statement or amendment or supplement  thereto or
any blue sky, NASD or other filing,  all  financial and other  records,  all SEC
Documents and other filings with the SEC, and all other corporate  documents and
properties of the Company as may be reasonably necessary for the purpose of such
review, and cause the Company's officers,  directors and employees to supply all
such information  reasonably  requested by Investor or any such  representative,
advisor  or  Underwriter  in  connection   with  such   Registration   Statement
(including, without limitation, in response to all questions and other inquiries
reasonably  made or  submitted  by any of them),  prior to and from time to time
after the filing and effectiveness of such Registration.

(b) Each of the Company, its officers, directors,  employees and agents shall in
no  event  disclose   non-public   information  to  Investor,   advisors  to  or
representatives of Investor.

(c) Nothing herein shall require the Company to disclose non-public  information
to Investor or its advisors or representatives,  and the Company represents that
it does not  disseminate  non-public  information  to any investors who purchase
stock in the Company in a public  offering,  to money  managers or to securities
analysts;  provided,  however,  that  notwithstanding  anything  herein  to  the
contrary,  the Company shall, as hereinabove  provided,  immediately  notify the
advisors and  representatives  of Investor and any  Underwriters of any event or
the  existence  of any  circumstance(without  any  obligation  to  disclose  the
specific  event  or  circumstance)  of  which  it  becomes  aware,  constituting
non-public  information (whether or not requested of the Company specifically or
generally  during  the course of due  diligence  by such  persons or  entities),
which, if not disclosed in the prospectus  included in a Registration  Statement
would  cause such  prospectus  to include a material  misstatement  or to omit a
material  fact  required  to be stated  therein in order to make the  statements
therein,  in light of the circumstances in which they were made, not misleading.
Nothing  contained  in this  Section  7.3 shall be  construed  to mean that such
persons or entities other than Investor (without the written consent of Investor
prior to disclosure of such information) may not obtain  non-public  information
in the course of  conducting  due  diligence  in  accordance  with the terms and
conditions of this  Agreement and nothing  herein shall prevent any such persons
or entities  from  notifying the Company of their opinion that based on such due
diligence by such persons or entities,  any Registration  Statement  contains an
untrue  statement  of a material  fact or omits a material  fact  required to be
stated  in such  Registration  Statement  or  necessary  to make the  statements
contained  therein,  in light of the  circumstances in which they were made, not
misleading.



                                  ARTICLE VIII

                                     LEGENDS

Section  8.1  LEGENDS.   Unless  otherwise   provided  below,  each  certificate
representing   Registrable  Securities  will  bear  the  following  legend  (the
"LEGEND"):

"The securities  represented by this  certificate have not been registered under
the Securities Act of 1933 (the "Securities  Act") or qualified under applicable
state  securities  laws.  These  securities may not be offered,  sold,  pledged,
hypothecated,  transferred  or otherwise  disposed of except  pursuant to (I) an
effective  registration  statement  and  qualification  in effect  with  respect
thereto under the Securities Act and under any applicable  state securities law,
(ii) to the extent  applicable,  Rule 144 under the Securities  Act, or (iii) an
opinion of counsel  reasonably  acceptable to the Company that such registration
and qualification is not required under applicable  federal and state securities
laws."

Section 8.2 NO OTHER LEGEND OR STOCK TRANSFER RESTRICTIONS. No legend other than
the one  specified  in Section  8.1,  shall be placed on the share  certificates
representing the Common Stock and no instructions or "stop transfers orders," so
called, "stock transfer  restrictions," or other restrictions have been or shall
be given to the  Company's  transfer  agent with respect  thereto  other than as
expressly set forth in this Article VIII.

Section 8.3 COVER. If the Company fails for any reason to deliver the Put Shares
on such Closing Date and the holder of the Put Shares (a "Investor")  purchases,
in an open  market  transaction  or  otherwise,  shares  of  Common  Stock  (the
"Covering Shares") in order to make delivery in satisfaction of a sale of Common
Stock by such  Investor  (the  "Sold  Shares"),  which  delivery  such  Investor
anticipated  to make using the Put Shares (a  "Buy-In"),  then the Company shall
pay to such  Investor,  in addition to all other amounts  contemplated  in other
provisions of the  Transaction  Documents,  and not in lieu thereof,  the Buy-In
Adjustment  Amount (as defined  below).  The "Buy-In  Adjustment  Amount" is the
amount equal to the excess,  if any, of (x) such Investor's total purchase price
(including brokerage  commissions,  if any) for the Covering Shares over (y) the
net proceeds  (after  brokerage  commissions,  if any) received by such Investor
from the sale of the Sold Shares.  The Company  shall pay the Buy-In  Adjustment
Amount to such Investor in immediately  available funds  immediately upon demand
by such Investor. By way of illustration and not in limitation of the foregoing,
if such  Investor  purchases  Covering  Shares  having  a total  purchase  price
(including  brokerage  commissions) of $11,000 to cover a Buy-In with respect to
shares of Common  Stock that it sold for net  proceeds  of  $10,000,  the Buy-In
Adjustment Amount that the Company will be required to pay to such Investor will
be $1,000.

Section 8.4 INVESTOR'S COMPLIANCE.  Nothing in this Article VIII shall affect in
any way Investor's obligations under any agreement to comply with all applicable
securities laws upon resale of the Common Stock.

                                   ARTICLE IX

                                     NOTICES

Section 9.1 NOTICES. All notices, demands,  requests,  consents,  approvals, and
other  communications  required or permitted  hereunder shall be in writing and,
unless otherwise specified herein, shall be (a) personally served, (b) deposited
in the mail, registered or certified, return receipt requested, postage prepaid,
(c)  delivered by reputable  air courier  service with charges  prepaid,  or (d)
transmitted by hand  delivery,  telegram,  or facsimile,  addressed as set forth



below or to such other address as such party shall have  specified most recently
by  written   notice  given  in  accordance   herewith.   Any  notice  or  other
communication  required  or  permitted  to be given  hereunder  shall be  deemed
effective  (i) upon hand  delivery  or  delivery  by  facsimile,  with  accurate
confirmation  generated by the transmitting facsimile machine, at the address or
number  designated  below (if delivered on a business day during normal business
hours where such notice is to be received),  or the first business day following
such delivery (if delivered  other than on a business day during normal business
hours where such notice is to be  received)  or (ii) on the second  business day
following  the date of  mailing  by  express  courier  service  or on the  fifth
business day after deposited in the mail, in each case, fully prepaid, addressed
to such address,  or upon actual receipt of such mailing,  whichever shall first
occur. The addresses for such communications shall be:

If to the Company:      Water Chef, Inc.
                        68 South Service Road, Suite 100
                        Melville, New York 11747
                        Attn: President
                        Tel:  (631) 577-7915
                        Fax:  (631) 577-7818

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

                        Jason Saltsberg, Esq.
                        Olshan Grundman Frome Rosenzweig & Wolosky, LLP
                        Park Avenue Tower
                        65 East 55th Street
                        New York, New York 10022
                        Tel:  (212) 451-2300
                        Fax:  (212) 451-2222

If to Investor:         Brittany Capital Management Limited
                        c/o Cumberland House
                        27 Cumberland Street
                        PO Box N-10818
                        Nassau, New Providence
                        Bahamas

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

                        Krieger & Prager, LLP
                        39 Broadway, Suite 920
                        New York, New York 10006
                        Tel:  (212) 363-2900
                        Fax:  (212) 363-2999

                        Mr. Henry Sargent
                        Southridge  Capital Management LLC
                        90 Grove Street
                        Ridgefield,  CT 06877
                        Tel:  (203) 431-8300
                        Fax:  (203) 431-8301



Either party hereto may from time to time change its address or facsimile number
for  notices  under this  Section  9.1 by giving at least ten (10)  days'  prior
written  notice of such changed  address or facsimile  number to the other party
hereto.

Section 9.2  INDEMNIFICATION.  The Company agrees to indemnify and hold harmless
Investor and its officers, directors,  employees, and agents, and each Person or
entity,  if any, who controls  Investor  within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act,  together with the Controlling
Persons (as defined in the Registration  Rights  Agreement) from and against any
Damages,  joint or several, and any action in respect thereof to which Investor,
its partners,  affiliates,  officers, directors,  employees, and duly authorized
agents,  and any such  Controlling  Person becomes  subject to,  resulting from,
arising  out of or  relating  to any  misrepresentation,  breach of  warranty or
nonfulfillment of or failure to perform any covenant or agreement on the part of
Company contained in this Agreement, as such Damages are incurred, except to the
extent such Damages  result  primarily  from  Investor's  failure to perform any
covenant  or  agreement  contained  in  this  Agreement  or  Investor's  or  its
officer's,  director's,  employee's, agent's or Controlling Person's negligence,
recklessness or bad faith in performing its obligations under this Agreement.

Section  9.3  METHOD  OF  ASSERTING   INDEMNIFICATION  CLAIMS.  All  claims  for
indemnification  by any  Indemnified  Party (as defined below) under Section 9.2
shall be asserted and resolved as follows:

(a) In the event any claim or demand in  respect  of which any  person  claiming
indemnification  under any  provision  of Section 9.2 (an  "INDEMNIFIED  PARTY")
might seek  indemnity  under  Section  9.2 is  asserted  against or sought to be
collected from such  Indemnified  Party by a person other than a party hereto or
an  affiliate  thereof (a "THIRD  PARTY  CLAIM"),  the  Indemnified  Party shall
deliver a written  notification,  enclosing a copy of all papers served, if any,
and  specifying  the nature of and basis for such Third  Party Claim and for the
Indemnified Party's claim for  indemnification  that is being asserted under any
provision of Section 9.2 against any person (the "INDEMNIFYING PARTY"), together
with the amount or, if not then reasonably ascertainable,  the estimated amount,
determined  in good faith,  of such Third Party  Claim (a "CLAIM  NOTICE")  with
reasonable  promptness to the Indemnifying Party. If the Indemnified Party fails
to provide the Claim Notice with  reasonable  promptness  after the  Indemnified
Party receives notice of such Third Party Claim,  the  Indemnifying  Party shall
not be obligated to indemnify the  Indemnified  Party with respect to such Third
Party Claim to the extent that the  Indemnifying  Party's  ability to defend has
been prejudiced by such failure of the Indemnified Party. The Indemnifying Party
shall  notify the  Indemnified  Party as soon as  practicable  within the period
ending thirty (30) calendar days following receipt by the Indemnifying  Party of
either a Claim Notice or an Indemnity  Notice (as defined  below) (the  "DISPUTE
PERIOD") whether the Indemnifying  Party disputes its liability or the amount of
its  liability  to the  Indemnified  Party  under  Section  9.2 and  whether the
Indemnifying  Party  desires,  at its  sole  cost and  expense,  to  defend  the
Indemnified  Party against such Third Party  Claim.(i)If the Indemnifying  Party
notifies the Indemnified  Party within the Dispute Period that the  Indemnifying
Party  desires to defend the  Indemnified  Party with respect to the Third Party
Claim pursuant to this Section 9.3(a),  then the  Indemnifying  Party shall have
the right to defend,  with counsel  reasonably  satisfactory  to the Indemnified
Party, at the sole cost and expense of the Indemnifying  Party, such Third Party
Claim by all appropriate proceedings,  which proceedings shall be vigorously and
diligently prosecuted by the Indemnifying Party to a final conclusion or will be
settled at the discretion of the  Indemnifying  Party (but only with the consent
of the  Indemnified  Party in the case of any  settlement  that provides for any
relief  other than the  payment of  monetary  damages or that  provides  for the
payment of  monetary  damages  as to which the  Indemnified  Party  shall not be
indemnified in full pursuant to Section 9.2). The Indemnifying  Party shall have
full  control of such  defense and  proceedings,  including  any  compromise  or
settlement thereof;  provided,  however,  that the Indemnified Party may, at the




sole  cost and  expense  of the  Indemnified  Party,  at any  time  prior to the
Indemnifying Party's delivery of the notice referred to in the first sentence of
this clause (i),  file any motion,  answer or other  pleadings or take any other
action  that the  Indemnified  Party  reasonably  believes  to be  necessary  or
appropriate to protect its interests; and provided further, that if requested by
the Indemnifying Party, the Indemnified Party will, at the sole cost and expense
of the Indemnifying  Party,  provide reasonable  cooperation to the Indemnifying
Party in contesting any Third Party Claim that the Indemnifying  Party elects to
contest.  The Indemnified Party may participate in, but not control, any defense
or settlement  of any Third Party Claim  controlled  by the  Indemnifying  Party
pursuant to this clause (i), and except as provided in the  preceding  sentence,
the Indemnified Party shall bear its own costs and expenses with respect to such
participation. Notwithstanding the foregoing, the Indemnified Party may takeover
the control of the defense or  settlement  of a Third Party Claim at any time if
it irrevocably  waives its right to indemnity  under Section 9.2 with respect to
such Third  Party  Claim.  (ii) If the  Indemnifying  Party  fails to notify the
Indemnified Party within the Dispute Period that the Indemnifying  Party desires
to  defend  the  Third  Party  Claim  pursuant  to  Section  9.3(a),  or if  the
Indemnifying  Party  gives such  notice but fails to  prosecute  vigorously  and
diligently or settle the Third Party Claim, or if the  Indemnifying  Party fails
to give any notice  whatsoever  within the Dispute Period,  then the Indemnified
Party  shall  have the  right to  defend,  at the sole cost and  expense  of the
Indemnifying Party, the Third Party Claim by all appropriate proceedings,  which
proceedings  shall be prosecuted by the Indemnified Party in a reasonable manner
and in good  faith  or will be  settled  at the  discretion  of the  Indemnified
Party(with  the consent of the  Indemnifying  Party,  which  consent will not be
unreasonably  withheld).  The  Indemnified  Party will have full control of such
defense  and  proceedings,  including  any  compromise  or  settlement  thereof;
provided,  however, that if requested by the Indemnified Party, the Indemnifying
Party will,  at the sole cost and  expense of the  Indemnifying  Party,  provide
reasonable  cooperation to the  Indemnified  Party and its counsel in contesting
any Third Party Claim which the Indemnified Party is contesting. Notwithstanding
the  foregoing  provisions of this clause (ii),  if the  Indemnifying  Party has
notified the Indemnified  Party within the Dispute Period that the  Indemnifying
Party  disputes its  liability or the amount of its  liability  hereunder to the
Indemnified  Party with respect to such Third Party Claim and if such dispute is
resolved  in  favor  of  the  Indemnifying  Party  in  the  manner  provided  in
clause(iii) below, the Indemnifying Party will not be required to bear the costs
and expenses of the Indemnified  Party's defense pursuant to this clause (ii) or
of the Indemnifying  Party's  participation  therein at the Indemnified  Party's
request,  and the Indemnified  Party shall reimburse the  Indemnifying  Party in
full for all reasonable costs and expenses incurred by the Indemnifying Party in
connection with such litigation.  The Indemnifying Party may participate in, but
not control,  any defense or  settlement  controlled  by the  Indemnified  Party
pursuant  to this clause  (ii),  and the  Indemnifying  Party shall bear its own
costs and expenses with respect to such participation. (iii) If the Indemnifying
Party notifies the  Indemnified  Party that it does not dispute its liability or
the amount of its liability to the  Indemnified  Party with respect to the Third
Party Claim under  Section 9.2 or fails to notify the  Indemnified  Party within
the Dispute Period whether the Indemnifying  Party disputes its liability or the
amount of its  liability  to the  Indemnified  Party with  respect to such Third
Party  Claim,  the  amount of Damages  specified  in the Claim  Notice  shall be
conclusively  deemed a liability of the Indemnifying Party under Section 9.2 and
the  Indemnifying  Party shall pay the amount of such Damages to the Indemnified
Party on demand. If the Indemnifying  Party has timely disputed its liability or
the amount of its liability with respect to such claim, the  Indemnifying  Party
and the Indemnified  Party shall proceed in good faith to negotiate a resolution
of such dispute;  provided,  however, that if the dispute is not resolved within
thirty  (30) days  after the  Claim  Notice,  the  Indemnifying  Party  shall be
entitled to institute such legal action as it deems appropriate.

(b) In the event any  Indemnified  Party  should have a claim under  Section 9.2
against the  Indemnifying  Party that does not involve a Third Party Claim,  the
Indemnified Party shall deliver a written  notification of a claim for indemnity
under Section 9.2  specifying  the nature of and basis for such claim,  together
with the amount or, if not then reasonably ascertainable,  the estimated amount,



determined in good faith, of such claim (an "INDEMNITY  NOTICE") with reasonable
promptness to the Indemnifying  Party.  The failure by any Indemnified  Party to
give the Indemnity  Notice shall not impair such party's rights hereunder except
to the  extent  that  the  Indemnifying  Party  demonstrates  that  it has  been
irreparably   prejudiced   thereby.  If  the  Indemnifying  Party  notifies  the
Indemnified  Party that it does not dispute the claim or the amount of the claim
described  in such  Indemnity  Notice or fails to notify the  Indemnified  Party
within the Dispute Period whether the  Indemnifying  Party disputes the claim or
the  amount of the claim  described  in such  Indemnity  Notice,  the  amount of
Damages  specified  in the  Indemnity  Notice  will  be  conclusively  deemed  a
liability of the Indemnifying Party under Section 9.2 and the Indemnifying Party
shall pay the amount of such Damages to the Indemnified  Party on demand. If the
Indemnifying  Party has  timely  disputed  its  liability  or the  amount of its
liability with respect to such claim, the Indemnifying Party and the Indemnified
Party shall  proceed in good faith to  negotiate a resolution  of such  dispute;
provided,  however,  that if the dispute is not resolved within thirty (30) days
after the Claim Notice,  the  Indemnifying  Party shall be entitled to institute
such  legal  action  as it  deems  appropriate.

(c) The indemnity  agreements  contained  herein shall be in addition to (i) any
cause  of  action  or  similar  rights  of the  Indemnified  Party  against  the
Indemnifying Party or others, and (ii)any liabilities the Indemnifying Party may
be subject to.

                                    ARTICLE X

                                  MISCELLANEOUS

Section 10.1 GOVERNING LAW;  JURISDICTION.  This Agreement  shall be governed by
and  interpreted  in  accordance  with the laws of the State of New York without
regard to the  principles  of conflicts of law. Each of the Company and Investor
hereby submit to the  exclusive  jurisdiction  of the United States  Federal and
state courts located in New York with respect to any dispute  arising under this
Agreement,   the  agreements   entered  into  in  connection   herewith  or  the
transactions contemplated hereby or thereby.

Section  10.2 JURY TRIAL  WAIVER.  The Company and the  Investor  hereby waive a
trial by jury in any action, proceeding or counterclaim brought by either of the
parties  hereto  against the other in respect of any matter arising out of or in
connection with the Transaction Documents.

Section 10.3 SPECIFIC ENFORCEMENT.  The Company and the Investor acknowledge and
agree that irreparable  damage would occur to the Investor in the event that any
of the provisions of this Agreement were not performed in accordance  with their
specific terms or were  otherwise  breached.  It is accordingly  agreed that the
Investor  shall be entitled to an injunction or  injunctions  to prevent or cure
breaches of the  provisions of this  Agreement and to enforce  specifically  the
terms and  provisions  hereof or  thereof,  this being in  addition to any other
remedy to which any of them may be entitled by law or equity.

Section 10.4  ASSIGNMENT.  This Agreement shall be binding upon and inure to the
benefit of the Company and Investor  and their  respective  successors.  Neither
this  Agreement  nor any rights of  Investor  or the  Company  hereunder  may be
assigned by either party to any other person. Notwithstanding the foregoing, (a)
the  provisions  of  this  Agreement  shall  inure  to the  benefit  of,  and be
enforceable  by, any transferee of any of the Common Stock purchased or acquired
by Investor  hereunder with respect to the Common Stock held by such person, and
(b) Investor's  interest in this Agreement may be assigned at any time, in whole
but not in part, to any affiliate of Investor.



Section  10.5 THIRD PARTY  BENEFICIARIES.  This  Agreement  is intended  for the
benefit  of the  Company  and  Investor  and  their  respective  successors  and
permitted  assigns,  and is not for the benefit of, nor may any provision hereof
be enforced by, any other person, other than as contemplated under Section 6.10.

Section 10.6  TERMINATION.  This Agreement  shall  terminate:  (a) at the end of
Commitment  Period,  (b) at the  option of the  Company  at any time,  or (c) as
otherwise  provided herein (unless  extended by the agreement of the Company and
Investor);  provided,  however,  that the  provisions  of Article VI, VIII,  and
Sections  9.2,  10.1,  10.2,  and 10.3 shall  survive  the  termination  of this
Agreement.

Section 10.7 ENTIRE  AGREEMENT,  AMENDMENT;  NO WAIVER.  This  Agreement and the
instruments  referenced  herein contain the entire  understanding of the Company
and Investor with respect to the matters  covered herein and therein and, except
as  specifically  set forth herein or therein,  neither the Company nor Investor
makes any representation, warranty, covenant or undertaking with respect to such
matters.  No provision of this  Agreement may be waived or amended other than by
an instrument in writing signed by the party to be charged with enforcement.

Section 10.8 FEES AND EXPENSES.  Each of the Company and Investor  agrees to pay
its own  expenses in  connection  with the  preparation  of this  Agreement  and
performance of its obligations  hereunder.  Any legal fees and expenses incurred
by either the Company or by the  Investor in  connection  with the  preparation,
negotiation,  execution  and  delivery of any  amendments  to this  Agreement or
relating to the enforcement of the rights of any party,  after the occurrence of
any breach of the terms of this  Agreement  by the other party or any default by
the other party in respect of the transactions contemplated hereunder,  shall be
paid on demand by the party which breached the Agreement  and/or  defaulted,  as
the  case  may  be.  The  Company  shall  pay  all  fees  of  any   unaffiliated
broker/dealer,  and Underwriter,  if required, pursuant to rules of the SEC. The
Company  shall pay all transfer  agent fees,  stamp or other  similar  taxes and
duties levied in connection with issuance of the Shares pursuant hereto.

Section 10.9 NO BROKERS. Each of the Company and Investor represents that it has
had no dealings in connection  with this  transaction  with any finder or broker
who will  demand  payment of any fee or  commission  from the other  party.  The
Company  agrees to indemnify  the Investor  against and hold the other  harmless
from any and all liabilities to any persons  claiming  brokerage  commissions or
finder's  fees on account of services  purported to have been rendered on behalf
of the indemnifying  party in connection with this Agreement or the transactions
contemplated hereby.

Section  10.10  COUNTERPARTS.   This  Agreement  may  be  executed  in  multiple
counterparts,  each of which may be executed by less than all of the Company and
shall be deemed to be an original  instrument which shall be enforceable against
the parties actually executing such counterparts and all of which together shall
constitute  one and the same  instrument.  This  Agreement,  once  executed by a
party, may be delivered to the other parties hereto by facsimile transmission of
a copy of this Agreement bearing the signature of the parties so delivering this
Agreement.

Section 10.11 SURVIVAL; SEVERABILITY. The representations, warranties, covenants
and agreements of the Company hereto shall survive each Closing  hereunder for a
period of one (1) year  thereafter.  In the  event  that any  provision  of this
Agreement  becomes or is declared  by a court of  competent  jurisdiction  to be
illegal,  unenforceable or void, this Agreement shall continue in full force and
effect  without  said  provision;  provided  that  such  severability  shall  be
ineffective if it materially  changes the economic  benefit of this Agreement to
any party.



Section 10.12 FURTHER  ASSURANCES.  Each party shall do and perform, or cause to
be done and performed,  all such further acts and things,  and shall execute and
deliver all such other agreements,  certificates,  instruments and documents, as
the other  party may  reasonably  request  in order to carry out the  intent and
accomplish  the  purposes  of  this  Agreement  and  the   consummation  of  the
transactions contemplated hereby.

Section 10.13 NO STRICT  CONSTRUCTION.  The language used in this Agreement will
be deemed to be the  language  chosen by the  parties  to express  their  mutual
intent, and no rules of strict construction will be applied against any party.

Section 10.14 EQUITABLE RELIEF. The Company recognizes that in the event that it
fails to perform, observe, or discharge any or all of its obligations under this
Agreement,  any remedy at law may prove to be inadequate relief to Investor. The
Company  therefore  agrees that  Investor  shall be entitled  to  temporary  and
permanent  injunctive  relief in any such case without the  necessity of proving
actual damages.

Section  10.15  TITLE AND  SUBTITLES.  The  titles  and  subtitles  used in this
Agreement are used for the convenience of reference and are not to be considered
in construing or interpreting this Agreement.

Section 10.16 REPORTING ENTITY FOR THE COMMON STOCK. The reporting entity relied
upon for the determination of the trading price of the Common Stock on any given
Trading Day for the purposes of this  Agreement  shall be Bloomberg  L.P. or any
successor thereto.  The written mutual consent of Investor and the Company shall
be required to employ any other reporting entity.

Section 10.17 PUBLICITY.  The Company and Investor shall consult with each other
in issuing any press releases or otherwise making public statements with respect
to the transactions  contemplated hereby and no party shall issue any such press
release or otherwise  make any such public  statement  without the prior written
consent of the other parties,  which consent shall not be unreasonably  withheld
or delayed, except that no prior consent shall be required if such disclosure is
required by law, in which such case the disclosing party shall provide the other
parties with prior notice of such public statement.  Investor  acknowledges that
this Agreement and all or part of the Transaction  Documents may be deemed to be
"material  contracts"  as that term is defined by Item  601(b)(10) of Regulation
S-K, and that the Company may  therefore  be required to file such  documents as
exhibits to reports or registration statements filed under the Securities Act or
the Exchange Act.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]




      IN WITNESS  WHEREOF,  the parties  hereto have caused this Private  Equity
Credit Agreement to be executed by the  undersigned,  thereunto duly authorized,
as of the date first set forth above.

WATER CHEF, INC.

By: /s/ Leslie J. Kessler
    ----------------------------------------
Name:  Leslie J. Kessler
      --------------------------------------
Title: President and Chief Executive Officer
       -------------------------------------


BRITTANY CAPITAL MANAGEMENT LIMITED

By: /s/ Barry W. Herman
    --------------------------------
Name:  Barry W. Herman
Title: Director



                                    EXHIBITS
                                    --------

EXHIBIT A                     Registration Rights Agreement

EXHIBIT B                     Put Notice

EXHIBIT C                     Opinion

EXHIBIT D                     Closing Certificate

EXHIBIT E                     [Intentionally omitted]

EXHIBIT F                     [Intentionally omitted]


Schedule 4.3                  Options, Warrants