EXHIBIT 4.7


                          REGISTRATION RIGHTS AGREEMENT

     This Registration  Rights Agreement (this  "Agreement") is made and entered
into as of May 11, 2000, among SITESTAR  CORPORATION,  a Nevada corporation (the
"Company"),  and  the  investors  signatory  hereto  (each  such  investor  is a
"Purchaser" and all such investors are, collectively, the "Purchasers ").

     This  Agreement  is made  pursuant  to the  Secured  Convertible  Debenture
Purchase  Agreement,  dated as of the date  hereof  among  the  Company  and the
Purchasers (the "Purchase Agreement").

     The Company and the Purchasers hereby agree as follows:

        1.     Definitions

               Capitalized  terms used and not otherwise defined herein that are
defined in the Purchase  Agreement  shall have the meanings  given such terms in
the Purchase  Agreement.  As used in this  Agreement,  the following terms shall
have the following meanings:

               "Advice" shall have meaning set forth in Section 3(r).

               "Affiliate"  means, with respect to any Person,  any other Person
that directly or indirectly controls or is controlled by or under common control
with such Person. For the purposes of this definition, "control," when used with
respect to any Person, means the possession, direct or indirect, of the power to
direct or cause the  direction  of the  management  and policies of such Person,
whether  through the ownership of voting  securities,  by contract or otherwise;
and the terms of  "affiliated,"  "controlling"  and  "controlled"  have meanings
correlative to the foregoing.

               "Business Day" means any day except Saturday,  Sunday and any day
which shall be a legal  holiday or a day on which  banking  institutions  in the
state  of New  York  generally  are  authorized  or  required  by  law or  other
government actions to close.

               "Closing Date" means May 11, 2000.

               "Commission" means the Securities and Exchange Commission.

               "Common Stock" means the Company's Class A Common Stock, no par
value.

               "Debentures"   means  the  Company's   12%  Secured   Convertible
Debentures  due three  years from the date of  issuance  thereof,  issued to the
Purchasers pursuant to the Purchase Agreement.


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<PAGE>


               "Effectiveness  Date" means the 120th day  following  the Closing
          Date.

               "Effectiveness  Period"  shall  have  the  meaning  set  forth in
          Section 2(a).

               "Exchange  Act" means the  Securities  Exchange  Act of 1934,  as
          amended.

               "Filing Date" means the 30th day following the Closing Date.

               "Holder" or  "Holders"  means the holder or holders,  as the case
          may be, from time to time of Registrable Securities.

               "Indemnified  Party"  shall have the meaning set forth in Section
          5(c).

               "Indemnifying  Party" shall have the meaning set forth in Section
          5(c).

               "Losses" shall have the meaning set forth in Section 5(a).

               "Person"  means  an  individual  or a  corporation,  partnership,
trust,  incorporated  or  unincorporated  association,  joint  venture,  limited
liability  company,  joint stock company,  government (or an agency or political
subdivision thereof) or other entity of any kind.

               "Proceeding"  means an  action,  claim,  suit,  investigation  or
proceeding   (including,   without  limitation,   an  investigation  or  partial
proceeding, such as a deposition), whether commenced or threatened.

               "Prospectus"  means the prospectus  included in the  Registration
Statement  (including,  without  limitation,  a  prospectus  that  includes  any
information  previously  omitted from a prospectus filed as part of an effective
registration  statement  in  reliance  upon  Rule  430A  promulgated  under  the
Securities Act), as amended or supplemented by any prospectus  supplement,  with
respect  to  the  terms  of  the  offering  of any  portion  of the  Registrable
Securities covered by the Registration  Statement,  and all other amendments and
supplements to the  Prospectus,  including  post-effective  amendments,  and all
material  incorporated by reference or deemed to be incorporated by reference in
such Prospectus.

               "Registrable   Securities"  means  the  shares  of  Common  Stock
issuable  (i) upon  conversion  in full of the  Debentures,  (ii) as  payment of
interest in respect of the Debentures, and (iii) upon exercise of the Warrants.

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<PAGE>

               "Registration Statement" means the registration statement and any
additional  registration  statements contemplated by Section 2(a), including (in
each case) the  Prospectus,  amendments  and  supplements  to such  registration
statement or  Prospectus,  including  pre- and  post-effective  amendments,  all
exhibits  thereto,  and all material  incorporated  by reference or deemed to be
incorporated by reference in such registration statement.

               "Rule 144" means Rule 144 promulgated by the Commission  pursuant
to the  Securities  Act, as such Rule may be amended  from time to time,  or any
similar  rule  or  regulation   hereafter   adopted  by  the  Commission  having
substantially the same effect as such Rule.

               "Rule 158" means Rule 158 promulgated by the Commission  pursuant
to the  Securities  Act, as such Rule may be amended  from time to time,  or any
similar  rule  or  regulation   hereafter   adopted  by  the  Commission  having
substantially the same effect as such Rule.

               "Rule 415" means Rule 415 promulgated by the Commission  pursuant
to the  Securities  Act, as such Rule may be amended  from time to time,  or any
similar  rule  or  regulation   hereafter   adopted  by  the  Commission  having
substantially the same effect as such Rule.

               "Securities  Act" means the  Securities  Act of 1933, as amended,
and the rules and regulations promulgated thereunder.

               "Special  Counsel" means one special counsel to the Holders,  for
which the Holders will be reimbursed by the Company pursuant to Section 4.

               "Underwritten  Registration  or  Underwritten  Offering"  means a
registration in connection  with which  securities of the Company are sold to an
underwriter for reoffering to the public  pursuant to an effective  registration
statement.

               "Warrants" means the Common Stock purchase warrants issued to the
Purchasers pursuant to the Purchase Agreement.


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<PAGE>

        2.     Shelf Registration

               (a) On or prior to the Filing Date, the Company shall prepare and
file with the Commission a "Shelf" Registration Statement covering the number of
Registrable  Securities  contemplated by Section 2(b) for an offering to be made
on a continuous basis pursuant to Rule 415. The Registration  Statement shall be
on Form S-1 or Form SB-2 (or on another  appropriate  form as mutually agreed to
by the Company and the Holders).  The Company shall, within ten (10) days of the
date on which the Company  becomes  eligible  to register  the resale by selling
security holders of its securities under Form S-3 promulgated by the Commission,
convert the  Registration  Statement from the originally filed form to Form S-3.
The Company shall use its best efforts to cause the Registration Statement to be
declared  effective  under the  Securities Act as promptly as possible after the
filing thereof,  but in any event prior to the Effectiveness Date, and shall use
its best  efforts to keep such  Registration  Statement  continuously  effective
under the Securities Act until the date which is three years after the date that
such  Registration  Statement is declared  effective by the  Commission  or such
earlier  date  when all  Registrable  Securities  covered  by such  Registration
Statement have been sold or may be sold without volume restrictions  pursuant to
Rule 144(k) as  determined  by the counsel to the Company  pursuant to a written
opinion  letter  to such  effect,  addressed  and  acceptable  to the  Company's
transfer agent (the "Effectiveness Period"), provided, however, that the Company
shall  not be  deemed to have  used its best  efforts  to keep the  Registration
Statement effective during the Effectiveness  Period if it voluntarily takes any
action that would  result in the Holders not being able to sell the  Registrable
Securities  covered by such  Registration  Statement  during  the  Effectiveness
Period,  unless such action is required under  applicable law or the Company has
filed  a  post-effective   amendment  to  the  Registration  Statement  and  the
Commission has not declared it effective.

               (b) In order to account for the fact that the number of shares of
Common Stock  issuable  upon  conversion  of the  Debentures  (and as payment of
interest  thereon) is  determined in part upon the bid price of the Common Stock
prior to the time of conversion,  the initial Registration Statement required to
be filed  hereunder  shall include (but not be limited to) a number of shares of
Common  Stock  equal to no less than the sum of (I) 200% of the number of shares
of Common Stock into which the Debentures, together with the payment of interest
thereon  (assuming  all  interest is paid in shares of Common Stock and that the
Debentures remain outstanding for three years),  are convertible,  assuming such
conversion occurred on the Closing Date, the Filing Date or the date the Company
files an acceleration  request with the Commission  relating to the Registration
Statement,  whichever  yields the  lowest  Conversion  Price (as  defined in the
Debentures) and (ii) the number of shares of Common Stock issuable upon exercise
in full of the Warrants.

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<PAGE>

               (c) If the Holders of a majority of the Registrable Securities so
elect,  an  offering of  Registrable  Securities  pursuant  to the  Registration
Statement  may be  effected  in the form of an  Underwritten  Offering.  In such
event, and, if the managing  underwriters advise the Company and such Holders in
writing that in their opinion the amount of Registrable  Securities  proposed to
be sold  in  such  Underwritten  Offering  exceeds  the  amount  of  Registrable
Securities  which  can be sold in such  Underwritten  Offering,  there  shall be
included in such Underwritten Offering the amount of such Registrable Securities
which in the opinion of such managing  underwriters can be sold, and such amount
shall be allocated  pro-rata  among the Holders  proposing  to sell  Registrable
Securities in such Underwritten Offering.

               (d) If any of the  Registrable  Securities  are to be  sold in an
Underwritten  Offering,  the investment  banker in interest that will administer
the  offering  will be selected by the Holders of a majority of the  Registrable
Securities included in such offering upon consultation with the Company.

        3.     Registration Procedures

               In  connection  with  the  Company's   registration   obligations
hereunder, the Company shall:

               (a)  Prepare  and  file  with the  Commission  on or prior to the
Filing Date, a Registration  Statement on the form  contemplated by Section 2(a)
which Registration  Statement shall contain (except if otherwise directed by the
Holders) the "Plan of  Distribution"  attached  hereto as Annex A, and cause the
Registration  Statement  to become  effective  and remain  effective as provided
herein;  provided,  however, that not less than three (3) Business Days prior to
the  filing of the  Registration  Statement  or any  related  Prospectus  or any
amendment  or  supplement   thereto   (including  any  document  that  would  be
incorporated  or deemed to be  incorporated  therein by reference),  the Company
shall,  (i) furnish to the  Holders,  their  Special  Counsel  and any  managing
underwriters, copies of all such documents proposed to be filed, which documents
(other than those  incorporated  or deemed to be incorporated by reference) will
be  subject  to the  review of such  Holders,  their  Special  Counsel  and such
managing  underwriters,  and (ii) cause its officers and directors,  counsel and
independent  certified public  accountants to respond to such inquiries as shall
be necessary,  in the reasonable  opinion of respective  counsel to such Holders
and such underwriters,  to conduct a reasonable investigation within the meaning
of the Securities  Act. The Company  shall,  within ten (10) days of the date on
which the Company  becomes  eligible to register the resale by selling  security
holders of its securities under Form S-3 promulgated by the Commission,  convert
the  Registration  Statement  from the  originally  filed form to Form S-3.  The
Company shall not file the Registration  Statement or any such Prospectus or any
amendments  or  supplements  thereto to which the  Holders of a majority  of the
Registrable  Securities,  their Special Counsel,  or any managing  underwriters,
shall reasonably object on a timely basis.

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<PAGE>

               (b) (i) Prepare  and file with the  Commission  such  amendments,
including  post-effective  amendments,  to the  Registration  Statement  and the
Prospectus  used  in  connection  therewith  as may be  necessary  to  keep  the
Registration  Statement  continuously effective as to the applicable Registrable
Securities for the Effectiveness Period and prepare and file with the Commission
such  additional  Registration  Statements in order to register for resale under
the Securities  Act all of the  Registrable  Securities;  (ii) cause the related
Prospectus to be amended or supplemented by any required Prospectus  supplement,
and as so  supplemented  or  amended  to be filed  pursuant  to Rule 424 (or any
similar  provisions then in force)  promulgated  under the Securities Act; (iii)
respond as promptly as  reasonably  possible to any comments  received  from the
Commission with respect to the Registration  Statement or any amendment  thereto
and as promptly as  reasonably  possible  provide the Holders  true and complete
copies  of  all  correspondence  from  and  to the  Commission  relating  to the
Registration  Statement;  and (iv)  comply  in all  material  respects  with the
provisions  of the  Securities  Act and the  Exchange  Act with  respect  to the
disposition of all Registrable  Securities covered by the Registration Statement
during  the  applicable  period  in  accordance  with the  intended  methods  of
disposition by the Holders thereof set forth in the Registration Statement as so
amended or in such Prospectus as so supplemented.

               (c) File  additional  Registration  Statements  if the  number of
Registrable  Securities at any time exceeds the number of shares of Common Stock
then registered in a Registration  Statement.  The Company shall have 30 days to
file such additional  Registration Statements after its receipt of notice of the
requirement  thereof which the Holders may give at any time when the Registrable
Securities  exceeds 85% of the number of shares of Common Stock then  registered
in a Registration Statement hereunder. In such event, the Registration Statement
required to be filed by the Company  shall  include a number of shares of Common
Stock  equal to no less than 200% of the  number of shares of Common  Stock into
which all then  outstanding  principal  amount  of  Debentures  are  convertible
(assuming  such  conversion  occurred on the Filing  Date for such  Registration
Statement or the date of the filing of the final acceleration  request therefor,
whichever date yields a lower  Conversion  Price) less the shares covered by the
prior  Registration  Statement  and any other  Registrable  Securities  not then
registered in a Registration Statement.


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<PAGE>

               (d) Notify  the  Holders of  Registrable  Securities  to be sold,
their Special  Counsel and any managing  underwriters  as promptly as reasonably
possible (and, in the case of (i)(A) below, not less than five (5) days prior to
such  filing)  and (if  requested  by any such  Person)  confirm  such notice in
writing no later  than one (1)  Business  Day  following  the day (i)(A)  when a
Prospectus  or any  Prospectus  supplement  or  post-effective  amendment to the
Registration Statement is proposed to be filed; (B) when the Commission notifies
the Company whether there will be a "review" of such Registration  Statement and
whenever the Commission comments in writing on such Registration  Statement (the
Company shall provide true and complete copies thereof and all written responses
thereto to each of the Holders, which the Holders shall keep confidential);  and
(C) with respect to the Registration Statement or any post-effective  amendment,
when the same has become effective; (ii) of any request by the Commission or any
other Federal or state  governmental  authority for amendments or supplements to
the Registration Statement or Prospectus or for additional information; (iii) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration  Statement covering any or all of the Registrable Securities or
the initiation of any Proceedings  for that purpose;  (iv) if at any time any of
the  representations  and  warranties of the Company  contained in any agreement
(including any underwriting agreement) contemplated hereby ceases to be true and
correct in all  material  respects;  (v) of the  receipt  by the  Company 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;  and (vi) of the  occurrence of any event or passage of time that makes
the financial  statements included in the Registration  Statement ineligible for
inclusion  therein  or any  statement  made  in the  Registration  Statement  or
Prospectus or any document  incorporated or deemed to be incorporated therein by
reference  untrue in any material  respect or that requires any revisions to the
Registration  Statement,  Prospectus or other  documents so that, in the case of
the  Registration  Statement or the Prospectus,  as the case may be, 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 light of the circumstances under which they were made, not misleading.

               (e) Use its best efforts to avoid the issuance of, or, if issued,
obtain the  withdrawal  of (i) any order  suspending  the  effectiveness  of the
Registration  Statement,  or  (ii)  any  suspension  of  the  qualification  (or
exemption from  qualification) of any of the Registrable  Securities for sale in
any jurisdiction, at the earliest practicable moment.

               (f) If requested by any managing  underwriter or the Holders of a
majority in interest of the Registrable Securities to be sold in connection with
an Underwritten Offering, (i) promptly incorporate in a Prospectus supplement or
post-effective  amendment to the Registration Statement such information as such
managing  underwriters  and such  Holders  reasonably  agree  should be included
therein,  and (ii) make all required  filings of such  Prospectus  supplement or
such  post-effective  amendment  as soon as  practicable  after the  Company has
received  notification  of the  matters to be  incorporated  in such  Prospectus
supplement or  post-effective  amendment;  provided,  however,  that the Company
shall not be required  to take any action  pursuant  to this  Section  3(f) that
would, in the opinion of counsel for the Company,  violate  applicable law or be
materially detrimental to the business prospects of the Company.

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<PAGE>

               (g)  Furnish  to  each  Holder,  their  Special  Counsel  and any
managing  underwriters,  without  charge,  at least one  conformed  copy of each
Registration  Statement and each  amendment  thereto,  including,  if requested,
financial statements and schedules,  all documents  incorporated or deemed to be
incorporated  therein by reference,  and all exhibits to the extent requested by
such Person (including those previously  furnished or incorporated by reference)
promptly after the filing of such documents with the Commission.

               (h) Promptly deliver to each Holder,  their Special Counsel,  and
any  underwriters,   without  charge,  as  many  copies  of  the  Prospectus  or
Prospectuses   (including  each  form  of  prospectus)  and  each  amendment  or
supplement  thereto as such  Persons  may  reasonably  request;  and the Company
hereby  consents to the use of such  Prospectus and each amendment or supplement
thereto by each of the selling  Holders and any  underwriters in connection with
the offering and sale of the Registrable  Securities  covered by such Prospectus
and any amendment or supplement thereto.

               (i) Prior to any public offering of Registrable  Securities,  use
its best efforts to register or qualify or cooperate  with the selling  Holders,
any  underwriters  and their Special Counsel in connection with the registration
or qualification  (or exemption from such registration or qualification) of such
Registrable  Securities for offer and sale under the securities or Blue Sky laws
of such  jurisdictions  within  the United  States as any Holder or  underwriter
requests  in  writing,  to keep  each such  registration  or  qualification  (or
exemption therefrom) effective during the Effectiveness Period and to do any and
all other acts or things  necessary or advisable  to enable the  disposition  in
such  jurisdictions  of the  Registrable  Securities  covered by a  Registration
Statement;  provided, however, that the Company shall not be required to qualify
generally to do business in any  jurisdiction  where it is not then so qualified
or to take any action that would subject it to general service of process in any
such jurisdiction  where it is not then so subject or subject the Company to any
material tax in any such jurisdiction where it is not then so subject.

               (j) Cooperate with the Holders and any managing  underwriters  to
facilitate  the timely  preparation  and delivery of  certificates  representing
Registrable   Securities  to  be  delivered  to  a  transferee   pursuant  to  a
Registration  Statement,  which  certificates  shall  be  free,  to  the  extent
permitted by  applicable  law, of all  restrictive  legends,  and to enable such
Registrable  Securities to be in such denominations and registered in such names
as any such managing underwriters or Holders may request.

               (k) Upon the  occurrence  of any event  contemplated  by  Section
3(d)(vi), as promptly as reasonably possible, prepare a supplement or amendment,
including  a  post-effective  amendment,  to  the  Registration  Statement  or a
supplement to the related  Prospectus or any document  incorporated or deemed to
be incorporated  therein by reference,  and file any other required  document so
that,  as  thereafter  delivered,  neither the  Registration  Statement nor such
Prospectus will contain an untrue  statement of a material fact or omit to state
a  material  fact  required  to be  stated  therein  or  necessary  to make  the
statements  therein,  in light of the circumstances  under which they were made,
not misleading.

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<PAGE>

               (l) Use its best  efforts  to cause  all  Registrable  Securities
relating  to such  Registration  Statement  to be listed on the Nasdaq  National
Market  ("NASDAQ") or on any other stock market or trading facility on which the
shares of  Common  Stock  are  traded,  listed  or  quoted,  including,  without
limitation,  the OTC  Bulletin  Board (each a  "Subsequent  Market") as and when
required pursuant to the Purchase Agreement.

               (m)  Enter  into  such  agreements   (including  an  underwriting
agreement  in  form,  scope  and  substance  as  is  customary  in  Underwritten
Offerings)  and take all such other actions in connection  therewith  (including
those  reasonably  requested by any managing  underwriters  and the Holders of a
majority  of the  Registrable  Securities  being  sold) in order to  expedite or
facilitate the disposition of such Registrable Securities, and whether or not an
underwriting  agreement  is  entered  into,  (i) make such  representations  and
warranties  to such Holders and such  underwriters  as are  customarily  made by
issuers  to  underwriters  in  underwritten  public  offerings  (subject  to the
scheduling  of  appropriate   exceptions  to  insure  such  representations  and
warranties are accurate),  and confirm the same if and when  requested;  (ii) in
the case of an  Underwritten  Offering obtain and deliver copies thereof to each
Holder and the  managing  underwriters,  if any,  of  opinions of counsel to the
Company and updates thereof  addressed to each Holder and each such underwriter,
in form,  scope  and  substance  reasonably  satisfactory  to any such  managing
underwriters  and Special  Counsel to the selling  Holders  covering the matters
customarily  covered in opinions  requested in  Underwritten  Offerings and such
other  matters  as may be  reasonably  requested  by such  Special  Counsel  and
underwriters;  (iii)  immediately prior to the effectiveness of the Registration
Statement, and, in the case of an Underwritten Offering, at the time of delivery
of any  Registrable  Securities sold pursuant  thereto,  use its best reasonable
efforts  to  obtain  and  deliver   copies  to  the  Holders  and  the  managing
underwriters,  if any, of "cold  comfort"  letters and updates  thereof from the
independent certified public accountants of the Company (and, if necessary,  any
other independent  certified public accountants of any subsidiary of the Company
or of any business  acquired by the Company for which  financial  statements and
financial  data  is,  or  is  required  to  be,  included  in  the  Registration
Statement),  addressed to the Company in form and  substance as are customary in
connection with  Underwritten  Offerings;  (iv) if an underwriting  agreement is
entered into, the same shall contain  indemnification  provisions and procedures
no less  favorable to the selling  Holders and the  underwriters,  if any,  than
those set forth in Section 5 (or such other provisions and procedures acceptable
to the managing  underwriters,  if any, and holders of a majority of Registrable
Securities  participating in such Underwritten  Offering);  and (v) deliver such
documents and  certificates  as may be reasonably  requested by the Holders of a
majority of the Registrable Securities being sold, their Special Counsel and any
managing  underwriters to evidence the continued validity of the representations
and warranties made pursuant to Section 3(m)(i) above and to evidence compliance
with any customary conditions  contained in the underwriting  agreement or other
agreement entered into by the Company.

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<PAGE>

               (n) Make  available for  inspection by the selling  Holders,  any
representative of such Holders, any underwriter participating in any disposition
of  Registrable  Securities,  and any  attorney or  accountant  retained by such
selling  Holders or  underwriters,  at the offices where normally  kept,  during
reasonable business hours, all financial and other records,  pertinent corporate
documents  and  properties  of the Company and its  subsidiaries,  and cause the
officers, directors, agents and employees of the Company and its subsidiaries to
supply all  information  in each case  reasonably  requested by any such Holder,
representative,  underwriter,  attorney or  accountant  in  connection  with the
Registration  Statement;   provided,  however,  that  any  information  that  is
determined  in good faith by the  Company  in  writing  to be of a  confidential
nature at the time of delivery of such information shall be kept confidential by
such Persons,  unless (i) disclosure of such information is required by court or
administrative  order or is  necessary  to respond to  inquiries  of  regulatory
authorities;  (ii) disclosure of such information,  in the opinion of counsel to
such  Person,  is  required by law;  (iii) such  information  becomes  generally
available  to the public  other than as a result of a  disclosure  or failure to
safeguard by such Person;  or (iv) such  information  becomes  available to such
Person from a source other than the Company and such source is not known by such
Person to be bound by a confidentiality agreement with the Company.

               (o)  Comply  with all  applicable  rules and  regulations  of the
Commission.

               (p) The Company may require each selling Holder to furnish to the
Company  such  information   regarding  the  distribution  of  such  Registrable
Securities and the  beneficial  ownership of Common Stock held by such Holder as
is  required  by law to be  disclosed  in the  Registration  Statement,  and the
Company may exclude from such  registration  the  Registrable  Securities of any
such  Holder  who  unreasonably  fails  to  furnish  such  information  within a
reasonable time after receiving such request.

               (q) If the Registration Statement refers to any Holder by name or
otherwise as the holder of any securities of the Company, then such Holder shall
have the right to require (if such reference to such Holder by name or otherwise
is not required by the  Securities  Act or any similar  Federal  statute then in
force)  the  deletion  of the  reference  to such  Holder  in any  amendment  or
supplement to the  Registration  Statement  filed or prepared  subsequent to the
time that such reference ceases to be required.

               (r) Each  Holder  covenants  and agrees that (i) it will not sell
any  Registrable  Securities  under  the  Registration  Statement  until  it has
received   copies  of  the  Prospectus  as  then  amended  or   supplemented  as
contemplated in Section 3(h) and notice from the Company that such  Registration
Statement and any  post-effective  amendments  thereto have become  effective as
contemplated  by  Section  3(d)  and  (ii) it and  its  officers,  directors  or
Affiliates, if any, will comply with the prospectus delivery requirements of the
Securities  Act as  applicable  to it in  connection  with sales of  Registrable
Securities pursuant to the Registration Statement.

                                       10
<PAGE>

               Each  Holder  agrees  by  its  acquisition  of  such  Registrable
Securities  that, upon receipt of a notice from the Company of the occurrence of
any event of the kind  described  in  Sections  3(d)(ii),  3(d)(iii),  3(d)(iv),
3(d)(v) or 3(d)(vi),  such Holder will forthwith discontinue disposition of such
Registrable  Securities  under the  Registration  Statement  until such Holder's
receipt of the copies of the supplemented Prospectus and/or amended Registration
Statement  contemplated  by Section 3(k), or until it is advised in writing (the
"Advice")  by the  Company  that  the use of the  applicable  Prospectus  may be
resumed,  and,  in  either  case,  has  received  copies  of any  additional  or
supplemental  filings  that are  incorporated  or deemed to be  incorporated  by
reference in such Prospectus or Registration Statement.  The Company may provide
appropriate stop orders to enforce the provisions of this paragraph.

               4.     Registration Expenses

               (a) All fees  and  expenses  incident  to the  performance  of or
compliance  with this  Agreement  by the  Company,  except as and to the  extent
specified in Section 4(b), shall be borne by the Company whether or not pursuant
to an  Underwritten  Offering and whether or not the  Registration  Statement is
filed or becomes  effective and whether or not any  Registrable  Securities  are
sold pursuant to the Registration  Statement.  The fees and expenses referred to
in  the  foregoing  sentence  shall  include,   without   limitation,   (i)  all
registration and filing fees (including,  without limitation,  fees and expenses
(A)  with  respect  to  filings  required  to be made  with the  NASDAQ  and any
Subsequent Market on which the Common Stock is then listed for trading,  and (B)
in  compliance  with  state  securities  or Blue  Sky laws  (including,  without
limitation, fees and disbursements of counsel for the Holders in connection with
Blue  Sky  qualifications  or  exemptions  of  the  Registrable  Securities  and
determination  of the eligibility of the  Registrable  Securities for investment
under the laws of such  jurisdictions as the managing  underwriters,  if any, or
the  Holders of a majority  of  Registrable  Securities  may  designate)),  (ii)
printing  expenses   (including,   without  limitation,   expenses  of  printing
certificates  for  Registrable  Securities and of printing  prospectuses  if the
printing of prospectuses is requested by the managing  underwriters,  if any, or
by the  holders of a majority  of the  Registrable  Securities  included  in the
Registration Statement), (iii) messenger,  telephone and delivery expenses, (iv)
fees and  disbursements  of counsel for the Company and Special  Counsel for the
Holders, (v) Securities Act liability insurance,  if the Company so desires such
insurance,  and (vi) fees and  expenses  of all other  Persons  retained  by the
Company in connection with the consummation of the transactions  contemplated by
this  Agreement.  In addition,  the Company shall be responsible  for all of its
internal   expenses   incurred  in  connection  with  the  consummation  of  the
transactions contemplated by this Agreement (including,  without limitation, all
salaries  and  expenses  of its  officers  and  employees  performing  legal  or
accounting  duties),  the  expense of any annual  audit,  the fees and  expenses
incurred in  connection  with the listing of the  Registrable  Securities on any
securities exchange as required hereunder.

                                       11
<PAGE>

               (b) If the Holders require an Underwritten  Offering  pursuant to
the terms  hereof,  the Company  shall be  responsible  for all costs,  fees and
expenses in connection  therewith,  except for the fees and disbursements of the
Underwriters  (including any  underwriting  commissions and discounts) and their
legal counsel and accountants.  By way of illustration  which is not intended to
diminish  from  the  provisions  of  Section  4(a),  the  Holders  shall  not be
responsible  for,  and  the  Company  shall  be  required  to pay  the  fees  or
disbursements  incurred  by the  Company  (including  by its legal  counsel  and
accountants)  in connection  with, the  preparation and filing of a Registration
Statement and related  Prospectus  for such  offering,  the  maintenance of such
Registration  Statement in accordance with the terms hereof,  the listing of the
Registrable  Securities in accordance with the requirements hereof, and printing
expenses incurred to comply with the requirements hereof.

        5.     Indemnification

               (a)   Indemnification   by  the  Company.   The  Company   shall,
notwithstanding  any termination of this Agreement,  indemnify and hold harmless
each  Holder,  the  officers,  directors,  agents  (including  any  underwriters
retained by such  Holder in  connection  with the offer and sale of  Registrable
Securities),   brokers   (including  brokers  who  offer  and  sell  Registrable
Securities  as principal as a result of a pledge or any failure to perform under
a margin call of Common  Stock),  investment  advisors and  employees of each of
them, each Person who controls any such Holder (within the meaning of Section 15
of the  Securities  Act or Section  20 of the  Exchange  Act) and the  officers,
directors,  agents and employees of each such controlling Person, to the fullest
extent permitted by applicable law, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation, costs of preparation
and attorneys' fees) and expenses (collectively, "Losses"), as incurred, arising
out of or relating to any untrue or alleged untrue  statement of a material fact
contained  in  the  Registration  Statement,  any  Prospectus  or  any  form  of
prospectus  or in any  amendment  or  supplement  thereto or in any  preliminary
prospectus, or arising out of or relating to any omission or alleged omission of
a  material  fact  required  to be  stated  therein  or  necessary  to make  the
statements  therein  (in the case of any  Prospectus  or form of  prospectus  or
supplement  thereto,  in light of the circumstances  under which they were made)
not  misleading,  except to the extent,  but only to the  extent,  that (1) such
untrue statements or omissions are based solely upon information  regarding such
Holder  furnished  in writing to the  Company by such Holder  expressly  for use
therein,  or to the extent that such information  relates to such Holder or such
Holder's  proposed  method of  distribution  of  Registrable  Securities and was
reviewed and expressly  approved in writing by such Holder  expressly for use in
the Registration Statement, such Prospectus or such form of Prospectus or in any
amendment or supplement  thereto or (2) in the case of an occurrence of an event
of the type  specified  in Section  3(d)(ii)-(vi),  the use by such Holder of an
outdated or defective  Prospectus  after the Company has notified such Holder in
writing that the Prospectus is outdated or defective and prior to the receipt by
such Holder of the Advice contemplated in Section 3(r). The Company shall notify
the Holders promptly of the  institution,  threat or assertion of any Proceeding
of which the Company is aware in connection with the  transactions  contemplated
by this Agreement.

                                       12
<PAGE>

               (b) Indemnification by Holders. Each Holder shall,  severally and
not jointly,  indemnify and hold harmless the Company, its directors,  officers,
agents and employees,  each Person who controls the Company  (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the
directors,  officers,  agents or employees of such controlling  Persons,  to the
fullest  extent  permitted by  applicable  law,  from and against all Losses (as
determined by a court of competent  jurisdiction in a final judgment not subject
to appeal or  review)  arising  solely  out of or based  solely  upon any untrue
statement  of a material  fact  contained  in the  Registration  Statement,  any
Prospectus,  or any  form  of  prospectus,  or in any  amendment  or  supplement
thereto,  or  arising  solely  out of or based  solely  upon any  omission  of a
material fact required to be stated  therein or necessary to make the statements
therein not misleading to the extent,  but only to the extent,  that such untrue
statement or omission is contained in any information so furnished in writing by
such  Holder to the  Company  specifically  for  inclusion  in the  Registration
Statement or such Prospectus or to the extent that such  information  relates to
such Holder or such Holder's  proposed  method of  distribution  of  Registrable
Securities  and was  reviewed and  expressly  approved in writing by such Holder
expressly for use in the Registration Statement, such Prospectus or such form of
Prospectus,  or in any  amendment or supplement  thereto.  In no event shall the
liability of any selling  Holder  hereunder be greater in amount than the dollar
amount  of the  net  proceeds  received  by such  Holder  upon  the  sale of the
Registrable Securities giving rise to such indemnification obligation.

               (c) Conduct of  Indemnification  Proceedings.  If any  Proceeding
shall be brought or asserted against any Person entitled to indemnity  hereunder
(an  "Indemnified  Party"),  such  Indemnified  Party shall promptly  notify the
Person from whom indemnity is sought (the "Indemnifying  Party") in writing, and
the  Indemnifying  Party  shall  assume  the  defense  thereof,   including  the
employment of counsel  reasonably  satisfactory to the Indemnified Party and the
payment of all fees and expenses  incurred in connection  with defense  thereof;
provided,  that the failure of any  Indemnified  Party to give such notice shall
not relieve the Indemnifying Party of its obligations or liabilities pursuant to
this  Agreement,  except  (and  only) to the  extent  that it  shall be  finally
determined  by a court of competent  jurisdiction  (which  determination  is not
subject to appeal or further  review) that such failure  shall have  proximately
and materially adversely prejudiced the Indemnifying Party.

               An  Indemnified  Party  shall  have the right to employ  separate
counsel in any such  Proceeding and to participate in the defense  thereof,  but
the  fees  and  expenses  of  such  counsel  shall  be at the  expense  of  such
Indemnified  Party or Parties unless:  (1) the Indemnifying  Party has agreed in
writing to pay such fees and expenses;  or (2) the Indemnifying Party shall have
failed  promptly to assume the defense of such  Proceeding and to employ counsel
reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3)
the named  parties to any such  Proceeding  (including  any  impleaded  parties)
include  both  such  Indemnified  Party  and the  Indemnifying  Party,  and such
Indemnified Party shall have been advised by counsel that a conflict of interest


                                       13
<PAGE>

is likely to exist if the same counsel were to represent such Indemnified  Party
and the Indemnifying  Party (in which case, if such  Indemnified  Party notifies
the  Indemnifying  Party in writing that it elects to employ separate counsel at
the expense of the Indemnifying Party, the Indemnifying Party shall not have the
right to assume the defense  thereof and such counsel shall be at the expense of
the  Indemnifying  Party).  The  Indemnifying  Party shall not be liable for any
settlement of any such Proceeding  effected without its written  consent,  which
consent shall not be unreasonably withheld. No Indemnifying Party shall, without
the prior written consent of the Indemnified Party, effect any settlement of any
pending Proceeding in respect of which any Indemnified Party is a party,  unless
such settlement includes an unconditional release of such Indemnified Party from
all liability on claims that are the subject matter of such Proceeding.

               All  fees  and  expenses  of  the  Indemnified  Party  (including
reasonable  fees  and  expenses  to  the  extent  incurred  in  connection  with
investigating   or  preparing  to  defend  such   Proceeding  in  a  manner  not
inconsistent  with this  Section)  shall be paid to the  Indemnified  Party,  as
incurred,  within  ten (10)  Business  Days of  written  notice  thereof  to the
Indemnifying  Party  (regardless of whether it is ultimately  determined that an
Indemnified Party is not entitled to indemnification  hereunder;  provided, that
the  Indemnifying  Party may require  such  Indemnified  Party to  undertake  to
reimburse  all such fees and  expenses  to the extent it is  finally  judicially
determined  that  such  Indemnified  Party is not  entitled  to  indemnification
hereunder).

               (d) Contribution.  If a claim for  indemnification  under Section
5(a) or 5(b) is unavailable to an Indemnified  Party (by reason of public policy
or  otherwise),  then each  Indemnifying  Party,  in lieu of  indemnifying  such
Indemnified  Party,  shall  contribute  to the  amount  paid or  payable by such
Indemnified  Party  as a  result  of  such  Losses,  in  such  proportion  as is
appropriate  to  reflect  the  relative  fault  of the  Indemnifying  Party  and
Indemnified  Party in connection with the actions,  statements or omissions that
resulted in such Losses as well as any other relevant equitable  considerations.
The relative fault of such  Indemnifying  Party and  Indemnified  Party shall be
determined by reference to, among other things,  whether any action in question,
including any untrue or alleged untrue  statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information  supplied by, such Indemnifying  Party or Indemnified Party, and the
parties'  relative intent,  knowledge,  access to information and opportunity to
correct or prevent  such  action,  statement  or  omission.  The amount  paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in Section 5(c), any reasonable attorneys' or other
reasonable  fees or  expenses  incurred  by such  party in  connection  with any
Proceeding to the extent such party would have been indemnified for such fees or
expenses if the  indemnification  provided for in this Section was  available to
such party in accordance with its terms.


                                       14
<PAGE>

               The parties  hereto agree that it would not be just and equitable
if  contribution  pursuant  to this  Section  5(d) were  determined  by pro rata
allocation or by any other method of allocation  that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no Holder shall be required
to contribute, in the aggregate, any amount in excess of the amount by which the
proceeds  actually  received  by such  Holder  from the sale of the  Registrable
Securities subject to the Proceeding exceeds the amount of any damages that such
Holder has  otherwise  been  required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation  (within the meaning of Section 11(f) of the  Securities  Act)
shall be  entitled  to  contribution  from any Person who was not guilty of such
fraudulent misrepresentation.

               The  indemnity  and  contribution  agreements  contained  in this
Section are in addition to any liability that the Indemnifying  Parties may have
to the Indemnified Parties.

        6.     Miscellaneous

               (a)  Remedies.  In the event of a breach by the  Company  or by a
Holder,  of any of their  obligations  under this Agreement,  each Holder or the
Company,  as the case may be, in  addition to being  entitled  to  exercise  all
rights granted by law and under this Agreement,  including  recovery of damages,
will be entitled to specific performance of its rights under this Agreement. The
Company and each Holder agree that monetary  damages would not provide  adequate
compensation  for any losses  incurred by reason of a breach by it of any of the
provisions of this Agreement and hereby further agrees that, in the event of any
action for specific  performance  in respect of such breach,  it shall waive the
defense that a remedy at law would be adequate.

               (b) No  Inconsistent  Agreements.  Neither the Company nor any of
its subsidiaries has, as of the date hereof, nor shall the Company or any of its
subsidiaries,  on or after the date of this Agreement,  enter into any agreement
with respect to its securities that is  inconsistent  with the rights granted to
the Holders in this Agreement or otherwise conflicts with the provisions hereof.
Except as and to the extent  specified  in  Schedule  6(b)  hereto,  neither the
Company nor any of its  subsidiaries  has previously  entered into any agreement
granting any  registration  rights with respect to any of its  securities to any
Person.  Without  limiting the generality of the foregoing,  without the written
consent  of the  Holders  of a  majority  of the  then  outstanding  Registrable
Securities,  the Company  shall not grant to any Person the right to request the
Company to register  any  securities  of the Company  under the  Securities  Act
unless the rights so granted are subject in all  respects to the prior rights in
full of the  Holders  set forth  herein,  and are not  otherwise  in conflict or
inconsistent with the provisions of this Agreement.

                                       15
<PAGE>

               (c) No  Piggyback on  Registrations.  Except as and to the extent
specified in Schedule  6(b) hereto,  neither the Company nor any of its security
holders  (other than the Holders in such capacity  pursuant  hereto) may include
securities  of  the  Company  in  the  Registration  Statement  other  than  the
Registrable  Securities,  and the Company  shall not after the date hereof enter
into any agreement providing any such right to any of its security holders.

               (d) Piggy-Back Registrations. If at any time when there is not an
effective  Registration Statement covering all of the Registrable Securities and
the Underlying  Shares, the Company shall determine to prepare and file with the
Commission a registration  statement relating to an offering for its own account
or the  account  of  others  under  the  Securities  Act  of  any of its  equity
securities,  other than on Form S-4 or Form S-8 (each as  promulgated  under the
Securities Act) or their then  equivalents  relating to equity  securities to be
issued solely in connection  with any  acquisition  of any entity or business or
equity  securities  issuable in connection  with stock option or other  employee
benefit  plans,  then the  Company  shall  send to each  holder  of  Registrable
Securities  written notice of such determination and, if within twenty (20) days
after receipt of such notice,  any such holder shall so request in writing,  the
Company  shall  include in such  registration  statement all or any part of such
Registrable Securities such holder requests to be registered; provided, however,
that the Company  shall not be required to register any  Registrable  Securities
pursuant to this Section 6(d) that are eligible for sale pursuant to Rule 144(k)
of the Commission.

               (e)  Amendments and Waivers.  The  provisions of this  Agreement,
including  the  provisions  of this  sentence,  may not be amended,  modified or
supplemented,  and waivers or consents to departures from the provisions  hereof
may not be given,  unless the same shall be in writing and signed by the Company
and the  Holders  of at least  two-thirds  of the then  outstanding  Registrable
Securities.  Notwithstanding  the foregoing,  a waiver or consent to depart from
the provisions  hereof with respect to a matter that relates  exclusively to the
rights of Holders and that does not directly or indirectly  affect the rights of
other Holders may be given by Holders of at least a majority of the  Registrable
Securities to which such waiver or consent relates; provided,  however, that the
provisions of this sentence may not be amended, modified, or supplemented except
in accordance with the provisions of the immediately preceding sentence.

               (f)  Notices.  Any and all  notices  or other  communications  or
deliveries  required or permitted to be provided  hereunder  shall be in writing
and  shall be deemed  given and  effective  on the  earliest  of (i) the date of
transmission,  if such notice or communication is delivered via facsimile at the
facsimile  telephone  number  specified in this Section  prior to 6:30 p.m. (New
York City  time) on a  Business  Day,  (ii) the  Business  Day after the date of
transmission,  if such notice or communication is delivered via facsimile at the
facsimile  telephone number specified in the Purchase  Agreement later than 6:30
p.m. (New York City time) on any date and earlier than 11:59 p.m. (New York City
time) on such date,  (iii) the Business Day  following  the date of mailing,  if
sent by nationally  recognized  overnight  courier service,  or (iv) upon actual
receipt by the party to whom such notice is  required  to be given.  The address
for such notices and communications shall be as follows:

                                       16
<PAGE>

        If to the Company:              16133 Ventura Boulevard, Suite 635
                                        Encino, CA 91436
                                        Attn:  Clinton J. Sallee

        If to a Purchaser:              To the address set forth
                                        under  such   Purchaser's  name  on  the
                                        signature pages hereto.

        If to any other Person who is then the registered Holder:

               To the address of such Holder as it appears in the
                       stock transfer books of the Company

or such other  address as may be designated  in writing  hereafter,  in the same
manner, by such Person.

               (g)  Successors and Assigns.  This  Agreement  shall inure to the
benefit of and be binding upon the successors  and permitted  assigns of each of
the parties and shall inure to the benefit of each  Holder.  The Company may not
assign its rights or obligations  hereunder without the prior written consent of
each Holder.  Each Holder may assign their  respective  rights  hereunder in the
manner and to the Persons as permitted under the Purchase Agreement.

               (h) Counterparts. This Agreement may be executed in any number of
counterparts,  each of which when so executed  shall be deemed to be an original
and, all of which taken together shall constitute one and the same Agreement. In
the event that any  signature  is  delivered  by  facsimile  transmission,  such
signature shall create a valid binding  obligation of the party executing (or on
whose behalf such signature is executed) the same with the same force and effect
as if such facsimile signature were the original thereof.

               (i) Governing  Law. All questions  concerning  the  construction,
validity,  enforcement and interpretation of this Agreement shall be governed by
and construed and enforced in accordance  with the internal laws of the State of
New York,  without  regard to the  principles of conflicts of law thereof.  Each
party hereby irrevocably submits to the exclusive  jurisdiction of the state and
federal  courts sitting in the City of New York,  borough of Manhattan,  for the
adjudication  of any dispute  hereunder  or in  connection  herewith or with any
transaction  contemplated  hereby or discussed  herein,  and hereby  irrevocably
waives,  and agrees not to assert in any suit,  action or proceeding,  any claim
that it is not personally  subject to the  jurisdiction of any such court,  that
such suit,  action or  proceeding  is improper.  Each party  hereby  irrevocably
waives  personal  service of process and consents to process being served in any
such suit,  action or  proceeding by mailing a copy thereof to such party at the
address in effect for  notices to it under this  Agreement  and agrees that such
service  shall  constitute  good and  sufficient  service of process  and notice
thereof.  Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law.

                                       17
<PAGE>

               (j)    Cumulative  Remedies.   The remedies  provided  herein are
cumulative and not exclusive of any remedies provided by law.

               (k) Severability. If any term, provision, covenant or restriction
of this  Agreement is held by a court of competent  jurisdiction  to be invalid,
illegal,  void  or  unenforceable,  the  remainder  of  the  terms,  provisions,
covenants  and  restrictions  set forth  herein  shall  remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto  shall use their  reasonable  efforts to find and  employ an  alternative
means to achieve the same or substantially  the same result as that contemplated
by such term,  provision,  covenant or restriction.  It is hereby stipulated and
declared to be the  intention of the parties  that they would have  executed the
remaining terms, provisions, covenants and restrictions without including any of
such that may be hereafter declared invalid, illegal, void or unenforceable.

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

               (m) Shares Held by The Company and its  Affiliates.  Whenever the
consent  or  approval  of  Holders  of a  specified  percentage  of  Registrable
Securities is required hereunder,  Registrable Securities held by the Company or
its  Affiliates  (other than any Holder or  transferees or successors or assigns
thereof  if such  Holder is deemed  to be an  Affiliate  solely by reason of its
holdings of such  Registrable  Securities)  shall not be counted in  determining
whether  such  consent or  approval  was given by the  Holders of such  required
percentage.


                   [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
                            SIGNATURE PAGE TO FOLLOW]



                                       18
<PAGE>


               IN WITNESS WHEREOF,  the parties have executed this  Registration
Rights Agreement as of the date first written above.

                             SITESTAR CORPORATION

                                   /s/ Clinton J. Sallee
                             By:__________________________________
                             Name:  Clinton J. Sallee
                             Title:    President & CEO


                             NEW MILLENNIUM CAPITAL PARTNERS II, LLC
                             By:        FIRST STREET MANAGER II, LLC

                                   /s/ Glenn A. Arbeitman
                             By:_____________________________________
                             Name:      Glenn A. Arbeitman
                             Title:     Manager

                             155 First Street, Suite B
                             Mineola, New York 11501
                             Facsimile No.: 516-739-7115

                             Debentures Purchase Price:      $350,000

                             AJW PARTNERS, LLC

                             By:         SMS GROUP, LLC

                                   /s/ Corey S. Ribotsky
                             By:_____________________________________
                             Name:      Corey S. Ribotsky
                             Title:     Manager

                             155 First Street, Suite B
                             Mineola, New York 11501
                             Facsimile No.: 516-739-7115

                             Debentures Purchase Price:      $150,000



                                       19
<PAGE>

                                     Annex A

                              Plan of Distribution


        The  Selling  Stockholders  and any of  their  pledgees,  assignees  and
successors-in-interest  may, from time to time,  sell any or all of their shares
of Common Stock on any stock exchange,  market or trading  facility on which the
shares  are traded or in private  transactions.  These  sales may be at fixed or
negotiated  prices.  The  Selling  Stockholders  may  use any one or more of the
following methods when selling shares:

     o    ordinary   brokerage   transactions  and  transactions  in  which  the
          broker-dealer solicits purchasers;

     o    block  trades  in which the  broker-dealer  will  attempt  to sell the
          shares as agent but may  position and resell a portion of the block as
          principal to facilitate the transaction;

     o    purchases  by  a   broker-dealer   as  principal  and  resale  by  the
          broker-dealer for its account;

     o    an  exchange   distribution  in  accordance  with  the  rules  of  the
          applicable exchange;

     o    privately negotiated transactions;

     o    short sales;

     o    broker-dealers  may  agree  with the  Selling  Stockholders  to sell a
          specified number of such shares at a stipulated price per share;

     o    a combination of any such methods of sale; and

     o    any other method permitted pursuant to applicable law.

        The Selling  Stockholders  may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.

        The Selling Stockholders may also engage in short sales against the box,
puts  and  calls  and  other  transactions  in  securities  of  the  Company  or
derivatives  of Company  securities and may sell or deliver shares in connection
with these  trades.  The Selling  Stockholders  may pledge their shares to their
brokers  under  the  margin  provisions  of  customer  agreements.  If a Selling
Stockholder  defaults on a margin loan, the broker may, from time to time, offer
and sell the pledged shares.

        Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales.  Broker-dealers may receive commissions
or discounts from the Selling  Stockholders  (or, if any  broker-dealer  acts as
agent  for the  purchaser  of  shares,  from the  purchaser)  in  amounts  to be
negotiated.  The  Selling  Stockholders  do not  expect  these  commissions  and
discounts to exceed what is customary in the types of transactions involved.

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<PAGE>

        The  Selling  Stockholders  and any  broker-dealers  or agents  that are
involved  in selling  the shares may be deemed to be  ?underwriters?  within the
meaning of the Securities Act in connection with such sales. In such event,  any
commissions  received  by such  broker-dealers  or agents  and any profit on the
resale  of the  shares  purchased  by  them  may be  deemed  to be  underwriting
commissions or discounts under the Securities Act.

        The  Company is required  to pay all fees and  expenses  incident to the
registration of the shares,  including fees and  disbursements of counsel to the
Selling   Stockholders.   The  Company  has  agreed  to  indemnify  the  Selling
Stockholders against certain losses, claims, damages and liabilities,  including
liabilities under the Securities Act.





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