Document:

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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               "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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               "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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        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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               (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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               (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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               (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.

                                       20
<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.

                                       21EXHIBIT 4.8

                               SECURITY AGREEMENT

        SECURITY  AGREEMENT,   dated  as  of  May  11,  2000,  between  SITESTAR
CORPORATION,  a Nevada  corporation  (the  "Company"),  and the secured  parties
signatory  hereto  and  their  respective  endorsees,  transferees  and  assigns
(collectively, the "Secured Party").

                              W I T N E S S E T H:

        WHEREAS, pursuant to a Secured Convertible Debenture Purchase Agreement,
dated the date  hereof  among  Company  and the  Secured  Party  (the  "Purchase
Agreement"),  Company has agreed to issue to the  Secured  Party and the Secured
Party has agreed to  purchase  from  Company an  aggregate  principal  amount of
$500,000 of Company's 12% Secured  Convertible  Debentures  (the  "Debentures"),
which are  convertible  into shares of Company's  Class A Common  Stock,  no par
value (the "Common Stock"); and

        WHEREAS,   in  order  to  induce  the  Secured  Party  to  purchase  the
Debentures,  Company has agreed to execute and deliver to the Secured Party this
Agreement  for the  benefit  of the  Secured  Party  and to  grant to it a first
priority  security  interest in certain property of Company to secure the prompt
payment, performance and discharge in full of all of Company's obligations under
the Debentures.

        NOW, THEREFORE,  in consideration of the agreements herein contained and
for other good and valuable consideration,  the receipt and sufficiency of which
is hereby acknowledged, the parties hereto hereby agree as follows:

        1. Certain Definitions.  As used in this Agreement,  the following terms
shall  have  the  meanings  set  forth in this  Section  1.  Terms  used but not
otherwise  defined in this  Agreement  that are  defined in Article 9 of the UCC
(such as  "general  intangibles"  and  "proceeds")  shall  have  the  respective
meanings given such terms in Article 9 of the UCC.

               (a) "Warrants"  means the Company's  Class A Warrants,  entitling
the holders thereof to purchase an aggregate of 250,000shares of Common Stock.

               (b) "Collateral"  means the collateral in which the Secured Party
is granted a security  interest by this  Agreement  and which shall  include the
following,  whether presently owned or existing or hereafter  acquired or coming
into existence,  and all additions and accessions  thereto and all substitutions
and  replacements  thereof,  and all  proceeds,  products and accounts  thereof,
including,  without  limitation,  all proceeds  from the sale or transfer of the
Collateral  and of  insurance  covering  the  same  and of any  tort  claims  in
connection therewith:

                                       1
<PAGE>

               (i) All Goods of the Company, including, without limitations, all
          machinery,  equipment,  computers, motor vehicles, trucks, appliances,
          furniture,  special  and  general  tools,  fixtures,  test and quality
          control  devices  and other  equipment  of every  kind and  nature and
          wherever situated,  together with all documents of title and documents
          representing   the  same,  all  additions  and   accessions   thereto,
          replacements therefor, all parts therefor, and all substitutes for any
          of the  foregoing  and all other  items used and useful in  connection
          with  the   Company's   businesses   and  all   improvements   thereto
          (collectively, the "Equipment"); and

               (ii) All Inventory of the Company; and

               (iii)  All  of  the   Company's   contract   rights  and  general
          intangibles, including, without limitation, all partnership interests,
          stock  or  other   securities,   licenses,   distribution   and  other
          agreements,  computer software development rights, leases, franchises,
          customer  lists,  quality  control  procedures,   grants  and  rights,
          goodwill,  trademarks,  service  marks,  trade  styles,  trade  names,
          patents, patent applications, copyrights, deposit accounts, and income
          tax refunds (collectively, the "General Intangibles"); and

               (iv) All  Receivables  of the  Company  including  all  insurance
          proceeds,  and rights to refunds or indemnification  whatsoever owing,
          together with all instruments, all documents of title representing any
          of the foregoing,  all rights in any merchandising,  goods, equipment,
          motor vehicles and trucks which any of the same may represent, and all
          right, title, security and guaranties with respect to each Receivable,
          including any right of stoppage in transit; and

               (v)  All of the  Company's  documents,  instruments  and  chattel
          paper, files,  records,  books of account,  business papers,  computer
          programs  and  the  products  and  proceeds  of all  of the  foregoing
          Collateral set forth in clauses (i)-(iv) above.

               (c) "Company"  shall mean,  collectively,  Company and all of the
subsidiaries of Company.

               (d)  "Obligations"  means all of the Company's  obligations under
this Agreement,  the Debentures and the Warrants,  in each case,  whether now or
hereafter existing,  voluntary or involuntary,  direct or indirect,  absolute or
contingent, liquidated or unliquidated, whether or not jointly owed with others,
and  whether  or not from  time to time  decreased  or  extinguished  and  later
increased,  created or incurred,  and all or any portion of such  obligations or
liabilities  that are paid,  to the  extent  all or any part of such  payment is
avoided  or  recovered  directly  or  indirectly  from  the  Secured  Party as a
preference, fraudulent transfer or otherwise as such obligations may be amended,
supplemented, converted, extended or modified from time to time.

                                       2
<PAGE>

               (e) INTENTIONALLY OMITTED.

               (f) INTENTIONALLY OMITTED.

               (g) "Two  Thirds-in-Interest"  means  one or more of the  secured
party signatories hereto holding in excess of 66.66% of the aggregate  principal
amount of the Debentures outstanding, determined on a cumulative basis.

               (h) "UCC" means the Uniform  Commercial  Code,  as  currently  in
effect in the State of New York.

        2. Grant of Security Interest. As an inducement for the Secured Party to
purchase  the  Debentures  and  to  secure  the  complete  and  timely  payment,
performance  and  discharge  in  full,  as  the  case  may  be,  of  all  of the
Obligations,  the Company  hereby,  unconditionally  and  irrevocably,  pledges,
grants and hypothecates to the Secured Party, a continuing security interest in,
a first lien upon and a right of set-off  against  all of the  Company's  right,
title and interest of whatsoever  kind and nature in and to the Collateral  (the
"Security Interest").

         3.  Representations,   Warranties,  Covenants  and  Agreements  of  the
Company.  The Company represents and warrants to, and covenants and agrees with,
the Secured Party as follows:

               (a) The Company has the requisite  corporate  power and authority
to  enter  into  this  Agreement  and  otherwise  to carry  out its  obligations
thereunder.  The  execution,  delivery  and  performance  by the Company of this
Agreement and the filings  contemplated therein have been duly authorized by all
necessary action on the part of the Company and no further action is required by
the Company.

               (b) The Company  represents  and warrants that it has no place of
business or offices where its  respective  books of account and records are kept
(other than  temporarily  at the offices of its  attorneys  or  accountants)  or
places where Collateral is stored or located,  except as set forth on Schedule A
attached hereto;

                                       3
<PAGE>

               (c) Except as specified in Schedule 3(c), the Company is the sole
owner of the  Collateral  (except  for  non-exclusive  licenses  granted  by the
Company  in the  ordinary  course of  business),  free and  clear of any  liens,
security interests,  encumbrances,  rights or claims, and is fully authorized to
grant the  Security  Interest in and to pledge the  Collateral.  There is not on
file in any governmental or regulatory authority,  agency or recording office an
effective financing  statement,  security agreement,  license or transfer or any
notice of any of the  foregoing  (other than those that have been filed in favor
of the Secured Party  pursuant to this  Agreement)  covering or affecting any of
the  Collateral.  So long as this  Agreement  shall be in effect  and other than
pursuant  to Section 11 hereof,  the  Company  shall not  execute  and shall not
knowingly  permit to be on file in any such office or agency any such  financing
statement  or other  document  or  instrument  (except  to the  extent  filed or
recorded in favor of the Secured Party pursuant to the terms of this Agreement).

               (d) Except as specified in Schedule  3(d),  no written  claim has
been  received  that  any  Collateral  or the  Company's  use of any  Collateral
violates  the rights of any third party.  There has been no adverse  decision to
the  Company's  claim of  ownership  rights  in or  exclusive  rights to use the
Collateral in any  jurisdiction  or to the Company's  right to keep and maintain
such Collateral in full force and effect,  and there is no proceeding  involving
said rights pending or, to the best knowledge of the Company,  threatened before
any court,  judicial body,  administrative or regulatory  agency,  arbitrator or
other governmental authority.

               (e) The Company shall at all times  maintain its books of account
and records relating to the Collateral at its principal place of business at the
locations  set forth on  Schedule A attached  hereto and may not  relocate  such
books of account and records or  tangible  Collateral  unless it delivers to the
Secured Party at least 30 days prior to such  relocation  (i) written  notice of
such  relocation  and the new location  thereof (which must be within the United
States)  and (ii)  evidence  that  appropriate  financing  statements  and other
necessary documents have been filed and recorded and other steps have been taken
to perfect the Security  Interest to create in favor of the Secured Party valid,
perfected and continuing first priority liens in the Collateral.

               (f) This Agreement  creates in favor of the Secured Party a valid
security interest in the Collateral  securing the payment and performance of the
Obligations and, upon making the filings described in the immediately  following
sentence,  a perfected  first  priority  security  interest in such  Collateral.
Except for the filing of financing  statements  on Form UCC-1 under the UCC with
the jurisdictions  indicated on Schedule B, attached hereto, no authorization or
approval of or filing with or notice to any governmental authority or regulatory
body  located in the United  States of  America is  required  either (i) for the
grant by the Company of, or the  effectiveness of, the Security Interest granted
hereby or for the execution,  delivery and  performance of this Agreement by the
Company or (ii) for the  perfection  of or exercise by the Secured  Party of its
rights and remedies hereunder.

                                       4
<PAGE>

               (g) On the date of execution of this Agreement,  the Company will
deliver to the Secured Party one or more  executed UCC  financing  statements on
UCC-1 under the UCC with  respect to the  Security  Interest for filing with the
jurisdictions  indicated  on  Schedule  B,  attached  hereto  and in such  other
jurisdictions as may be requested by the Secured Party.

               (h) The  execution,  delivery and  performance  of this Agreement
does not  conflict  with or cause a breach or default,  or an event that with or
without the  passage of time or notice,  shall  constitute  a breach or default,
under any  agreement  to which the Company is a party or by which the Company is
bound.  No  consent  (including,  without  limitation,  from  stock  holders  or
creditors  of the Company) is required for the Company to enter into and perform
its obligations hereunder.

               (i) The  Company  shall  at all  times  maintain  the  liens  and
Security  Interest  provided for hereunder as valid and perfected first priority
liens and security  interests in the  Collateral  in favor of the Secured  Party
until this  Agreement and the Security  Interest  hereunder  shall be terminated
pursuant to Section 11. The Company hereby agrees to defend the same against any
and all persons.  The Company shall safeguard and protect all Collateral for the
account of the Secured Party.  At the request of the Secured Party,  the Company
will sign and deliver to the Secured  Party at any time or from time to time one
or more  financing  statements  pursuant  to the UCC  (or any  other  applicable
statute) in form  reasonably  satisfactory to the Secured Party and will pay the
cost of filing the same in all public offices  wherever  filing is, or is deemed
by the Secured  Party to be,  necessary  or  desirable  to effect the rights and
obligations  provided  for  herein.  Without  limiting  the  generality  of  the
foregoing,  the Company shall pay all fees, taxes and other amounts necessary to
maintain the Collateral  and the Security  Interest  hereunder,  and the Company
shall  obtain and furnish to the Secured  Party from time to time,  upon demand,
such  releases  and liens which may be required to maintain  the priority of the
Security Interest hereunder.

               (j) The Company will not transfer, pledge, hypothecate, encumber,
license  (except  for  non-exclusive  licenses  granted  by the  Company  in the
ordinary course of business),  sell (except Inventory in the ordinary course) or
otherwise dispose of any of the Collateral  without the prior written consent of
the Secured Party.

               (k) The Company shall keep and preserve its Equipment,  Inventory
and other tangible Collateral in good condition,  repair and order and shall not
operate or locate any such  Collateral  (or cause to be  operated or located) in
any area excluded from insurance coverage.

               (l)  The  Company  shall,  within  ten  (10)  days  of  obtaining
knowledge thereof,  advise the Secured Party promptly,  in sufficient detail, of
any  substantial  change in the  Collateral,  and of the occurrence of any event
which would have a material  adverse effect on the value of the Collateral or on
the Secured Party's security interest therein.

                                       5
<PAGE>

               (m) The Company shall promptly execute and deliver to the Secured
Party such further deeds, mortgages, assignments, security agreements, financing
statements or other instruments, documents, certificates and assurances and take
such further  action as the Secured  Party may from time to time request and may
in its sole  discretion  deem  necessary  to  perfect,  protect or  enforce  its
security interest in the Collateral.

               (n)  The  Company   shall  permit  the  Secured   Party  and  its
representatives  and agents to inspect the  Collateral at any time,  and to make
copies of  records  pertaining  to the  Collateral  as may be  requested  by the
Secured Party from time to time.

               (o) The  Company  will take all  steps  reasonably  necessary  to
diligently pursue and seek to preserve,  enforce and collect any rights, claims,
causes of action and accounts receivable in respect of the Collateral.

               (p) The  Company  shall  promptly  notify  the  Secured  Party in
sufficient detail upon becoming aware of any attachment,  garnishment, execution
or  other  legal  process  levied  against  any  Collateral  and  of  any  other
information  received by the Company that may materially affect the value of the
Collateral,  the  Security  Interest  or the rights and  remedies of the Secured
Party hereunder.

               (q) All information  heretofore,  herein or hereafter supplied to
the Secured Party by or on behalf of the Company with respect to the  Collateral
is accurate and complete in all material respects as of the date furnished.

               (r)  Schedule A,  attached  hereto  contains a list of all of the
subsidiaries of Company.

         4.    Defaults.  The following events shall be "Events of Default":

               (a)    The  occurrence  of an Event of Default (as defined in the
Debentures) under the Debentures;

               (b)  Any  representation  or  warranty  of the  Company  in  this
Agreement or in the Intellectual Property Security Agreement shall prove to have
been incorrect in any material respect when made;

               (c) The  failure by the  Company to observe or perform any of its
obligations  for ten (10) days after  receipt  by the  Company of notice of such
failure from the Secured Party; and

               (d)    Any breach or default under the Warrants.

         5. Duty To Hold In Trust.  Upon the  occurrence of any Event of Default
and at any  time  thereafter,  the  Company  shall,  upon  receipt  by it of any
revenue, income or other sums subject to the Security Interest,  whether payable
pursuant to the Debentures or otherwise,  or of any check,  draft,  note,  trade
acceptance  or other  instrument  evidencing  an obligation to pay any such sum,
hold the same in trust for the  Secured  Party and shall  forthwith  endorse and
transfer  any such  sums or  instruments,  or both,  to the  Secured  Party  for
application to the satisfaction of the Obligations.

                                       6
<PAGE>

         6. Rights and Remedies  Upon Default.  Upon  occurrence of any Event of
Default and at any time  thereafter,  the Secured  Party shall have the right to
exercise all of the remedies  conferred  hereunder and under the  Debentures and
the Warrants,  and the Secured Party shall have all the rights and remedies of a
secured  party  under the UCC and/or any other  applicable  law  (including  the
Uniform  Commercial  Code of any  jurisdiction  in which any  Collateral is then
located).  Without limitation, the Secured Party shall have the following rights
and powers:

               (a) The Secured Party shall have the right to take  possession of
the Collateral and, for that purpose,  enter, with the aid and assistance of any
person,  any premises where the  Collateral,  or any part thereof,  is or may be
placed and remove the same,  and the Company shall  assemble the  Collateral and
make it available to the Secured  Party at places which the Secured  Party shall
reasonably  select,  whether at the Company's  premises or  elsewhere,  and make
available to the Secured Party,  without rent,  all of the Company's  respective
premises and facilities  for the purpose of the Secured Party taking  possession
of, removing or putting the Collateral in saleable or disposable form.

               (b) The  Secured  Party  shall  have  the  right to  operate  the
business of the Company using the Collateral and shall have the right to assign,
sell,  lease  or  otherwise  dispose  of and  deliver  all or  any  part  of the
Collateral,  at public or  private  sale or  otherwise,  either  with or without
special  conditions  or  stipulations,  for  cash  or on  credit  or for  future
delivery,  in such parcel or parcels and at such time or times and at such place
or places,  and upon such terms and  conditions  as the  Secured  Party may deem
commercially reasonable,  all without (except as shall be required by applicable
statute  and cannot be  waived)  advertisement  or demand  upon or notice to the
Company  or right of  redemption  of the  Company,  which are  hereby  expressly
waived. Upon each such sale, lease,  assignment or other transfer of Collateral,
the Secured  Party may,  unless  prohibited  by  applicable  law which cannot be
waived,  purchase all or any part of the  Collateral  being sold,  free from and
discharged  of all  trusts,  claims,  right of  redemption  and  equities of the
Company, which are hereby waived and released.

        7.  Applications  of Proceeds.  The proceeds of any such sale,  lease or
other  disposition of the Collateral  hereunder  shall be applied first,  to the
expenses of retaking,  holding,  storing,  processing  and  preparing  for sale,
selling, and the like (including,  without limitation, any taxes, fees and other
costs  incurred in connection  therewith) of the  Collateral,  to the reasonable
attorneys'  fees and expenses  incurred by the Secured  Party in  enforcing  its
rights hereunder and in connection with collecting, storing and disposing of the
Collateral,  and then to satisfaction of the Obligations,  and to the payment of
any other  amounts  required by  applicable  law,  after which the Secured Party
shall pay to the  Company any surplus  proceeds.  If, upon the sale,  license or
other  disposition of the Collateral,  the proceeds  thereof are insufficient to
pay all amounts to which the Secured Party is legally entitled,  secured parties

                                       7
<PAGE>

signatory  hereto will be entitled  to their pro rata  portion of such  proceeds
(determined  by  reference  to the  aggregate  principal  amount  of  Debentures
outstanding,  determined on a cumulative  basis), and the Company will be liable
for the deficiency, together with interest thereon, at the rate of 17% per annum
(the "Default Rate"),  and the reasonable fees of any attorneys  employed by the
Secured Party to collect such deficiency.  To the extent permitted by applicable
law,  the  Company  waives all claims,  damages and demands  against the Secured
Party  arising  out of the  repossession,  removal,  retention  or  sale  of the
Collateral,  unless due to the gross  negligence  or willful  misconduct  of the
Secured Party.

        8. Costs and Expenses. The Company agrees to pay all out-of-pocket fees,
costs and expenses  incurred in connection with any filing  required  hereunder,
including without limitation, any financing statements, continuation statements,
partial releases and/or  termination  statements related thereto or any expenses
of any searches reasonably required by the Secured Party. The Company shall also
pay all other claims and charges which in the reasonable  opinion of the Secured
Party  might  prejudice,  imperil  or  otherwise  affect the  Collateral  or the
Security  Interest  therein.  The Company  will also,  upon  demand,  pay to the
Secured  Party the  amount of any and all  reasonable  expenses,  including  the
reasonable fees and expenses of its counsel and of any experts and agents, which
the  Secured  Party may incur in  connection  with (i) the  enforcement  of this
Agreement, (ii) the custody or preservation of, or the sale of, collection from,
or other  realization  upon,  any of the  Collateral,  or (iii) the  exercise or
enforcement  of any of the rights of the  Secured  Party  under the  Debentures.
Until so paid, any fees payable hereunder shall be added to the principal amount
of the Debentures and shall bear interest at the Default Rate.

        9.  Responsibility  for Collateral.  The Company assumes all liabilities
and responsibility in connection with all Collateral, and the obligations of the
Company  hereunder or under the  Debentures  and the Warrants shall in no way be
affected or  diminished by reason of the loss,  destruction,  damage or theft of
any of the Collateral or its unavailability for any reason.

                                       8
<PAGE>

        10. Security Interest Absolute.  All rights of the Secured Party and all
Obligations  of the  Company  hereunder,  shall be absolute  and  unconditional,
irrespective of: (a) any lack of validity or  enforceability  of this Agreement,
the  Debentures,  the Warrants or any agreement  entered into in connection with
the  foregoing,  or any portion  hereof or thereof;  (b) any change in the time,
manner or place of  payment or  performance  of, or in any other term of, all or
any of the  Obligations,  or any other  amendment or waiver of or any consent to
any departure from the Debentures,  the Warrants or any other agreement  entered
into  in  connection   with  the  foregoing;   (c)  any  exchange,   release  or
nonperfection of any of the Collateral, or any release or amendment or waiver of
or consent to departure from any other  collateral for, or any guaranty,  or any
other security, for all or any of the Obligations; (d) any action by the Secured
Party to obtain,  adjust, settle and cancel in its sole discretion any insurance
claims or matters made or arising in connection with the Collateral;  or (e) any
other  circumstance  which might  otherwise  constitute  any legal or  equitable
defense  available  to the  Company,  or a  discharge  of all or any part of the
Security Interest granted hereby. Until the Obligations shall have been paid and
performed in full,  the rights of the Secured  Party shall  continue even if the
Obligations  are barred  for any  reason,  including,  without  limitation,  the
running of the statute of  limitations  or  bankruptcy.  The  Company  expressly
waives presentment, protest, notice of protest, demand, notice of nonpayment and
demand  for  performance.  In the  event  that at any time any  transfer  of any
Collateral  or any  payment  received by the Secured  Party  hereunder  shall be
deemed  by final  order  of a court of  competent  jurisdiction  to have  been a
voidable preference or fraudulent  conveyance under the bankruptcy or insolvency
laws of the United  States,  or shall be deemed to be otherwise due to any party
other than the Secured Party, then, in any such event, the Company's obligations
hereunder  shall  survive  cancellation  of this  Agreement,  and  shall  not be
discharged or satisfied by any prior payment thereof and/or cancellation of this
Agreement,  but  shall  remain a valid and  binding  obligation  enforceable  in
accordance with the terms and provisions hereof. The Company waives all right to
require the Secured  Party to proceed  against any other  person or to apply any
Collateral  which the Secured Party may hold at any time, or to marshal  assets,
or to pursue any other remedy.  The Company waives any defense arising by reason
of the  application  of the statute of  limitations  to any  obligation  secured
hereby.

        11. Term of Agreement and Subordination of Security  Interest.  (a) This
Agreement  and the Security  Interest  shall  terminate on the date on which all
payments under the Debentures  have been made in full and all other  Obligations
have been paid or discharged.  Notwithstanding the foregoing and anything to the
contrary  contained  herein,  in no event shall this  Agreement  or the Security
Interest  terminate  prior to the date that an  Underlying  Shares  Registration
Statement is first declared effective by the Securities and Exchange Commission.

               (b)    INTENTIONALLY OMITTED.

                                       9
<PAGE>

               (c) Upon any  termination  of the Security  Interest  pursuant to
this  Section  11, the Secured  Party,  at the request and at the expense of the
Company,  will  join  in  executing  an  appropriate  amendment  or  termination
statement (as the case may be) with respect to any financing  statement executed
and filed pursuant to this Agreement.

         12. Power of Attorney;  Further Assurances.  (a) The Company authorizes
the Secured  Party,  and does hereby  make,  constitute  and appoint it, and its
respective  officers,   agents,   successors  or  assigns  with  full  power  of
substitution, as the Company's true and lawful attorney-in-fact,  with power, in
its own name or in the name of the Company,  to, after the occurrence and during
the continuance of an Event of Default, (i) endorse any notes,  checks,  drafts,
money orders, or other instruments of payment (including  payments payable under
or in respect of any policy of insurance) in respect of the Collateral  that may
come into  possession  of the  Secured  Party;  (ii) to sign and endorse any UCC
financing  statement or any invoice,  freight or express  bill,  bill of lading,
storage  or   warehouse   receipts,   drafts   against   debtors,   assignments,
verifications  and notices in  connection  with  accounts,  and other  documents
relating to the Collateral;  (iii) to pay or discharge  taxes,  liens,  security
interests or other  encumbrances  at any time levied or placed on or  threatened
against the Collateral; (iv) to demand, collect, receipt for, compromise, settle
and sue for monies due in respect of the Collateral;  and (v) generally,  to do,
at the option of the Secured Party, and at the Company's  expense,  at any time,
or from  time to  time,  all acts and  things  which  the  Secured  Party  deems
necessary to protect,  preserve and realize upon the Collateral and the Security
Interest  granted therein in order to effect the intent of this  Agreement,  the
Debentures and the Warrants all as fully and effectually as the Company might or
could do; and the Company hereby  ratifies all that said attorney shall lawfully
do or cause to be done by virtue hereof.  This power of attorney is coupled with
an  interest  and  shall  be  irrevocable  for the  term of this  Agreement  and
thereafter as long as any of the Obligations  shall be  outstanding,  subject to
termination under Section 11.

               (b) On a  continuing  basis,  the  Company  will  make,  execute,
acknowledge,  deliver, file and record, as the case may be, in the proper filing
and recording places in any jurisdiction,  including,  without  limitation,  the
jurisdictions  indicated on Schedule B, attached hereto,  all such  instruments,
and take all such action as may reasonably be deemed necessary or advisable,  or
as reasonably  requested by the Secured Party, to perfect the Security  Interest
granted  hereunder  and  otherwise  to carry out the intent and purposes of this
Agreement,  or for assuring  and  confirming  to the Secured  Party the grant or
perfection of a security interest in all the Collateral.

               (c) The Company hereby irrevocably  appoints the Secured Party as
the Company's  attorney-in-fact,  with full  authority in the place and stead of
the  Company  and in the name of the  Company,  from time to time in the Secured
Party's  discretion,  to take any action and to execute any instrument which the
Secured Party may deem necessary or advisable to accomplish the purposes of this
Agreement,  including  the  filing,  in its  sole  discretion,  of  one or  more
financing or continuation statements and amendments thereto,  relative to any of
the Collateral without the signature of the Company where permitted by law.

                                       10
<PAGE>

        13. Notices.  All notices,  requests,  demands and other  communications
hereunder shall be in writing,  with copies to all the other parties hereto, and
shall be deemed to have been duly  given  when (i) if  delivered  by hand,  upon
receipt,  (ii) if sent by facsimile,  upon receipt of proof of sending  thereof,
(iii) if sent by  nationally  recognized  overnight  delivery  service  (receipt
requested), the next business day or (iv) if mailed by first-class registered or
certified  mail,  return receipt  requested,  postage  prepaid,  four days after
posting in the U.S. mails, in each case if delivered to the following addresses:

        If to the Company:          16133 Ventura Boulevard
                                    Suite 635
                                    Encino, CA 91436

        If to the Secured  Party,  to the  address set forth below such  Secured
Party's name on the signatures pages hereto.

        14.  Other  Security.  To the  extent  that the  Obligations  are now or
hereafter  secured by property  other than the  Collateral or by the  guarantee,
endorsement or property of any other person, firm,  corporation or other entity,
then the Secured Party shall have the right, in its sole discretion,  to pursue,
relinquish,  subordinate,  modify or take any other action with respect thereto,
without in any way modifying or affecting any of the Secured  Party's rights and
remedies hereunder.

        15.  Actions by the Secured  Party.  Any action  required  or  permitted
hereunder to be taken by or on behalf of the secured  parties  signatory  hereto
shall,  for  such  action  to  be  valid,   require  the  approval  of  the  Two
Thirds-in-Interest prior to the taking of such action. If the consent,  approval
or disapproval of the secured parties  signatory hereto is required or permitted
pursuant to this Agreement,  such consent, approval or disapproval shall only be
valid if given by the Two Thirds-in-Interest.

        16.    Miscellaneous.

               (a) No course of dealing  between  the  Company  and the  Secured
Party, nor any failure to exercise, nor any delay in exercising,  on the part of
the  Secured  Party,  any  right,  power or  privilege  hereunder  or under  the
Debentures  shall operate as a waiver  thereof;  nor shall any single or partial
exercise of any right, power or privilege  hereunder or thereunder  preclude any
other or further exercise  thereof or the exercise of any other right,  power or
privilege.

               (b) All of the  rights and  remedies  of the  Secured  Party with
respect to the Collateral, whether established hereby or by the Debentures or by
any other agreements, instruments or documents or by law shall be cumulative and
may be exercised singly or concurrently.

                                       11
<PAGE>

               (c)  This  Agreement  constitutes  the  entire  agreement  of the
parties with respect to the subject  matter  hereof and is intended to supersede
all prior  negotiations,  understandings  and agreements  with respect  thereto.
Except  as  specifically  set  forth in this  Agreement,  no  provision  of this
Agreement may be modified or amended except by a written agreement  specifically
referring to this Agreement and signed by the parties hereto.

               (d) In the event that any provision of this  Agreement is held to
be invalid,  prohibited or  unenforceable  in any  jurisdiction  for any reason,
unless such  provision  is narrowed by  judicial  construction,  this  Agreement
shall, as to such jurisdiction,  be construed as if such invalid,  prohibited or
unenforceable  provision had been more  narrowly  drawn so as not to be invalid,
prohibited or unenforceable. If, notwithstanding the foregoing, any provision of
this  Agreement  is held  to be  invalid,  prohibited  or  unenforceable  in any
jurisdiction,  such provision, as to such jurisdiction,  shall be ineffective to
the  extent  of  such  invalidity,   prohibition  or  unenforceability   without
invalidating the remaining  portion of such provision or the other provisions of
this  Agreement  and without  affecting the validity or  enforceability  of such
provision or the other provisions of this Agreement in any other jurisdiction.

               (e) No waiver of any breach or  default  or any right  under this
Agreement  shall be  considered  valid unless in writing and signed by the party
giving  such  waiver,  and no such  waiver  shall  be  deemed  a  waiver  of any
subsequent breach or default or right,  whether of the same or similar nature or
otherwise.

               (f) This Agreement shall be binding upon and inure to the benefit
of each party hereto and its successors and assigns.

               (g) Each party  shall take such  further  action and  execute and
deliver such further  documents as may be necessary or  appropriate  in order to
carry out the provisions and purposes of this Agreement.

               (h) This Agreement shall be construed in accordance with the laws
of the State of New York,  except to the  extent  the  validity,  perfection  or
enforcement  of a security  interest  hereunder  in  respect  of any  particular
Collateral which are governed by a jurisdiction other than the State of New York
in which case such law shall  govern.  Each of the  parties  hereto  irrevocably
submit to the  exclusive  jurisdiction  of any New York  State or United  States
Federal court sitting in Nassau county over any action or proceeding arising out
of or relating to this  Agreement,  and the parties  hereto  hereby  irrevocably
agree that all claims in respect of such action or  proceeding  may be heard and
determined  in such New York State or Federal  court.  The parties  hereto agree
that a final  judgment in any such action or proceeding  shall be conclusive and
may be enforced in other  jurisdictions  by suit on the judgment or in any other
manner  provided by law. The parties hereto further waive any objection to venue
in the State of New York and any  objection  to an action or  proceeding  in the
State of New York on the basis of forum non convenient.

                                       12
<PAGE>

               (i) EACH  PARTY  HERETO  HEREBY  AGREES TO WAIVE  ITS  RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT.  THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL  ENCOMPASSING
OF ANY  DISPUTES  THAT MAY BE FILED IN ANY COURT AND THAT  RELATE TO THE SUBJECT
MATTER OF THIS AGREEMENT,  INCLUDING WITHOUT  LIMITATION  CONTRACT CLAIMS,  TORT
CLAIMS,  BREACH OF DUTY CLAIMS AND ALL OTHER  COMMON LAW AND  STATUTORY  CLAIMS.
EACH PARTY HERETO  ACKNOWLEDGES  THAT THIS WAIVER IS A MATERIAL  INDUCEMENT  FOR
EACH PARTY TO ENTER INTO A BUSINESS  RELATIONSHIP,  THAT EACH PARTY HAS  ALREADY
RELIED ON THIS WAIVER IN ENTERING  INTO THIS  AGREEMENT AND THAT EACH PARTY WILL
CONTINUE TO RELY ON THIS WAIVER IN THEIR  RELATED  FUTURE  DEALINGS.  EACH PARTY
FURTHER  WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL,  AND THAT SUCH PARTY KNOWINGLY AND  VOLUNTARILY  WAIVED ITS RIGHTS TO A
JURY TRIAL  FOLLOWING SUCH  CONSULTATION.  THIS WAIVER IS  IRREVOCABLE,  MEANING
THAT,  NOTWITHSTANDING  ANYTHING HEREIN TO THE CONTRARY,  IT MAY NOT BE MODIFIED
EITHER  ORALLY OR IN  WRITING,  AND THIS WAIVER  SHALL  APPLY TO ANY  SUBSEQUENT
AMENDMENTS,  RENEWALS AND SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. IN THE
EVENT OF A LITIGATION,  THIS  AGREEMENT  MAY BE FILED AS A WRITTEN  CONSENT TO A
TRIAL BY THE COURT.

               (j) 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.

                              * * * * * * * * * * *

                                       13
<PAGE>

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

                             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

                                       14
<PAGE>

                                   SCHEDULE A

Principal Place of Business of the Company:
16133 Ventura Boulevard
Suite 635
Encino, California  91436

Locations Where Collateral is Located or Stored:
16133 Ventura Boulevard
Suite 635
Encino, California  91436

29 West Main Streeet
Martinsville, Virginia  24112

List of subsidiaries of the Company:
Neocom Microspecialists, Inc.
Greattools.com
Soccersite.com
Holland-American.com

                                       15
<PAGE>

                                          SCHEDULE B

Jurisdictions:

                                       16

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