<SUBMISSION>
<ACCESSION-NUMBER>0000028452-04-000042
<TYPE>PRE 14A
<PUBLIC-DOCUMENT-COUNT>1
<PERIOD>20040510
<FILING-DATE>20040408
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>DEVCON INTERNATIONAL CORP
<CIK>0000028452
<ASSIGNED-SIC>3270
<IRS-NUMBER>590671992
<STATE-OF-INCORPORATION>FL
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>PRE 14A
<ACT>34
<FILE-NUMBER>000-07152
<FILM-NUMBER>04723281
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>1350 E NEWPORT CENTER DR
<STREET2>STE 201
<CITY>DEERFIELD BEACH
<STATE>FL
<ZIP>33443
<PHONE>3054291500
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>1350 E NEWPORT CENTER DR
<STREET2>SUITE 201
<CITY>DEERFIELD BEACH
<STATE>FL
<ZIP>33442
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>PRE 14A
<SEQUENCE>1
<FILENAME>proxyf.htm
<TEXT>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SCHEDULE 14A</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(Rule
14a-101)</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>INFORMATION
REQUIRED IN PROXY STATEMENT</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SCHEDULE 14A
INFORMATION</FONT></H1>

<H1 ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Proxy
Statement Pursuant to Section 14(a)<br>
of the
Securities Exchange Act of 1934</FONT></H1>
<H1 ALIGN=left><font size="2">Filed by the registrant<br>
&nbsp;filed by a party other than the registrant



<br>
<br>
Check the appropriate box:  </font></H1>
<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>
<p align="center"><font size="2">X</font></TD>
<TD WIDTH="39%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Preliminary
proxy statement&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br>
Definitive additional materials
<br>
Definitive proxy statement<br>
Soliciting material pursuant to Rule 14a-11(c) or Rule

     14a-12

</FONT></TD>
<TD WIDTH="56%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Confidential, For Use of the Commission only&nbsp; (as permitted by Rule
14a-6(e)(2)) </FONT></TD>
</TR>
</TABLE>
<p align="center"><b><font size="2">Devcon International Corp</font></b><font size="2"><br>
-------------------------------------------------------------------------------------------------------------------
<br>
(Name of Registrant as Specified in Its Charter)</font></p>
<p align="center"><b><font size="2">Devcon International Corp</font></b><font size="2"><br>
-------------------------------------------------------------------------------------------------------------------
<br>
(Name of Person(s) Filing Proxy Statement)</font></p>
<p align="left"><font size="2">Payment of filing fee (Check the appropriate box):
<br>
&nbsp;&nbsp;&nbsp;&nbsp; X&nbsp;&nbsp;&nbsp;
         No fee required.
         <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Fee computed on the table below per Exchange Act Rules 14a-6(i)(4) and 0-11.<br>
<br>
<br>
&nbsp;(1)   Title of each class of securities to which transaction applies:<br>
&nbsp;-------------------------------------------------------------------------------------------------------------------

     <br>
(2)   Aggregate number of securities to which transaction applies:

<br>
-------------------------------------------------------------------------------------------------------------------<br>

     (3)   Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11:

<br>
-------------------------------------------------------------------------------------------------------------------

     <br>
(4)   Proposed maximum aggregate value of transaction:<br>
&nbsp;-------------------------------------------------------------------------------------------------------------------

     <br>
(5)   Total fee paid:<br>
&nbsp;-------------------------------------------------------------------------------------------------------------------<br>
Payment of filing fee (Check appropriate</font></p>

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<TR VALIGN=TOP>
<TD WIDTH="9%">&nbsp;</TD>
<TD WIDTH="91%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Check
box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid previously.
Identify the previous filing by registration statement number, or the form or
schedule and the date of its filing.</FONT></TD>
</TR>
</TABLE>
<font size="2">
<BR>

-------------------------------------------------------------------------------------------------------------------

     <br>
(1)   Amount previously paid:<br>

-------------------------------------------------------------------------------------------------------------------<br>
&nbsp;(2)   Form, schedule or registration statement no.:<br>
&nbsp;-------------------------------------------------------------------------------------------------------------------

     <br>
(3)   Filing party:<br>
&nbsp;-------------------------------------------------------------------------------------------------------------------<br>
&nbsp;(4)   Date Filed:<br>
&nbsp;-------------------------------------------------------------------------------------------------------------------


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<HR SIZE=5 COLOR=GRAY NOSHADE>


<PAGE>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>DEVCON
INTERNATIONAL CORP.</FONT></H1>
<p align="center"><font size="2">1350 EAST NEWPORT CENTER DRIVE, SUITE 201
                                          <br>
DEERFIELD BEACH, FLORIDA 33442 </font></p>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOTICE OF
SPECIAL MEETING OF SHAREHOLDERS<br>
TO BE HELD
ON MAY 10, 2004</FONT></H1><font size="2">To our shareholders:

</font>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; A special meeting of our shareholders
will be held at the Deerfield Beach Hilton, Hillsboro Executive Center North,
100 Fairway Drive, Deerfield Beach, Florida on Monday, May&#160;10, 2004 at
3:00&#160;p.m., local time. At this special meeting, our shareholders will act
on the following matte</FONT></P>
<blockquote>
	<blockquote>
		<ol>
			<li><font size="2">Approval  and  authorization  of the  issuance  and sale by Devcon  International  Corp.  to Coconut  Palm
                  Capital  Investors  I, Ltd.  of up to  2,000,000  units,  including  the  shares of common  stock
                  underlying  these  units,  for a  purchase  price of nine  dollars  ($9.00)  per unit,  each unit
                  consisting  of 1 share of common  stock and  warrants  to purchase  an  aggregate  of 2 shares of
                  common stock at various exercise prices set forth in the accompanying proxy statement;

			</font></li>
			<li><font size="2">Approval of amendments  to our Articles of  Incorporation  to increase the number of authorized  shares of
                  our common stock to  50,000,000  shares,  increase the size of our board of directors  from seven
                  to nine  members  and  allow our board of  directors  to set the size of the board in the  future
                  (Proposals (1) and (2) are referred to in this notice, collectively, as the Transaction);
			</font></li>
			<li><font size="2">Election of nine (9)  members to our board of  directors  to serve until the 2005 annual  meeting or until
                  their successors have been duly elected and qualified; and
			</font></li>
			<li><font size="2">Any other  matters  that  properly  come  before  the  special  meeting  and any and all  adjournments  or
                  postponements of the special meeting. </font></li>
		</ol>
	</blockquote>
</blockquote>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>&nbsp;&nbsp;&nbsp; While the proposals are
being listed separately for purposes of voting, they are all interdependent.
Accordingly, the obtaining of shareholder approval for each proposal is a
condition precedent to the effectiveness of the other proposals set forth in
this proxy statement. If each of the proposals is adopted by our shareholders,
the special meeting will be deemed to be a special meeting in lieu of our 2004
annual meeting, and we will not hold a separate annual meeting.</B> </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; We have fixed the close of
business on April 9, 2004 as the record date for determining those shareholders
entitled to notice of, and to vote at, the special meeting and any adjournments
or postponements of the special meeting. </FONT></P>

                                                          <p align="right">
															<font size="2">&nbsp;&nbsp;&nbsp;

                                                          By Order of the Board of Directors<br>
															\\s\Donald L. Smith,
															Jr&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
															<br>
															Donald L. Smith, Jr.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
															<br>
															President&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
															<br>
&nbsp;</font></p>
<p align="left"><font size="2">Deerfield Beach, FL<br>
&nbsp;April 16, 2004 </font> </p>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>This is an important
meeting and you are invited to attend the meeting in person. Whether or not you
expect to be present at the special meeting, please complete, sign and date the
enclosed proxy card and return it promptly in the enclosed return envelope. No
postage is required if mailed in the United States. Shareholders who execute a
proxy card may nevertheless attend the meeting, revoke their proxy and vote
their shares in person.</B> <br>
&nbsp;</FONT></P>

<page>
 COLOR=GRAY NOSHADE>

                                                         <H1 ALIGN=CENTER>
															<FONT FACE="Times New Roman, Times, Serif" SIZE=2>DEVCON
INTERNATIONAL CORP.<br>
															1350 East
Newport Center Drive, Suite 201<br>
															Deerfield Beach,
Florida 33442<br>
															</FONT>
															<font size="2">----------------------------------------------------------------------------------------

															</font></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROXY
STATEMENT<br>
SPECIAL
MEETING OF SHAREHOLDERS</FONT><font size="2"><br>

----------------------------------------------------------------------------------------

</font></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; This proxy statement
contains information relating to a special meeting of our shareholders to be
held on Monday, May&#160;10, 2004, beginning at 3:00&#160;p.m. local time, at
the Deerfield Beach Hilton, Hillsboro Executive Center North, 100 Fairway Drive,
Deerfield Beach, Florida, and to any adjournments or postponements. Our board of
directors is soliciting your proxy with respect to the matters to be voted upon
at this meeting. The approximate date that this proxy statement and the enclosed
form of proxy are first being sent to shareholders is April 16, 2004. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>You should review the
information provided in this proxy statement together with our 2004 Annual
Report, which accompanies this proxy statement. Our telephone number is (954)
429-1500. </FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PURPOSES OF
THE MEETING</FONT></H1>

         <font size="2">At the special meeting, our shareholders will consider and vote upon the following matters:</font><blockquote>
	<blockquote>
		<blockquote>
			<ol>
				<li><font size="2">&nbsp;Approval  and  authorization  of the  issuance  and sale by Devcon  International  Corp.  to Coconut  Palm
                      Capital  Investors I, Ltd. of up to  2,000,000  units,  including  the shares of common stock
                      underlying  these units,  for a purchase  price of nine dollars  ($9.00) per unit,  each unit
                      consisting  of 1 share of common  stock and a warrant to purchase 1 share of common  stock at
                      an exercise  price of $10.00 per share,  a warrant to purchase  1/2 share of common  stock at
                      an  exercise  price of $11.00 per share and a warrant to purchase  1/2 share of common  stock
                      at an exercise price of $15.00 per share;

</font></li>
				<li><font size="2">Approval of amendments  to our Articles of  Incorporation  to increase the number of authorized  shares of
                      our common stock to  50,000,000  shares,  increase  the size of our board of  directors  from
                      seven to nine  members and allow our board of  directors  to set the size of the board in the
                      future  (Proposals (1) and (2) are referred to in this proxy  statement  collectively  as the
                      Transaction); </font></li>
				<li><font size="2">Election of nine (9)  members to our board of  directors  to serve until the 2005 annual  meeting or until
                      their successors have been duly elected and qualified; and</font></li>
				<li><font size="2">&nbsp;Any other  matters  that  properly  come  before  the  special  meeting  and any and all  adjournments  or
                      postponements of the special meeting. </font></li>
			</ol>
		</blockquote>
	</blockquote>
</blockquote>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>&nbsp;&nbsp;&nbsp; While the proposals are
being listed separately for purposes of voting, they are all interdependent.
Accordingly, the obtaining of shareholder approval for each proposal is a
condition precedent to the effectiveness of the other proposals set forth in
this proxy statement.</B> </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Our board of directors
considered and evaluated the Transaction mentioned above. In connection with its
evaluation, our board of directors engaged Capitalink, L.C. to act as its
financial advisor. Capitalink has rendered its opinion, dated as of
April&#160;1, 2004, to the effect that, as of that date and based upon and
subject to the assumptions, limitations and qualifications set forth in its
opinion, the issuance of the units at the price stated in this proxy statement
is fair, from a financial point of view, to our shareholders. A copy of this
opinion is attached to the accompanying proxy statement as Annex A. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Our board of directors has
determined that the Transaction and the election of the nominees to our Board of
Directors are in our best interests and the best interests of our shareholders.
Our board of directors has approved, and recommends that you vote in favor of,
the Transaction. Our board of directors has approved the nomination of and
recommends that you vote to elect the nine nominees to our board of directors. </FONT></P>




<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SUMMARY</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>This summary highlights
selected information from this proxy statement and may not contain all of the
information that is important to you. To understand the transaction fully and
for a more complete description of the terms of the transaction, you should read
carefully this entire document, including the annexes, and the documents to
which we have referred you.</I> </FONT></P>


<font size="2">



</font>


<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Companies</FONT></H2>

<font size="2">Devcon International Corp.
<br>
1350 East Newport Center Drive, Suite 201
<br>
Deerfield Beach, Florida 33442<br>
(954) 429-1500 </font>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Devcon is a large producer
and distributor of ready-mix concrete and quarry products in the Caribbean
region. We produce and distribute ready-mix concrete, crushed stone, concrete
block, and asphalt and distribute bagged cement. We also perform site
preparation work as a land development contractor. We have established a
significant market share in most locations where we have facilities. Our
construction division performs earthmoving, excavating, and filling operations,
builds golf courses, roads and utility infrastructures, dredges waterways and
constructs deep-water piers and marinas in the Caribbean. We have historically
provided these land development services to both private enterprises and
governments in the Caribbean. Except where the context otherwise requires, the
terms &#147;we,&#148; &#147;us,&#148; &#147;our&#148; or &#147;Devcon&#148;
refer to the business of Devcon International Corp. and its consolidated
subsidiaries. </FONT></P>

<font face="Times New Roman, Times, Serif" size="2">Coconut Palm Capital Investors I, Ltd.
<br>
595 South Federal Highway
<br>
Boca Raton, Florida 33342
<br>
(561) 955-7300

         </font>
<p><font size="2">&nbsp;&nbsp;&nbsp; </font>
<font face="Times New Roman, Times, Serif" size="2">Coconut Palm Capital  Investors  I, Ltd. was formed as a  special-purpose  entity by Richard C. Rochon and
Mario B. Ferrari to acquire equity interests in Devcon.  Coconut Palm Capital  Investors I, Ltd. is an affiliate of
Royal Palm Capital  Partners,  Ltd.  Royal Palm is a private equity  investment and management  firm whose Chairman
and Chief Executive Officer,  Richard.  C. Rochon,  served for 15 years as President of Huizenga Holdings,  Inc., a
management and holding  company owned by H. Wayne  Huizenga. Huizenga  Holdings'  investments  included  several
publicly-held  companies  that  became  market  leaders  in  their  respective  industries,  including  Blockbuster
Entertainment  Corporation,  Republic Waste Industries,  Inc., AutoNation,  Inc., and Boca Resorts, Inc.
</font></p>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
Transaction (page 9)</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; If the proposals set forth
in this proxy statement are approved, subject to specified conditions, we will
issue and sell to Coconut Palm up to a total of 2,000,000 units for a purchase
price of $9.00 per unit. Each unit will consist of the following: </FONT></P>

<blockquote>
	<blockquote>
		<blockquote>
			<ul type="circle">
				<li><font face="Times New Roman, Times, Serif" size="2">1 share of common stock;
				</font></li>
				<li><font face="Times New Roman, Times, Serif" size="2">a warrant to  purchase 1 share of common  stock at an  exercise  price of $10.00 per share and a term of 3
         years;

</font></li>
				<li><font face="Times New Roman, Times, Serif" size="2">a warrant to purchase 1/2 share of common  stock at an exercise  price of $11.00 per share and a term of 4
         years; and </font></li>
				<li><font face="Times New Roman, Times, Serif" size="2">a warrant to purchase 1/2 share of common  stock at an exercise  price of $15.00 per share and a term of 5
         years. </font></li>
			</ul>
		</blockquote>
	</blockquote>
</blockquote>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The
units will be purchased by Coconut Palm. Coconut Palm has advised us that, at
some time after the closing of the Transaction and from time to time, it may
separate the shares of common stock and warrants comprising units into the
securities that comprise them. There are no prohibitions against this
separation in the governing agreements so long as the separation and subsequent
distribution is in compliance with applicable securities laws. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Under the purchase
agreement, Coconut Palm is obligated to purchase only 1,666,667 units at the
closing, subject to the satisfaction of specified conditions. Coconut Palm has
the right, but not the obligation, to purchase the remaining 333,333 units at
the same purchase price of $9.00 per unit if they so elect within 5 days prior
to the closing of the </FONT></P>
<HR SIZE=5 COLOR=GRAY NOSHADE>



<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Transaction. This right is referred to in this proxy
statement as the Overallotment Option. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; In connection with the
Transaction, Coconut Palm has designated two individuals, Richard&#160;C. Rochon
and Mario B. Ferrari, to be nominated for election to our board of directors.
The remaining nominees presented for election consist of incumbents, except for
Per-Olof L&ouml;&ouml;f, who has been nominated for election to the board of directors to
fill a vacancy which we anticipate will be left by Jose&#160;A. Bechara, Jr.,
Esq. who has informed us he does not intend to run for re-election. Coconut Palm
has advised us that Messrs. Rochon and Ferrari are expected to receive some of the units,
or the securities comprising the units, purchased by Coconut Palm as a
distribution from Coconut Palm. See &#147;Relationship
Between Richard Rochon, Mario Ferrari and Coconut Palm Capital Investors I,
Ltd.&#148; on p.&#160;35. </FONT></P>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Amendments to
Articles of Incorporation</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The Transaction will
require us to issue or reserve for issuance up to 6,000,000 shares of our common
stock, subject to specified adjustments set forth in the warrants. In addition,
our proposed strategy for entering into the security services business (as
described in this proxy statement) may require us to enter into acquisitions,
the consideration for which may be shares of our common stock. Accordingly, we
are asking our shareholders to approve an amendment to our Articles of
Incorporation to increase the number of authorized shares of our common stock
from 15,000,000 to 50,000,000. In addition, in connection with the Transaction,
Coconut Palm has designated two individuals to be nominated to our board of
directors. This will require an increase in the size of our board of directors
from 7 to 9 members. Under our bylaws, this requires an amendment to our
Articles of Incorporation. We are also amending our Articles of Incorporation to
allow our board of directors to set its size without shareholder approval in the
future. </FONT></P>

<h2 ALIGN="LEFT"><font face="Times New Roman, Times, Serif" size="2">Recommendation of the Board of Directors and Reasons for the Transaction (page 15)

</font></h2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Devcon has been
investigating strategic alternatives since 2002. We believe that,
notwithstanding the fact that we have enjoyed the benefits of experienced and
qualified employees and executives as well as periods of positive cash flow, our
business has not been growing at a rate we believe it could achieve, has
experienced net losses during some years and is generally in need of a new or
additional industry focus as a catalyst for growth. When Devcon was approached
by Coconut Palm, we believed the best interests of our shareholders required us
to pursue an opportunity for investment from Coconut Palm and to use the cash
resources as well as the experience and other resources Coconut Palm could offer
to pursue this strategic alternative. In making this determination, we
considered that Richard C. Rochon had, in our opinion, a
positive history of investing in and improving companies.
Although we cannot assure you pursuing the strategic alternative in the security
services business will ultimately benefit us and lead to increased
profitability, we believe undertaking this aggressive growth strategy is in our
best interests at this point in Devcon&#146;s life. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; We believe Coconut Palm
will bring to Devcon increased investment and, as a result of this investment,
rapid growth. We also believe the experience, skills and resources contributed
by the Coconut Palm principals as well as Stephen Ruzika who has been selected
to head the new Security Services Division will offer significant benefits
towards implementing this strategic alternative. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Our board of directors has
evaluated the Transaction and conducted negotiations with Coconut Palm regarding
the terms of the Transaction and has considered whether to approve the issuance
and sale of the units and whether the Transaction would be in our best
interests. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; These and other factors led
the board of directors to determine that the Transaction is in our best
interests and in the best interests of our shareholders and to recommend that
our shareholders approve the Transaction. We intend to complete the Transaction
as soon as possible after the special meeting. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Each member of our board of
directors individually stated for the record his/her vote in favor of and
approval of the board of director&#146;s determination that the Transaction was
in the best interest of Devcon and its shareholders. </FONT></P>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Opinion of
Financial Advisor (page 7)</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; In deciding to approve the
transaction, our board of directors considered the opinion of its financial
advisor, Capitalink, L.C., that the issuance of the units at the price stated in
this proxy statement is fair, from a financial point of view, to Devcon and its
shareholders. This opinion is attached as Annex A to this proxy statement. </FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4</FONT></H1>
<page>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Record Date;
Voting Power (page 8)</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The special meeting will be
held on May&#160;10, 2004 at 3:00&#160;p.m., local time, at the Deerfield Beach
Hilton, Hillsboro Executive Center North, 100 Fairway Drive, Deerfield Beach,
Florida. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; You are entitled to vote at
the special meeting if you own shares of our common stock as of the close of
business on April 9, 2004, the record date. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; At the close of business on
the record date, 3,457,848 shares of our common stock were outstanding and
entitled to vote at the special meeting. You will have one vote at the special
meeting for each share of our common stock you own as of the record date. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Whether or not you plan to
attend the special meeting, please sign, date and return the accompanying proxy
card to us. You may revoke your proxy at any time before it is exercised by
giving written notice to our corporate secretary at the address listed above.
You may also revoke your proxy by attending the special meeting, but only if 1)
you have provided the written notice discussed above or 2) you vote by ballot at
the meeting. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The affirmative vote of the
holders of a majority of the shares of our common stock present or represented
by proxy and voting on the matter is required to approve the proposal to issue
the units to Coconut Palm. The affirmative vote of the holders of a majority of
the shares of our common stock entitled to vote on the amendments to the
Articles of Incorporation is required to approve the proposed amendments to our
Articles of Incorporation. Directors will be elected by a plurality of the votes
cast by the holders of the shares of common stock represented in person or by
proxy at the special meeting. </FONT></P>

<h2 ALIGN="LEFT"><font face="Times New Roman, Times, Serif" size="2">Ownership of Devcon Following the Transaction; Consequences of this Proposal; Future Plans (page 37)
</font></h2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Coconut Palm will acquire
up to 2,000,000 shares of our common stock in the Transaction and be entitled to
purchase up to an additional 4,000,000 shares of our common stock upon exercise
of the warrants. Based on that number and the number of shares of our common
stock outstanding on the record date, Coconut Palm will acquire up to
approximately 36.6% of our common stock outstanding immediately after the
closing of the Transaction. Coconut Palm will also be entitled, on a fully
diluted basis, to acquire up to 58.7% of our common stock outstanding
immediately after the closing of the Transaction upon exercise of the warrants.
If Coconut Palm were to exercise its warrants, it would have enough shares of
our common stock to control Devcon. Two of the nominees for election to our
board of directors, Richard C. Rochon and Mario B. Ferrari, are designees of
Coconut Palm. Coconut Palm has advised us that Messrs. Rochon and Ferrari are expected to
eventually receive some of the units, or the securities comprising the units
purchased by Coconut Palm as a distribution from Coconut Palm. Specifically, Coconut Palm
has advised us that it anticipates distributing one-half of all
warrants issued in the Transaction (with equal distribution from the three tranches) for performance of services to Messrs. Rochon and Ferrari and
the management team led by Mr. Ruzika. Coconut Palm currently anticipates
distributing to Mr. Ruzika and his management team 650,000 of these warrants
(with equal distribution from the three tranches). Coconut Palm has also informed us that Messrs. Rochon and Ferrari
are expected to retain the power to vote and dispose of the securities remaining
with Coconut Palm and are thus attributed beneficial ownership of all of these
securities. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; As Coconut Palm is a
partnership, it may ultimately distribute the units to its principals, which may have
the effect of eliminating any control Coconut Palm acquires.&nbsp;
Coconut Palm has not informed us of any intent to distribute any of the units,
or any portion of the securities comprising the units, to anyone other than
Messrs. Rochon and Ferrari and Mr. Ruzika. Coconut Palm has agreed that any
distributions it makes to anyone, including its partners, must be in compliance
with applicable securities laws. </FONT></P>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Interests of
Certain Persons in the Transaction (page 30)</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In considering the board of
director&#146;s recommendation to approve the Transaction, you should be aware
that a number of our directors and executive officers have interests in the
Transaction that are different from, or in addition to, your interests as a
Devcon shareholder. These interests include: </FONT></P>
<blockquote>

	<ul>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The terms of the transaction contemplate that Donald J. Smith, Jr., our
Chairman, Chief Executive Officer and President, and Robert Armstrong, one of
our directors, and their affiliates will be allowed to register their shares of
our common stock along with, and to the same extent as, the shares of our common
stock being acquired by (and the shares of our common stock underlying the
warrants being acquired by) Coconut Palm. <br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Each of Jan Norelid, our Chief Financial Officer, Kevin M. Smith, our Vice
President &#150; Materials Division and Donald L. Smith, III, our Vice President
&#150; Construction Division have employment agreements under the terms of which
they may be entitled to specified severance payments upon the termination of
their employment within one year if (i) any person, entity or group acquires
beneficial ownership of 40% of our outstanding common stock or (ii) Donald
Smith, Jr. and his family fails to beneficially own, collectively, at least 20%
of our outstanding common stock. <br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The terms of the options granted by us from time to time to our employees and
directors provide that the vesting of these options automatically accelerates if
		we experience a change of control as defined in our stock option plan. The
acquisition of over 25% of our common stock constitutes a change of control
under this plan; however, not if the acquisition is from shares we issue, as is the case in
this Transaction. <br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A note issued to Donald L. Smith, Jr., our Chairman, Chief Executive Officer and
President contains provisions which provide the balance under the note becomes
immediately due and payable upon a change of control which is defined as
		an acquisition by any person of 15% or more of our outstanding shares of common
stock. However, under the terms of a guarantee issued in our favor by Mr. Smith,
		Mr. Smith must maintain collateral in the amount of $1770,000.
		Consequently, only $300,000 of the balance under the note could be paid
		back unless some other form of collateral is substituted. </FONT></li>
	</ul>
</blockquote>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Nominations of Specified
Directors to the Board of Directors and Additions to the Management Team of
Devcon (page 28)</B> </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; As a result of Coconut
Palm&#146;s desire that it be provided with sufficient ability to monitor and
protect its investment in Devcon, our board of directors has approved the
nominations of Richard C. Rochon and Mario B. Ferrari to our board of directors.
In addition, Stephen J. Ruzika and three members of his management team will
join our current international management team with oversight of the Security
Services Division to be implemented after the closing of the Transaction. Mr.
Ruzika will serve under the terms of an employment agreement he has entered into
with us which, by its terms, will be effective upon, and only upon, the closing
of the Transaction. We anticipate the aggregate compensation for this management
team will be $750,000-$850,000 in aggregate annual salary, plus participation,
as determined and approved by our board of directors or compensation committee,
in our equity-based compensation plans to the same extent as our other similarly
situated senior executives participate after the closing of the Transaction. For
more information on Mr. Ruzika&#146;s employment agreement, see
&#147;Nominations of Specified Directors to the Board of Directors and Additions
to the Management Team of Devcon&#148; on page&#160;28. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; In addition, we have
entered into a letter of intent with Security Equipment Company, Inc., a company
that is managed and controlled by Mr. Ruzika, under the terms of which we have
agreed to purchase this company. We anticipate completing this acquisition
simultaneously with the completion of the Transaction. For more information on
our acquisition of Mr. Ruzika&#146;s company, please see &#147;Recent
Developments&#148; on page&#160;38. </FONT></P>
<P><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; A
majority of the nominees are independent under the rules and regulations of
NASDAQ.</font></P>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Registration
Rights (page 35)</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The purchase agreement
provides Coconut Palm and any assignee to which Coconut Palm assigns its units
with specified registration rights under which we have agreed to file a
registration statement to register the resale of each of the shares being issued
to Coconut Palm as well as the shares underlying the warrants issued to Coconut
Palm in the Transaction. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; We have agreed that we will
file with the Securities and Exchange Commission the registration statement not
later than 60 days after the closing of the Transaction. We have further agreed
to use our reasonable best efforts to cause this registration statement to
become effective within 60 days of its filing with the Securities and Exchange
Commission. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; In the event this
registration statement has not been declared effective within 180 days of the
closing of the Transaction, as a result of our not exercising reasonable best
efforts, for the first 30 day period after this 180-day period, we will be
required to pay to Coconut Palm a cash penalty equal to 2.0% of Coconut
Palm&#146;s investment and, for each 30-day period after this first 30-day
period, we will be required to pay Coconut Palm a cash penalty equal to 1.0% of
Coconut Palm&#146;s investment. This cash penalty will not be in effect if the
delay in effectiveness of the registration statement is due to inquiries,
comments or other delays by the Securities and Exchange Commission or other
issues outside of our control. </FONT></P>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Special
Meeting in Lieu of Annual Meeting</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; If each of the proposals is
adopted by our shareholders, this special meeting will be deemed in lieu of our
2004 annual meeting. If the special meeting is deemed in lieu of the annual
meeting, we will not hold a separate 2004 annual meeting. </FONT></P>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Additional
Arrangements</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The purchase agreement provides
that, in the event of a change of control transaction approved by our board of
directors, Coconut Palm may elect to exercise specified &#147;tag-along
rights&#148; set forth in the purchase agreement along with and to the same
extent as Donald Smith, Jr., our Chairman, Chief Executive Officer and President
and/or Robert D. Armstrong, a director of ours. These tag-along rights would
entitle Coconut Palm to sell its common stock and warrants to the acquiring
party in the change of control transaction on the same terms and in the same
proportion as the acquiring party shall acquire shares of common stock from
Messrs. Smith or Armstrong. A &#147;change of control&#148; for these purposes
would occur when a third party, other than Donald Smith, Jr., Robert D.
Armstrong, Coconut Palm or any affiliate of these shareholders, acquired greater
than 50% in voting rights in one or a series of related transactions not
involving Coconut Palm or its affiliates. See &#147;Description of the Purchase
Agreement&#148; on page 31. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; For the 12-month period
following the closing of the Transaction, Coconut Palm will have the right to
purchase its pro rata share of any new equity offerings by us at the same terms
offered by us, subject to specified limitations described in this proxy
statement. See &#147;Description of the Purchase Agreement&#148; on page 31. </FONT></P>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Covenants in the purchase
agreement will require us to pursue specified proposed strategies in order to
utilize the investment of Coconut Palm to begin our entry into the security
services business. These strategies include the following: </FONT></P>
<blockquote>
	<ul>
		<li><font face="Times New Roman, Times, Serif" size="2">Diversifying our operations into the security services sector;
		<br>
&nbsp;</font></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Targeting potential acquisitions of security services businesses in the United
States and its territories that would provide a critical mass from which we may
grow organically and through acquisitions; and <br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;Financing the growth of this new Security Services Division by accessing the
equity and debt capital markets to the extent access to such markets is deemed
to be favorable by our board of directors. </FONT></li>
	</ul>
</blockquote>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; We anticipate that the
initial platform acquisition(s) will be financed with a combination of equity
and debt, with $5.0 million of our existing cash and the investment made by
Coconut Palm in this Transaction being dedicated to acquisitions in furtherance
of these strategies and objectives and costs reasonably incidental to the
furtherance of these strategies, including the new management team to be formed
and led by Stephen J. Ruzika. See &#147;Description of the Purchase
Agreement&#148; on page 31. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Coconut Palm and Donald
Smith, Jr., our Chairman, Chief Executive Officer and President, and specified
affiliates of Mr. Smith have entered into a voting agreement under the terms of
which Mr. Smith and his affiliates will agree to vote all shares of common stock
beneficially owned by them in favor of the Transaction, subject to termination
of the voting agreement in the event our board of directors withdraws its
approval of the Transaction because it is so obligated under its fiduciary
duties to our shareholders. See &#147;Description of the Voting Agreement&#148;
on page&#160;36. </FONT></P>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Interdependence
of Proposals</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; While the proposals are
being listed separately for purposes of voting, they are all interdependent.
Accordingly, obtaining the requisite shareholder approval for each proposal is a
condition precedent to the effectiveness of the other proposals in this proxy
statement. </FONT></P>


<!-- MARKER PAGE="sheet: 5; page: 5" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>




<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>VOTING
SECURITIES</FONT></H1>

         <b>&nbsp;&nbsp; <font face="Times New Roman, Times, Serif" size="2">&nbsp;Date; Time; Venue

</font></b>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The special meeting will be
held on May&#160;10, 2004, at 3:00&#160;p.m., local time, at the Deerfield Beach
Hilton, Hillsboro Executive Center North, 100 Fairway Drive, Deerfield Beach,
Florida. </FONT></P>

         <b>&nbsp;&nbsp;&nbsp; </b>
<font face="Times New Roman, Times, Serif" size="2"><b>Quorum

</b></font>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The presence, in person or
by proxy, of the holders of shares representing a majority of the outstanding
shares of our common stock will constitute a quorum. </FONT></P>

         <b>&nbsp;&nbsp;&nbsp;
<font face="Times New Roman, Times, Serif" size="2">Shareholder Vote Necessary to Approve Proposals

</font></b>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The affirmative vote of the
holders of a majority of the shares of our common stock, present or represented
by proxy and voting on the matter is required to approve the proposal to issue
the units to Coconut Palm. The affirmative vote of the holders of a majority of
the shares of our common stock entitled to vote is required to approve the
proposed amendments to our Articles of Incorporation. Directors will be elected
by a plurality of the votes cast by the holders of the shares of common stock
represented in person or by proxy at the special meeting. If any other matters
should properly come before the special meeting, proxies will be voted on these
other matters in accordance with the judgment of the persons voting the proxies. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>&nbsp;&nbsp;&nbsp; While the proposals are
being listed separately for purposes of voting, they are all interdependent.
Accordingly, obtaining the requisite shareholder approval for each proposal is a
condition precedent to the effectiveness of the other proposals set forth in
this proxy statement. </B> </FONT></P>

         &nbsp;&nbsp;&nbsp; <b>
<font face="Times New Roman, Times, Serif" size="2">Proxy and Voting Mechanics

</font></b>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; If you hold of record
shares of our common stock at the close of business on April 9, 2004, the record
date, you are entitled to vote at the special meeting. Each share of our common
stock is entitled to one vote upon all matters to be acted upon at the special
meeting. As of the record date, we had issued and outstanding 3,457,848 shares
of common stock. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Abstentions are considered
as shares present and entitled to vote for purposes of determining the outcome
of any matter submitted to the shareholders for a vote, but are not counted as
votes cast &#147;for&#148; or &#147;against&#148; any matter. The inspector of
elections will treat shares referred to as &#147;broker or nominee
non-votes&#148; (shares held by brokers or nominees as to which instructions
have not been received from the beneficial owners or persons entitled to vote
and the broker or nominee does not have discretionary voting power on a
particular matter) as shares that are present and entitled to vote for purposes
of determining the presence of a quorum. For purposes of determining the outcome
on proposals as to which the proxies reflect broker or nominee non-votes, shares
represented by these proxies will be treated as not present and not entitled to
vote on that subject matter. Accordingly, these shares would not be considered
by the inspectors as shares entitled to vote on that subject matter and therefor
would not be considered by the inspector when counting votes cast on the matter. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>&nbsp;&nbsp;&nbsp; Your vote is important.
Accordingly, you are urged to sign, date and return the accompanying proxy card
whether or not you plan to attend the special meeting</B>. If you do attend, you
may vote by ballot at the special meeting, which will have the effect of
canceling any proxy previously given. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If the enclosed proxy is
properly signed, dated and returned, the shares represented by the proxy will be
voted in accordance with the instructions on the proxy card. If no instructions
are indicated, the shares represented by the proxy will be voted in the
following manner: </FONT></P>

         <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

         (i)&nbsp;&nbsp;&nbsp;&nbsp; FOR the proposal to approve and authorize the issuance of the units by us to Coconut Palm;
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)&nbsp;&nbsp;&nbsp; FOR the proposal to approve the amendment of our Articles of Incorporation; and
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iii)&nbsp;&nbsp; FOR election of each of the nominees for director.
</font>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; If any other matters should
properly come before the special meeting, proxies will be voted on these other
matters in accordance with the judgment of the persons voting the proxies.
Discretionary authority to vote on such matters is conferred only by the
granting of these proxies. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Any shareholder giving a
proxy may revoke it by written notice to our Corporate Secretary at the address
provided above at any time before it is exercised. Attendance at the special
meeting will not have the effect of revoking the proxy unless this written
notice is given or unless the shareholder votes by ballot at the meeting. </FONT></P>

         <b><font face="Times New Roman, Times, Serif" size="2">Costs of Proxy Solicitation</font>
</b>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; We will bear the cost of
preparing, printing, assembling and mailing all proxy materials that may be sent
to shareholders in connection with this solicitation. Arrangements will also be
made with brokerage houses, other custodians, nominees and fiduciaries, to
forward soliciting material to the beneficial owners of shares of our common
stock held by these persons. We will reimburse these persons for reasonable
out-of-pocket expenses incurred by them. In addition to the solicitation of
proxies by use of the mails, our officers and regular employees may solicit
proxies without additional compensation by telephone or telegraph. We do not
expect to pay any compensation for the solicitation of proxies. </FONT></P>

         <b><font face="Times New Roman, Times, Serif" size="2">Special Meeting in Lieu of an Annual Meeting

</font></b>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; If each of the proposals is
adopted by our shareholders, the special meeting shall be deemed to be in lieu
of our 2004 annual meeting. If this occurs, we will not hold a separate annual
meeting and the directors elected at the special meeting will hold office until
the 2005 annual meeting of our shareholders or until their successors have been
duly elected and qualified. </FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROPOSAL
NOS. 1 AND 2</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>THE
TRANSACTION</FONT></H1>

<b><font face="Times New Roman, Times, Serif" size="2">Background

</font></b>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Between 2002 and 2004, our
management engaged in various discussions with respect to strategic alternatives
to enter into profitable lines of business that would provide predictable,
recurring revenue for our shareholders. During the end of 2002 and in early
2003, we engaged outside consultants to facilitate the process of assessing
strategic alternatives. As a part of this new strategy, we explored and analyzed
the possibility of entering into the water desalination industry, becoming
involved with Everglades restoration efforts being undertaken by the State of
Florida, becoming involved with road maintenance work with respect to U.S.
highways, exploring real estate opportunities in the South Florida region,
building and operating a yacht marina in South Florida as well as engaging in a
consolidation of quarries in the Southeastern United States. We also considered
the possibility of Devcon being purchased by a strategic buyer or,
alternatively, whether it was best to sell our construction division or our
materials division separately. Ultimately, out of these various avenues we
determined to pursue entry into the water desalination industry and, in 2003, we
entered into a joint venture to build, own and operate water desalination
plants. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; In December 2003, Donald L.
Smith, Jr., our Chairman, Chief Executive Officer and President and Richard C.
Rochon, the principal of Coconut Palm met informally to discuss possible avenues
in which Mr. Rochon could assist Mr. Smith with Devcon&#146;s efforts to seek
strategic alternatives. Mr. Smith had previously served as a director of another
company with Mr. Rochon and the two individuals were familiar with each other
through this mutual service. This meeting ended with Mr. Rochon concluding he
could not assist in Devcon&#146;s efforts. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; On January 22, 2004, upon
the invitation of Mr. Rochon, Mr. Smith and Jan A. Norelid, our Chief Financial
Officer, met with Mr. Rochon and Mario B. Ferrari of Coconut Palm. At this
meeting Messrs. Rochon and Ferrari for the first time expressed an interest in exploring
a
strategy that could provide Devcon with entry into a business line with
predictable, recurring revenues. The discussion was centered around
Devcon&#146;s ongoing process of assessing strategic alternatives and Coconut
Palm&#146;s idea of entering into the security services business. Messrs. Rochon
and Ferrari expressed their interest in making a private investment in Devcon
for the purpose of starting a new division, the Security Services Division. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; On January 29, 2004, Mr.
Norelid met with Messrs. Rochon and Ferrari who discussed the security services
business with Mr. Norelid and reviewed the history of transactions that Mr.
Rochon had been part of during his 17 years with Huizenga Holdings. The
presentation also provided an outline of how Messrs. Rochon and Ferrari proposed
to structure an investment and a summary of potential acquisition targets which
we could pursue after the investment was completed. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; On January 30, 2004, Mr.
Norelid met with Mr. Rochon, Mr. Ferrari and Mr. Stephen J. Ruzika in order to
further detail the security services business that was discussed. Mr. Ruzika,
who previously served as President and Chief Executive Officer of ADT Security
Services, was presented as the individual that would be hired to lead the
Security Services Division. Mr. Ruzika&#146;s credentials and experience were
discussed at length. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; On February 4, 2004, Mr.
Norelid met with Mr. Rochon and Mr. Ferrari to further discuss the strategy of
the security services business. During this meeting, the structure of a private
investment by Coconut Palm of $15 million in Devcon for shares of Devcon common
stock, in addition to a certain number of warrants was discussed at length. </FONT></P>

         <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;

         On February 10, 2004, Mr. Smith,  Mr.  Norelid and James Cast, one of our directors,  met with Mr. Rochon,
Mr. Ferrari and Mr. Ruzika to further discuss the security services business,  and review the proposed  acquisition
and internal growth strategy.

         </font>
<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; On  February  17,  2004,  Mr.  Norelid  met with Mr.  Ferrari to discuss an agenda for a  presentation  by
Messrs. Rochon, Ferrari and Ruzika to our board of directors. </font></p>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; On February 18, 2004, our
board held a special meeting and Messrs. Rochon, Ferrari, and Ruzika presented
the strategy of entering into the security services business. All of our
directors attended this meeting. The presentation analyzed similar transactions
that had been conducted by Mr. Rochon and outlined the factors indicating Devcon
would be a candidate to replicate the same successes Mr. Rochon had experienced
with previous investments. Following the presentation, our board of directors
continued their discussion and our legal counsel detailed that the transaction
would involve a potential change of control in Devcon. Our board of directors
decided to continue the review of the security services business and investment
and to select and engage an investment banker to assist the board, in an
advisory capacity, in forming an opinion. Except for Mr. Cast who learned of the
proposed transaction earlier in the month, the board was first informed that
Devcon was considering the transaction on or around the day before this meeting
when the board members received the meeting agenda.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; On February 18, 2004, our
board of directors contacted three investment-banking firms regarding providing
a fairness opinion with respect to the Transaction. Discussions were held with
representatives from these firms detailing the proposed transaction and the
background of the transaction. On February 20, 2004, the board retained
Capitalink to act as financial advisor to the board to review the transaction
and, if requested by the board, to render its opinion as to whether the issuance
of the units at the price stated in this proxy statement is fair, from a
financial point of view, to our shareholders. Capitalink was selected based on
its proposal and its experience in evaluating similar transactions. On the same
date, Capitalink began to conduct its due diligence on Coconut Palm and the
Transaction. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; On
February 22, 2004, Mr. Norelid had telephonic conversations with Mr. Ferrari to
discuss the purchase price and the exercise prices of the warrants. There were
various discussions with Mr. Ferrari that Mr. Norelid, after consultation with
Mr. Smith in each instance, made counter-proposals to. During these discussions
Coconut Palm's proposed&nbsp; purchase price
for the units, proposed exercise price of the warrants, and the term of the
warrants was increased. The ultimate agreement
was that, subject to receipt of approval by our board, Coconut Palm would invest
$15 million in the Company at a price of $9 per share, and at the same time
Coconut Palm would receive warrants to, within 3 years, purchase additionally
one share for each share initially purchased at the price of $10 per share, to
receive warrants to, within 4 years, purchase additionally half a share, for
each share initially purchased, at the price of $11 per share and to receive
warrants to, within 5 years, purchase additionally half a share, for each share
initially purchased, at the price of $15 per share. </FONT></P>

         <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;

         On February 25, 2004, Mr. Norelid met with Mr. Ferrari to discuss the due diligence planning.

</font>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; On February 27, 2004 the
investment bank, Capitalink, presented to the board its initial review of the
proposed transactions and the board approved in principle moving forward to
negotiate the transaction and complete due diligence and authorized management
to continue its diligence and to finalize a term sheet with Coconut Palm as soon
as possible. All of the members of the board were present for this meeting. At
the same time Capitalink was engaged to furnish a fairness opinion on the
proposed transaction. During the meeting we confirmed that we had to obtain
shareholders&#146; approval of the transaction as the total amount of new shares
would be more than 20 percent of our existing outstanding shares. During the
board meeting it was further decided that it would be prudent for a board representative and/or our legal counsel
to be
present at or involved with all future negotiations of the terms and conditions. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; From February 24, 2004 to
March 11, 2004, representatives of Devcon and representatives of Coconut Palm,
including their legal counsel and financial advisors, negotiated and finalized the terms of
a preliminary term sheet, the terms of which would guide the parties in their
drafting of the definitive documentation. This term sheet was not executed.</FONT></P>

         <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;

         Also on February 27, 2004 Mr. Rochon met with Mr. Smith and Mr. Armstrong to further discuss the
strategy of the security services business and the proposed transaction.

         </font>
<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; On March 4, 2004  Messrs. Rochon and Ruzika met with  Messrs.  Smith and Cast for a review of the process
and strategy session. </font></p>
<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; On
March 12, 2004 the board held a telephonic meeting in which it reviewed and
discussed the terms of the preliminary term sheet and all other matters related
to the proposed transaction.</font></p>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; From March 19 to March 25,
2004, Messrs. Norelid, Cast, and Gustavo Benejam, another member of the board,
held discussions with legal counsel for Devcon, Capitalink and Messrs. Rochon
and Ferrari and their legal counsel to address issues regarding the Transaction
and procedures for effecting the Transaction, such as drafting of the proxy
statement and finalizing definitive agreements. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; On March 26, 2004, at a
meeting of the board of directors, the board received a presentation from
Capitalink regarding the financial terms of the Transaction and its analysis of
those terms as presently structured. All of our
directors attended this meeting. As the terms of the transaction had not yet
been finalized, Capitalink did not deliver its fairness opinion. In addition,
our legal counsel and management reviewed with the board the remaining business
issues and obtained board guidance on these issues. Legal guidance also reviewed with the board its fiduciary duties in connection
with the approval of the proposed Transaction. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Between March 26, 2004 and
March 30, 2004, Jan Norelid and James Cast, together with our legal counsel, and
Capitalink held several telephonic negotiation sessions with Coconut Palm and
its legal counsel to finalize the terms of the Transaction. Also, between March
29, 2004 and April 1, 2004, Jan Norelid and James Cast, together with our legal
counsel, finalized the terms of a letter of intent, the terms of which govern
the acquisition of Security Equipment Company, Inc., a company which Stephen J.
Ruzika manages and controls, as well as the terms of the employment agreement
Mr. Ruzika was to enter into with the Company. Both the employment agreement and
the letter of intent were to be signed prior to the execution of the documents
governing the Transaction, and the parties understood that closings under both
agreements were conditioned upon the closing of the Transaction and that the
closing of the Transaction would be conditioned upon the closings under both
these agreements. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; On March 31, 2004, the
board held a telephonic meeting in which the members of the board of directors
discussed with their legal counsel and Capitalink some of the terms of the
transaction, their fiduciary obligations with respect to the Transaction and
whether they had satisfied these fiduciary obligations. Prior to this
discussion, the board met with Mr. Rochon and Mr. Ferrari as to the strategy
going-forward after the Transaction closed and the necessity of structuring the
agreement so that the strategy would be viable. All of our directors were in
attendance at this telephonic meeting. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; On April 1, 2004, the board
held another telephonic meeting in which the board reviewed the final terms of
the Transaction, as well as the final terms of the transactions with Mr. Ruzika.
At this time Capitalink made an additional presentation and delivered orally its
fairness opinion to the board to the effect that the purchase price of the units
was fair, from a financial point of view, to our shareholders. The fairness
opinion is more fully described under &#147;Opinion of the Financial Advisor to
the Company&#148; on page 17. After the discussion, the board determined that
the proposed Transaction was in our best interests and the best interests of our
shareholders. Following this presentation and the receipt of the fairness
opinion, the board authorized and approved the Transaction and recommended it be
submitted to our shareholders for their approval. The board also determined that
in light of Coconut Palm&#146;s requirement that this be a condition for it to
enter into the Transaction and in light of the experience, qualifications,
resources and skills they possessed, the election of the two individuals
designated by the Coconut Palm to our board of directors was in our best
interests and the best interests of our shareholders. Accordingly, the board
authorized and approved the nomination of the two principals designated by
Coconut Palm, Richard C. Rochon and Mario B. Ferrari. The board also reviewed
proposed amendments to our Articles of Incorporation which would increase our
authorized shares of common stock from 15,000,000 to 50,000,000 and would allow
the board to set the size of the board as opposed to the shareholders. The board
approved these amendments and recommended they be submitted to our shareholders
in light of Coconut Palm&#146;s request that these amendments be effected and in
light of the fact that the board determined the flexibility of having more
authorized shares from which we could issue shares to raise funds and consummate
acquisitions as part of our new growth strategy, as well as to more easily
adjust the size of the board, would assist us in implementing our new
strategies. The board also reviewed and approved, subject to changes deemed
desirable or necessary by Devcon&#146;s officers, a draft of the preliminary
proxy statement that our legal counsel had prepared and intended to file with
the Securities and Exchange Commission on our behalf. The board also approved
the employment agreement and transaction with Mr. Ruzika. All of our directors
were in attendance at this telephonic meeting. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; On April&#160;2, 2004,
Coconut Palm entered into a purchase agreement with us under which we agreed to
issue and sell to Coconut Palm up to 2,000,000 units for a purchase price of
nine dollars ($9.00) per share, each unit consisting of 1 share of common stock
and a warrant to purchase 1 share of common stock at an exercise price of $10.00
per share, a warrant to purchase 1/2 share of common stock at an exercise price
of $11.00 per share and a warrant to purchase 1/2 share of common stock at an
exercise price of $15.00 per share. In addition, on this same date, Mr. Ruzika
entered into a letter of intent with us under the terms of which he agreed to
sell his company to us and entered into an employment agreement with us,
which is conditioned upon the closing of the Transaction. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; In addition to the above,
there were numerous other telephonic discussions among various members of the
respective working groups as well as face-to-face sessions at which the
remaining terms of the Transaction were agreed. </FONT></P>

         <b>&nbsp; <font face="Times New Roman, Times, Serif" size="2">&nbsp;

         Nasdaq National Market Listing </font></b>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Our common stock is listed
on the Nasdaq National Market operated by Nasdaq. Nasdaq has established rules
of corporate governance which must be followed by all issuers whose securities
are listed on Nasdaq. Under these rules, we are required to obtain shareholder
approval prior to the issuance of securities: </FONT></P>

                  <blockquote>
					<blockquote>
						<ol>
							<li>
							<font face="Times New Roman, Times, Serif" size="2">that will result in a change in control of Devcon; or

                  			<br>
&nbsp;</font></li>
							<li>
							<font face="Times New Roman, Times, Serif" size="2">where,  in  connection  with a  present  or  potential  issuance  of  common  stock,  or
                  securities        convertible  into  or&nbsp; exercisable  for  common  stock,  other  than  a  public
                  offering: </font></li>
						</ol>
						<blockquote>
							<p>
							<font face="Times New Roman, Times, Serif" size="2">(a)      the  common  stock  has,  or will have upon  issuance,  voting  power  equal to or in excess of 20% of the
                                    voting power outstanding  before the issuance of the common stock or securities
                                    convertible into or exercisable for common stock; or

							<br>
							(b)      the  number  of  shares  of  common  stock to be  issued is or will be equal to or in excess of 20% of the
                                    number of shares of common stock outstanding  before the issuance of the common
                                    stock or securities.

                  </font></p>
						</blockquote>
						<p><font face="Times New Roman, Times, Serif" size="2">This rule is referred to in this proxy statement as the "Nasdaq 20% Limitation."
						</font></p>
					</blockquote>
</blockquote>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; In light of the
requirements of the Nasdaq 20% Limitation, we are requesting that the
shareholders approve the issuance by us of up to 2,000,000 units to Coconut Palm
under the terms of the purchase agreement. </FONT></P>

         <b>&nbsp;&nbsp; <font face="Times New Roman, Times, Serif" size="2">&nbsp;Shift in Focus of Business
</font></b>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The Transaction, including
the issuance of the warrants, is also being submitted for shareholder approval
due to the fundamental shift in the nature of our business and operations that
are contemplated by the Transaction by the addition of the new Security Services
Division that will be implemented if the Transaction is approved. However, our
existing business will still continue in its current form as a separate
division</FONT></P>
<p><b>&nbsp;&nbsp;&nbsp; <font face="Times New Roman, Times, Serif" size="2">Section 607.0902 (Control Share Acquisitions Statute)

</font></b></p>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Section 607.0902 of the
Florida Business Corporation Act, or the &#147;control-share acquisition
statute&#148;, regulates the acquisition of control of any &#147;issuing public
corporation&#148;, which is defined in the control-share acquisition statute as
a corporation that has more than 100 shareholders and a substantial nexus to
Florida. Under the section, &#147;control shares&#148; acquired in a
&#147;control-share acquisition&#148; have voting rights only if, and to the
extent, granted in a resolution of the shareholders of the corporation approved
by (1) a majority of all the votes entitled to be cast by each class or series
entitled to vote on the proposed control-share acquisition and (2) a majority of
all shares of each class or series entitled to vote separately on the proposal,
excluding all &#147;interested shares&#148;. &#147;Interested shares&#148; are
shares that are owned by the acquiring person or persons, each officer of the
corporation and each employee of the corporation who is also a director of the
corporation. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A Florida corporation may
adopt an amendment to its bylaws expressly electing not to be governed by
Section 607.0902. The Company has not amended its bylaws in this manner and,
accordingly, remains governed by Section 607.0902. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>However, the restrictions
of Section 607.0902 do not apply where the board of directors of the corporation
issuing the shares approves of the transaction and thereby removes the
acquisition of the shares from the definition of &#147;control-share
acquisition,&#148; which takes the acquisition out of the purview of the section.
This board approval must come before the control-share acquisition occurs. On
April&#160;1, 2004, our board of directors unanimously determined that the
Transaction was in our best interests and in the best interests of our
shareholders, and authorized and approved the Transaction. Accordingly, the
Transaction, which would constitute a control-share acquisition under Section
607.0902, has received board approval and, as a result, the restrictions of
Section 607.0902 do not apply to the Transaction. </FONT></P>

         &nbsp;&nbsp;&nbsp; <b>
<font face="Times New Roman, Times, Serif" size="2">No Shareholder Vote Regarding Acquisition of Security Equipment Company, Inc.

</font></b>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; We are not seeking
shareholder approval with respect to our proposed acquisition of Security
Equipment Company, Inc. as this approval is not required by applicable corporate
law or the rules and regulations of Nasdaq and because this company, in
isolation, is not material to our operations. </FONT></P>

<b><font face="Times New Roman, Times, Serif" size="2">Amendment to Articles of Incorporation

</font></b>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; On April&#160;1, 2004, our
board of directors unanimously approved and recommended to our shareholders for
approval at the special meeting the proposal to amend our Articles of
Incorporation to increase the number of shares of our common stock which we are
authorized to issue from 15,000,000 shares of our common stock to 50,000,000
shares of our common stock. The adoption of the amendment requires approval of
the amendment by our shareholders. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Our board of directors is
empowered to authorize the issuance of common stock. Of the 15,000,000 shares of
our common stock presently authorized for issuance, 3,457,848 shares of our
common stock were issued and outstanding as of the record date and 757,320
shares are reserved for issuance upon exercise of options granted under our
equity-based incentive plans and upon exercise or conversion of any convertible
securities or warrants we currently have outstanding. Accordingly, if the
Transaction is approved, assuming the issuance of all shares currently reserved
for future issuance and which will be reserved for issuance under the warrants
issued in the Transaction, we will have issued 10,215,168 of the 15,000,000
shares of our common stock currently authorized for issuance, leaving only
4,784,832 shares authorized for subsequent issuance. If this proposal is
approved, approximately 39,784,832 shares of our common stock will be available
for future issuance, in addition to the shares currently reserved for issuance. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Our board of directors
believes that it is in our best interest to increase the authorized number of
shares of our common stock to 50,000,000 so that there will be a substantial
number of authorized but unissued shares of our common stock available for
issuance, from time to time, in the discretion of the board and in such amounts,
for such purposes and on such terms as the our board of directors may from time
to time determine, without further shareholder approval except as may be
required by applicable laws, rules and regulations. Our board of directors
believes that the increase in the authorized shares of our common stock will
give us added flexibility to act in the future with respect to equity offerings,
acquisitions, financing programs, stock dividends or splits, corporate planning
and other corporate transactions without delay and expense of shareholder action
each time an opportunity requiring the issuance of shares may arise. In
addition, our proposed strategy for entering into the security services business
(as described in this proxy statement) may require us to enter into
acquisitions, the consideration for which may be shares of our common stock. The
additional 35,000,000 shares of our common stock would be part of the existing
class of our common stock and, if and when issued, would have the same rights
and privileges as the shares of our common stock presently issued and
outstanding. The holders of our common stock are not entitled to preemptive
rights or cumulative voting. If the Transaction is approved, however, specified
preemptive rights will be granted to Coconut Palm. For more information see
&#147;Description of the Purchase Agreement &#150; Covenants&#148; on page 33.
Future issuances of our common stock could result in dilution to existing
shareholders. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; In addition to these
corporate purposes, an increase in the number of authorized shares of our common
stock could be used to make more difficult a change in control of Devcon. Under
some circumstances our board of directors could create impediments to, or
frustrate persons seeking to effect, a takeover or transfer of control of us by
causing such shares to be issued to a holder or holders who might side with our
board in opposing a takeover bid that our board of directors determines is not
in our best interest and the best interest of our shareholders. Furthermore, the
existence of these additional authorized shares of our common stock might have
the effect of discouraging any attempt by a person or entity, through the
acquisition of a substantial number of shares of our common stock, to acquire
control of Devcon because the issuance of these additional shares could dilute
the common stock ownership of such person or entity. We are not aware of any of
these actions that may be proposed or pending. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; In addition, in connection
with the Transaction, Coconut Palm has designated two individuals to sit on our
board of directors. This will require an increase in the size of our board of
directors from 7 to 9 members. Under our bylaws, this requires an amendment to
our Articles of Incorporation. We are also amending our Articles of
Incorporation to allow our board of directors to set its size without
shareholder approval in the future. The amendment would vest sole authority in
our board of directors to set the number of directors, generally. Our board of
directors believes that these provisions will make administration of the number
and composition of the board more efficient and consistent with the corporate
governance of most comparable companies. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; While our board of
directors believes that these are useful provisions to allow us to make changes
in our corporate governance structure more efficiently, by vesting authority
only in our board of directors to set its size, this provision may make it
easier for a third party to change or acquire control over our board of
directors by electing additional directors. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Our board of directors
recommends that Article III of our Articles of Incorporation be amended in its
entirety to read as follows: </FONT></P>

                                                   <p align="center">"ARTICLE III

</p>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=25%>&nbsp;</TD>
<TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;
The
capital stock of the corporation shall consist of 50,000,000 shares of common
stock, par value $.10 per share. All of said stock shall be payable in cash,
property, real or personal, labor or services in lieu of cash, at a just
valuation to be fixed by the Board of Directors of this corporation. &#147;</FONT></TD>
</TR>
</TABLE>
<BR>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our board of directors also
recommends that Article V of our Articles of Incorporation be amended in its
entirety to read as follows: </FONT></P>

                                                    <p align="center">"ARTICLE V

</p>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=25%>&nbsp;</TD>
<TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The business
of the corporation shall be managed by its Board of Directors, which shall
consist of at least five members, with the exact number to be specified by the
Board of Directors from time to time by amendment to the bylaws of the
corporation or by resolution passed by the Board of Directors.&#148;</FONT></TD>
</TR>
</TABLE>
<BR>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; A copy of the entire text
of the Articles of Amendment to our Articles of Incorporation, which sets forth
the amendments discussed above is provided as Annex B to this proxy statement.
The above description of the amendments to our Articles of Incorporation is a
summary only and you should read the proposed amendments that are attached to
this proxy statement in their entirety. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; If the amendments to our
Articles of Incorporation are approved at the special meeting, they will become
effective upon the filing of the Articles of Amendment with the Secretary of
State of the State of Florida, which is expected to be accomplished as promptly
as practicable after such approval is obtained. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Under Florida corporation
law, the affirmative vote of the holders of a majority of the shares of our
common stock entitled to vote at the special meeting is required to adopt the
proposal to increase the number of authorized shares of our common stock and
amend the Articles of Incorporation to vest authority solely in the board with
respect to setting its size. </FONT></P>

<b><font face="Times New Roman, Times, Serif" size="2">Recommendation of the Board of Directors and Reasons for the Transaction</font></b>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Devcon has been
investigating strategic alternatives since 2002. We believe that,
notwithstanding the fact that we have enjoyed the benefits of experienced and
qualified employees and executives as well as periods of positive cash flow, our
business has not been growing at a rate we believe it could achieve, has
experienced net losses during some years and is generally in need of a new or
additional industry focus as a catalyst for growth. As a part of this new
strategy, we explored and analyzed the possibility of entering into the water
desalination industry, becoming involved with Everglades restoration efforts
being undertaken by the State of Florida, becoming involved with road
maintenance work with respect to U.S. highways, exploring real estate
opportunities in the South Florida region, building and operating a yacht marina
in South Florida as well as engaging in a consolidation of quarries in the
Southeastern United States. We also considered the possibility of Devcon being
purchased by a strategic buyer or, alternatively, whether it was best to sell
our construction division or our materials division separately. Ultimately, out
of these various avenues we determined to pursue entry into the water
desalination industry and, in 2003, we entered into a joint venture to build,
own and operate water desalination plants. Coconut Palm then approached us to
discuss our entry into another line of business, the security services industry
which would be driven initially by Coconut Palm&#146;s investment in Devcon. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; When Devcon was approached
by Coconut Palm, we believed the best interests of our shareholders required us
to pursue an opportunity for investment from Coconut Palm and to use the cash
resources as well as the experience and other resources Coconut Palm could offer
to pursue this strategic alternative. In making this determination, we
considered that Richard C. Rochon had, in our opinion, a positive history of investing in and improving companies.
Although we cannot assure you pursuing the strategic alternative in the security
services business will ultimately benefit us and lead to increased
profitability, we believe undertaking this aggressive growth strategy is in our
best interests at this point in Devcon&#146;s life. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; We believe Coconut Palm
will bring to Devcon increased investment and, as a result of this investment,
rapid growth. We also believe the experience, skills and resources contributed
by the Coconut Palm principals as well as Stephen Ruzika who has been selected
to head the new Security Services Division will offer significant benefits
towards implementing this strategic alternative. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>At its meeting on
April&#160;1, 2004, our board of directors determined that the proposed
Transaction is in our best interests and the best interests of our shareholders.
Our board of directors based its determination on a number of factors, including
the following: </FONT></P>

<blockquote>
	<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&#150;
the presentations delivered by Capitalink to the board of directors on
March&#160;26, 2004 and April&#160;1, 2004, and the written opinion of
Capitalink dated April&#160;1, 2004, addressed to the board of directors to the
effect that, as of the date of the opinion and based on and subject to the
matters set forth in the opinion, the issuance of the units at the price stated
in this proxy statement was fair from a financial point of view to us and our
shareholders; </FONT></P>
	<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#150;
the terms of the purchase agreement, the warrants, the proposed amendments to
our Articles of Incorporation, the voting agreement, the employment agreement to
be entered into with Stephen J. Ruzika and other members of his management team,
the terms of the letter of intent providing for the sale of Mr. Ruzika&#146;s
company to us and the proposed strategies and objectives for implementing the
new security services division, which were the product of arms&#146; length
negotiations among the parties; </FONT></P>
	<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#150;
our increased cash resources as a result of the cash infusion by Coconut Palm
through the additional equity provided by the purchase of Coconut Palm, which
would not be provided unless we entered into the Transaction; </FONT></P>
	<font face="Times New Roman, Times, Serif" size="2">-        the  possibility  that Mr. Ruzika and his management  team could  successfully  implement the new Security
         Services Division; </font>
	<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&#150;
the potential appreciation in the market value of our common stock due to the
involvement of Coconut Palm, the principals of which have positive reputations
in the business community as well as our entry into a new line of business and
the potential success of that business; and </FONT></P>
	<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&#150;
that, based upon the projections of management, following the consummation of
the Transaction, we would have sufficient liquidity, including cash flows from
its operations, to conduct our new Security Services Division. </FONT></P>
</blockquote>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our board of directors also
considered a number of potentially negative consequences of the Transaction in
its deliberations, including: </FONT></P>
<blockquote>
	<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&#150;
the potential reduction in our earnings per share due to the dilution of the
percentage ownership of the existing holders of the shares of our common stock
resulting from the issuance of the shares under the purchase agreement as well
as the issuance of the shares upon exercise of the warrants. Immediately
following the Transaction, Coconut Palm will beneficially own, collectively, up
to 2,000,000 shares of our common stock or 36.6% of our outstanding shares. If
shares of our common stock underlying the warrants are included, Coconut Palm
will beneficially own, collectively, up to 6,000,000 shares of our commons stock
or 58.7% of our outstanding shares on a fully-diluted basis; </FONT></P>
	<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&#150;
the possible decline in the market price of the shares of our common stock
caused by the sale by shareholders of their shares as a result of the perceived
risk of dilution of the earnings per share and voting rights of our
shareholders; </FONT></P>
	<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&#150;
the possible engagement in short sales by third parties as a result of the
possible perceived risk of dilution and decline in the market price of the
shares of our common stock; </FONT></P>
	<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&#150;
the fact that Coconut Palm would be purchasing a significant ownership interest
which could effectively deter third parties from making an offer to acquire us
after the closing of the Transaction, which offer could involve a premium stock
price or other benefits for shareholders or otherwise prevent changes in control
or management of us after the closing of the Transaction; </FONT></P>
	<font face="Times New Roman, Times, Serif" size="2">-        the new  Security  Services  Division  management  team may not be able to implement  effectively  our new
         security services franchise; and

</font>
	<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&#150;
the risk that the benefits sought to be achieved in the Transaction, including
the successful implementation of the new Security Services Division, will not be
achieved. </FONT></P>
</blockquote>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; This discussion of
information and factors considered by our board of directors is not intended to
be exhaustive but is intended to summarize all material factors considered by
our board of directors. In view of the wide variety of factors considered by our
board of directors, our board of directors did not find it practicable to
quantify or otherwise assign relative weights to the specific factors
considered. However, after taking into account all of the factors set forth
above, our board of directors has determined that the Transaction is in our best
interests and the best interests of our shareholders and that we should enter
into the Transaction. </FONT></P>

<b><font face="Times New Roman, Times, Serif" size="2">Opinion of Financial Advisor to the Company

</font></b>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The board of directors of
Devcon engaged Capitalink as financial advisor and to render an opinion in
connection with the Transaction. Capitalink was advised that Devcon is
contemplating a transaction whereby Coconut Palm Capital Investors I, Ltd., or
an affiliate of Coconut Palm, will purchase up to 2,000,000 units for a purchase
price of $9.00 per unit, each unit consisting of (i) one share of Devcon&#146;s
common stock, (ii) warrants to purchase one share of Devcon&#146;s common stock
for each share of common stock purchased at an exercise price of $10.00 per
share, exercisable for a three-year period, (iii) warrants to purchase one share
of Devcon&#146;s common stock for each two shares of common stock purchased, at
an exercise price of $11.00 per share, exercisable for a four-year period, and
(iv) warrants to purchase one share of Devcon&#146;s common stock for each two
shares of common stock purchased, at an exercise price of $15.00 per share,
exercisable for a five-year period. Capitalink has been retained to render an
opinion as to whether, on the date of its opinion, the purchase price is fair,
from a financial point of view, to Devcon&#146;s shareholders. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; For purposes of the
transaction, the purchase price is comprised of $8.67 attributable to the
shares, or the share consideration, and $0.33 attributable to the warrants. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; On March 26, 2004
Capitalink made a presentation to Devcon&#146;s board of directors setting forth
its financial analyses regarding the transaction. On April 1, 2004, Capitalink
made a subsequent presentation to the board of directors and rendered its oral
opinion that, as of such date, based upon and subject to the assumptions made,
matters considered, and limitations on its review as set forth in the opinion,
the purchase price is fair, from a financial point of view, to Devcon&#146;s
shareholders. Subsequently, Capitalink delivered its written opinion. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>&nbsp;&nbsp;&nbsp; The full text of the
written opinion of Capitalink, dated as of April 1, 2004, is attached as Annex A
and is incorporated by reference into this proxy statement. Devcon and
Capitalink urge you to read the Capitalink opinion carefully and in its entirety
for a description of the assumptions made, matters considered, procedures
followed and limitations on the review undertaken by Capitalink in rendering its
opinion. The summary of the Capitalink opinion set forth in this proxy statement
is qualified in its entirety by reference to the full text of the opinion.</B> </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; No limitations were imposed
by Devcon on the scope of Capitalink&#146;s investigation or the procedures to
be followed by Capitalink in rendering its opinion. The Capitalink opinion was
for the use and benefit of the board of directors of Devcon in connection with
its consideration of the Transaction and was not intended to be and does not
constitute a recommendation to any shareholder of Devcon as to how that
shareholder should vote with respect to the Transaction. Capitalink was not
requested to opine as to, and its opinion does not address, Devcon&#146;s
underlying business decision to proceed with or effect the Transaction. Further,
Capitalink was not asked to consider, and its opinion does not address, the
relative merits of the Transaction as compared to any alternative business
strategy that might exist for Devcon. Capitalink was not engaged to seek
alternatives to the Transaction that might exist for Devcon. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; In arriving at its opinion,
Capitalink took into account an assessment of general economic, market and
financial conditions as well as its experience in connection with similar
transactions and securities valuations generally and, among other things: (i)
reviewed the draft Agreement dated April 1, 2004 by and among Devcon and Coconut
Palm; (ii) reviewed publicly available financial information and other data with
respect to Devcon, including the Annual Report on Form 10-K for the year ended
December 31, 2003, and the Proxy Statement on Schedule 14-A, dated April 28,
2003; (iii) reviewed and analyzed the Transaction&#146;s financial impact on
Devcon&#146;s book value and impact on common shares outstanding; (iv) reviewed
and analyzed certain information related to the alarm security sector of the
security services industry; (v) reviewed certain Security Equipment Company,
Inc., or Security Equipment, unaudited financial and other data as provided by
Security Equipment management; (vi) considered the historical financial results
and present financial condition of Devcon; (vii) reviewed certain publicly
available information concerning the trading of, and the trading market for, the
common stock of Devcon; (viii) reviewed and analyzed certain financial
characteristics of companies that were deemed to have characteristics comparable
to those of Devcon; (ix) reviewed and analyzed certain financial characteristics
of target companies in transactions where that target company was deemed to have
characteristics comparable to those of Devcon; (x) reviewed and analyzed
Devcon&#146;s free cash flows and prepared capitalized earnings; (xi) reviewed
and analyzed Devcon&#146;s adjusted net book value; (xii) reviewed and analyzed
the premium implied by the share consideration; (xiii) reviewed and discussed
with representatives of the management of Devcon certain financial and operating
information furnished by them, including financial analyses with respect to the
business and operations of Devcon; (xiv) inquired about and discussed the
Transaction and other matters related to the Transaction with Devcon&#146;s
management and the board of directors of Devcon; and (xv) performed such other
analyses and examinations as were deemed appropriate. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; In arriving at its opinion,
Capitalink relied upon and assumed the accuracy and completeness of all of the
financial and other information that was used without assuming any
responsibility for any independent verification of any such information and has
further relied upon the assurances of Devcon&#146;s management that it is not
aware of any facts or circumstances that would make any such information
inaccurate or misleading. Capitalink did not make a physical inspection of the
properties and facilities of Devcon or Security Equipment and did not make or
obtain any evaluations or appraisals of the assets and liabilities (contingent
or otherwise) of Devcon or Security Equipment. Capitalink assumed that the
Transaction will be consummated in a manner that complies in all respects with
the applicable provisions of the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and all other applicable federal
and state statues, rules and regulations. Capitalink assumed that the
Transaction will be consummated substantially in accordance with the terms set
forth in the draft agreement, without any further amendments to the draft
agreement, and without waiver by Devcon of any of the conditions to any
obligations or in the alternative that any of these amendments, revisions or
waivers thereto will not be detrimental to the shareholders of Devcon. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;
Capitalink&#146;s opinion is necessarily based upon market, economic and other
conditions as they existed on, and could be evaluated as of, April 1, 2004.
Accordingly, although subsequent developments may affect its opinion, Capitalink
has not assumed any obligation to update, review or reaffirm its opinion. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The
estimates contained in Capitalink&#146;s analyses and the ranges of valuations
resulting from any particular analysis are not necessarily indicative of actual
values or future results, which may be significantly more or less favorable than
those suggested by such analyses. In addition, analyses relating to the value of
businesses or securities do not necessarily purport to be appraisals or to
reflect the prices at which businesses or securities actually may be sold.
Accordingly, Capitalink&#146;s analyses and estimates are inherently subject to
substantial uncertainty. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Each of
the analyses conducted by Capitalink was carried out in order to provide a
different perspective on the Transaction, and to enhance the total mix of
information available. Capitalink did not form a conclusion as to whether any
individual analysis, considered in isolation, supported or failed to support an
opinion as to the fairness, from a financial point of view, of the purchase
price to Devcon&#146;s shareholders. Capitalink did not place any particular reliance
or weight on any individual analysis, but instead concluded that its analyses,
taken as a whole, supported its determination. Accordingly, Capitalink believes
that its analyses must be considered as a whole and that selecting portions of
its analyses or the factors it considered, without considering all analyses and
factors collectively, could create an incomplete and misleading view of the
process underlying the analyses performed by Capitalink in connection with the
preparation of its opinion. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>&nbsp;&nbsp;&nbsp; The
financial reviews and analyses include information presented in tabular format.
In order to fully understand Capitalink&#146;s financial review and analyses, the
tables must be read together with the text presented. The tables alone are not a
complete description of the financial review and analyses and considering the
tables alone could create a misleading or incomplete view of Capitalink&#146;s
financial review and analyses.</B> </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Further, the summary of
Capitalink&#146;s analyses described below is not a complete description of the
analyses underlying Capitalink&#146;s opinion. The preparation of a fairness opinion
is a complex process involving various determinations as to the most appropriate
and relevant methods of financial analysis and the application of those methods
to the particular circumstances and, therefore, a fairness opinion is not
readily susceptible to partial analysis or summary description. In arriving at
its opinion, Capitalink made qualitative judgments as to the relevance of each
analysis and factors that it considered. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>&nbsp;&nbsp;&nbsp; Pro
Forma Review.
</B>Capitalink analyzed the pro forma impact of the Transaction to Devcon&#146;s book
value and securities ownership. Capitalink noted that Devcon&#146;s net book value
per share would fall from $13.82 per share to $12.55 per share (excluding the
additional purchase option and exercise of the warrants). Capitalink also noted
that if Coconut Palm acquires 2,000,000 shares in the Transaction and if all
three tranches of warrants are exercised, then Coconut Palm would own
approximately 59.4% of Devcon. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>&nbsp;&nbsp;&nbsp; Alarm
Security Sector Review. </B>Capitalink reviewed the characteristics of the alarm
security sector with respect to its key operating characteristics, competitive
landscape, comparable transactions, and comparable companies. Based on this
review, Capitalink made the following observations: </FONT></P>

<blockquote>
	<ul>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;The sector is dominated by a number of large players (e.g. ADT Security,
Protection One and others) who together make up at least 50% of the market. The
remainder of the market consists of small &#147;mom and pop&#148; players.<br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>One of the key valuation
multiples is recurring monthly revenues, or RMR. <br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Revenue growth in the sector has increased significantly over the last decade,
but has slowed in recent years. <br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The outlook in the
industry is for continued growth despite rising competition. <br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>There are significant economies of scale advantages through the consolidation of
security alarm monitoring companies. <br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The number of
transactions within the sector has fallen significantly from the mid 1990s
highs. <br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The multiples paid in alarm security transactions have also fallen over the last
decade from RMR multiples in the low 40s during the mid-1990&#145;s to the low
30s in recent transactions. <br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Historical trading multiples for publicly listed security alarm companies has
also fallen significantly from the mid-1990s highs. <br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>There are few publicly listed U.S. pure-play alarm security monitoring
companies. Capitalink reviewed the financial characteristics of three publicly
listed companies, including Protection One, Integrated Alarm Services Group and
Diversified Security Systems. Capitalink noted that the enterprise
value-to-revenue multiples ranged from 1.58 to 6.16 times, and RMR multiples
ranged from 28.4 to 44.1 times. <br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Over the last two years,
the alarm security sector has underperformed the general market. </FONT></li>
	</ul>
</blockquote>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>&nbsp;&nbsp;&nbsp; Review of Security
Equipment. </B>Capitalink reviewed the overall operating statistics and
financial information for Security Equipment and discussed the historical
performance and future prospects with the President and CEO of Security
Equipment. Capitalink noted the following: </FONT></P>

<blockquote>
	<ul>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Revenue for Security Equipment was approximately $1.8 million for the fiscal
year ended September 30, 2003. Approximately 81.8% of the revenue is derived
from its alarm monitoring services. <br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>RMR as of February 29,
2004 was approximately $121,000.<br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Security Equipment currently has 2,700 customers in the Panhandle region and
over 1,200 in the Tampa Bay region. The customer base is approximately 60%
commercial and 40% residential. <br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Monitoring and service gross margins ranged from a low of 68.7% to a high of
73.9% over the last three years. </FONT></li>
	</ul>
</blockquote>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Valuation Overview</B>.
The following table provides a summary of the range of indicated values for
Devcon for each of the analyses used by Capitalink. </FONT></P>&nbsp;-------------------------------------------------------------------------------------------------------------------

<p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<font face="Times New Roman, Times, Serif" size="2">&nbsp; Methodology&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Indicated Equity Value Per Share<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Comparable Company Analysis&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$7.72&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$9.75<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Comparable Transaction Analysis&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$7.99&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$9.82<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Capitalized Earnings Analysis&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$7.16&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$9.82<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Adjusted Net Book Value Analysis&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$5.85&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
-&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$9.19</font></p>
<p>&nbsp;&nbsp;&nbsp; <font face="Times New Roman, Times, Serif" size="2"><b>Financial  Performance  Analysis.
</b></font><font face="Times New Roman, Times, Serif" size="2">Capitalink  undertook  analyses of the historical and financial data of
Devcon in order to understand and interpret its operating and financial performance and strength.
</font></p>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Capitalink reviewed
Devcon&#146;s historical financial data from Devcon&#146;s public filings for
the five years ended December 31, 2003. Devcon&#146;s revenue and earnings were
adjusted to remove any unusual or extraordinary sources of revenue and expenses.
The adjustments provide a more accurate portrayal of Devcon&#146;s underlying
earnings. Capitalink noted the following: </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; For FY2003, approximately
69.1% of revenue was derived from the Materials Division and 30.9% from the
Construction Division. Revenue fell over the reviewed period &#150; from a high
of $68.0 million in FY1999 to $55.3 million in FY2003. The fall was most
noticeable in FY2001 when revenue fell by approximately 15.9%. Most of the fall
in revenue was due to a reduction in the Materials business resulting from i)
the sale of the cement terminals and operations in Dominica in FY2000, ii) the
termination of a cement distribution agreement in March 2001, iii) a decrease in
the demand for block and concrete in St. Martin and Antigua, and iv) a general
decrease in economic growth as a result of reduced tourism from the events of
9/11 and the subsequent downturn in the U.S. economy. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Devcon&#146;s adjusted
EBITDA has ranged from a high of $5.0 million for FY2001 to $1.6 million for
FY2003. The fall in EBITDA is primarily a result of lower gross margin for the
Materials Division, which fell from approximately 18.9% in FY2001 to 12.8% in
FY2003. The reduction in margin was a result of lower average aggregate sales
prices, heavy rains resulting in a reduction of aggregate production and block
production difficulties in St. Thomas. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; As of December 31, 2003,
Devcon had approximately $2.8 million in interest bearing debt, including
minority interests, of which $2.1 million represents unsecured notes payable to
Devcon&#146;s President. Devcon also had approximately $10.0 million in cash and
cash equivalents, and net debt (interest bearing debt less cash) of
approximately $(7.3) million. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>&nbsp;&nbsp;&nbsp; Market Performance
Analysis<I>.</I></B><I> </I>Capitalink utilized a historical stock price
analysis to review and compare Devcon&#146;s stock performance to the general
market indices and a selected peer group. In addition, Capitalink reviewed the
liquidity of Devcon&#146;s common stock in the public trading markets. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Capitalink reviewed the
daily closing market price and trading volume of Devcon&#146;s common stock over
two time periods; (i) the two-year period ending March 31, 2004, and (ii) the
last twelve months ended March 31, 2004. Capitalink compared the daily closing
market price performance of Devcon&#146;s common stock to both the comparable
companies (noted below) and the Russell 3000 Index for both periods. Capitalink
also calculated total trading volumes at various closing price ranges. In
addition, the number of trading days, and the respective percentages, at certain
trading volumes, was set forth. </FONT></P>

         <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;

         Capitalink noted that during the two-year period ended March 31, 2004, the Devcon common stock:
</font>
<blockquote>
	<ul>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>experienced limited liquidity with the average and median daily number of shares
traded equal to 2,417 and 100, respectively. It was further noted that on 228
trading days, or approximately 45.1% of the total trading days, there was no
volume; <br>
&nbsp;</FONT></li>
		<li><font face="Times New Roman, Times, Serif" size="2">ranged from as
		high as $9.69 to as low as $5.51, closing at $8.22 on March 31, 2004;
		and<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">&nbsp;increased  27.4%,  while the comparable  companies  index  increased 17.3% and the Russell 3000 Index fell
              1.1%. </font></li>
	</ul>
</blockquote>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Capitalink also noted that
during the last twelve months ended March 31, 2004, Devcon&#146;s common stock: </FONT></P>

<blockquote>
	<ul>
		<li><font face="Times New Roman, Times, Serif" size="2">experienced
		limited liquidity with the average and median daily number of shares
		traded equal to 3,306 and 400, respectively; <br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">&nbsp;ranged from as high as $9.69 to as low as $6.09;, and
		<br>
&nbsp;</font></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>increased 19.1%, while the comparable companies index increased 68.9% and the
Russell 3000 Index increased 35.8%. </FONT></li>
	</ul>
</blockquote>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>&nbsp;&nbsp;&nbsp; Selected Comparable
Company Analysis<I>.</I></B><I></I> Capitalink utilized the selected comparable
company analysis, a market valuation approach, for the purposes of compiling
guideline or comparable company statistics and developing valuation metrics
based on prices at which stocks of similar companies are trading in a public
market. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The selected comparable
company analysis compares the trading multiples of Devcon with those of other
publicly traded companies that are similar with respect to business model,
operating sector, size and target customer base. Capitalink located five
companies that it deemed comparable to Devcon with respect to their industry
sector and operating model. All of the comparable companies are classified under
the SIC codes 14 (Mining and Quarrying of Nonmetallic Materials) and 15
(Building Construction). </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The comparable companies
utilized were: Florida Rock Industries, Inc., Granite Construction, Inc., Martin
Marietta Materials Inc., U.S. Concrete, Inc., and Vulcan Materials Co. Devcon is
significantly smaller than all of the comparable companies. As of March 31,
2004, the enterprise value for the comparable companies ranged from
approximately $330.4 million to approximately $5.8 billion and revenue ranged
from approximately $473.1 million to approximately $2.9 billion. In comparison,
Devcon had an enterprise value and FY2003 revenue of approximately $19.3 million
and $55.3 million, respectively. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Capitalink reviewed certain
financial information relating to Devcon in the context of the corresponding
financial information, ratios and public market multiples for the comparable
companies. No company used in Capitalink&#146;s analysis was deemed to be
identical or directly comparable to Devcon; accordingly, Capitalink considered
the multiples for the comparable companies, taken as a whole, to be more
relevant than the multiples of any single company. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Market values were used to
calculate multiples of EPS, common equity and net tangible common equity, while
enterprise values were used to calculate multiples of LTM revenue, LTM EBIT, LTM
EBITDA and total assets. For comparison purposes, all operating profits,
including EBITDA, were normalized to exclude unusual and extraordinary expenses
or income. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Capitalink noted that the
EBITDA margin for Devcon of 2.9% for FY2003 was lower than all of the comparable
companies, the mean and median of which was 16.6% and 18.9%, respectively. Given
the volatility in Devcon&#146;s EBITDA, Capitalink also calculated the average
EBITDA from FY1999 to FY2003 to be approximately $3.4 million. Capitalink also
noted that Devcon&#146;s debt-to-total invested capital was 9.2%, compared to
the average of the comparable companies&#146; of 21.3%. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Capitalink expects
Devcon&#146;s valuation multiples to be below the average of the comparable
companies due to the smaller size of Devcon (which limits the ability of Devcon
to gain economies of scale advantages with respect to corporate and supply
costs), the less profitable historical performance of Devcon relative to most of
the comparable companies, and the additional risk from having significant
operations in the Caribbean. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Capitalink selected an
appropriate multiple range for Devcon by examining the range provided by the
comparable companies and then applied this multiple range to Devcon&#146;s
common equity, FY2003 revenue, FY2003 EBITDA and average EBITDA (between FY1999
to FY2003). </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Based on the selected
multiple ranges, Capitalink calculated a range of enterprise values. After
deducting net interest bearing debt and minority interests of approximately
$(10.9) million, adding non-operating notes receivable of $9.0 million, and
dividing by approximately 4.159 million shares (including in-the-money options),
Capitalink calculated a range of indicated equity values per share of between
$7.72 and $9.75. </FONT>&nbsp;</P>
<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Statistic&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Selected Multiple&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Indicated Equity Value Per Share<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$(000)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Low&nbsp;&nbsp; -&nbsp;&nbsp;&nbsp;
High&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Low&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
High <br>
<b>Market Value
Multiple</b><br>
Common Equity........................................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$45,549&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.6x&nbsp;&nbsp;&nbsp; -&nbsp; &nbsp;
1.0x&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$6.57&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$10.95<br>
<b>Enterprise Value Multiple</b><br>
FY2003 Revenue .....................................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$55,313&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.30x&nbsp;&nbsp; -&nbsp;&nbsp; 0.40x&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$8.77&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$10.10<br>
  FY2003 EBITDA......................................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$1,619&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.0x&nbsp;&nbsp;&nbsp;&nbsp;
-&nbsp; 7.0x&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$6.73&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;
$ 7.51<br>
  Average EBITDA (FY1999 - FY2003)......&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$3,366&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.0x&nbsp;&nbsp;&nbsp; -&nbsp;&nbsp;&nbsp;
7.0x&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$8.83&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$10.45 <br>
<b>Indicated Reference Range</b>.........................&nbsp; </font>
<font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$7.72&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; -&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$9.75</font></p>
<font face="Times New Roman, Times, Serif" size="2">--------------------------------------------------------------------------------------------------------------------------
</font>
<P><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; </font>
<font face="Times New Roman, Times, Serif" size="2">As noted above, none of the
comparable companies is identical or directly comparable to Devcon. Accordingly,
Capitalink considered the multiples for such companies, taken as a whole, to be
more relevant than the multiples of any single company. Further, an analysis of
publicly traded comparable companies is not mathematical; rather it involves
complex considerations and judgments concerning differences in financial and
operating characteristics of the comparable companies and other factors that
could affect the public trading of the comparable companies. </font></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>&nbsp;&nbsp;&nbsp; Selected Comparable
Transaction Analysis<I>. </I></B><I></I>Capitalink utilized the selected
comparable transaction analysis, a market valuation approach, for the purposes
of compiling precedent or comparable transaction statistics and developing
valuation metrics based on the pricing in such transactions. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Information is typically
not disclosed for transactions involving a private seller, even when the buyer
is a public company, unless the acquisition is deemed to be &#147;material&#148;
for the acquiror. As a result, the selected comparable transaction analysis is
limited to transactions involving the acquisition of a public company, or
substantially all of its assets, or the acquisition of a large private company,
or substantially all of its assets, by a public company. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Capitalink located eight
transactions announced since January 2000 involving target companies in related
industries to Devcon and for which detailed financial information was available.
Target companies were classified under the SIC codes 14 (Mining and Quarrying of
Nonmetallic Materials) and 15 (Building Contractors). </FONT></P>

                  <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

                  Acquiror&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Acquiree&nbsp;&nbsp;
<br>
-------------------------------------------------------------------------------------------------------------------&nbsp;
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
CRH PLC&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Johnson (SE) Cos<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Headwaters, Inc.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ISG Resources, Inc.<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; CRH PLC&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;                                       U.S. Aggregates
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Oakhurst Co Inc.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Sterling Construction Co<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ISG Resources, Inc.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Palestine Concrete Title Co
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; CRH PLC&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
The Shelly Co <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; U.S. Concrete, Inc.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Beall Industries, Inc<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Umar Union Martima Int'&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Devcon Int'l - Ready Mix Concrete

<br>
&nbsp;</font><P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Based on the information
disclosed with respect to the targets in each of the comparable transactions,
Capitalink determined a range of indicated enterprise values for Devcon by
selecting a range of valuation multiples based on the comparable transactions,
and then applied them to Devcon&#146;s common equity, FY2003 revenue, FY2003
EBITDA, and average EBITDA (FY1999 to FY2003). </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Similar to the comparable
company analysis, Devcon&#146;s unique characteristics, smaller size, poor
historical performance and higher business risk characteristics would suggest
Devcon be valued below the average of the comparable transaction multiples. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Based on the selected
multiple ranges, Capitalink calculated a range of enterprise values. After
deducting net interest bearing debt and minority interests of approximately
$(10.9) million, adding non-operating notes receivable of $9.0 million, and
dividing by approximately 4.159 million shares (including in-the-money options),
Capitalink calculated a range of indicated equity values per share of between
$7.99 and $9.92. </FONT></P>

                                                                                                   <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
bsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

                                                                                                   Indicated
                                                                                                  Equity Value
                                                         <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Statistic&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Selected&nbsp; Multiple&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Per Share
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $(000)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Low     -    High&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Low     -    High
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --------------------------------------------------------------------------------------------
<br>
<b>Market Value Multiple<br>
</b>Common Equity...................................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $45,549&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;       0.6x    -&nbsp;&nbsp; 1.0x&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $6.57    -   $10.95
<br>
<b>Enterprise
Value Multiple</b><br>

  FY2003 Revenue .................................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $55,313&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0.47x    -   0.50x&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $9.44    -   $10.77<br>
  FY2003 EBITDA................................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;         $&nbsp; 1,619&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
5.3x    -&nbsp; 7.0x&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $6.85    -    $&nbsp; 7.51<br>
  Average EBITDA (FY1999 - FY2003)...&nbsp;&nbsp;         $&nbsp;&nbsp;3,366&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.3x    -&nbsp; 7.0x&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $9.09    -   $10.45
<b><br>
Indicated Reference Range.</b>......................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $7.99    -    $9.92

<br>
&nbsp;</font><P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; None of the comparable transactions
are identical to the Transaction. Accordingly, an analysis of comparable
business combinations is not mathematical; rather it involves complex
considerations and judgments concerning differences in financial and operating
characteristics of the target companies in the comparable transactions and other
factors that could affect the respective acquisition values. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>&nbsp;&nbsp;&nbsp; Capitalized Earnings
Analysis</B>. Capitalink utilized the capitalized earnings analysis, an income
valuation approach, in order to develop valuation metrics based on the present
value of expected perpetual returns. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The capitalized earnings
analysis estimates value by assuming a steady future normalized unlevered free
cash flow is generated in perpetuity at a given growth rate and capitalized at a
rate which reflects the risks inherent in its business and capital structure. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Capitalink prepared the
capitalized earnings analysis based on two methods: the capitalized free cash
flow method and the capitalized net earnings method. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The capitalized free cash
flow method estimates value by assuming a steady future normalized unlevered
free cash flow is generated in perpetuity at a given growth rate and is
capitalized at a rate that reflects the risks inherent in the business and its
capital structure. Unlevered free cash flow represents the amount of cash
generated and available for principal, interest and dividend payments after
providing for ongoing business operations. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The capitalized net
earnings method estimates value by assuming a steady future normalized net
income cash flow is generated in perpetuity at a given growth rate and
capitalized at a rate which reflects the risks inherent in its business and
equity structure. The method differs from the capitalized free cash flow method
in that the cash flow to be capitalized represents the net cash flow available
to common shareholders after debt, minority interest and preferred stock
obligations are taken into account and the capitalization rate is based on
Devcon&#146;s cost of equity. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Devcon&#146;s recent
performance has generated low levels of earnings. The assumptions of expected
normalized EBITDA of between $4.5 million and $5.5 million is higher than what
Devcon has been able to generate over the last two years. However, Devcon&#146;s
management believes this range of EBITDA is realistically achievable in the near
term. </FONT></P>

         <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;

         The capitalization rate was derived using the following assumptions:
</font>
<blockquote>
	<ul>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>An assumed cost of equity of 16.1%, based on riskless and risk-based rates,
including company specific and industry specific risks.<br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A WACC of 14.9%, assuming cost of debt of 4.8%, and an assumed average debt to
total capitalization ratio of 9.4%. <br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A long term growth rate of 6.0% based on an assessment of forecast industry
sales growth, and Devcon&#146;s low historical sales and earnings growth. </FONT>
		</li>
	</ul>
</blockquote>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Under the capitalized free
cash flow method, a range of free cash flows was derived by deducting taxes and
capital expenditures from projected EBITDA. Capitalink then determined a range
of indicated enterprise values of $4.5 million to $13.4 million by dividing the
free cash flow with an assumed free cash flow capitalization rate of 8.9%.
Taking into account cash on hand and from the exercise of in-the-money options,
the estimated value of the non-operating notes receivable, and interest bearing
debt as of December 31, 2003 of approximately $2.67 million in total, and
dividing by approximately 4.159 million shares (including in-the-money options),
Capitalink derived a range of indicated equity values per share of between $6.92
and $9.07. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Under the capitalized net
earnings method, a range of net income cash flows was derived by deducting taxes
from projected operating income. Capitalink then determined a range of indicated
equity values of $27.8 million to $39.7 million by dividing the net earnings
cash flow by an assumed net income capitalization rate of 10.1%. Taking into
account the 3.756 million shares (including in-the-money options using the
treasury stock method), Capitalink derived a range of indicated equity values
per share of between $7.40 and $10.58. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Utilizing the free cash
flow and the net income approaches, Capitalink determined a range of equity
values per share of between $7.16 and $9.82. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>&nbsp;&nbsp;&nbsp; Adjusted Net Book Value
Analysis<I>. </I></B><I></I>An adjusted book value analysis utilizes a
company&#146;s most recent balance sheet to estimate the current realizable
market value of the company&#146;s assets. A company&#146;s financial
statements, including the balance sheet, are prepared according to generally
accepted accounting principles and generally reflect historical cost amounts and
do not reflect current market value.</FONT></P>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Based upon discussions with
Devcon&#146;s management, Capitalink applied a range of expected realizations
from Devcon&#146;s assets assuming they were properly marketed over a reasonable
period of time. The following adjustments were made: </FONT></P>
<blockquote>
	<ul>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Receivables, other notes
receivable and inventory reflect proceeds from collections or sales. <br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;Notes and bonds due from the Government of Antigua and Barbuda reflect a wide
range of proceeds from a sale. <br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Prepaid and other
expenses reflect Devcon&#146;s inability to either recover or sell the assets.
		<br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Property, plant and
equipment reflect proceeds from sales. <br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Other assets reflect Devcon&#146;s inability to either convert to cash or sell the assets.
		<br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Contingent liabilities were added to reflect potential severance costs in
various island locations and potential costs associated with various lawsuits.
		</FONT></li>
	</ul>
</blockquote>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Capitalink determined the
net book value after these adjustments to range from approximately $23.9 million
to $39.5 million. Capitalink then assumed realization costs of 2.5% of total
assets to reflect legal, accounting, and other disposal costs, to obtain a range
of future indicated values of approximately $22.8 million and $38.0 million. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Based upon discussions with
management, Capitalink determined that it would take on average one year to
complete the realization of value from Devcon&#146;s assets. Assuming a discount
rate of 10%, Capitalink discounted the future indicated value to obtain a range
of indicated values from approximately $20.7 million to $34.6 million. After
adding cash from in-the-money options and dividing by 4.159 million shares
(including in-the-money options), Capitalink calculated a range of indicated
equity values per share of between $5.85 and $9.19. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The adjustments may not
anticipate all the economic, socioeconomic, political, market or legal factors
that impact realizable values. The net book value analysis involves complex
considerations and judgments concerning realization and timing that could affect
indicated values. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>&nbsp;&nbsp;&nbsp; Premiums Paid
Analysis.<I> </I></B><I></I>A premiums paid analysis involves the comparison of
the share consideration to the average closing price of Devcon&#146;s common
stock on March 31, 2004, March 30, 2004 and over varying average time periods
prior to March 31, 2004. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The share consideration
represents a significant premium over the average closing share price for each
period. In addition, the daily premium or discount over the period March 31,
2003 to March 31, 2004 was graphed versus the share consideration. For the full
prior one-year period, the share consideration represented a premium for almost
all of the prevailing daily share prices, particularly during the early portion
of that period. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Capitalink performed a
variety of financial and comparative analyses for the purpose of rendering the
Capitalink opinion. While the foregoing summary describes all material analyses
and factors reviewed by Capitalink with Devcon&#146;s board of directors, it
does not purport to be a complete description of the presentations by Capitalink
or the analyses performed by Capitalink in arriving at its opinion. The
preparation of a fairness opinion is a complex process and is not necessarily
susceptible to partial analysis or summary description. In addition, Capitalink
may have given various analyses more or less weight than other analyses, and may
have deemed various assumptions more or less probable than other assumptions, so
that the range of valuations resulting from any particular analysis described
above should not be taken to be Capitalink&#146;s view of the actual value of
Devcon. In performing its analyses, Capitalink made numerous assumptions with
respect to industry performance, general business and economic conditions and
other matters, many of which are beyond the control of Devcon. The analyses
performed by Capitalink are not necessarily indicative of actual values or
actual future results, which may be significantly more or less favorable than
suggested by such analyses. In addition, analyses relating to the value of
businesses or assets do not purport to be appraisals or to necessarily reflect
the prices at which businesses or assets may actually be sold. The analyses
performed were prepared solely as part of Capitalink&#146;s analysis of the
fairness of the purchase price, from a financial point of view, to Devcon&#146;s
shareholders, and were provided to Devcon&#146;s board of directors in
connection with the delivery of Capitalink&#146;s opinion. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; As part of its financial
advisory services, Capitalink receives a monthly consulting fee and has received
a fee in connection with the preparation and issuance of its opinion. In
addition, Devcon has agreed to indemnify Capitalink for certain liabilities that
may arise out of the rendering of the opinion. Capitalink is an investment
banking firm that, as part of its investment banking business, regularly is
engaged in the evaluation of businesses and their securities in connection with
mergers, acquisitions, corporate restructurings, private placements, and for
other purposes. Capitalink does not beneficially own any interest in us. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>&nbsp;&nbsp;&nbsp; Based on the foregoing,
including the opinion of Capitalink, our board of directors has approved and
adopted the Transaction as set forth in Proposals 1 and 2 and determined that it
is in our best interest and the best interest of our shareholders and recommends
that the shareholders vote for the proposal to approve the issuances of the
units and for the proposal to approve the amendments to our Articles of
Incorporation.</B> </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Each member of our board of
directors individually stated for the record his/her vote in favor of and
approval of the Transaction. </FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROPOSAL NO.
3</FONT></H1>

<b><font face="Times New Roman, Times, Serif" size="2">Election of Directors

</font></b>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Our Amended and Restated
Bylaws provide that the number of directors to serve on our board of directors
shall be determined by our shareholders. Our shareholders have set the size of
our board of directors to not less than five nor more than seven directors. Our
board of directors has determined to increase the number of directors from seven
to nine. See &#147;Proposal 2 &#150; Amendments to Articles of
Incorporation.&#148; </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; We are also seeking
shareholder election of nine members to our board of directors. If elected, the
nominees shall serve until the 2005 annual meeting of our shareholders, expected
to be held in June 2005, or until their successors have been duly elected and
qualified. Messrs. Richard C. Rochon and Mario B. Ferrari, each of whom is a
designee of Coconut Palm, as well as Messrs. Donald L. Smith, Jr., Richard L.
Hornsby, W. Douglas Pitts, James R. Cast, Robert D. Armstrong, Gustavo R.
Benejam and Per-Olof L&ouml;&ouml;f have been nominated to serve as our directors. We
have no reason to believe that any of these nominees will not be a candidate or
will be unable to serve as director. However, in the event that any nominee
should become unable or unwilling to serve as a director, the proxy will be
voted for the election of those person or persons as shall be designated by our
board of directors with the consent of Coconut Palm. </FONT></P>

         <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;

         Six of the nominees for election as a director are current  members of our board of  directors.  Mr. Smith
has served as a director  since 1951,  Mr.  Hornsby has served as a director  since 1975, Mr. Pitts has served as a
director  since 1996,  and each of Mr. Cast,  Mr.  Benejam and Mr.  Armstrong has served as a director  since 2003.
Jose A.  Bechara,  Jr.,  Esq.,  a current  director  of ours,  has  informed  us that he does not intend to run for
re-election  to the board.  Per-Olof L&ouml;&ouml;f was  recommended  by  Jan Norelid  to our
nominating committee for
review as a possible  replacement  for Mr. Bechara's  seat; and our&nbsp;
nominating committee has approached reviewed
the credentials of and recommended to our board of directors L&ouml;&ouml;f&nbsp; for
nomination.  On April 7, 2004, our board of directors  nominated  L&ouml;&ouml;f for
election by our shareholders to the board.


</font>
<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; The
election of the board is contingent upon the closing of the Transaction: and if
the Transaction does&nbsp; not close the election of the board will not go into
effect</font></p>
<p><font face="Times New Roman, Times, Serif" size="2"><b>Nominees

         </b></font></p>
<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; Set forth below is information with respect to three of these nominees:
</font></p>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Richard C. Rochon is
currently Chairman and Chief Executive Officer of Royal Palm Capital Partners, a
private investment and management fund. Previously, Mr. Rochon served for 14
years as President of Huizenga Holdings, Inc. a management and holding company
owned by H. Wayne Huizenga. Mr. Rochon was a seventeen-year veteran of the
Huizenga organization, joining in 1985 as Treasurer and promoted to President in
1988. Huizenga Holdings&#146; investments included several publicly-held
companies that became market leaders in their respective industries, including
Blockbuster Entertainment Corporation, Republic Waste Industries, Inc.,
AutoNation, Inc., and Boca Resorts, Inc. Mr. Rochon has also served as sole
director for many of Huizenga Holdings&#146; portfolio companies and has
served as Vice Chairman of Huizenga Investements. Mr. Rochon continues to
serve as a director of publicly-held Boca Resorts, Inc., Century Business
Services, Inc. and Bancshares of Florida, Inc. From 1979 until 1985 Mr. Rochon
was employed as a certified public accountant by the public accounting firm of
Coopers &amp; Lybrand. L.L.P. Mr. Rochon received his B.S. in Accounting from
Binghamton University (formerly State University of New York at Binghamton) in
1979 and his Certified Public Accounting designation in 1981. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Mario B. Ferrari has been
Vice President of Royal Palm Capital Partners, Ltd. since 2002. Prior to that,
he worked as an investment banker with Morgan Stanley &amp; Co., where he served
as a founding member of the Private Equity Placement Group. Previously Mr.
Ferrari co-founded PowerUSA, LLC, a retail energy services company. Mr. Ferrari
has a B.S. in Finance and International Business, magna cum laude, from
Georgetown University. </FONT></P>

         <font face="Times New Roman, Times, Serif" size="2">Per-Olof L&ouml;&ouml;f is currently Senior Partner
 with The QuanStar Group, a strategic management consulting firm in New York City.  He is also chairman
of the board of directors of Datatec Systems, Inc., a systems integration company servicing the retail
services industries.  He is also the chairman of the board of Fifth Taste Concepts LLC, a Florida based restaurant company.
 From August 1999 to November 2001, Mr. L&ouml;&ouml;f was President and Chief Executive Officer of Sensormatic Electronics,
 Inc., a leading company in the electronic security industry. During his tenure, he successfully led the company
through a turnaround and managed a successful acquisition of Sensormatic by TYCO International Ltd. From 1995 to
 June 1999, Mr. L&ouml;&ouml;f was Senior Vice President of NCR&acute;s Financial Solutions Group, a supplier to the retail
 financial services industry. From 1994 to 1995, Mr. L&ouml;&ouml;f was President and Chief Executive Officer of AT&amp;T Istel Co.,
 a Europe-based provider of integrated computing and communication services. From 1982 to 1994,
Mr. L&ouml;&ouml;f held a variety of management positions with Digital Equipment Corporation, including Vice President
 of Sales and Marketing for Europe and Vice President, Financial Services Enterprise for Europe. Mr. L&ouml;&ouml;f holds
 a MSc degree in economics and business from the Stockholm School of Economics.

</font>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The remaining nominees,
Messrs. Smith, Hornsby, Pitts, Cast, Armstrong and Benejam currently serve on
our board of directors. Information on these remaining nominees is set forth
under &#147;Current Directors and Executive Officers&#148; on page 38. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; If elected, these nominees
will assume office upon the completion of the Transaction. All nominees will
hold office until the 2005 annual meeting of our shareholders, expected to occur
in June 2005, or until their successors have been duly elected and qualified. </FONT></P>

<b><font face="Times New Roman, Times, Serif" size="2">Information Regarding the Board of Directors and Committees of the Board of Directors

         </font><br>
<br>
&nbsp;&nbsp; <i>&nbsp;</i></b><i><font face="Times New Roman, Times, Serif" size="2">Directors' Fees
</font></i>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; We pay each of our
directors an annual retainer for board service of $9,000, except for our
Chairman, Donald L. Smith, Jr., who is paid $35,000. Members of our audit
committee receive an additional annual retainer of $5,000 in June, except for
the chairman of that committee who receives an additional annual retainer of
$7,500. Compensation committee and nominating committee members receive an
additional $1,000 annual retainer, except for the chairman of each of these
committees who receives an additional $2,000 annual retainer. Amounts paid to
our directors, including the chairmen of the committees of the board of
directors may be increased by action of the board. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; A new non-employee director
will be granted an option to purchase 8,000 shares of our common stock upon the
commencement of service as a director from a stock option plan then in effect.
In addition, each non-employee director is granted options to purchase 1,000
shares of our common stock after each of our annual meetings. These options will
be granted at an exercise price equal to the closing market price on the day
preceding the grant date. </FONT></P>

         <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;
<i>Committees and Meetings of the Board </i></font>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The following is a brief
description of the functions of the committees of our board of directors and the
identity of their members: </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; During the year ended
December 31, 2003, our board of directors held 6 meetings and took no actions by
unanimous written consent. During 2003, no incumbent director attended fewer
than 75 percent of the aggregate of (i) the number of meetings of our board of
directors held during the period he served on the board and (ii) the number of
meetings of committees of the board held during the period he served on such
committees. Our board of directors has three standing committees -- the audit
committee, the compensation committee and the nominating committee. </FONT></P>

         <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;

         Messrs.  Pitts,  Armstrong and Benejam are members of our audit committee,  which held 6 meetings and took
no actions by  unanimous  written  consent  during 2003.  The duties and  responsibilities  of our audit  committee
include (a)  monitoring  the  integrity  of our  financial  reporting  process  and  systems of  internal  controls
regarding finance,  accounting,  legal and regulatory  compliance,  (b) monitoring the independence and performance
of our independent  auditors and our internal audit functions,  (c) providing an avenue of communication  among our
independent auditors and management,  (d) having the sole authority to appoint,  determine funding for, and oversee
our outside  auditors.  Our audit  committee's  charter was originally  filed with our proxy statement for the year
ended  December 31, 2000,  dated May 4, 2001.  The audit  committee has since amended its charter to conform to the
final  corporate  governance  rules issued by the Securities and Exchange  Commission and Nasdaq  concerning  audit
committees.  This  amended  charter is attached to this proxy  statement as Annex C and is available on our website
at www.devc.com.

         </font>
<p><font face="Times New Roman, Times, Serif" size="2">Messrs.  Cast, Bechara and Pitts are members of our  Compensation  Committee,  which held 2 meetings  and
took no actions by unanimous  written  consent  during 2003.  This  committee  administers  the 1992 and 1999 stock
option  plans and has the power and  authority  to (a)  determine  the persons to be awarded  options and the terms
thereof and (b) construe and  interpret the 1992 and 1999 stock option plans.  This  committee is also  responsible
for the final review and  determination  of executive  compensation.  The  compensation  committee is governed by a
charter adopted by our board of directors.  This charter is available on our website at www.devc.com.

         Messrs.  Cast,  Armstrong and Benejam are members of the Company's  Nominating  Committee.  The Nominating
Committee  did not meet during  2003.  The purpose of this  committee is to define the basic  responsibilities  and
qualifications  of  individuals  nominated and elected to serve as members of our board of  directors,  to identify
and nominate  individuals  qualified to become  directors in  accordance  with these  policies and  guidelines  and
oversee the  selection  and  composition  of committees  of our board of  directors.  The  nominating  committee is
governed  by a  charter  adopted  by  our  board  of  directors.  This  charter  is  available  on our  website  at
www.devc.com.

         <br>
<br>
&nbsp;&nbsp;&nbsp; <b>Nominations  of Specified  Directors to the Board of Directors  and  Additions to the  Management  Team of Devcon</b>
</font></p>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Due to the nature of the
Transaction, Coconut Palm requested that its representatives be provided with
the ability with which to monitor our operations, particularly the use of the
funds received in the Transaction, to further our entry into the security
services business. In addition, we expressed a need for personnel with
experience in the security services business with whom we could consult and who
could facilitate our entry into the security services market. As a result,
Messrs. Richard C. Rochon and Mario B. Ferrari, each of whom is a designee of
Coconut Palm, have been nominated to serve on our board of directors and our
board of directors approved an employment agreement under the terms of which
Stephen J. Ruzika would become our Executive Vice President and President of
Devcon&#146;s Security Services Division. The effectiveness of
Mr.&#160;Ruzika&#146;s employment agreement, which was entered into by us and
Mr. Ruzika on April 2, 2004, is conditioned upon the closing of the Transaction. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Under the terms of Mr.
Ruzika&#146;s employment agreement, we will pay Mr. Ruzika an annual salary
equal to $325,000 plus any bonuses which the compensation committee of our board
of directors determines to pay him in its sole discretion. In addition to this
salary, Mr. Ruzika will be entitled to participate in any bonus plan, incentive
compensation program or incentive stock option plan or other employee benefits
we provide to our other similarly situated executives, on the terms and at the
level of participation determined by our compensation committee. In addition,
Mr. Ruzika will be granted 50,000 options with and exercise price of $9.00 per
share upon the effectiveness of the employment agreement. Any options
granted under these plans will vest in equal annual installments from the time
of grant until the expiration date under the employment agreement. The
employment agreement has a term of three years; however, this term may be
further extended by the parties in writing in a separate instrument. Either we
or Mr. Ruzika may terminate the employment agreement for any reason upon sixty
(60) days prior written notice to the other. However, if we terminate the
agreement (which includes failing to renew the agreement after the initial three
years) without cause, or Mr. Ruzika terminates the agreement (which includes
failing to renew the agreement after the initial three years) with cause, we are
required to pay Mr. Ruzika severance payments at the rate of his salary in
effect on the date of termination for two years, payable in accordance with our
usual payroll schedule. In the event of specified changes in control of us, all
options previously granted to Mr. Ruzika will automatically vest and if Mr.
Ruzika terminates his employment with us within one year of this change in
control with cause, he will be entitled to the two years of severance payments
described above. However, no transaction will be considered to be a change in
control for purposes of triggering these severance obligations if the
transaction in question involves the security services industry or is procured
by Mr. Ruzika, Richard C. Rochon, Mario B. Ferrari, Coconut Palm or any
affiliate of theirs. Mr. Ruzika is also subject to a three-year noncompete
covenant to the extent his employment is terminated (including not renewing his
employment agreement) in a manner that does not entitle him to the severance
payments described above; however, if we fail to make these severance payments,
Mr. Ruzika&#146;s noncompete obligations will no longer be in effect. </FONT></P>
<font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; Mr.
Ruzika's employment agreement is not effective unless and until our shareholders
approve and we close the Transaction. In addition, we anticipate Mr. Ruzika will
employ three members of his management team to join our current international
management team. This management team will have the responsibility of overseeing
our new Security Services Division, which will be implemented after the
completion of the Transaction. We anticipate the aggregate compensation for Mr.
Ruzika's management team, excluding Mr. Ruzika's compensation, will be
$400,000-$500,000 in aggregate salary, plus participation in our equity-based
compensation plans to the same extent as our other similarly situated senior
executives participate after the completion of the Transaction, as this
participation may be approved by our board of directors. </font>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Coconut
Palm has advised us that it anticipates distributing one-half of all warrants
issued in the Transaction (with equal distribution from the three tranches) for
performance of services to, among others, the two nominees for election to our
board of directors, Messrs. Rochon and Ferrari and the management team led by
Mr. Ruzika. Coconut Palm currently anticipates a distributing to Mr. Ruzika and
his management team 650,000 of these warrants (with equal distribution from the
three tranches). Coconut Palm has also informed us that Messrs. Rochon and
Ferrari are expected to retain the power to vote and dispose of the securities
remaining with Coconut Palm and are thus attributed beneficial ownership of all
of these securities. Coconut Palm has agreed that any distributions it makes to
anyone, including its partners, must be in compliance with applicable securities
laws. </FONT></P>

         <font face="Times New Roman, Times, Serif" size="2">Mr. Ruzika is the
former Chief Financial Officer (1989-1997) of ADT Limited and President of ADT
Security Services, Inc., and has over 17 years of experience in the security
services industry. From 1989 to 1997, Mr. Ruzika oversaw the growth of ADT
Security Services, Inc. into the largest electronic security services company in
the United States and United Kingdom. Mr. Ruzika previously served as a Director
and Executive Vice President (1987-1997), and Chief Financial Officer
(1989-1997) of ADT, a NYSE listed company. Mr. Ruzika also served as President
and Chief Executive Officer of ADT Security Services Inc. (1995-1997), a wholly
owned subsidiary of ADT. Mr. Ruzika joined ADT in 198</font><font face="Times New Roman, Times, Serif" size="2">2.  In 1997, ADT merged with TYCO  International  Ltd.  and the
combined company was renamed TYCO  International.  ADT, at the time of the merger,  was the single largest provider
of  electronic  security  services in North  America and the United  Kingdom  providing  continuous  monitoring  of
commercial  and  residential  security  systems  to over 2 million  customers  in North  America  and  Europe.  ADT
Security  Services,  with  revenue in excess of $1.5  billion,  operated  more than 200 sales and  service  offices
worldwide.  ADT,  through it automotive  division,  was also a leading  provider of vehicle auction services in the
United  States and the United  Kingdom.  Mr.  Ruzika is 48 years old.  and  currently  serves as Chairman and Chief
Executive Officer of Congress Security  Services,  Inc.  Congress,  through its  subsidiaries,  including  Security
Equipment Company,  Inc., the corporation we are acquiring,  provides  employment  screening and paperless workflow
services to major corporate  clients in North America and also provides  electronic  security  services  throughout
the Panhandle of Florida.  Prior to forming  Congress,  Mr. Ruzika  served as Chief  Executive  Officer of Carlisle
Holdings Limited  (formerly known as BHI  Incorporated),  a Nasdaq listed company.  Mr. Ruzika is a graduate of the
University of Miami and received his Certified Public Accountant designation.
</font>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; In addition, we have
entered into a letter of intent with Mr. Ruzika under the terms of which we have
agreed to purchase Security Equipment Company, Inc. We anticipate completing
this acquisition simultaneously with the completion of the Transaction. For more
information on our acquisition of Mr. Ruzika&#146;s company, please see
&#147;Recent Developments&#148; on page 38. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; In light of the extensive
expertise and resources Coconut Palm could offer us and Coconut Palm&#146;s
requirement that the election of Messrs. Rochon and Ferrari to our board of
directors and the employment of Mr. Ruzika and his management team be a
condition for Coconut Palm to enter into the Transaction, our board of directors
determined that the election of Messrs. Rochon and Ferrari and the other
nominees set forth in this proxy statement to our board of directors and the
employment of Mr. Ruzika and his management team was in our best interests and
the best interests of our shareholders. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>&nbsp;&nbsp;&nbsp; Based on the foregoing,
our board of directors approved the matters set forth in Proposal 3, determined
that they are in our best interest and the best interest of our shareholders,
and recommended that our shareholders vote to elect each of the nominees to our
board of directors.</B> </FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>OTHER
INFORMATION ABOUT THE TRANSACTION</FONT></H1>

<font face="Times New Roman, Times, Serif" size="2"><b>Completion of the Transaction; Effective Time; Timing
</b></font>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The purchase agreement
provides that the issuance of the units to Coconut Palm will be effected if our
shareholders vote to approve and authorize the Transaction and other conditions
stated in the purchase agreement have been satisfied. If the shareholders vote
for approval of the proposals, the effective time of the election of the
nominees will be the date on which the Transaction contemplated by the purchase
agreement is completed. We have agreed that we will file with the Securities and
Exchange Commission a registration statement registering the resale of the
shares of common stock and the shares underlying the warrants issued to Coconut
Palm not later than 60 days after the closing of the Transaction. We have
further agreed to use our reasonable best efforts to cause this registration
statement to become effective no later than 60 days after it has been filed with
the Securities and Exchange Commission. Failure to comply with these deadlines
may subject us to cash penalties. For more information, see &#147;Purchase
Agreement - Registration Rights&#148; on page 35. </FONT></P>

<b><font face="Times New Roman, Times, Serif" size="2">Interests of Certain Persons in the Transaction

</font></b>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Members of our management
and our board of directors may have interests in the Transaction that are in
addition to their interests as our shareholders generally. Our board of
directors was aware of these interests and considered them in approving the
Transaction. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; <i>Additional Registration
Rights. </i>Donald J. Smith, Jr., our Chairman, Chief Executive Officer and
President, and Robert Armstrong, one of our directors, and their affiliates will
be granted registration rights which will permit them to register their shares
of common stock along with, and to the same extent as, the shares of our common
stock (and the shares of our common stock underlying the warrants) being
acquired by Coconut Palm. See &#147;Description of the Purchase Agreement &#150;
Registration Rights&#148; on page 35. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Se<i>verance Payments</i>.
Each of Jan Norelid, our Chief Financial Officer, Kevin M. Smith, our Vice
President &#150; Materials Division and Donald L. Smith, III, our Vice President
&#150; Construction Division has an employment agreement with us. Under the
terms of these agreements, they may be entitled to severance payments equaling
two years of their respective annual compensation if their employment is
terminated by us without cause or by the respective officer without good reason
within one year of (i) any person, entity or group acquiring beneficial
ownership of 40% of our outstanding common stock or (ii) Donald Smith, Jr. and
his family failing to beneficially own, collectively, at least 20% of our
outstanding common stock. The employment agreements also provide for specified
&#147;gross-up&#148; payments to take into account any excise taxes that may be
imposed upon these severance payments. For more information, see &#147;Executive
Compensation &#150; Employment Agreements&#148; on page 44. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>&nbsp;&nbsp;&nbsp; Acceleration of Vesting
of Options</I>. Under the terms of the options we have granted to our employees
and directors from time to time, these options automatically accelerate if we
experience a
change of control. The only options that have not yet fully vested are
options granted under our Amended 1999 Stock Option Plan. Our Amended 1999 Stock
Option Plan defines a &#147;change of control&#148; as (i) approval by our
shareholders of a reorganization, merger, consolidation or other form of
corporate transaction where our shareholders prior to this transaction do not,
immediately after the transaction, own more than 50% of the combined voting
power, (ii) individuals who, on the date the option was granted, constitute our
board of directors cease to constitute at least a majority of our board of
directors unless the election of the other directors was approved by a vote of
at least a majority of the incumbent directors, or (iii) the acquisition, other
than from us, by any person of more than 25% of either the outstanding shares of
our common stock or the combined voting power of our outstanding voting
securities entitled to vote. Under this definition, acquisition of more than 25%
of our outstanding common stock constitutes a change of control, but not if the
acquisition is from shares we issue, as is the case in the Transaction.
Accordingly, we do not believe the vesting of the options will be accelerated by
the Transaction.</FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>&nbsp;&nbsp;&nbsp; Donald L. Smith, Jr.
Note.</I> On June 6, 1991, we issued a promissory note in favor of Donald Smith,
Jr., our Chairman, Chief Executive Officer and President in the aggregate
principal amount of $2,070,000. The note provided that the balance due under the
note was due on January 1, 2004, but this maturity date has been extended by
agreement between Mr. Smith and Devcon to July 1, 2005. The balance under that
note becomes immediately due and payable upon a change of control (as defined in
the note). However, under the terms of a guarantee, dated March 10, 2004, by and
between us and Mr. Smith where Mr. Smith guarantees our receivable from Emerald
Bay Resort amounting to $2,415,000, Mr. Smith must maintain collateral in the
amount of $1,770,000. Consequently, upon the occurrence of this change of
control only $300,000 of the balance under the note could be paid back unless
some other form of collateral is substituted. The note defines a &#147;change of control&#148; as the acquisition
or other beneficial ownership, the commencement of an offer to acquire
beneficial ownership, or the filing of a Schedule 13D or 13G with the SEC
indicating an intention to acquire beneficial ownership, by any person or group,
other than Mr. Smith and members of his family,<B> </B>of 15% or more of the
outstanding shares of our common stock. For more information, see &#147;Certain
Relationships and Related Transactions&#148; on page&#160;55. </FONT></P>

<b><font face="Times New Roman, Times, Serif" size="2">Description of Purchase Agreement

</font></b>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The following summary of
terms of the purchase agreement does not purport to be complete and is qualified
in its entirety by reference to the complete text of the purchase agreement
which is included as Annex D to this proxy statement. We urge you to carefully
read the purchase agreement in its entirety. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The purchase agreement
provides that, following the approval of the Transaction by our shareholders, we
will issue and sell to Coconut Palm up to a total of 2,000,000 units for a
purchase price of $9.00 per unit. Each unit will consist of the following: </FONT></P>

<blockquote>
	<ul>
		<li><font face="Times New Roman, Times, Serif" size="2">1 share of common stock;
		<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">a warrant to  purchase 1 share of common  stock at an  exercise  price of $10.00 per share and a term of 3
              years; <br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">a warrant to purchase 1/2 share of common  stock at an exercise  price of $11.00 per share and a term of 4
              years; and <br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">a warrant to purchase 1/2 share of common  stock at an exercise  price of $15.00 per share and a term of 5
              years. </font></li>
	</ul>
</blockquote>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The aggregate purchase
price is to be paid&#160;through a wire transfer to an account designated by us.
The purchase agreement provides that the issuance of the shares of common stock
or the shares underlying the warrants which comprise the units will not be
registered under the Securities Act of 1933, as amended, and that, accordingly,
the shares will be restricted securities with associated limitations on the
ability of Coconut Palm to transfer these shares. However, the purchase
agreement also provides for specified registration rights under which we will
agree to register these shares and the shares underlying the warrants and also
provides for the same registration rights to Donald L. Smith, our Chairman,
Chief Executive Officer and President, Robert Armstrong, a director of ours, or
any of their affiliates as to all their shares. See &#147;Registration
Rights&#148; below. </FONT></P>

         <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp; <i>&nbsp;Representations and Warranties</i>
</font>
<blockquote>
	<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The purchase agreement
contains representations and warranties provided by Coconut Palm as to the
following: </FONT></P>
	<ul>
		<li><font face="Times New Roman, Times, Serif" size="2">opportunity  to obtain and acquire  access to  information  in order to  evaluate  the  investment  in the
              shares; <br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">opportunity  to ask  questions  concerning  the terms and  conditions  of the purchase  agreement  and the
              shares; <br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">understanding of
		any risks inherent in the investment;<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">level of financial sophistication;
		<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">lack of intent to acquire the shares with a view to distribution of the shares to anyone;
		<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">qualifications  as an  "accredited  investor"  as this term is used in Rule 501 of the  Securities  Act of
              1933, as amended; <br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">awareness of restrictions on the transferability of the shares;

		<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">&nbsp;awareness of the application of the securities laws to future resales of the shares;

		<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">authorization, execution and enforceability of the purchase agreement;
		<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">lack of  reliance  on any  advertisement  or other form of public  solicitation  in  participating  in the
              purchase of the shares; <br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">acknowledgement of our reliance on representations and warranties;
		<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">lack of a conflict caused by the execution, delivery and performance of the purchase agreement; and
		<br>
&nbsp;</font></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>compliance with applicable securities laws in connection with the Transaction
and any subsequent transfers of the units or securities comprising the units.
		</FONT></li>
	</ul>
	<p><font face="Times New Roman, Times, Serif" size="2">The purchase agreement also contains representations and warranties provided by us as to the following:

	</font></p>
	<ul>
		<li><font face="Times New Roman, Times, Serif" size="2">organization,
		good standing and capitalization<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">authorization, execution and enforceability of the purchase agreement;
		<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">legality of the issuance of the units and the securities comprising the units;
		<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">lack of a conflict caused by the execution, delivery and performance of the purchase agreement;
		<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">availability  and  accuracy  of  reports  and other  documents  filed  with the  Securities  and  Exchange
              Commission<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">financial statements;
		<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">subsidiaries;
		<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">lack of material adverse effect since December 31, 2003;
		<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">compliance with environmental laws;<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">rights to intellectual property;
		<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">compliance with applicable securities laws in connection with the Transaction;
		<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">compliance with applicable tax laws;
		<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">compliance with applicable permit and licensing regulations;
		<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">insurance;<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">real estate;<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">compliance with the Foreign Corrupt Practices Act and similar laws;
		<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">solvency;

<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">extension of loans to officers and directors;
		<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">compliance with the Sarbanes-Oxley Act of 2002;<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">lack of
		necessity to register under the Securities Act of 1933 the issuance of
		the units to Coconut Palm. <br>
		<br>
		<i>Conditions to Closing</i></font></li>
	</ul>
</blockquote>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The closing of the
Transaction contemplated by the purchase agreement is subject to the
satisfaction or waiver of the following conditions: 1)&#160;shareholder approval
of the Transaction and election of the nominees, 2) the absence of a withdrawal
of the approval of the Transaction by our board of directors in the event our
board of directors determines this withdrawal is required by its fiduciary
duties to our shareholders, 3) receipt of necessary governmental and/or
regulatory filings, approvals or required third party consents of both parties,
4) receipt of satisfactory legal opinions of our counsel and counsel for Coconut
Palm, 5) the absence of the occurrence of any material adverse event affecting
us, our business, Coconut Palm or Coconut Palm&#146;s principals, and 6) the
authorization by us of 50,000,000 shares of our common stock and the filing with
the Secretary of State of Florida by us of Articles of Amendment to our Articles
of Incorporation effecting this increase in our authorized shares of common
stock and allowing our board to set its own size. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Our board of directors has
approved the Transaction. The affirmative vote of the holders of a majority of
the shares voting and present at the special meeting is required to approve the
Transaction, except for the amendments to our Articles of Incorporation which
require the affirmative vote of the holders of a majority of the shares entitled
to vote on the matter. </FONT></P>

         &nbsp;&nbsp;&nbsp; <i>
<font face="Times New Roman, Times, Serif" size="2">Overallotment Option </font>
</i>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Of the 2,000,000 units
contemplated to be issued and sold by us to Coconut Palm, 333,333 units are
subject to an overallotment option held by Coconut Palm, whereby Coconut Palm is
obligated to purchase these units only if it so elects at any time until 5 days
prior to the closing of the Transaction. The closing of the purchase of these
additional overallotment units is anticipated to occur at the same time as the
closing of the Transaction; however, if, despite their best efforts, we and
Coconut Palm are unable to close on the purchase of the overallotment units at
this time, then we and Coconut Palm will mutually agree on a closing date which
may not be later than 7 business days after the closing of the Transaction. </FONT></P>

         &nbsp;&nbsp;&nbsp; <i>
<font face="Times New Roman, Times, Serif" size="2">Covenants</font></i>

<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; The purchase agreement also contains covenants which require of us the following:
</font></p>
<blockquote>
	<ul>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Adoption and diligent
pursuit of the following strategies and objectives: </FONT></li>
	</ul>
	<blockquote>
		<font face="Times New Roman, Times, Serif" size="2">o        Diversifying our
		operations into the security services sector; </font>
		<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>o
Targeting potential acquisitions of security services businesses in the United
States and its territories that would provide a critical mass from which we may
grow organically and through acquisitions; and </FONT></P>
		<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>o
Financing the growth of this new Security Services Division by accessing the
equity and debt capital markets to the extent access to such markets is deemed
to be favorable by our board of directors. </FONT></P>
	</blockquote>
	<ul>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Use of the proceeds solely in furtherance of the above strategies and objectives
and any other expenditures that may be reasonably incidental to the furtherance
of these strategies (e.g., payment of the salaries of Stephen J. Ruzika and his
management team). <br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;Granting of specified &#147;tag along&#148; rights to Coconut Palm whereby if a
third party, other than Donald Smith, Jr., Robert D. Armstrong, Coconut Palm or
any affiliate of these shareholders, acquired greater than 50% in voting rights
in one or a series of related transactions not involving Coconut Palm or its
affiliates, and Donald Smith, Jr. or Robert D. Armstrong participate, then
Coconut Palm will have the right to sell its shares of common stock to the
acquirer on the same terms and in the same pro rata portion as Mr. Smith or Mr.
Armstrong, as the case may be. <br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Preemptive rights for one year after the closing of the transaction whereby
Coconut Palm will have the right to purchase their pro rata share of any new
equity offerings by us at the same terms offered by us except in situations
where (i) the underwriter of that offering objects to the exercise of the
preemptive rights on the grounds that it will have a material adverse effect on
the offering, (ii) the issuance of securities by us occurs in the form of grants
of options, warrants or convertible securities or under the exercise of options
or warrants or the conversion of convertible securities, or (iii) the issuance
of securities by us occurs in the context of an acquisition by us of another
company. <br>
&nbsp;</FONT></li>
		<li><font face="Times New Roman, Times, Serif" size="2">Nomination of Richard C. Rochon and Mario B. Ferrari for election to our board of directors.
		<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">Employment of Stephen J. Ruzika and his management team for an aggregate salary
of $750,000 - $850,000 and the granting of specified equity-based incentives.
		<br>
&nbsp;</font></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Reservation by us of a
sufficient number of shares for issuance upon the exercise of the warrants. <br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Holding of a special
meeting of our shareholders to approve the Transaction. <br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Compliance with applicable federal and state securities laws and the rules and
regulations of Nasdaq with respect to the issuance of the securities comprising
the units. </FONT></li>
	</ul>
	<ul>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>No transactions with our affiliates prior to the closing of the Transaction,
except those transactions which have been disclosed to Coconut Palm or which
Coconut Palm agrees to in writing or which are permitted by our Code of Ethical
Conduct or applicable law and the rules and regulations of the SEC and Nasdaq.
		<br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;No solicitation or negotiation by us with competing proposals unless our board
of directors determines these activities are required by its fiduciary duties to
our shareholders. If we breach this covenant by completing a transaction with a
competing proposal that is not required under the fiduciary duties of our board
of directors, we must pay to Coconut Palm a breakup fee in an amount equal to 3%
of our market capitalization at that time. <br>
&nbsp;</FONT></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Payment or reimbursement of all fees and expenses incurred by Coconut Palm in
connection with the Transaction, including investment banking, legal,
accounting, attorneys&#146;, consultants&#146; and other professional fees, not
to exceed, in total, $100,000. </FONT></li>
	</ul>
</blockquote>
<i>&nbsp;&nbsp;&nbsp; <font face="Times New Roman, Times, Serif" size="2">Registration Rights

</font></i>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Neither the issuance of the
shares under the purchase agreement nor the issuance of the shares under the
warrants will be registered under the securities laws. Accordingly, the shares
issued by us to Coconut Palm will not be freely tradeable. However, we have
agreed to file a registration statement on Form S-3 to register the resale of
both the shares issued to Coconut Palm under the purchase agreement and any
shares issuable upon exercise of the warrants issued to Coconut Palm under the
purchase agreement. We are required to file this registration statement with the
Securities and Exchange Commission no later than 60 days after the closing of
the Transaction. Furthermore, Coconut Palm has agreed to allow us to include
shares of common stock owned by Donald Smith, Jr., our Chairman, Chief Executive
Officer and President, and Robert Armstrong, one of our directors, and their
affiliates along with, and to register these shares to the same extent as, the
shares of our common stock being acquired by (and the shares of our common stock
underlying the warrants being acquired by) Coconut Palm. Our board of directors
determined Mr. Smith and Mr. Armstrong should be granted this ability due to the
contributions these individuals have made to Devcon. Our board made this
determination with respect to Mr. Smith in particular in recognition of the
decades of service he has contributed to Devcon. We are further obligated to
cause the registration statement we file under the registration rights agreement
to go effective no later than 60 days after filing it with the Securities and
Exchange Commission. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The registration rights
agreement allows for specified &#147;deferral periods&#148; in which we may
delay the filing or effectiveness of the registration statement or the
disclosure of material non-public information in the event the filing,
effectiveness or disclosure is determined to be materially disadvantageous to
us. We are entitled to no more than two deferral periods in any twelve-month
period and any deferral period may not exceed 45 days. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; In the event the
registration statement has not been declared effective within 180 days of the
closing of the Transaction as a result of our not exercising reasonable best
efforts, for the first 30-day period after this 180-day period, we will be
required to pay Coconut Palm a cash penalty equal to 2.0% of Coconut Palm&#146;s
$15 million investment and, for each 30-day period after this first 30-day
period, we will be required to pay Coconut Palm a cash penalty equal to 1.0% of
Coconut palm&#146;s $15 million to $18 million investment. This cash penalty
will not be in effect if the delay in effectiveness of the registration
statement is due to inquiries, comments or other delays by the Securities and
Exchange Commission or other issues outside of our control. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; These registration rights
terminate on the date which all the shares of Common Stock may be resold by
Coconut Palm by reason of Rule 144 under the Securities Act of 1933, as amended. </FONT></P>

         &nbsp;&nbsp;&nbsp; <i>
<font face="Times New Roman, Times, Serif" size="2">Indemnification and Insurance</font>
</i>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; We and Coconut Palm each
agree to indemnify and hold harmless the other for any losses we incur due to
(i) untrue statements of a material fact or omissions to state a material fact
required to make the statements made not misleading provided to each other for
purposes of filing the registration statement we are required to file or (ii)
the breach of any representation, warranty, covenant or agreement in the
agreement. This indemnification is subject to a $5,000,000 limit on liability as
well as a $500,000 threshold, below which neither party is obligated to satisfy
any liability. </FONT></P>

         &nbsp;&nbsp; <i><font face="Times New Roman, Times, Serif" size="2">&nbsp;Relationship of Richard C. Rochon and Mario B. Ferrari to Coconut Palm Capital Investors I, Ltd.
</font></i>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Richard C. Rochon and Mario
B. Ferrari are both principals of Coconut Palm Capital Investors I, Ltd, an
affiliate of Royal Palm Capital Partners, Ltd., of which both individuals are
officers. Royal Palm is a private equity investment and management firm led by
Mr. Rochon. Messrs.Rochon and Ferrari have informed us that they both expect to
receive distributions of units from Coconut Palm under the terms of the internal
organizational documents of Coconut Palm. Specifically, Coconut Palm has advised
us that it anticipates distributing one-half of
all warrants issued in the Transaction (with equal distribution from the three tranches) for performance of services to, among others, Messrs. Rochon
and Ferrari and the management team led by Mr. Ruzika. Coconut Palm currently anticipates distributing to Mr. Ruzika and his management team 650,000 of
these warrants (with equal distrubution from the three tranches). Coconut Palm has
also informed us that Messrs. Rochon and
Ferrari are expected to retain the power to vote and dispose of the securities
remaining with Coconut Palm and are thus attributed beneficial ownership of all
of these securities. Coconut Palm has agreed that any distributions it makes to
anyone, including its partners, must be in compliance with applicable securities
laws. </FONT></P>

&nbsp;<b><font face="Times New Roman, Times, Serif" size="2">Description of the Warrant Agreements

</font></b>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The following summary of
terms of the warrant agreements does not purport to be complete and is qualified
in its entirety by reference to the complete text of the warrant agreements, a
form of which is included as Annex E to this proxy statement. We urge you to
carefully read the form of warrant agreement in its entirety. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The form of warrant
agreement contemplates three tranches of warrants, all to be issued as part of
the units. The tranches differ only in terms of their respective exercise prices
and terms and specified anti-dilution adjustments. One tranche of warrants which
is exercisable for 1 share of our common stock for every unit has an exercise
price of $10 per share and a term of 3 years. A second tranche of warrants which
is exercisable for 1/2 share of our common stock for every unit has an exercise
price of $11 per share and a term of 4 years. A third tranche of warrants which
is exercisable for 1/2 share of our common stock for every unit has an exercise
price of $15 per share a term of 5 years. </FONT></P>

         <blockquote>
			<font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;

         The warrants provide for two forms of exercise:

         <br>
			<br>
			(i)      a cash  exercise  whereby  the holder  exercises  the  warrant by paying to us the product of the
number of shares of our common stock underlying the warrant and the exercise price per share of the warrant; and

         	<br>
			<br>
			(ii)     a  "broker-assisted  exercise"  in which the holder  shall be  permitted to exercise a portion of
the warrants,  sell the  underlying  shares of our common stock using a broker and  immediately  apply the proceeds
from the  exercise to pay the  exercise  price of the  exercised  warrants as well as the  exercise  price of other
warrants  which the holder  desires to  exercise.  We agree in the  warrant to allow the  issuance of the shares of
common stock necessary to effect this broker-assisted  exercise  notwithstanding the fact that we would not receive
the cash  proceeds  until after the sale of the  underlying  shares of common  stock,  subject to  compliance  with
applicable  law.  The holder of the warrant  agrees to  indemnify us for any damages we incur due to the failure of
the broker to remit these proceeds to us. </font>
</blockquote>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The broker-assisted
exercise may only be effected after six months have elapsed since the closing of
the Transaction. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The warrant provides that
the exercise price shall be subject to adjustment, on a fully-diluted basis, in
the event of any issuances of common stock (to a party other than the holder) at
a price less than, or options and other convertible securities bearing an
exercise price less than, the closing sales price of our common stock on the
date of this subsequent issuance unless (i)&#160;this issuance has been approved
by any director that has been designated by Coconut Palm, including one of
Coconut Palm&#146;s designees, (ii)&#160;this issuance consists of an issuance
of options under our Stock Option Plan, or (iii)&#160;this issuance is in
connection with any acquisition of another corporation by us if this acquisition
is approved by our board of directors. This anti-dilution adjustment is
effective only for the first 180 days following the closing of the Transaction
and applies only to the tranche of warrants bearing an exercise price equal to
$10 per share. The warrant also provides for other customary anti-dilution
adjustments to the exercise price in the event of stock splits, stock dividends,
recapitalizations, reorganizations, reclassifications, distributions and
business combinations, as well as adjustments in the event of cash dividends and
other specified distributions. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The warrant provides that
we may not effect any business combination unless the surviving company in this
business combination assumes our obligations under the warrant. </FONT></P>

<i><b><font face="Times New Roman, Times, Serif" size="2">Description of the Voting Agreement

</font></b></i>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The following summary of
terms of the voting agreement between Coconut Palm and Donald Smith, Jr., our
Chairman, Chief Executive Officer and President, and specified affiliates of Mr.
Smith does not purport to be complete and is qualified in its entirety by
reference to the complete text of the voting agreement, which is included as
Annex F to this proxy statement. We urge you to carefully read the voting
agreement in its entirety. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Under the terms of the
voting agreement, Mr. Smith and specified affiliates of his agree to vote all
shares of common stock beneficially owned by them in favor of the Transaction.
The voting agreement grants to Coconut Palm an irrevocable proxy, which Coconut
Palm may use to vote the shares of common stock held by Mr. Smith and his
specified affiliates in favor of the Transaction. Mr. Smith and specified
affiliates of his also agree in the voting agreement not to transfer or pledge
any shares of common stock beneficially owned by them except for transfers where
the transferee enters into a similar voting agreement with Coconut Palm. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The voting agreement
contains customary representations regarding the beneficial ownership of our
common stock by Mr. Smith and specified affiliates of his. The voting agreement
terminates upon the earlier to occur of the closing of the Transaction, the
termination of the purchase agreement in accordance with its terms or the
withdrawal of the approval granted by our board of directors with respect to the
Transaction to the extent withdrawn to comply with the board&#146;s fiduciary
duties to its shareholders. </FONT></P>

<b><i><font face="Times New Roman, Times, Serif" size="2">Consequences of this Proposal

</font></i></b>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>&nbsp;&nbsp;&nbsp; While the proposals are
being listed separately for purposes of voting, they are all interdependent.
Accordingly, obtaining the requisite shareholder approval for each proposal is a
condition precedent to the effectiveness of the other proposals set forth in
this proxy statement.</B>&nbsp; <b>The election of the board is contingent upon
the closing of the Transaction; and if the Transaction does not close the
election of the board will not go into effect.</b></FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; If our shareholders fail to
approve any of the proposals set forth in this proxy statement, we will be
unable to issue the shares and warrants to Coconut Palm and the Transaction
contemplated by the purchase agreement will not be completed. In addition,
because all of the proposals are interdependent, none of the nominees will be
elected to our board of directors. Furthermore, the special meeting will not be
deemed to be in lieu of our 2004 annual meeting and we would have to hold an
annual meeting in order to elect the slate of directors to serve during the 2004
fiscal year. If we were to effect the sale and issuance of our shares to Coconut
Palm in accordance with the terms of the purchase agreement in the absence of
shareholder approval our common stock could be delisted from Nasdaq due to the
violation of the Nasdaq 20% Limitation. Consequently, obtaining this approval is
a condition to the closing of the Transaction under the purchase agreement. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; If our shareholders approve
the proposals, an aggregate of up to 2,000,000 additional shares of our common
stock will be issued and outstanding and warrants to purchase up to an
additional 6,000,000 additional shares of our common stock will be issued and
outstanding, the nominees (including the two designees of Coconut Palm) will be
elected to our board of directors, and the proposed amendments to our Articles
of Incorporation will be in effect. The additional shares issued by us will
dilute the percentage ownership of existing shareholders of our common stock and
would, absent any further factors, reduce our earnings per share. The perceived
risk of dilution may cause our shareholders to sell their shares, which would
contribute to a downward movement in the market price of our common stock.
Moreover, the perceived risk of dilution and the resulting downward pressure on
the stock price could encourage third parties to engage in short sales of our
common stock. By increasing the number of shares offered for sale, material
amounts of short selling could further contribute to progressive price declines
in our common stock. If the market price of our common stock does decline, this
could further accelerate sales of our common stock. Ultimately, however, the
extent of dilution to our shareholders with respect to earnings per share will
depend on the actual results we achieve. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Ultimately, after the
closing of the Transaction contemplated by the purchase agreement, Coconut Palm
will beneficially own up to 2,000,000 shares of 5,457,848 shares of our common
stock then outstanding or up to 36.6% of our then outstanding shares and, taking
into account the warrants, beneficially own, on a fully diluted basis, up to
6,000,000 shares of 10,215,168 shares of our common stock then outstanding on a
fully diluted basis (including all shares of our common stock underlying
outstanding options) or up to 58.7% of our then outstanding shares on a fully
diluted basis. The holdings of Coconut Palm will, on a fully diluted basis,
amount to control over Devcon. Also, two of the nominees for election to our
board of directors are designees of Coconut Palm. A majority of the nominees for
election to our board of directors are independent under the rules and
regulations of Nasdaq. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Upon the completion of the
Transaction, Stephen J. Ruzika&#146;s employment agreement will go into effect
and he and his management team will begin the process of implementing our entry
into the security services market. In addition, we will have completed the
acquisition of Security Equipment Company, Inc., Mr. Ruzika&#146;s company. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Coconut Palm has advised us
that, at some time after the closing of the Transaction and from time to time,
it may separate the shares of common stock and warrants comprising&nbsp; the
units into the securities that comprise them. There are
no prohibitions against this separation in the governing agreements, so long as
the separation and subsequent distribution is in compliance with applicable
securities laws. </FONT></P>

<i><b><font face="Times New Roman, Times, Serif" size="2">Future Plans

</font></b></i>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Upon completion of the
Transaction, we will implement our new Security Services Division which will be
led by Stephen J. Ruzika. This will represent a material deviation from our
current core businesses. However, our existing business will still continue in
its current form as a separate division. In addition, the holdings of Coconut
Palm on a fully diluted basis, taking into account exercise of all the warrants,
would amount to control over us. As Coconut Palm is a partnership, it may
ultimately distribute the units to its principles which may have the effect of eliminating
any control Coconut Palm acquires. Coconut Palm has not
informed us of any intent to distribute any of the units, or any portion of the
securities comprising the units, to anyone other than Messrs. Rochon and Ferrari
and Mr. Ruzika. Coconut Palm has agreed that any distributions it makes to
anyone, including its partners, must be in compliance with applicable securities
laws. </FONT></P>

<i><b><font face="Times New Roman, Times, Serif" size="2">Use of Proceeds.

</font></b></i>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The proceeds from the
issuance and sale of the 2,000,000 units to Coconut Palm will be used to
implement the following strategies regarding formation of our new Security
Services Division: </FONT></P>

<blockquote>
	<ul>
		<li><font face="Times New Roman, Times, Serif" size="2">Diversifying our operations into the security services sector;</font></li>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;Targeting potential acquisitions of security services businesses in the United
States and its territories that would provide a critical mass from which we may
grow organically and through acquisitions; </FONT></li>
		<li><font face="Times New Roman, Times, Serif" size="2">Acquiring single surveillance contracts or groups, whether through brokers or otherwise; and</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">Expenditures that are reasonably  incidental to the furtherance of these strategies (e.g.,  payment of the
         salaries of Stephen J. Ruzika and his management team). </font></li>
	</ul>
</blockquote>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; We anticipate that the
initial platform acquisition(s) will be financed with a combination of equity
and debt, with $5.0 million of our existing cash and the investment made by
Coconut Palm in this Transaction. Covenants in the purchase agreement require us
to pursue these specified proposed strategies in order to utilize the investment
of Coconut Palm to begin our entry into the security services business. </FONT></P>

         <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;

         We also expect to use the proceeds from any exercise of the warrants for similar purposes.



</font>



<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>RECENT
DEVELOPMENTS</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; On April 2, 2004, we entered
into a Letter of Intent with Security Equipment Company, Inc., a company managed
and controlled by Stephen J. Ruzika. Under the terms of this Letter of Intent,
we and Security Equipment express our intent to have us purchase either 100% of
the assets or 100% of the capital stock of Security Equipment. We will be
assuming none of the liabilities of Security Equipment except for specified
trade payables. The Letter of Intent provides for a total purchase price equal
to $4,370,000 which will be paid with a combination of cash and shares of our
common stock. The parties intend that $2,500,000 will be paid in cash to be used
by Security Equipment to apply towards the satisfaction of all of its
outstanding obligations and liabilities. The remainder of the purchase price is
intended to be paid in the form of shares of our common stock valued for these
purposes at a price of nine dollars per share. The purchase price is subject to
specified adjustments set forth in the Letter of Intent which are based on the
level of recurring monthly revenue and working capital that Security Equipment
has achieved at the date of closing. The parties intend that Security Equipment
will be granted the one-time right to demand to have us register our shares of
common stock received in the sale under the Securities Act of 1933, as amended.
The transactions contemplated in the Letter of Intent are conditioned upon us
closing the Transaction. However, until September 1, 2004, Security Equipment
has agreed not to solicit nor negotiate with any competing proposals. If
Security Equipment fails to comply with this obligation and consummates a
competing proposal, Security Equipment will be obligated to pay us a breakup fee
equal to $200,000. </FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CURRENT
DIRECTORS AND EXECUTIVE OFFICERS</FONT></H1>

         O<font face="Times New Roman, Times, Serif" size="2">ur directors and executive officers and nominees for director are as follows:
<br>
Name&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Age&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Position(s)
held with the Company <br>
-------------------------------------------------------------------------------------------------------------------------------------<br>
Donald L. Smith, Jr..................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 82&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Chairman of the Board, President and Chief Executive Officer
<br>
Richard L. Hornsby...................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 68&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Director and Executive Vice President
<br>
W. Douglas Pitts.....................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 64&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Director
<br>
Jose A. Bechara, Jr. Esq.............&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 59&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Director
<br>
James R. Cast........................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 55&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;     Director<br>
&nbsp;Robert D. Armstrong..................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 68&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Director<br>
Gustavo R. Benejam...................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 48&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Director
<br>
Per-Olof L&ouml;&ouml;f ........................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
53&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Director-Nominee]
<br>
Richard C. Rochon....................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;       46&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Director (Coconut Palm designee-nominee)
<br>
Mario B. Ferrari.....................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 26&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Director (Coconut Palm designee-nominee)
<br>
Jan A. Norelid.......................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp; 50&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Vice President-Finance and Chief Financial Officer
<br>
Donald L. Smith, III.................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 51&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Vice President-Construction Division<br>
&nbsp;Kevin S. Smith.......................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp; 47&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Vice President-Materials Division
</font>
<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; Donald L. Smith,  Jr., a cofounder of ours,  has served as our Chairman of the Board,  President and Chief
Executive Officer since our formation in 1951.</font></p>
<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;

         Richard L. Hornsby was appointed our Executive  Vice  President in March 1989.  Mr.  Hornsby served as our
Vice President from August 1986 to February 1989.  From September 1981 until July 1986 he was Financial  Manager of R.O.L., Inc. and L.O.R.,  Inc., companies primarily engaged in various private investment  activities.  He has been
a director of ours since 1975 and served as Vice President-Finance from 1972 to 1977.

         </font></p>
<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; W. Douglas Pitts, a director of ours since 1996, is Chairman of the Board and Chief  Executive  Officer of Courtelis  Company,  which is engaged  primarily  in  various  real  estate  development  activities.  Prior to his
selection  as Chairman of the Board and Chief  Executive  Officer in December  1995,  Mr. Pitts served as Executive
Vice President and Chief Operating Officer of Courtelis Company from 1983 to 1995.
</font></p>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Jose A. Bechara, Jr., Esq.,
a director of ours since 1999, is Chairman of the Board and Chief Executive
Officer of Hormigonera Mayag&#252;ezana, Inc., a leading manufacturer of
concrete in Puerto Rico. He has served on various boards of directors, including
banks, industrial companies, utilities and educational institutions, and has
been active in numerous professional associations. He was admitted to the bar in
the Commonwealth of Puerto Rico in 1969. Mr. Bechara has informed us that he
does not intend to run for re-election to the board. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; James R. Cast, a director
of ours since 2003, is owner of his own CPA firm, specializing in business
acquisitions and general tax matters. Prior to that and from 1972 to 1994, he
was with KPMG LLP, with his last position as Senior Tax Partner in Charge of the
South Florida practice. He was also the coordinator of KPMG&#146;s South Florida
Mergers &amp; Acquisitions practice. He currently serves as Chairman of the
Board of the Covenant House of Florida, a charitable organization. Mr. Cast has
an MBA degree from the Wharton School at the University of Pennsylvania. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Robert Armstrong, a
director of ours since 2003, is owner and director of V.I. Asphalt Products
Corporation, The Buccaneer Hotel, the Bank of St. Croix and several other
corporations in St. Croix, U.S. Virgin Islands. His extensive experience
includes the aggregates industry, heavy construction and engineering in the U.S.
Virgin Islands. He also owns Haywood Street Redevelopment Corporation, a real
estate developer and investor in North Carolina. Mr. Armstrong is a graduate of
Princeton University. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Gustavo R. Benejam, a
director of ours since 2003, is currently providing consulting services to
various companies. Prior to that and from 2000 to 2002 he served as Chief
Operating Officer of AOL Latin America, and prior to that and from 1995 to 2000
he worked in various positions for Pepsico, as Frito Lay&#146;s VP Caribbean,
Andean and South Cone, and as Pepsi Cola&#146;s President-Latin America. Mr.
Benejam has an MBA from Indiana University. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Information regarding the
background and experience of Richard C. Rochon may be found under &#147;Proposal
No. 3 &#150; Nominees&#148; on page 26 of this proxy statement. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Information regarding the
background and experience of Mario B. Ferrari may be found under &#147;Proposal
No. 3 &#150; Nominees&#148; on page 26 of this proxy statement. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Information regarding the
background and experience of Per-Olof L&ouml;&ouml;f&nbsp; may be found under &#147;Proposal
No. 3 &#151; Nominees&#148; on page 26 of this proxy statement. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Jan A. Norelid was
appointed our Vice President-Finance and Chief Financial Officer in October
1997. Prior to that he served as Chief Financial Officer or Controller for
various companies in and outside the United States. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Donald L. Smith, III was
appointed our Vice President-Construction Division in December 1992. Mr. Smith
joined us in 1976 and has served in various supervisory and managerial positions
with us since joining us. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Kevin M. Smith was
appointed our Vice President-Materials Division in June 2002. Mr. Smith joined
us in 1989 and has served in various management positions with us since joining
us. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Our directors hold office
until the next annual meeting of our shareholders or until their successors have
been duly elected and qualified. Our officers are elected annually by our board
of directors and serve at the discretion of our board of directors. There are no
arrangements or understandings with respect to the selection of officers or
directors. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Donald L. Smith, III and
Kevin S. Smith are sons of Donald L. Smith, Jr., our Chairman, President and
Chief Executive Officer. Aside from the foregoing, there are no family
relationships between any of our directors and executive officers. We also
employ another child and a daughter-in-law of Donald L. Smith, Jr. and a
brother-in-law to Donald L. Smith, III. </FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SECURITY
OWNERSHIP</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The following table sets
forth as of the record date (or such other date indicated in the footnotes
below), the number of shares beneficially owned prior to the transaction, the
number of shares beneficially owned immediately after completing the Transaction, the percentage of
ownership of our common stock prior to the Transaction and the percentage
ownership of our common stock immediately after completion of the Transaction, assuming full exercise of
the overallotment option, by the following: </FONT></P>

<blockquote>
	<font face="Times New Roman, Times, Serif" size="2">(i) each person known to us to own  beneficially  more than 5 percent of the outstanding  shares of our common
stock; <br>
	<br>
	(ii) each of our directors; <br>
	<br>
	(iii) each nominee for director (but does not take into account any options
	that would be granted to that nominee if elected at that special meeting);<br>
	<br>
	(iv) each of our five
executive officers who had annual salary and bonus for 2003 in excess of
$100,000, referred to in this proxy statement as the named executive officers,
including our President and Chief Executive Officer; and <br>
	<br>

(v) all of our directors and executive officers as a group. </font>
</blockquote>
<p><br>
<font face="Times New Roman, Times, Serif" size="2"><br>
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Common Stock
                                                                                  <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Beneficially Owned(2)
                                                                <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Prior to Transaction&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;              After Transaction<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                                                                 Shares&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;       Percent&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Shares&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Percent
<br>
Donald L. Smith, Jr. (3).................................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;      1,319,711&nbsp;&nbsp;&nbsp;&nbsp; 37.73&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;        1,319,711&nbsp;&nbsp;&nbsp;&nbsp; 25.37
<br>
Smithcon Family Investments, Ltd (4)............&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 985,372&nbsp;&nbsp;&nbsp;&nbsp;        28.50&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          985,372&nbsp;&nbsp;&nbsp;&nbsp; 19.23
<br>
Richard L. Hornsby (5).................................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;        121,155&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.42&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 121,155&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.32
<br>
Robert Armstrong (6)....................................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;        400,300&nbsp;&nbsp;&nbsp;&nbsp; 11.55&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 400,300&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7.80
<br>
Jose A. Bechara, Jr. Esq. (7).........................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 62,500&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.80&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;           62,500&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 1.22
<br>
Gustavo R. Benejam (8)................................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 18,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 18,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *
<br>
James R. Cast (9)........................................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *
<br>
W. Douglas Pitts (10)...................................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;         25,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 25,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *
<br>
Richard C. Rochon(16)................................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;              0&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5,000,000&nbsp;&nbsp;            59.12
<br>
Mario B. Ferrari (16)....................................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5,000,000&nbsp;&nbsp;&nbsp; 59.12
<br>
Per-Olof L&ouml;&ouml;f ...............................................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;              0&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;         *&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 0&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *
<br>
Kevin M. Smith (11)....................................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;        174,828&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.97&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 174,828&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.37
<br>
Donald L. Smith, III (12)..............................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;        153,019&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4.33&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 153,019&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.94<br>
Jan A. Norelid (13)......................................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;        106,480&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3.02&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 106,480&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2.05
<br>
Dimensional Fund Advisors, Inc. (14)..........&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;        178,400&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5.16&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 178,400&nbsp;&nbsp;&nbsp;&nbsp; 3.48
<br>
FMR Corp. (15).........................................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;        375,700&nbsp;&nbsp;&nbsp;&nbsp; 10.87&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 375,700&nbsp;&nbsp;&nbsp;&nbsp; 7.33
<br>
All directors, director-nominees and executive officers<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; as
    a group (13 persons)...................&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2,361,993&nbsp;&nbsp;&nbsp;61.51&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7,361,993&nbsp; &nbsp;
83.28 <br>
__________<br>
&nbsp;*........Less than 1%. </font></p>
<blockquote>
	<ol>
		<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Unless
otherwise indicated, the address of each of the beneficial owners is 1350 East
Newport Center Drive, Suite 201, Deerfield Beach, Florida 33442. <br>
&nbsp;</FONT></li>
		<li><font face="Times New Roman, Times, Serif" size="2">Unless  otherwise  indicated,  each person or group has sole voting and  investment  power with respect to
       all such shares. <br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">Mr. Smith's holdings  include (i) 229,341 shares directly owned by Mr. Donald L. Smith,  Jr., (ii) 985,372
       shares held by Smithcon Family  Investments,  Ltd., an entity  controlled by Smithcon  Investments,  Inc., a
       corporation  that is wholly owned by Mr. Smith,  (iii) 17,628 shares held by Smithcon  Investments  and (iv)
       77,280 shares  issuable upon exercise of options that are presently  exercisable  or  exercisable  within 60
       days of the record date and does not include  3,420 shares not  presently  exercisable  and that will not be
       exercisable within 60 days of the record date.

<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">All 985,372 shares held by Smithcon Family  Investments,  Ltd. are deemed  beneficially owned by Donald L.
       Smith, Jr. and are included in the above table for each of Mr. Smith and Smithcon Family  Investments,  Ltd.
       See footnote (3) for a description of the  relationship  between Smithcon Family  Investments,  Ltd. and Mr.
       Smith.

<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">Includes (i) 33,875 shares  directly owned by Mr.  Hornsby,  (ii) 57,280 shares  issuable upon exercise of
       options  granted by us that are presently  exercisable or exercisable  within 60 days of the Record Date and
       (iii)  30,000  shares  issuable  upon  exercise of an option that is presently  exercisable,  granted by Mr.
       Donald L. Smith,  Jr., to Mr.  Hornsby to purchase  shares of Mr.  Smith's common stock at an exercise price
       of $2.33 per share.  Does not include  3,420  shares  subject to options  held by Mr.  Hornsby  that are not
       presently exercisable and that will not be exercisable within 60 days of the record date.

		<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">Includes  (i) 392,300  shares  owned by Mr.  Armstrong  and (ii) 8,000 shares  issuable  upon  exercise of
       options that are presently exercisable.

<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">Includes (i) 50,000  shares owned by  Hormigonera  Mayaguezana,  Inc.,  deemed  beneficially  owned by Mr.
       Bechara,  (ii) 500 shares  directly owned by Mr.  Bechara and (iii) 12,000 shares  issuable upon exercise of
       options that are presently exercisable.

<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">Includes (i) 10,000  shares owned by Mr.  Benejam and (ii) 8,000 shares  issuable upon exercise of options
       that are presently exercisable.<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">Includes (i) 3,000 shares owned by Mr. Cast and (ii) 8,000 shares  issuable  upon exercise of options that
       are presently exercisable.<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">Includes (i) 17,000  shares owned by Mr. Pitts and (ii) 8,000  shares  issuable  upon  exercise of options
       that are presently exercisable.<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">Includes  (i)  48,948  shares  directly  owned by Mr.  Kevin M.  Smith and his wife,  (ii)  63,600  shares
       beneficially  owned  that are held in trust by Kevin M.  Smith for the  benefit  of his  children,  to which
       latter shares Mr. Smith disclaims  beneficial  ownership,  and (iii) 62,280 shares issuable upon exercise of
       options that are presently  exercisable or exercisable  within 60 days of the record date.  Does not include
       23,420 shares  issuable upon  exercise of options that are not  presently  exercisable  and that will not be
       exercisable within 60 days of the record date.

<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">Includes (i) 37,089 shares  directly  owned by Mr. Donald L. Smith,  III and his wife,  (ii) 38,200 shares
       beneficially  owned  that are held in trust by Donald L.  Smith,  III for the  benefit of his  children,  to
       which  latter  shares Mr.  Smith  disclaims  beneficial  ownership  and (iii) 77,730  shares  issuable  upon
       exercise of options that are presently  exercisable or exercisable  within 60 days of the record date.  Does
       not include  30,920 shares  issuable upon  exercise of options that are not presently  exercisable  and that
       will not be exercisable within 60 days of the record date.

<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">Includes (i) 42,800 shares  directly  owned by Mr.  Norelid and (ii) 63,680 shares  issuable upon exercise
       of options  that are  presently  exercisable  or  exercisable  within 60 days of the record  date.  Does not
       include  23,420 shares  issuable upon exercise of options that are not presently  exercisable  and that will
       not be exercisable within 60 days of the record date.

<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">The address for  Dimensional  Fund  Advisors,  Inc. is 1299 Ocean Avenue,  11th Floor,  Santa  Monica,  CA
       90401.  Dimensional,  a registered  investment  advisor,  is deemed to have beneficial  ownership of 178,400
       shares, all of which shares are held by advisory clients of Dimensional.  Dimensional  disclaims  beneficial
       ownership of all such shares.  The  information  with respect to  Dimensional  is based solely on a Schedule
       13G, dated February 6, 2004. <br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">The address for FMR Corp.  (Fidelity  Investments) is 82 Devonshire Street,  Boston, MA 02109. The 375,700
       shares were held by FMR Corp.  on behalf of its direct  subsidiary  Fidelity  Management &amp; Research  Company
       (Fidelity),  a wholly owned subsidiary of FMR and an investment  advisor registered under Section 203 of the
       Investment  Advisors Act of 1940.  Fidelity was the beneficial owner of 375,700 shares as a result of acting
       as an investment  advisor to various  investment  companies  registered  under  Section 8 of the  Investment
       Company Act of 1940. The  information  with respect to FMR is based solely on a Schedule 13G, dated December
       11, 2000.

<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">All shares  consist of all shares  purchased by Coconut Palm  (including all shares  underlying  warrants,
       all of which will be exercisable upon delivery).  Assumes beneficial  ownership of such shares is attributed
       to Messrs. Rochon and Ferrari.  Messrs. Rochon and Ferrari disclaim beneficial ownership of these shares.</font></li>
	</ol>
</blockquote>
<p><b><font face="Times New Roman, Times, Serif" size="2">Compliance with Section 16(a) of the Securities Exchange Act of 1934
</font></b></p>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Section 16(a) of the
Securities Exchange Act of 1934, as amended, requires our directors and
executive officers, and persons who own more than 10 percent of our common
stock, to file with the Securities and Exchange Commission initial reports of
ownership and reports of changes in ownership of our common stock. Officers,
directors and greater than 10 percent shareholders are required by the rules and
regulations of the Securities and Exchange Commission to furnish us with copies
of all Section 16(a) forms they file. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; To our knowledge, based
solely on review of the copies of these reports furnished to us and
representations that no other reports were required, during the fiscal year
ended December 31, 2003, all Section 16(a) filing requirements applicable to its
officers, directors and greater than 10 percent beneficial owners were complied
with. </FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EXECUTIVE
COMPENSATION</FONT></H1>

<b>Summary Compensation Table

</b>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The following table sets
forth compensation awarded to, earned by or paid to our Chief Executive Officer
and each of our other named executive officers. We have not granted any
restricted stock awards or stock appreciation rights. </FONT></P>

                                                                             <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Annual                              Compensation&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Other Annual&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Long-term Compensation&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
All Other <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Fiscal year&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Salary&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Bonus&nbsp;&nbsp;&nbsp;&nbsp; compensation&nbsp;&nbsp;&nbsp; Awards&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Payouts&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; compensation<br>
&nbsp;Name and Principal Position&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
($)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;               ($)(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Securities&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; LTIP&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;    ($)(2)&nbsp;&nbsp;
<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; underlying&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
($)<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
options<br>
-----------------------------------------------------------------------------------------------------------------------------------------<br>
Donald L. Smith, Jr.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2003&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 300,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;           --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 57,500&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;       --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8,206<br>
&nbsp;Chairman of the Board,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2002&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;        300,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 40,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5,700&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 8,252<br>
&nbsp;President and CEO&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2001&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 300,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;           --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 35,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 7,958<br>
-----------------------------------------------------------------------------------------------------------------------------------------<br>
Richard L. Hornsby&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;                   2003&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 190,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 13,500&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;       --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          7,217<br>
   Executive Vice President&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          2002&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 190,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;           --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;         9,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;         5,700&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;       --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 22,376
                                     <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2001&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 187,500&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 9,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;         72,739
<br>
-----------------------------------------------------------------------------------------------------------------------------------------<br>
Jan A. Norelid&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2003&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 180,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 20,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6,272<br>
&nbsp;Vice President--Finance&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;            2002&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 164,615&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 15,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5,700&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;       --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 3,715
   <br>
Chief Financial Officer&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2001&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;        155,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;         5,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;       --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          3,638<br>
-----------------------------------------------------------------------------------------------------------------------------------------<br>
Kevin M. Smith&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2003&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;        140,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;           --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 20,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;          4,547<br>
&nbsp;Vice President--&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;                  2002&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 134,882&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;         5,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5,700&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4,397<br>
&nbsp;Materials Division&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2001&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 128,189&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;         5,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;       --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4,042<br>
-----------------------------------------------------------------------------------------------------------------------------------------<br>
Donald L. Smith III&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2003&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 140,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 20,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;       --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 4,818<br>
&nbsp;Vice President--&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 2002&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 133,780&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;         5,700&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5,277<br>
&nbsp;Construction Division&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;             2001&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 125,950&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;       13,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 5,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11,543
<br>
&nbsp;</font><P><font face="Times New Roman, Times, Serif" size="2">__________

</font>
<blockquote>
	<ol>
		<li><font face="Times New Roman, Times, Serif" size="2">&nbsp;Does not  include  the dollar  value of  personal  benefits,  such as the cost of  automobiles  and health
     insurance,  the aggregate value of which for each named executive  officer was less than 10% of such executive
     officer's  salary and bonus.  Includes $8,500 for Mr.  Hornsby,  representing a retainer paid to all directors
     other than Mr. Smith,  Jr., and $52,500 in board fees paid to Mr.  Smith,  Jr., as well as $5,000 per year for
     Messrs. Smith, Jr., Hornsby, Norelid, K. Smith, and Smith III for service on a management policy committee.
		<br>
&nbsp;</font></li>
		<li><font face="Times New Roman, Times, Serif" size="2">Represents  (i) the cost of term and non-term life  insurance  coverage  paid to the insurance  company as
     premiums  for  policies  on the lives of  Messrs.  Hornsby  and Smith III in 2002 and 2001  pursuant  to split
     dollar  life  insurance  policies  on the  lives of such  executive  officers  and (ii) our  match of a 401(k)
     contribution  made by each named  executive  officer.  We were  reimbursed  in 2003 for its  non-term  premium
     payments as the split-life agreement was terminated.



</font></li>
		</ol>
		</blockquote>
		<P><b>Option Grants and Long-Term Incentive Awards </b>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The following table sets
forth certain information concerning stock option grants to our named executive
officers during the 2003 year. No stock appreciation rights or long-term
incentive awards were granted to our named executive officers during 2003. </FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>OPTION
GRANTS IN LAST FISCAL YEAR</FONT></H1>

                                                &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
		<font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

                                                Percent of
                              <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Number of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; total options<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                              securities&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; granted to all&nbsp;&nbsp;&nbsp;
		<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; underlying&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; employees in&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Grant date
                               <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; options&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;         fiscal year&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;      Exercise price&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Expiration&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; present value<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                                (#)(1)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (%)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ($/Sh)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;             Date&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ($)(2)<br>
		-----------------------------------------------------------------------------------------------------------------------------------------<br>
&nbsp;Jan A. Norelid&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 20,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 21.5%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.93&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;            12/23/13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 44,810<br>
&nbsp;Kevin M. Smith&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 20,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 21.5%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;              6.93&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;            12/23/13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;           44,810
		<br>
		Donald L. Smith III&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 20,000&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 21.5%&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 6.93&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 12/23/13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 44,810
		<br>
		-----------------------------------------------------------------------------------</font><font face="Times New Roman, Times, Serif" size="2">------------------------------------------------------</font><blockquote>
			<ol>
				<li><font face="Times New Roman, Times, Serif" size="2">Options vest at the rate of 20% on each anniversary of the date of the grants, December 23, 2003.
				<br>
&nbsp;</font></li>
				<li><font face="Times New Roman, Times, Serif" size="2">The  Black-Scholes  option-pricing  model was used to determine  the grant date present value of the stock
     options  granted.  The following  facts and  assumptions  were used in making such  calculation:  (i) exercise
     prices as indicated  in the table above;  (ii) fair market  value equal to the  respective  exercise  price of
     each option on the date of the grants;  (iii) a dividend  yield of 0%; (iv) an expected  stock  option term of
     six years;  (v) a stock price  volatility  of 25.0% based on an analysis of monthly  stock  closing  prices of
     common  stock  during the  preceding 44 months;  and (vi) a risk-free  interest  rate of 3.48% for the options
     granted on December 23, 2003,  which is  equivalent  to the yield of a six-year  Treasury  note on the date of
     the grants.  No other  discounts  or  restrictions  related to vesting or the  likelihood  of vesting of stock
     options were  applied.  The  resulting  grant date present  value for each stock option was  multiplied by the
     number of stock options granted.



</font></li>
			</ol>
			<p><b><font face="Times New Roman, Times, Serif" size="2">Aggregated Fiscal Year-End Option Value Table
			</font></b></p>
		</blockquote>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The following table sets
forth information concerning unexercised stock options held by our named
executive officers as of December 31, 2003. No stock appreciation rights have
been granted or are outstanding. </FONT></P>

<H2 ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>AGGREGATED
OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL <BR>YEAR-END OPTION VALUES</FONT></H2>

                                                                 &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
		<font face="Times New Roman, Times, Serif" size="2">&nbsp;

                                                                 Number of securities
                                     <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Shares&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; underlying unexercised&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Value of unexercised<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                                  acquired on&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Value&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;              options at&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;             in-the-money- options
                                    <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; exercise&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;      realized&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; fiscal year end (#)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; at fiscal year end (#)
		<br>
		Name&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;                                  (#)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ($)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; exercisable&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; unexercisable&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;  exercisable&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; unexercisable<br>
		-----------------------------------------------------------------------------------------------------------------------------------------
		<br>
Donald L. Smith, Jr.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;                       --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;   $&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 116,140&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;        14,560&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;       $565,561&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $ 58,744
		<br>
		Richard L. Hornsby&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
82,515&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 10,560&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 268,652&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 38,244<br>
Jan A. Norelid&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 11,400&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 54,948&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;        82,540&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;        35,960&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;        272,751&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;        69,344
		<br>
		Kevin M. Smith&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;            --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 71,140&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 34,560&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 123,811&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 61,644
		<br>
		Donald L. Smith, III&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 70,590&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;        38,060&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;        212,963&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 74,669
		<br>
		-----------------------------------------------------------------------------------------------------------------------------------------&nbsp;&nbsp;&nbsp;
		<br>
		(1)      The closing  price for our common  stock as reported  on Nasdaq on December  31, 2003 was $7.00.  Value is
     calculated by  multiplying  (a) the difference  between $7.00 and the option  exercise price by (b) the number
     of shares of our common stock underlying the option.


</font>
		<p><b><i><font face="Times New Roman, Times, Serif" size="2">Employment Agreements
		</font></i></b></p>
		<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; In June 2000, we entered
into an amended Life Insurance and Salary Continuation Agreement with Donald J.
Smith, Jr., our Chairman, Chief Executive Officer and President. Mr. Smith shall
receive a retirement benefit upon the sooner of his retirement from his position
after March 31, 2003, or a change in control of Devcon. Benefits to be received
shall equal 75 percent of his base salary, which currently is $300,000 per year,
and shall continue for the remainder of his life. In the event that a spouse
survives him, then the surviving spouse shall receive a benefit equal to 100
percent of his base salary for the shorter of five years or the remainder of the
surviving spouse&#146;s life. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; In June 2001, we entered
into employment agreements with Messrs. Hornsby, Norelid, Kevin M. Smith and
Donald L. Smith, III. The term of the agreements are for one year, annually
renewable for additional equivalent terms. The agreements stipulate an annual
base salary with merit increases and bonuses as determined by the Compensation
Committee. If the agreement is terminated by us without cause or terminated by
the employee for &#147;Good Reason&#148;, which includes assignment of duties
inconsistent with the executive&#146;s position, then we will pay one
year&#146;s salary in severance. If we have a change in control, which includes
a change of the majority of our board of directors not approved by the incumbent
board, or members of Donald L. Smith, Jr.&#145;s family controlling less than
20% of our shares, we will pay two years annual compensation upon termination of
the agreement by either party. We will reimburse the employee any excise tax
payable by the employee. Under certain conditions, during employment and for a
period of 2 years after termination, the employee shall not compete with our
business. On March 26, 2004, we entered into an amendment of Mr. Hornsby&#146;s
employment agreement under the terms of which these payments due to Mr. Hornsby
in the event of a Change in Control were eliminated. </FONT></P>

		<b><font face="Times New Roman, Times, Serif" size="2">Stock Option Plan

		</font></b>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; On April 1, 1999, our board
of directors adopted the Devcon International Corp. 1999 Stock Option Plan,
which was approved by our shareholders on June 10, 1999. This plan is the only
plan under which we currently issue stock options. Under this plan, our
compensation committee has the authority to grant incentive stock options and
non-qualified stock options to key employees, directors, consultants and
independent contractors and these options may be exercised using loans from us
or shares of our common stock that are already owned by the holder. The
effective date of this plan was April 1, 1999. As of the record date, options to
purchase an aggregate of 313,100 shares of our common stock were outstanding
under this plan, and options to purchase an aggregate of 404,220 shares of our
common stock were outstanding under our other stock option plans. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Shares Available for
Awards; Annual Per-Person Limitations. Under the plan, the total number of
shares of common stock that may be subject to the granting of options under the
plan at any time during the term of the plan is equal to 600,000 shares. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Our compensation committee
or our board of directors, in its sole discretion, determines the persons to be
awarded options, the number of shares subject thereto and the exercise price and
other terms thereof. In addition, our compensation committee or our board of
directors has full power and authority to construe and interpret the plan, and
the acts of our compensation committee or our board of directors are final,
conclusive and binding on all interested parties, including us, our
shareholders, our officers and employees, recipients of grants under the plan,
and all persons or entities claiming by or through these persons. </FONT></P>

         <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;
		<i>Eligibility</i>.  The  persons  eligible  to  receive  options  under this plan are our  officers,  directors,
employees and  independent  contractors  and officers,  directors,  employees and  independent  contractors  of our
subsidiaries. As of the record date, approximately 300 persons were eligible to participate in the plan.
		</font><br>
		<font face="Times New Roman, Times, Serif" size="2"><br>
		<b>Compensation Committee Interlocks and Insider Participation

         </b></font>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; Our compensation committee members are James R. Cast, W. Douglas Pitts and Jose A. Bechara, Jr., Esq.

         We own 50.02% of our  subsidiary in Puerto Rico,  Puerto Rico  Crushing  Company,  Inc., or PRCC.  Jose A.
Bechara, Jr. Esq., one of our directors,  is a majority shareholder of Empresas Bechara,  which in turn owns 24.99%
of PRCC.  PRCC's  most  important  customer is  Hormigonera  Mayaguezana,  a wholly  owned  subsidiary  of Empresas
Bechara.  Sales to Hormigonera  Mayaguezana of $2.5 million  represented  73% of PRCC's total sales for fiscal year
2003. PRCC had $195,000 of outstanding receivables from Hormigonera Mayaguezana at December 31, 2003.
		</font></p>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; We own a 50% interest in
ZSC South, a joint venture, which currently owns one parcel of vacant land in
South Florida. Mr. W. Douglas Pitts, a director, owns a 5% interest in the joint
venture; Courtelis Company, manages the joint venture&#146;s operations and Mr.
Pitts is the President of Courtelis Company. ZSC South sold a parcel of land in
June 2003 and we recognized net earnings of $116,000 from that transaction. At
the time of sale, Mr. Pitts received a real estate commission of $13,000. </FONT></P>

         <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;

         Mr.  James R. Cast, a director,  has a tax and  consulting  practice,  which  provides  services to us and
privately to Mr.  Donald  Smith,  Jr. We paid Mr. Cast $58,000 and $35,000 for his services to us in 2003 and 2002,
respectively. Mr. Smith paid Mr. Cast $21,000 and $19,000 for his services in 2003 and 2002, respectively.


		</font>
		<p><b><font face="Times New Roman, Times, Serif" size="2">Securities Authorized for Issuance Under Equity Compensation Plans
		</font></b></p>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The following table
provides information as of December 31, 2003 with respect to compensation plans
under which the Company&#146;s equity securities are authorized for issuance. </FONT></P>

                                                                                                 <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
p;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

                                                                                                 Number of shares&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
		<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Number of shares to be&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;      Weighted average&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; remaining available for<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                                          issued upon exercise of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; exercise price of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; future issuance under&nbsp;&nbsp;
		<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; outstanding options&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; outstanding options&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;     compensation plans (1)
		<br>
		-----------------------------------------------------------------------------------------------------------------------------------------<br>
		Equity compensation plans:
<br>
		Approved by Shareholders&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 801,195&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; $4.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 179,000
		<br>
		Not approved by Shareholders&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; --
		<br>
		Total&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 801,195&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;                        $4.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 179,000
		<br>
		-----------------------------------------------------------------------------------------------------------------------------------------<br>
		-
(1)      Excluding shares reflected in first column.




<!-- MARKER PAGE="sheet: 6; page: 6" -->
		</font>
<HR SIZE=5 COLOR=GRAY NOSHADE>




<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>REPORT OF
THE COMPENSATION COMMITTEE</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Our compensation committee
is primarily responsible for determining the compensation of our executive
officers, although our Chief Executive Officer and President makes
recommendations to our committee as to the compensation of our executive
officers. Our compensation committee&#146;s general philosophy is to offer
competitive compensation programs designed to attract and retain qualified
executives, to motivate performance to achieve specific goals and to align the
interests of senior management with the long-term interests of our shareholders. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; In determining
compensation, job level, individual performance and overall company performance
are considered. More specifically, factors considered include, with respect to
all other officers, the Chief Executive Officer and President&#146;s
recommendations, specific accomplishments of the executive officers, our
historical and projected performance, sales, earnings, financial condition and
return on equity and economic conditions. These factors and the ultimate
determination of compensation are subjective. We attempt to provide incentives
to retain qualified executive officers, but also believe that the compensation
paid to our executives is well within the range of compensation paid to
similarly situated executives at other companies in similar industries or at
companies having similar market capitalization. Given the level of our executive
officers&#146; compensation, our compensation committee does not believe that it
is necessary to incur the expense of formal studies or market analysis. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Of all the components of
compensation, base salary is most closely related to individual performance.
With respect to the base salary of all other officers, strong emphasis is given
to our Chief Executive Officer&#146;s recommendations, given his experience with
us since our origin and his day-to-day contact with the other executive
officers. Consideration is also given to the amount deemed necessary to retain
an executive officer&#146;s services. These considerations are subjective and
not subject to specific criteria. Our performance is also a factor; salaries for
three executive officers were increased in 2003 based on merit and other
factors. Based on our experience with companies in general and on experience
within our industry, and without utilizing any formal market studies, our
compensation committee believes that the salaries paid by us to our executive
officers are moderate by comparison to external standards. This analysis was
also subjective and not subject to specific criteria. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; While bonuses are also
related to individual performance, company performance is emphasized more in
determining bonus payments than in determining base salary. This is particularly
true at the highest level of management. In considering performance, generally
earnings are most emphasized, although revenues and financial condition are also
considered. The amount of any bonus is not tied to specific performance
criteria, but is also subjectively determined based upon an analysis of the
aforementioned factors. An executive officer could receive a bonus in a year
when we are not profitable, based upon his individual performance or areas of
responsibility. Two executive officers received bonuses totaling $10,000 after
review of the foregoing factors. We also attempt to provide incentives to our
executive officers to remain with us and to improve longer-term performance
through the grant of stock options. Options allow executive officers to share,
to some extent, in shareholders&#146; return on equity. Typically, our options
vest annually in equal amounts over a predetermined term. The determination of
how many options to grant to an executive officer depends, to varying degrees,
on the number of outstanding options held by the executive officer, his job
level and performance and our performance. Limited options have been issued to
executive officers since 1999, and, as a means of providing additional incentive
to some executive officers, an additional 20,000 options were issued in 2003 to
each of three named executive officers. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; As a result of the
foregoing factors, the President and Chief Executive Officer&#146;s base salary
was not increased in 2003. In addition, he received no bonus or stock options in
2003. In determining not to reduce the President&#146;s compensation from its
existing level the Committee took into consideration, in addition to the other
factors mentioned above, the time and effort being expended by the President,
our results in 2003, the President&#146;s experience and expertise in handling
the issues facing us and the perceived progress toward enabling us to meet
future goals. The final determination, after reviewing these factors, was
subjective. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; We have various obligations
under our 401(k) plan and with respect to split dollar insurance premiums, all
of which were met. In December 1993, the Internal Revenue Service issued
proposed regulations concerning compliance with Section 162(m) of the Internal
Revenue Code of 1986, as amended. Section 162(m) generally disallows a public
company&#146;s deduction for compensation to any one of specified employees
(primarily executive officers) in excess of $1.0 million per year unless the
compensation is pursuant to a plan or performance goals approved by the public
company&#146;s shareholders. None of our named executive officers presently
receives, and our compensation committee does not anticipate that these persons
will receive, annual cash compensation in excess of the $1.0 million cap
provided in Section 162(m). </FONT></P>

                        <p align="center"><font size="2">Submitted by the Compensation Committee of the Board of Directors.

						</font></p>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Members of
The Compensation Committee</FONT></H1>

                            <p align="center"><i><font size="2">James R. Cast, Jose A. Bechara, Jr., Esq., W. Douglas Pitts
							</font></i></p>



<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>REPORT OF
THE AUDIT COMMITTEE</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The audit committee of our
board of directors is established under our bylaws and our audit committee
charter adopted by our board of directors on February 27, 2004. Our audit
committee&#146;s charter is filed with this proxy statement as Annex B. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Our management is
responsible for our internal controls and the financial reporting process. Our
independent auditors are responsible for performing the independent audit of our
consolidated financial statements in accordance with auditing standards
generally accepted in the United States of America and for issuing a report
thereon. Our audit committee is comprised of three non-management directors and
its responsibility is generally to monitor and oversee the processes described
in our audit committee charter. The members of our audit committee are not
professionally engaged in the practice of accounting or auditing and are not
experts in the fields of accounting or auditing. Our audit committee relies,
without independent verification, on the information provided to it and on the
representations made by management and the independent auditors that the
financial statements have been prepared in conformity with generally accepted
accounting principles. Each member of our audit committee is independent in the
judgment of our board of directors as required by the listing standards of
Nasdaq, the Sarbanes-Oxley Act of 2002 and the rules and regulations of the
Securities and Exchange Commission adopted under this Act, as of this date. We
do not know what the composition of our audit committee will be after the
election of new members to our board of directors. With respect to the period
ended December 31, 2003, in addition to its other work, our audit committee had
five meetings in fiscal 2003, and: </FONT></P>

		<blockquote>
			<ul>
				<li><font face="Times New Roman, Times, Serif" size="2">Reviewed  and  discussed  with our  management  and the  independent  auditors  our  audited  consolidated
              financial statements as of December 31, 2003; <br>
&nbsp;</font></li>
				<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Discussed with the independent auditors the matters required to be discussed by
auditing standards generally accepted in the United States of America; and <br>
&nbsp;</FONT></li>
				<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;Received from the independent auditors written affirmation of their independence
required by Independence Standards Board Standard No. 1 and discussed with the
auditors the firm&#146;s independence. The independent auditors met with our
audit committee without management being present. </FONT></li>
			</ul>
		</blockquote>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Our audit committee also
reviews and approves transactions between us and our affiliates, including our
officers and directors. The audit committee has also reviewed transactions which
occurred prior to its review. For more information, see &#147;Certain
Relationships and Related Transactions&#148; on page 55. The audit committee and
our policy is that all of these transactions be reviewed and approved by the
audit committee prior to being entered into. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; In fulfilling its
responsibilities, our audit committee selected KPMG LLP to be our independent
accountants. KPMG has discussed with our audit committee and provided written
disclosures to our audit committee on (1) that firm&#146;s independence as
required by the Independence Standards Board and (2) the matters required to be
communicated under generally accepted auditing standards. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Our audit committee
chairman communicates with both the internal and external auditors regarding
both quarterly and year-end reporting issues. On an informal basis the chairman
communicates with the members outside of meetings with regard to significant
issues that need to be brought to their immediate attention. Otherwise,
communication between the members is mostly during meetings. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Consistent with the
Securities and Exchange Commission&#146;s policies regarding auditor
independence, our audit committee has responsibility for appointing, setting
compensation and overseeing the work of the independent auditor. In recognition
of this responsibility, our audit committee has established a policy to
pre-approve all audit and permissible non-audit services provided by the
independent auditor. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Based upon the review and
discussions referred to above, and subject to the limitations on its role and
responsibilities described above and in our audit committee charter, our audit
committee recommended to our board of directors that our audited consolidated
financial statements be included in our Annual Report on Form 10-K for the year
ended December 31, 2003 for filing with the Securities and Exchange Commission. </FONT></P>

                            <p align="center"><font size="2">Submitted by the Audit Committee of the Board of Directors

							</font></p>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Members of
The Audit Committee</FONT></H1>

                             <p align="center"><i><font size="2">W. Douglas Pitts, Robert D. Armstrong, Gustavo R. Benejam


<!-- MARKER PAGE="sheet: 7; page: 7" -->
								</font></i></p>
<HR SIZE=5 COLOR=GRAY NOSHADE>


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>STOCK
PERFORMANCE GRAPH</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The following graph shows
the cumulative total shareholder return on our common stock over the last five
fiscal years as compared to the total returns of the Nasdaq stock market index
and the Dow Jones building material index. Returns are based on the change in
year-end to year-end price and assume reinvested dividends. The graph assumes
$100 was invested on December 31, 1998 in our common stock, the Nasdaq stock
market index and the Dow Jones building materials index. </FONT></P>

		<font face="Times New Roman, Times, Serif" size="2">[GRAPH OMITTED]
		</font>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>* $100 invested on 12/31/98
in stock or index- including reinvestment of dividends Fiscal year ending
December 31. </FONT></P>

		<font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 12/98&nbsp;&nbsp;&nbsp;&nbsp;       12/99&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 12/00&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 12/01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;        12/02&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
		12/03<br>
		-----------------------------------------------------------------------------------------------------------------------------------------<br>
		Devcon International Corp.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 100.00&nbsp;&nbsp;&nbsp;&nbsp;       217.87&nbsp;&nbsp;&nbsp;&nbsp; 259.54&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;       243.81&nbsp;&nbsp;&nbsp;&nbsp; 255.05&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 266.67<br>
&nbsp;NASDAQ Stock Market (U.S.)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;                   100.00&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 186.20&nbsp;&nbsp;&nbsp;&nbsp; 126.78&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 96.96&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 68.65&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
		108.18 <br>
&nbsp;Dow Jones US Building Materials&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;              100.00&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 83.85&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 83.58&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 85.22&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 74.50&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
		101.71 </font>
<HR SIZE=5 COLOR=GRAY NOSHADE>




<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CORPORATE
GOVERNANCE</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We operate within a
comprehensive plan of corporate governance for the purpose of defining
responsibilities, setting high standards of professional and personal conduct
and assuring compliance with such responsibilities and standards. We regularly
monitor developments in the area of corporate governance. In July 2002, Congress
passed the Sarbanes-Oxley Act of 2002, which, among other things, establishes,
or provides the basis for, a number of new corporate governance standards and
disclosure requirements. In addition, Nasdaq has recently enacted changes to its
corporate governance and listing requirements which changes have been approved
by the Securities and Exchange Commission. In response to these actions, our
board of directors has initiated the below actions consistent with certain of
the proposed rules. </FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Independent
Directors</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Assuming the election of
all of the nominees at the special meeting and the consummation of the
Transaction at which time the nominees will all be elected to their seats on our
board, a majority of the members of our board of directors will be independent
according to the new NASDAQ Corporate Governance rules. In particular, our board
of directors has in the past evaluated, and our nominating committee will in the
future evaluate, periodically the independence of each member of the board of
directors. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The committee or board
analyzes whether a director is independent by evaluating, among other factors,
the following: </FONT></P>
		<ol>
			<li><font face="Times New Roman, Times, Serif" size="2">Whether the member of the board of directors has any material  relationship  with us, either directly,  or
              as a partner, shareholder or officer of an organization that has a relationship with us;
			<br>
&nbsp;</font></li>
			<li><font face="Times New Roman, Times, Serif" size="2">Whether  the member of the board of  directors  is a current  employee  of ours or was an employee of ours
              within three years preceding the date of determination; <br>
&nbsp;</font></li>
			<li><font face="Times New Roman, Times, Serif" size="2">Whether  the  member  of the  board  of  directors  is,  or in the  three  years  preceding  the  date  of
              determination  has been,  affiliated with or employed by (i) a present  internal or external  auditor
              of ours or any affiliate of such  auditor,  or (ii) any former  internal or external  auditor of ours
              or any affiliate of such auditor,  which  performed  services for us within three years preceding the
              date of determination; <br>
&nbsp;</font></li>
			<li><font face="Times New Roman, Times, Serif" size="2">Whether  the  member  of the  board  of  directors  is,  or in the  three  years  preceding  the  date  of
              determination  has been, part of an interlocking  directorate,  in which an executive officer of ours
              serves on the compensation  committee of another company that  concurrently  employs the member as an
              executive officer; <br>
&nbsp;</font></li>
			<li><font face="Times New Roman, Times, Serif" size="2">Whether the member of the board of directors  receives any  consulting,  advisory,  or other  compensatory
              fee from us,  other  than in his or her  capacity  as a member of our audit  committee,  our board of
              directors  or any other board  committee or fixed  amounts of  compensation  under a retirement  plan
              (including  deferred  compensation  for  prior  service  with us) and  reimbursement  for  reasonable
              expenses  incurred  in  connection  with  such  service  and  for  reasonable   educational  expenses
              associated with board or committee membership matters; <br>
&nbsp;</font></li>
			<li><font face="Times New Roman, Times, Serif" size="2">Whether the member is an executive  officer of ours or owns  specified  amounts of our  securities  -- for
              purposes of this  determination,  a member will not lose his or her independent  status due to levels
              of stock  ownership so long as the member owns 10% or less of our voting  securities  or we determine
              that this member's ownership above the 10% level does not affect his independence;</font></li>
			<li><font face="Times New Roman, Times, Serif" size="2">&nbsp;Whether  an  immediate  family  member  of the  member of the board of  directors  is a current  executive
              officer  of ours or was an  executive  officer  of ours  within  three  years  preceding  the date of
              determination; <br>
&nbsp;</font></li>
			<li><font face="Times New Roman, Times, Serif" size="2">Whether an  immediate  family  member of the member of the board of  directors  is, or in the three  years
              preceding  the  date of  determination  has  been,  affiliated  with or  employed  in a  professional
              capacity by (i) a present  internal or external  auditor of ours or any  affiliate  of ours,  or (ii)
              any former  internal or external  auditor of ours or any affiliate of ours which  performed  services
              for us within three years preceding the date of determination; and
			<br>
&nbsp;</font></li>
			<li><font face="Times New Roman, Times, Serif" size="2">Whether an  immediate  family  member of the member of the board of  directors  is, or in the three  years
              preceding  the date of  determination  has been,  part of an  interlocking  directorate,  in which an
              executive  officer of ours serves on the compensation  committee of another company that concurrently
              employs the immediate family member of the member of the board of directors as an executive officer.
			</font></li>
		</ol>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The above list is not
exhaustive and the committee considers all other factors which could assist it
in its determination that a director has no material relationship with us that
could compromise that director&#146;s independence. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; As a result of this review,
our board of directors affirmatively determined that W. Douglas Pitts, Robert D.
Armstrong, Gustavo R. Benejam and James R. Cast are independent of Devcon and
our management under the standards set forth above. Donald L. Smith, Jr. and
Richard L. Hornsby are considered inside directors because of their employment
as our senior executives. Jose A. Bechara is considered a non-independent
outside director because of transactions we have engaged in with an affiliate of
his; however, he is not seeking re-election to the board. Additional information
regarding these transactions and arrangements between us and Mr. Bechara&#146;s
affiliates can be found under &#147;Certain Relationships and Related
Transactions&#148; on page 55. Mr. Cast was determined to be independent in
accordance with the Nasdaq rules and regulations concerning independence, but
not in accordance with the independence rules and regulations enacted by the
Securities and Exchange Commission under the Sarbanes-Oxley Act of 2004 for
membership on our audit committee due to specified fees Mr. Cast has received
from us and our affiliates for work conducted for us outside of his role as a
director. Mr. Armstrong was determined to be independent in accordance with the
Nasdaq rules and regulations concerning independence and in accordance with the
independence rules and regulations enacted by the Securities and Exchange
Commission under the Sarbanes-Oxley Act of 2004, notwithstanding specified
transactions Mr. Armstrong and affiliates of his have conducted with us, the
amount of our common stock owned by Mr. Armstrong (approximately 12% as of the
record date) and specified investments Mr. Armstrong has made with us due to our
board&#146;s determination that these activities had not affected Mr.
Armstrong&#146;s independence coupled with Mr. Armstrong&#146;s significant
experience with construction companies in the Caribbean which provided input our
board deemed important to the operations of our audit committee. As a result of
this analysis Messrs. Cast, Smith, Hornsby, Rochon and Ferrari are precluded
from sitting on our audit committee. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Also, under this same
analysis, our board of directors affirmatively determined that, if elected to
the board by our shareholders, Richard C. Rochon and Mario B. Ferrari will be
considered non-independent outside directors because of their relationship with
Coconut Palm, while Per-Olof L&ouml;&ouml;f&nbsp; will be considered an independent director. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our non-management
directors hold meetings, separate from management, and intend to continue
holding such meetings at least 2 times a year. </FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Audit
Committee</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Our audit committee is
comprised of three non-employee members of our board of directors. After
reviewing the qualifications of the current members of our audit committee, and
any relationships they may have with us that might affect their independence
from us, our board of directors has determined that: </FONT></P>

		<blockquote>
			<ol>
				<li><font face="Times New Roman, Times, Serif" size="2">all current  committee  members are  "independent"  as that concept is defined in the applicable  rules of Nasdaq and the Securities and Exchange Commission,

				<br>
&nbsp;</font></li>
				<li><font face="Times New Roman, Times, Serif" size="2">all current committee members are financially literate, and
				<br>
&nbsp;</font></li>
				<li><font face="Times New Roman, Times, Serif" size="2">Mr. Gustavo R. Benejam  qualifies as an "audit committee  financial  expert" under the applicable rules of
the  Securities  and  Exchange  Commission.  In making the  determination  as to Mr.  Benejam's  status as an audit
committee  financial expert, our board of directors  determined he has accounting and related financial  management
expertise within the meaning of the aforementioned rules as well as the listing standards of Nasdaq.
				</font></li>
			</ol>
		</blockquote>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Assuming our shareholders
elect all of the directors nominated for election at the special meeting,
beginning immediately after the special meeting, three members of our board of
directors will meet the appropriate tests for independence according to SEC
rules. KPMG LLP, our independent auditors, reports directly to the audit
committee. Any allowable work to be performed by KPMG LLP outside of the scope
of the regular audit will be pre-approved by the audit committee. The audit
committee will not approve any work to be performed that is in violation to the
Securities Exchange Act of 1934, as amended. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The audit committee,
consistent with the Sarbanes-Oxley Act of 2002 and the rules adopted thereunder,
meets with management and the auditors prior to the filing of officers&#146;
certifications with the SEC to receive information concerning, among other
things, significant deficiencies in the design or operation of internal
controls. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The audit committee has
through the Code of Ethical Conduct enabled confidential and anonymous reporting
of improper activities directly to the audit committee. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The audit committee is
governed by a charter which is available on our website at www.devc.com. A copy
of this charter may be obtained for no cost upon request from our Corporate
Secretary. Our internet website and the information contained in it are not
incorporated into this proxy statement. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Please refer to the audit
committee report, which is set forth on page 48, for a further description of
the audit committee&#146;s responsibilities and its recommendation with respect
to our audited consolidated financial statements for the year ended December 31,
2003. </FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Compensation
Committee</FONT></H1>

         &nbsp;&nbsp; <font face="Times New Roman, Times, Serif" size="2">&nbsp;Two of the  existing  members  of our  compensation  committee,  Messrs.  Cast and  Pitts  are  considered
independent  under Nasdaq's  independence  rules.  The third member,  Mr.  Bechara,  is not considered  independent
under Nasdaq's  independence  rules.  Although Mr.  Bechara is not  independent as that term is defined by Nasdaq's
independence  rules,  our board of directors has  determined  that Mr.  Bechara's  membership  on the  compensation
committee is required by our best  interests  and the best  interests of our  shareholders  taking into account the
benefit to us of the continuity of leadership  and  experience  (both in the industry and with us) that Mr. Bechara
can provide to the compensation  committee.  Mr. Bechara is not seeking  re-election to the board and, effective as
of the date of the special meeting,  Mr. Bechara's seat on the board will be filled by
Per-Olof L&ouml;&ouml;f&nbsp; if he is elected to the board by our shareholders. We
anticipate L&ouml;&ouml;f will serve on the  compensation
committee to fill the vacancy left by Mr. Bechara. </font>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; This committee is governed by
a charter which is available on our website at www.devc.com. A copy of this
charter may be obtained for no cost upon request from our Corporate Secretary.
Our internet website and the information contained in it are not incorporated
into this proxy statement. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Please refer to the
compensation committee report, which is set forth on page 47, for a further
description of the compensation committee&#146;s responsibilities and its
compensation philosophy and a description of considerations underlying each
component of compensation paid to our executive officers for 2003. </FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Nominating
Committee and Procedures</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The three existing members
of our nominating committee are considered independent under Nasdaq&#146;s
independence rules. The nominating committee did not hold any meetings in 2003
and, instead, the board of directors fulfilled the responsibilities and performed
the functions of the nominating committee, including the nomination of each of
the individuals being submitted to our shareholders for election to the board of
directors at the special meeting; however, where appropriate or required by
applicable law and the rules and regulations of Nasdaq, the independent members
of the board of directors performed the role and responsibilities of the
nominating committee. In the future, the nominating committee shall fulfill
these responsibilities. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The nominating committee
will consider candidates for board membership suggested by its members and other
board members, as well as management and shareholders. This committee will also
have the sole authority to retain and to terminate any search firm to be used to
assist in identifying candidates to serve as trustees from time to time. A
shareholder who wishes to recommend a prospective nominee for the board should
notify our Corporate Secretary or any member of our nominating committee in
writing with whatever supporting material the shareholder considers appropriate.
The nominating committee will also consider whether to nominate any person
nominated by a shareholder under the provisions of our bylaws relating to
shareholder nominations as described in &#147;Information Concerning Shareholder
Proposals&#148; on page 58. The nominating committee will not solicit director
nominations. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Once the nominating
committee has identified a prospective nominee, the committee will make an
initial determination as to whether to conduct a full evaluation of the
candidate. This initial determination is based on the information provided to
the committee with the recommendation of the prospective candidate, as well as
the committee&#146;s own knowledge of the prospective candidate, which may be
supplemented by inquiries to the person making the recommendation or others. The
preliminary determination is based primarily on the need for additional board
members to fill vacancies or expand the size of our board and the likelihood
that the prospective nominee can satisfy the evaluation factors described below.
If the committee determines, in consultation with the Chairman of the Board and
other board members as appropriate, that additional consideration is warranted,
it may request a third-party search firm to gather additional information about
the prospective nominee&#146;s background and experience and to report its
findings to the committee. The committee will then evaluate the prospective
nominee against the standards and qualifications set out by the nominating
committee for board membership. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The committee will also
consider other relevant factors as it deems appropriate, including the current
composition of the board, the balance of management and independent trustees,
the need for audit committee expertise and the evaluations of other prospective
nominees. In connection with this evaluation, the committee will determine
whether to interview the prospective nominee, and if warranted, one or more
members of the committee, and others as appropriate, will interview prospective
nominees in person or by telephone. After completing this evaluation and
interview, the committee will make a recommendation to the full board as to the
persons who should be nominated by the board, and the board will determine the
nominees after considering the recommendation and report of the committee. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; This committee is governed
by a charter which is available on our website at www.devc.com. A copy of this
charter may be obtained for no cost upon request from our Corporate Secretary.
Our internet website and the information contained in it are not incorporated
into this proxy statement. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; While there are no formal
procedures for shareholders to recommend nominations beyond those set forth on
page 58 of this proxy statement, our board of directors will consider
shareholder recommendations. These recommendations should be addressed to the
Chairman of our nominating committee who will submit these nominations to the
independent members of our board of directors for review. </FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Code of
Ethical Conduct</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; We have adopted a Code of
Ethical Conduct that includes provisions ranging from restrictions on gifts to
conflicts of interest. All employees are bound by this Code of Ethical Conduct,
violations of which may be reported to the audit committee. The Code of Ethical
Conduct includes provisions applicable to our senior executive officers
consistent with the Sarbanes-Oxley Act of 2002. This Code of Ethical Conduct is
available on our website (www.devc.com). We intend to post on our website
amendments to or waivers from our Code of Ethical Conduct. </FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Personal
Loans to Executive Officers and Directors</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; We comply with and will
operate in a manner consistent with recently enacted legislation prohibiting
extensions of credit in the form of a personal loan to or for our directors and
executive officers. For information on arrangements we currently have in place,
see &#147;Certain Relationships and Related Transactions&#148; on page&#160;55. </FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Communications
with Shareholders</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; We have no formal policy
regarding attendance by our directors at annual shareholders meetings, although
most of our directors have historically attended those meetings. Each of our
seven directors attended the 2003 Annual Meeting of Shareholders. Anyone who has
a concern about Devcon&#146;s conduct, including accounting, internal accounting
controls or audit matters, may communicate directly with the Chairman of our
board of directors, our non-management directors or the audit committee. Such
communications may be confidential or anonymous, and may be e-mailed, submitted
in writing or reported by phone to special addresses and a toll-free phone
number that will be published on our website at www.devc.com. All such concerns
will be forwarded to the appropriate directors for their review, and will be
simultaneously reviewed and addressed by our chief financial officer in the same
way that other concerns are addressed by us. Our Code of Ethical Conduct
prohibits any employee from retaliating or taking any adverse action against
anyone for raising or helping to resolve an integrity concern. </FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; We lease a 1.8-acre parcel
of real property in Deerfield Beach, Florida from the wife of Mr. Donald L.
Smith, Jr., our Chairman, Chief Executive Officer and President. Annual rent on
the property was $95,400 in both 2003 and 2002 and $49,303 in 2001. The lease
was renewed for five years beginning January 1, 2002 with an annual rent of
$95,400. The rent was based on comparable rental prices for similar properties
in Deerfield Beach. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; At December 31, 2003, we
had a note payable of $2.1 million to Mr. Smith resulting from various advances
made to us in previous years, to provide long-term financing to us and security
for a payment-guarantee issued by Mr. Smith on behalf of an entity in the
Bahamas. The note is unsecured and bears interest at the prime rate. Presently,
$300,000 dollars is due on demand and $1.8 million is due on July 1, 2005. We
believe that these terms are similar to what we would be able to achieve if we
were to borrow this money from a bank. Our board of directors approved this
transaction. Mr. Smith has the option to make the note due on demand should a
&#147;Change of Control&#148; occur. A Change of Control has occurred if a
person or group acquires 15 percent or more of the common stock or announces a
tender offer that, if successful, would result in ownership by a person or group
of 15 percent or more of our common stock. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; At December 31, 2003, we
had an investment and advances totaling $186,000, representing a 1.2 percent
interest in a real estate joint venture in the Bahamas in which Mr. Smith and
Mr. Armstrong, a director, participate with an equity interest of 11.3 and 1.55
percent, respectively. The investment is carried at cost; accordingly no income
or loss has been recorded from this investment. We have a $29.7 million contract
with the venture to perform land preparation services. In connection with this
contract, we recorded revenue of $4.9 million during 2003. The backlog on the
contract as of December 31, 2003 was $288,000. As of January 1, 2003, we entered
into an agreement with the partnership to defer payment of 50% of our regular
contract billings issued for work from September, 2002 and onwards, up to a
maximum amount of $2.5 million. The total deferral is $2.4 million. Mr. Smith
has personally guaranteed the $2.4 million deferral, subject to exhaustion by us
of all other remedies. The deferral of payment is for three years from the date
invoices become due. Interest of eight percent annually will accrue and become
payable at maturity. Mr. Smith has also guaranteed $270,000 for work done in
December 2003 to be paid by June 1, 2004. As of December 31, 2003, we had trade
and note receivables from the venture of approximately $3.4 million and the cost
and estimated earnings in excess of billings was $269,000. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Our joint venture
subsidiary in Puerto Rico has transactions with the joint venture partners. A
company controlled by one of the partners provides drilling and blasting
services for our quarry in Guaynabo. The price for the services is negotiated
periodically, primarily by comparison to the cost of performing that work by us.
In 2001, the subsidiary entered into a 36-month lease agreement for equipment
located in the Aguadilla facility with another company controlled by this
partner. The agreement also contains an option to buy the equipment. The price
of the lease and the sales price of the equipment were negotiated between the
parties at arm&#146;s length. There are no clear comparable prices in the market
place and no third party evaluation of the fairness of the transaction was
completed. The subsidiary will recuperate its recorded book value of the assets,
should the purchase option be exercised. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The same subsidiary sells a
significant portion of its products to a company controlled by another joint
venture partner. In 2003, our subsidiary&#146;s revenue from these sales was
$2.5 million. This partner is controlled by one of our directors -- Jose A.
Bechara, Jr., Esq. The price of the products is governed by firm supply
agreements, renegotiated every other year. Comparable prices from other quarries
are studied and used in the price negotiation. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; As of December 31, 2002,
other assets included amounts due from our officers as a result of payments made
by us pursuant to a split-dollar life insurance plan. In December 2003, the
split-dollar life insurance agreements were cancelled and we were repaid the
amounts owed. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; We purchased from our Chief
Financial Officer, Jan A. Norelid, in a private transaction in May 2002, 11,400
shares of our common stock at the prevailing market rate. The total payment was
$74,000. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; We purchased from Robert A.
Steele, who at the time was a director of ours, in a private transaction in
April 2003, 12,000 shares of our common stock at the prevailing market rate. The
total payment was $82,000. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; We employ William H. Ladd,
a brother-in-law to Donald L. Smith, III, as manager for our operations on the
island of Sint Maarten/St. Martin. Mr. Ladd received annual compensation of
$98,432, including bonuses, compensation from exercise of stock options and a
car allowance. We also provide Mr. Ladd temporary living expenses while working
on the island. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; We own a 50% interest in
ZSC South, a joint venture, which currently owns one parcel of vacant land in
South Florida. Mr. W. Douglas Pitts, a director, owns a 5% interest in the joint
venture; Courtelis Company, manages the joint venture&#146;s operations and Mr.
Pitts is the President of Courtelis Company. ZSC South sold a parcel of land in
June 2003 and we recognized net earnings of $116,000 from that transaction. At
the time of sale, Mr. Pitts or an affiliate of his in which he owns a 50%
interest received a real estate commission of $13,000. </FONT></P>

         <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;

         Mr.  James R. Cast, a director,  has a tax and  consulting  practice,  which  provides  services to us and
privately to Mr.  Donald  Smith,  Jr. We paid Mr. Cast $58,000 and $35,000 for his services to us in 2003 and 2002,
respectively. Mr. Smith paid Mr. Cast $21,000 and $19,000 for his services in 2003 and 2002, respectively.

		</font>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; We sell products to
corporations controlled by Mr. Robert D. Armstrong. The amount of products sold
is less than 5% of our gross receipts. We purchase products from corporations
controlled by Mr. Armstrong. Corporations controlled by Mr. Armstrong sometimes
offer to sell asphalt to customers in St. Croix to whom we may also quote
concrete and aggregate products in competition with the asphalt. We also
sometimes compete for construction contracts with corporations controlled by Mr.
Armstrong. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; We have entered into a
retirement agreement with Mr. Richard L. Hornsby, Senior Vice President and
director, who will retire from all positions with us at the end of 2004. During
2005 he will still receive his full salary and beginning 2006 he will receive
annual payments of $32,000, for as long as he lives. During 2003, we recorded an
expense of $232,000 for services rendered; this amount will be paid out in 2005.
We will expense, the net present value of the obligation to pay Mr. Hornsby
$32,000 annually for life, over his estimated remaining service period with us,
i.e. during 2004. The net present value of the future obligation is presently
estimated at $313,000. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Our policies and codes
provide that related party transactions be approved in advance by either the
audit committee or a majority of disinterested directors. As indicated, we have
a $29.7 million construction contract with an entity in the Bahamas in which
Messrs.&#160;Smith and Armstrong are minority shareholders. During the year, a
subsidiary of ours commenced certain additional work for this entity for it
which it has billed or is billing approximately $1.5 million, of which $510,000
has been paid through March 15, 2004. We did not obtain audit committee approval
prior to doing the additional work. Subsequently, the audit committee has
reviewed the work and determined that the terms and conditions under which we
entered into such work were similar to the terms and conditions of work we have
agreed to perform for unrelated third parties. In addition to the guarantee
Mr.&#160;Smith has provided with respect to earlier work for this entity as
described above, Mr.&#160;Smith has guaranteed $270,000 of the amount due for
this work. Taking into consideration the amount paid for this work, offsets
available to us, Mr.&#160;Smith&#146;s guarantee and other factors, we believe
that this work will be profitable for us. </FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>INDEPENDENT
AUDITORS</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The firm of KPMG LLP,
independent certified public accountants, has been our auditor since 1980 and
has advised us that the firm does not have any direct financial interest or
indirect financial interest in us or any of our subsidiaries, nor has this firm
had any such interest in connection with us or our subsidiaries during the past
four years, other than in its capacity as our independent certified public
accountant. Our board of directors, on the recommendation of our audit
committee, has reappointed KPMG LLP as our auditor for the year ended December
31, 2004. One or more representatives of KPMG LLP are expected to be present at
the special meeting, and will have the opportunity to make a statement if they
desire to do so, and are expected to be available to respond to appropriate
questions from our shareholders. The audit committee will pre-approve any
services to be provided by KPMG LLP, which will only be audit services and
permissible non-audit services. </FONT></P>

		<b><font face="Times New Roman, Times, Serif" size="2">Audit Fees

</font></b>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The aggregate fees billed
by KPMG LLP for audit and review of our financial statements was $248,000 for
each of 2003 and 2002. </FONT></P>

		<b><font face="Times New Roman, Times, Serif" size="2">Audit-Related Fees; Tax Fees; Financial Information Systems Design and Implementation Fees; All Other Fees

		</font></b>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; KPMG LLP did not provide
any consulting services, audit-related services or services related to tax
issues, financial information systems design and implementation or any other
matter, except for audit fees, during 2003 or 2002. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; All audit-related services,
tax services and other services were pre-approved by the audit committee, which
concluded that the provision of these services by KPMG was compatible with the
maintenance of that firm&#146;s independence in the conduct of its auditing
functions. The audit committee&#146;s charter provides the audit committee has
authority to pre-approve all audit and allowable non-audit services to be
provided to us by our outside auditors. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; In its performance of these
responsibilities, prior approval of some non-audit services is not required if: </FONT></P>

         <font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

         (i) these  services  involve no more than 5% of the revenues paid by us to the auditors  during the fiscal
year;

         </font>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)  these  services  were  not  recognized  by us to be  non-audit  services  at the  time of the  audit
engagement, and</font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

         (iii) these  services are promptly  brought to the  attention of the audit  committee  and are approved by
the audit committee prior to completion of the audit for that fiscal year.
		</font></p>
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The audit committee is
permitted to delegate the responsibility to pre-approve audit and non-audit
services to one or more members of the audit committee so long as any decision
made by that member or those members is presented to the full audit committee at
its next regularly scheduled meeting. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The audit committee
annually reviews the performance of the independent auditors and the fees
charged for their services. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The audit committee of our
board of directors has considered whether the provision of the above-described
services is compatible with maintaining KPMG&#146;s independence and believes
the provision of such services is not incompatible with maintaining this
independence. </FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>OTHER
BUSINESS</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Our board of directors
knows of no other business to be brought before the special meeting. If,
however, any other business should properly come before the special meeting, the
persons named in the accompanying proxy will vote proxies as in their discretion
they may deem appropriate, unless they are directed by a proxy to do otherwise.
Discretionary authority to vote on such matters is conferred only by the
granting of such proxies. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; A copy of our 2004 Annual
Report on Form 10-K for the fiscal year ended December&#160;31, 2003, as filed
with the Securities and Exchange Commission, except for exhibits, accompanies
this proxy statement and is incorporated in this proxy statement by reference.
Upon request, we will provide copies of the exhibits to its Form 10-K at no
additional cost. All requests should be directed to our Corporate Secretary at
1350 East Newport Center Drive, Suite 201, Deerfield Beach, Florida 33442. </FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>INFORMATION
CONCERNING SHAREHOLDER PROPOSALS</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Any shareholder who intends
to present a proposal at our 2005 Annual Meeting of Shareholders and who wishes
to have their proposal included in our proxy statement for that meeting, must
deliver the proposal, not exceeding 500 words in length, to our Corporate
Secretary in writing not later than December 17, 2004. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; Under our bylaws,
nominations for director may be made only by our board of directors or a
committee of our board of directors, or by a shareholder entitled to vote who
delivers notice to us not less than 120 days nor more than 180 days prior to the
first anniversary of the date of the notice of the preceding year&#146;s annual
meeting. For our meeting in the year 2005, we must receive this notice no sooner
than October 18, 2004, and no later than December 17, 2004. Our board of
directors will consider nominations, which are timely received. A copy of the
full text of the bylaws discussed above may be obtained by writing to our
Corporate Secretary at 1350 East Newport Center Drive, Suite 201, Deerfield
Beach, Florida 33442. </FONT></P>

                                                          <p align="right">
															<font face="Times New Roman, Times, Serif" size="2">By Order of the Board of Directors,&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
															<br>
															//s/Donald L. Smith, Jr.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
															<br>
															Donald L. Smith, Jr.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
															<br>
&nbsp;Chairman, Chief Executive Officer <br>
															and President</font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;Deerfield Beach, Florida<br>
&nbsp;April 16, 2004




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		</font></p>
<HR SIZE=5 COLOR=GRAY NOSHADE>


                                                        A-3


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ANNEX A</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Fairness
Opinion</FONT></H1>

A<font face="Times New Roman, Times, Serif" size="2">pril 1, 2004<br>
		<br>


Board of Directors <br>
		Devcon International Corp.<br>
&nbsp;1350 East Newport Center Drive
<br>
		Deerfield Beach, FL  33442

<br>
		<br>
		Gentlemen: </font>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We have been advised that
Devcon International Corp. (the &#147;Company&#148;) is contemplating a
transaction (the &#147;Transaction&#148;) whereby Coconut Palm Capital Investors
I, Ltd., and its assigns (&#147;Palm&#148;), will purchase up to 2,000,000 Units
(as defined hereinafter) for a purchase price of $9.00 per Unit (the
&#147;Purchase Price&#148;), each &#147;Unit&#148; comprised of (i) one share of
the Company&#146;s common stock (the &#147;Shares&#148;), and (ii) (a) warrants
(the &#147;First Tranche Warrants&#148;) to purchase one share of the
Company&#146;s common stock for each share purchased, at an exercise price of
$10.00 per share, exercisable for a three-year period, (b) warrants (the
&#147;Second Tranche Warrants&#148;) to purchase one share of the Company&#146;s
common stock for each two shares purchased, at an exercise price of $11.00 per
share, exercisable for a four-year period, and (c) warrants (the &#147;Third
Tranche Warrants&#148; and, together with the First Tranche Warrants and the
Second Trance Warrants, the &#147;Warrants&#148;) to purchase one share of the
Company&#146;s common stock for each two shares purchased, at an exercise price
of $15.00 per share, exercisable for a five-year period. We have been retained
to render an opinion as to whether, on the date of such opinion, the Transaction
is fair, from a financial point of view, to the Company&#146;s shareholders. For
purposes of the Transaction, the Purchase Price is comprised of $8.67
attributable to the Shares (the &#147;Share Consideration&#148;) and $0.33
attributable to the Warrants. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We have not been requested
to opine as to, and our opinion does not in any manner address, the underlying
business decision of the Company to proceed with or effect the Transaction. In
addition, we have not been requested to explore any alternatives to the
Transaction. Further, our opinion does not address the relative merits of the
Transaction as compared to any alternative business strategy that might exist
for the Company. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In conjunction with the
Transaction, the Company shall adopt and diligently pursue a strategy to
diversify and expand its business and operations into the electronic security
services sector by investing in one or more businesses (the &#147;Proposed
Strategies&#148;). Further, the Company shall use $5,000,000 of its cash
together with the proceeds from the Transaction and from the exercise of the
Warrants to fund such acquisitions. The Company is expected to finance the
Proposed Strategies by accessing the equity and debt capital markets. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In arriving at our opinion,
we took into account an assessment of general economic, market and financial
conditions as well as our experience in connection with similar transactions and
securities valuations generally and, among other things: (i) reviewed the draft
Agreement dated April 1, 2004 by and among the Company and Palm (the &#147;Draft
Agreement&#148;); (ii) reviewed publicly available financial information and
other data with respect to the Company, including the Annual Report on Form 10-K
for the year ended December 31, 2003, and the Proxy Statement on Schedule 14-A,
dated April 28, 2003; (iii) reviewed and analyzed the Transaction&#146;s
financial impact on the Company&#146;s book value and impact on common shares
outstanding; (iv) reviewed and analyzed certain information related to the alarm
security sector of the electronic security industry; (v) reviewed certain
Security Equipment Company, Inc. (&#147;SECco&#148;) unaudited financial and
other data as provided by SECco management; (vi) considered the historical
financial results and present financial condition of the Company; (vii) reviewed
certain publicly available information concerning the trading of, and the
trading market for, the common stock of the Company; (viii) reviewed and
analyzed certain financial characteristics of companies that were deemed to have
characteristics comparable to those of the Company; (ix) reviewed and analyzed
certain financial characteristics of target companies in transactions where such
target company was deemed to have characteristics comparable to those of the
Company; (x) reviewed and analyzed the Company&#146;s free cash flows and
prepared capitalized earnings; (xi) reviewed and analyzed the Company&#146;s
adjusted net book value; (xii) reviewed and analyzed the premium implied by the
Share Consideration; (xiii) reviewed and discussed with representatives of the
management of the Company certain financial and operating information furnished
by them, including financial analyses with respect to the business and
operations of the Company; (xiv) inquired about and discussed the Transaction
and other matters related thereto with Company management and the Board of
Directors; and (xv) performed such other analyses and examinations as were
deemed appropriate. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In arriving at our opinion,
we have relied upon and assumed the accuracy and completeness of all of the
financial and other information that was used by us without assuming any
responsibility for any independent verification of any such information and have
further relied upon the assurances of Company management that it is not aware of
any facts or circumstances that would make any such information inaccurate or
misleading. We have not made a physical inspection of the properties and
facilities of the Company or SECco and have not made or obtained any evaluations
or appraisals of the assets and liabilities (contingent or otherwise) of the
Company or SECco. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>We assumed that the
Transaction will be consummated in a manner that complies in all respects with
the applicable provisions of the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and all other applicable federal
and state statues, rules and regulations. We assumed that the Transaction will
be consummated substantially in accordance with the terms set forth in the Draft
Agreement, without any further amendments thereto, and without waiver by the
Company of any of the conditions to any obligations or in the alternative that
any such amendments, revisions or waivers thereto will not be detrimental to the
shareholders of the Company. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our opinion is necessarily
based upon market, economic and other conditions, as they exist on, and could be
evaluated as of April 1, 2004. Accordingly, although subsequent developments may
affect our opinion, we do not assume any obligation to update, review or
reaffirm our opinion. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The opinion is for the use
and benefit of the Board of Directors in connection with its consideration of
the Transaction and is not intended to be and does not constitute a
recommendation to any shareholder of the Company as to how such shareholder
should vote in connection with the Transaction, if such a vote is required. We
do not express any opinion as to the underlying valuation or future performance
of the Company or the price at which the Company&#146;s common stock would trade
at any time in the future. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Based upon and subject to
the foregoing, it is our opinion that, as of the date of this letter, the
Purchase Price is fair, from a financial point of view, to the Company&#146;s
shareholders. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>In connection with our
services, we have previously received a retainer and will receive the balance of
our fee upon the rendering of this opinion. In addition, the Company has agreed
to indemnify us for certain liabilities that may arise out of the rendering this
opinion. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Our opinion is for the use
and benefit of the Board of Directors and is rendered in connection with its
consideration of the Transaction and may not be used by the Company for any
other purpose or reproduced, disseminated, quoted or referred to by the Company
at any time, in any manner or for any purpose, without the prior written consent
of Capitalink, except that this opinion may be reproduced in full in, and
references to the opinion and to Capitalink and its relationship with the
Company may be included in filings made by the Company with the Securities and
Exchange Commission if required by Securities and Exchange Commission rules, and
in any proxy statement or similar disclosure document disseminated to
shareholders if required by the Securities and Exchange Commission rules. </FONT></P>

Very truly yours,


<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>/s/
Capitalink, L.C.</FONT></H2>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CAPITALINK,
L.C.</FONT></H2>


<!-- MARKER PAGE="sheet: 10; page: 10" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>


                                                        &nbsp;<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ANNEX B</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Articles of
Amendment</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ARTICLES OF AMENDMENT<br>
TO<br>
<br>
ARTICLES OF INCORPORATION<br>
of<br>
DEVCON
INTERNATIONAL CORP.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Pursuant to the provisions
of Section 607.1006 of the Florida Business Corporation Act (the
&#147;Act&#148;), the undersigned corporation adopts the following
Articles of Amendment to its Articles of Incorporation: </FONT></P>

         <font face="Times New Roman, Times, Serif" size="2"><b>FIRST</b>:   The name of the corporation is DEVCON INTERNATIONAL CORP. (the "Corporation").
                                                                                  -----------
		</font>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>SECOND</b>: The
Amendments to the Articles of Incorporation of the Corporation set forth below
(the &#147;Amendments&#148;) were adopted by all of the Directors of the
Corporation at a meeting duly called and held on March 31, 2004, and approved by
the shareholders of the Corporation voting as a class, the number of votes cast
being sufficient for approval, at a meeting duly called and held on May 10,
2004, in the manner prescribed by Section 607.1003 of the Act. </FONT></P>

         <font face="Times New Roman, Times, Serif" size="2"><b>THIRD</b>:   The text of the Amendments are as follows:

                  </font>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; (i)      Article III of the Articles of  Incorporation  of the  Corporation  shall be amended and
restated in its entirety to read as follows: </font></p>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;ARTICLE
III</FONT></H1>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
capital stock of the corporation shall consist of 50,000,000 shares of common
stock, par value $.10 per share. All of said stock shall be payable in cash,
property, real or personal, labor or services in lieu of cash, at a just
valuation to be fixed by the Board of Directors of this corporation.&#148; </FONT>
</TD>
</TR>
</TABLE>
<BR>

                  &nbsp;&nbsp;&nbsp;

                  (ii)     Article V of the  Articles  of  Incorporation  of the  Corporation  shall be amended and
restated in its entirety to read as follows:

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&#147;ARTICLE
V</FONT></H1>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
business of the corporation shall be managed by its Board of Directors, which
shall consist of at least five (5) members, with the exact number to be
specified by the Board of Directors from time to time by amendment to the bylaws
of the corporation or by resolution passed by the Board of Directors.&#148; </FONT>
</TD>
</TR>
</TABLE>
<BR>

         <font face="Times New Roman, Times, Serif" size="2"><b>FOURTH</b>:  Except as hereby  amended,  the Articles of  Incorporation  of the  Corporation  shall remain the
same.

         <br>
		<b>FIFTH</b>:   The effective date of this amendment to the Articles of  Incorporation  of the Corporation  shall
be upon the filing of these Articles of Amendment to Articles of Incorporation.
		</font>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>IN WITNESS WHEREOF</b>,
the Corporation has caused these Articles of Amendment to Articles of
Incorporation to be signed in its name by its Chairman of the Board, President
and Chief Executive Officer as of the ___ day of May, 2004. </FONT></P>

                                                     &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
		<font face="Times New Roman, Times, Serif" size="2"><b>&nbsp;DEVCON INTERNATIONAL CORP.</b></font><p>
		<font face="Times New Roman, Times, Serif" size="2"><b>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;



                                                     By:_______________________________________
                                                          <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Donald L. Smith, Jr.<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
                                                          Chairman, President and Chief Executive Officer





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		</b></font></p>
<HR SIZE=5 COLOR=GRAY NOSHADE>


                                                        C-6


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ANNEX C</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Audit
Committee Charter</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Charter of
the Audit Committee of the Board of Directors</FONT></H1>

         I.       Audit Committee Purpose

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH="94%"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
Audit Committee is appointed by the Board of Directors to assist the Board in
fulfilling its oversight responsibilities. The Audit Committee&#146;s purpose is
to oversee the accounting and financial reporting process of the Company and
audits of the Company&#146;s financial statements. The Audit Committee&#146;s
primary duties and responsibilities are to:</FONT></TD>
</TR>
</TABLE>
<BR>

		<ul>
			<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;Monitor the integrity of the Company&#146;s financial reporting process and
systems of internal controls regarding finance, accounting, legal and regulatory
compliance. <br>
&nbsp;</FONT></li>
			<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Monitor the independence and performance of the Company&#146;s independent
auditors and the Company&#146;s internal audit function, if any. <br>
&nbsp;</FONT></li>
			<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Provide an avenue of
communication among the independent auditors and management. <br>
&nbsp;</FONT></li>
			<li><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Have the sole authority
to appoint, determine funding for, and oversee the outside auditors. </FONT>
			</li>
		</ul>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
Audit Committee shall prepare reports that the Securities and Exchange
Commission (the &#147;SEC&#148;) rules require (Item 306 of Regulation S-K and
such other reports as the SEC may mandate) to be included in the Company&#146;s
annual proxy statement or other disclosure documents.</FONT></TD>
</TR>
</TABLE>
&nbsp;<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
Audit Committee has the authority to conduct any investigation appropriate to
fulfilling its responsibilities, and it has direct access to the existing
independent auditors, as well as anyone in the organization. The Audit Committee
has the ability to retain, at the Company&#146;s expense, special legal,
accounting, or other appropriate consultants or experts it deems necessary in
the performance of its duties.</FONT></TD>
</TR>
</TABLE>
		<font face="Times New Roman, Times, Serif" size="2">
<BR>

         II.      Audit Committee Composition, Qualifications and Meetings

<br>
&nbsp;</font><TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Audit
Committee members shall meet the requirements of Nasdaq. The Audit Committee
shall be comprised of three or more directors selected by the Board, each of
whom shall be determined by the Board to be &#147;independent.&#148; All members
of the Committee shall have a basic understanding of finance and accounting and
be able to read and understand fundamental financial statements, and meet the
experience requirements of Nasdaq, the Exchange Act and the rules and
regulations of the SEC. At least one member of the Committee shall have
accounting or related financial management expertise, and be an &#147;Audit
Committee Financial Expert&#148; under the requirements of the Exchange Act and
the rules and regulations of the SEC, it being understood that there shall not
be imposed upon any member who is designated or identified as a &#147;Audit
Committee Financial Expert&#148; any duties, obligations or liability that is
greater than the duties, obligations and liability imposed on such person as a
member of the Audit Committee or the Board of Directors in the absence of such
designation or identification. In the event that the board determines there is
no person on the Audit Committee that it considers to be an &#147;Audit
Committee Financial Expert&#148; then this shall be disclosed in the
Company&#146;s proxy, until an &#147;Audit Committee Financial Expert&#148; has
been identified on the Audit Committee. No member of the Audit Committee may
serve on the audit committee of more than three public companies, including the
Company, unless the Board of Directors (1)&#160;determines that such
simultaneous service would not impair the ability of such member to effectively
serve on the Audit Committee and (2)&#160;discloses such determination in the
Company&#146;s annual proxy statement.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Audit
Committee members shall be appointed by the Board. If an audit committee Chair
is not designated, the members of the Committee may designate a Chair by
majority vote of the Committee membership. The Chairman will chair all regular
sessions of the Audit Committee and set the agendas for Audit Committee
meetings.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
Committee shall meet at least four times annually, or more frequently as
circumstances dictate. The Audit Committee Chair shall prepare and/or approve an
agenda in advance of each meeting. As part of its goal to foster open
communication, the Audit Committee shall periodically meet separately with each
of management, the director of the internal auditing department, if any, and the
independent auditors (including in separate executive sessions as the Audit
Committee may see fit) to discuss any matters that the Audit Committee or any of
these groups believe would be appropriate to discuss privately. The Chairman of
the Board or any member of the Audit Committee may call meetings of the Audit
Committee. All meetings of the Audit Committee may be held telephonically. In
addition, the Committee, or at least its Chair, should communicate with
management and the independent auditors&#146; quarterly to review the
Company&#146;s financial statements and significant findings based upon the
auditors limited review procedures.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
All
non-management directors who are not members of the Audit Committee may attend
meetings of the Audit Committee, but may not vote. In addition, the Audit
Committee may invite to its meetings any director, member of management of the
Company and such other persons as it deems appropriate in order to carry out its
responsibilities. The Audit Committee may also exclude from its meetings any
persons it deems appropriate in order to carry out its responsibilities.</FONT></TD>
</TR>
</TABLE>
<BR>

         <font size="2">III.     Audit Committee Compensation

</font>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Subject
to further limitations imposed by law, regulation or the rules of Nasdaq, no
member of the Audit Committee shall receive compensation other than
director&#146;s fees for service as a director of the Company, including
reasonable compensation for serving on the Audit Committee and regular benefits
that other directors receive.</FONT></TD>
</TR>
</TABLE>
<BR>

         <font size="2">IV.      Audit Committee Responsibilities and Duties

		</font>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
It
is the fundamental policy of the Company that the independent auditor of the
Company shall report directly to the Audit Committee. Accordingly, the
authority, duties and responsibilities of the Audit Committee set forth in this
Charter shall be construed in a manner so as to effectuate such policy.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
authority, duties and responsibilities of the Audit Committee described below
shall serve as a guide with the understanding that the Audit Committee may
determine to carry out additional functions and adopt additional policies and
procedures as may be appropriate in light of changing business, legislative,
regulatory, legal, or other conditions. The Audit Committee shall also carry out
any other duties and responsibilities delegated to it by the Board of Directors
from time to time related to the purposes of the Audit Committee outlined in
this Charter. The Audit Committee may perform any functions it deems appropriate
under applicable law, rules, or regulations, the Company&#146;s by-laws, and the
resolutions or other directives of the Board, including review of any
certification required to be reviewed in accordance with applicable law or
regulations of the SEC.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
In
discharging its duties, the Audit Committee is empowered to study or investigate
any matter of interest or concern that the Audit Committee deems appropriate.
Furthermore, in fulfilling its duties, the Audit Committee shall have the
authority to retain, without seeking Board approval, outside legal, accounting
or other advisors for this purpose, including the authority to approve the terms
of retention of, and to cause the Company to pay the fees payable to, such
advisors.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
Audit Committee shall be given full access to the Company&#146;s internal audit
group, if any, Board of Directors, corporate executives, and independent
accountants as necessary to carry out these responsibilities. While acting
within the scope of its stated purpose, the Audit Committee shall have all the
authority of the Board of Directors, except as otherwise limited by applicable
law. While the internal auditor, if any, shall report on a day-to-day basis to
the Company&#146;s Chief Financial Officer, the Audit Committee shall have
overall oversight of the internal audit function, including authority over the
hiring and termination of the internal auditor, his or her salary or
compensation, the internal audit group&#146;s budget, as well as the right to
receive reports from the internal auditor. It shall be the Company&#146;s policy
that the internal auditor may report directly to the Audit Committee if he or
she believes that a matter so requires.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Notwithstanding
the foregoing, the Audit Committee is not responsible for certifying the
Company&#146;s financial statements or guaranteeing the independent
auditor&#146;s report. The fundamental responsibility for the Company&#146;s
financial disclosures rests with management and the Company&#146;s independent
auditors.</FONT></TD>
</TR>
</TABLE>
<BR>

         <font face="Times New Roman, Times, Serif" size="2">The Audit Committee, to the extent it deems necessary and appropriate, shall:</font><p>
		<font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;
		<u>Documents/Reports Review
         </u><br>
&nbsp;&nbsp;&nbsp; 1.       Discuss  with  management  and  the  independent  auditors  prior  to  public  dissemination  the
Company's  annual  audited  financial  statements  and  quarterly  financial  statements,  including  the Company's
disclosures  under  "Management's  Discussion and Analysis of Financial  Condition and Results of  Operations"  and
discuss with the independent  auditors the matters required to be discussed by Statement of Auditing  Standards No.
61 and the results of the audit or any quarterly review procedures.

         </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; 2.       Discuss  with  management  and the  independent  auditors  prior to the  Company's  filing of any
quarterly  or annual  report (a)  whether  any  significant  deficiencies  in the design or  operation  of internal
controls  exist that could  adversely  affect the  Company's  ability  to record,  process,  summarize,  and report
financial  data;  (b) the  existence of any material  weaknesses in the Company's  internal  controls;  and (c) the
existence  of any  fraud,  whether  or not  material,  that  involves  management  or  other  employees  who have a
significant role in the Company's internal controls.

         </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; 3.       Discuss with  management  and the  independent  auditors the Company's  earnings  press  releases
(paying  particular  attention  to the use of any "pro  forma"  or  "adjusted"  non-GAAP  information),  as well as
financial  information  and earnings  guidance  provided to analysts  and rating  agencies.  The Audit  Committee's
discussion in this regard may be general in nature (i.e.,  discussion of the types of  information  to be disclosed
and the type of  presentation  to be made) and need not take  place in  advance  of each  earnings  release or each
instance in which the Company may provide earnings guidance.

         </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; 4.       Discuss  with  management  and the  independent  auditors  the  Company's  major  financial  risk
exposures,  off balance sheet  arrangements and the guidelines and policies by which risk assessment and management
is undertaken, and the steps management has taken to monitor and control risk exposure.

         </font></p>
		<p><u><font face="Times New Roman, Times, Serif" size="2">&nbsp;</font></u><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;
		<u>Independent Auditors
         </u></font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;

         5.       Retain and terminate the Company's  independent  auditors and have the sole  authority to approve
all audit engagement fees and terms as well as all non-audit engagements with the independent auditors.

         </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; 6.       Inform each public  accounting firm performing  audit and audit related work for the Company that
such firm shall report directly to the Audit Committee.</font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;

         7.       Oversee  the work of any  public  accounting  firm  employed  by the  Company  for audit or audit
related  work,  including  the  resolution of any  disagreement  between  management  and the  independent  auditor
regarding financial reporting, for the purpose of preparing or issuing an audit report or related work.</font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp;&nbsp;

         8.       Approve in advance any audit or  non-audit  engagement  or  relationship  between the Company and
the independent  auditors,  other than "prohibited  non-audit  services," as may be specified in the Sarbanes-Oxley
Act of 2002 or applicable  laws or  regulations.  The Audit Committee may delegate to a subcommittee of one or more
members of the Audit Committee the authority to pre-approve audit and permitted non-audit  services,  provided that
any such pre-approvals  shall be presented to the full Audit Committee at its next scheduled  meeting.  "Prohibited
non-audit  services" shall mean those  prohibited  services set forth in Section 10A(g) of the Exchange Act and the
rules and regulations of the SEC thereunder.

         </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; 9.       Review, at least annually, the qualifications,  performance,  and independence of the independent
auditors. In conducting its review and evaluation, the Audit Committee should:

                  </font></p>
		<blockquote>
			<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; (a)      At least  annually,  obtain and  review a report by the  Company's  independent  auditor
describing (i) the auditing  firm's  internal  quality-control  procedures;  (ii) any material issues raised by the
most  recent  internal  quality-control  review,  or peer  review,  of the  auditing  firm,  or by any  inquiry  or
investigation  by  governmental  or professional  authorities,  within the preceding five years,  respecting one or
more  independent  audits carried out by the auditing  firm, and any steps taken to deal with any such issues;  and
(iii) all  relationships  between  the  independent  auditor  and the  Company  in order to  assess  the  auditor's
independence;

                  </font></p>
			<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; (b)      Ensure the  rotation of the lead audit  partner,  concurring  audit  partners  and other
audit partners in accordance with the rules and regulations of the SEC; and

                  </font></p>
			<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; (c)      Take into account the opinions of management  and the Company's  internal  auditors,  if
any (or other personnel responsible for the internal audit function).

         </font></p>
		</blockquote>
		<p><u><font face="Times New Roman, Times, Serif" size="2">Financial Reporting Process
         </font></u></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; 10.      In consultation with the independent  auditors,  management,  and the internal  auditors,  review
the integrity of the Company's financial reporting processes,  both internal and external. In that connection,  the
Audit Committee  should obtain and discuss with management and the independent  auditor reports from management and
the  independent  auditor  regarding (a) all critical  accounting  policies and practices to be used by the Company
and the related disclosure of those critical  accounting  policies under  "Management's  Discussion and Analysis of
Financial  Condition  and Results of  Operations";  (b)  analyses  prepared by  management  and/or the  independent
auditor  setting  forth  significant  financial  reporting  issues  and  judgments  made  in  connection  with  the
preparation of the financial  statements,  including all  alternative  treatments of financial  information  within
generally  accepted  accounting   principles  that  have  been  discussed  with  the  Company's   management,   the
ramifications  of the use of the  alternative  disclosures,  and  treatments,  and the  treatment  preferred by the
independent  auditor;  (c) major issues  regarding  accounting  principles and financial  statement  presentations,
including any significant  changes in the Company's  selection or application of accounting  principles;  (d) major
issues as to the adequacy of the  Company's  internal  controls and any  specific  audit steps  adopted in light of
material  control  deficiencies;  (e)  issues  with  respect  to the  design  and  effectiveness  of the  Company's
disclosure  controls and  procedures,  management's  evaluation of those  controls and  procedures,  and any issues
relating to such controls and  procedures  during the most recent  reporting  period;  (f) the effect of regulatory
and  accounting  initiatives as well as off-balance  sheet  structures on the financial  statements of the Company;
and (g) any other material written  communications  between the independent  auditor and the Company's  management,
including management letters and the schedule of unadjusted differences. </font>
		</p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; 11.      Review periodically the effect of regulatory and accounting  initiatives,  as well as off-balance
sheet structures, on the financial statements of the Company.

         </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; 12.      Regularly review with the independent  auditor any audit problems or difficulties  encountered by
the auditor in the course of the audit work,  including any restrictions on the scope of the independent  auditor's
activities  or on access to requested  information,  and any  significant  disagreements  with  management  and (b)
management's  responses to such matters.  Without  excluding other  possibilities,  the Audit Committee may wish to
review with the independent  auditor (i) any accounting  adjustments that were noted or proposed by the auditor but
were "passed" (as immaterial or  otherwise),  (ii) any  communications  between the audit team and the audit firm's
national office respecting  auditing or accounting  issues presented by the engagement,  and (iii) any "management"
or "internal control" letter issued, or proposed to be issued, by the independent auditor to the Company.

         </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; 13.      Review and discuss with the independent  auditor the  responsibilities,  budget,  and staffing of
the Company's internal audit function.

         </font></p>
		<p><u><font face="Times New Roman, Times, Serif" size="2">Legal
		Compliance/General </font></u></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; 14.      Review  periodically,  with the Company's counsel, any legal matter that could have a significant
impact on the Company's financial statements.

         </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; 15.      Discuss with management and the independent  auditors the Company's  guidelines and policies with
respect to risk assessment and risk  management.  The Audit Committee  should discuss the Company's major financial
risk exposures and the steps management has taken to monitor and control such exposures.

         </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; 16.      Set clear hiring  policies for employees or former  employees of the independent  auditors.  At a
minimum,  these  policies  must  comply with the rules and  regulations  of the SEC related to the hiring of former
partners, principals, shareholders and professional employees of the independent auditor.

         </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; 17.      Establish  procedures  for (i) the receipt,  retention,  and treatment of complaints  received by
the Company regarding  accounting,  internal accounting  controls,  or auditing matters; and (ii) the confidential,
anonymous  submission  by  employees  of the  Company of concerns  regarding  questionable  accounting  or auditing
matters.</font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;<u>Reports</u>
		</font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; 18.      Prepare all reports  required to be included in the Company's  proxy  statement,  pursuant to and
in accordance with applicable rules and regulations of the SEC.

         </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; 19.      Report  regularly to the full Board of  Directors.  In this regard,  the Audit  Committee  should
review  with the full  board any issues  that arise with  respect  to the  quality or  integrity  of the  Company's
financial  statements,  the  Company's  compliance  with legal or  regulatory  requirements,  the  performance  and
independence  of the  Company's  independent  auditors,  or the  performance  of the internal  audit  function.  In
addition the Audit  Committee  should  report to the full Board of Directors  with respect to such other matters as
are relevant to the Committee's discharge of its responsibilities.

         </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; 20.      The  Audit  Committee  shall  provide  such  recommendations  as the  Audit  Committee  may  deem
appropriate.  The  report to the Board of  Directors  may take the form of an oral  report by the  Chairman  or any
other member of the Audit Committee designated by the Audit Committee to make such report.

         </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; 21.      Maintain minutes or other records of meetings and activities of the Audit Committee.

         </font></p>
		<p><u><font face="Times New Roman, Times, Serif" size="2">Delegation
         </font></u></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; 22.      In fulfilling  its  responsibilities,  the Audit  Committee  shall be entitled to delegate any or
all of its responsibilities to a subcommittee of the Audit Committee.

         </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">V.       Annual Performance Evaluation</font></p>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
Audit Committee shall perform a review and evaluation, at least annually, of the
performance of the Audit Committee, including by reviewing the compliance of the
Audit Committee with this Charter. In addition, the Audit Committee shall review
and reassess, at least annually, the adequacy of this Charter and recommend to
the Board of Directors any improvements to this Charter that the Audit Committee
considers necessary or valuable. The Audit Committee shall conduct such
evaluations and reviews as required by law, regulation and the requirements of
Nasdaq, in such manner as the Audit Committee deems appropriate.</FONT></TD>
</TR>
</TABLE>
		<font face="Times New Roman, Times, Serif" size="2">
<BR>

         VI.      Limitation of Audit Committee's Role

<br>
&nbsp;</font><TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
With
respect to the foregoing responsibilities and processes, the Audit Committee
recognizes that the Company&#146;s financial management, including its internal
audit staff, as well as the independent auditors have more time, knowledge, and
detailed information regarding the Company than do Audit Committee members.
Consequently, in discharging its oversight responsibilities, the Audit Committee
will not provide or be deemed to provide any expertise or special assurance as
to the Company&#146;s financial statements or any professional certification as
to the independent auditors&#146; work.</FONT></TD>
</TR>
</TABLE>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>While the Audit Committee
has the responsibilities and powers set forth in this Charter, it is not the
duty of the Audit Committee to plan or conduct audits or to determine that the
Company&#146;s financial statements and disclosures are complete and accurate
and are in accordance with generally accepted accounting principles and
applicable rules and regulations. These are the responsibilities of management
and the independent auditor. It also is not the duty of the Audit Committee to
conduct investigations or to assure compliance with laws and regulations and the
Company&#146;s internal policies and procedures. </FONT></P>


<!-- MARKER PAGE="sheet: 12; page: 12" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ANNEX D</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PURCHASE
AGREEMENT</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>THIS PURCHASE
AGREEMENT</B> is made and entered into as of April&#160;2, 2004 by and among
<B>DEVCON INTERNATIONAL CORP.</B>, a Florida corporation (the
&#147;<B>Company</B>&#148;), and <B>COCONUT PALM CAPITAL INVESTORS I, LTD.,</B>
a Florida limited partnership (&#147;<B>Purchaser</B>&#148;). </FONT></P>

         <font face="Times New Roman, Times, Serif" size="2">1.       Authorization.  The Company has  authorized  the issuance and sale to the  Purchaser,  subject to
the terms and  conditions  of this  Agreement,  of up to Two Million  (2,000,000)  Units (as herein  defined) for a
purchase  price per Unit of Nine  Dollars  ($9.00) or an  aggregate  purchase  price of  Eighteen  Million  Dollars
($18,000,000).  For purposes of this  Agreement,  the term "<b>Unit</b>" means (a) one (1) share of the  Company's  common
stock,  par value $0.10 per share (the "Common  Stock"),  (b) warrants to purchase an  additional  one (1) share of
Common  Stock for each  share of Common  Stock  purchased  hereunder  at an  exercise  price of $10.00 per share of
Common  Stock  exercisable  in whole or in part at any time and from time to time on or after the date of  issuance
of such  warrant  on the  applicable  Closing  Date (as herein  defined)  and at or before  5:00 p.m.  on the third
anniversary  thereof,  pursuant  to the terms of the  warrant  certificate  substantially  in the form of
		<u>Exhibit A</u> attached  hereto (the "<b>First Tranche  Warrants</b>," and any shares of Common Stock issuable upon exercise  thereof are
hereinafter  referred to as "<b>First Tranche Warrant  Shares</b>"),  (c) warrants to purchase an additional one (1) share
of Common Stock for each two (2) shares of Common Stock  purchased  hereunder,  at an exercise  price of $11.00 per
share of  Common  Stock  exercisable  in whole or in part at any time and from time to time on or after the date of
issuance of such  warrant on the  applicable  Closing  Date and at or before  5:00 p.m.  on the fourth  anniversary
thereof,  pursuant to the terms of the warrant  certificate  substantially in the form of
		<u>Exhibit B</u> attached hereto
                                                                                          (the "<b>Second Tranche  Warrants</b>,"  and any shares of Common Stock issuable upon exercise  thereof are  hereinafter
referred to as "<b>Second Tranche  Warrant  Shares</b>")  and (d)  warrants to  purchase an  additional  one (1) share of
Common  Stock for each two (2) shares of Common  Stock  purchased  hereunder,  at an  exercise  price of $15.00 per
share of  Common  Stock  exercisable  in whole or in part at any time and from time to time on or after the date of
issuance  of such  warrant on the  applicable  Closing  Date and at or before  5:00 p.m.  on the fifth  anniversary
thereof,  pursuant to the terms of the warrant  certificate  substantially in the form of
		<u>Exhibit C</u> attached hereto (the "<b>Third Tranche  Warrants</b>,"  and any shares of Common Stock issuable  upon exercise  thereof are  hereinafter
referred to as "<b>Third Tranche Warrant Shares</b>"). </font>
		<p><font face="Times New Roman, Times, Serif" size="2">2.       Agreement to Sell and Purchase.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;&nbsp;&nbsp; (a)      On the basis of the  representations  and warranties  contained in this  Agreement,  and
subject to its terms and  conditions,  (i) on the First Closing Date (as herein  defined),  the Company shall issue
and sell to the Purchaser,  and the Purchaser  shall purchase from the Company,  One Million Six Hundred  Sixty-Six
Thousand Six Hundred  Sixty-Seven  (1,666,667)  Units (the "<b>Initial  Units</b>") for a purchase  price per Unit of Nine
Dollars ($9.00) or an aggregate  purchase price of Fifteen Million Three Dollars  ($15,000,003) (the "<b>First Closing
Purchase  Pric</b>e") and (ii) if the Purchaser  shall exercise the Additional  Purchase  Option (as herein defined) in
accordance with Section 2(b) hereof,  then on the Second Closing Date (as herein defined),  the Company shall issue
and sell to the Purchaser,  and the Purchaser shall purchase from the Company,  Three Hundred Thirty-Three Thousand
Three Hundred  Thirty-Three  (333,333) Units (the "<b>Additional  Units</b>") (or such fewer number of Additional Units as
the Purchaser in its sole  discretion  shall elect  pursuant to Section 2(b) below),  for a purchase price per Unit
of Nine Dollars  ($9.00) or an aggregate  purchase  price of Two Million Nine  Hundred  Ninety-Nine  Thousand  Nine
Hundred  Ninety-Seven  Dollars  ($2,999,997)  if all 333,333  Units are  purchased  (the "<b>Second  Closing  Purchase
Price</b>").  The aggregate  amount of the First Closing  Purchase Price and the Second Closing  Purchase Price paid by
the Purchaser pursuant to this Agreement is hereinafter referred to as the "<b>Purchase Price</b>."
		</font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(b)      The  Purchaser  shall have the right,  but not the  obligation,  to purchase some or all
(at the  Purchaser's  option) of the  Additional  Units on the terms set forth  herein  (the  "<b>Additional  Purchase
Option</b>").  The Purchaser may exercise the Additional  Purchase Option only one time by delivering written notice of
exercise  to the  Company at any time after the date  hereof  until five (5) days prior to the First  Closing  Date
(the "<b>Additional  Purchase Exercise  Notice</b>").  The Additional  Purchase Exercise Notice shall set forth the number
of Additional  Shares (as herein defined) and Additional  Warrants (as herein  defined) that the Purchaser  desires
to purchase.  The parties agree that the closing of the Additional  Purchase Option shall be simultaneous  with the
First Closing  Date,  however,  if,  despite  their best  efforts,  the parties are unable to close the  Additional
Purchase  Option at such time,  then the parties shall  mutually  agree on a closing date (not later than seven (7)
business  days after the First  Closing  Date) on which to  consummate  the  purchase and sale (if  necessary,  the
"<b>Second  Closing Date</b>").  Upon the Purchaser's  exercise of the Additional  Purchase  Option,  the Company shall be
obligated  to issue and sell to the  Purchaser  that  number of  Additional  Units  that the  Purchaser  desires to
purchase as set forth in the Additional  Purchase  Exercise Notice delivered to the Company,  at the purchase price
per Unit of Nine Dollars ($9.00), up to the maximum number of Additional Units.</font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;(c)      The  aggregate  shares of Common  Stock  comprising  the Units issuable  hereunder  are
hereinafter  collectively  referred to as the "<b>Shares</b>," and the Shares purchased by the Purchaser  pursuant to this
Agreement are hereinafter  collectively  referred to as the "<b>Purchased  Shares.</b>" The aggregate warrants to purchase
shares of Common Stock  comprising the Units issuable  hereunder are  hereinafter  collectively  referred to as the
"<b>Warrants</b>," and the Warrants  purchased by the Purchaser  pursuant to this Agreement are  hereinafter  collectively
referred to as the  "<b>Purchased</b> <b>Warrants</b>."  The shares of Common  Stock issuable  upon  exercise  of or  otherwise
pursuant to the  Warrants  are  hereinafter  collectively  referred to as the  "<b>Warrant</b>
		<b>Shares</b>," and the shares of
Common  Stock issuable  upon  exercise  of or  otherwise  pursuant  to  the  Purchased  Warrants  are  hereinafter
collectively  referred to as the "<b>Purchased  Warrant  Shares.</b>" The Shares,  the Warrants and the Warrant Shares are
sometimes  hereinafter  collectively  referred to as the  "<b>Securities</b>,"  and the  Purchased  Shares,  the Purchased
Warrants and the Purchased  Warrant  Shares are sometimes  hereinafter  collectively  referred to as the "<b>Purchased
Securities.</b>"  The Shares and Warrants  constituting  the Additional Units are referred to herein as the "<b>Additional
Shares</b>" and the "<b>Additional Warrants</b>." </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(d)      The  Purchaser  shall  provide to the  Company on or prior to Closing a form of Schedule
13D to be filed with the Securities and Exchange Commission (the "<b>SEC</b>") due to a Purchaser's  beneficial  ownership
subsequent to the First Closing of more than five percent (5%) of the outstanding Common Stock of the Company.</font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">3.       Payment and Delivery; Termination.</font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;(a)      Payment for the Initial  Units  shall be made to the  Company by the  Purchaser  by wire
transfer in  immediately  available  funds in accordance  with wire  instructions  provided by the Company  against
delivery of the Initial Units and all other  documents and items required to be delivered  hereunder by the Company
to the Purchaser at the First Closing (such payment and delivery  hereinafter  referred to as the "<b>First  Closing</b>")
at 10:00 a.m.,  Miami time,  on the date that is between  seven (7) and fifteen (15) days  following  the date that
all of the  conditions  precedent  set forth in Section 4 and Section 5 have been  satisfied or waived by the party
to whom such performance is owed, at the offices of Greenberg Traurig,  P.A., 1221 Brickell Avenue,  Miami, Florida
("<b>Greenberg Traurig</b>")  or at such other time on the same or such other date and at such other  location,  as shall
be agreed by the Company and the  Purchaser,  subject to the terms and conditions of this  Agreement.  The time and
date of the First Closing are hereinafter referred to as the "<b>First Closing Date</b>."
		</font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(b)      Payment for the  Additional  Units to be purchased by the Purchaser  hereunder  shall be
made to the Company by the  Purchaser by wire  transfer in  immediately  available  funds in  accordance  with wire
instructions  provided by the Company against  delivery of such  Additional  Units and any other documents or items
required  hereunder  to be  delivered  by the Company to the  Purchaser  at the Second  Closing  (such  payment and
delivery  hereinafter  referred  to as the "<b>Second  Closing</b>")  on the date and at the time agreed to by the Company
and the Purchaser after receipt by the Company of the Additional  Purchase  Exercise  Notice,  which Second Closing
shall occur on the First Closing  Date,  unless the parties,  despite  their best  efforts,  are unable to close on
such date,  in which case the Second  Closing  shall occur on a mutually  determined  date not later than seven (7)
business days after the First Closing Date,  subject to the terms and  conditions of this  Agreement.  The time and
date of the Second  Closing are  hereinafter  referred to as the "<b>Second  Closing  Date</b>." The Second  Closing shall
occur at the  offices of  Greenberg Traurig  or such  other  location  as shall be agreed by the  Company  and the
Purchaser.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(c)      For purposes of this Agreement,  the term "<b>Closing</b>" or the phrase  "<b>applicable  Closing</b>"
shall refer to and mean the First Closing or the Second Closing, as the context shall reasonably  require,  and the
term "<b>Closing Date</b>" or the phrase  "<b>applicable  Closing Date</b>" shall refer to and mean the First Closing Date or the
Second Closing Date, as the context shall reasonably require. </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(d)      Certificates  evidencing the Purchased  Shares and the Purchased  Warrants  purchased by
the  Purchaser  hereunder  shall be  registered  in the name of the  Purchaser.  The  certificates  evidencing  the
Purchased  Shares and the  Purchased  Warrants  purchased  by the  Purchaser  hereunder  shall be  delivered to the
Purchaser on the applicable  Closing Date,  with any transfer taxes payable in connection with the transfer of such
Purchased  Shares and the Purchased  Warrants to the Purchaser  duly paid,  against  payment of the Purchase  Price therefor.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(e)      This  Agreement  and the  transactions  contemplated  hereby  may be  terminated  by the
Purchaser or the Company at any time prior to the First  Closing Date if the First  Closing shall not have occurred
by September 1, 2004.</font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;4.       Conditions to the Company's  Obligations.  The  Company's  obligations  to issue the Units to the
Purchaser and  consummate  the  transactions  contemplated  by this  Agreement on the  applicable  Closing Date are
subject to satisfaction of the following conditions:</font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;(a) The
		Company shall have received on the applicable Closing Date immediately
		available funds in the amount of the Purchase Price for the Units to be
		issued and delivered on such Closing Date; </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(b)      All  representations  and warranties of the Purchaser  contained in this Agreement shall
be true and correct in all material  respects (if not  qualified by  materiality)  or in all respects (if qualified
by  materiality)  at and as of the  applicable  Closing  with the same  effect as though such  representations  and
warranties were made at and as of such Closing;</font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;(c)      The Purchaser  shall have  performed and complied in all material  respects with all the
covenants and  agreements  required by this  Agreement to be performed or complied with by the Purchaser  hereunder
at or prior to the applicable Closing;

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(d)      The Company  shall have received  from the  Purchaser on the  applicable  Closing Date a
certificate,  dated as of the applicable  Closing Date and signed by an executive officer of the Purchaser,  to the
effect that the  representations  and warranties of the Purchaser  contained in this Agreement are true and correct
in all material  respects (if not qualified by  materiality)  or in all respects (if qualified by  materiality)  at
and as of the applicable  Closing with the same effect as though such  representations  and warranties were made at
and as of such Closing and that the Purchaser  has performed and complied in all material  respects with all of the
covenants and  agreements  required by this  Agreement to be performed or complied with by the Purchaser  hereunder
at or prior to the applicable Closing;

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(e)      All  material   governmental   and/or   regulatory   consents,   approvals,   orders  or
authorizations  necessary for the  consummation of the transactions  contemplated  hereby shall have been obtained,
all  material   governmental  and/or  regulatory  filings  and  notices  necessary  for  the  consummation  of  the
transactions  contemplated  hereby shall have been made or given, as the case may be, and all material  third-party
consents necessary for the consummation of the transactions contemplated hereby shall have been obtained;

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(f) The Purchaser
		shall have delivered or caused to be delivered to the Company at the
		First Closing an opinion of counsel for the Purchaser, dated the
		applicable Closing Date, to the effect set forth in<u> Exhibit D</u> (&quot;<b>Purchaser's
		Opinion of Counsel</b>&quot;); </font></p>
		<p><font size="2">(g)      </font>      <font face="Times New Roman, Times, Serif" size="2">The  shareholders  of the Company  shall have (i)
		approved the issuance to the Purchaser of the Units and any other terms
		of this Agreement if and as required by applicable law, (ii) elected any
		individuals the Purchaser nominates for election to the Company's Board
		of Directors and (iii) approved the amendments to the Company's Articles
		of Incorporation as set forth in the Articles of Amendment attached
		hereto as <u>Exhibit E</u> ;</font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">&nbsp;(h)      All material  documents,  instruments  and other items  required by this Agreement to be
delivered by the Purchaser to the Company at or prior to the  applicable  Closing shall have been  delivered to the
Company at or prior to the applicable Closing.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(i)      Between the date hereof and the applicable  Closing Date,  there shall not have occurred
any material adverse event affecting the Purchaser or any of the Purchaser's principals.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(j)      the absence of a withdrawal of the approval of the  transaction  by the Company's  board
of directors  where such  withdrawal  resulted from the board's  determination  that its fiduciary  duties required
such withdrawal pursuant to Section 8(o) below.

         </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">5.       Conditions  to the  Purchaser's  Obligations.  The  obligations  of the Purchaser to purchase and
pay for the Units and consummate the  transactions  contemplated  by this Agreement on the applicable  Closing Date
are subject to the following conditions:

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(a)      All  representations  and warranties of the Company contained in this Agreement shall be
true and correct in all material  respects (if not  qualified by  materiality)  or in all respects (if qualified by
materiality)  at and as of the  applicable  Closing  with  the same  effect  as  though  such  representations  and
warranties were made at and as of such Closing;

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(b)      The Company  shall have  performed  and complied in all material  respects  with all the
covenants and agreements  required by this  Agreement to be performed or complied with by the Company  hereunder at
or prior to the applicable Closing;

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(c)      The  Purchaser  shall have received  from the Company on the  applicable  Closing Date a
certificate,  dated as of the  applicable  Closing Date and signed by an executive  officer of the Company,  to the
effect that the  representations  and  warranties of the Company  contained in this  Agreement are true and correct
in all material  respects (if not qualified by  materiality)  or in all respects (if qualified by  materiality)  at
and as of the applicable  Closing with the same effect as though such  representations  and warranties were made at
and as of such Closing and that the Company has  performed  and complied in all material  respects  with all of the
covenants and agreements  required by this  Agreement to be performed or complied with by the Company  hereunder at
or prior to the applicable Closing;</font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(d)      All  material   governmental   and/or   regulatory   consents,   approvals,   orders  or
authorizations  necessary for the  consummation of the transactions  contemplated  hereby shall have been obtained,
all  material   governmental  and/or  regulatory  filings  and  notices  necessary  for  the  consummation  of  the
transactions  contemplated  hereby shall have been made or given, as the case may be, and all material  third-party
consents necessary for the consummation of the transactions contemplated hereby shall have been obtained;</font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(e)      The Company  shall have  delivered  to the  Purchaser  at the  applicable  Closing  duly
executed  certificates  representing the Purchased Shares to be delivered at such Closing registered in the name of
the Purchaser;

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(f)      The Company  shall have  executed  and  delivered  to the  Purchaser  at the  applicable
Closing Warrant  Certificates  for the Purchased  Warrants to be delivered at such Closing in the respective  forms
set forth in Exhibits A, B and C hereto registered in the name of the Purchaser;

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(g)      The Company  shall have  delivered  or caused to be  delivered  to the  Purchaser at the
time of execution of this  Agreement  the Voting  Agreement in the form  attached  hereto as
		<u>Exhibit F</u> (the "<b>Voting&nbsp;
Agreement</b>")  duly  executed  by Donald  Smith,  Jr.,  Donald L. Smith,  III and his spouse,  Kevin M. Smith and his
spouse, Smithcon Family Investments,  Ltd. and Smithcon Investments,  Inc. and any other persons or entities (other
than the Purchaser) that are parties thereto;

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(h) The Company
		shall have delivered or caused to be delivered to the Purchaser at the
		First Closing an opinion of counsel for the Company, dated the
		applicable Closing Date, to the effect set forth in <u>Exhibit G</u> (&quot;<b>Company's
		Opinion of Counsel</b>&quot;); </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(i)      The  shareholders  of the Company  shall have  approved the purchase by the Purchaser of
the Units and any other terms of this  Agreement,  if and as required by  applicable  law,  and elected  Richard C.
Rochon and Mario B. Ferrari to the Company's Board of Directors;

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(j)      All actions  required to be taken by the Company under  Section  607.0902 of the Florida
Business  Corporation  Act necessary to cause the  acquisition by the Purchaser of the Securities  pursuant to this
Agreement to not constitute a "control-share acquisition" as defined therein shall have been taken;

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(k) The Company
		shall have provided to the Purchaser a true and correct copy, certified
		by the Company's secretary, of the resolutions of the Company's Board of
		Directors approving this Agreement and the transactions contemplated
		hereby; and the Company's shareholders shall have approved, and the
		Company shall have caused to be filed and effective with the Florida
		Secretary of State, the amendments to the Company's Articles of
		Incorporation set forth on Exhibit E attached hereto; </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(l)      Between  the date  hereof and the  applicable  Closing  Date,  (i) there  shall not have
occurred any material  adverse event affecting the Company or any of its  subsidiaries  or any of their  respective
businesses,  operations,  financial  conditions,  assets or  liabilities  (contingent  or  otherwise)  and (ii) the
Company shall not have  restated or announced  its intention to restate any portion of its financial  statements as
included in any filing with the SEC or in any press release or other form of media;

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(m)      All material  documents,  instruments  and other items  required by this Agreement to be
delivered by the Company to the Purchaser at or prior to the  applicable  Closing shall have been  delivered to the
Purchaser at or prior to the applicable Closing.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(n)      The Company shall have caused its  authorized  shares of Common Stock to be increased to
Fifty Million  (50,000,000)  in accordance  with  applicable law, and the Company shall have filed with the Florida
Secretary  of State an  amendment to its  Articles of  Incorporation  to reflect such  increase and taken all other
actions necessary to effect such increase.

         </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">6.       Representations,  Warranties  and Covenants of the Company.  The Company  represents and warrants
to, and covenants with, the Purchaser that:

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(a)      The Company has on a timely  basis filed all forms,  reports and  documents  required to
be filed by it with the SEC since  January 1, 2002.  Except to the extent  available  on the SEC's web site through
the  Electronic  Data  Gathering,  Analysis and Retrieval  System</font>  (<font face="Times New Roman, Times, Serif" size="2">"<b>EDGAR</b>") two (2) days prior to the date of this
Agreement,  <u>Schedule 6(a)</u> lists,  or the Company has  delivered to the Purchaser  copies in the form filed with the
            SEC of, (i) the Company's  Annual Reports on Form 10-K for each fiscal year of the Company  beginning since January
1, 2002, (ii) the Company's  Quarterly  Reports on Form 10-Q for each of the first three fiscal quarters in each of
the fiscal  years of the  Company  referred  to in clause (i) above,  (iii) all proxy  statements  relating  to the
Company's  meetings of shareholders  (whether annual or special) held, and all information  statements  relating to
shareholder  consents  since the  beginning  of the first  fiscal year  referred  to in clause (i)
		above, (iv) all certifications and stat</font><font face="Times New Roman, Times, Serif" size="2">ements
		required by (x) the SEC's Order dated June 27, 2002 pursuant to Section 21(a)(1) of
the Securities  Exchange Act of 1934, as amended (the "<b>Exchange  Act</b>") (File No. 4-460),  (y) Rule 13a-14 or 15d-14
under the  Exchange  Act or (z) 18 U.S.C.ss.1350  (Section  906 of the  Sarbanes-Oxley  Act of 2002  ("<b>SOX</b>"))  with
respect to any report referred to in clause (i), (ii) or (iii) above,  (v) all other forms,  reports,  registration
statements and other documents (other than preliminary  materials if the  corresponding  definitive  materials have
been  provided  to the  Purchaser  pursuant  to this  Section  6(a))  filed by the  Company  with the SE</font><font face="Times New Roman, Times, Serif" size="2">C since the
beginning of the first fiscal year  referred to in clause (i) above (the forms,  reports,  registration  statements
and other documents referred to in clauses (i), (ii), (iii), (iv) and (v) above are,  collectively,  referred to as
the  "<b>Company  SEC  Documents</b>"),  and (vi) all comment  letters  received by the Company  from the Staff of the SEC
since  January 1, 2002 and all  responses  to such comment  letters by or on behalf of the Company.  To the date of
the Second  Closing  Date,  the Company SEC Documents (x) were or will be prepared,  in all material  respects,  in
accordance  with the  requirements  of the  Securities  Act of 1933,  as  amended  (the  "<b>Securities  Act</b>") and the
Exchange Act, as the case may be, and the rules and  regulations thereunder and
		(y) did not at the time they were filed with the SEC, or will not at the
		time they are filed with the SEC, contain any untrue statement of a
		material fact or omit to state a material fact required to be stated
		therein or necessary in order to make the statements made therein, in
		the light of the circumstances under which they were made, not
		misleading. No subsidiary of the Company is or has been required to file
		any form, report, registration statement or other document with the SEC.
		The Company maintains disclosure controls and procedures required by
		Rule 13a-15 or 15d-15 under the Exchange Act; and such controls and
		procedures are effective to provide reasonable assurance that all
		material information concerning the Company and its subsidiaries is mad</font><font face="Times New Roman, Times, Serif" size="2">e
		known on a timely basis to the individuals responsible for the
		preparation of the Company's filings with the SEC and other public
		disclosure documents. To the Company's knowledge, except as otherwise
		disclosed in the Company SEC Documents, each director and executive
		officer of the Company has filed with the SEC on a timely basis all
		statements required by Section 16(a) of the Exchange Act and the rules and  regulations thereunder  since  January 1, 2000.  As used in
this  Section  6(a),  the term  "<b>file</b>"  shall be broadly  construed  to include  any manner in which a document  or
information is furnished, supplied or otherwise made available to the SEC.

                  </font></p>
		<p>(<font face="Times New Roman, Times, Serif" size="2">b)      Except as otherwise  disclosed in the Company SEC  Documents,  the financial  statements
of the Company and its  subsidiaries  included in the Company SEC Documents  (including the related notes) complied
as to form,  as of their  respective  dates of  filing  with the SEC,  in all  material  respects  with  applicable
accounting  requirements  and the  published  rules and  regulations  of the SEC with respect  thereto  (including,
without  limitation,  Regulation  S-X),  have been  prepared  in  accordance  with  generally  accepted  accounting
principles in the United States ("<b>GAAP</b>") (except, in the case of unaudited  statements,  to the extent permitted by
Regulation  S-X for  Quarterly  Reports on Form 10-Q)  applied on a consistent  basis during the periods and at the
dates involved  (except as may be indicated in the notes  thereto) and fairly  present,  in all material  respects,
the  consolidated  financial  condition  of  the  Company  and  its  subsidiaries  at the  dates  thereof  and  the
consolidated  results of operations  and cash flows for the periods then ended  (subject,  in the case of unaudited
statements,  to notes or the absence thereof and normal year-end audit  adjustments  that were not, or with respect
to any such financial  statements  contained in any Company SEC Documents to be filed subsequent to the date hereof
are not  reasonably  expected to be,  material  in amount or  effect).  Except (A) as  reflected  in the  Company's
audited  balance  sheet at December 31, 2003 or  liabilities  described in any notes  thereto (or  liabilities  for
which neither accrual nor footnote  disclosure is required  pursuant to GAAP), (B) for liabilities  incurred in the
ordinary  course of business  since  December 31, 2003  consistent  with past practice or in  connection  with this
Agreement or the transactions  contemplated  hereby, (C) otherwise  disclosed in the Company SEC Documents,  or (D)
otherwise  set forth in Schedule 6(b) hereto,  to the knowledge of the Company,  neither the Company nor any of its
subsidiaries  has any material  liabilities or obligations of any nature.  The Company has been in compliance  with
all rules and regulations  promulgated in response to SOX with respect to non-audit  services performed by KPMG LLP
since the date of the enactment of such rules and regulations.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(c)      The Company (i) has been duly  incorporated  and is validly existing as a corporation in
good standing under the laws of the jurisdiction of its  incorporation,  (ii) has the corporate power and authority
to own, lease,  use and operate its properties and to conduct its business as currently  conducted and as described
in the Company SEC  Documents  and (iii) is duly  qualified to transact  business  and is in good  standing in each
jurisdiction  in which the conduct of its  business or its  ownership,  leasing,  use or  operation of its property
requires such  qualification,  except in connection with the representation in clause (iii) where the failure to be
so qualified as a foreign  corporation  would not have a material  adverse  effect on the  Securities,  the assets,
liabilities,  business, properties,  operations, financial condition or results of operations of the Company and/or
its subsidiaries,  the transactions  contemplated  hereby or by the agreements or instruments to be entered into in
connection  herewith  or the  authority  or the  ability  of the  Company  to perform  its  obligations  under this
Agreement,  the  Warrants or the other  agreements  or  instruments  to be entered into in  connection  herewith (a
"<b>Material Adverse Effect</b>"). </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(d)      Except as set forth in Schedule  6(d),  the Company SEC  Documents set forth the name of
each  subsidiary of the Company or other entity in which the Company owns,  directly or  indirectly,  any equity or
debt  interest  or any form of  proprietary  interest,  or any  obligation,  right or  option to  acquire  any such
interest,  and the  jurisdiction of its formation.  Each subsidiary of the Company has been duly  incorporated,  is
validly  existing as a corporation in good standing under the laws of the  jurisdiction of its  incorporation,  has
the corporate  power and authority to own,  lease,  use and operate its  properties  and to conduct its business as
currently  conducted and described in the Company SEC Documents and is duly  qualified to transact  business and is
in good  standing in each  jurisdiction  in which the conduct of its  business or its  ownership,  leasing,  use or
operation of property  requires such  qualification,  except where the failure to be so qualified  would not have a
Material  Adverse  Effect.  Except as set forth in <u>Schedule 6(d), </u>all of the issued shares of capital stock of each subsidiary of the Company have been duly and validly  authorized and issued,  are fully paid and non-assessable and
are owned directly by the Company, free and clear of all liens, encumbrances, equities or claims.
		</font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(e)      Each of this Agreement,  the Warrants,  and the other agreements and documents  executed
and/or  delivered by the Company in connection  herewith has been duly  authorized,  executed and delivered by, and
is a valid and binding agreement of, the Company,  enforceable in accordance with its terms,  subject to applicable
bankruptcy,  insolvency,  reorganization,  moratorium or similar laws of general application  affecting  creditors'
rights  generally and general  principles of equity.  The Company has all requisite  corporate  power and authority
to enter into and perform this  Agreement,  the Warrants,  and the other  agreements and documents  executed and/or
delivered  by the Company in  connection  herewith  and to  consummate  the  transactions  contemplated  hereby and
thereby and to issue the Securities, in accordance with the terms hereof and thereof.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(f)      The  authorized  capital stock of each of the Company and its  subsidiaries  conforms as
to legal  matters to the  description  thereof  contained  in the  Company  SEC  Documents.  As of the date of this
Agreement,  the  authorized  capital stock of the Company  consists  only of  15,000,000  shares of Common Stock of
which  3,447,848  shares are issued and  outstanding,  767,320  shares are reserved  for  issuance  pursuant to the
Company's  stock option  plans,  and no shares are reserved for  issuance  pursuant to  securities  (other than the
Warrants)  exercisable  for, or  convertible  into or  exchangeable  for shares of Common  Stock.  All  outstanding
shares of capital  stock of the Company are duly  authorized,  validly  issued,  fully paid and nonassessable.  No
shares of capital  stock of the Company or any of its  subsidiaries  are subject to preemptive  rights  (except the
rights of the Purchaser  under Section 8(d) hereof) or any other similar rights of the  shareholders of the Company
or any of its  subsidiaries  or any liens or  encumbrances  imposed  through  the  actions or failure to act of the
Company or any of its  subsidiaries.  Except as disclosed in <u>Schedule  6(f)</u>
		heret</font><font face="Times New Roman, Times, Serif" size="2">o,  (i) there are no  outstanding
                                                             options,   warrants,  scrip,  rights  to  subscribe  for,  puts,  calls,  rights  of  first  refusal,   agreements,
understandings,  claims or other  commitments or rights of any character  whatsoever  that have been granted by the
Company  relating to, or securities or rights  convertible  into or exchangeable for any shares of capital stock of
the Company or any of its  subsidiaries,  or arrangements by which the Company or any of its subsidiaries is or may
become bound to issue  additional  shares of capital  stock of the Company or any of its  subsidiaries,  (ii) there
are no agreements or arrangements  under which the Company or any of its  subsidiaries is obligated to register the
sale of any of its or their  securities  under the  Securities  Act  (except as  provided  in Section 9 hereof) and
(iii) there are no  anti-dilution or price  adjustment  provisions  contained in any security issued by the Company
(or in any  agreement  providing  rights  to  security  holders)  that will be  triggered  by the  issuance  of the
Securities.  The Company SEC  Documents  contain true and correct  copies of the Articles of  Incorporation  of the
Company as in effect on the date  hereof,  the By-laws of the Company as in effect on the date hereof and the terms
of all securities  convertible  into or exercisable for Common Stock of the Company or capital stock of each of its
subsidiaries and the material rights of the holders thereof in respect thereto.
		</font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(g)      The Shares and the Warrants  have been duly  authorized  and,  when issued and delivered
in accordance with the terms of this Agreement,  will be validly issued,  fully paid and  non-assessable,  and free
from all taxes,  liens,  claims and  encumbrances  with respect to the issue thereof and will not be subject to any
preemptive or similar  rights,  except as provided for in this  Agreement.  The Warrant Shares are duly  authorized
and reserved for issuance,  and,  when issued upon exercise of or otherwise  pursuant to the Warrants in accordance
with the terms  thereof,  will be,  except with  respect to the  "broker-assisted  exercises"  provided  for in the
Warrant  during the time period  between  exercise of the Warrants and payment by the broker of the exercise  price
to the Company (the "Broker Assisted  Exercise  Exception") which Warrant Shares upon payment to the Company of the
exercise price in full will be, validly  issued,  fully paid and  non-assessable,  and free from all taxes,  liens,
claims and  encumbrances  with  respect to the issue  thereof and will not be subject to any  preemptive  rights or
other similar rights, except as provided for in this Agreement.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(h)      Except  as set  forth in
		<u>Schedule  6(h</u>)  attached  hereto  and  except  for the  Broker
                                                     Assisted  Exercise  Exception,  the execution,  delivery and  performance of this Agreement and the Warrants by the
Company  and the  consummation  by the Company of the  transactions  contemplated  hereby and  thereby  (including,
without  limitation,  the issuance of the Shares and the Warrants and the issuance and  reservation for issuance of
the Warrant  Shares)  will not (i)  conflict  with or result in a violation  of any  provision  of the  Articles of
Incorporation  or By-laws of the Company or (ii) violate or conflict  with,  or result in a breach of any provision
of, or  constitute  a default  (or an event  which  with  notice or lapse of time or both  could  become a default)
under, or give to others any rights of  termination,  amendment,  acceleration  or cancellation  of, any agreement,
indenture,  patent,  patent  license or  instrument  to which the  Company or any of its  subsidiaries  is a party,
except for such  violations,  conflicts,  br</font><font size="2">eaches or defaults under  agreements,  licenses and  instruments  which
would not cau</font><font face="Times New Roman, Times, Serif" size="2">se a Material  Adverse  Effect or (iii) to the knowledge of the Company,  result in a violation of any
law, rule,  regulation,  order, judgment or decree (including federal and state securities laws and regulations and
regulations  of any  self-regulatory  organizations  to  which  the  Company  or any of its  subsidiaries  or their
securities are subject)  applicable to the Company or any of its  subsidiaries or by which any property or asset of
the Company or any of its  subsidiaries  is bound or affected,  except for those  violations of law which would not
cause a Material  Adverse Effect.  Neither the Company nor any of its  subsidiaries is in violation of its Articles
of  Incorporation,  By-laws or other  organizational  documents  and, to the knowledge of the Company,  neither the
Company nor any of its  subsidiaries  is in default (and no event has  occurred  which with notice or lapse of time
or both could put the  Company or any of its  subsidiaries  in default)  under,  and neither the Company nor any of
its  subsidiaries  has taken any  action or failed to take any  action  that  would  give to others  any  rights of
termination,  amendment,  acceleration  or  cancellation  of, any  agreement,  indenture or instrument to which the
Company  or any of its  subsidiaries  is a party or by which any  property  or assets of the  Company or any of its
subsidiaries is bound or affected,  except for such violations,  conflicts,  breaches or defaults under agreements,
licenses and  instruments  which would not cause a Material  Adverse Effect.  To the knowledge of the Company,  the
businesses  of the Company and its  subsidiaries  are not being  conducted in  violation  of any law,  ordinance or
regulation of any  governmental  entity,  except to the extent that the failure to so conduct such  businesses does
not and will not have a Material  Adverse  Effect.  Except as  specifically  contemplated  by this Agreement and as
required  under the Securities Act and any applicable  state  securities  laws and by the rules and  regulations of
the Nasdaq National Market (</font><font size="2">"</font><font face="Times New Roman, Times, Serif" size="2"><b>Nasdaq</b>"),  to the knowledge of the Company,  the Company is not required to obtain any
consent,  authorization  or order of, or make any filing or  registration  with,  any court,  governmental  agency,
regulatory  agency,  or self  regulatory  organization  or stock  market or third party in order for it to execute,
deliver or perform any of its  obligations  under this  Agreement,  or the  Warrants in  accordance  with the terms
hereof or  thereof  or to issue and sell the  Securities  in  accordance  with the terms  hereof,  except for those
consents the failure of which to obtain would not have a Material  Adverse  Effect.  All consents,  authorizations,
orders,  filings and registrations  which the Company is required to obtain pursuant to the preceding sentence have
been  obtained  or  effected  or will be  obtained  or  effected  on or prior to the  First  Closing  Date.  To the
knowledge of the  Company,  the Company is not in violation of the listing  requirements  of Nasdaq  applicable  to
continued listings

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(i)      Except as set forth on
		<u>Schedule  6(i)</u>  attached  hereto,  there  has not  occurred  any material adverse change,  or any development  involving a prospective  material  adverse change,  in the condition,
financial or otherwise,  or in the earnings,  business or operations of the Company and/or any of its subsidiaries,
taken as a whole, since December 31, 2003.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(j)      There are no legal or  governmental  proceedings  pending  or, to the  knowledge  of the
Company,  threatened,  to which the Company or any of its subsidiaries is a party or to which any of the properties
of the Company or any of its  subsidiaries is subject other than  proceedings  accurately  described in the Company
SEC Documents or set forth on<u> Schedule 6(j). </u></font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(k)      Except as set forth in
		<u>Schedule 6(k) </u>attached  hereto or the Company SEC Documents,  and except  where such has not had and could not  reasonably  be expected  to have a Material  Adverse  Effect,  on the
Company or, any of its  subsidiaries,  to the  knowledge of the Company,  the Company and each of its  subsidiaries
(i) have obtained all applicable  permits,  licenses and other  authorizations,  including the Company  Permits (as
herein  defined),  which are  required  to be obtained  under all  applicable  federal,  state or local laws or any
applicable regulation,  code, plan, order, decree, judgment,  notice or demand letter issued, entered,  promulgated
or approved thereunder  relating to pollution or protection of the environment  ("<u>Environmental  Laws</u>"),  including laws relating to emissions,  discharges,  releases or threatened releases of pollutants,  contaminants or hazardous
or toxic  material or wastes,  including  petroleum,  into  ambient  air,  surface  water,  ground water or land or
otherwise relating to the manufacture,  processing,  distribution,  use, treatment, storage, disposal, transport or
handling of  pollutants,  contaminants  or hazardous  or toxic  materials or wastes,  including  petroleum,  by the
Company or any of its  subsidiaries  (or their respective  agents);  (ii) are in compliance with all  Environmental
Laws  and all  terms  and  conditions  of such  required  permits,  licenses  and  authorizations,  and also are in
compliance  with  all  other   applicable   limitations,   restrictions,   conditions,   standards,   prohibitions,
requirements,  obligations,  schedules and timetables  contained in applicable  Environmental Laws; (iii) as of the
date hereof,  are not aware of nor have received notice of any uncured past or present  violations of Environmental
Laws or any event,  condition,  circumstance,  activity,  practice,  incident,  action or plan which is  reasonably
likely to interfere with or prevent continued  compliance with  Environmental  Laws or which could give rise to any
material  capital  expenditure  or common law or statutory  liability,  or  otherwise  form the basis of any claim,
action,  suit or  proceeding  against  the  Company  or any of its  subsidiaries  under  any  Environmental  Law or
otherwise  based  on or  resulting  from  the  manufacture,  processing,  distribution,  use,  treatment,  storage,
disposal, transport,  handling, emission, discharge or release into the environment of any pollutant,  contaminant,
or  hazardous  or toxic  material  or waste,  including  petroleum;  (iv) have taken all  actions  necessary  under
applicable  Environmental  Laws to register any products or materials  required to be  registered by the Company or
any of its subsidiaries (or any of their respective  agents) thereunder and (v) none of the Company nor any of its
subsidiaries  has entered into any  agreement to undertake or pay for any response  action of any kind or nature or
to pay any  damages  (including  punitive  damages),  costs,  fines or  penalties  associated  with any  release or
threatened release of any pollutant,  contaminant or hazardous or toxic material or waste, including petroleum,  at
any location.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(l)      The Company and its  subsidiaries own or possess all patents,  patent rights,  licenses,
inventions,  copyrights,  know-how (including trade secrets and other unpatented and/or unpatentable proprietary or
confidential information,  systems or procedures),  trademarks, service marks and trade names currently employed by
them in  connection  with the business now  operated by them,  and neither the Company nor any of its  subsidiaries
has received any notice of  infringement  of or conflict with asserted  rights of others with respect to any of the
foregoing.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(m)      To the  knowledge  of the Company,  the Company is not,  and after giving  effect to the
offering and sale of the Securities and the  application of the proceeds  thereof will not be, required to register
as an "<b>investment company</b>" as such term is defined in the Investment Company Act of 1940, as amended.
		</font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(n)      Neither the Company nor any  affiliate  (as defined in Rule 501(b) of Regulation D under
the Securities Act, an  "<b>Affiliate</b>")  of the Company has,  directly,  or through any agent,  (i) sold,  offered for
sale,  solicited  offers to buy or otherwise  negotiated in respect of, any security (as defined in the  Securities
Act) which is or will be  integrated  with the offer or sale of the  Securities  in a manner that would require the
registration  under the  Securities Act of the  Securities;  or (ii) offered,  solicited  offers to buy or sold the
Securities  by any form of general  solicitation  or general  advertising  (as those terms are used in Regulation D
under the Securities  Act) or in any manner  involving a public  offering within the meaning of Section 4(2) of the
Securities  Act;  and  neither  the Company  nor any  Affiliate  of the  Company  will engage in any of the actions
described in clauses (i) and (ii) of this paragraph.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(o)      Subject to the accuracy of the Purchaser's  representations  herein, and upon the advice
of the  Company's  legal  counsel,  to the knowledge of the Company,  it is not  necessary in  connection  with the
offer,  sale and delivery of the  Securities  to the  Purchaser  in the manner  contemplated  by this  Agreement to
register the Securities under the Securities Act. </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(p)      The  Company  shall  comply  with  all  requirements  of  the  National  Association  of
Securities  Dealers,  Inc.  with  respect  to the  issuance  of the  Purchased  Securities  and the  listing of the
Purchased  Shares,  the Purchased  Warrant Shares,  any shares  acquired by the Purchaser  pursuant to Section 8(d)
hereof and any  securities  issued as a dividend  thereon or in  replacement  thereof  or  otherwise  with  respect
thereto (collectively, the "<b>Common Shares</b>") on Nasdaq.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(q)      The  Company  has not taken and will not,  in  violation  of  applicable  law,  take any
action  designed to or that might  reasonably be expected to cause or result in  stabilization  or  manipulation of
the price of the Common Stock to facilitate the sale or resale of the Common Shares.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(r)      The Company is eligible to file with the SEC a  registration  statement  on Form S-3 for
purposes of registering the resale of the Common Shares.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(s)      Except as set forth in Section 9 hereof,  no  shareholder  of the  Company has any right
(which has not been  waived) to require the Company to register  the sale of any shares  owned by such  shareholder
under the Securities Act in the  Registration  Statement (as defined in Section 9(a)) to be filed by the Company on
behalf of the Purchaser.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(t)      Except in respect of any  electronic  security  services  businesses  identified  by the
Purchaser  in  accordance  with  Section 8(b)  hereof,  the Company is not in  discussions  and has not reached any
understanding,  whether or not in writing,  regarding  potential terms with respect to any  transaction  that would
constitute  a business  combination  under  Regulation  S-X  11-01(a),  where the  business  to be  acquired  would
constitute a significant subsidiary as defined in Rule 1-02(w) at the 10% level.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(u)      Except as  otherwise  disclosed  in the Company SEC  Documents,  the Company and each of
its  subsidiaries  has made or filed,  or properly filed for an extension  with respect to, all federal,  state and
foreign income and all other tax returns,  reports and  declarations  required by any  jurisdiction  to which it is
subject  (unless and only to the extent that the  Company and each of its  subsidiaries  has set aside on its books
provisions  reasonably  adequate  for the  payment of all unpaid and  unreported  taxes) and has paid all taxes and
other  governmental  assessments  and charges that are material in amount,  shown or  determined  to be due on such
returns,  reports  and  declarations,  except  those being  contested  in good faith and has set aside on its books
provisions  reasonably  adequate for the payment of all taxes for periods  subsequent  to the periods to which such
returns,  reports or  declarations  apply.  Except as  otherwise  disclosed  in the  Company  SEC  Documents  or on
Schedule 6(u),  there are no unpaid taxes in any material  amount claimed to be due to the taxing  authority of any jurisdiction,  and the officers of the Company know of no basis for any such claim.  Except as otherwise  disclosed
in the Company SEC Documents,  neither the Company nor any of its  subsidiaries  has executed a waiver with respect
to the statute of  limitations  relating to the  assessment or collection of any foreign,  federal,  state or local
tax.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(v)      Except as  otherwise  disclosed  in the Company SEC  Documents,  except for arm's length
transactions  pursuant to which the Company or any of its  subsidiaries  makes  payments in the ordinary  course of
business  upon  terms no less  favorable  than the  Company  or any of its  subsidiaries  could  obtain  from third
parties,  each of which is set forth in the  Company  SEC  Documents,  other  than the grant of stock  options  and
                                                                    -
warrants disclosed on Schedule 6(f) and other than the employment  agreements and retirement  agreements  disclosed on
		<u>Schedule  6(f)</u>,  none of the  officers,  directors,  or employees of the Company or any of its  subsidiaries  is
presently a party to any  transaction  with the  Company or any of its  subsidiaries  (other  than for  services as
employees,  officers and  directors),  including any  contract,  agreement or other  arrangement  providing for the
furnishing  of  services to or by,  providing  for rental of real or personal  property  to or from,  or  otherwise
requiring  payments to or from any  officer,  director or such  employee or, to the  knowledge of the Company,  any
corporation,  partnership,  trust or other  entity in which  any  officer,  director,  or any such  employee  has a
substantial interest or is an officer, director, trustee or partner.</font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(w)      All  information  relating to or concerning the Company or any of its  subsidiaries  set
forth in this  Agreement  is true and  correct in all  material  respects as of the date hereof and the Company has
not omitted to state any material fact necessary in order to make the statements  made herein or therein,  in light
of the circumstances under which they were made, not misleading.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(x)      The  Company  acknowledges  and  agrees  that the  Purchaser  is  acting  solely  in its
capacity of arm's length purchaser with respect to this Agreement and the  transactions  contemplated  hereby.  The
Company further  acknowledges  that the Purchaser is not acting as a financial  advisor or fiduciary of the Company
(or in any similar capacity) with respect to this Agreement and the transactions  contemplated  hereby and that any
statement made by the Purchaser or any of its  representatives  or agents in connection with this Agreement and the
transactions  contemplated  hereby is not advice or a  recommendation  and is merely  incidental to the Purchaser's
purchase of the  Securities  and has not been relied upon by the  Company,  its  officers or  directors in any way.
The Company further  represents to the Purchaser that the Company's  decision to enter into this Agreement has been
based solely on the independent evaluation by the Company and its representatives.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(y)      The Company and each of its  subsidiaries  are in possession of all franchises,  grants,
authorizations,  licenses, permits, easements, variances, exemptions, consents, certificates,  approvals and orders
necessary  to own,  lease and  operate its  properties  and to carry on its  business as it is now being  conducted
(collectively,  the "<b>Company Permits</b>&quot;), e</font><font face="Times New Roman, Times, Serif" size="2">xcept
		where the failure to so possess such Company Permits would not have
a  Material  Adverse  Effect,  and there is no action  pending  or, to the  knowledge  of the  Company,  threatened
regarding  suspension  or  cancellation  of any  of  the  Company  Permits.  Neither  the  Company  nor  any of its
subsidiaries  is in conflict  with,  or in default or  violation  of, any of the Company  Permits,  except for such
conflicts, defaults or violations which would not have a Material Adverse Effect.
		</font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(z)      To the knowledge of the Company,  each of the Company and its  subsidiaries has good and
marketable  title in fee simple to all real  property  owned by it, free and clear of all liens,  encumbrances  and
defects except (x) liens for real estate taxes not yet due and payable and (y) recorded easements,  covenants,  and
other  restrictions  of record  which do not impair the current use,  occupancy  or value of the  property  subject
thereto.  Any real property and  facilities  held under lease by the Company  and/or its  subsidiaries  are held by
them under valid, subsisting and enforceable leases.

                  </font></p>
		<p>(<font face="Times New Roman, Times, Serif" size="2">aa)     The  Company and its  subsidiaries  are  insured by  insurers  of  recognized  financial
responsibility  against  such losses and risks and in such  amounts as  management  of the  Company  believes to be
prudent and  customary  in the  businesses  in which the  Company and its  subsidiaries  are  engaged.  Neither the
Company  nor any  such  subsidiary  has any  reason  to  believe  that it will not be able to  renew  its  existing
insurance  coverage as and when such coverage  expires or to obtain similar  coverage from similar  insurers as may
be necessary to continue its business at a comparable cost.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(bb)     Except as set  forth in
		<u>Schedule  6(bb)</u>  hereof,  neither  the  Company  nor any of its subsidiaries,  nor, to the knowledge of the Company, any director,  officer, agent, employee or other person acting
on behalf of the Company or any of its  subsidiaries  has,  in the course of his actions  for, or on behalf of, the
Company or any of its subsidiaries,  used any corporate funds for any unlawful  contribution,  gift,  entertainment
or other unlawful  expenses  relating to political  activity;  made any direct or indirect  unlawful payment to any
foreign or domestic  government  official or employee  from  corporate  funds;  violated or is in  violation of any
provision  of the U.S.  Foreign  Corrupt  Practices  Act of 1977;  or made any  bribe,  rebate,  payoff,  influence
payment, kickback or other unlawful payment to any foreign or domestic government official or employee.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(cc)     The Company (both before and after giving  effect to the  transactions  contemplated  by
this Agreement) and, except as set forth in <u>Schedule 6(cc</u>),  each of its  subsidiaries is solvent (i.e., its assets have a fair market value in excess of the amount  required to pay its probable  liabilities  on its existing  debts
as they  become  absolute  and  matured)  and  currently  the  Company  has no  information  that  would lead it to
reasonably  conclude that the Company or, except as set forth in <u>Schedule 6(cc)</u>, any of its subsidiaries  would not
                                                                 have the  ability  to, nor does it intend to take any action  that would  impair its ability to, pay its debts from
time to time  incurred  in  connection  therewith  as such debts  mature.  The  Company did not receive a qualified
opinion from its auditors with respect to its most recent fiscal year end.
		</font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(dd)     Except as  disclosed  on
		<u>Schedule  6(dd</u>),  the Company has not,  since the  enactment of SOX,  extended credit,  arranged for the extension of credit,  or renewed an extension of credit,  in the form of a
personal  loan to or for any  director or executive  officer (or  equivalent  thereof) of the Company.  The Company
SEC Documents  identify any loan or extension of credit  maintained by the Company to which the second  sentence of
Section  13(k) (1) of the  Exchange  Act  applies.  Each of the Company,  its  directors  and its senior  financial
officers has  consulted  with the  Company's  independent  auditors  and with the  Company's  outside  counsel with
respect to, and (to the extent  applicable  to the  Company) is familiar in all material  respects  with all of the
requirements  of, SOX. The Company is in  compliance  with the  provisions  of SOX  applicable to it as of the date
hereof  and has  implemented  such  programs  and has taken  reasonable  steps,  upon the  advice of the  Company's
independent auditors and outside counsel,  respectively,  to ensure the Company's future compliance (not later than
the  relevant  statutory  and  regulatory  deadlines therefor)  with all  provisions  of SOX  which  shall  become
applicable to the Company after the date hereof.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(ee)     Except as disclosed on
		<u>Schedule  6(ee)</u>,  no duties,  liabilities  or  obligations of the Company,  vest,  accelerate  or become  due and  owing as a result of the  Company's  concluding  the  transactions
contemplated by this Agreement  including,  without  limitation,  loan payments to affiliates,  salary continuation
payments,  employment  benefits,  or  any  other  Company  duties,  liabilities  or  obligations  whether  owed  to
shareholders, employees, affiliates or unrelated third parties.

         </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">7.       Representations, Warranties and Covenants of the Purchaser.

         </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">The Purchaser represents and warrants to, and covenants with, the Company as follows:

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(a)      The  Purchaser  is an  "accredited  investor"  as that term is defined in Rule 501(a) of
Regulation D under the Securities Act.</font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(b)      The  Purchaser  and its  advisors,  if any,  have  been  furnished  with  all  materials
relating to the business,  finances and  operations of the Company and materials  relating to the offer and sale of
the  Purchased  Shares and the Purchased  Warrants  which have been  requested by them.  The Purchaser is acquiring
the  Purchased  Shares and the  Purchased  Warrants  for its own  account for  investment  only and with no present
intention  of  distributing  any of the  Purchased  Shares  and  the  Purchased  Warrants  or  any  arrangement  or
understanding  with any other  persons  regarding  the  distribution  of the  Purchased  Shares  and the  Purchased
Warrants,  other than as  contemplated  in Section 9 of this Agreement or pursuant to sales  registered or exempted
from registration  under the Securities Act;  <u>provided,  however</u>,  that by making the  representations  herein, the
Purchaser  does not agree to hold any of the  Purchased  Securities  for any  minimum  or other  specific  term and
reserves the right to dispose of the Purchased  Securities at any time in accordance  with  applicable  law and the
provisions of this Agreement. </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(c)      The  Purchaser  will not,  directly or  indirectly,  offer,  sell,  pledge,  transfer or
otherwise  dispose of (or  solicit  offers to buy,  purchase or  otherwise  acquire or take a pledge of) any of the
Purchased  Securities,  except in compliance  with the Securities Act and the applicable  rules and  regulations of
the SEC thereunder.  Notwithstanding  the foregoing or anything  else  contained  herein to the contrary,  nothing
herein shall  restrict the  Securities  from being  pledged as  collateral  in  connection  with a<u> bona fide
		</u>margin
account or other lending arrangement provided such pledge is effected in compliance with applicable law.
		</font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(d)      The Purchaser  will not make any sale of the Common Shares  without  complying  with the
provisions  of this  Agreement  and  without  causing  the  prospectus  delivery  requirement,  if any,  under  the
Securities Act to be satisfied,  and the Purchaser acknowledges that the certificates  evidencing the Warrants and,
until such time as the Common Shares have been  registered  under the Securities Act as  contemplated  by Section 9
hereof  or  otherwise  may be sold  pursuant  to Rule 144  under  the  Securities  Act  ("<b>Rule
		144</b>")  without  any
restriction as to the number of securities as of a particular  date that can then be  immediately  sold, the Common
Shares may bear a restrictive  legend in substantially the following form (and a stop-transfer  order may be placed
against transfer of the certificates for the Common Shares): </font></p>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=25%>&nbsp;</TD>
<TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
securities represented by this certificate have been acquired directly or
indirectly from the Company without being registered under the Securities Act of
1933, as amended (the &#147;Act&#148;), or any other applicable securities laws,
and are restricted securities as that term is defined under Rule 144 promulgated
under the Act. These securities may not be sold, pledged, transferred,
distributed or otherwise disposed of in any manner (&#147;Transfer&#148;) unless
they are registered under the Act and any other applicable securities laws, or
unless the request for Transfer is accompanied by a favorable opinion of
counsel, reasonably satisfactory to the Company, stating that the Transfer will
not result in a violation of the Act or any other applicable securities laws.</FONT></TD>
</TR>
</TABLE>
<BR>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The Company shall cause the
legend set forth above to be removed and the Company shall issue a certificate
without such legend to the holder of any Security upon which it is stamped if
(a) such Security is sold under an effective registration statement filed under
the Securities Act or (b) such holder provides the Company with reasonable
assurances that such Security can be sold pursuant to Rule 144(k) without any
restriction as to the number of securities as of a particular date that can then
be immediately sold. </FONT></P>

                  <font face="Times New Roman, Times, Serif" size="2">(e)      The  Purchaser  acknowledges  that it has  had  the  opportunity  to  obtain  additional
information  beyond the Company  SEC  Documents  in order to verify the  information  contained  in the Company SEC
Documents and to evaluate the risks of an investment in the Securities.</font><p>
		<font face="Times New Roman, Times, Serif" size="2">(f)      The  Purchaser  acknowledges  that it has had the  opportunity  to ask  questions of and
receive  answers  from  qualified  representatives  of the  Company  concerning  the terms and  conditions  of this
Agreement and of the Securities to be issued  hereunder,  as well as the  information  contained in the Company SEC
Documents.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(g)      The Purchaser  acknowledges  that it is a sophisticated  investor familiar with the type
of risks  inherent in the  acquisition  of securities  such as the  Securities and that, by reason of its knowledge
and experience in financial and business  matters in general,  and investments of this type in particular,  and the
knowledge and  experience in financial and business  matters of its  representatives  and agents,  it is capable of
evaluating the merits and risks of an investment by it in the Securities.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(h)      The  Purchaser is able to bear the economic  risk of an  investment  in the  Securities,
including,  without  limiting the generality of the foregoing,  the risk of losing part or all of its investment in
the Securities and its probable inability to sell or transfer the Securities for an indefinite period of time.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(i)      The  Purchaser  recognizes  that  investment  in  the  Securities  involves  substantial
risks.  The Purchaser  further  recognizes  that no Federal or State agencies have passed upon this offering of the
Securities or made any findings or determination as to the fairness of this investment.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(j)      The  Purchaser is not  purchasing  the  Securities  as a result of or  subsequent to any
general  advertisement,  article,  notice or other communication  published in any newspaper,  magazine, or similar
media or broadcast over television or radio or presented at any seminar.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(k)      The  Purchaser  acknowledges  that its attention  has been  specifically  called to, and
that its  representatives  or agents  have  read,  the  Company  SEC  Documents,  drafts of the  preliminary  proxy
statement to be filed with the SEC in connection with the transaction  contemplated  hereby, all documents referred
to and  incorporated  therein  and any  other  material  received  by the  Purchaser  from the  Company  and  fully
understands the risk involved in the investment.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(l)      None of the  information  supplied by the Purchaser in writing to the Company  expressly
for inclusion or  incorporation  by reference in the proxy  statement  (the "<b>Proxy  Statement</b>")  used in connection
with the  solicitation  of  proxies at its  Special  Meeting  (the  "<b>Special  Meeting</b>")  held to seek  approval  of
transactions  contemplated  herein  shall,  at the time it is filed with the SEC, at the time it is first mailed to
the Company's  shareholders or at the time of the Special Meeting,  contain any untrue statement of a material fact
or omit to state a material  fact  required  to be stated  therein  or  necessary  in order to make the  statements
therein, in light of the circumstances under which they were made, not misleading.
		</font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(m)      The Purchaser has been duly formed and is validly  existing as a limited  partnership in
good standing under the laws of the  jurisdiction  of its formation,  has the requisite power and authority to own,
lease,  use and operate its properties and to conduct its business as currently  conducted and is duly qualified to
transact  business  and is in good  standing  in each  jurisdiction  in which the  conduct of its  business  or its
ownership, leasing, use or operation of its property requires such qualification.</font></p>
		<p>(<font face="Times New Roman, Times, Serif" size="2">n)      Each of this  Agreement,  the Voting  Agreement and the other  agreements  and documents
executed  and/or  delivered  by the  Purchaser  in  connection  herewith  has been duly  authorized,  executed  and
delivered by, and is a valid and binding  agreement of, the Purchaser,  enforceable  in accordance  with its terms,
subject to applicable  bankruptcy,  insolvency,  reorganization,  moratorium or similar laws of general application
affecting  creditors'  rights  generally and general  principles of equity.  The Purchaser has all requisite  power
and  authority  to enter into and  perform  this  Agreement,  the Voting  Agreement  and the other  agreements  and
documents  executed  and/or  delivered by the Purchaser in connection  herewith and to consummate the  transactions
contemplated hereby and thereby.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(o)      Except as set forth in
		<u>Schedule  7(o</u>)  attached  hereto,  the  execution,  delivery  and performance of this  Agreement and any other  agreements  executed and delivered by the Purchaser,  if any, and the
consummation  by the Purchaser of the  transactions  contemplated  hereby and thereby will not (i) conflict with or
result in a violation  of any  provision  of the charter or  organizational  documents  of the  Purchaser,  or (ii)
violate or conflict  with,  or result in a breach of any  provision  of, or constitute a default (or an event which
with notice or lapse of time or both could become a default)  under,  or give to others any rights of  termination,
amendment,  acceleration  or cancellation  of, any agreement,  indenture,  patent,  patent license or instrument to
which the Purchaser is a party,  except for such  violations,  conflicts,  breaches or defaults  under  agreements,
licenses  and  instruments  which  would not cause a  Material  Adverse  Effect  or (iii) to the  knowledge  of the
Purchaser,  result in a violation of any law, rule,  regulation,  order,  judgment or decree (including federal and
state  securities  laws and  regulations)  applicable  to the  Purchaser  or by which any  property or asset of the
Purchaser  is bound or  affected,  except for those  violations  of law which  would not cause a  Material  Adverse
Effect.  The  Purchaser  is not in  violation  of any of its  organizational  documents.  To the  knowledge  of the
Purchaser,  the business of the Purchaser is not being  conducted in violation of any law,  ordinance or regulation
of any  governmental  entity,  except to the extent that the failure to so conduct such  business does not and will
not have a Material  Adverse Effect.  Except as  specifically  contemplated by this Agreement and as required under
the Securities Act and any applicable  state  securities  laws and by the rules and  regulations of Nasdaq,  to the
knowledge of the  Purchaser,  the  Purchaser is not required to obtain any consent,  authorization  or order of, or
make any filing or  registration  with, any court,  governmental  agency,  regulatory  agency,  or self  regulatory
organization  or stock market or third party in order for it to execute,  deliver or perform any of its obligations
under this Agreement or any other  agreements  executed and delivered by the Purchaser,  if any, in accordance with
the terms  hereof or thereof,  except for those  consents  the failure of which to obtain would not have a Material
Adverse Effect. All consents,  authorizations,  orders,  filings and registrations  which the Purchaser is required
to obtain  pursuant to the preceding  sentence have been obtained or effected or will be obtained or effected on or
prior to the applicable Closing Date.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(p) Purchaser or
		any affiliate thereof shall not engage in any trading of the Company's
		securities in violation of federal and state securities laws. </font>
		</p>
		<p><font face="Times New Roman, Times, Serif" size="2">(q)      The  Purchaser   acknowledges  that  the  Company  has  relied  on  the  representations
contained  herein in making its  determination  that a  statutory  basis for  exemption  from the  requirements  of
Section 5 of the Securities Act currently exists. </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">8.       Additional Covenants of the Company and/or the Purchaser.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(a)      The  Company  shall use the  proceeds  from the sale to the  Purchaser  of the Units and
from the  exercise of the  Warrants  solely in  furtherance  of, and solely to effect and  implement,  the Proposed
Strategies (as herein  defined),  including any expenditures  that may be reasonably  incidental to the furtherance
of such Proposed  Strategies (e.g.,  payment of employee  salaries pursuant to Section 8(g) hereof).  Specifically,
the Company  shall use such  proceeds to invest in one or more  security  businesses  identified by or presented to
the Company in one or more  transactions  if approved by the  Company's  Board of  Directors,  consistent  with the
provisions of Section 8(b) hereof.  Notwithstanding  anything stated herein to the contrary,  the Company shall not
be liable for breach of the covenants in this Section 8 for not pursuing and implementing  the Proposed  Strategies
in  connection  with a transaction  that has not been  approved by any member of the  Company's  Board of Directors
that was designated by Purchaser.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(b)      The Company shall adopt,  diligently  pursue and implement the following  strategies and
objectives  (the  "<b>Proposed  Strategies</b>"):  (i) The Company shall
		diversify and expand its business and operations </font>
		<font face="Times New Roman, Times, Serif" size="2">into the electronic
		security services sector by investing in one or more  security  businesses  in one or more
transactions  that have been  approved by the  Company's  Board of  Directors;  (ii) The Company  shall support and
facilitate  the  potential  acquisitions  for the Company of  electronic  security  businesses in the United States
and/or its  territories  to the extent such  acquisitions  would provide a critical mass from which the Company may
grow organically and through  acquisitions;  (iii) The Company shall finance the growth of its Electronic  Security
Services  Division by accessing the equity and debt capital  markets when  conditions in such markets are such that
the Board of Directors  believe  accessing  capital through them is in the Company's best  interests;  and (iv) The
Company shall cause the initial platform acquisition(s)  to be financed with a combination of equity and debt; and
the Company shall use and dedicate  $5,000,000  of its cash (from sources other than the proceeds  arising from the
sale to the  Purchaser of the Units and from the exercise of the Warrants)  together  with the Purchase  Price paid
to the Company hereunder to fund  acquisitions of one or more security  businesses in one or more transactions that
have been approved by the Company's  Board of Directors and otherwise in  furtherance  of the Proposed  Strategies.
The Company  agrees to support and conclude  reasonable  transactions  to the extent the  opportunity to enter into
such  transactions  is  presented  to the Company in  furtherance  of the Proposed  Strategies.  The Company  shall
actively and  diligently  pursue the  reasonable  implementation  of the Proposed  Strategies and shall support and
facilitate  such  reasonable  implementation.  The  provisions of Section 8(a) and this Section 8(b) are a material
inducement to Purchaser  entering into this Agreement and purchasing any Securities.  The foregoing  obligations of
the Company shall be effective only after the First Closing Date and shall be subject,  in their  entirety,  to the
fiduciary  duties the Board of  Directors  owes to the  shareholders  of the Company and shall not be  construed to
obligate  the Board of  Directors  to approve and pursue any action  without an  independent  determination  by the
Board  of  Directors  that  such  action  is in the  best  interests  of the  Company  and its  shareholders;  and,
notwithstanding  anything  stated  herein to the  contrary,  if, at any time the Board of  Directors of the Company
determines in good faith,  based upon the opinion of independent legal counsel (who may be the Company's  regularly
engaged  independent  counsel),  that it is required by its fiduciary  duties to the Company's  shareholders  under
applicable  law to refuse or delay to pursue any action  that  purports  to further the  Proposed  Strategies,  the
Company may refuse or delay to pursue any action that  purports to further the Proposed  Strategies,  including the
investigation,  negotiation  or  consummation  of any potential  acquisitions  or offerings.  Nothing stated herein
shall preclude the Company and its subsidiaries from continuing the Company's  present  operations and pursuing the
Company's   traditional  and  other   businesses  as  identified  and  described  in  the  Company  SEC  Documents.
Furthermore,  notwithstanding  anything  stated herein to the contrary,  the Company shall not be liable for breach
of the covenants in this Section 8 for not pursuing and implementing  the Proposed  Strategies in connection with a
transaction  that has not been approved by any member of the Company's  Board of Directors  that was  designated by
Purchaser.

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(c)      In the  event the  Company's  Board of  Directors  approves  one or a series of  related
transactions  not involving  the Purchaser or its  affiliates to which the Company is a party and pursuant to which
one or more persons or entities (the "<b>Acquirer</b>&quot;) other th</font><font face="Times New Roman, Times, Serif" size="2">an
		Donald Smith,  Jr., Robert D. Armstrong,  Purchaser or
any  affiliate  thereof  shall  acquire  record or  beneficial  ownership or control,  directly or  indirectly,  of
securities of the Company  representing  (when aggregated with any securities  beneficially  owned or controlled by
such person(s) or entity(ies) prior to such transaction or series of related  transactions)  fifty percent (50%) or
more of the total number of votes that may be cast for the  election of the  directors of the Company (a "<b>Change of
Control  Transaction</b>"),  then the Purchaser shall have the right to elect to exercise  tag-along rights with Donald
Smith,  Jr. and/or Robert D.  Armstrong  (collectively,  Messrs.  Smith and  Armstrong  and their  affiliates,  the
"<b>Selling  Parties</b>&quot;) to the extent a</font><font face="Times New Roman, Times, Serif" size="2">ny
		of such Selling Parties sell a portion or all of the  Company's  securities
they own that would  entitle the  Purchaser  to sell to the  Acquirer  securities  of the Company then owned by the
Purchaser  (on a pro rata basis based upon the same  proportion  of shares of Common Stock  (determined  on a fully
diluted  basis) sold by the Selling  Parties  relative to their  aggregate  holdings of the Company's  Common Stock
(determined on a fully diluted basis)) and, upon the  Purchaser's  exercise of such right as herein  provided,  the
Company  shall cause the Acquirer to purchase  such  securities  of the Purchaser on the same terms as the Acquirer
shall acquire the  securities of the Company from the Selling  Parties in the Change of Control  Transaction.  If a
Change of Control  Transaction  is approved by the Company's  Board of Directors,  the Company shall deliver to the
Purchaser,  at least  fifteen (15) days prior to the  consummation  of the Change of Control  Transaction,  written
notice of the terms and  conditions  of the Change of Control  Transaction  and copies of any  proposed  definitive
documentation  in  connection  therewith  (a "<b>Tag  Notice</b>").  For a period of ten (10) days  after the  Purchaser's
receipt from the Company of a Tag Notice,  the  Purchaser  shall have the right to require the Company to cause the
Acquirer  to  purchase  securities  of the Company  then owned by the  Purchaser  on the same terms and in the same
proportion as the Acquirer  shall acquire the  securities of the Company from the Selling  Parties in the Change of
Control  Transaction,  which right shall be exercisable  by the  Purchaser's  giving the Company  written notice of
exercise  within  such 10-day  period (a "<b>Tag  Exercise  Notice</b>").  Upon  receipt by the Company of a Tag  Exercise
Notice,  the  Company  shall  cause the  Acquirer  to purchase  any  securities  of the  Company  then owned by the
Purchaser  on the same terms and in the same  proportion  as the  Acquirer  shall  acquire  the  securities  of the
Company from the Selling Parties in the Change of Control  Transaction.  Any Warrants or other securities,  options
or rights  convertible  into or  exchangeable  for capital  stock of the Company owned by the Purchaser and each of
the Selling Parties,  as the case may be, shall be treated,  for purposes of determining  their respective pro rata
amounts to be included in a sale in respect of which a Tag Exercise  Notice has been given under this  Section,  as
having been  converted  into or  exchanged  for the maximum  number of shares of capital  stock of the Company into
which such securities are convertible or exchangeable in accordance with their terms.
		</font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(d)      During the twelve months  immediately  following  the First Closing Date,  the Purchaser
shall have the right to exercise its right to purchase its pro rata share of  securities  offered in any new equity
or equity  linked  offerings  by the  Company on the terms and during the period set forth  herein  (the  "<b>Right of
First  Offer</b>&quot;). The Company shall not conduct or  conclude  any equity or  equity-linked  offering or  financing
(including debt with an equity component)  ("<b>Future  Offerings</b>&quot;) during
		the period commencing on the First Closing Date and ending on the
		anniversary of the First Closing Date (or if the Second Closing shall</font> occur,  then ending<font face="Times New Roman, Times, Serif" size="2">
on the anniversary of the Second Closing Date) unless the Company shall have first  delivered to the Purchaser,  at
least  fifteen (15) business  days prior to the closing of such Future  Offering,  written  notice  describing  the
proposed  Future  Offering,  including  the terms and  conditions  thereof,  together  with copies of the  proposed
definitive  documentation  to be entered  into in  connection  therewith,  and  providing  the  Purchaser an option
exercisable  (by  delivering  to the Company  written  notice of exercise at any time) during the seven (7) Trading
Day (as herein  defined)  period  following  delivery of such notice to purchase up to its pro rata share (based on
the  ratio  that the  total  number of shares of Common  Stock  then  owned or deemed  owned by the  Purchaser,  as
applicable,  bears to the total number of shares of Common  Stock then issued and  outstanding)  of the  securities
being  offered in the Future  Offering  on the same terms  being  offered by the  Company to other offerees in the
Future  Offering and, if the Company shall have retained an underwriter or placement  agent in connection with such
Future Offering,  then on the terms generally applicable to all offerees reasonably  prescribed by such underwriter
or  placement  agent for such  Future  Offering;  provided,  however,  that in the event that such  underwriter  or
placement  agent  reasonably  objects in writing  (and  delivers  such  written  objections  to the Company and the
Purchaser  prior to the  commencement  of the  offering) to such pro rata  purchase by the Purchaser on the grounds
that its pro rata  purchase  in such  offering  will have a material  adverse  effect on the  Company's  ability to
consummate  such Future  Offering at the offering price and on the material  terms proposed for such offering,  the
Purchaser shall be deemed to waive its rights to purchase that portion of its shares which such  underwriter  deems
objectionable  (and only such  portion) in that  particular  Future  Offering (and only in that  particular  Future
Offering)  in respect of which such  underwriter  or  placement  agent so objects  (and shall not be deemed to have
waived the Right of First Offer with respect to any other Future  Offerings) (the "<b>Waiver  Proviso</b>&quot;)
		</font><font face="Times New Roman, Times, Serif" size="2">provided that
		the  Purchaser  may  purchase  any  portion of its pro rata share in  respect  of which such  underwriter  does not
object.  In the event the terms and  conditions  of a proposed  Future  Offering  are amended in any respect  after
delivery of the notice to the Purchaser  concerning the proposed Future  Offering,  the Company shall deliver a new
notice to the  Purchaser  describing  the amended  terms and  conditions  of the proposed  Future  Offering and the
Purchaser  thereafter shall have an option during the seven (7) Trading Day period  following  delivery of such new
notice to purchase  its pro rata share (as  determined  above) of the  securities  being  offered on the same terms
being  offered  by the  Company  to other offerees  in the  Future  Offering,  as  amended,  subject to the Waiver
Proviso.  The foregoing  sentence shall apply to successive  amendments to the terms and conditions of any proposed
Future  Offering.  The Right of First Offer shall not apply to (i) the issuance
		by the Company of securities upon exercise or conversion of the
		Company's options, warrants or other convertible securities outstanding
		as of the date hereof and set forth on Schedule 6(f) or the Purchased
		Warrants or to the grant, exercise or conversion of additional options
		or warrants, or the issuance of additional securities, under any Company
		stock option or restricted stock plan approved by the shareholders and
		the Board of Directors of the Company or (ii) the issuance by the
		Company of any securities of the Company, including, without limitation,
		shares of the Company's Common Stock or options, warrants or other
		securities convertible or exercisable into shares of the Company's
		Common Stock if such issuance by the Company was issued as consideration
		for and in connection with the consu</font><font face="Times New Roman, Times, Serif" size="2">mmation
		by the Company of an acquisition of another corporation approved by the
		Company's Board of Directors in furtherance
of the  Proposed  Strategies  or  other  acquisitions  outside  the  scope of the  Proposed  Strategies  (e.g.,  in
connection  with the Company's  traditional  business).  "<b>Trading Day</b>" shall mean any day on which the Common Stock
is traded for any period on Nasdaq,  or on the principal  securities  exchange or other securities  market on which
the Common Stock is then being traded.

                  </font></p>
		<p>(<font size="2">e)      The  Company  shall  pay or  reimburse  Purchaser  all fees  and  expenses  incurred  by
Purchaser  in  connection  with  the  transactions  contemplated  by this  Agreement  and in  connection  with  the
negotiation,  preparation,  execution,  delivery and  performance of this Agreement  and/or any term sheets and the
other  agreements  and  documents  to be executed  and/or  delivered in  connection  herewith,  including,  without
limitation,  investment banking, legal,  accounting,  attorneys',  consultants' and other professional fees, not to
exceed in the aggregate One Hundred  Thousand  Dollars  ($100,000) (the "<b>Expense  Cap</b>");  provided that the Company
shall have no obligation to pay the Purchaser's  professional  fees or other expenses  incurred by it in connection
with the transactions  contemplated  hereby if the Purchaser fails to exercise its commercially  reasonable efforts
to conclude  the  purchase  by it of the Initial  Units (as a result of which  failure the First  Closing  does not
occur)  except where such failure (i) is due to the failure of the Company to act  reasonably  and in good faith or
(ii) arises from Purchaser's  reasonable  dissatisfaction  with its due diligence  investigation of the Company, in
which  events  under  clause (i) or (ii) the  Company  shall be so  obligated  to pay such fees and  expenses.  The
Expense Cap shall not apply to the provisions of the first sentence of Section 9(g) hereof or Section 12 hereof.

                  </font></p>
		<p><font size="2">(f)      The Company  shall  undertake  and use its best  efforts to nominate and procure each of
Richard C. Rochon's and Mario B.  Ferrari's  election to its Board of Directors as of the First  Closing Date and,
if elected,  the Company shall provide  liability  insurance and  indemnification  for such individuals to the same
extent that it shall provide such benefits to the other members of the Board of Directors.

                  </font></p>
		<p><font size="2">(g)      The Company  shall engage  Stephen J. Ruzika and up to three  members of his  management
team  designated by him as of the First Closing Date to serve as members of the Company's  management team with the
power and authority to oversee and manage the Electronic  Security  Services  Division of the Company,  on mutually
agreeable  terms to be  determined by the parties;  provided  that,  the  anticipated  compensation  payable by the
Company to such persons will be in the form of  $750,000-850,000 in aggregate annual salary,  plus,  following such
engagement,  participation  in the  Company's  stock  option  plan to the same extent as other  similarly  situated
senior  executives  of the Company  participate  subsequent to the First Closing Date, as approved by the Company's
Board of Directors.

                  </font></p>
		<p><font size="2">(h)      Each of the Company and the  Purchaser  shall  deliver or cause to be  delivered  to the
other at the applicable Closing any and all certificates,  documents,  instruments and other items required by this
Agreement  to be  delivered  by such party at or prior to such  Closing  duly  executed by such party as and to the
extent required. </font></p>
		<p><font size="2">(i)      The Company shall use its best  commercially  reasonable  efforts to timely satisfy each
of the  conditions  described  in  Section 4 of this  Agreement.  The  Purchaser  shall  use its best  commercially
reasonable efforts to timely satisfy each of the conditions described in Section 5 of this Agreement.

                  </font></p>
		<p><font size="2">(j)      During  the  period  from the date of this  Agreement  to the First  Closing  Date,  the
Company  shall  permit  the  Purchaser  and their  representatives  to have  reasonable  access  to the  directors,
officers,  employees,  agents,  assets and properties of the Company and each of its  subsidiaries and all relevant
books,  records  and  documents  of or  relating  to the  Company  and each of its  subsidiaries  and each of their
respective  businesses and assets during normal business hours and will furnish to the Purchaser such  information,
financial  records and other documents  relating to the Company and each of its  subsidiaries  and their respective
business and assets as the Purchaser may reasonably  request.  Without  limiting the  foregoing,  the Company shall
permit the Purchaser'  officers to meet with the officers of the Company and its  subsidiaries  responsible for its
financial  statements,  the internal  controls of the Company and its subsidiaries and the disclosure  controls and
procedures  of the Company and its  subsidiaries  to discuss  such  matters as the  Purchaser  may deem  reasonably
necessary or  appropriate  for the Purchaser to satisfy its  obligations  under Sections 302 and 906 of SOX and any
rules and regulations  relating thereto.  Access to such information by the Purchaser shall be effected through the
granting  of  access  by the  Company  to the  Purchaser  and  shall be  governed  by  Purchaser's  confidentiality
obligations  set forth in that certain  Confidentiality  Agreement,  dated March 8, 2004 by and between the Company
and Purchaser.

                  </font></p>
		<p><font size="2">(k)      The Company  agrees at its expense to file a Form D with  respect to the  Securities  as
required  under  Regulation  D and to provide a copy  thereof to the  Purchaser  promptly  after such  filing.  The
Company  shall at its expense,  on or before each Closing Date,  take such action as the Company  shall  reasonably
determine is necessary to qualify the  Securities  for sale to the Purchaser at each such Closing under  applicable
securities  or  "blue  sky"  laws of the  states  of the  United  States  (or to  obtain  an  exemption  from  such
qualification),  and shall  provide  evidence of any such action so taken to the Purchaser on or prior to each such
Closing  Date.  Purchaser  shall provide the Company  reasonably  advance  notice of all States in which  Purchaser
shall be distributing the Securities to allow the Company time to prepare such filings.

                  </font></p>
		<p><font size="2">(l)      The  Company  shall at all times  have  authorized,  and  reserved  for the  purpose  of
issuance,  a sufficient  number of shares of Common Stock to provide for the maximum number of shares issuable upon
exercise of or  otherwise  pursuant to the Warrants and  issuance of the Warrant  Shares in  connection  therewith.
The  Company  shall not reduce the number of shares of Common  Stock  reserved  for  issuance  upon  exercise of or
otherwise  pursuant to the Warrants  without the consent of the  Purchaser.  If at any time the number of shares of
Common  Stock  authorized  and  reserved  for  issuance is below the maximum  number of Warrant  Shares  issued and
issuable upon  exercise of or otherwise  pursuant to the Warrants  (based on the exercise  price of the Warrants in
effect from time to time),  the Company will promptly take all corporate  action necessary to authorize and reserve
a  sufficient  number of shares,  including,  without  limitation,  calling a special  meeting of  shareholders  to
authorize  additional shares to meet the Company's  obligations under this Section,  in the case of an insufficient
number of  authorized  shares,  and using its best  efforts to obtain  shareholder  approval of an increase in such
authorized number of shares.

                  </font></p>
		<p><font size="2">(m)      The Company  shall  promptly  secure the listing of the Common Shares upon each national
securities  exchange or  automated  quotation  system,  if any,  upon which  shares of Common Stock are then listed
(subject to official  notice of issuance)  and, as long as any of the  Purchaser  owns any of the Common  Shares or
other Securities,  shall maintain,  so long as any other shares of Common Stock shall be so listed, such listing of
all Common  Shares.  The Company  will obtain,  as long as any of the  Purchaser  owns any of the Common  Shares or
other  Securities,  and  maintain,  the  listing  and trading of the Common  Stock on Nasdaq,  the Nasdaq  SmallCap
Market,  the New York Stock  Exchange,  or the American  Stock  Exchange  and will comply in all respects  with the
Company's  reporting,  filing  and other  obligations  under the  bylaws or rules of the  National  Association  of
Securities Dealers ("<b>NASD</b>") to the extent,  and on such other exchanges upon which,  shares of the Company's Common
Stock are then listed.

                  </font></p>
		<p><font size="2">(n)      The Company  shall call and hold a special  meeting of its  shareholders  as promptly as
practicable  for the  purpose of voting upon the  approval  of this  Agreement  and the  transactions  contemplated
hereby.  The Company  shall  comply with all  requirements  of  applicable  law  applicable  to such  meeting.  The
Company  shall use its  commercially  reasonable  efforts  to  solicit  from its  shareholders  proxies in favor of
approval of this Agreement and the transactions  contemplated  hereby, and shall take all other action necessary or
advisable to obtain the vote or consent of the  shareholders  required by applicable law to obtain such  approvals;
provided that nothing stated herein shall obligate the Company to hire a third party proxy solicitation firm.

                  </font></p>
		<p><font size="2">(o)      If, at any time the Board of Directors of the Company  determines  in good faith,  based
upon the opinion of independent  legal counsel (who may be the Company's  regularly engaged  independent  counsel),
that it is so required by its fiduciary  duties to the Company's  shareholders  under  applicable  law, the Company
may,  in  response  to an  unsolicited  Superior  Proposal  (as  hereinafter  defined)  which does not  violate the
non-solicitation  provisions  of Section  8(q) below,  (x) furnish  information  with respect to the Company to the
person making such unsolicited  Superior  Proposal  pursuant to a  confidentiality  agreement in substantially  the
same  form as the  confidentiality  agreement  executed  by the  Company  and  Purchaser,  and (y)  participate  in
discussions or negotiations  regarding such Superior Proposal.  Following its receipt of the Superior Proposal,  in
the event that the Board of  Directors  determines  in good  faith,  based upon the  opinion of  independent  legal
counsel (who may be the Company's  regularly  engaged  independent  counsel),  that it is required by its fiduciary
duties to the  Company's  shareholders  under  applicable  law, the Board of Directors may withdraw its approval of
the  transactions  contemplated  herein.  Upon the  consummation  of any such Superior  Proposal,  Purchaser  shall
become  irrevocably  entitled  to receive  the  break-up  fee  specified  in Section  8(r).  For  purposes  of this
Agreement,  a  "Superior  Proposal"  means any bona fide  proposal,  made by a third  party to acquire  one hundred
                percent (100%) or more of the shares of the Company's  Common Stock,  whether by  acquisition  of stock,  merger or
otherwise,  then  outstanding,  the  consideration for which may consist of cash or securities of such third party,
on terms  which the Board of  Directors  of the  Company  determines  in its good faith  judgment  (based  upon the
written  advice  of Capitalink)  to be  more  favorable  to the  Company's  shareholders  than  the  terms  of the
transactions  contemplated  hereunder  taking  into  account  the  break-up  fee  specified  in  Section  8(r).  In
determining  whether an unsolicited third party proposal is, in fact a Superior  Proposal,  it shall be a condition
that (i)  Capitalink  has advised the Company that it reasonably  believes that such third party has the ability to
finance and conclude  the  transaction  and (ii)  Capitalink  confirms to Company in writing its analysis  that the
unsolicited  third party proposal is in fact a Superior  Proposal.  The Company  acknowledges that (i) historically
its  stock  price  has  consistently  been  lower  than the  price at  which it is  trading  as of the date of this
Agreement,  (ii) the  Company  would not have the  opportunity  to enter into the  security  services  industry  as
contemplated  herein without the input and expertise  provided by Purchaser and Stephen J. Ruzika whose  employment
by the Company was facilitated by the Purchaser and (iii) as a consequence of the foregoing,  in analyzing  whether
any proposal  constitutes a "Superior  Proposal" the Company and Capitalink shall (A) take into  consideration what
the market  price of such  price  would be absent the  participation  by  Purchaser  and  Stephen J.  Ruzika in the
Company's  operations and the Company's  public  announcement  of such  participation  and (B) make a determination
whether it is in the best  interests of the Company's  shareholders  and whether the Company has the capability and
desire  to  enter  into  another  industry  other  than the  security  services  industry.  In  addition,  any such
alternative  proposal  must be deemed by the  Company's  board of  directors  to benefit  all  shareholders  of the
Company.  To the extent the Company has received after the date hereof  subscriptions  from  investors,  other than
Purchaser  or any  affiliate  thereof,  for the  purchase,  in the  aggregate,  of  600,000  or more  shares of the
Company's  Common  Stock,  in one or a series of  transactions  (the  "Pre-Closing  Offering"),  the  definition of
"Superior  Proposal"  shall be deemed to not include any proposal the offered per share value of which is less than
120% of the price  paid for the shares of Common  Stock in the  Pre-Closing  Offering;  provided  that the  Company
consummates  the sale of the shares of Common Stock in such  Pre-Closing  Offering  prior to the Closing  hereunder
and such  Pre-Closing  Offering is  conducted by the Company in  compliance  with all  applicable  law. The Company
shall not be prohibited  from taking and disclosing to its  shareholders a position  contemplated  by Rule 14e-2(a)
promulgated  under the  Exchange  Act or from making any  disclosure  to the  Company's  shareholders  concerning a
Superior  Proposal if, in the good faith  judgment of the Board of Directors  of the  Company,  after  consultation
with independent legal counsel (who may be the Company's  regularly  engaged  independent  counsel),  failure so to
disclose would be a violation of its fiduciary duties to the Company's shareholders under applicable law.

                  </font></p>
		<p><font size="2">(p)      The Company  covenants and agrees that,  except as  contemplated by or disclosed in this
Agreement,  unless the Purchaser  shall have  consented in writing (such consent not to be  unreasonably  withheld)
neither the Company nor any of its  subsidiaries  shall,  between the date of this Agreement and the Second Closing
Date,  directly or indirectly do or propose or agree to do any of the following  without the prior written  consent
of the Purchaser, which consent shall not be unreasonably withheld:</font></p>
		<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

                           (i)      amend  or  otherwise   change  its  Articles  of  Incorporation  or  Bylaws  or
         equivalent organizational documents;

                           </font></p>
		<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)     declare, set aside, make or pay any dividend or other distribution,  payable in
         cash, stock, property or otherwise, with respect to any of its capital stock;

                           </font></p>
		<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iii)    reclassify,   combine,  split,  subdivide  or  redeem,  purchase  or  otherwise
         acquire, directly or indirectly, any of its capital stock;

                           </font></p>
		<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iv)     take any action other than in the  ordinary  course of business and in a manner
         consistent with past practice with respect to accounting policies or procedures;

                           </font></p>
		<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (v)      enter into any agreement,  arrangement or  understanding  with any Affiliate of
         the  Company  (except as set forth in  <u>Schedule  8(o)</u> or as  permitted  by the  Company's  Code of Ethical Conduct,  SOX, the rules and regulations of the SEC  promulgated thereunder,  or applicable  Nasdaq rules
         and regulations); or

                           </font></p>
		<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (vi)     agree,  in writing or otherwise,  to take any of the  foregoing  actions or any
         action that would make any  representation  or warranty in this  Agreement  made by the Company  untrue or
         incorrect. </font></p>
		<p><font size="2">(q)      Until the  Closing  Date,  the  Company  agrees  that it shall not,  and shall cause its
officers,  directors,  shareholders,  agents, employees or affiliates, not to (i) solicit,  encourage,  consider or
accept any  offers  from any other  party to acquire  all or any  portion of the assets of or any  interest  in the
Company,  (ii)  participate in any discussions or negotiations  with any other party  concerning the sale of all or
any portion of the assets of or any interest in the Company,  (iii) provide any  non-public  information  about the
Company to any person related to a potential  sale of any assets of or interests in the Company,  or (iv) otherwise
cooperate in any way with,  assist,  facilitate or encourage any effort by any other person  seeking to acquire all
or any  portion of the assets of or any  interest  in the  Company,  except in the  situation  where,  pursuant  to
		<u>Section 8(o)</u>,  the Board of Directors  has  determined,  in good faith,  that its  fiduciary  duties  require it to respond to an unsolicited  Superior  Proposal.  The Company shall promptly advise  Purchaser in writing of any such
inquiry or proposal  which they may  receive,  including  the terms of the proposal and identity of the inquirer or offeror.

                  </font></p>
		<p><font size="2">(r)      If the Company  breaches any of its  obligations  under
		<u>Section 8(o</u>) or <u>Section 8(q</u>), or the Board of Directors  withdraws its approval of the transactions  that are the subject of this Agreement in order
to respond  to a  Superior  Proposal,  or the  Company  makes a public  announcement  of its  receipt of a Superior
Proposal,  and the Company,  in any of such events,  consummates  such Superior  Proposal then,  immediately  after
consummation of such Superior  Proposal,  Purchaser will become  irrevocably  entitled to payment of a fee equal to
three  percent (3%) of the  Company's  market  capitalization  at the time the Company  consummates  such  Superior
Proposal.  In addition to this breakup fee,  Purchaser will be entitled to all other equitable  rights and remedies
available  to  Purchaser  including  specific  performance  and  the  obtaining  of  an  injunction  enjoining  the
consummation  of the Superior  Proposal to the extent a court of law determines  such  consummation is not required
by the Company's  fiduciary  duties.  In addition,  if the Company  breaches any of its obligations  under
		<u>Section 8(o) </u>or <u>Section 8(q)</u>, then Purchaser will be entitled to recover all  out-of-pocket  costs and expenses incurred in
        connection with the proposed transaction including,  without limitation,  the cost of enforcement hereunder, all of
which shall be in addition to any other damages or remedies which may be available to Purchaser.
		</font></p>
		<p><font size="2">(s)      The Company  hereby  covenants and agrees with the Purchaser  that the Company shall not
consummate  any  transaction  or enter into any form of agreement  with Stephen J. Ruzika or any affiliate  thereof
without the prior written consent of the Purchaser.</font></p>
		<p><font size="2">&nbsp;9.       Shelf Registration.  The Company shall:

                  </font></p>
		<p><font size="2">(a)      Prepare  and  file  or  cause  to be  prepared  and  filed  with  the  SEC,  as  soon as
practicable,  but in any  event by the date that is sixty  (60) days  after the last  applicable  Closing  Date,  a
registration  statement (the  "<b>Registration  Statement</b>")  registering the resale from time to time by the Purchaser
of all of the  Common  Shares.  The  Registration  Statement  shall  be on Form  S-3 or  another  appropriate  form
permitting  registration  of the Common Shares for resale by the Purchaser  from time to time through the automated
quotation  system of Nasdaq or the facilities of a national  securities  exchange on which the Common Stock is then
traded,  or if not then traded on a national  securities  exchange  then on any  securities  exchange or  quotation
system  on  which  the  Common  Stock is then  listed  or on the OTC  Bulletin  Board,  or in  privately-negotiated
transactions.  The  Company  shall use its  reasonable  best  efforts  to cause the  Registration  Statement  to be
declared  effective  under the Securities  Act as promptly as is  practicable  but in any event by the date that is
the  earlier of sixty (60) days after the date the  Registration  Statement  is filed or one hundred  twenty  (120)
days after the last applicable Closing Date.

                  </font></p>
		<p><font size="2">(b)      Prepare  and file with the SEC such  amendments  and  post-effective  amendments  to the
Registration  Statement as may be necessary to keep the Registration  Statement continuously effective for a period
at least  equal to the later of (i) the  second  anniversary  of the date on which the  Registration  Statement  is
declared  effective  under the  Securities Act or (ii) the date on which all Common Shares may be resold by all the
Purchaser  pursuant to Rule 144 without any  restriction  as to the number of  securities  as of a particular  date
that can then be immediately  sold (such period,  the  "<b>Effectiveness  Period</b>");  cause the related  Prospectus (as
herein  defined) to be  supplemented  by any required  Prospectus  supplement,  and as so  supplemented to be filed
pursuant to Rule 424 (or any similar  provisions  then in force) under the Securities Act; and use its best efforts
to comply with the  provisions  of the  Securities  Act  applicable  to it with respect to the  disposition  of all
securities covered by such Registration  Statement during the Effectiveness  Period in accordance with the intended
methods of  disposition  by the sellers  thereof  set forth in such  Registration  Statement  as so amended or such
Prospectus as so supplemented. </font></p>
		<p><font size="2">(c)      As promptly  as  practicable  give  notice to the  Purchaser  (i) when  any  Prospectus,
Prospectus supplement,  or the Registration  Statement or a post-effective  amendment to the Registration Statement
has been filed with the SEC and, with respect to a Registration  Statement or any  post-effective  amendment,  when
the same has been declared effective.

                  </font></p>
		<p><font size="2">(d)      Use  reasonable  best  efforts  to obtain the  withdrawal  of any order  suspending  the
effectiveness of the  Registration  Statement or the lifting of any suspension of the  qualification  (or exemption
from  qualification)  of any of the Common Shares for sale in any  jurisdiction  in which they have been  qualified
for sale,  in either case at the  earliest  possible  moment,  and provide  prompt  notice to the  Purchaser of the
withdrawal of any such order.

                  </font></p>
		<p><font size="2">(e)      During the  Effectiveness  Period,  deliver to the Purchaser in connection with any sale
by the Purchaser of Common Shares pursuant to the  Registration  Statement,  without charge,  as many copies of the
Prospectus  or  Prospectuses  relating  to such Common  Shares  (including  each  preliminary  prospectus)  and any
amendment or supplement thereto as the Purchaser may reasonably request.

                  </font></p>
		<p><font size="2">(f)      File  documents  required of the  Company for  customary  Blue Sky  clearance  in states
specified in writing by the  Purchaser to the extent  required by  applicable  law;  provided that the Company will
not be required to (i) qualify as a foreign  corporation or as a dealer in securities in any jurisdiction  where it
would not  otherwise be required to qualify but for this  Agreement  or (ii) take any action that would  subject it
to general service of process in suits or to taxation in any such jurisdiction where it is not then so subject.

                  </font></p>
		<p><font size="2">(g)      Bear all fees and expenses  incurred in connection  with the  performance by the Company
of its obligations under this Section 9 whether or not the Registration Statement is declared effective.
		</font></p>
		<p><font size="2">(h)      Not allow any  shareholders  other than the  Purchaser  to include  their  shares in the
Registration  Statement;  except that it shall allow the Smith and Armstrong  family  members and their  affiliates
identified on Schedule 9(h) hereto  (collectively,  the  "<b>Smith/Armstrong  Families</b>") to include an amount of their
              shares of Common  Stock in the  Registration  Statement  equal to the  number of  Purchased  Shares  and  Purchased
Warrant  Shares;  provided that in the event the managing  underwriter,  if any,  advises the Company,  in writing,
that in its reasonable  opinion the number of shares proposed to be included in the Registration  Statement exceeds
the number that  reasonably  can be included  for any reason,  then the Company  will  include in the  Registration
Statement  to the extent of the number  which the managing  underwriter  advises the Company can be  included,  the
following  shares in the  following  order and  priority:  (1) first,  the Common  Shares of the  Purchaser and the
shares of the  Smith/Armstrong  Families included on the Registration  Statement on a pro-rata basis based upon the
proportion of each  shareholder's  ownership  relative to the aggregate number of shares owned by Purchaser and the
Smith/Armstrong  families included on the Registration  Statement combined and (2) second,  other securities of the
Company,  if permitted.  Notwithstanding  anything  stated to the contrary,  the Company's  obligations  under this
Section 9 shall  terminate as to the  Purchaser,  any assign or any other party granted rights under this Section 9
at such  time as all of such  party's  Securities  and  Common  Shares  can be sold  under  Rule  144  without  any
restriction as to the number of securities as of a particular date that can then be immediately sold.

         </font></p>
		<p><font size="2">10.      Delay  in  Effectiveness  of  Registration  Statement.  If  the  Registration  Statement  is  not
declared  effective by the SEC by the date that is one hundred eighty (180) days after the last applicable  Closing
Date as a result of the Company's not exercising  reasonable  best efforts to cause the  Registration  Statement to
be declared  effective by the SEC as promptly as possible  (and not because of delays in the  registration  process
due to SEC  inquiries,  comments or other  delays by the SEC or other issues  outside the control of the  Company),
then (a) for the first thirty (30) day period (or part thereof)  beginning one hundred  eighty (180) days after the
last applicable  Closing Date, the Company shall pay to the Purchaser,  as liquidated damages and not as a penalty,
an amount  in cash  equal to two  percent  (2%) of the  total  Purchase  Price  paid by the  Purchaser  for all the
Purchased  Securities as of the last  applicable  Closing Date and (b) for each  subsequent  30-day period (or part
thereof),  until but excluding the date the SEC declares the Registration  Statement effective,  the Company shall,
for each such 30-day  period,  pay the  Purchaser,  as liquidated  damages and not as a penalty,  an amount in cash
equal to one percent (1%) of the total Purchase Price paid by the Purchaser for all the Purchased  Securities;  and
for any such 30-day  period,  such payment shall be made by the Company no later than the first business day of the
calendar  month next  succeeding the month in which such 30-day period  expires,  calculated on a pro rata basis to
the  date on which  the SEC  declares  the  Registration  Statement  effective.  The  parties  agree  that the sole
damages  payable for a  violation  of the terms of this  Section 10 with  respect to which  liquidated  damages are
expressly  provided  shall be such  liquidated  damages.  Nothing  shall  preclude the  Purchaser  from pursuing or
obtaining  specific  performance  or other  equitable  relief with respect to this  Agreement.  The parties  hereto
agree that the liquidated  damages provided for in this Section 10 constitute a reasonable  estimate of the damages
that may be  incurred  by the  Purchaser  by reason of the  failure of the  Registration  Statement  to be declared
effective in accordance with the provisions hereof. </font></p>
		<p><font size="2">11.      Transfer of Shares After Registration; Suspension; Obligations of Purchaser.

                  </font></p>
		<p><font size="2">(a)      Subject  to  the  effectiveness  of  the  Registration   Statement  and  the  rules  and
regulations  promulgated  by the SEC,  the  Purchased  Securities  shall be  freely  transferable.  Subject  to its
compliance  with  applicable  rules and  regulations of the SEC, the Purchaser may assign the Purchased  Securities
prior to the  effectiveness  of the  Registration  Statement  and such  assignment  shall not reduce or release the
Company from its obligation to register such securities.

                  </font></p>
		<p><font size="2">(b)      The Company shall, as promptly as  practicable,  give notice to the Purchaser (i) of any
request,  following the  effectiveness  of the  Registration  Statement under the Securities Act, by the SEC or any
other federal or state  governmental  authority for  amendments or  supplements  to the  Registration  Statement or
related  Prospectus or for  additional  information,  (ii) of the issuance by the SEC or any other federal or state
governmental  authority  of any stop order  suspending  the  effectiveness  of the  Registration  Statement  or the
initiation  or  threatening  of any  proceedings  for that  purpose,  (iii) 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
Common Shares for sale in any  jurisdiction  or the  initiation or  threatening of any proceeding for such purpose,
(iv) of the  occurrence  of a Material  Event (as  defined in Section  11(c)) and (v) of the  determination  by the
Company that a post-effective  amendment to a Registration  Statement will be filed with the SEC, which notice may,
as  required  pursuant  to  paragraph  11(c),  state that it  constitutes  a Deferral  Notice,  in which  event the
provisions of Section 11(c) shall apply.

                  </font></p>
		<p><font size="2">(c)      The  Company  shall,  upon (A) the  issuance by the SEC of a stop order  suspending  the
effectiveness  of the  Registration  Statement or the  initiation of proceedings  with respect to the  Registration
Statement  under Section 8(d) or 8(e) of the  Securities  Act, (B) the  occurrence of any event or the existence of
any fact (a "<b>Material  Event</b>") as a result of which the  Registration  Statement shall contain any untrue statement
of a material  fact or omit to state any  material  fact  required to be stated  therein or  necessary  to make the
statements  therein not  misleading,  or the related  Prospectus  shall contain any untrue  statement of a material
fact or omit to state any  material  fact  required  to be  stated  therein  or  necessary  to make the  statements
therein,  in the light of the  circumstances  under which they were made, not misleading,  or (C) the occurrence or
existence of any pending  corporate  development  constituting a Material Event that, in the reasonable  discretion
of the  Company's  Board of  Directors,  makes it  appropriate  to suspend  the  availability  of the  Registration
Statement  and the  related  Prospectus,  (i) in the case of clause (B) above,  subject  to the next  sentence,  as
promptly as practicable  prepare and file, if necessary  pursuant to applicable law, a post-effective  amendment to
such  Registration  Statement or a supplement  to the related  Prospectus or any document  incorporated  therein by
reference or file any other  required  document  that would be  incorporated  by reference  into such  Registration
Statement and Prospectus so that such  Registration  Statement does not contain any untrue  statement of a material
fact or omit to state any material fact required to be stated therein or necessary to make the  statements  therein
not misleading,  and such Prospectus does not contain any untrue  statement of a material fact or omit to state any
material  fact  required to be stated  therein or necessary  to make the  statements  therein,  in the light of the
circumstances  under which they were made, not misleading,  as thereafter  delivered to the Purchaser of the Common
Shares  being sold  thereunder,  and, in the case of a  post-effective  amendment  to the  Registration  Statement,
subject to the next sentence,  use its reasonable best efforts to cause it to be declared  effective as promptly as
is  practicable,  and (ii) give notice to the Purchaser  that the  availability  of the  Registration  Statement is
suspended (a "<b>Deferral  Notice</b>") and,  upon receipt of any Deferral  Notice,  the  Purchaser  agree not to sell any
Common Shares pursuant to the  Registration  Statement until the Purchaser'  receipt of copies of the  supplemented
or amended  Prospectus  provided for in clause (i) above, or until it is advised in writing by the Company that the
Prospectus may be used, and has received  copies of any additional or  supplemental  filings that are  incorporated
or deemed  incorporated  by  reference in such  Prospectus.  The Company  will use all  reasonable  best efforts to
ensure that the use of the  Prospectus  may be resumed (x) in the case of clause (A) and (B) above,  as promptly as
is practicable,  and (y) in the case of clause (C) above,  as soon as, in the reasonable  judgment of the Company's
Board of Directors,  public disclosure of such Material Event would not be materially  prejudicial to the interests
of the Company or, if necessary to avoid  unreasonable  burden or expense to the  Company,  as soon as  practicable
thereafter.  The  Company  shall be  entitled  to  exercise  its right  under this  Section 11(c)  to  suspend  the
availability  of the  Registration  Statement  or any  Prospectus  no more than two (2)  times in any  twelve-month
period,  and any such period during which the  availability  of the  Registration  Statement and any  Prospectus is
suspended (the "<b>Deferral  Period</b>") shall not exceed  forty-five  (45) days. The Company shall use all  commercially
reasonable  best  efforts  to limit the  duration  and  number  of any  Deferral  Periods.  Each  Purchaser  hereby
expressly  acknowledges its obligation to keep confidential all nonpublic information about the Company,  including
all nonpublic  information set forth in such notice. The Effectiveness  Period  automatically shall be extended for
a period of time  equal in  duration  to the  duration  of all  Deferral  Periods in the  aggregate.  It shall be a
condition  precedent to the obligations of the Company to complete the registration  pursuant to Section 9 that the
Purchaser  shall  furnish to the Company such  information  regarding  itself,  Securities  held by it, any assign,
Securities  held by any assign and the intended  method of disposition  of the Securities  held by it or any assign
as shall be reasonably  required to effect the  registration of such Securities and shall execute such documents in
connection with such registration as the Company may reasonably request.

                  </font></p>
		<p><font size="2">(d)      As promptly as  practicable  after  becoming  aware of such event,  the Purchaser  shall
notify  the  Company  of the  occurrence  of any  event,  as a  result  of which  the  prospectus  included  in the
registration  statement,  as then in effect,  includes an untrue  statement of a material  fact or omits to state a
material  fact  required  to be  stated  therein  or  necessary  to make the  statements  therein,  in light of the
circumstances under which they were made, not misleading. </font></p>
		<p><font size="2">12.      Indemnity and Contribution.</font></p>
		<p><font size="2">&nbsp;(a)      The  Company  agrees to  indemnify  and hold  harmless  each of the  Purchaser  and each
person,  if any,  who controls  the  Purchaser  within the meaning of either  Section 15 of the  Securities  Act or
Section 20 of the Exchange Act and the Purchaser's respective officers,  directors,  general partners and managers,
as the case may be (collectively,  "<b>Purchaser Indemnitees</b>") from and against any and all losses, claims,  damages,
liabilities  and expenses  (including,  without  limitation,  any legal or other  expenses  reasonably  incurred in
connection with defending or investigating any such action or claim)  (collectively,  the "<b>Losses</b>") in each case to
the  extent,  but only to the extent  (i)  caused by any untrue  statement  of a  material  fact  contained  in the
Registration  Statement or the prospectus  included in the  Registration  Statement,  as amended or supplemented by
any amendment or prospectus  supplement,  including  post-effective  amendments,  and all material  incorporated by
reference in such prospectus  (the  "<b>Prospectus</b>")  or in any amendment or supplement  thereto or in any preliminary
prospectus,  or caused  by any  omission  to state  therein a  material  fact  required  to be  stated  therein  or
necessary to make the  statements  therein in light of the  circumstances  under which it was made not  misleading,
except insofar as such losses,  claims,  damages or liabilities are caused by any such untrue statement or omission
based upon  information  relating  to the  Purchaser  or its  assigns  furnished  to the Company in writing by such
Purchaser  or assign  expressly  for use  therein or (ii) caused by,  arising  from or related to the breach of any
representation,  warranty,  covenant or  agreement  made by the Company in or  pursuant  to this  Agreement  or any
document  delivered  by the  Company in  connection  herewith.  The  aggregate  Losses  incurred  by the  Purchaser Indemnitees  in  respect  of which  they are  entitled  to  indemnification  pursuant  to this  Section  12(a)  are
hereinafter  referred to as  "<b>Purchaser Indemnifiable  Losses</b>."  Notwithstanding  anything to the contrary in this
Agreement,  the Company shall have no obligation  to indemnify the Purchaser Indemnitees  pursuant to this Section
12(a):  (1) unless the aggregate  amount of Purchaser  Indemnifiable  Losses exceeds $500,000 and then only for the
amount of  Purchaser  Indemnifiable  Losses in excess of  $500,000;  or (2) for any amounts by which the  aggregate
amount of Purchaser  Indemnifiable  Losses exceeds $5,000,000;  provided that,  notwithstanding the foregoing,  the
foregoing  provisions of this sentence shall apply to any liquidated  damages  pursuant to Section 10 hereof or the
Company's  obligations to pay the Purchaser's  expenses  pursuant to Section 8(e) hereof,  and the Company shall be
liable  for the  full  amount  of any  liquidated  damages  pursuant  to  Section  10  hereof  and the  Purchaser's
reimbursable expenses under Section 8(e) hereof pursuant to the terms of such sections.

                  </font></p>
		<p><font size="2">(b)      The Purchaser  agrees to indemnify and hold harmless the Company,  its directors and its
officers  and each  person,  if any,  who  controls  the  Company  within the  meaning of either  Section 15 of the
Securities Act or Section 20 of the Exchange Act (collectively,  "<b>Company Indemnitees</b>"),  from and against any and
all Losses,  insofar as such Losses are (i) caused by any untrue  statement  of a material  fact  contained  in the
Registration  Statement  or  the  Prospectus  or in any  amendment  or  supplement  thereto  or in any  preliminary
prospectus,  or caused by any omission to state therein a material fact required to be stated  therein or necessary
to make the  statements  therein  not  misleading,  in each case to the extent,  but only to the extent,  that such
untrue  statement  or  omission  was made in  reliance  upon and in  conformity  with  information  relating to the
Purchaser  furnished in writing by the Purchaser to the Company expressly for use in the Registration  Statement or
Prospectus or (ii) caused by, arising from or related to the breach of any  representation,  warranty,  covenant or
agreement  made by the  Purchaser in or pursuant to this  Agreement or any document  delivered by the  Purchaser in
connection  herewith.  The  aggregate  Losses  incurred  by the  Company  Indemnitees  in respect of which they are
entitled to indemnification  pursuant to this Section 12(b) are hereinafter  referred to as "<b>Company Indemnifiable
Losses</b>."  Notwithstanding  anything to the contrary in this  Agreement,  the Purchaser  shall have no obligation to
indemnify  the Company Indemnitees  pursuant to this Section  12(b):  (1) unless the  aggregate  amount of Company
Indemnifiable  Losses exceeds  $500,000 and then only for the amount of Company  Indemnifiable  Losses in excess of
$500,000; or (2) for any amounts by which the aggregate amount of Company Indemnifiable Losses exceeds $5,000,000.

                  </font></p>
		<p><font size="2">(c)      In case any proceeding  (including any governmental  investigation)  shall be instituted
involving  any person or entity in respect of which  indemnity  may be sought  pursuant to Section  12(a) or 12(b),
such person or entity (the  "<b>indemnified  party</b>")  shall  promptly  notify the person or entity  against  whom such
indemnity  may be sought (the  "<b>indemnifying  party</b>") in writing and the  indemnifying  party,  upon request of the
indemnified  party,  shall retain  counsel  reasonably  satisfactory  to the  indemnified  party to  represent  the
indemnified  party and any others the  indemnifying  party may designate in such  proceeding and shall pay the fees
and  disbursements  of such counsel related to such  proceeding.  In any such  proceeding,  any  indemnified  party
shall have the right to retain its own counsel,  but the fees and expenses of such counsel  shall be at the expense
of such indemnified  party unless (i) the indemnifying  party and the indemnified  party shall have mutually agreed
to the  retention  of such  counsel  or (ii) the named  parties to any such  proceeding  (including  any  impleaded
parties) include both the indemnifying  party and the indemnified  party and  representation of both parties by the
same  counsel  would  be  inappropriate  due to  actual  or  potential  differing  interests  between  them.  It is
understood  that the  indemnifying  party shall not, in respect of the legal expenses of any  indemnified  party in
connection  with any  proceeding  or  related  proceedings  in the same  jurisdiction,  be liable  for the fees and
expenses of more than one separate firm (in addition to any local counsel) for all  indemnified  parties,  and that
all such fees and expenses shall be reimbursed  reasonably  promptly after incurred.  The indemnifying  party shall
not be liable for any settlement of any proceeding  affected without its written consent,  but if settled with such
consent  or if there be a final  judgment  for the  plaintiff,  the  indemnifying  party  agrees to  indemnify  the
indemnified  party from and against any loss,  liability or expense by reason of such  settlement  or judgment.  No
indemnifying  party shall,  without the prior written  consent of the indemnified  party,  effect any settlement of
any pending or threatened  proceeding in respect of which any  indemnified  party is or could have been a party and
indemnity  could have been sought  hereunder by such  indemnified  party,  unless such  settlement  (i) includes an
unconditional  release of such  indemnified  party from all liability on claims that are the subject matter of such
proceeding and (ii) does not include a statement as to or an admission of fault,  culpability,  criminal  liability
or a failure to act by or on behalf of any Indemnified Party.

                  </font></p>
		<p><font size="2">(d)      To the extent that the  indemnification  provided  for under  Section  12(a) or 12(b) is
unavailable to an indemnified  party or is  insufficient in respect of any losses,  claims,  damages or liabilities
referred to therein,  then each indemnifying  party under such paragraph,  in lieu of indemnifying such indemnified
party thereunder,  shall  contribute to the amount paid or payable by such  indemnified  party as a result of such
losses,  claims,  damages or liabilities (i) in such proportion as is appropriate to reflect the relative  benefits
received by the  indemnifying  party or parties on the one hand and the  indemnified  party or parties on the other
hand or (ii) if the  allocation  provided  by  clause  (i)  above  is not  permitted  by  applicable  law,  in such
proportion as is  appropriate  to reflect not only the relative  benefits  referred to in clause (i) above but also
the relative fault of the  indemnifying  party or parties on the one hand and of the  indemnified  party or parties
on the other hand in  connection  with the  statements  or omissions or other matters that resulted in such losses,
claims,  damages or liabilities,  as well as any other relevant  equitable  considerations.  The relative  benefits
received  by the  Company  shall be deemed to be equal to the total net  proceeds  from the sale  pursuant  to this
Agreement  (before  deducting  expenses)  of the  Purchased  Securities  to which such losses,  claims,  damages or
liabilities  relate.  The relative  benefits  received by the Purchaser shall be deemed to be equal to the value of
Purchased  Securities  that are  registered  under the  Securities  Act. The relative fault of the Purchaser on the
one hand and the Company on the other hand shall be determined  by reference  to, among other  things,  whether the
untrue statement of a material fact or the omission to state a material fact, or the inaccurate  representation  or
warranty  relates to  information  supplied by the  Purchaser or by the Company and the parties'  relative  intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission.
		</font></p>

<P><font size="2">The parties hereto agree
that it would not be just and equitable if contribution pursuant to this Section
12(d) were determined by pro rata allocation or by any other method of
allocation that does not take account of the equitable considerations referred
to in the immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and liabilities
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding this Section 12(d), the
Purchaser shall not be required to contribute any amount in excess of the amount
by which the net amount received by the Purchaser from the sale of the Purchased
Securities to which such loss relates exceeds the amount of any damages that
such indemnifying party has otherwise been required to pay by reason of such
untrue statement or 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. </font></P>

                  <font size="2">(e)      The remedies  provided for in this Section 12 are not  exclusive and shall not limit any
rights or remedies which may otherwise be available to any indemnified party at law or equity.

                  </font>
		<p><font size="2">(f)      The  indemnity  and  contribution  provisions  contained  in  this  Section  12 and  the
representations,  warranties  and other  statements  of the Company and the Purchaser  contained in this  Agreement
shall survive the execution of this Agreement  through the second  anniversary of the last  applicable  Closing and
shall remain  operative and in full force and effect  regardless of (i) any  investigation  made by or on behalf of
the Purchaser or any assign,  or the Purchaser's or any assign's officers or directors,  or any person  controlling
the Purchaser or any assign, or the Company,  or the Company's  officers or directors or any person controlling the
Company and (ii) the sale of any Purchased Securities by the Purchaser.

         </font></p>
		<p><font size="2">13.      Reliance on  Representations.  Notwithstanding  any knowledge of facts determined or determinable
by any of the  Purchaser  or the  Company by  investigation,  each party  shall have the right to fully rely on the
representations,  warranties,  covenants and agreements of the other party hereto contained in this Agreement or in
any other  documents or papers  delivered in  connection  herewith.  Each  representation,  warranty,  covenant and
agreement  of the  parties set forth in this  Agreement  is  independent  of each other  representation,  warranty,
covenant and agreement.  Each  representation  and warranty made by any party in this Agreement  shall survive each
Closing  through the second  anniversary  thereof.  If any party hereto  notifies  another of a claim under Section
12 hereof after the  expiration  of the time  periods set forth with respect to such claim under  Section 12 and 13
hereof and such notice  constitutes  the first notice received with respect to such claim (any such claim initially
made after such  expiration  of time referred to as a "Late  Claim"),  then the maximum  amount of liability  under
such Late Claim shall be Five  Thousand  Dollars  ($5,000) if a court of  competent  jurisdiction  applies  Section
95.03 of the Florida Statutes to permit such Late Claim.

         </font></p>
		<p><font size="2">14.      Termination of Conditions and  Obligations.  The conditions  precedent  imposed by this Agreement
upon the  transferability  of the Common Shares shall cease and terminate as to any particular number of the Shares
(and any legend on the Common  Shares will be removed by the Company) at such time as such Common  Shares have been
effectively  registered under the Securities Act and sold or otherwise  disposed of in accordance with the intended
method of disposition set forth in the Registration  Statement  covering such Common Shares,  or at such time as an
opinion of counsel  satisfactory  to the Company  shall have been  rendered to the effect that (i) such  conditions
are not  necessary in order to comply with the  Securities  Act or (ii) such Common  Shares may be sold pursuant to
Rule 144.

         </font></p>
		<p><font size="2">15.      Information  Available.  So long as the Registration  Statement is effective  covering the resale
of  securities  owned by any of the  Purchaser,  except to the extent such may be  obtained  on EDGAR or  otherwise
obtained off the internet, the Company will furnish to such Purchaser:

                  </font></p>
		<p><font size="2">(a)      as soon as practicable  after it is available  (but in the case of the Company's  Annual
Report to Shareholders, within 120 days of each fiscal year of the Company), one copy of:</font></p>
		<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;
                           (i)      its Annual Report to Shareholders  (which Annual Report shall contain financial
         statements  audited in accordance  with  generally  accepted  accounting  principles by a national firm of
         certified public accountants);

                           </font></p>
		<p><font size="2">&nbsp;&nbsp;&nbsp; (ii)     if not included in substance in the Annual Report to  Shareholders,  its Annual
         Report on Form 10-K;

                           </font></p>
		<p><font size="2">&nbsp;&nbsp;&nbsp; (iii)    its Quarterly Reports on Form 10-Q;

                           </font></p>
		<p><font size="2">&nbsp;&nbsp;&nbsp; (iv)     any Current Reports on Form 8-K; and

                           </font></p>
		<p><font size="2">&nbsp;&nbsp;&nbsp; (v)      a full copy of the particular  Registration  Statement  covering the securities
         owned by Purchaser;

                  </font></p>
		<p><font size="2">(b)      upon the  reasonable  request  of the  Purchaser,  an  adequate  number of copies of the
Prospectus to supply to any other party requiring such Prospectus; and

                  </font></p>
		<p><font size="2">(c)      within one (1) day after  release,  copies of all press  releases  issued by the Company
or any of its  subsidiaries  and  contemporaneously  with the making available or giving to the shareholders of the
Company, copies of any notices or other information the Company makes available or gives to such shareholders.

         </font></p>
		<p><font size="2">16.      No Brokers.  Each of the parties to this Agreement  hereby  represents  that, on the basis of any
actions and  agreements by it, there are no brokers or finders  entitled to  compensation  in  connection  with the
offer or sale of the Securities to the Purchaser.  The parties hereto  expressly  acknowledge the Company is paying
certain  fees to Capitalink,  L.C.  ("Capitalink")  for certain  financial  advisory  services  being  provided by
Capitalink in connection  with the  transactions  contemplated  hereunder.  The parties hereto  expressly agree and
acknowledge Capitalink's role is not that of a broker or finder.

         </font></p>
		<p><font size="2">17.      Rule 144.

                  </font></p>
		<p><font size="2">(a)      The Company  covenants that, if at any time before the end of the  Effectiveness  Period
the  Company  is not  subject to the  reporting  requirements  of the  Exchange  Act,  it will  cooperate  with the
Purchaser  and take such further  reasonable  action as the Purchaser  may request in writing  (including,  without
limitation,  making such reasonable  representations  as the Purchaser may request),  all to the extent  reasonably
required from time to time to enable the Purchaser to sell Securities or Common Shares without  registration  under
the  Securities  Act  within  the  limitation  of the  exemptions  provided  by Rule 144 and Rule  144A  under  the
Securities Act and  customarily  taken in connection  with sales pursuant to such  exemptions.  Upon the reasonable
written request of the Purchaser,  the Company shall deliver to the Purchaser a written  statement as to whether it
has complied with such  reporting  requirements,  unless such a statement  has been included in the Company's  most
recent  report filed  pursuant to Section 13 or Section  15(d) of the Exchange  Act;  provided that the Company may
reasonably  decline  to  deliver  such  written  statement  if  Purchaser  has made more than six (6) such  written
requests  in any year and such  written  requests  have  resulted  in a  significant  disruption  of the  Company's
business.

                  </font></p>
		<p><font size="2">(b)      The Company  shall file the reports  required to be filed by it under the  Exchange  Act
and shall  comply  with all other  requirements  set  forth in the  instructions  to Form S-3 in order to allow the
Company to be eligible to file registration statements on Form S-3.

         </font></p>
		<p><font size="2">18.      Notices.  All notices and other  communications  provided  for or  permitted  hereunder  shall be
made in writing by hand  delivery,  by telecopier,  by courier  guaranteeing  overnight  delivery or by first-class
mail and shall be  deemed  given (i) when  made,  if made by hand  delivery,  (ii)  upon  confirmation,  if made by
telecopier,  (iii) one (1) business day after being  deposited with such courier,  if made by overnight  courier or
(iv) on the third day after deposit in the mail, if made by first-class mail, to the parties as follows:

                  </font></p>
		<p><font size="2">(a)      if to the Purchaser, to:</font></p>
		<blockquote>
			<blockquote>
				<p><font size="2">&nbsp;Coconut Palm Capital Investors I, Ltd.<br>
&nbsp;555 South Federal Highway
                           <br>
				Second Floor<br>
&nbsp;Boca Raton, Florida 33432</font></p>
				<p><font size="2">&nbsp;With a copy to: </font></p>
				<p><font size="2">Akerman Senterfitt <br>
                           1 S.E. 3rd Avenue, Suite 2800<br>
&nbsp;Miami, Florida 33131
                           <br>
				Attn:  Edward L. Ristaino, Esq.

                  <br>
&nbsp;</font></p>
			</blockquote>
		</blockquote>
		<p><font size="2">(b)      if to the Company, to: </font></p>
		<blockquote>
			<blockquote>
				<p><font size="2">Devcon International Corp.
                           <br>
				1350 E. Newport Center Drive
                           Suite 201
                           <br>
				Deerfield Beach, Florida  33442
                           <br>
				Attn:  Donald J. Smith, Jr., President

                           <br>
				<br>
				With a copy to:

                           </font></p>
				<p><font size="2">Greenberg Traurig, <br>
				P.A.
                           1221 Brickell Avenue
                           <br>
				Miami, Florida 33131
                           <br>
				Attn:  Robert L. Grossman, Esq. </font></p>
			</blockquote>
		</blockquote>



<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>or to such other address as
such person or entity may have furnished to the other persons or entities
identified in this Section 18 in writing in accordance herewith. </FONT></P>

         <font size="2">19.      Severability.  If any term,  provision,  covenant or  restriction of this Agreement is held 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
thereby,  and the parties  hereto shall use their best efforts to find and employ an  alternative  means to achieve
the same or substantially  the same result as that contemplated by such term,  provision,  covenant or restriction,
it being  intended that all of the rights and  privileges of the parties shall be enforceable to the fullest extent
permitted by law.

         </font>
		<p><font size="2">20.      Modification;  Amendment.  The  provisions of this  Agreement,  including the  provisions of this
sentence,  may not be amended,  modified or supplemented  unless pursuant to an instrument in writing signed by the
Company and the Purchaser.</font></p>
		<p><font size="2">&nbsp;21.      Entire  Agreement.  This  Agreement  is intended by the  parties as a final  expression  of their
agreement  and is intended to be a complete and  exclusive  statement of the  agreement  and  understanding  of the
parties hereto with respect to the subject matter  contained  herein.  Except as provided in this Agreement,  there
are no restrictions,  promises, warranties or undertakings,  other than those set forth or referred to herein, with
respect to such matters.  This Agreement  supersedes all prior agreements and  undertakings  among the parties with
respect  to such  matters.  No party  hereto  shall  have any  rights,  duties  or  obligations  other  than  those
specifically set forth in this Agreement.

         </font></p>
		<p><font size="2">22.      Counterparts.   This   Agreement   may  be  signed  in  any  number  of  original  or   facsimile
counterparts,  each of which shall be an  original,  with the same effect as if the  signatures  thereto and hereto
were upon the same instrument.

         </font></p>
		<p><font size="2">23.      Applicable  Law.  This  Agreement  shall be  governed by and  construed  in  accordance  with the
internal laws of the State of Florida.

         </font></p>
		<p><font size="2">24.      Headings.  The headings of the sections of this Agreement  have been inserted for  convenience of
reference only and shall not be deemed a part of this Agreement.



<!-- MARKER PAGE="sheet: 13; page: 13" -->
		</font></p>
<HR SIZE=5 COLOR=GRAY NOSHADE>


         <font size="2">IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

                                                     </font>
		<blockquote>
			<blockquote>
				<blockquote>
					<blockquote>
						<blockquote>
							<blockquote>
								<p><font size="2">COCONUT PALM CAPITAL INVESTORS I, LTD.


                                                     </font></p>
								<p><font size="2">By:/s/ Richard C. Rochon_____<br>
								Name: Richard C. Rochon <br>
                                                     Title: President

                                                     </font></p>
								<p><font size="2">DEVCON INTERNATIONAL CORP.


                                                     </font></p>
								<p><font size="2">By: /s/ Donald L. Smith, Jr.____<br>
								Name: Donald L. Smith, Jr.
                                                     <br>
								Title: Chairman, President and Chief Executive Officer






<!-- MARKER PAGE="sheet: 14; page: 14" -->
								</font></p>
							</blockquote>
						</blockquote>
					</blockquote>
				</blockquote>
			</blockquote>
		</blockquote>
<HR SIZE=5 COLOR=GRAY NOSHADE>



<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ANNEX E</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Form of
First Tranche Warrant</FONT></H1>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Warrant No.
_____</FONT></H2>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=25%>&nbsp;</TD>
<TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
The
securities represented by this certificate have been acquired directly or
indirectly from the Issuer without being registered under the Securities Act of
1933, as amended (the &#147;Securities Act&#148;), or any other applicable
securities laws, and are restricted securities as that term is defined under
Rule 144 promulgated under the Securities Act. These securities may not be sold,
pledged, transferred, distributed or otherwise disposed of in any manner
(&#147;Transfer&#148;) unless they are registered under the Securities Act and
any other applicable securities laws, or unless the request for Transfer is
accompanied by a favorable opinion of counsel, reasonably satisfactory to the
Issuer, stating that the Transfer will not result in a violation of the
Securities Act or any other applicable securities laws.</FONT></TD>
</TR>
</TABLE>
		<font size="2">
<BR>

		</font>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Warrant
Certificate</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>DEVCON
INTERNATIONAL CORP.</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; DEVCON INTERNATIONAL CORP.
(the &#147;<U>Issuer</U>&#148;), a Florida corporation, with offices at 1350 E.
Newport Center Drive, Suite 201, Deerfield Beach, Florida, 33442, for value
received, hereby certifies that COCONUT PALM CAPITAL INVESTORS I, LTD., a
Florida limited partnership, with an address for notice purposes hereunder at
555 South Federal Highway, Second Floor, Boca Raton, Florida 33432, or its
registered assigns, is entitled to purchase from the Issuer up to
_______________________ (the &#147;<U>Issuable Number</U>&#148;) duly
authorized, validly issued, fully paid and non-assessable shares (subject to the
adjustments contained in this Warrant) of common stock, par value $0.10 per
share (the &#147;<U>Common Stock</U>&#148;), of the Issuer at the purchase price
per share equal to Ten Dollars ($10.00) (the <U>&#147;Exercise Price</U>&#148;)
at any time and from time to time on or after ________________________, 2004
(the &#147;<U>Issuance </U>Date&#148;) and at or before 5:00&#160;p.m., Miami,
Florida time, on the third anniversary of the Issuance Date (as more
particularly defined in Section&#160;10 hereof, the &#147;<U>Termination
Date</U>&#148;), all subject to the terms, conditions and adjustments set forth
below in this Warrant. Capitalized terms used herein are defined in Section 10
hereof or elsewhere throughout this Warrant. </FONT></P>

         <u><font size="2">1. Exercise of Warrant. </font></u>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.1 <U>Manner of
Exercise</U>. This Warrant may be exercised by the holder of this Warrant (the
&#147;Holder&#148;) in whole or in part, at any time and from time to time on or
after the Issuance Date, by facsimile, mail or overnight courier delivery of a
notice in substantially the form attached to this Warrant (or a reasonable
facsimile thereof) duly executed by such Holder (a &#147;<U>Warrant Exercise
Notice</U>&#148;). The closing of each exercise shall take place on (i)&#160;the
third (3<SUP>rd</SUP>) Business Day following, and excluding, the date the
Warrant Exercise Notice is delivered (the &#147;<U>Warrant Notice
Date</U>&#148;), subject to the provisions of Section 1.4(b) hereof, (ii) at the
option of the Holder, such later date as the conditions set forth in Section 1.2
have been waived or satisfied or (iii) any other date upon which the exercising
Holder and the Issuer mutually agree (each, a &#147;<U>Warrant Closing
</U>Date&#148;). </FONT></P>

                  <font size="2">(a)      This  Warrant  may be  exercised  by the Holder  hereof by paying  cash to Issuer in the
amount  equal to the product of (i) the number of shares of Common  Stock for which the Warrant is being  exercised
(without giving effect to any adjustment thereof) multiplied by (ii) the Exercise Price.

                  </font>
		<p><font size="2">(b)      At any time on or after one hundred  eighty (180) days  following the Issuance  Date, in
lieu of payment of the Exercise Price in cash as set forth in  Section 1.1(a),  the Holder hereof may exercise this
Warrant by  specifying  in the Warrant  Exercise  Notice that such  Holder has  elected to  exercise  this  Warrant
pursuant  to a  "broker-assisted"  exercise/sale  procedure  pursuant  to which  funds to pay for  exercise  of the
Warrant  are  delivered  to the Issuer by a broker upon  receipt of stock  certificates  from the Issuer  through a
licensed broker  reasonably  acceptable to the Issuer whereby the stock  certificate or certificates for the shares
of Common  Stock for which the Warrant is  exercised  will be  delivered  by the Issuer to such broker as the agent
for the Holder  exercising  the  Warrant  and the broker  will  deliver  to the  Issuer  cash (or cash  equivalents
acceptable  to the Issuer)  equal to the Exercise  Price for the shares of Common Stock  purchased  pursuant to the
exercise of the  Warrant.  The Issuer  shall allow the issuance and delivery to such broker of the shares of Common
Stock  necessary to effect the sale of such shares by such broker and apply the sales  proceeds to pay the Exercise
Price  notwithstanding  the fact that the Issuer  will not receive  the cash  proceeds  until after the sale of the
underlying  shares of Common Stock,  subject,  in the event the Holder is an officer or director of the Issuer,  to
compliance with the applicable  provisions of the  Sarbanes-Oxley Act of 2002 with respect to loans to officers and
directors.  Holder  hereby  expressly  agrees to indemnify  and to hold the Issuer  harmless for the full amount of
any loss or damage ( including all reasonable  trial  attorneys'  and appellate  attorneys'  fees  including  those
which may be incurred in the enforcement of this  indemnity)  Issuer may sustain as a result of such broker failing
to remit to Issuer the  proceeds  from the sale of such  shares of Common  Stock in  accordance  with this  Section
1.1(b). </font></p>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.2 <U>Conditions to
Closing</U>. It shall be a condition of the exercising Holder&#146;s obligation
to close on each Warrant Closing Date that each of the following is satisfied,
unless waived by such Holder: </FONT></P>

                  <font size="2">(a)      all shares to be issued upon such  exercise  shall be  registered  under the  Securities
Act, shall be freely tradable  Registered  Common Stock and shall be duly listed and admitted to trading on Nasdaq,
the New York Stock Exchange or the American Stock  Exchange,  depending on where such shares are traded at the time
the Warrant is exercised  (unless the Holder expressly  consents in writing to the issuance of unregistered  Common
Stock for a portion or all of the shares to be issued  upon such  exercise  in which  case the Issuer  shall  issue
such unregistered Common Stock upon such request).

                  </font>
		<p><font size="2">(b)      As of such  Warrant  Closing  Date,  the Issuer  shall have  notified  the Holder of all
Restatements,  and no Restatement  shall have occurred on or after the date on which the Warrant Exercise Notice is
delivered.  The Holder and the Issuer  expressly  acknowledge and agree that the issuance of a press release by the
Issuer disclosing a Restatement shall be deemed sufficient to satisfy this notice requirement.
		</font></p>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If any such condition is
not satisfied or waived prior to the third (3<SUP>rd</SUP>) Business Day
following and excluding the date the Warrant Exercise Notice is delivered, then
the Holder may, at its sole option, and at any time, withdraw the Warrant
Exercise Notice by written notice to the Issuer regardless of whether such
condition has been satisfied or waived as of the withdrawal date and, after such
withdrawal, shall have no further obligation with respect to such Warrant
Exercise Notice and may submit a Warrant Exercise Notice on any future date with
respect to the shares referenced in the original Warrant Exercise Notice. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.3 <U>When Exercise
Effective</U>. Each exercise of this Warrant shall be deemed to have been
effected immediately prior to 5:00 p.m. (time in effect in Miami, Florida on
such date) on the Business Day on which the Warrant Exercise Notice is delivered
as provided in Section 1.1, and at such time the Person or Persons in whose name
or names any certificate or certificates for shares of Common Stock (or Other
Securities) shall be issuable upon such exercise as provided in Section 1.4
shall be deemed to have become the Holder or Holders of record thereof,
provided, however, that such exercise shall not be deemed effective if at or
prior to 5:00 p.m. (time in effect in Miami, Florida on such date) on the
Warrant Closing Date the Holder delivers written notice of withdrawal to the
Issuer as set forth in Section 1.2. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.4 <U>Delivery of Warrant
and Payment</U>. On each Warrant Closing Date, the registered Holder shall
surrender this Warrant Certificate to the Issuer at the address set forth for
the Issuer in the introductory paragraph of this Warrant or such other address
as the Issuer advises the Holder in writing and (a) shall deliver payment in
cash, by wire transfer to the Issuer&#146;s account designated by Issuer of
immediately available funds or by certified or official bank check payable to
the order of the Issuer, to the extent that the Warrant is exercised in
accordance with Section 1.1(a), shall have so specified in the Warrant Exercise
Notice delivered by such Holder and such Holder shall thereupon be entitled to
receive the number of duly authorized, validly issued, fully paid and
nonassessable shares of Common Stock (or Other Securities) determined as
provided in Sections 2 and 3 hereof, or (b) if exercising this Warrant in
accordance with Section 1.1(b) above, shall have so specified in the Warrant
Exercise Notice delivered by such Holder, and the Issuer shall deliver to the
Holder&#146;s broker the number of duly authorized, validly issued, fully paid
and nonassessable shares of Common Stock (or Other Securities) determined as
provided in Sections 2 and 3 hereof, following the sale of which in accordance
with Section&#160;1.1(b) above such broker shall, within three (3) Business Days
after the Warrant Closing Date, deliver payment in cash, by wire transfer to the
Issuer&#146;s account designated by Issuer of immediately available funds or by
certified or official bank check payable to the order of the Issuer, to the
extent that the Warrant is exercised. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.5 <U>Delivery of Stock
Certificates, etc</U>. On each Warrant Closing Date, the Issuer at its expense
(including the payment by it of any applicable issue taxes) shall cause to be
issued in the name of and delivered to the Holder hereof or as such Holder may
direct, </FONT></P>

                  <font size="2">(a)      via  facsimile  and at such address  specified  by the Holder via a reputable  overnight
courier,  a delivery  notice in the form of Exhibit 2 hereto  and one or more  certificates  for the number of duly
authorized,  validly issued,  fully paid and  nonassessable  shares of Common Stock (or Other  Securities) to which
such Holder shall be entitled upon such exercise plus, in lieu of any  fractional  share to which such Holder would
otherwise be entitled,  cash in an amount  equal to the same  fraction of the Closing  Sales Price per share on the
Business Day next preceding the date of such exercise, and

                  </font>
		<p><font size="2">(b)      in case such  exercise  is in part only,  at such  address  specified  by the Holder via
reputable  overnight  courier,  a new Warrant of like tenor,  calling in the aggregate on the face or faces thereof
for the number of shares of Common Stock equal (without  giving effect to any adjustment  thereof) to the number of
such shares  called for on the face of this  Warrant  minus the number of such shares  designated  by the Holder in
the related Warrant Exercise Notice upon such exercise as provided in Section 1.1.

         </font></p>
		<p><font size="2"><u>2.       Adjustment of Common Stock Issuable Upon
		Exercise</u>. </font></p>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.1 <U>General; Warrant
Price</U>. The number of shares of Common Stock that the Holder of this Warrant
shall be entitled to receive upon each exercise hereof shall be determined by
multiplying the number of shares of Common Stock that would otherwise (but for
the provisions of Sections 2 and 3) be issuable upon such exercise, as
designated by the Holder hereof pursuant to Section 1.1, by a fraction of which
(a) the numerator is the Exercise Price and (b) the denominator is the Warrant
Price in effect on the date of such exercise. The &#147;<U>Warrant
Price</U>&#148; shall initially be the Exercise Price. The Warrant Price shall
be adjusted and readjusted from time to time as provided in Sections 2 and 3
hereof and, as so adjusted or readjusted, shall remain in effect until a further
adjustment or readjustment thereof is required by Sections 2 and 3 hereof. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.2 <U>Adjustment of
Warrant Price Upon Issuance of Additional Shares of Common Stock</U>. In case at
any time or from time to time on or after the Issuance Date and at or before
5:00 p.m. (Miami time) on the date that is one hundred eighty (180) days
following the Issuance Date, the Issuer shall issue or sell any Additional
Shares of Common Stock (including any Additional Shares of Common Stock deemed
to be issued pursuant to Section 2.3), without consideration or for a
consideration per share less than the Closing Sales Price in effect on the date
of such issue or sale (or if such issue or sale date is not a Business Day, then
on the Business Day next preceding such issue or sale date), then, and in each
such case, the Warrant Price shall be reduced, concurrently with such issue or
sale, to a price (calculated to the nearest .001 of a cent) determined by
multiplying the Warrant Price by a fraction; </FONT></P>

                  <font size="2">(a)      the  numerator  of which shall be (1) the number of shares of Common  Stock  outstanding
immediately  prior to such  issue or sale  plus (2) the  number  of shares  of  Common  Stock  which the  aggregate
consideration  received or to be received by the Issuer for the total  number of such  Additional  Shares of Common
Stock so issued or sold would purchase at such Closing Sales Price, and

                  </font>
		<p><font size="2">(b)      the  denominator  of which  shall be the  number of shares of Common  Stock  outstanding
immediately after such issue or sale, </font></p>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=25%>&nbsp;</TD>
<TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
provided
that, for the purposes of this Section 2.2, (x) immediately after any Additional
Shares of Common Stock are deemed to have been issued pursuant to Section 2.3,
such Additional Shares of Common Stock shall be deemed to be outstanding, and
(y) treasury shares shall not be deemed to be outstanding.</FONT></TD>
</TR>
</TABLE>
<BR>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.3 <U>Treatment of Options
and Convertible Securities Under Section 2.2</U>. For purposes of the
adjustments provided for in Section 2.2 hereof, in case the Issuer at any time
or from time to time on or after the Issuance Date shall issue, sell, grant or
assume, or shall fix a record date for the determination of Holders of any class
of securities entitled to receive, any Options or Convertible Securities, then,
and in each such case, the maximum number of Additional Shares of Common Stock
(as set forth in the instrument relating thereto, without regard to any
provisions contained therein for a subsequent adjustment of such number)
issuable upon the exercise of such Options or, in the case of Convertible
Securities and Options therefor, the conversion or exchange of such Convertible
Securities, shall be deemed to be Additional Shares of Common Stock (except to
the extent such Additional Shares of Common Stock constitute Excluded
Securities) issued as of the time of such issue, sale, grant or assumption or,
in case such a record date shall have been fixed, as of the close of business on
such record date (or, in the case of Options or Convertible Securities with
terms described in Section 2.3(b), the date of any change, increase or decrease
described in Section 2.3(b)) (or, if the Common Stock trades on an ex-dividend
basis, on the date prior to the commencement of ex-dividend trading), provided
that such Additional Shares of Common Stock shall not be deemed to have been
issued unless the consideration per share (determined pursuant to Section 2.4)
of such shares would be less than the Closing Sales Price in effect on the date
of and immediately prior to such issue, sale, grant or assumption or immediately
prior to the close of business on such record date (or, if the Common Stock
trades on an ex-dividend basis, on the date prior to the commencement of
ex-dividend trading), as the case may be, and provided, further, that in any
such case in which Additional Shares of Common Stock are deemed to be issued </FONT></P>

                  <font size="2">(a)      no further  adjustment of the Warrant Price shall be made upon the  subsequent  issue or
sale of  Convertible  Securities  or shares of Common Stock upon the exercise of such Options or the  conversion or
exchange of such Convertible Securities;

                  </font>
		<p><font size="2">(b)      if such Options or Convertible  Securities by their terms  provide,  with the passage of
time or  otherwise,  for any change in the  consideration  payable to the  Issuer,  or  increase or decrease in the
number of  Additional  Shares of Common Stock issuable,  upon the  exercise,  conversion  or exchange  thereof (by
change of rate or  otherwise),  the Warrant  Price  computed  upon the original  issue,  sale,  grant or assumption
thereof (or upon the occurrence of the record date, or date prior to the  commencement of ex-dividend  trading,  as
the case may be, with  respect  thereto),  and any  subsequent  adjustments  based  thereon,  shall,  upon any such
increase or decrease becoming  effective,  be recomputed to reflect such increase or decrease insofar as it affects
such Options, or the rights of conversion or exchange under such Convertible  Securities,  which are outstanding at
such time;

                  </font></p>
		<p><font size="2">(c)      upon the  expiration (or purchase by the Issuer and  cancellation  or retirement) of any
such Options which shall not have been  exercised or the  expiration of any rights of conversion or exchange  under
any such  Convertible  Securities  which (or  purchase by the Issuer and  cancellation  or  retirement  of any such
Convertible  Securities  the rights of  conversion  or exchange  under  which) shall not have been  exercised,  the
Warrant Price computed upon the original issue,  sale,  grant or assumption  thereof (or upon the occurrence of the
record date, or date prior to the commencement of ex-dividend  trading,  as the case may be, with respect thereto),
and any subsequent  adjustments  based  thereon,  shall,  upon such  expiration (or such purchase by the Issuer and
cancellation or retirement, as the case may be), be recomputed as if:

                           </font></p>
		<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i)      in the case of Options for Common  Stock or  Convertible  Securities,  the only
         Additional  Shares of Common  Stock issued or sold were the  Additional  Shares of Common  Stock,  if any,
         actually  issued  or sold  upon the  exercise  of such  Options  or the  conversion  or  exchange  of such
         Convertible  Securities and the consideration  received  therefor was the consideration  actually received
         by the Issuer for the issue,  sale,  grant or assumption of all such  Options,  whether or not  exercised,
         plus the  consideration  actually  received by the Issuer upon such exercise,  or for the issue or sale of
         all such  Convertible  Securities  which  were  actually  converted  or  exchanged,  plus  the  additional
         consideration, if any, actually received by the Issuer upon such conversion or exchange, and

                           </font></p>
		<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)     in the  case of  Options  for  Convertible  Securities,  only  the  Convertible
         Securities,  if any,  actually issued or sold upon the exercise of such Options were issued at the time of
         the issue,  sale, grant or assumption of such Options,  and the  consideration  received by the Issuer for
         the  Additional  Shares of Common  Stock  deemed to have then been issued was the  consideration  actually
         received  by the Issuer for the issue,  sale,  grant or  assumption  of all such  Options,  whether or not
         exercised,  plus the  consideration  deemed to have been received by the Issuer  (pursuant to Section 2.4)
         upon the issue or sale of such  Convertible  Securities  with respect to which such Options were  actually
         exercised; and

                  </font></p>
		<p><font size="2">(d)      no  readjustment  pursuant  to  subdivision  (b) or (c) above  shall  have the effect of
increasing  the Warrant Price by an amount in excess of the amount of the  adjustment  thereof  originally  made in
respect of the issue, sale, grant or assumption of such Options or Convertible Securities.

         </font></p>
		<p><u><font size="2">2.4      Computation of Consideration.  For the purposes of this Section 2:
		</font></u></p>
		<p><font size="2">(a)      the  consideration  for the  issue or sale of any  Additional  Shares  of  Common  Stock
shall, irrespective of the accounting treatment of such consideration,

                           </font></p>
		<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i)      insofar as it consists of cash,  be computed at the amount of cash  received by
         the Issuer less any expenses paid or incurred by the Issuer or any  commissions or  compensations  paid to
         underwriters, dealers or others performing similar services in connection with such issue or sale,

                           </font></p>
		<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)     insofar as it consists of property  (including  securities) other than cash, be
         computed at the fair value  thereof at the time of such issue or sale,  as determined in good faith by the
         Board of Directors of the Issuer, and </font></p>
		<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (iii)    in case  Additional  Shares of Common  Stock are issued or sold  together  with
         other stock or  securities  or other assets of the Issuer for a  consideration  which covers both,  be the
         portion of such consideration so received,  computed as provided in clauses (i) and (ii) above,  allocable
         to such  Additional  Shares of Common Stock,  as determined in good faith by the Board of Directors of the
         Issuer.

                  </font></p>
		<p><font size="2">(b)      Additional  Shares of Common Stock  deemed to have been issued  pursuant to Section 2.3,
relating to Options and Convertible  Securities,  shall be deemed to have been issued for a consideration per share
determined by dividing

                           </font></p>
		<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (i)      the  total  amount,   if  any,   received  and  receivable  by  the  Issuer  as
         consideration  for the issue,  sale,  grant or  assumption  of the Options or  Convertible  Securities  in
         question,  plus the minimum aggregate amount of additional  consideration (as set forth in the instruments
         relating thereto,  without regard to any provision  contained therein for a subsequent  adjustment of such
         consideration  to  protect  against  dilution)  payable to the Issuer  upon the  exercise  in full of such
         Options or the  conversion  or  exchange  of such  Convertible  Securities  or, in the case of Options for
         Convertible  Securities,  the exercise of such Options for  Convertible  Securities  and the conversion or
         exchange of such  Convertible  Securities,  in each case computing such  consideration  as provided in the
         foregoing subdivision (a), by

                           </font></p>
		<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (ii)     the maximum  number of shares of Common Stock (as set forth in the  instruments
         relating thereto,  without regard to any provision  contained therein for a subsequent  adjustment of such
         number to protect  against  dilution) issuable  upon the  exercise of such Options or the  conversion  or
         exchange of such  Convertible  Securities  (including  the full  conversion or exchange of all Options and
         Convertible Securities underlying such Options and Convertible Securities).
		</font></p>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.5 Treatment of Stock
Dividends, Stock Splits, etc. In case the Issuer at any time or from time to
time on or after the Issuance Date shall declare or pay any dividend on the
Common Stock payable in Common Stock, or shall effect a subdivision of the
outstanding shares of Common Stock into a greater number of shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in Common
Stock), then, and in each such case, the Warrant Price in effect immediately
prior to such dividend or subdivision shall, concurrently with the deemed
effectiveness of such dividend or subdivision, be reduced to a price determined
by multiplying the Warrant Price by a fraction, the numerator of which shall be
the number of shares of Common Stock outstanding immediately prior to giving
effect to such dividend or subdivision and the denominator of which shall be the
number of shares of Common Stock outstanding immediately after giving effect to
such dividend or subdivision (including, without limitation, all shares of
Common Stock deemed issued or issuable in connection with or as a result of such
dividend or subdivision notwithstanding that any such shares have not actually
been issued as of the deemed effectiveness of such dividend or subdivision). For
purposes hereof, such dividend or subdivision shall be deemed effective, and
additional shares of Common Stock shall be deemed to have been issued pursuant
thereto (a) in the case of any such dividend, immediately after the close of
business on the record date for the determination of holders of any class of
securities entitled to receive such dividend, or (b) in the case of any such
subdivision, at the close of business on the day immediately prior to the day
upon which such corporate action becomes effective. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.6 Adjustments for
Combinations, etc. In case the outstanding shares of Common Stock shall be
combined or consolidated, by reclassification or otherwise, into a lesser number
of shares of Common Stock, the Warrant Price in effect immediately prior to such
combination or consolidation shall, concurrently with the effectiveness of such
combination or consolidation, be proportionately increased. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.7 Dividends and
Distributions in Cash, Property or Securities other than Common Stock. In case
the Issuer at any time or from time to time on or after the Issuance Date shall
declare, order, pay or make a dividend or other distribution on the Common Stock
of cash, property or securities (including, without limitation, a dividend
payable in any shares, interests, rights, options, warrants, evidences of
indebtedness or convertible securities of the Company or any other Person) other
than a dividend payable in Common Stock covered under Section 2.5 hereof, then
the Warrant Price shall be reduced, effective as of the date of such
distribution record date, (a) in the case of a cash distribution, by the dollar
amount of the cash distribution per share of Common Stock, subject to the last
sentence of this Section 2.7, (b) in the case of a distribution of property
other than cash, by the dollar amount of the fair market value of all the
property being distributed divided by the number of shares of Common Stock
issued and outstanding as of such dividend record date in respect of which such
property distribution is being made and (c) in the case of a distribution of
securities (including, without limitation, a dividend payable in any shares,
interests, rights, options, warrants, evidences of indebtedness or convertible
securities of the Company or any other Person) other than a dividend payable in
Common Stock covered under Section 2.5 hereof, by the dollar amount of the fair
market value of all such securities being distributed divided by the number of
shares of Common Stock issued and outstanding as of such dividend record date in
respect of which such property distribution is being made. The determination of
fair market value of any such property (other than cash) or securities pursuant
to this Section 2.7 shall be made by an independent, nationally recognized
appraisal firm not affiliated with the Issuer that is regularly engaged in the
business of appraising the type of property or securities, as applicable, that
is the subject of such distribution, at the Issuer&#146;s expense. If the
aggregate amount of any ordinary cash distributions from retained earnings
lawfully made in accordance with Section 607.06401 of the Florida Business
Corporation Act (expressly excluding, without limitation, extraordinary,
liquidating or partial liquidating cash distributions, by way of return of
capital or otherwise) (&#147;Ordinary Cash Distributions&#148;) covered by this
Section 2.7 shall, during any quarterly period of any calendar year (<I>i.e.</I>
January 1 to March 31, April 1 to June 30, July 1 to September 30, or October 1
to December 31) (each, a &#147;Quarterly Period&#148;), total three-quarters of
one percent (.75%) of the average of the Closing Sales Prices for the dividend
record dates for such Ordinary Cash Distributions during such Quarterly Period
(the &#147;De Minimis Cash Distribution Amount&#148;) or less, then such cash
distributions shall not require an adjustment to the Warrant Price pursuant to
clause (a) of this Section 2.7; provided that, notwithstanding anything to the
contrary set forth herein, the Warrant Price shall be adjusted as provided in
clause (a) of this Section 2.7 by the aggregate amount of all (i) Ordinary Cash
Distributions during any Quarterly Period in excess of the De Minimis Cash
Distribution Amount and (ii) cash distributions other than Ordinary Cash
Distributions. </FONT></P>

         3<font size="2">. </font><u><font size="2">Business Combinations.
		</font></u>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.1 <U>Adjustment upon
Business Combination</U>. In case the Issuer on or after the Issuance Date is a
party to (i) any acquisition of the Issuer by means of merger or other form of
corporate reorganization in which outstanding shares of the Issuer are exchanged
for securities or other consideration issued, or caused to be issued, by the
Acquiring Person or its Parent, Subsidiary or affiliate, (ii) a sale of all or
substantially all of the assets of the Issuer (on a consolidated basis) in a
single transaction or series of related transactions, (iii) any other
transaction or series of related transactions by the Issuer or relating to the
Common Stock (including without limitation, any stock purchase or tender or
exchange offer) in which the power to cast the majority of the eligible votes at
a meeting of the Issuer&#146;s shareholders at which directors are elected is
transferred to a single entity or group acting in concert, or (iv) a capital
reorganization or reclassification of the Common Stock (other than a
reorganization or reclassification in which the Common Stock are not converted
into or exchanged for cash or other property, and, immediately after
consummation of such transaction, the shareholders of the Issuer immediately
prior to such transaction own the Common Stock or other voting stock of the
Issuer in substantially the same proportions relative to each other as such
shareholders owned immediately prior to such transaction), then, and in the case
of each such transaction (each of which is referred to herein as &#147;Business
Combination&#148;), proper provision shall be made so that, upon the basis and
the terms and in the manner provided herein, the Holder, upon exercise of all or
any part of this Warrant at any time after the consummation of such Business
Combination, shall be entitled to receive upon such exercise, the Common Stock
and Other Securities, cash and property to which the Holder would have been
entitled upon such consummation if the Holder had exercised the Warrant
immediately prior thereto (including, without limitation, any additional shares
of Common Stock, Other Securities, cash and property issuable as a result of an
increase in the Issuable Number occurring after the date of consummation of such
Business Combination); provided, that if the Acquiring Person or its Parent, as
the case may be, shall combine, subdivide or reclassify its common stock, or
shall declare any dividend payable in shares of its common stock, or shall take
any other action of a similar nature affecting such shares, the calculations
above shall be adjusted to the extent appropriate, as provided in Section 2 of
this Warrant, to reflect such event, including appropriate adjustments to
account for any such event that occurs during any of the measurement periods set
forth above. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.2 <U>Assumption of
Obligations</U>. Notwithstanding anything contained herein to the contrary, the
Issuer will not effect any Business Combination unless, prior to the
consummation thereof, each Person (other than the Issuer) that may be required
to deliver any stock, securities, cash or property upon exercise of this Warrant
as provided herein shall assume (A) the obligations of the Issuer under this
Warrant (and if the Issuer shall survive the consummation of such transaction,
such assumption shall be in addition to, and shall not release the Issuer from,
any continuing obligations of the Issuer under this Warrant) and (B) the
obligation to deliver to the Holder such shares of stock, securities, cash or
property as, in accordance with the foregoing provisions of this Section 3 and
the other provisions of this Warrant, the Holder may be entitled to receive. </FONT></P>

         <font face="Times New Roman, Times, Serif" size="2">4<u>.       No  Impairmen</u>t.  The Issuer will not, by amendment of its  articles of  incorporation  or through any consolidation,  merger,  reorganization,  transfer of assets,  dissolution,  issue or sale of securities or any
other voluntary  action,  avoid or seek to avoid the observance or performance of any of the terms of this Warrant,
but will at all times in good  faith  assist in the  carrying  out of all such  terms and in the taking of all such
action as may be necessary  or  appropriate  in order to protect the rights of the Holder of this  Warrant  against
impairment.  Without  limiting the  generality  of the  foregoing,  the Issuer (a) will not permit the par value of
any shares of stock  receivable  upon the exercise of this Warrant to exceed the amount payable therefor upon such
exercise,  and (b) will take all such  action as may be  necessary  or  appropriate  in order  that the  Issuer may
validly and legally  issue fully paid and  nonassessable  shares of stock on the exercise of the Warrants from time
to time outstanding.</font><p>
		<font face="Times New Roman, Times, Serif" size="2">&nbsp;5.       <u>Accountants'  Report as to  Adjustments</u>.  In each case of any adjustment or  readjustment  in the shares of Common  Stock (or Other  Securities) issuable
		upon the exercise of this Warrant, the Issuer at its expense will
		promptly compute such adjustment or readjustment in accordance with the
		terms of this Warrant and, to the extent Holder disputes in writing such
		computations, cause independent certified public accountants of
		recognized national standing (which may be the regular auditors of the
		Issuer) selected by the Issuer to verify such computation and prepare a
		report setting forth such adjustment or readjustment and showing in
		reasonable detail the method of calculation thereof and the facts upon
		which such adjustment or readjustment is based, including but not
		limited to a statement of (a) the consideration received or to be
		received by the Issuer for any Additional Shares of Common Stock issued
		or sold or deemed to have been issued, (b) the number of share</font><font face="Times New Roman, Times, Serif" size="2">s
		of Common Stock outstanding or deemed to be outstanding, and (c) the
		Warrant Price in effect immediately prior to such issue or sale and as
		adjusted and readjusted (if required by Section 2 or 3) on account
		thereof. The Issuer will forthwith mail a copy of each such report to
		each Holder of a Warrant and will, upon the written request at any time
		of any Holder of a Warrant, furnish to such Holder a copy of the most
		recent report setting forth the Warrant Price in effect as of the date
		such report is delivered and showing in reasonable detail how it was
		calculated. The Issuer will also keep copies of all such reports at its
		principal office and will cause the same to be available for inspection
		at such office during normal business hours by any Holder of a Warrant
		or any prospective purchaser of a Warrant designated by the Holder thereof.

         </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">6.       <u>Notices of Corporate Action.  In the event of :
		</u></font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(a)      any taking by the Issuer of a record of the holders of any class of  securities  for the
purpose of determining the holders thereof who are entitled to receive any dividend or other  distribution,  or any
right to subscribe for,  purchase or otherwise  acquire any shares of stock of any class or any other securities or
property, or to receive any other right, or

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(b)      any capital  reorganization of the Issuer, any  reclassification  or recapitalization of
the capital  stock of the Issuer or any  consolidation  or merger  involving the Issuer and any other Person or any
transfer of all or substantially all the assets of the Issuer to any other Person, or

                  </font></p>
		<p><font face="Times New Roman, Times, Serif" size="2">(c<u>)      any voluntary or involuntary dissolution, liquidation or winding-up of the Issuer,</u> the Issuer will mail to the
Holder a notice specifying (i) the date or expected date on which any such
record is to be taken for the purpose of such dividend, distribution or right,
and the amount and character of such dividend, distribution or right, and (ii)
the date or expected date on which any such reorganization, reclassification,
recapitalization, consolidation, merger, transfer, dissolution, liquidation or
winding-up is to take place and the time, if any such time is to be fixed, as of
which the holders of record of Common Stock (or Other Securities) shall be
entitled to exchange their shares of Common Stock (or Other Securities) for the
securities or other property deliverable upon such reorganization,
reclassification, recapitalization, consolidation, merger, transfer,
dissolution, liquidation or winding-up. Such notice shall be delivered to Holder
at least twenty (20) Business Days prior to the date therein specified, but in
no event later than the date notice is delivered to any holder of Common Stock.
		</font></p>
		<font size="2">7.       <u>Reservation of Share</u>s.  For so long as the Warrant  represented  hereby has not been exercised in full,  the  Issuer  shall at all  times  prior to the  Termination  Date  reserve  and keep  available,  free  from
pre-emptive  rights,  out of its authorized but unissued capital stock, the number of shares required to permit the
full exercise of this Warrant (assuming it were exercised in the manner provided for in Section 1.1(a) hereof).

         </font>
		<p><font size="2">8.       <u>Lost or Stolen Warrant</u>.  In case this Warrant  Certificate  shall be mutilated,  lost,  stolen or destroyed,  the Issuer shall issue in exchange and substitution for and upon  cancellation of the mutilated Warrant
Certificate,  or in lieu of and substitution for the Warrant  Certificate lost, stolen or destroyed,  a new Warrant
Certificate of like tenor,  but only upon receipt of evidence  reasonably  satisfactory,  and (in the case of loss,
theft or destruction) of an undertaking to provide  reasonably  satisfactory  indemnification,  to the Issuer of or
in respect of such loss, theft or destruction of such Warrant Certificate.</font></p>
		<p><font size="2">&nbsp;9.       <u>Warrant  Agent</u>.  The  Issuer  (and any  corporation  into  which  the  Issuer  is  merged  or any corporation  resulting  from any  consolidation  to which the Issuer is a party) shall serve as warrant  agent (the
"Warrant  Agent")  under this  Warrant.  The Warrant Agent  hereunder  shall at all times  maintain a register (the
"Warrant  Register") of the Holders of this Warrant.  Upon 30 days' notice to the  registered  Holder  hereof,  the
Issuer may appoint a new Warrant  Agent.  Such new Warrant Agent shall be a corporation  doing business and in good
standing  under the laws of the United States or any state  thereof,  and having a combined  capital and surplus of
not less than  $50,000,000.  The combined  capital and surplus of any such new Warrant  Agent shall be deemed to be
the  combined  capital  and  surplus as set forth in the most  recent  report of its  condition  published  by such
Warrant Agent prior to its  appointment;  provided that such reports are  published at least  annually  pursuant to
law or to the requirements of a federal or state  supervising or examining  authority.  After acceptance in writing
of such  appointment  by the new  Warrant  Agent,  it shall be vested  with the same  powers,  rights,  duties  and
responsibilities  as if it had been originally  named herein as the Warrant Agent,  without any further  assurance,
conveyance,  act or deed;  but if for any reason it shall be  reasonably  necessary  or  expedient  to execute  and
deliver any further  assurance,  conveyance,  act or deed,  the same shall be done at the expense of the Issuer and
shall be legally and validly  executed and  delivered  by the Issuer.  Any  corporation  into which any new Warrant
Agent may be merged or any corporation  resulting from any  consolidation to which any new Warrant Agent shall be a
party or any  corporation  to which any new Warrant Agent  transfers  substantially  all of its corporate  trust or
shareholders  services  business  shall be a successor  Warrant  Agent under this Warrant  without any further act;
provided that such  corporation  (i) would be eligible for  appointment as successor to the Warrant Agent under the
provisions  of this  Section 9 or (ii) is a wholly  owned  subsidiary  of the  Warrant  Agent.  Any such  successor
Warrant  Agent shall  promptly  cause  notice of its  succession  as Warrant  Agent to be delivered  via  reputable
overnight courier to the registered Holder hereof at such Holder's last address as shown on the Warrant Register.

         </font></p>
		<p><font size="2">10.      <u>Definitions</u>.  As used herein,  unless the context  otherwise  requires,  the following terms have
                  the following respective meanings: </font></p>

<P><font size="2">10.1 &#147;<u>Acquiring
Person</u>&#148; means, in connection with any Business Combination: (i) the
continuing or surviving corporation or other entity of a consolidation or merger
with the Issuer (if other than the Issuer), (ii) the transferee of all or
substantially all of the properties or assets of the Issuer, (iii) the
corporation or other entity consolidating with or merging into the Issuer in a
consolidation or merger in connection with which the Common Stock is changed
into or exchanged for stock or other securities of any other Person or cash or
any other property, (iv) the entity or group acting in concert acquiring or
possessing the power to cast the majority of the eligible votes at a meeting of
the Issuer&#146;s shareholders at which directors are elected or, (v) in the
case of a capital reorganization or reclassification described in clause (iv) of
the definition of Business Combination, the Issuer. </font></P>

<P><font size="2">10.2 &#147;<u>Additional
Shares of Common Stock</u>&#148; means all shares (including treasury shares) of
Common Stock issued or sold (or, pursuant to Section 2.3, deemed to be issued)
by the Issuer on or after the Issuance Date, whether or not subsequently
reacquired or retired by the Issuer, other than shares issued upon the exercise
of the Warrants; provided, however, that this term shall not
include Excluded Securities. </font></P>

         <font size="2">10.3     "<u>Business Combination</u>" shall have the meaning attributed to it in Section 3.1 hereof.
		</font>

<P><font size="2">10.4 &#147;<u>Business
Day</u>&#148; means any day on which the Common Stock may be traded on the
Nasdaq or, if not admitted for trading on the Nasdaq, on any day other than a
Saturday, Sunday or holiday on which banks in Miami, Florida are required or
permitted to be closed. </font></P>

<P><font size="2">10.5 &#147;<u>Closing Sales
Price</u>&#148; means, on any date, the amount per share of the Common Stock
(or, for purposes of determining the Closing Sales Price of the common stock of
an Acquiring Person or its Parent under Section 3, the common stock of such
Acquiring Person or such Parent), equal to (i) the closing sales price, or if no
sale takes place on such date, the closing bid price of the Common Stock (or, in
the case of an Acquiring Person or its Parent, it common stock) on the Nasdaq,
or if not the</font><FONT FACE="Times New Roman, Times, Serif" SIZE=2>n listed or admitted for trading on the Nasdaq then on the national
securities exchange on which the Common Stock (or, in the case of an Acquiring
Person or its Parent, it common stock) is then listed or admitted for trading,
or if not then listed or admitted for trading on a national securities exchange
then on any securities exchange, quotation system or the OTC Bulletin Board on
which the Common Stock (or, in the case of an Acquiring Person or its Parent, it
common stock) is then listed or admitted for trading on such date, in each case
as reported by Bloomberg, L.P. (or by such other Person as the Holder and the
Issuer may agree), or (ii) if such Common Stock or common stock of an Acquiring
Person or its Parent is not then listed or admitted for trading on any
securities exchange, quotation system or the OTC Bulletin Board, the higher of
(x) the book value per share thereof as determined (at Issuer&#146;s cost) by
any firm of independent public accountants of recognized standing selected by
the Board of Directors of the Issuer as of the last calendar day of any month
ending within sixty (60) calendar days preceding the date as of which the
determination is to be made or (y) the fair value per share thereof determined
in good faith by an independent, nationally recognized appraisal firm selected
by the Issuer and reasonably acceptable to the Holder (whose fees and expenses
shall be borne by Issuer), subject to adjustment for stock splits,
recombinations, stock dividends and the like. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.6 &#147;<U>Common
Stock</U>&#148; as defined in the introduction to this Warrant, such term to
include any stock into which such Common Stock shall have been changed or any
stock resulting from any reclassification of such Common Stock, and all other
stock of any class or classes (however designated) of the Issuer the holders of
which have the right, without limitation as to amount, either to all or to a
share of the balance of current dividends and liquidating dividends after the
payment of dividends and distributions on any shares entitled to preference to
Common Stock shares. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.7 &#147;<U>Convertible
Securities</U>&#148; means any evidences of indebtedness, shares of stock (other
than Common Stock) or other securities directly or indirectly convertible into
or exchangeable for Additional Shares of Common Stock. </FONT></P>

         <font size="2">10.8     "<u>Excluded Securities</u>" means each of the following:
                   </font>
		<p><font size="2">(a)      Common Stock issued  pursuant to a duly  authorized  resolution of the Issuer's Board of
Directors  approving  such  issuance,  the  issuance of which has been  expressly  approved by any  director of the
Issuer designated by Coconut Palm Capital Investors I, Ltd.;</font></p>
		<p><font size="2">&nbsp;(b)      Common  Stock issuable  upon  the  exercise  of  Options  issued  pursuant  to  a  duly
authorized  resolution of the Issuer's  Board of Directors or the  Compensation  Committee of the Issuer's Board of
Directors  approving  such  issuance,  the  issuance of which has been  expressly  approved by any  director of the
Issuer  designated  by Coconut  Palm  Capital  Investors I, Ltd.,  or Common  Stock  issuable  upon the exercise of
Options issued  pursuant to the Issuer's  employee stock option plan approved by the Issuer's Board of Directors or
the Compensation Committee of the Issuer's Board of Directors;

                  </font></p>
		<p><font size="2">(c)      Common Stock issuable upon the conversion of  Convertible  Securities  outstanding as of
the Issuance Date or Convertible  Securities issued pursuant to a duly authorized  resolution of the Issuer's Board
of Directors  approving  such issuance,  the issuance of which has been  expressly  approved by any director of the
Issuer designated by Coconut Palm Capital Investors I, Ltd.;

                  </font></p>
		<p><font size="2">(d)      Common Stock issuable in connection with any  acquisition of another  corporation by the
Company to the extent such  acquisition  and issuance in  connection  therewith are  authorized  pursuant to a duly
authorized resolution of the Issuer's Board of Directors; and

                  </font></p>
		<p><font size="2">(e)      Common  Stock  issued or issuable to the Holder upon  exercise of this Warrant or on the
Issuance Date.

         </font></p>
		<p><font size="2">10.9     "<u>Issuer</u>" as defined in the  introduction to this Warrant,  means DEVCON  INTERNATIONAL  CORP. and
                   ------
any corporation or entity which shall succeed to or assume the obligations of DEVCON INTERNATIONAL CORP.
		</font></p>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.10
&#147;<U>Options</U>&#148; means any rights, options or warrants to subscribe
for, purchase or otherwise acquire either Additional Shares of Common Stock or
Convertible Securities. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.11 &#147;<U>Other
Securities</U>&#148; means any stock (other than Common Stock) and other
securities of the Issuer or any other Person (corporate or otherwise) which the
Holder of the Warrant at any time shall be entitled to receive, or shall have
received, upon the exercise of the Warrant, in lieu of or in addition to Common
Stock, or which at any time shall be issuable or shall have been issued in
exchange for or in replacement of Common Stock or Other Securities. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.12
&#147;<U>Parent</U>&#148; as to any Acquiring Person, means any corporation
which (a) controls the Acquiring Person directly or indirectly through one or
more intermediaries, (b) is required to include the Acquiring Person in the
consolidated financial statements contained in such Parent&#146;s Annual Report
on Form 10-K (if Parent is required to file such a report) or would be required
to so include the Acquiring Person in such Parent&#146;s consolidated financial
statements if they were prepared in accordance with U.S. GAAP and (c) is not
itself included in the consolidated financial statements of any other Person
(other than its consolidated subsidiaries). </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.13
&#147;<U>Person</U>&#148; means a corporation, an association, a partnership, a
limited liability company, an organization, a business, an individual, a
government or political subdivision thereof or a governmental agency. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.14 &#147;<U>Registered
Common Stock</U>&#148; means Common Stock that has been registered under the
Securities Act and is freely tradable. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.15
&#147;<U>Restatement</U>&#148; means that Issuer restates or announces its
intention to restate, in any material way, any portion of its financial
statements as included (i) in a Form 10-K or Form 10-Q filed with the SEC in the
form of an amendment thereto, (ii) in a Form 8-K or in any other filing made
with the SEC, or (iii) in a press release or other form of media, except as is
required as a result of a change occurring after the date of this Warrant in (1)
applicable law or (2) generally accepted accounting principles promulgated by
the Financial Accounting Standards Board or the SEC, which change is implemented
by Issuer in the manner and at the time prescribed by such law or such generally
accepted accounting principle. </FONT></P>

         <font size="2">10.16    "<u>SEC</u>" means the Securities and Exchange Commission.
                   </font>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.17
&#147;<U>Subsidiary</U>&#148; of a Person means (i) a corporation, a majority of
whose stock with voting power, under ordinary circumstances, to elect directors
is at the time of determination, directly or indirectly, owned by such Person or
by one or more Subsidiaries of such Person, or (ii) any other entity (other than
a corporation) in which such Person or one or more Subsidiaries of such Person,
directly or indirectly, at the date of determination thereof has at least a
majority ownership interest. </FONT></P>

         <font size="2">10.18    "<u>Termination Date</u>" has the meaning set forth in the introductory paragraph of this Warrant.
		</font>
		<p><font size="2">11.      <u>Remedies</u>.  The Issuer  stipulates  that the  remedies at law of the Holder of this Warrant in the
                  event of any  default or  threatened  default by the Issuer in the  performance  of or  compliance  with any of the
terms of this  Warrant are not and will not be adequate and that,  to the fullest  extent  permitted  by law,  such
terms may be specifically  enforced by a decree for the specific  performance of any agreement  contained herein or
by an injunction against a violation of any of the terms hereof or otherwise.
		</font></p>
		<p><font size="2">12.      <u>No Rights or Liabilities  as  Shareholder</u>.  Nothing  contained in this Warrant shall be construed as conferring  upon the Holder hereof any rights as a  shareholder  of the Issuer or as imposing any  obligation on
such Holder to purchase  any  securities  or as imposing any  liabilities  on such Holder as a  shareholder  of the
Issuer, whether such obligation or liabilities are asserted by the Issuer or by creditors of the Issuer.
		</font></p>
		<p><font size="2">13.      <u>Notices</u>.  All notices and other  communications  under this Warrant shall be in writing and shall be delivered by facsimile or by a nationally  recognized  overnight courier,  postage prepaid,  addressed (a) if to
Holder,  to the address  set forth for the Holder in the  introductory  paragraph  of this  Warrant,  and if to the
Issuer,  to the address set forth for the Issuer in the  introductory  paragraph of this Warrant,  or (b) if to any
other  Holder of any Warrant,  at the  registered  address of such Holder as set forth in the register  kept at the
principal  office of the  Issuer,  provided  that the  exercise  of any Warrant  shall be  effective  in the manner
provided in Section 1.

         </font></p>
		<p><font size="2">14.      <u>Amendments</u>.  This Warrant and any term hereof may be changed,  waived,  discharged  or terminated only by an instrument in writing signed by the party against which  enforcement of such change,  waiver,  discharge
or termination is sought. </font></p>
		<p><font size="2">15.      <u>Descriptive  Headings</u>.  The  headings in this  Warrant are for  purposes  of  reference  only and shall not limit or otherwise affect the meaning hereof.

         </font></p>
		<p><font size="2">16.      <u>GOVERNING  LAW</u>. THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE  WITH,  AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF THE STATE OF FLORIDA,  WITHOUT  REGARD TO PRINCIPLES OF CONFLICT OF
LAWS.

         </font></p>
		<p><font size="2">17.      <u>Judicial  Proceeding</u>s;  <u>Waiver of Jury.
		</u>Any judicial  proceeding  brought against the Issuer with respect to this  Warrant may be brought in any court of  competent  jurisdiction  in the State of Florida or of the
United  States of America  for the  Southern  District  of Florida  and, by Issuer's  execution  and  delivery  and
Holder's acceptance of this Warrant, each of the Issuer and Holder (a) accepts, generally and unconditionally,  the
nonexclusive  jurisdiction of such courts and any related  appellate court,  and irrevocably  agrees to be bound by
any  judgment  rendered  thereby  in  connection  with this  Warrant,  subject  to any  rights of  appeal,  and (b)
irrevocably  waives any objection the Issuer or Holder may now or hereafter  have as to the venue of any such suit,
action or proceeding  brought in such a court or that such court is an inconvenient  forum.  Each of the Issuer and
Holder  hereby  waives  personal  service of process and  consents,  that service of process upon it may be made by
certified or registered mail, return receipt  requested,  at its address specified or determined in accordance with
the  provisions of Section 13, and service so made shall be deemed  completed on the first  Business Day after such
service is deposited  with a reputable  overnight  courier or, if earlier,  when  delivered.  Nothing  herein shall
affect the right to serve  process in any other  manner  permitted  by law or shall limit the right of any party to
bring  proceedings  against  the other  party in the courts of any other  jurisdiction.  EACH PARTY  HEREBY  WAIVES
TRIAL BY JURY IN ANY JUDICIAL  PROCEEDING  INVOLVING,  DIRECTLY,  OR INDIRECTLY,  ANY MATTER  (WHETHER  SOUNDING IN
TORT,  CONTRACT OR  OTHERWISE)  IN ANY WAY  ARISING  OUT OF,  RELATED  TO, OR  CONNECTED  WITH THIS  WARRANT OR THE
RELATIONSHIP ESTABLISHED HEREUNDER. </font></p>
		<p><font size="2">18.      <u>Legend</u>.  Unless the shares of Common Stock or Other  Securities issuable  upon  exercise of this
                  Warrant have been  registered  under the  Securities  Act,  upon exercise of all or any part of the Warrant and the
issuance of any of the shares of Common Stock or Other  Securities,  all certificates  representing such securities
shall bear on the face thereof substantially the following legend: </font></p>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=25%>&nbsp;</TD>
<TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
&#147;The
securities represented by this certificate have been acquired directly or
indirectly from the Issuer without being registered under the Securities Act of
1933, as amended (the &#147;Securities Act&#148;), or any other applicable
securities laws, and are restricted securities as that term is defined under
Rule 144 promulgated under the Securities Act. These securities may not be sold,
pledged, transferred, distributed or otherwise disposed of in any manner
(&#147;Transfer&#148;) unless they are registered under the Securities Act and
any other applicable securities laws, or unless the request for Transfer is
accompanied by a favorable opinion of counsel, reasonably satisfactory to the
Issuer, stating that the Transfer will not result in a violation of the
Securities Act or any other applicable securities laws.&#148;</FONT></TD>
</TR>
</TABLE>
		<font size="2">
<BR>

         19.      <u>Assignment</u>.  Notwithstanding  anything to the  contrary  set forth  herein,  this Warrant and all
                  rights  hereunder may be assigned by the Holder to any person or entity;  and upon the Holder's  providing  written
notice of such  assignment  to the Issuer,  the  Holder's  assignee  shall become the  registered  assignee and the
registered  Holder of this Warrant,  and the Issuer shall recognize such assignment and cause such assignment to be
reflected in its books and records. </font>
		<p><font size="2">&nbsp;&nbsp;&nbsp; This Warrant Certificate shall not be valid unless signed by the Issuer.

                                   </font></p>
		<p align="center"><font size="2">[Remainder of Page Left Blank Intentionally]


<!-- MARKER PAGE="sheet: 15; page: 15" -->
		</font></p>
<HR SIZE=5 COLOR=GRAY NOSHADE>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>IN WITNESS WHEREOF, Devcon
International Corp. has caused this Warrant Certificate to be signed by its duly
authorized officer. </FONT></P>

		<font size="2">Dated: [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ], 2004&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; DEVCON INTERNATIONAL CORP.



                                                             <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; By:_________________________________________&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
		<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:_________________________________________&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
		<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Title:_________________________________________




<!-- MARKER PAGE="sheet: 16; page: 16" -->
		</font>
<HR SIZE=5 COLOR=GRAY NOSHADE>


                                                       <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
		</font><b><font size="2">Exhibit 1
                                                                                                          </font>
		</b>
		<p align="center"><font size="2">[FORM OF WARRANT EXERCISE NOTICE]

                                   </font></p>
		<p align="center"><font size="2">(To Be Executed Upon Exercise Of the Warrant)


                                                      </font></p>
		<p align="center"><font size="2">[DATE] </font></p>
		<p><font size="2">DEVCON INTERNATIONAL CORP.
<br>
		1350 E. Newport Center Drive
Suite 201<br>
&nbsp;Deerfield Beach, Florida  33442
<br>
		Attention:  [&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;                                    ]
		<br>
&nbsp;&nbsp;&nbsp; Re:      Warrant No. ____
                           </font></p>
		<p><font size="2">Ladies and Gentlemen: </font></p>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The undersigned is the
registered Holder of the above-referenced warrant (the
&#147;<U>Warrant</U>&#148;) issued by DEVCON INTERNATIONAL CORP. (the
&#147;<U>Issuer</U>&#148;), evidenced by copy of the Warrant Certificate
attached hereto, and hereby elects to exercise the Warrant to purchase
[___________]<SUP>1</SUP> shares of Common Stock (or Other Securities, as
applicable) (as such capitalized terms are defined in such Warrant Certificate)
[<I>cash exercise</I>: and shall deliver on the Warrant Closing Date via wire
transfer of immediately available funds or by certified or official bank check]
[<I>broker-assisted exercise</I>: and following the Issuer&#146;s issuance and
delivery to the broker identified below of certificates for the shares of Common
Stock (or Other Securities, as applicable) with respect to which this Warrant is
being exercised and the sale of such shares of Common Stock (or Other
Securities, as applicable), such broker shall deliver within three (3) Business
Days after the Warrant Closing Date via wire transfer of immediately available
funds or by certified or official bank check] $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to the order of DEVCON
INTERNATIONAL CORP. as payment for such Common Shares in accordance with the
terms of such Warrant Certificate. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; In accordance with the
terms of the attached Warrant Certificate, the undersigned requests that
certificates for such shares be registered in the name of and delivered to the
undersigned at the following address (or in the case of a broker-assisted
exercise, delivered to the following broker at the following address): </FONT></P>

<HR SIZE=1 NOSHADE WIDTH=15% ALIGN=CENTER>

<HR SIZE=1 NOSHADE WIDTH=15% ALIGN=CENTER>

<HR SIZE=1 NOSHADE WIDTH=15% ALIGN=CENTER>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp; The undersigned will
deliver the original of the Warrant Certificate no later than the third Business
Day after and excluding the date of this notice. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><I>&nbsp;&nbsp;&nbsp; [If the number of shares
of Common Stock to be delivered is less than the total number of shares of
Common Stock deliverable under the Warrant, insert the following -- The
undersigned requests that a new warrant certificate substantially identical to
the attached Warrant Certificate be issued to the undersigned evidencing the
right to purchase the number of shares of Common Stock equal to (x) the total
number of shares of Common Stock deliverable under the Warrant less (y)
[_____________]<SUP>2</SUP>.]</I> </FONT></P>
		<FONT FACE="Times New Roman, Times, Serif" SIZE=2><SUP>1</SUP> Insert here
the number of shares called for on the face of this Warrant (or, in the case of
a partial exercise, the portion thereof as to which this Warrant is being
exercised), in either case without making any adjustment for Additional Shares
of Common Stock or any other stock or other securities or property or cash
which, pursuant to the adjustment provisions of this Warrant, may be delivered
upon exercise. In the case of partial exercise, a new Warrant or Warrants will
be issued and delivered, representing the unexercised portion of the Warrant, to
the Holder surrendering the Warrant. </FONT>
		<p><font size="2">2        Insert here the number of shares identified in the footnote immediately preceding this one.
		</font></p>
<HR SIZE=5 COLOR=GRAY NOSHADE>


                                                       <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

                                                        [HOLDER]</font><blockquote>
			<blockquote>
				<blockquote>
					<blockquote>
						<blockquote>
							<blockquote>
								<blockquote>
									<blockquote>
										<blockquote>
											<p><font size="2">&nbsp;By:_________________________________
											Name:______________________________
											Title:________________________________&nbsp;




<!-- MARKER PAGE="sheet: 17; page: 17" -->
											</font></p>
										</blockquote>
									</blockquote>
								</blockquote>
							</blockquote>
						</blockquote>
					</blockquote>
				</blockquote>
			</blockquote>
		</blockquote>
		<font size="2">ACKNOWLEDGED:<br>
&nbsp;DEVCON INTERNATIONAL CORP.</font><p><font size="2">
		By:___________________________________<br>
		Name:________________________________<br>
		Title:__________________________________</font></p>
		<p>&nbsp;</p>
<HR SIZE=5 COLOR=GRAY NOSHADE>


		<p>&nbsp;</p>
		<p align="right"><font size="2">Exhibit 2
                                                                                                          </font>
		</p>
		<p align="center"><font size="2">[FORM OF WARRANT EXERCISE DELIVERY NOTICE]


                                                      </font></p>
		<p align="center"><font size="2">[Date]




</font></p>
		<p><font size="2">[HOLDER] <br>
		__________

<br>
		__________

<br>
		__________

<br>
		Attention:        ______________________
<br>
		Telephone:        ______________________<br>
&nbsp;Facsimile:        ______________________

<br>
		<br>
		Ladies and Gentlemen:</font></p>
		<p><font size="2">&nbsp;Reference is made to Warrant  Certificate  No. ______ issued by DEVCON  INTERNATIONAL  CORP. (the "Warrant ") dated
                                                                                                   -------
as of  [________________],  2004.  Capitalized  terms not otherwise defined herein shall have the meanings ascribed
thereto in the Warrant. </font></p>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>This notice confirms that
the Warrant has been exercised by the Holder with respect to ______________
shares of Common Stock at a Warrant Price (as defined in the Warrant
Certificate) of $_____________. Attached are copies of the front and back of the
_________ original stock certificates, each representing ___________ shares of
Common Stock, together with a copy of the overnight courier air bill which will
be used to ship such stock certificates. Also attached is a reissued warrant
certificate, as provided in Section 1.5 of the Warrant Certificate. We will send
the original stock certificates by overnight courier to the following address: </FONT></P>

                            <font size="2">[__________________________________]<br>
&nbsp;[__________________________________]<br>
&nbsp;[__________________________________]&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; DEVCON INTERNATIONAL CORP.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
		<br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; By:________________________________________________________
                                                        <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name:______________________________________________________
                                                        <br>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Title:_____________________________________________________







<!-- MARKER PAGE="sheet: 18; page: 18" -->
		</font>
<HR SIZE=5 COLOR=GRAY NOSHADE>


                                                        <font size="2">F-4


		</font>


<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ANNEX F</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>VOTING
AGREEMENT AND IRREVOCABLE PROXY</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>THIS VOTING AGREEMENT AND
IRREVOCABLE PROXY (this &#147;Agreement&#148;), dated as of April 2, 2004,
between the shareholders listed on the signature page hereto (collectively, the
&#147;Shareholders&#148; and each individually, a &#147;Shareholder&#148;) and
Coconut Palm Capital Investors I, Ltd., a Florida limited partnership
(&#147;Coconut Palm&#148;). </FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>RECITALS</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A. The Shareholders
collectively own of record and beneficially shares of common stock of Devcon
International Corp., a Florida corporation (the &#147;Company&#148;), and
options to purchase shares of Company common stock, as set forth on <U>Exhibit
A</U> (such shares, options or any other voting or equity securities of the
Company hereafter acquired by any Shareholder prior to the termination of this
Agreement, being referred to collectively as the &#147;Shares&#148;). </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>B. In accordance with
the terms of that certain Purchase Agreement, dated April&#160;2, 2004, by and
between the Company and Coconut Palm (including all exhibits thereto, the
&#147;Purchase Agreement&#148;), the Company and Coconut Palm intend to close
the acquisition by Coconut Palm of the Initial Units (as defined in the Purchase
Agreement), and if elected by Coconut Palm, the Additional Shares and the
Additional Warrants (as defined in the Purchase Agreement) (collectively, the
&#147;Transactions&#148;). </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>C. Coconut Palm
desires to have the Shareholders, and the Shareholders desire, in order to
induce Coconut Palm to proceed with closing the Transactions, to agree to vote
in favor of approving certain matters relating to the Transactions that require
approval of the Company&#146;s shareholders and that are necessary to close the
Transactions, each as set forth below. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>D. This Agreement is
made and entered into pursuant to Section 607.0731 of the Florida Business
Corporation Act. </FONT></P>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>TERMS AND
CONDITIONS</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOW, THEREFORE, in
consideration of the foregoing and the mutual covenants and agreements contained
herein, and intending to be legally bound hereby, the parties hereby agree as
follows: </FONT></P>

         <font size="2"><b>Section 1.</b>        Voting of Shares. </font>
		<p><font size="2">&nbsp;&nbsp;&nbsp; (a)      Each  Shareholder  covenants  and agrees  that until the  Termination  Date (as  defined
below),  at the meeting of the Company's  shareholders  or any  adjournment  thereof to consider the  Transactions,
however  called,  and in any  action by  written  consent  of the  shareholders  of the  Company  to  consider  the
Transactions,  such  Shareholder will vote, or cause to be voted, all of such  Shareholder's  respective  Shares in
favor of the  Transactions  as described in and, in every  material  respect,  in  accordance  with,  the terms and
conditions set forth in this Agreement.</font></p>
		<p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;

                  (b)      Each  Shareholder  hereby  irrevocably  grants to and  appoints  Coconut  Palm,  and any
                                                      individual  designated in writing by it, as its proxy and attorney-in-fact  (with full power of substitution),  for
and in its name,  place and stead,  to vote its Shares at any meeting of the  shareholders  of the Company,  or any
adjournment  thereof,  called with respect to any of the matters  specified  in, and in accordance  and  consistent
with,  this  Section 1 and against any actions or approval  that would  compete  with or could serve to  materially
interfere with, delay,  discourage,  adversely affect or inhibit the timely consummation of the Transactions.  Each
Shareholder  understands  and  acknowledges  that Coconut Palm is entering into the Purchase  Agreement in reliance
upon the  Shareholder's  execution  and  delivery of this  Agreement.  Each  Shareholder  hereby  affirms  that the
irrevocable proxy set forth in this Section 1(b) is given in connection with the closing of the  Transactions,  and
that such  irrevocable  proxy is given to secure  the  performance  of the  duties of such  Shareholder  under this
           Agreement.  Except as otherwise provided for herein,  each Shareholder hereby affirms that the irrevocable proxy is
                                                                                               coupled with an interest and may under no  circumstances be revoked.  Notwithstanding  any other provisions of this Agreement,  the  irrevocable  proxy granted  hereunder shall  automatically  terminate upon the termination of this
                 Agreement. </font></p>
		<p><font size="2">&nbsp;&nbsp;&nbsp; (c)      Each of the  Shareholders  hereby  revokes any and all  previous  proxies  granted  with
respect to any of the Shares and shall not hereafter,  until this Agreement terminates,  purport to grant any other
proxy or power of  attorney  with  respect  to any of the  Shares  or enter  into any  agreement  (other  than this
Agreement),  arrangement or  understanding  with any person,  directly or indirectly,  to vote,  grant any proxy or
give  instructions  with  respect  to the  voting  of any  of  the  Shares  covering  the  subject  matter  hereof.
Notwithstanding  anything stated to the contrary,  the foregoing shall not prohibit the Shareholders  from granting
proxies in  connection  with the annual  meeting of the  Company's  shareholders  with respect to voting on matters
other than the matters that are the subject matter of this Agreement. </font>
		</p>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Section</B> <B>2.</B>
<U>Transfer of Shares</U>. Each Shareholder covenants and agrees that until the
termination of this Agreement, such Shareholder will not directly or indirectly,
(a) sell, assign, transfer (including by purchase, interspousal disposition
pursuant to a domestic relations proceeding or otherwise by operation of law),
pledge, encumber or otherwise dispose of any of the Shares, (b) deposit any of
the Shares into a voting trust or enter into a voting agreement or arrangement
with respect to the Shares or grant any proxy or power of attorney with respect
thereto which is inconsistent with this Agreement, or (c) enter into any
contract, option or other arrangement or undertaking with respect to the direct
or indirect sale, assignment, transfer (including by purchase, interspousal
disposition pursuant to a domestic relations proceeding or otherwise by
operation of law) or other disposition of any Shares unless the transferee (i)
enters into an agreement with Coconut Palm containing provisions substantially
similar to this Agreement and (ii) notifies Coconut Palm of such transfer. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Section</B> <B>3.</B>
<U>Shareholder Representations</U>. Each Shareholder represents to Coconut Palm
that (a) on the date hereof, such Shareholder is the record and beneficial owner
(as determined pursuant to Rule 13d-3 under the Securities Exchange Act of 1934,
as amended) of the Shares set forth next to such Shareholder&#146;s name on
<U>Exhibit A</U> and that such Shareholder has sole voting power, without
restrictions, with respect to all of his shares of common stock of the Company
comprising the Shares; and (b) such Shareholder has the right, power and
authority to execute and deliver this Agreement and to perform its obligations
under this Agreement, and this Agreement has been duly executed and delivered by
such Shareholder and constitutes a valid and legally binding agreement of such
Shareholder, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors&#146; rights and to
general equity principles; and such execution, delivery and performance by
Shareholder of this Agreement will not (i)&#160;conflict with, require a
consent, waiver or approval under, or result in a breach of or default under,
any of the terms of any contract, commitment or other agreement to which such
Shareholder is bound; (ii) violate any order, writ, injunction decree or
statute, or any rule or regulation, applicable to Shareholder or any of the
properties or assets of Shareholder or (iii) result in the creation of, or
impose any obligation on such Shareholder to create, any lien, charge or other
encumbrance of any nature whatsoever upon the Shares; and (c) the Shares are now
and will at all times during the term of this Agreement be held by such
Shareholder, or by a nominee or custodian for the account of such Shareholder,
free and clear of all pledges, liens, proxies, claims, shares, security
interests, preemptive rights and any other encumbrances whatsoever with respect
to the ownership, transfer or voting of such Shares; and there are no
outstanding options, warrants or rights to purchase or acquire, or other
agreements relating to, such Shares other than this Agreement. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Section</B> <B>4.</B>
<U>Termination</U>. This Agreement shall terminate upon the earlier to occur of
(a) the consummation of the Transactions, (b) any termination of the Purchase
Agreement in accordance with its terms or (c) upon the withdrawal by the
Company&#146;s Board of Directors of its approval of the transaction pursuant to
Section 8(o) of the Purchase Agreement. Notwithstanding the foregoing, the
provisions of Sections 4 and 6 shall survive the termination of this Agreement </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Section</B> <B>5.</B>
<U>Further Assurances</U>. Each Shareholder will execute and deliver, or cause
to be executed and delivered, all further documents and instruments and use its
best efforts to take, or cause to be taken, all actions necessary, proper or
advisable under applicable law to consummate and make effective the transactions
contemplated by this Agreement. </FONT></P>

         <b><font size="2">Section 6</font></b><font size="2">.        <u>Miscellaneous</u>.</font><p>
		<font size="2">&nbsp;(a)      This  Agreement  constitutes  the entire  agreement  between  the  parties  hereto  with
respect to the subject  matter hereof and  supersedes all prior  agreements  and  understandings,  both written and
oral,  between the parties with respect  thereto.  This Agreement may not be amended,  modified or rescinded except
by an instrument in writing signed by each of the parties hereto.

                  </font></p>
		<p><font size="2">(b)      If any term or other  provision of this  Agreement  is invalid,  illegal or incapable of
being enforced by any rule of law, or public policy,  all other  conditions and provisions of this Agreement  shall
nevertheless  remain in full  force  and  effect.  Upon  such  determination  that any term or other  provision  is
invalid,  illegal or incapable of being  enforced,  the parties hereto shall negotiate in good faith to modify this
Agreement  so as to effect  the  original  intent of the  parties  as closely as  possible  to the  fullest  extent
permitted by applicable law in a mutually  acceptable  manner in order that the terms of this  Agreement  remain as
originally contemplated to the fullest extent possible.</font></p>
		<p><font size="2">&nbsp;(c)      The  headings  in this  Agreement  are  inserted  for  convenience  only,  and shall not
constitute a part of this  Agreement or be used to construe or interpret  any of its  provisions.  The parties have
participated  jointly in the negotiation and drafting of this Agreement.  If a question of  interpretation  arises,
this  Agreement  shall be construed as if drafted  jointly by the parties,  and no  presumption  or burden of proof
shall arise  favoring or  disfavoring  any party by virtue of the  authorship of any  provision of this  Agreement.
The word  "include"  or  "including"  means  include or  including,  without  limitation.  The use of a  particular
pronoun  herein will not be  restrictive as to gender or number but will be interpreted in all cases as the context
may require.</font></p>
		<p><font size="2">(d)      This Agreement  shall be governed by and construed in accordance  with the internal laws
of the State of Florida,  without  giving effect to any choice or conflict of law provision or rule (whether of the
State of Florida  or any other  jurisdiction)  that would  cause the  application  of the laws of any  jurisdiction
other than the State of Florida.

                  </font></p>
		<p><font size="2">(e)      Each  party  hereto  severally  acknowledges  that it will be  impossible  to measure in
money the damage to the other  party if the party  hereto  fails to comply with any of the  obligations  imposed by
this  Agreement,  that every such  obligation  is material and that,  in the event of any such  failure,  the other
party will not have an adequate  remedy at law or damages.  Accordingly,  each party hereto  severally  agrees that
injunctive relief or other equitable remedy, in addition to remedies at law or damages,  is the appropriate  remedy
for any such  failure  and will not oppose the  granting  of such  relief on the basis that the other  party has an
adequate  remedy at law. Each party hereto agrees that it will not seek, and agrees to waive any  requirement  for,
the securing or posting of a bond in connection with any other party's seeking or obtaining such equitable relief

                  </font></p>
		<p><font size="2">(f)      If any legal  action or any other  proceeding  is brought  for the  enforcement  of this
Agreement,  or because of an  alleged  dispute,  breach,  default,  or  misrepresentation  in  connection  with any
provision of this Agreement,  the prevailing  party or parties shall be entitled to recover  reasonable  attorneys'
fees and other costs  incurred in that action or  proceeding,  in addition to any other  relief to which it or they
may be entitled.

                  </font></p>
		<p><font size="2">(g)      This Agreement may be executed in two or more original or facsimile  counterparts,  each
of which shall be deemed an original and all of which together shall constitute but one and the same instrument.
		</font></p>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>[Signatures
appear on the next page]</FONT></H1>


<!-- MARKER PAGE="sheet: 19; page: 19" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>IN WITNESS WHEREOF, each of
the parties hereto has caused this Agreement to be signed individually or by its
respective duly authorized officer as of the date first written above. </FONT></P>

                                                     <blockquote>
														<blockquote>
															<blockquote>
																<blockquote>
																	<blockquote>
																		<font size="2">Coconut Palm Capital Investors I, Ltd.</font><p>
																		<font size="2">&nbsp;By:/s/ Richard C. Rochon
																		<br>&nbsp;Name:  Richard C Rochon<br>&nbsp;Title:    President
																		</font>
																		</p>
																		<H1 ALIGN=left>
																		<FONT FACE="Times New Roman, Times, Serif" SIZE=2>Shareholders:</FONT></H1>
																		<font size="2">/s/ Donald L. Smith, Jr
																		<br>Donald L. Smith, Jr.
																			<br>Smithcon Family Investments, Ltd.<br>By Smithcon Investments, Inc.,
																		<br>&nbsp;&nbsp;&nbsp; Its General Partner

                                                     					</font>
																		<p>
																		<font size="2">By:/s/ Donald L. Smith, Jr.<br>Name: Donald L. Smith, Jr.<br>Title: President


                                                     					</font>
																		</p>
																		<p>
																		<font size="2">/s/ Donald L. Smith, III
                                                     						<br>Donald L. Smith, III

                                                     						</font>
																		</p>
																		<p>
																		<font size="2">/s/ Mary Ellen Smith
                                                     						<br>Mary Ellen Smith

                                                     						</font>
																		</p>
																		<p>
																		<font size="2">/s/
																			Kevin
																			M.
																			Smith
																			</font>
																		<FONT FACE="Times New Roman, Times, Serif" SIZE=2>
																		<br>Kevin M.
Smith</FONT></p><font size="2">/s/ Barbara Ann Smith
                                                     						<br>Barbara Ann Smith</font><p>
																		<font size="2">&nbsp;Smithcon Investments, Inc.
																		</font>
																		</p>
																		<p>
																		<font size="2">By:/s/
																			Donald
																			L.
																			Smith,
																			Jr.
																			<br>Name:Donald L. Smith, Jr.<br>Title:President

<!-- MARKER PAGE="sheet: 20; page: 20" -->
																			</font>
																		</p>
																	</blockquote>
																</blockquote>
															</blockquote>
														</blockquote>
		</blockquote>
<HR SIZE=5 COLOR=GRAY NOSHADE>





<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>DEVCON
INTERNATIONAL CORP.</FONT></H1>

<H1 ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>COMMON STOCK</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>THIS PROXY
IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS</FONT></H1>

<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROXY &#150;
SPECIAL MEETING OF SHAREHOLDERS &#150; MAY 10, 2004</FONT></H1>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The undersigned, a holder
of Common Stock of Devcon International Corp., a Florida corporation (the
&#147;Company&#148;), does hereby appoint Donald L. Smith, Jr. and Jan Norelid,
and each of them, the true and lawful attorneys and proxies with full power of
substitution, for and in the name, place and stead of the undersigned, to vote
all of the shares of Common Stock of the Company which the undersigned would be
entitled to vote if personally present at a Special Meeting of Shareholders of
the Company to be held at 3:00 p.m., local time, at the Deerfield Beach Hilton,
Hillsboro Executive Center North, 100 Fairway Drive, Deerfield Beach, Florida,
on May 10, 2004, and at any adjournment(s), or postponement(s) thereof. </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>While</B> <B>the</B>
<B>proposals</B> <B>are</B> <B>being</B> <B>listed</B> <B>separately</B>
<B>for</B> <B>purposes</B> <B>of</B> <B>voting,</B> <B>they</B> <B>are</B>
<B>all</B> <B>interdependent. Accordingly,</B> <B>obtaining</B> <B>the</B>
<B>requisite</B> <B>shareholder</B> <B>approval</B> <B>for</B> <B>each</B>
<B>proposal</B> <B>is</B> <B>a</B> <B>condition</B> <B>precedent</B> <B>to</B>
<B>the effectiveness</B> <B>of</B> <B>the</B> <B>other</B> <B>proposals</B>
<B>set</B> <B>forth</B> <B>below.</B> </FONT></P>

         <b><font size="2">THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" EACH OF THE PROPOSALS SET FORTH BELOW.</font></b><p>
		<font size="2">&nbsp;The undersigned hereby instructs said proxies or their substitutes:
		</font></p>

<H2 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1. PROPOSAL</FONT></H2>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To approve and adopt the
proposal to authorize the issuance and sale by Devcon International Corp. (the
&#147;Company&#148;) to Coconut Palm Capital Investors I, Ltd. (&#147;Coconut
Palm&#148;) of up to 2,000,000 units, including the shares of common stock
underlying these units, for a purchase price of nine dollars ($9.00) per unit,
each unit consisting of 1 share of common stock and a warrant to purchase 1
share of common stock at an exercise price of $10.00 per share, a warrant to
purchase 1/2 share of common stock at an exercise price of $11.00 per share and
a warrant to purchase 1/2 share of common stock at an exercise price of $15.00
per share. </FONT></P>

                <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

                FOR&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; AGAINST&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ABSTAIN
		<br>
		------------------------------------------------------------------------------------------------------------------------------------</font><p>
		<font size="2">2.       <b>PROPOSAL 2.</b> </font></p>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To approve and adopt
amendments to the Company&#146;s Articles of Incorporation to increase the
number of authorized shares of our common stock to 50,000,000 shares, increase
the size of our board of directors from seven to nine members and allow the
Company&#146;s Board of Directors to set the size of the board of directors in
the future. </FONT></P>

                <p><font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

                FOR&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; AGAINST&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; ABSTAIN
				<br>
				-------------------------------------------------------------------------------------------------------------------------------------</font></p>
		<p><font size="2">3.       </font><b><font size="2">PROPOSAL 3. </font>
		</b></p>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Election of nine (9)
members to the Company&#146;s Board of Directors to serve until the 2005 annual
meeting or until their successors have been duly elected and qualified. </FONT></P>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=15%>&nbsp;</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>VOTE</B>
<B>FOR</B> all nine nominees listed in the Proxy Statement, except vote withheld
from the following nominee(s) (if any). </FONT>
</TD>
</TR>
</TABLE>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 id="table1">
<TR VALIGN=TOP>
<TD WIDTH="100%" colspan="2"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------</FONT></TD>
</TR>
<tr>
<TD WIDTH=15% height="31">&nbsp;</TD>
<TD WIDTH=85% height="31"><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>VOTE</B>
<b>WITHHELD</b> from all nominees.&nbsp; </FONT>
</TD>
</tr>
</TABLE>
		<font size="2">
<BR>

         4.       In their  discretion,  the proxies are  authorized  to vote upon such business as may properly come before
the meeting.



                                   </font>
		<p align="center"><font size="2">(Continued and to be signed on reverse side)


<!-- MARKER PAGE="sheet: 21; page: 21" -->
		</font></p>
<HR SIZE=5 COLOR=GRAY NOSHADE>


<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>THIS</B> <B>PROXY,</B>
<B>WHEN</B> <B>PROPERLY</B> <B>EXECUTED,</B> <B>WILL</B> <B>BE</B> <B>VOTED</B>
<B>IN</B> <B>THE</B> <B>MANNER</B> <B>DIRECTED</B> <B>HEREIN</B> <B>BY</B>
<B>THE</B> <B>UNDERSIGNED SHAREHOLDER.</B> <B>IF</B> <B>NO</B> <B>DIRECTION</B>
<B>IS</B> <B>MADE,</B> <B>THIS</B> <B>PROXY</B> <B>WILL</B> <B>BE</B>
<B>VOTED</B> <B>&#147;FOR&#148;</B> <B>EACH</B> <B>OF</B> <B>THE</B>
<B>PROPOSALS.</B> </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The undersigned hereby
revokes any proxy or proxies heretofore given, and ratifies and confirms that
the proxies appointed hereby, or any of them, or their substitute or
substitutes, may lawfully do or cause to be done by virtue thereof. The
undersigned hereby acknowledges receipt of a copy of the Notice of Special
Meeting of Shareholders and Proxy Statement, both dated ________ ___, 2004, and
the Company&#146;s Annual Report on Form 10-K for the fiscal year ended
December&#160;31, 2003. </FONT></P>

                                                          <font size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

                                                          Dated: __________________________, 2004</font><p>
		<font size="2">&nbsp;__________________________________________          ______________________________________________
		<br>
		Print Name&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Signature<br>
&nbsp;__________________________________________          ______________________________________________
		<br>
		Print Name&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Signature
		</font></p>

<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0>
<TR VALIGN=TOP>
<TD WIDTH=25%>&nbsp;</TD>
<TD WIDTH=75%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
NOTE:
Your signature should appear exactly the same as your name appears hereon. If
signing as partner, attorney, executor, administrator, trustee or guardian,
please indicate the capacity in which signing. When signing as joint tenants,
all parties in the joint tenancy must sign. When a proxy is given by a
corporation, it should be signed by an authorized officer and the corporate seal
affixed. No postage is required if mailed within the United States.</FONT></TD>
</TR>
</TABLE>
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