Document:

Exhibit 4.5

                     NORDIC AMERICAN TANKER SHIPPING LIMITED
                            2004 STOCK INCENTIVE PLAN

                                   ARTICLE I.
                                     General

1.1. Purpose

          The Nordic  American  Tanker  Shipping Ltd. 2004 Stock  Incentive Plan
(the "Plan") is designed to provide certain key persons, on whose initiative and
efforts  the  successful  conduct  of the  business  of Nordic  American  Tanker
Shipping Ltd. (the  "Company")  depends,  with incentives to: (a) enter into and
remain in the service of the Company (b) acquire a  proprietary  interest in the
success of the  Company,  (c)  maximize  their  performance  and (d) enhance the
long-term performance of the Company.

1.2. Administration

          (a)   Administration  by  Board  of  Directors.   The  Plan  shall  be
administered  by the Company's  Board of Directors  (the  "Administrator").  The
Administrator shall have the authority (i) to exercise all of the powers granted
to it under the Plan, (ii) to construe, interpret and implement the Plan and any
Award  Agreements  executed  pursuant to Section 2.1 in its sole discretion with
all such determination being final, binding and conclusive,  (iii) to prescribe,
amend and rescind rules and  regulations  relating to the Plan,  including rules
governing  its own  operations,  (iv) to make all  determinations  necessary  or
advisable in administering  the Plan, and (v) to correct any defect,  supply any
omission and reconcile any inconsistency in the Plan.

          (b) Administrator Action.  Actions of the Administrator shall be taken
by the vote of a majority of its  members.  Any action may be taken by a written
instrument  signed by a majority  of the  Administrator  members,  and action so
taken  shall  be  fully  as  effective  as if it had  been  taken by a vote at a
meeting.  Except to the extent  prohibited by applicable  law or the  applicable
rules of a stock exchange,  the Administrator may allocate all or any portion of
its  responsibilities  and  powers  to any one or more  of its  members  and may
delegate  all or any  part of its  responsibilities  to any  person  or  persons
selected by it, and may revoke any such allocation or delegation at any time.

1.3. Persons Eligible for Awards

          The  persons  eligible  to  receive  awards  under  the Plan are those
officers, directors, and executive, managerial,  administrative and professional
employees of the Company and of Scandic American  Shipping,  Ltd.,  ("Scandic"),
(collectively,  "key persons") as the Administrator in its sole discretion shall
select,  taking  into  account  the duties of the  respective  employees,  their
present and  potential  contributions  to the success of the  Company,  and such
other  factors as the  Administrator  shall deem  relevant  in  connection  with
accomplishing  the purpose of the Plan. The Administrator may from time to time,
in its sole  discretion,  determine  that any key person shall be  ineligible to
receive awards under the Plan.

1.4. Types of Awards Under Plan

          Awards may be made under the Plan in the form of (a)  incentive  stock
options,  (b) non-qualified  stock options,  (c) stock appreciation  rights, (d)
dividend  equivalent rights,  (e) restricted stock, (f) unrestricted  stock, (g)
restricted stock units, and (h) performance  shares, all as more fully set forth
in Article II. The term "award" means any of the foregoing. . No incentive stock
option may be granted to a person who is not an  employee  of the Company on the
date of grant.

1.5. Shares Available for Awards

          (a) Subject to the provisions of Section 1.5(b),  the aggregate number
of shares of common stock of the Company  ("Common Stock") with respect to which
options  or  restricted  shares  may at any time be  granted  under the Plan are
400,000 shares of Common Stock.

          (b) Shares issued  pursuant to the Plan may be authorized but unissued
Common Stock. The Administrator may direct that any stock certificate evidencing
shares  issued  pursuant  to the Plan  shall  bear a legend  setting  forth such
restrictions on transferability as may apply to such shares.

          (c) Adjustment  Upon Changes in Common Stock.  Upon certain changes in
Common Stock,  the number of shares of Common Stock  available for issuance with
respect to awards that may be granted under the Plan pursuant to Section 1.5(a),
shall be adjusted pursuant to Section 3.7(a).

          (d) Certain Shares to Become  Available Again. The following shares of
Common Stock shall again become  available for awards under the Plan: any shares
that are subject to an award under the Plan and that  remain  unissued  upon the
cancellation or termination of such award for any reason whatsoever;  any shares
of restricted  stock  forfeited  pursuant to Section  2.7(e),  provided that any
dividends  paid on such  shares  are also  forfeited  pursuant  to such  Section
2.7(e);  and any  shares  in  respect  of  which a stock  appreciation  right or
performance share award is settled for cash.

          (e) Individual Limit.  Except for the limits set forth in this Section
1.5(d) and 2.2(i), no provision of this Plan shall be deemed to limit the number
or value of shares with  respect to which the  Administrator  may make awards to
any eligible  person.  Subject to adjustment as provided in Section 3.7(a),  the
total  number of shares of Common  Stock  with  respect  to which  awards may be
granted to any one employee of the Company  during any one  calendar  year shall
not exceed 400,000 shares.  Stock options and stock appreciation  rights granted
and  subsequently  canceled or deemed to be  canceled  in a calendar  year count
against this limit even after their cancellation.

1.6. Definitions of Certain Terms

          (a) The "Fair  Market  Value"  of a share of  Common  Stock on any day
shall be the closing  price on the New York Stock  Exchange as reported for such
day in The Wall Street  Journal  or, if no such price is reported  for such day,
the average of the high bid and low asked price of Common  Stock as reported for
such day. If no quotation is made for the applicable  day, the Fair Market Value
of a share of Common  Stock on such day shall be  determined  in the  manner set
forth in the preceding  sentence using quotations for the next preceding day for
which there were quotations,  provided that such quotations shall have been made
within the ten (10) business days preceding the applicable day.  Notwithstanding
the foregoing, if deemed necessary or appropriate by the Administrator, the Fair
Market  Value of a share of Common Stock on any day shall be  determined  by the
Administrator.  In no event shall the Fair  Market  Value of any share of Common
Stock be less than its par value.

          (b) The term "incentive stock option" means an option that is intended
to qualify for special federal income tax treatment pursuant to sections 421 and
422 of the Code as now  constituted or  subsequently  amended,  or pursuant to a
successor  provision of the Code,  and which is so designated in the  applicable
Grant  Certificate.  Any  option  that  is  not  specifically  designated  as an
incentive stock option shall under no  circumstances  be considered an incentive
stock  option.  Any option that is not an incentive  stock option is referred to
herein as a "non-qualified stock option."

          (c) The term "cause" in connection with a termination of employment or
Board membership by reason of a dismissal for cause shall mean:

               (i) to the extent that there is an employment, severance or other
          agreement  governing  the  relationship  between  the  grantee and the
          Company,  a Company  subsidiary  or a  Company  joint  venture,  which
          agreement  contains a definition  of "cause,"  cause shall  consist of
          those acts or  omissions  that  would  constitute  "cause"  under such
          agreement; and otherwise,

               (ii) the grantee's  termination of employment or Board membership
          by the  Company or an  affiliate  on account of any one or more of the
          following:

                    (A) any failure by the grantee  substantially to perform the
               grantee's employment or Board membership duties;

                    (B) any excessive unauthorized absenteeism by the grantee;

                    (C) any refusal by the grantee to obey the lawful  orders of
               the  Board  or any  other  person  or  Administrator  to whom the
               grantee reports;

                    (D) any act or  omission  by the  grantee  that is or may be
               injurious to the Company, monetarily or otherwise;

                    (E) any act by the  grantee  that is  inconsistent  with the
               best interests of the Company;

                    (F) the grantee's material violation of any of the Company's
               policies,  including, without limitation, those policies relating
               to discrimination or sexual harassment;

                    (G) the grantee's unauthorized (a) removal from the premises
               of the Company or an  affiliate of any document (in any medium or
               form) relating to the Company or an affiliate or the customers or
               clients of the Company or an affiliate or (b)  disclosure  to any
               person  or  entity of any of the  Company's,  or its  affiliates'
               confidential or proprietary information;

                    (H) the  grantee's  commission  of any felony,  or any other
               crime involving moral turpitude; and

                    (I) the grantee's commission of any act involving dishonesty
               or fraud.

          The terms of this  Section  1.6(c) shall apply to employees of Scandic
in the same manner as they apply to  employees  of the  Company.  Any rights the
Company may have  hereunder in respect of the events  giving rise to cause shall
be in addition to the rights the Company may have under any other agreement with
a grantee  or at law or in equity.  Any  determination  of  whether a  grantee's
employment  or Board  membership is (or is deemed to have been)  terminated  for
cause shall be made by the Administrator in its discretion,  which determination
shall be final,  binding and  conclusive  on all parties.  If,  subsequent  to a
grantee's  voluntary  termination  of employment or  involuntary  termination of
employment  without cause, it is discovered that the grantee's  employment could
have been  terminated  for  cause,  the  Administrator  may deem such  grantee's
employment or Board  membership to have been  terminated  for cause. A grantee's
termination of employment or Board membership for cause shall be effective as of
the date of the occurrence of the event giving rise to cause, regardless of when
the determination of cause is made.

                                  ARTICLE II.
                              Awards Under The Plan

2.1. Agreements Evidencing Awards

          Each award  granted  under the Plan  (except an award of  unrestricted
stock) shall be evidenced by a written  certificate  ("Award  Agreement")  which
shall contain such provisions as the Administrator  may, in its sole discretion,
deem  necessary or desirable.  By executing an Award  Agreement  pursuant to the
Plan,  a grantee  thereby  agrees  that the award shall be subject to all of the
terms and provisions of the Plan and the applicable Award Agreement.

2.2. Grant of Stock Options,  Stock Appreciation Rights,  Restricted Stock Units
and Dividend Equivalent Rights

          (a) Stock Option Grants.  The  Administrator may grant incentive stock
options and non-qualified stock options ("options") to purchase shares of Common
Stock from the Company, to such key persons,  and in such amounts and subject to
such vesting and forfeiture  provisions and other terms and  conditions,  as the
Administrator shall determine, in its sole discretion, subject to the provisions
of the  Plan.  The  Administrator  may not  grant  incentive  stock  options  to
non-employee directors or Scandic employees.

          (b)  Stock  Appreciation  Right  Grants;  Types of Stock  Appreciation
Rights.  The  Administrator  may  grant  stock  appreciation  rights to such key
persons,  and in such  amounts  and  subject  to  such  vesting  and  forfeiture
provisions and other terms and conditions, as the Administrator shall determine,
in its sole  discretion,  subject to the  provisions of the Plan. The terms of a
stock  appreciation  right may provide that it shall be automatically  exercised
for a cash payment upon the  happening of a specified  event that is outside the
control of the grantee,  and that it shall not be otherwise  exercisable.  Stock
appreciation  rights may be granted  in  connection  with all or any part of, or
independently of, any option granted under the Plan. A stock  appreciation right
granted  in  connection  with an option  may be  granted at or after the time of
grant of such option.

          (c)  Nature  of Stock  Appreciation  Rights.  The  grantee  of a stock
appreciation  right  shall have the right,  subject to the terms of the Plan and
the applicable Award  Agreement,  to receive from the Company an amount equal to
(i) the excess of the Fair Market  Value of a share of Common  Stock on the date
of exercise  of the stock  appreciation  right over the Fair  Market  Value of a
share of Common Stock on the date of grant (or over the option exercise price if
the  stock  appreciation  right  is  granted  in  connection  with  an  option),
multiplied  by (ii) the  number  of  shares  with  respect  to which  the  stock
appreciation  right is exercised.  Payment upon exercise of a stock appreciation
right shall be in cash or in shares of Common Stock (valued at their Fair Market
Value on the date of exercise of the stock  appreciation  right) or both, all as
the Administrator shall determine in its sole discretion. Upon the exercise of a
stock  appreciation  right granted in connection  with an option,  the number of
shares  subject  to the option  shall be  reduced  by the number of shares  with
respect to which the stock appreciation right is exercised. Upon the exercise of
an option in connection with which a stock  appreciation right has been granted,
the number of shares subject to the stock appreciation right shall be reduced by
the number of shares with respect to which the option is exercised.

          (d) Option  Exercise  Price.  Each Award  Agreement with respect to an
option shall set forth the amount (the "option  exercise  price") payable by the
grantee to the Company upon exercise of the option evidenced thereby. The option
exercise  price per share shall be determined by the  Administrator  in its sole
discretion;  provided,  however,  that the option exercise price of an incentive
stock  option  shall be at least  100% of the  Fair  Market  Value of a share of
Common Stock on the date the option is granted,  and provided further that in no
event shall the option  exercise  price be less than the par value of a share of
Common Stock.

          (e) Exercise Period. Each Award Agreement with respect to an option or
stock  appreciation  right  shall set forth the periods  during  which the award
evidenced  thereby  shall be  exercisable,  whether  in  whole or in part.  Such
periods  shall  be  determined  by the  Administrator  in its  sole  discretion;
provided,  however,  that no  option  or a stock  appreciation  right  shall  be
exercisable  more than 10 years after the date of grant,  and  provided  further
that,  except as and to the extent that the  Administrator may otherwise provide
pursuant to Sections  2.5,  3.7 or 3.8,  no option or stock  appreciation  right
shall be exercisable  prior to the first  anniversary of the date of grant. (See
the default exercise period provided for under Sections 2.3(a) and (b).)

          (f) Reload Options.  The  Administrator  may, in its sole  discretion,
include in any Award Agreement with respect to an option (the "original option")
a provision that an additional  option (the "reload option") shall be granted to
any grantee who, pursuant to Section 2.3(e)(ii), delivers shares of Common Stock
in partial or full payment of the exercise  price of the  original  option.  The
reload  option  shall be for a number of shares  of  Common  Stock  equal to the
number thus  delivered,  shall have an  exercise  price equal to the Fair Market
Value of a share of Common Stock on the date of exercise of the original option,
and shall  have an  expiration  date no later  than the  expiration  date of the
original option. In the event that a Award Agreement provides for the grant of a
reload option,  such Agreement shall also provide that the exercise price of the
original option be no less than the Fair Market Value of a share of Common Stock
on its date of grant, and that any shares that are delivered pursuant to Section
2.3 (e) (ii) in payment of such exercise price shall have been held for at least
six months.

          (g) Dividend  Equivalent  Rights.  The Administrator  may, in its sole
discretion,  include in any Award  Agreement  with  respect to an option,  stock
appreciation right or performance  shares, a dividend equivalent right entitling
the grantee to receive  amounts  equal to the ordinary  dividends  that would be
paid,  during the time such award is outstanding and unexercised,  on the shares
of Common Stock covered by such award if such shares were then  outstanding.  In
the event such a provision is included in a Award Agreement,  the  Administrator
shall  determine  whether  such  payments  shall be made in cash or in shares of
Common Stock,  whether they shall be conditioned  upon the exercise of the award
to which they  relate,  the time or times at which they shall be made,  and such
other vesting and  forfeiture  provisions  and other terms and conditions as the
Administrator shall deem appropriate.

          (h)  Restricted  Stock  Units.  The  Administrator  may,  in its  sole
discretion,  grant stock restricted stock units to such key persons, and in such
amounts and subject to such vesting and  forfeiture  provisions  and other terms
and conditions,  as the Administrator  shall determine,  in its sole discretion,
subject to the provisions of the Plan. A restricted stock unit granted under the
Plan shall confer upon the grantee a right to receive from the Company, upon the
occurrence of an event specified in the Award  Agreement,  such grantee's vested
restricted  stock units multiplied by the Fair Market Value of a share of Common
Stock.  Restricted stock units may be granted in connection with all or any part
of, or  independently  of, any award granted under the Plan. A restricted  stock
unit granted in  connection  with  another  award may be granted at or after the
time of grant of such award.

          (i) Incentive Stock Option Limitation:  Exercisability.  To the extent
that the aggregate  Fair Market Value  (determined  as of the time the option is
granted) of the stock with respect to which  incentive  stock  options are first
exercisable by any employee during any calendar year shall exceed  $100,000,  or
such higher  amount as may be permitted  from time to time under  section 422 of
the Code, such options shall be treated as non-qualified stock options.

          (j) Incentive Stock Option Limitation: 10% Owners. Notwithstanding the
provisions  of  paragraphs  (d) and (e) of this Section 2.2, an incentive  stock
option may not be granted under the Plan to an  individual  who, at the time the
option is granted,  owns stock  possessing  more than 10% of the total  combined
voting  power of all  classes  of stock of his  employer  corporation  or of its
parent or subsidiary  corporations  (as such  ownership  may be  determined  for
purposes  of  section  422(b)  (6) of the  Code)  unless  (i) at the  time  such
incentive  stock option is granted the option exercise price is at least 110% of
the Fair Market Value of the shares subject thereto and (ii) the incentive stock
option by its terms is not exercisable  after the expiration of 5 years from the
date it is granted.

2.3. Exercise of Options, Stock Appreciation Rights and Restricted Stock Units

          Subject to the other provisions of this Article II, each option, stock
appreciation  right and  restricted  stock unit granted  under the Plan shall be
exercisable as follows:

          (a) Timing and Extent of Exercise.  Options, stock appreciation rights
and  restricted  stock units shall be  exercisable  at such times and under such
conditions as set forth in the  corresponding  Award Agreement,  but in no event
shall any such award be exercisable prior to the first anniversary or subsequent
to the tenth anniversary of the date on which such award was granted. Unless the
applicable Award Agreement  otherwise  provides,  an option,  stock appreciation
right or restricted  stock unit may be exercised  from time to time as to all or
part of the shares or units as to which such award is then exercisable.  A stock
appreciation  right granted in connection with an option may be exercised at any
time when, and to the same extent that, the related option may be exercised.

          (b)  Notice  of  Exercise.  An  option,  stock  appreciation  right or
restricted  stock unit shall be exercised by the filing of a written notice with
the Company or the Company's  designated  exchange agent (the "exchange agent"),
on  such  form  and in  such  manner  as the  Administrator  shall  in its  sole
discretion prescribe.

          (c) Payment of Exercise  Price.  Any written  notice of exercise of an
option  shall be  accompanied  by payment for the shares being  purchased.  Such
payment  shall  be  made:  (i) by  certified  or  official  bank  check  (or the
equivalent thereof acceptable to the Company or its exchange agent) for the full
option  exercise  price;  or (ii)  with the  consent  of the  Administrator,  by
delivery of shares of Common Stock having a Fair Market Value  (determined as of
the  exercise  date)  equal to all or part of the  option  exercise  price and a
certified or official bank check (or the  equivalent  thereof  acceptable to the
Company or its  exchange  agent) for any  remaining  portion of the full  option
exercise  price;  or (iii) at the  discretion  of the  Administrator  and to the
extent permitted by law, by such other  provision,  consistent with the terms of
the Plan, as the Administrator may from time to time prescribe (whether directly
or indirectly through the exchange agent).

          (d) Delivery of Certificates  Upon Exercise.  Subject to the provision
of section 2.3(e),  promptly after receiving payment of the full option exercise
price, or after receiving notice of the exercise of a stock  appreciation  right
for which payment will be made partly or entirely in shares,  the Company or its
exchange agent shall,  subject to the provisions of Section 3.2,  deliver to the
grantee  or to such  other  person as may then have the  right to  exercise  the
award,  a certificate or  certificates  for the shares of Common Stock for which
the award has been  exercised.  If the method of payment  employed  upon  option
exercise so requires,  and if applicable law permits, an optionee may direct the
Company,  or its  exchange  agent as the  case  may be,  to  deliver  the  stock
certificate(s) to the optionee's stockbroker.

          (e) Investment  Purpose and Legal  Requirements.  Notwithstanding  the
foregoing,  at the time of the  exercise of any option,  the Company  may, if it
shall deem it necessary or advisable for any reason,  require the holder of such
option (i) to represent in writing to the Company that it is the optionee's then
intention  to  acquire  the  Shares  with  respect  to which the option is to be
exercised for investment  and not with a view to the  distribution  thereof,  or
(ii) to  postpone  the date of  exercise  until  such  time as the  Company  has
available for delivery to the optionee a prospectus  meeting the requirements of
all  applicable  securities  laws;  and no shares shall be issued or transferred
upon the  exercise  of any  option  unless  and  until  all  legal  requirements
applicable to the issuance or transfer of such Shares have been complied with to
the  satisfaction of the Company.  The Company shall have the right to condition
any issuance of shares to any optionee hereunder on such optionee's  undertaking
in writing to comply with such  restrictions on the subsequent  transfer of such
shares as the  Company  shall deem  necessary  or  advisable  as a result of any
applicable law, regulation or official  interpretation thereof, and certificates
representing such shares may contain a legend to reflect any such restrictions.

          (f) No Stockholder Rights. No grantee of an option, stock appreciation
right or  restricted  stock unit (or other  person  having the right to exercise
such award)  shall have any of the rights of a  stockholder  of the Company with
respect  to  shares  subject  to  such  award  until  the  issuance  of a  stock
certificate  to such person for such  shares.  Except as  otherwise  provided in
Section  1.5(b),  no adjustment  shall be made for dividends,  distributions  or
other rights (whether ordinary or extraordinary, and whether in cash, securities
or other  property)  for which the  record  date is prior to the date such stock
certificate is issued.

2.4. Compensation in Lieu of Exercise of an Option

          Upon   written   application   of  the  grantee  of  an  option,   the
Administrator  may in its  sole  discretion  determine  to  substitute,  for the
exercise  of such  option,  compensation  to the  grantee  not in  excess of the
difference  between the option  exercise  price and the Fair Market Value of the
shares covered by such written application on the date of such application. Such
compensation may be in cash, in shares of Common Stock, or both, and the payment
thereof may be subject to conditions,  all as the Administrator  shall determine
in its sole  discretion.  In the event  compensation is substituted  pursuant to
this Section 2.4 for the exercise, in whole or in part, of an option, the number
of shares  subject  to the  option  shall be reduced by the number of shares for
which such compensation is substituted.

2.5. Termination of Employment; Death Subsequent to a Termination of Employment

          (a)  General  Rule.  Except  to  the  extent  otherwise   provided  in
paragraphs  (b), (c), (d) or (e) of this Section 2.5 or Section  3.8(b)(iii),  a
grantee who incurs a  termination  of  employment  may exercise any  outstanding
option or stock  appreciation  right on the following terms and conditions:  (i)
exercise  may be made  only to the  extent  that the  grantee  was  entitled  to
exercise the award on the termination of employment date; and (ii) exercise must
occur within three months after  termination of employment but in no event after
the original expiration date of the award.

          (b)  Dismissal  for  Cause;   Resignation.   If  a  grantee  incurs  a
termination  of employment as the result of a dismissal for cause or resignation
without the Company's or Scandic's prior consent, as applicable, all options and
stock  appreciation  rights not  theretofore  exercised shall terminate upon the
grantee's termination of employment.

          (c) Retirement. If a grantee incurs a termination of employment as the
result of his retirement,  then any outstanding option, stock appreciation right
or restricted  stock unit shall be exercisable  pursuant to its terms.  For this
purpose  "retirement"  shall mean a grantee's  termination of employment,  under
circumstances  other than those  described in paragraph (b) above,  on or after:
(x)  his  65th  birthday,  (y) the  date on  which  he has  attained  age 60 and
completed  at least five  years of  service  with the  Company  or  Scandic,  as
applicable,   (using  any  method  of  calculation   the   Administrator   deems
appropriate)  or (z)  if  approved  by the  Administrator,  on or  after  he has
completed at least 20 years of service.

          (d)  Disability.  If a grantee  incurs a termination  of employment by
reason of a disability (as defined below),  then any outstanding  option,  stock
appreciation right or restricted stock unit shall be exercisable pursuant to its
terms.  For this  purpose  "disability"  shall mean,  except in  connection  any
physical  or mental  condition  that would  qualify a grantee  for a  disability
benefit  under the  long-term  disability  plan  maintained  by the  Company  or
Scandic,  if there is no such plan, a physical or mental condition that prevents
the grantee from  performing the essential  functions of the grantee's  position
(with or  without  reasonable  accommodation)  for a period  of six  consecutive
months.  The existence of a disability shall be determined by the  Administrator
in its sole and absolute discretion.

          (e)  Death.

               (i) Termination of Employment as a Result of Grantee's  Death. If
          a grantee  incurs a  termination  of  employment  as the result of his
          death,  then  any  outstanding  option,  stock  appreciation  right or
          restricted stock unit shall be exercisable pursuant to its terms.

               (ii) Restrictions on Exercise  Following Death. Any such exercise
          of an award  following  a  grantee's  death  shall be made only by the
          grantee's   executor  or   administrator   or  other  duly   appointed
          representative reasonably acceptable to the Administrator,  unless the
          grantee's will specifically disposes of such award, in which case such
          exercise  shall  be  made  only  by the  recipient  of  such  specific
          disposition.  If a grantee's personal  representative or the recipient
          of a specific  disposition  under the grantee's will shall be entitled
          to  exercise  any  award  pursuant  to the  preceding  sentence,  such
          representative  or  recipient  shall  be bound  by all the  terms  and
          conditions of the Plan and the applicable  Award Agreement which would
          have  applied  to  the  grantee  including,  without  limitation,  the
          provisions of Sections 3.2 and 3.5 hereof.

          (f) Special Rules for Incentive Stock Options.  No option that remains
exercisable  for more than three  months  following a grantee's  termination  of
employment for any reason other than death or  disability,  or for more than one
year  following  a  grantee's  termination  of  employment  as the result of his
becoming disabled, may be treated as an incentive stock option.

          (g) Administrator  Discretion.  The  Administrator,  in the applicable
Award Agreement, may waive or modify the application of the foregoing provisions
of this Section 2.5.

2.6. Transferability of Options,  Stock Appreciation Rights and Restricted Stock
     Units

          Except  as  otherwise   provided  in  an  applicable  Award  Agreement
evidencing an option,  stock appreciation right or restricted stock unit, during
the  lifetime  of a  grantee,  each such  award  granted  to a grantee  shall be
exercisable  only by the  grantee  and no such  award  shall  be  assignable  or
transferable  otherwise than by will or by the laws of descent and distribution.
The  Administrator  may, in any applicable Award Agreement  evidencing an option
(other  than an  incentive  stock  option to the  extent  inconsistent  with the
requirements  of section 422 of the Code applicable to incentive stock options),
permit a grantee to  transfer  all or some of the  options to (A) the  grantee's
spouse, children or grandchildren  ("Immediate Family Members"),  (B) a trust or
trusts for the exclusive benefit of such Immediate Family Members,  or (C) other
parties  approved  by the  Administrator  in its sole and  absolute  discretion.
Following  any such  transfer,  any  transferred  options  shall  continue to be
subject to the same terms and conditions as were applicable immediately prior to
the transfer.

2.7. Grant of Restricted Stock

          (a) Restricted Stock Grants.  The  Administrator  may grant restricted
shares of Common Stock to such key persons, in such amounts, and subject to such
vesting  and  forfeiture  provisions  and  other  terms  and  conditions  as the
Administrator shall determine in its sole discretion,  subject to the provisions
of the  Plan.  Restricted  stock  awards  may  be  made  independently  of or in
connection with any other award under the Plan. A grantee of a restricted  stock
award  shall  have no rights  with  respect to such award  unless  such  grantee
accepts  the award  within  such period as the  Administrator  shall  specify by
accepting  delivery  of a  restricted  stock  agreement  in  such  form  as  the
Administrator  shall determine and, in the event the restricted shares are newly
issued by the  Company,  makes  payment to the  Company  its  exchange  agent by
certified or official bank check (or the  equivalent  thereof  acceptable to the
Company) in an amount at least  equal to the par value of the shares  covered by
the award.

          (b) Issuance of Stock Certificate(s). Promptly after a grantee accepts
a restricted  stock award,  the Company or its exchange agent shall issue to the
grantee a stock certificate or stock certificates for the shares of Common Stock
covered by the award or shall establish an account  evidencing  ownership of the
stock in uncertificated form. Upon the issuance of such stock certificate(s), or
establishment  of  such  account,  the  grantee  shall  have  the  rights  of  a
stockholder  with  respect  to  the  restricted  stock,   subject  to:  (i)  the
nontransferability restrictions and forfeiture provision described in paragraphs
(d) and (e) of this Section 2.7; (ii) in the  Administrator's  discretion,  to a
requirement that any dividends paid on such shares shall be held in escrow until
all  restrictions on such shares have lapsed;  and (iii) any other  restrictions
and conditions contained in the applicable restricted stock agreement.

          (c) Custody of Stock  Certificate(s).  Unless the Administrator  shall
otherwise  determine,   any  stock  certificates  issued  evidencing  shares  of
restricted stock shall remain in the possession of the Company until such shares
are  free of any  restrictions  specified  in the  applicable  restricted  stock
agreement.  The Administrator may direct that such stock  certificate(s)  bear a
legend setting forth the applicable restrictions on transferability.

          (d)  Nontransferability.  Shares of restricted  stock may not be sold,
assigned, transferred,  pledged or otherwise encumbered or disposed of except as
otherwise  specifically provided in this Plan or the applicable restricted stock
agreement.  The  Administrator  at the time of grant  shall  specify the date or
dates  (which may depend  upon or be related to the  attainment  of  performance
goals and other  conditions) on which the  nontransferability  of the restricted
stock shall lapse.

          (e) Consequence of Termination of Employment.  A grantee's termination
of  employment  for any  reason  (including  death)  shall  cause the  immediate
forfeiture of all shares of restricted  stock that have not yet vested as of the
date of such  termination of employment.  All dividends paid on such shares also
shall be forfeited, whether by termination of any escrow arrangement under which
such  dividends are held,  by the  grantee's  repayment of dividends he received
directly, or otherwise.

2.8. Grant of Unrestricted Stock

          The  Administrator  may  grant (or sell at a  purchase  price at least
equal to par value) shares of Common Stock free of restrictions  under the Plan,
to such  key  persons  and in  such  amounts  and  subject  to  such  forfeiture
provisions as the Administrator  shall determine in its sole discretion.  Shares
may be  thus  granted  or sold  in  respect  of past  services  or  other  valid
consideration.

2.9. Grant of Performance Shares

          (a) Performance Share Grants.  The Administrator may grant performance
share  awards to such key  persons,  and in such  amounts  and  subject  to such
vesting  and  forfeiture  provisions  and  other  terms and  conditions,  as the
Administrator shall in its sole discretion determine,  subject to the provisions
of the Plan. Such an award shall entitle the grantee to acquire shares of Common
Stock,  or to be paid the value  thereof  in cash,  as the  Administrator  shall
determine,  if specified  performance goals are met.  Performance  shares may be
awarded independently of, or in connection with, any other award under the Plan.
A grantee shall have no rights with respect to a performance  share award unless
such  grantee  accepts the award by accepting  delivery of a Award  Agreement at
such time and in such form as the Administrator shall determine.

          (b) Stockholder  Rights. The grantee of a performance share award will
have the rights of a stockholder only as to shares for which a stock certificate
has been issued  pursuant to the award and not with  respect to any other shares
subject to the award.

          (c) Consequence of Termination of Employment.  Except as may otherwise
be provided by the Administrator at any time prior to a grantee's termination of
employment,  the  rights  of  a  grantee  of a  performance  share  award  shall
automatically  terminate  upon the  grantee's  termination  of employment by the
Company, its subsidiaries or Scandic for any reason (including death).

          (d) Exercise Procedures;  Automatic Exercise. At the discretion of the
Administrator,  the applicable  Award Agreement may set out the procedures to be
followed in  exercising  a  performance  share award or it may provide that such
exercise  shall  be made  automatically  after  satisfaction  of the  applicable
performance goals.

          (e) Tandem Grants;  Effect on Exercise.  Except as otherwise specified
by the  Administrator,  (i) a performance  share award granted in tandem with an
option may be exercised only while the option is exercisable,  (ii) the exercise
of a performance share award granted in tandem with any other award shall reduce
the number of shares subject to such other award in the manner  specified in the
applicable  Award  Agreement,  and (iii) the  exercise  of any award  granted in
tandem with a performance  share award shall reduce the number of shares subject
to the latter in the manner specified in the applicable Award Agreement.

          (f) Nontransferability.  Performance shares may not be sold, assigned,
transferred,  pledged or otherwise encumbered or disposed of except as otherwise
specifically  provided  in this  Plan or the  applicable  Award  Agreement.  The
Administrator  at the time of grant shall  specify the date or dates  (which may
depend  upon or be  related to the  attainment  of  performance  goals and other
conditions)  on which the  nontransferability  of the  performance  shares shall
lapse.

                                  ARTICLE III.
                                  Miscellaneous

3.1. Amendment of the Plan; Modification of Awards

          (a)  Amendment of the Plan.  The Board may from time to time  suspend,
discontinue,  revise or amend the Plan in any respect whatsoever, except that no
such amendment  shall  materially  impair any rights or materially  increase any
obligations  under any award theretofore made under the Plan without the consent
of the grantee (or,  upon the  grantee's  death,  the person having the right to
exercise  the award).  For purposes of this Section 3.1, any action of the Board
or the Administrator  that in any way alters or affects the tax treatment of any
award shall not be considered to materially impair any rights of any grantee.

          (b) Stockholder  Approval  Requirement.  Stockholder approval shall be
required  with  respect  to any  amendment  to the Plan that (i)  increases  the
aggregate  number  of shares  that may be issued  pursuant  to  incentive  stock
options or changes the class of employees  eligible to receive such options;  or
(ii)  materially  increases  the  benefits  under  the  Plan  to  persons  whose
transactions  in Common  Stock are  subject to section  16(b) of the 1934 Act or
increases the benefits  under the Plan to someone who is,  materially  increases
the number of shares which may be issued to such persons, or materially modifies
the eligibility requirements affecting such persons.

          (c)  Modification of Awards.  The  Administrator  may cancel any award
under  the  Plan.  The  Administrator  also  may  amend  any  outstanding  Award
Agreement,   including,  without  limitation,  by  amendment  which  would:  (i)
accelerate the time or times at which the award becomes  unrestricted  or may be
exercised, provided that, except as and to the extent that the Administrator may
otherwise  provide  pursuant  to  Section  2.5,  3.7 or 3.8,  no  option,  stock
appreciation  right or restricted  stock unit shall be exercisable  prior to the
first  anniversary  of its  date of  grant;  (ii)  waive  or  amend  any  goals,
restrictions  or conditions set forth in the Agreement;  or (iii) waive or amend
the operation of Section 2.5 with respect to the  termination  of the award upon
termination of employment.  However,  any such  cancellation or amendment (other
than an amendment  pursuant to Sections 3.7 or 3.8(b)) that  materially  impairs
the  rights or  materially  increases  the  obligations  of a  grantee  under an
outstanding  award shall be made only with the consent of the grantee (or,  upon
the grantee's death, the person having the right to exercise the award).

3.2. Consent Requirement

          (a) No Plan Action  Without  Required  Consent.  If the  Administrator
shall at any time  determine  that  any  Consent  (as  hereinafter  defined)  is
necessary or desirable as a condition of, or in connection with, the granting of
any award under the Plan,  the  issuance  or purchase of shares or other  rights
thereunder, or the taking of any other action thereunder (each such action being
hereinafter referred to as a "Plan Action"),  then such Plan Action shall not be
taken,  in whole or in part,  unless  and until  such  Consent  shall  have been
effected or obtained to the full satisfaction of the Administrator.

          (b) Consent Defined. The term "Consent" as used herein with respect to
any Plan Action means (i) any and all listings,  registrations or qualifications
in respect thereof upon any securities  exchange or under any federal,  state or
local  law,  rule  or  regulation,  (ii)  any  and all  written  agreements  and
representations  by the grantee with respect to the  disposition  of shares,  or
with respect to any other matter,  which the Administrator  shall deem necessary
or  desirable  to comply  with the terms of any such  listing,  registration  or
qualification  or to  obtain an  exemption  from the  requirement  that any such
listing,  qualification  or registration be made and (iii) any and all consents,
clearances  and  approvals  in respect of a Plan Action by any  governmental  or
other regulatory bodies.

3.3. Nonassignability

          Except as provided in Sections 2.5(e),  2.6, 2.7(d) and 2.9(f): (a) no
award or right granted to any person under the Plan or under any Award Agreement
shall be assignable or transferable other than by will or by the laws of descent
and  distribution;  and (b) all  rights  granted  under  the  Plan or any  Award
Agreement  shall  be  exercisable  during  the life of the  grantee  only by the
grantee or the grantee's legal representative.

3.4. Requirement of Notification of Election Under Section 83(b) of the Code

          If any grantee shall,  in connection with the acquisition of shares of
Common Stock under the Plan, make the election  permitted under section 83(b) of
the Code (i.e.,  an election to include in gross  income in the year of transfer
the amounts  specified in section 83(b)),  such grantee shall notify the Company
of such  election  within 10 days of  filing  notice  of the  election  with the
Internal  Revenue Service,  in addition to any filing and notification  required
pursuant to regulations issued under the authority of Code section 83(b).

3.5.  Requirement of Notification Upon  Disqualifying  Disposition Under Section
421(b) of the Code

          Each Award  Agreement with respect to an incentive  stock option shall
require the grantee to notify the Company of any disposition of shares of Common
Stock issued  pursuant to the  exercise of such option  under the  circumstances
described  in section  421(b) of the Code  (relating  to  certain  disqualifying
dispositions), within 10 days of such disposition.

3.6. Withholding Taxes

          (a)  With  Respect  to  Cash  Payments.  Whenever  cash  is to be paid
pursuant  to an award under the Plan,  the  Company  shall be entitled to deduct
therefrom an amount sufficient in its opinion to satisfy all federal,  state and
other governmental tax withholding requirements related to such payment.

          (b) With  Respect to  Delivery  of Common  Stock.  Whenever  shares of
Common  Stock are to be  delivered  pursuant  to an award  under  the Plan,  the
Company shall be entitled to require as a condition of delivery that the grantee
remit to the  Company an amount  sufficient  in the  opinion  of the  Company to
satisfy all federal,  state and other governmental tax withholding  requirements
related thereto. With the approval of the Administrator, which the Administrator
shall have sole  discretion  whether or not to give, the grantee may satisfy the
foregoing  condition  by  electing to have the Company  withhold  from  delivery
shares  having a value  equal to the amount of tax to be  withheld.  Such shares
shall be valued at their Fair Market Value as of the date on which the amount of
tax to be withheld is determined.  Fractional  share amounts shall be settled in
cash. Such a withholding election may be made with respect to all or any portion
of the shares to be delivered pursuant to an award.

3.7. Adjustment Upon Changes in Common Stock

          (a) Shares  Available  for  Grants.  In the event of any change in the
number of shares of Common Stock  outstanding by reason of any stock dividend or
split, reverse stock split, recapitalization, merger, consolidation, combination
or exchange of shares or similar corporate change,  the maximum number of shares
of Common Stock with respect to which the  Administrator  may grant awards under
Article II hereof,  as described in Section  1.5(a),  and the individual  annual
limit  described  in Section  1.5(d),  shall be  appropriately  adjusted  by the
Administrator.  In the  event of any  change  in the  number of shares of Common
Stock outstanding by reason of any other event or transaction, the Administrator
may, but need not,  make such  adjustments  in the number and class of shares of
Common Stock with respect to which  awards:  (i) may be granted under Article II
hereof  and (ii)  granted to any one  employee  of the  Company or a  subsidiary
during  any one  calendar  year,  in each  case as the  Administrator  may  deem
appropriate.

          (b) Outstanding  Restricted Stock and Performance  Shares.  Unless the
Administrator  in its sole and absolute  discretion  otherwise  determines,  any
securities or other  property  (including  dividends paid in cash) received by a
grantee with respect to a share of restricted stock, the issue date with respect
to which occurs prior to such event,  but which has not vested as of the date of
such event,  as a result of any  dividend,  stock  split,  reverse  stock split,
recapitalization,  merger,  consolidation,  combination,  exchange  of shares or
otherwise will not vest until such share of restricted stock vests, and shall be
promptly  deposited with the Company or other custodian  designated  pursuant to
Section 2.7(c) hereof.

          The Administrator may, in its absolute discretion, adjust any grant of
shares of  restricted  stock,  the  issue  date  with  respect  to which has not
occurred as of the date of the occurrence of any of the following events, or any
grant of performance shares, to reflect any dividend, stock split, reverse stock
split, recapitalization,  merger, consolidation, combination, exchange of shares
or similar corporate change as the Administrator may deem appropriate to prevent
the enlargement or dilution of rights of grantees.

          (c)  Outstanding  Options,  Stock  Appreciation  Rights  and  Dividend
Equivalent  Rights--Increase or Decrease in Issued Shares Without Consideration.
Subject to any required action by the stockholders of the Company,  in the event
of any  increase  or  decrease  in the number of issued  shares of Common  Stock
resulting from a subdivision or  consolidation  of shares of Common Stock or the
payment of a stock  dividend  (but only on the shares of Common  Stock),  or any
other increase or decrease in the number of such shares effected without receipt
of consideration by the Company, the Administrator shall  proportionally  adjust
the  number of shares of Common  Stock  subject to each  outstanding  option and
stock  appreciation  right, and the exercise  price-per-share of Common Stock of
each such  option and stock  appreciation  right and the  number of any  related
dividend equivalent rights.

          (d) Outstanding Options,  Stock Appreciation Rights,  Restricted Stock
Units and Dividend Equivalent  Rights--Certain  Mergers. Subject to any required
action by the  stockholders of the Company,  in the event that the Company shall
be the surviving  corporation in any merger or consolidation (except a merger or
consolidation as a result of which the holders of shares of Common Stock receive
securities of another  corporation),  each option,  stock appreciation right and
dividend   equivalent   right   outstanding  on  the  date  of  such  merger  or
consolidation shall pertain to and apply to the securities which a holder of the
number of shares of Common  Stock  subject to such  option,  stock  appreciation
right, restricted stock unit or dividend equivalent right would have received in
such merger or consolidation.

          (e) Outstanding Options,  Stock Appreciation Rights,  Restricted Stock
Units and Dividend Equivalent  Rights--Certain Other Transactions.  In the event
of (i) a  dissolution  or  liquidation  of the  Company,  (ii) a sale  of all or
substantially  all of the  Company's  assets,  (iii) a merger  or  consolidation
involving the Company in which the Company is not the surviving  corporation  or
(iv) a merger or consolidation involving the Company in which the Company is the
surviving  corporation  but the  holders  of  shares  of  Common  Stock  receive
securities of another  corporation  and/or other  property,  including cash, the
Administrator shall, in its absolute discretion, have the power to:

               (i) cancel, effective immediately prior to the occurrence of such
          event, each option, stock appreciation right and restricted stock unit
          (including each dividend equivalent right related thereto) outstanding
          immediately  prior to such event  (whether  or not then  exercisable),
          and, in full consideration of such cancellation, pay to the grantee to
          whom such option or stock  appreciation right was granted an amount in
          cash,  for each share of Common Stock  subject to such option or stock
          appreciation  right,  respectively,  equal  to the  excess  of (x) the
          value, as determined by the Administrator in its absolute  discretion,
          of the property  (including cash) received by the holder of a share of
          Common Stock as a result of such event over (y) the exercise  price of
          such option or stock appreciation right; or

               (ii) provide for the exchange of each option,  stock appreciation
          right and  restricted  stock  unit  (including  any  related  dividend
          equivalent right) outstanding immediately prior to such event (whether
          or not then exercisable) for an option on, stock  appreciation  right,
          restricted  stock unit and dividend  equivalent right with respect to,
          as  appropriate,  some or all of the  property  which a holder  of the
          number of  shares  of  Common  Stock  subject  to such  option,  stock
          appreciation  right or restricted  stock unit would have received and,
          incident  thereto,  make an equitable  adjustment as determined by the
          Administrator in its absolute  discretion in the exercise price of the
          option,  stock  appreciation  right or  restricted  stock unit, or the
          number of shares or amount of property  subject to the  option,  stock
          appreciation right, restricted stock unit or dividend equivalent right
          or, if appropriate,  provide for a cash payment to the grantee to whom
          such option,  stock  appreciation  right or restricted  stock unit was
          granted in partial consideration for the exchange of the option, stock
          appreciation right or restricted stock unit.

          (f) Outstanding Options,  Stock Appreciation Rights,  Restricted Stock
Units and Dividend Equivalent  Rights--Other Changes. In the event of any change
in the  capitalization  of the  Company or a corporate  change  other than those
specifically   referred  to  in  Sections  3.7(c),   (d)  or  (e)  hereof,   the
Administrator  may, in its absolute  discretion,  make such  adjustments  in the
number  and class of shares  subject  to  options,  stock  appreciation  rights,
restricted stock units and dividend equivalent rights outstanding on the date on
which  such  change  occurs  and in the  per-share  exercise  price of each such
option,  stock appreciation right and restricted stock unit as the Administrator
may  consider  appropriate  to prevent  dilution or  enlargement  of rights.  In
addition,  if and to the extent the Administrator  determines it is appropriate,
the Administrator may elect to cancel each option,  stock appreciation right and
restricted stock unit (including each dividend equivalent right related thereto)
outstanding  immediately prior to such event (whether or not then  exercisable),
and, in full consideration of such cancellation, pay to the grantee to whom such
option,  stock appreciation right or restricted stock unit was granted an amount
in  cash,  for  each  share  of  Common  Stock  subject  to such  option,  stock
appreciation right or restricted stock unit,  respectively,  equal to the excess
of (i) the Fair Market  Value of Common  Stock on the date of such  cancellation
over  (ii)  the  exercise  price of such  option,  stock  appreciation  right or
restricted stock unit.

          (g) No Other  Rights.  Except as  expressly  provided in the Plan,  no
grantee shall have any rights by reason of any subdivision or  consolidation  of
shares of stock of any class,  the  payment of any  dividend,  any  increase  or
decrease  in the  number of  shares  of stock of any  class or any  dissolution,
liquidation,  merger or consolidation  of the Company or any other  corporation.
Except as expressly  provided in the Plan,  no issuance by the Company of shares
of stock of any class,  or  securities  convertible  into shares of stock of any
class,  shall affect,  and no  adjustment  by reason  thereof shall be made with
respect  to,  the  number of shares of Common  Stock  subject to an award or the
exercise price of any option or stock appreciation right.

3.8.     Change in Control

          (a) Change in Control  Defined.  For  purposes  of this  Section  3.8,
"Change in Control" shall mean the occurrence of any of the following:

               (i) any person or "group" (within the meaning of Section 13(d)(3)
          of the 1934 Act),  other than entities which the Chairman of the Board
          directly or  indirectly  controls  (as defined in Rule 12b-2 under the
          1934 Act), acquiring "beneficial  ownership" (as defined in Rule 13d-3
          under the 1934 Act), directly or indirectly, of fifty percent (50%) or
          more of the  aggregate  voting power of the capital  stock  ordinarily
          entitled to elect directors of the Company;

               (ii) the sale of all or substantially all of the Company's assets
          in one or more related transactions to a person other than such a sale
          to a subsidiary  of the Company which does not involve a change in the
          equity  holdings  of the  Company or to an entity  which the  Chairman
          directly or indirectly controls; or

               (iii) any merger, consolidation,  reorganization or similar event
          of the  Company or any of its  subsidiaries,  as a result of which the
          holders of the voting stock of the Company  immediately  prior to such
          merger, consolidation, reorganization or similar event do not directly
          or indirectly hold at least  fifty-one  percent (51%) of the aggregate
          voting power of the capital stock of the surviving entity.

          (b) Effect of a Change in Control.  Unless the Administrator  provides
otherwise in a Award Agreement, upon the occurrence of a Change in Control:

               (i)  notwithstanding  any other provision of this Plan, any award
          then  outstanding  shall become fully vested and any award in the form
          of an option,  stock appreciation right or restricted stock unit shall
          be immediately exercisable;

               (ii) to the extent  permitted by law, the  Administrator  may, in
          its sole  discretion,  amend any Award  Agreement in such manner as it
          deems appropriate;

               (iii) a grantee who incurs a termination  of  employment  for any
          reason,  other than a dismissal for cause,  concurrent  with or within
          one year following the Change in Control may exercise any  outstanding
          option, stock appreciation right or restricted stock unit, but only to
          the extent that the grantee was  entitled to exercise the award on his
          termination of employment  date, until the earlier of (A) the original
          expiration  date  of the  award  and  (B) the  later  of (x) the  date
          provided for under the terms of Section 2.5 without  reference to this
          Section  3.8(b)(iii)  and (y) the first  anniversary  of the grantee's
          termination of employment.

          (c)  Miscellaneous.  Whenever deemed appropriate by the Administrator,
any action  referred  to in  paragraph  (b)(ii) of this  Section 3.8 may be made
conditional  upon  the   consummation  of  the  applicable   Change  in  Control
transaction.

3.9.     Right of Discharge Reserved

          Nothing in the Plan or in any Award  Agreement  shall  confer upon any
grantee  the right to  continue  his  employment  with the Company or affect any
right that the Company or Scandic may have to terminate such employment.

3.10. Non-Uniform Determinations

          The Administrator's  determinations under the Plan need not be uniform
and may be made by it selectively among persons who receive, or who are eligible
to receive,  awards under the Plan  (whether or not such  persons are  similarly
situated).  Without limiting the generality of the foregoing,  the Administrator
shall be  entitled,  among  other  things,  to make  non-uniform  and  selective
determinations, and to enter into non-uniform and selective Award Agreements, as
to (a) the  persons  to  receive  awards  under the Plan,  and (b) the terms and
provisions of awards under the Plan.

3.11. Other Payments or Awards

          Nothing  contained  in the Plan shall be deemed in any way to limit or
restrict  the Company  from making any award or payment to any person  under any
other plan,  arrangement or understanding,  whether now existing or hereafter in
effect.

3.12.   Headings

         Any  section,  subsection,  paragraph  or  other  subdivision  headings
contained herein are for the purpose of convenience only and are not intended to
expand, limit or otherwise define the contents of such subdivisions.

3.13. Effective Date and Term of Plan

          (a) Adoption;  Stockholder Approval. The Plan was adopted by the Board
and although the Company intends to obtain approval of the Plan by the Company's
stockholders  within  the time  period  required  to  allow  grants  of  options
hereunder to qualify as incentive stock options,  awards under the Plan prior to
such stockholder approval may, but need not, be made subject to such approval.

          (b)  Termination  of Plan.  Unless  sooner  terminated by the Board or
pursuant to Paragraph (a) above, the provisions of the Plan respecting the grant
of incentive  stock  options  shall  terminate on the tenth  anniversary  of the
adoption of the Plan by the Board,  and no incentive  stock option  awards shall
thereafter be made under the Plan.  All such awards made under the Plan prior to
its termination  shall remain in effect until such awards have been satisfied or
terminated  in  accordance  with the  terms and  provisions  of the Plan and the
applicable Award Agreements.

3.14. Restriction on Issuance of Stock Pursuant to Awards

          The Company  shall not permit any shares of Common  Stock to be issued
pursuant to Awards granted under the Plan unless such shares of Common Stock are
fully paid and non-assessable under applicable law.

3.15.    Governing Law

          Except to the extent preempted by any applicable federal law, the Plan
will be construed and  administered  in accordance with the laws of the State of
New York, without giving effect to principles of conflict of laws.

01318.0002 #583544sec document

                                                                     Exhibit 4.1

                             SUBSCRIPTION AGREEMENT

          SUBSCRIPTION  AGREEMENT made as of this ____ day of June 2005, between
Relationserve  Media, Inc., a Nevada corporation with offices at 6700 N. Andrews
Avenue,  Ft.  Lauderdale,  FL 33309 (the  "Company")  and the  undersigned  (the
"Subscriber").

          WHEREAS,  pursuant to a Confidential  Memorandum  dated June 22, 2005,
(the "PPM"),  the Company is offering in a private placement (the "Offering") to
accredited  investors up to $4,000,000 of Units for a purchase price of $100,000
per Unit. Each Unit consists of 50,000 shares of the Company's common stock, par
value $0.001 per share (the "Common Stock") and a three-year warrant to purchase
25,000 shares of Common Stock at $3.50 per share; and

          WHEREAS,  the Subscriber  desires to subscribe for the number of Units
set forth on the signature page hereof, on the terms and conditions  hereinafter
set forth.

          NOW,  THEREFORE,  for and in  consideration  of the  premises  and the
mutual  covenants  hereinafter set forth,  the parties hereto do hereby agree as
follows:

     I.   SUBSCRIPTION FOR UNITS AND REPRESENTATIONS AND COVENANTS OF SUBSCRIBER

     1.1   Subject  to the terms  and  conditions  hereinafter  set  forth,  the
Subscriber  hereby  subscribes  for and agrees to purchase from the Company such
number of Units as is set forth upon the signature page hereof, at a price equal
to  $100,000  per  Unit,  and the  Company  agrees  to sell  such  Units  to the
Subscriber for said purchase  price,  subject to the Company's  right to sell to
the Subscriber  such lesser number of Units (or no Units) as the Company may, in
its sole discretion,  deem necessary or desirable. The purchase price is payable
by cash or wire transfer of  immediately  available  funds to the account of the
Company, pursuant to the wire instructions attached hereto as EXHIBIT A.

     1.2  The Subscriber  recognizes  that the purchase of Units involves a high
degree of risk in that (i) an  investment  in the Company is highly  speculative
and only  investors  who can afford the loss of their entire  investment  should
consider  investing  in the  Company  and the  Units;  (ii)  the  Units  are not
registered  under the  Securities  Act of 1933,  as amended (the "Act"),  or any
state  securities  law; (iii) there is no trading market for the Units,  none is
likely ever to develop,  and the  Subscriber  may not be able to  liquidate  his
investment;  (iv)  transferability of the Units is extremely limited; and (v) an
investor could suffer the loss of his, her or its entire investment.

     1.3 The  Subscriber  represents  and  warrants  that the  Subscriber  is an
"accredited  investor"  as such  term in  defined  in Rule 501 of  Regulation  D
promulgated  under the Act and that the  Subscriber is able to bear the economic
risk of an investment in the Units.

     1.4 The Subscriber  acknowledges  that the Subscriber has prior  investment
experience (including  investment in non listed and non registered  securities),
and has read and  evaluated,  or has  employed  the  services  of an  investment
advisor,  attorney or  accountant  to read and  evaluate,  all of the  documents
furnished or made  available by the Company to the  Subscriber  and to all other

prospective investors in the Units, including without limitation the PPM and the
Company's  Current  Report on Form 8-K filed with the  Securities  and  Exchange
Commission  ("SEC") on June 16,  2005  ("Current  Report")  and  subsequent  SEC
filings and reports,  as well as the merits and risks of such an  investment  by
the  Subscriber.  The  Subscriber  represents  that  his,  her  or  its  overall
commitment   to   investments   which  are  not   readily   marketable   is  not
disproportionate  to the  Subscriber's  net  worth,  and that  the  Subscriber's
investment  in the  Units  will not  cause  such  overall  commitment  to become
excessive.  The  Subscriber  represents  that, if an  individual,  he or she has
adequate means of providing for his or her current needs and personal and family
contingencies  and has no need for  liquidity  in his or her  investment  in the
Units.  The  Subscriber  is  financially  able to bear the economic risk of this
investment,  including the ability to afford holding the Units for an indefinite
period or to afford a complete loss of this investment.

     1.5 The Subscriber  acknowledges  receipt and careful review of the PPM and
the Current  Report  (including  all  exhibits  attached  thereto) and all other
documents  furnished in  connection  with this  transaction  (collectively,  the
"Offering  Documents")  and  hereby  represents  that  the  Subscriber  has been
furnished  by the  Company  during  the  course  of this  transaction  with  all
information  regarding the Company which the Subscriber has requested or desires
to know;  and that the  Subscriber  has been  afforded  the  opportunity  to ask
questions  of and  receive  answers  from  duly  authorized  officers  or  other
representatives  of the  Company  concerning  the  terms and  conditions  of the
Offering, and any additional information which the Subscriber has requested.

     1.6 The Subscriber  acknowledges that the purchase of Units may involve tax
consequences  to the Subscriber and that the contents of the Offering  Documents
do not contain tax advice. The Subscriber  acknowledges that the Subscriber must
retain his own professional  advisors to evaluate the tax and other consequences
to the  Subscriber of an investment in the Units.  The  Subscriber  acknowledges
that it is the responsibility of the Subscriber to determine the appropriateness
and the  merits  of a  corporate  entity to own the  Subscriber's  Units and the
corporate structure of such entity.

     1.7 The Subscriber acknowledges that this Offering has not been reviewed by
the SEC or any state securities commission,  and that no federal or state agency
has made any finding or  determination  regarding  the fairness or merits of the
Offering.  The Subscriber represents that the Units are being purchased for his,
her or its  own  account,  for  investment  only,  and  not  with a view  toward
distribution or resale to others. The Subscriber agrees that he will not sell or
otherwise  transfer the Units unless they are registered under the Act or unless
an exemption  from such  registration  is available,  as the same may be amended
from time to time.

     1.8 The  Subscriber  understands  that the provisions of Rule 144 under the
Act are not available for at least one (1) year to permit  resales of the Units,
and there can be no assurance that the conditions necessary to permit such sales
under  Rule 144 will ever be  satisfied.  The  Subscriber  understands  that the
Company is under no obligation to the  Subscriber to comply with the  conditions
of Rule 144 or take any other action  necessary  in order to make any  exemption
for the sale of the Units without registration available.

     1.9 The Subscriber  agrees to hold the Company and its directors,  officers
and controlling persons and their respective heirs, representatives,  successors

                                       2

and assigns  harmless and to indemnify them against all  liabilities,  costs and
expenses  incurred  by them as a  result  of any  misrepresentation  made by the
Subscriber  contained  herein or any sale or  distribution  by the Subscriber in
violation  of the  Act  (including  without  limitation  the  rules  promulgated
thereunder),  any  state  securities  laws,  or  the  Company's  certificate  of
incorporation or by-laws, as amended from time to time.

     1.10  The  Subscriber  consents  to  the  placement  of  a  legend  on  any
certificate  or other  document  evidencing the Units stating that they have not
been registered under the Act and setting forth or referring to the restrictions
on transferability and sale thereof.

     1.11 The  Subscriber  understands  that the Company will review and rely on
this Subscription Agreement without making any independent investigation; and it
is agreed that the Company  reserves the  unrestricted  right to reject or limit
any subscription and to withdraw the Offering at any time.

     1.12 The Subscriber  hereby  represents  that the address of the Subscriber
furnished  at the  end  of  this  Subscription  Agreement  is the  undersigned's
principal residence if the Subscriber is an individual or its principal business
address if it is a corporation or other entity.

     1.13 The  Subscriber  acknowledges  that if the  Subscriber is a Registered
Representative  of an NASD member firm, the  Subscriber  must give such firm the
notice  required  by  the  NASD's  Conduct  Rules,  receipt  of  which  must  be
acknowledged by such firm on the signature page hereof.

     1.14 The Subscriber  hereby  represents that, except as expressly set forth
in the Offering  Documents,  no  representations or warranties have been made to
the Subscriber by the Company or any agent, employee or affiliate of the Company
and in entering  into this  transaction,  the  Subscriber  is not relying on any
information, other than that contained in the Offering Documents and the results
of independent investigation by the Subscriber.

     1.15 The  Subscriber  recognizes  that  this is an  offering  in which  the
Company will accept  subscriptions  regardless of the  attainment of any minimum
amount of  subscriptions,  and may  accept  subscriptions  even if the  proceeds
received in the  Offering  are less than  $4,000,000.  The Company  will require
additional  financing  in order  to  accomplish  its  short-term  goals  and its
business  objectives.  There can be no assurance that any such additional  funds
will be available on reasonable  terms, or at all, and any such additional funds
raised in any equity  offering  will  dilute the  interests  of the  Subscriber.
Subscriber  further  recognizes  that  Company  reserves  the  right  to  pay  a
commission or finders fee of up to 5% of the gross proceeds of the Offering.

     1.16  All   information   provided  by  the   Subscriber  in  the  Investor
Questionnaire attached hereto as EXHIBIT B is true and accurate in all respects,
and the  Subscriber  acknowledges  that  the  Company  will be  relying  on such
information to its possible  detriment in deciding  whether the Company can sell
these  securities  to the  Subscriber  without  giving  rise  to the  loss of an
exemption from registration under the applicable securities laws.

                                       3

     1.17 The  Subscriber  is aware that the Company  has not  entered  into any
agreement or understanding  providing for the purchase of any business or assets
other than those referred to in the PPM and no such agreements have been agreed,
or are being negotiated,  and that by execution of this Subscription  Agreement,
the Subscriber  consents to any and all resulting  terms of such purchases which
will be in the sole  discretion  of the Company over which the  Subscriber  will
have no effective influence.

     II.  REPRESENTATIONS BY THE COMPANY

          The Company  represents and warrants to the Subscriber  that as of the
date of the closing of this Offering (the "Closing Date"):

               (a) The  Company  is a  corporation  duly  incorporated,  validly
existing and in good standing  under the laws of the State of Nevada and has the
corporate  power to conduct  the  business  which it  conducts  and  proposes to
conduct.

               (b) The execution,  delivery and performance of this Subscription
Agreement by the Company will have been duly  authorized  by the Company and all
other  corporate  action required to authorize and consummate the offer and sale
of the Units will have been duly taken and approved.

               (c) The Units have been duly and validly authorized and issued.

               (d) The Company has obtained,  or is in the process of obtaining,
all licenses,  permits and other  governmental  authorizations  necessary to the
conduct of its  business,  except where the failure to so obtain such  licenses,
permits  and  authorizations  would not have a  material  adverse  effect on the
Company. Such licenses,  permits and other governmental  authorizations obtained
are in full force and effect, except where the failure to be so would not have a
material  adverse  effect on the  Company,  and the  Company is in all  material
respects complying therewith.

               (e) The  Company  knows  of no  pending  or  threatened  legal or
governmental  proceedings to which the Company is a party which would materially
adversely affect the business, financial condition or operations of the Company,
except that the Company has advised the  subscribers of certain facts  described
under Certain Legal Proceedings in the Current Report.

               (f) The Company is not in violation of or default under, nor will
the execution and delivery of this Subscription Agreement or the issuance of the
Units, or the consummation of the transactions herein contemplated,  result in a
violation  of, or  constitute a default  under,  the  Company's  certificate  of
incorporation or by-laws,  any material  obligations,  agreements,  covenants or
conditions  contained  in  any  bond,  debenture,  note  or  other  evidence  of
indebtedness or in any material contract,  indenture,  mortgage, loan agreement,
lease,  joint venture or other agreement or instrument to which the Company is a
party  or by  which it or any of its  properties  may be  bound or any  material
order,  rule,  regulation,  writ,  injunction,  or  decree  of  any  government,
governmental instrumentality or court, domestic or foreign.

                                       4

     III. COVENANTS BY THE COMPANY

          The Company  agrees  Subscribers  shall have the certain  registration
rights with respect to the shares of Common Stock  underlying the Units, and the
Warrants, issued to Subscribers pursuant to the terms of the Registration Rights
Agreement  annexed  hereto as Exhibit C.  Certain  additional  holders of Common
Stock will have a right to have their shares of Common Stock registered pursuant
to any registration statement tat is filed for Subscribers.

     IV.  TERMS OF SUBSCRIPTION

          4.1 Subject to Section 4.2 hereof, the subscription  period will begin
as of June 22, 2005 and will  terminate  at 11:59 PM Eastern  time,  on June 30,
2005, unless sooner terminated by the Company, or extended by the Company.

          4.2 The  Subscriber has effected a wire transfer in the full amount of
the purchase price for the Units to the Company's account in accordance with the
wire instructions set forth on Exhibit A hereto.

          4.3 The  Subscriber  hereby  authorizes  and  directs  the  Company to
deliver any certificates or other written instruments  representing the Units to
be issued to such  Subscriber  pursuant to this  Subscription  Agreement  to the
address indicated on the signature page hereof.

          4.4 The Subscriber hereby authorizes and directs the Company to return
any funds,  without interest,  for unaccepted  subscriptions to the same account
from which the funds were drawn.

          4.5 If the Subscriber is not a United States person,  such  Subscriber
shall  immediately  notify the Company and the Subscriber hereby represents that
the  Subscriber  is  satisfied  as to the  full  observance  of the  laws of its
jurisdiction in connection with any invitation to subscribe for the Units or any
use of this Subscription Agreement,  including (i) the legal requirements within
its  jurisdiction  for the  purchase  of the Units,  (ii) any  foreign  exchange
restrictions  applicable  to such  purchase,  (iii)  any  governmental  or other
consents  that may need to be  obtained,  and (iv) the  income tax and other tax
consequences, if any, that may be relevant to the purchase, holding, redemption,
sale or  transfer  of the Units or the  securities  comprising  the Units.  Such
Subscriber's  subscription and payment for, and continued  beneficial  ownership
of,  the Units and the  securities  comprising  the Units will not  violate  any
applicable securities or other laws of the Subscriber's jurisdiction.

     V.   MISCELLANEOUS

          5.1 Any notice or other  communication given hereunder shall be deemed
sufficient  if in writing and sent by  reputable  overnight  courier,  facsimile
(with receipt of confirmation)  or registered or certified mail,  return receipt
requested,  addressed  to the  Company,  at the  address  set forth in the first
paragraph hereof, Attention Danielle Karp, President,  facsimile ((954)202-6002)
and to the  Subscriber at the address  indicated on the  signature  page hereof.
Notices shall be deemed to have been given on the date of mailing or fax, except
notices  of change of  address,  which  shall be deemed to have been  given when
received.

                                       5

          5.2 This  Subscription  Agreement  shall not be  changed,  modified or
amended  except  by a writing  signed by the  parties  to be  charged,  and this
Subscription Agreement may not be discharged except by performance in accordance
with its terms or by a writing signed by the party to be charged.

          5.3 This Subscription Agreement shall be binding upon and inure to the
benefit  of  the  parties   hereto  and  to  their   respective   heirs,   legal
representatives,  successors and assigns. This Subscription Agreement sets forth
the entire  agreement  and  understanding  between the parties as to the subject
matter thereof and merges and supersedes all prior  discussions,  agreements and
understandings of any and every nature among them.

          5.4 Notwithstanding the place where this Subscription Agreement may be
executed by any of the parties hereto,  the parties expressly agree that all the
terms and provisions  hereof shall be construed in accordance  with and governed
by the laws of the State of Florida.  The parties  hereby agree that any dispute
which  may  arise  between  them  arising  out  of or in  connection  with  this
Subscription  Agreement  shall be adjudicated  before a court located in Broward
County,  Florida and they hereby  submit to the  exclusive  jurisdiction  of the
federal and state courts of the State of Florida  located in Broward County with
respect  to  any  action  or  legal  proceeding  commenced  by  any  party,  and
irrevocably  waive any objection  they now or hereafter may have  respecting the
venue of any such action or proceeding brought in such a court or respecting the
fact that such court is an  inconvenient  forum,  relating  to or arising out of
this Subscription Agreement or any acts or omissions relating to the sale of the
securities  hereunder,  and consent to the service of process in any such action
or legal  proceeding by means of registered or certified  mail,  return  receipt
requested,  in care of the address set forth below or such other  address as the
undersigned shall furnish in writing to the other.

          5.5 This Subscription Agreement may be executed in counterparts.  Upon
the execution  and delivery of this  Subscription  Agreement by the  Subscriber,
this Subscription  Agreement shall become a binding obligation of the Subscriber
with respect to the purchase of Units as herein provided;  subject,  however, to
the right hereby  reserved to the Company to (i) enter into the same  agreements
with  other  subscribers,  (ii)  to  add  and/or  to  delete  other  persons  as
subscribers and (iii) to cut back or reject any subscription.

          5.6 The holding of any provision of this Subscription  Agreement to be
invalid or unenforceable by a court of competent  jurisdiction  shall not affect
any other provision of this Subscription  Agreement,  which shall remain in full
force and effect.

          5.7 It is  agreed  that a waiver  by  either  party of a breach of any
provision of this Subscription Agreement shall not operate, or be construed,  as
a waiver of any subsequent breach by that same party.

          5.8 The  parties  agree  to  execute  and  deliver  all  such  further
documents,  agreements and instruments and take such other and further action as
may be  necessary  or  appropriate  to carry out the purposes and intent of this
Subscription Agreement.

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

                                       6

          IN WITNESS  WHEREOF,  the  parties  have  executed  this  Subscription
Agreement as of the day and year first written above.

______________________________  X $100,000 for each Unit = $__________________.
Number of Units subscribed for                          Aggregate Purchase Price

             MANNER IN WHICH TITLE IS TO BE HELD (PLEASE CHECK ONE):

1. ___  Individual                        7. ___  Trust/Estate/Pension or Profit
                                                  sharing Plan
                                                  Date Opened:______________

2. ___  Joint Tenants with Right of       8. ___  As a Custodian for
        Survivorship                              ______________________________
                                                  Under the Uniform Gift to
                                                  Minors Act of the State of
                                                  ______________________________

3. ___  Community Property                9. ___  Married with Separate Property

4. ___  Tenants in Common                10. ___  Keogh

5. ___  Corporation/Partnership/         11. ___  Tenants by the Entirety
         Limited Liability Company

6. ___ IRA

             IF MORE THAN ONE SUBSCRIBER, EACH SUBSCRIBER MUST SIGN.
                   INDIVIDUAL SUBSCRIBERS MUST COMPLETE PAGE 8
              SUBSCRIBERS WHICH ARE ENTITIES MUST COMPLETE PAGE 9.

                                       7

                          EXECUTION BY NATURAL PERSONS

--------------------------------------------------------------------------------
                     Exact Name in Which Title is to be Held

--------------------------------            -----------------------------------
 Name (Please Print)                        Name of Additional Subscriber

--------------------------------            -----------------------------------
 Residence: Number and Street               Address of Additional Subscriber

--------------------------------            -----------------------------------
 City, State and Zip Code                   City, State and Zip Code

--------------------------------            -----------------------------------
 Social Security Number                     Social Security Number

--------------------------------            -----------------------------------
 Telephone Number                           Telephone Number

--------------------------------            -----------------------------------
 Fax Number (if available)                  Fax Number (if available)

--------------------------------            -----------------------------------
 E-Mail (if available)                      E-Mail (if available)

--------------------------------            -----------------------------------
 (Signature)                                (Signature of Additional Subscriber)

          ACCEPTED  this ___ day of  _________  2005,  on  behalf  Relationserve
Media, Inc.

                                             By: _______________________________
                                                 Name:
                                                 Title:

                                       8

                   EXECUTION BY SUBSCRIBER WHICH IS AN ENTITY
                     (Corporation, Partnership, Trust, Etc.)

--------------------------------------------------------------------------------
                          Name of Entity (Please Print)

Date of Incorporation or Organization:__________________________________________

State of Principal Office:______________________________________________________

Federal Taxpayer Identification Number:_________________________________________

--------------------------------------------
Office Address
--------------------------------------------
City, State and Zip Code
--------------------------------------------
Telephone Number
--------------------------------------------
Fax Number (if available)
--------------------------------------------
E-Mail (if available)

[seal]
                                                By:_____________________________
                                                Name:
Attest:_____________________________________    Title:
         (If Entity is a Corporation)

*IF SUBSCRIBER IS A REGISTERED
REPRESENTATIVE WITH AN NASD MEMBER FIRM,
HAVE THE FOLLOWING ACKNOWLEDGEMENT
SIGNED BY THE APPROPRIATE PARTY:

The undersigned NASD member firm
acknowledges receipt of the notice
required by Rule 3050 of the NASD
Conduct Rules

     ACCEPTED this ____ day of __________ 2005, on behalf of Relationserve
Media, Inc.

                                               By: _____________________________
                                               Name:
                                               Title:

                                       9

                                    EXHIBIT A
                                WIRE INSTRUCTIONS

WIRE INSTRUCTIONS:

BANK NAME:              BANK OF AMERICA

ADDRESS:                1133 AVENUE OF THE AMERICAS
                        NEW YORK, NY 10036

ATTENTION:              SCOTT VANDERWALL
                        (212) 819-5832

ACCOUNT NAME:           RELATIONSERVE MEDIA, INC.

ACCOUNT NUMBER:         2592-52-1891
                        FOR THE BENEFIT OF:
                        OLSHAN GRUNDMAN FROME ROSENZWEIG & WOLOSKY LLP

ABA ROUTING #:          026009593

                                       1

                                    EXHIBIT B
                             INVESTOR QUESTIONNAIRE

                                  INSTRUCTIONS

This  Questionnaire  is being  given to each  person  or  entity  expressing  an
interest in participating in the offering.  The purpose of this Questionnaire is
to obtain certain  information  regarding your status, so the Company can comply
with various laws and regulations governing this investment.

Your  answers  will be kept  confidential.  However,  you hereby  agree that the
Company may present this  Questionnaire to such parties as it deems  appropriate
in order to ascertain  that the offer and the sale of the securities to you will
not result in  violations  of federal or state  securities  laws which are being
relied upon by the Company in connection with the offer and sale thereof.

                                       1

                             INVESTOR QUESTIONNAIRE

INSTRUCTIONS:  CHECK ALL BOXES BELOW WHICH CORRECTLY DESCRIBE YOU.

|_|       You are (i) a bank,  as defined in Section  3(a)(2) of the  Securities
          Act of 1933,  as amended (the  "Securities  Act"),  (ii) a savings and
          loan  association  or  other   institution,   as  defined  in  Section
          3(a)(5)(A) of the Securities  Act,  whether acting in an individual or
          fiduciary  capacity,  (iii) a broker or dealer registered  pursuant to
          Section 15 of the  Securities  Exchange  Act of 1934,  as amended (the
          "Exchange Act"), (iv) an insurance company as defined in Section 2(13)
          of the Securities Act, (v) an investment  company registered under the
          Investment  Company Act of 1940, as amended (the  "Investment  Company
          Act"),  (vi) a  business  development  company  as  defined in Section
          2(a)(48)  of the  Investment  Company  Act,  (vii)  a  Small  Business
          Investment Company licensed by the U.S. Small Business  Administration
          under Section 301 (c) or (d) of the Small  Business  Investment Act of
          1958, as amended, (viii) a plan established and maintained by a state,
          its political subdivisions, or an agency or instrumentality of a state
          or its  political  subdivisions,  for the benefit of its employees and
          you have total  assets in excess of  $5,000,000,  or (ix) an  employee
          benefit  plan within the  meaning of the  Employee  Retirement  Income
          Security Act of 1974,  as amended  ("ERISA") and (1) the decision that
          you shall  subscribe for and purchase  Units offered by  Relationserve
          Media, Inc. (the "Units"), is made by a plan fiduciary,  as defined in
          Section  3(21) of  ERISA,  which is  either a bank,  savings  and loan
          association,  insurance company, or registered investment adviser, (2)
          you have total assets in excess of  $5,000,000  and the decision  that
          you shall  subscribe  for and  purchase  the  Units is made  solely by
          persons or entities that are accredited investors,  as defined in Rule
          501 of Regulation D promulgated  under the Securities Act ("Regulation
          D") or (3) you are a  self-directed  plan  and the  decision  that you
          shall  subscribe  for and purchase the Units is made solely by persons
          or entities that are accredited investors.

|_|       You are a private business  development  company as defined in Section
          202(a)(22) of the Investment Advisers Act of 1940, as amended.

|_|       You are an organization described in Section 501(c)(3) of the Internal
          Revenue  Code  of  1986,  as  amended  (the  "Code"),  a  corporation,
          Massachusetts or similar business trust or a partnership, in each case
          not formed for the  specific  purpose of making an  investment  in the
          Units and with total assets in excess of $5,000,000.

|_|       You are a director or executive officer of Relationserve Media, Inc.

|_|       You are a natural  person  whose  individual  net worth,  or joint net
          worth  with  your  spouse,  exceeds  $1,000,000  at the  time  of your
          subscription for and purchase of the Units.

                                       2

|_|       You are a natural  person  who had an  individual  income in excess of
          $200,000  in each of the two most  recent  years or joint  income with
          your  spouse  in  excess of  $300,000  in each of the two most  recent
          years,  and who has a  reasonable  expectation  of  reaching  the same
          income level in the current year.

|_|       You are a trust, with total assets in excess of $5,000,000, not formed
          for the specific  purpose of acquiring the Units,  whose  subscription
          for and purchase of the Units is directed by a sophisticated person as
          described in Rule 506(b)(2)(ii) of Regulation D.

|_|       You are an entity in which all of the  equity  owners  are  persons or
          entities described in one of the preceding paragraphs.

     The undersigned  hereby  represents and warrants that all of its answers to
this  Investor  Questionnaire  are true as of the date of its  execution  of the
Subscription   Agreement  pursuant  to  which  it  purchased  Units,  each  Unit
consisting of (i) 50,000 shares of common stock,  and (ii) a three-year  warrant
to purchase 25,000 shares of the common stock of Relationserve Media, Inc.

-------------------------------------       ------------------------------------
Name of Purchaser [please print]            Name of Co-Purchaser  [please print]

-------------------------------------       ------------------------------------
Signature of Purchaser (Entities            Signature of Co-Purchaser
please provide signature of
Purchaser's duly authorized
signatory.)

------------------------------------
Name of Signatory (Entities only)

------------------------------------
Title of Signatory (Entities only)

                                       3

                       SPECIAL NOTICE TO FLORIDA RESIDENTS

     THE UNITS  REFERRED TO HEREIN WILL BE SOLD TO, AND  ACQUIRED BY, THE HOLDER
     IN A TRANSACTION  EXEMPT UNDER ss. 517.061 OF THE FLORIDA  SECURITIES  ACT.
     THE UNITS HAVE NOT BEEN REGISTERED  UNDER SAID ACT IN THE STATE OF FLORIDA.
     IN ADDITION,  ALL FLORIDA RESIDENTS SHALL HAVE THE PRIVILEGE OF VOIDING THE
     PURCHASE WITHIN THREE (3) DAYS AFTER THE FIRST TENDER OF  CONSIDERATION  IS
     MADE BY SUCH PURCHASER TO THE ISSUER,  AN AGENT OF THE ISSUER, OR AN ESCROW
     AGENT OR WITHIN  THREE DAYS AFTER THE  AVAILABILITY  OF THAT  PRIVILEGE  IS
     COMMUNICATED TO SUCH PURCHASER, WHICHEVER OCCURS LATER.

                                    EXHIBIT C

                          REGISTRATION RIGHTS AGREEMENT

                          REGISTRATION RIGHTS AGREEMENT

     THIS  REGISTRATION  RIGHTS AGREEMENT (the  "AGREEMENT") is made and entered
into  as of the __ day of  June,  2005  between  RELATIONSERVE  MEDIA,  INC.,  a
corporation  organized  and  existing  under  the laws of the  State  of  Nevada
("Relationserve"    or   the    "Company")    and    _____________________,    a
___________________,  (the "INVESTOR").  Unless defined  otherwise,  capitalized
terms  herein  shall  have  the  identical   meaning  as  in  the  Common  Stock
Subscription Agreement.

                              PRELIMINARY STATEMENT

     WHEREAS,  pursuant to the Common Stock Subscription Agreement, of even date
herewith,  by  and  among  Relationserve  and  the  Investor,  as  part  of  the
consideration,  Investor  shall receive  Common Stock and  Warrants,  which upon
conversion  and  exercise,  in  accordance  with the terms of the  Common  Stock
Subscription  Agreement and Warrant  Agreement,  entitle the Investor to receive
shares of the Common Stock,  par value $0.001 per share (the  "Shares"),  of the
Company; and

     WHEREAS,  the ability of the  Investor to sell their Shares of Common Stock
is subject to certain restrictions under the 1933 Act; and

     WHEREAS,  as a condition to the Common Stock  Subscription  Agreement,  the
Company has agreed to provide  the  Investor  with a mechanism  that will permit
such Investor,  subject to a market stand-off  agreement,  to sell its Shares of
Common Stock in the future.

     NOW,  THEREFORE,  in  consideration  of the  premises  and  of  the  mutual
covenants  and  agreements,  and  subject  to the  terms and  conditions  herein
contained, the parties hereto hereby agree as follows:

                                    ARTICLE I

                     INCORPORATION BY REFERENCE, SUPERSEDER

1.1.  INCORPORATION  BY  REFERENCE.  The  foregoing  recitals  and the  Exhibits
attached hereto and referred to herein,  are hereby  acknowledged to be true and
accurate, and are incorporated herein by this reference.

1.2. SUPERSEDER.  This Agreement, to the extent that it is inconsistent with any
other instrument or understanding among the parties governing the affairs of the
Company,  shall supersede such instrument or understanding to the fullest extent
permitted  by law.  A copy of this  Agreement  shall be  filed at the  Company's
principal office.

                                   ARTICLE II

                           DEMAND REGISTRATION RIGHTS

2.1.  "REGISTRABLE  SECURITIES"  means and  includes  the Shares of the  Company
underlying  the Common  Stock and Warrants  issued  pursuant to the Common Stock

Subscription  Agreement and Warrant Agreement.  As to any particular Registrable
Securities,  such  securities  will cease to be Registrable  Securities when (a)
they have been  effectively  registered  under the 1933 Act and  disposed  of in
accordance with the registration statement covering them, (b) they are or may be
freely traded without  registration  pursuant to Rule 144 under the 1933 Act (or
any similar provisions that are then in effect), or (c) they have been otherwise
transferred and new certificates for them not bearing a restrictive  legend have
been  issued by the  Company  and the  Company  shall not have  "stop  transfer"
instructions  against them.  "SHARES"  shall mean,  collectively,  the shares of
Common Stock of the Company  issuable  upon  conversion  of the Common Stock and
those  shares of Common  Stock of the  Company  issuable  to the  Investor  upon
exercise of the Warrants.

2.2. REGISTRATION OF REGISTRABLE SECURITIES.  The Company shall prepare and file
within  forty-five  (45) days following the date of final closing of the sale of
Units  under  the  PPM  (the  "FILING  DATE")  a  registration   statement  (the
"REGISTRATION  STATEMENT")  covering  the resale of such number of shares of the
Registrable  Securities  as the  Investor  shall elect by written  notice to the
Company,  and absent such election,  covering the resale of all of the shares of
the Registrable Securities.  The Company shall use its best efforts to cause the
Registration Statement to be declared effective by the SEC on the earlier of (i)
120 days following the Closing Date with respect to the Registration  Statement,
(ii) ten (10) days following the receipt of a "No Review" or similar letter from
the SEC or (iii) the first business day following the day the SEC determines the
Registration   Statement  eligible  to  be  declared  effective  (the  "REQUIRED
EFFECTIVENESS  DATE").  Nothing  contained  herein  shall be deemed to limit the
number of Registrable Securities to be registered by the Company hereunder. As a
result,  should the  Registration  Statement not relate to the maximum number of
Registrable Securities acquired by (or potentially acquirable by) the holders of
the Shares of the Company  issued to the  Investor  pursuant to the Common Stock
Subscription  Agreement,  the  Company  shall be  required  to  promptly  file a
separate  registration  statement (utilizing Rule 462 promulgated under the 1933
Act, where applicable) relating to such Registrable Securities which then remain
unregistered. The provisions of this Agreement shall relate to any such separate
registration statement as if it were an amendment to the Registration Statement.

2.3. DEMAND REGISTRATION. Subject to the limitations of Section 2.2, at any time
and from time to time, the Investor may request the registration  under the 1933
Act of all or  part  of the  Registrable  Shares  then  outstanding  (a  "DEMAND
REGISTRATION").  Subject to the  conditions  of Section 3, the Company shall use
its best  efforts  to file  such  registration  statement  under the 1933 Act as
promptly  as  practicable  after the date any such  request is  received  by the
Company and to cause such registration  statement to be declared effective.  The
Company shall notify the Investor promptly when any such registration  statement
has been  declared  effective.  If more than eighty  percent (80%) of the Shares
issuable under the Common Stock  Subscription  Agreement have been registered or
sold, this provision shall expire.

2.4.  REGISTRATION  STATEMENT FORM.  Registrations under Section 2.2 and Section
2.3 shall be on the appropriate registration form of the SEC as shall permit the
disposition  of such  Registrable  Securities  in  accordance  with the intended
method or  methods  of  disposition  specified  in the  Registration  Statement;
provided,  however,  such intended  method of  disposition  shall not include an
underwritten offering of the Registrable Securities.

                                       2

2.5. EXPENSES. The Company will pay all Registration expenses in connection with
any registration required by under Sections 2.2 and Section 2.3 herein.

2.6.  EFFECTIVE  REGISTRATION  STATEMENT.  A registration  requested pursuant to
Sections  2.2 and  Section  2.3 shall not be  deemed to have been  effected  (i)
unless a registration statement with respect thereto has become effective within
the time period specified  herein,  provided that a registration  which does not
become  effective after the Company filed a registration  statement with respect
thereto  solely by reason of the refusal to proceed of any holder of Registrable
Securities  (other than a refusal to proceed based upon the advice of counsel in
the form of a letter signed by such counsel and provided to the Company relating
to a disclosure  matter  unrelated to such holder)  shall be deemed to have been
effected by the Company unless the holders of the Registrable  Securities  shall
have  elected  to  pay  all  Registration   Expenses  in  connection  with  such
registration,  (ii) if, after it has become effective, such registration becomes
subject  to  any  stop  order,   injunction  or  other  order  or  extraordinary
requirement of the SEC or other  governmental  agency or court for any reason or
(iii)  if,  after  it has  become  effective,  such  registration  ceases  to be
effective for more than the allowable Black-Out Periods (as defined herein).

2.7.  PLAN OF  DISTRIBUTION.  The Company  hereby  agrees that the  Registration
Statement shall include a plan of distribution section reasonably  acceptable to
the Investor;  provided,  however,  such plan of  distribution  section shall be
modified  by the  Company  so as to  not  provide  for  the  disposition  of the
Registrable Securities on the basis of an underwritten offering.

2.8.  LIQUIDATED  DAMAGES.  Subject to the right of the Company to allow for any
Black  Out  periods  if,  after  four (4)  months  from  the  date on which  the
Registration  Statement  is filed  pursuant to the  requirements  of Section 2.2
herein, or if the Registration Statement filed pursuant to Section 2.2 herein is
not declared effective,  the Company shall, for each such full month for which a
Registration  Statement is not so  effective,  pay the  Investor,  as liquidated
damages and not as a penalty, an amount equal to one percent (1%) percent of the
Purchase  Price per full month for which such  Registration  Statement is not so
effective  following the four (4) months  period;  such payment shall be made no
later than the first  business day of the  calendar  month next  succeeding  the
month in which such day occurs.  The maximum amount of liquidated  damages shall
be twelve (12%) percent. All payments shall be made in shares of Common Stock at
the Initial Purchase Price (i.e. $2.00 per share).

The parties agree that the only damages  payable for a violation of the terms of
this Agreement with respect to which liquidated  damages are expressly  provided
shall be such  liquidated  damages.  Nothing  shall  preclude the Investor  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 2.8 constitute a reasonable estimate of the damages that may be incurred
by the Investor by reason of the failure of the Registration  Statement(s) to be
filed or declared effective in accordance with the provisions hereof.

The  obligation  of  the  Company  terminates  when  the  holder  of  shares  of
Registrable  Securities  no longer holds more than twenty  percent  (20%) of its
shares of Registrable Securities.

                                       3

                                  ARTICLE III

                         INCIDENTAL REGISTRATION RIGHTS

3.1. RIGHT TO INCLUDE ("PIGGY-BACK")  REGISTRABLE SECURITIES.  Provided that the
Registrable  Securities have not been registered,  if at any time after the date
hereof but  before  the  second  anniversary  of the date  hereof,  the  Company
proposes to register any of its  securities  under the 1933 Act (other than by a
registration  in  connection  with an  acquisition  in a manner  which would not
permit  registration of Registrable  Securities for sale to the public,  on Form
S-8, or any successor  form thereto,  on Form S-4, or any successor form thereto
and other  than  pursuant  to  Section  2),  on an  underwritten  basis  (either
best-efforts  or  firm-commitment),  then,  the Company will each such time give
prompt written notice to all holders of Registrable  Securities of its intention
to do so and of such  holders  of  Registrable  Securities'  rights  under  this
Section  3.1.  Upon the  written  request  of any such  holders  of  Registrable
Securities made within ten (10) days after the receipt of any such notice (which
request shall specify the Registrable  Securities  intended to be disposed of by
such holders of Registrable  Securities  and the intended  method of disposition
thereof),  the Company  will,  subject to the terms of this  Agreement,  use its
commercially  reasonable best efforts to effect the registration  under the 1933
Act of the  Registrable  Securities,  to the  extent  requisite  to  permit  the
disposition  (in accordance  with the intended  methods thereof as aforesaid) of
such  Registrable  Securities  so  to  be  registered,   by  inclusion  of  such
Registrable Securities in the registration statement which covers the securities
which the Company  proposes  to  register,  provided  that if, at any time after
written  notice of its  intention  to register any  securities  and prior to the
effective  date of the  registration  statement  filed in  connection  with such
registration,  the Company shall determine for any reason either not to register
or to delay  registration of such securities,  the Company may, at its election,
give  written  notice  of such  determination  to each  holders  of  Registrable
Securities and,  thereupon,  (i) in the case of a determination not to register,
shall be relieved of this obligation to register any  Registrable  Securities in
connection  with  such  registration  (but not from  its  obligation  to pay the
Registration Expenses in connection therewith),  without prejudice,  however, to
the rights of any holder or holders of Registrable  Securities entitled to do so
to request that such registration be effected as a registration under Section 2,
and (ii) in the case of a determination to delay registering, shall be permitted
to delay  registering  any  Registrable  Securities,  for the same period as the
delay in registering such other securities.  No registration effected under this
Section  3.1  shall  relieve  the  Company  of  its  obligation  to  effect  any
registration upon request under Section 2. The Company will pay all Registration
Expenses  in  connection  with  each  registration  of  Registrable   Securities
requested  pursuant to this Section  3.1. The right  provided the Holders of the
Registrable  Securities  pursuant to this Section shall be  exercisable at their
sole discretion and will in no way limit any of the Company's obligations to pay
the Securities according to their terms.

3.2. PRIORITY IN INCIDENTAL  REGISTRATIONS.  If the managing  underwriter of the
underwritten  offering  contemplated  by this Section 3 shall inform the Company
and holders of the Registrable Securities requesting such registration by letter
of its belief  that the number of  securities  requested  to be included in such
registration  exceeds the number  which can be sold in such  offering,  then the
Company will include in such registration, to the extent of the number which the
Company  is so  advised  can be sold  in such  offering,  (i)  first  securities
proposed  by the  Company  to be sold  for  its own  account,  and  (ii)  second

                                       4

Registrable  Securities and (iii)  securities of other selling  security holders
requested to be included in such registration.

                                   ARTICLE IV

                            REGISTRATION PROCEDURES

4.1. REGISTRATION PROCEDURES.  If and whenever the Company is required to effect
the registration of any Registrable Securities under the 1933 Act as provided in
Section 2.2 and, as applicable,  2.3, the Company  shall,  as  expeditiously  as
possible:

     (i) prepare and file with the SEC the Registration Statement, or amendments
thereto,   to  effect  such  registration   (including  such  audited  financial
statements  as may be  required  by the 1933 Act or the  rules  and  regulations
promulgated  thereunder)  and thereafter use its  commercially  reasonable  best
efforts to cause such  registration  statement  to be declared  effective by the
SEC,  as soon as  practicable,  but in any  event  no later  than  the  Required
Effectiveness  Date (with  respect to a  registration  pursuant to Section 2.2);
provided,  however,  that  before  filing  such  registration  statement  or any
amendments  thereto,  the Company  will  furnish to the counsel  selected by the
holders of Registrable Securities which are to be included in such registration,
copies of all such documents proposed to be filed;

     (ii) with respect to any registration  statement pursuant to Section 2.2 or
Section 2.3,  prepare and file with the SEC such  amendments and  supplements to
such registration  statement and the prospectus used in connection  therewith as
may be necessary to keep such  registration  statement  effective  and to comply
with the  provisions  of the 1933 Act with  respect  to the  disposition  of all
Registrable  Securities covered by such registration statement until the earlier
to occur of twenty-four (24) months after the date of this Agreement (subject to
the right of the Company to suspend the effectiveness  thereof for not more than
twenty-five (25) consecutive  Trading Days or an aggregate of sixty (60) Trading
Days during each year (each a  "BLACK-OUT  PERIOD"))  or such time as all of the
securities  which are the  subject of such  registration  statement  cease to be
Registrable Securities (such period, in each case, the "REGISTRATION MAINTENANCE
PERIOD");

     (iii)  furnish to each  holder of  Registrable  Securities  covered by such
registration  statement  such number of  conformed  copies of such  registration
statement  and of each  such  amendment  and  supplement  thereto  (in each case
including all exhibits),  such number of copies of the  prospectus  contained in
such  registration  statement  (including  each  preliminary  prospectus and any
summary prospectus) and any other prospectus filed under Rule 424 under the 1933
Act,  in  conformity  with the  requirements  of the 1933  Act,  and such  other
documents, as such holder of Registrable Securities and underwriter, if any, may
reasonably  request in order to facilitate the public sale or other  disposition
of the Registrable Securities owned by such holder of Registrable Securities;

     (iv) use its  commercially  reasonable  best efforts to register or qualify
all Registrable  Securities and other  securities  covered by such  registration
statement under such other U.S.  federal or state  securities laws or U.S. state
blue  sky  laws as any U.S.  holder  of  Registrable  Securities  thereof  shall
reasonably  request,  to keep such registrations or qualifications in effect for

                                       5

so long as such  registration  statement  remains in effect,  and take any other
action which may be  reasonably  necessary to enable such holder of  Registrable
Securities to consummate the disposition in such jurisdictions of the securities
owned by such holder of  Registrable  Securities,  except that the Company shall
not for any such  purpose be required to qualify  generally  to do business as a
foreign  corporation  in any  jurisdiction  wherein  it  would  not  but for the
requirements  of this  subdivision  (iv) be  obligated  to be so qualified or to
consent to general service of process in any such jurisdiction;

     (v) use its  commercially  reasonable best efforts to cause all Registrable
Securities  covered by such  registration  statement  to be  registered  with or
approved by such other governmental  agencies or authorities as may be necessary
to enable the U.S.  holder of Registrable  Securities  thereof to consummate the
disposition of such Registrable Securities;

     (vi) furnish to each holder of Registrable Securities a signed counterpart,
addressed to such holder of Registrable  Securities,  and the  underwriters,  if
any, of an opinion of counsel for the Company,  dated the effective date of such
registration statement (or, if such registration includes an underwritten public
offering,  an  opinion  dated the date of the  closing  under  the  underwriting
agreement),  reasonably  satisfactory  in form and  substance  to such holder of
Registrable  Securities)  including  that  the  prospectus  and  any  prospectus
supplement  forming a part of the  Registration  Statement  does not  contain an
untrue  statement  of a material  fact or omits 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, and

     (vii) notify the Investor and its counsel  promptly and confirm such advice
in writing promptly after the Company has knowledge thereof:

          (A) when the Registration Statement,  the prospectus or any prospectus
supplement  related  thereto or  post-effective  amendment  to the  Registration
Statement has been filed, and, with respect to the Registration Statement or any
post-effective amendment thereto, when the same has become effective;

          (B) of any request by the SEC for  amendments  or  supplements  to the
Registration Statement or the prospectus or for additional information;

          (C) of the  issuance  by the  SEC of any  stop  order  suspending  the
effectiveness of the Registration Statement or the initiation of any proceedings
by any Person for that  purpose;  and

          (D) of the receipt by the Company of any notification  with respect to
the suspension of the qualification of any Registrable Securities for sale under
the securities or blue sky laws of any  jurisdiction or the initiation or threat
of any proceeding for such purpose;

     (viii)  notify  each  holder  of  Registrable  Securities  covered  by such
registration  statement,  at any time  when a  prospectus  relating  thereto  is
required to be delivered  under the 1933 Act, upon  discovery  that, or upon the
happening  of any event as a result of which,  the  prospectus  included in such
registration  statement,  as then in effect,  includes an untrue  statement of a
material fact or omits to state any material facts required to be stated therein
or necessary to make the  statements  therein not misleading in the light of the
circumstances  then  existing,  and  at  the  request  of  any  such  holder  of

                                       6

Registrable   Securities   promptly  prepare  and  furnish  to  such  holder  of
Registrable  Securities a reasonable  number of copies of a supplement  to or an
amendment  of  such  prospectus  as may be  necessary  so  that,  as  thereafter
delivered  to the  purchasers  of such  securities,  such  prospectus  shall not
include an untrue  statement of a material fact or omit to state a material fact
required to be stated  therein or necessary to make the  statements  therein not
misleading in the light of the circumstances then existing;

     (ix) use its best efforts to obtain the withdrawal of any order  suspending
the effectiveness of the Registration Statement at the earliest possible moment;

     (x) otherwise use its  commercially  reasonable best efforts to comply with
all  applicable  rules and  regulations  of the SEC,  and make  available to its
security  holders,  as soon as  reasonably  practicable,  an earnings  statement
covering  the  period of at least  twelve  months,  but not more  than  eighteen
months, beginning with the first full calendar month after the effective date of
such  registration  statement,   which  earnings  statement  shall  satisfy  the
provisions of Section 11(a) of the 1933 Act and Rule 158 thereunder;

     (xi) enter into such agreements and take such other actions as the Investor
shall  reasonably  request  in writing  (at the  expense  of the  requesting  or
benefiting  Investor) in order to expedite or facilitate the disposition of such
Registrable Securities; and

     (xii) use its commercially  reasonable best efforts to list all Registrable
Securities covered by such registration  statement on any securities exchange on
which any of the Registrable Securities are then listed.

     The Company may require each holder of  Registrable  Securities as to which
any  registration  is being  effected to furnish the  Company  such  information
regarding such holder of Registrable  Securities  and the  distribution  of such
securities as the Company may from time to time reasonably request in writing.

4.2. The Company will not file any  registration  statement  pursuant to Section
2.2 or Section 2.3, or amendment  thereto or any  prospectus  or any  supplement
thereto to which the Investor shall reasonably object, provided that the Company
may file such  documents  in a form  required  by law or upon the  advice of its
counsel.

4.3.  The  Company  represents  and  warrants  to  each  holder  of  Registrable
Securities   that  it  has  obtained  all   necessary   waivers,   consents  and
authorizations   necessary  to  execute  this   Agreement  and   consummate  the
transactions  contemplated  hereby  other  than such  waivers,  consents  and/or
authorizations  specifically  contemplated  by  the  Common  Stock  Subscription
Agreement.

4.4.  Each holder of  Registrable  Securities  agrees that,  upon receipt of any
notice from the Company of the  occurrence of any event of the kind described in
subdivision  (viii) of Section 4.1, such Holder will forthwith  discontinue such
holder of Registrable Securities' disposition of Registrable Securities pursuant
to the Registration Statement relating to such Registrable Securities until such
holder of Registrable  Securities'  receipt of the copies of the supplemented or
amended prospectus  contemplated by subdivision (viii) of Section 4.1 and, if so
directed by the Company,  will deliver to the Company (at the Company's expense)
all copies,  other than permanent file copies,  then in such Holder's possession

                                       7

of the prospectus relating to such Registrable Securities current at the time of
receipt of such notice.

                                   ARTICLE V

                             UNDERWRITTEN OFFERINGS

5.1. INCIDENTAL  UNDERWRITTEN  OFFERINGS. If the Company at any time proposes to
register any of its securities under the 1933 Act as contemplated by Section 3.1
and  such   securities  are  to  be  distributed  by  or  through  one  or  more
underwriters,  the  Company  will,  if  requested  by any holder of  Registrable
Securities  as provided in Section 3.1 and subject to the  provisions of Section
3.2,  use  its  commercially   reasonable  best  efforts  to  arrange  for  such
underwriters to include all the Registrable Securities to be offered and sold by
such holder among the securities to be distributed by such  underwriters.  In no
event  shall  any  Investor  be  deemed  an  underwriter  for  purposes  of this
Agreement.

5.2.  PARTICIPATION  IN  UNDERWRITTEN   OFFERINGS.   No  holder  of  Registrable
Securities may participate in any underwritten offering under Section 3.1 unless
such  holder  of  Registrable  Securities  (i)  agrees  to  sell  such  Person's
securities  on the basis  provided in any  underwriting  arrangements  approved,
subject to the terms and  conditions  hereof,  by the  holders of a majority  of
Registrable  Securities  to be included in such  underwritten  offering and (ii)
completes and executes all questionnaires,  indemnities, underwriting agreements
and other documents (other than powers of attorney)  required under the terms of
such underwriting  arrangements.  Notwithstanding the foregoing, no underwriting
agreement (or other  agreement in connection  with such offering)  shall require
any holder of Registrable  Securities to make a representation or warranty to or
agreements with the Company or the underwriters other than  representations  and
warranties  contained  in a writing  furnished  by such  holder  of  Registrable
Securities  expressly  for  use  in  the  related   registration   statement  or
representations,  warranties or agreements  regarding such holder of Registrable
Securities,  such holder's  Registrable  Securities  and such holder's  intended
method of distribution and any other representation required by law.

5.3. PREPARATION;  REASONABLE INVESTIGATION.  In connection with the preparation
and filing of each  registration  statement  under the 1933 Act pursuant to this
Agreement,   the  Company  will  give  the  holders  of  Registrable  Securities
registered under such registration  statement,  and their respective counsel and
accountants,   the  opportunity  to  participate  in  the  preparation  of  such
registration statement,  each prospectus included therein or filed with the SEC,
and each  amendment  thereof or supplement  thereto,  and will give each of them
such  access to its books and  records  and such  opportunities  to discuss  the
business of the Company with its officers and the independent public accountants
who have  certified  its  financial  statements  as shall be  necessary,  in the
reasonable opinion of such holders' and such underwriters'  respective  counsel,
to conduct a reasonable investigation within the meaning of the 1933 Act.

                                       8

                                   ARTICLE VI

                                INDEMNIFICATION

6.1.  INDEMNIFICATION  BY THE COMPANY.  In the event of any  registration of any
securities of the Company under the 1933 Act, the Company will,  and hereby does
agree to indemnify  and hold harmless the holder of any  Registrable  Securities
covered by such registration  statement,  its directors and officers, each other
Person  who  participates  as an  underwriter  in the  offering  or sale of such
securities  and each other Person,  if any, who controls such holder or any such
underwriter  within the  meaning of the 1933 Act  against  any  losses,  claims,
damages or  liabilities,  joint or  several,  to which  such  holder or any such
director or officer or  underwriter  or  controlling  person may become  subject
under the 1933 Act or  otherwise,  insofar as such  losses,  claims,  damages or
liabilities  (or actions or  proceedings,  whether  commenced or threatened,  in
respect  thereof) arise out of or are based upon any untrue statement or alleged
untrue  statement of any material fact contained in any  registration  statement
under which such securities were registered  under the 1933 Act, any preliminary
prospectus,  final prospectus or summary prospectus  contained  therein,  or any
amendment or supplement  thereto,  or any omission or alleged  omission to state
therein a material fact  required to be stated  therein or necessary to make the
statements  therein not  misleading,  and the Company will reimburse such holder
and each such director,  officer,  underwriter  and  controlling  person for any
legal or any other  expenses  reasonably  incurred  by them in  connection  with
investigating  or  defending  any  such  loss,  claim,   liability,   action  or
proceeding,  provided  that the Company  shall not be liable in any such case to
the  extent  that any  such  loss,  claim,  damage,  liability,  (or  action  or
proceeding  in respect  thereof)  or  expense  arises out of or is based upon an
untrue  statement or alleged  untrue  statement or omission or alleged  omission
made in such  registration  statement,  any such preliminary  prospectus,  final
prospectus, summary prospectus,  amendment or supplement in reliance upon and in
conformity with written  information  furnished to the Company by such holder or
underwriter  stating that it is for use in the preparation thereof and, provided
further that the Company shall not be liable to any Person who  participates  as
an underwriter in the offering or sale of Registrable Securities or to any other
Person,  if any, who controls  such  underwriter  within the meaning of the 1933
Act, in any such case to the extent that any such loss, claim, damage, liability
(or action or  proceeding  in  respect  thereof)  or expense  arises out of such
Person's failure to send or give a copy of the final prospectus, as the same may
be then supplemented or amended, within the time required by the 1933 Act to the
Person  asserting  the  existence  of an  untrue  statement  or  alleged  untrue
statement  or  omission  or  alleged   omission  at  or  prior  to  the  written
confirmation  of the  sale of  Registrable  Securities  to such  Person  if such
statement or omission was corrected in such final  prospectus or an amendment or
supplement  thereto.  Such  indemnity  shall  remain in full  force  and  effect
regardless of any investigation  made by or on behalf of such holder or any such
director,  officer,  underwriter  or  controlling  person and shall  survive the
transfer of such securities by such holder.

6.2. INDEMNIFICATION BY THE INVESTOR. The Company may require, as a condition to
including  any  Registrable  Securities  in  any  registration  statement  filed
pursuant to this Agreement,  that the Company shall have received an undertaking
satisfactory to it from the prospective  holder of such Registrable  Securities,
to indemnify and hold harmless (in the same manner and to the same extent as set
forth in Section 6.1) the Company, each director of the Company, each officer of
the Company and each other Person,  if any, who controls the Company  within the

                                       9

meaning of the 1933 Act, with respect to any  statement or alleged  statement in
or  omission  or  alleged  omission  from  such  registration   statement,   any
preliminary  prospectus,   final  prospectus  or  summary  prospectus  contained
therein,  or any amendment or supplement  thereto,  if such statement or alleged
statement  or omission  or alleged  omission  was made in  reliance  upon and in
conformity  with  written  information  furnished  to  the  Company  through  an
instrument duly executed by such holder of Registrable  Securities  specifically
stating that it is for use in the  preparation of such  registration  statement,
preliminary  prospectus,  final  prospectus,  summary  prospectus,  amendment or
supplement. Any such indemnity shall remain in full force and effect, regardless
of any  investigation  made by or on behalf of the Company or any such director,
officer or controlling  person and shall survive the transfer of such securities
by such Investor.

6.3. NOTICES OF CLAIMS,  ETC.  Promptly after receipt by an indemnified party of
notice  of the  commencement  of any  action  or  proceeding  involving  a claim
referred to in Sections 6.1 and Section 6.2,  such  indemnified  party will,  if
claim in respect  thereof  is to be made  against an  indemnifying  party,  give
written notice to the latter of the  commencement of such action,  provided that
the failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under Sections 6.1 and Section
6.2, except to the extent that the indemnifying party is actually  prejudiced by
such  failure to give  notice.  In case any such  action is  brought  against an
indemnified  party,  unless in such indemnified  party's  reasonable  judgment a
conflict of interest between such indemnified and indemnifying parties may exist
in  respect  of  such  claim,  the  indemnifying  party  shall  be  entitled  to
participate  in and to  assume  the  defense  thereof,  jointly  with any  other
indemnifying party similarly notified, to the extent that the indemnifying party
may wish, with counsel  reasonably  satisfactory to such indemnified  party, and
after  notice  from  the  indemnifying  party to such  indemnified  party of its
election so to assume the defense thereof,  the indemnifying  party shall not be
liable to such  indemnified  party for any legal or other expenses  subsequently
incurred  by the  latter in  connection  with the  defense  thereof  other  than
reasonable  costs of  investigation.  No indemnifying  party shall,  without the
consent of the indemnified party, consent to entry of any judgment or enter into
any  settlement  of any such action  which does not include as an  unconditional
term thereof the giving by the claimant or plaintiff to such  indemnified  party
of a release  from all  liability,  or a covenant not to sue, in respect to such
claim or litigation. No indemnified party shall consent to entry of any judgment
or enter into any  settlement  of any such  action the defense of which has been
assumed by an indemnifying party without the consent of such indemnifying party.

6.4.  OTHER  INDEMNIFICATION.  Indemnification  similar  to  that  specified  in
Sections 6.1 and Section 6.2 (with appropriate  modifications) shall be given by
the Company and each holder of  Registrable  Securities  (but only if and to the
extent  required  pursuant to the terms  herein)  with  respect to any  required
registration or other qualification of securities under any Federal or state law
or regulation of any governmental authority, other than the 1933 Act.

6.5. INDEMNIFICATION  PAYMENTS. The indemnification required by Sections 6.1 and
Section 6.2 shall be made by periodic  payments of the amount thereof during the
course of the  investigation  or  defense,  as and when  bills are  received  or
expense, loss, damage or liability is incurred.

                                       10

6.6.  CONTRIBUTION.  If the  indemnification  provided  for in Sections  6.1 and
Section 6.2 is unavailable  to an  indemnified  party in respect of any expense,
loss,  claim,  damage or liability  referred to therein,  then each indemnifying
party, in lieu of indemnifying such indemnified  party,  shall contribute to the
amount paid or payable by such  indemnified  party as a result of such  expense,
loss,  claim,  damage or liability (i) in such  proportion as is  appropriate to
reflect the  relative  benefits  received by the Company on the one hand and the
holder of  Registrable  Securities  or  underwriter,  as the case may be, on the
other  from  the  distribution  of the  Registrable  Securities  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 Company on
the one hand and of the holder of Registrable Securities or underwriter,  as the
case may be, on the other in connection  with the statements or omissions  which
resulted  in such  expense,  loss,  damage  or  liability,  as well as any other
relevant equitable considerations. The relative benefits received by the Company
on the one hand and the holder of Registrable Securities or underwriter,  as the
case may be, on the other in connection with the distribution of the Registrable
Securities  shall  be  deemed  to be in the same  proportion  as the  total  net
proceeds  received  by the  Company  from the  initial  sale of the  Registrable
Securities by the Company to the purchasers  bear to the gain, if any,  realized
by all  selling  holders  participating  in such  offering  or the  underwriting
discounts and commissions  received by the underwriter,  as the case may be. The
relative  fault of the Company on the one hand and of the holder of  Registrable
Securities or underwriter,  as the case may be, on the other shall be determined
by  reference  to,  among other  things,  whether  the untrue or alleged  untrue
statement  of a material  fact or omission to state a material  fact  relates to
information supplied by the Company, by the holder of Registrable  Securities or
by the  underwriter  and the  parties'  relative  intent,  knowledge,  access to
information supplied by the Company, by the holder of Registrable  Securities or
by the  underwriter  and the  parties'  relative  intent,  knowledge,  access to
information  and  opportunity  to correct or prevent such statement or omission,
provided  that the  foregoing  contribution  agreement  shall  not  inure to the
benefit of any indemnified party if indemnification would be unavailable to such
indemnified party by reason of the provisions  contained herein, and in no event
shall the obligation of any indemnifying  party to contribute under this Section
6.6 exceed the amount that such indemnifying  party would have been obligated to
pay by way of indemnification if the indemnification  provided for hereunder had
been available under the circumstances.

            The Company and the holders of Registrable  Securities agree that it
would not be just and  equitable  if  contribution  pursuant to this Section 6.6
were  determined  by pro rata  allocation  (even if the  holders of  Registrable
Securities and any underwriters  were treated as one entity for such purpose) 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 herein, any legal or
other expenses  reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim.

            Notwithstanding  the  provisions  of this  Section 6.6, no holder of
Registrable Securities or underwriter shall be required to contribute any amount
in excess of the  amount  by which (i) in the case of any such  holder,  the net
proceeds received by such holder from the sale of Registrable  Securities in the
applicable  Registration  Statement or (ii) in the case of an  underwriter,  the

                                       11

total price at which the Registrable  Securities purchased by it and distributed
to the public were offered to the public  exceeds,  in any such case, the amount
of any damages that such holder or  underwriter  has otherwise  been required to
pay by reason of such untrue or alleged untrue statement or omission.  No Person
guilty of fraudulent  misrepresentation  (within the meaning of Section 11(f) of
the 1933 Act)  shall be  entitled  to  contribution  from any person who was not
guilty of such fraudulent misrepresentation.

                                  ARTICLE VII

                                    RULE 144

7.1. RULE 144. The Company shall timely file the reports required to be filed by
it under the 1933 Act and the 1934 Act (including but not limited to the reports
under Sections 13 and 15(d) of the Exchange Act referred to in subparagraph  (c)
of Rule 144 adopted by the SEC under the 1933 Act) and the rules and regulations
adopted by the SEC  thereunder  (or, if the Company is not required to file such
reports,  will, upon the request of any holder of Registrable  Securities,  make
publicly  available other  information) and will take such further action as any
holder of  Registrable  Securities  may  reasonably  request,  all to the extent
required from time to time to enable such holder to sell Registrable  Securities
without  registration under the 1933 Act within the limitation of the exemptions
provided  by (a) Rule 144 under the 1933 Act,  as such Rule may be amended  from
time to time,  or (b) any similar rule or  regulation  hereafter  adopted by the
SEC. Upon the request of any holder of Registrable Securities,  the Company will
deliver to such holder a written  statement as to whether it has  complied  with
the requirements of this Section 7.1.

                                  ARTICLE VIII

                                 MISCELLANEOUS

8.1.  AMENDMENTS AND WAIVERS.  This Agreement may be amended and the Company may
take any action herein prohibited, or omit to perform any act herein required to
be performed by it, only if the Company shall have obtained the written  consent
to such  amendment,  action or  omission to act, of the holder or holders of the
sum of the  fifty-one  percent  (51%) or more of the  shares of (i)  Registrable
Securities issued at such time, plus (ii) Registrable  Securities  issuable upon
exercise or conversion of the Securities then constituting derivative securities
(if such Securities were not fully exchanged or converted in full as of the date
such consent if sought).  Each holder of any Registrable  Securities at the time
or  thereafter  outstanding  shall be bound by any  consent  authorized  by this
Section 8.1, whether or not such  Registrable  Securities shall have been marked
to indicate such consent.

8.2.  NOMINEES  FOR  BENEFICIAL  OWNERS.  In  the  event  that  any  Registrable
Securities  are  held  by a  nominee  for  the  beneficial  owner  thereof,  the
beneficial owner thereof may, at its election,  be treated as the holder of such
Registrable Securities for purposes of any request or other action by any holder
or  holders  of  Registrable  Securities  pursuant  to  this  Agreement  or  any
determination  of any number of percentage of shares of  Registrable  Securities
held by a holder or  holders  of  Registrable  Securities  contemplated  by this
Agreement.  If the beneficial owner of any Registrable Securities so elects, the

                                       12

Company may require  assurances  reasonably  satisfactory  to it of such owner's
beneficial ownership or such Registrable Securities.

8.3.  NOTICES.  Except as  otherwise  provided in this  Agreement,  all notices,
requests and other  communications to any Person provided for hereunder shall be
in writing and shall be given to such  Person (a) in the case of a party  hereto
other than the  Company,  addressed to such party in the manner set forth in the
Common Stock Subscription Agreement or at such other address as such party shall
have furnished to the Company in writing, or (b) in the case of any other holder
of Registrable Securities,  at the address that such holder shall have furnished
to the Company in writing,  or,  until any such other holder so furnishes to the
Company  an  address,  then to and at the  address  of the last  holder  of such
Registrable  Securities  who has furnished an address to the Company,  or (c) in
the case of the Company,  at the address set forth on the signature page hereto,
to the attention of its President, or at such other address, or to the attention
of such other  officer,  as the Company  shall have  furnished to each holder of
Registrable  Securities at the time  outstanding.  Each such notice,  request or
other communication shall be effective (i) if given by mail, 72 hours after such
communication  is  deposited  in the mail  with  first  class  postage  prepaid,
addressed as aforesaid or (ii) if given by any other means  (including,  without
limitation,  by fax or air  courier),  when  delivered at the address  specified
above,  provided  that any such notice,  request or  communication  shall not be
effective until received.

8.4.  ASSIGNMENT.  This Agreement shall be binding upon and inure to the benefit
of and be enforceable by the parties hereto. In addition, and whether or not any
express  assignment shall have been made, the provisions of this Agreement which
are for the benefit of the parties  hereto other than the Company  shall also be
for the benefit of and  enforceable by any subsequent  holder of any Registrable
Securities.  Each  of the  Holders  of the  Registrable  Securities  agrees,  by
accepting any portion of the Registrable  Securities  after the date hereof,  to
the provisions of this Agreement including,  without limitation,  appointment of
the  Investor'  Representative  to act on behalf of such Holder  pursuant to the
terms hereof which such actions  shall be made in the good faith  discretion  of
the Investor' Representative and be binding on all persons for all purposes.

8.5. DESCRIPTIVE HEADINGS.  The descriptive headings of the several sections and
paragraphs of this Agreement are inserted for reference only and shall not limit
or otherwise affect the meaning hereof.

8.6.  GOVERNING  LAW.  This  Agreement  shall be governed  by, and  construed in
accordance  with,  the  internal  laws of the State of Florida,  without  giving
effect to principles of conflicts of law.

8.7.  JURISDICTION.  If any action is brought  among the parties with respect to
this  Agreement or  otherwise,  by way of a claim or  counterclaim,  the parties
agree that in any such action, and on all issues, the parties  irrevocably waive
their right to a trial by jury.  Exclusive  jurisdiction  and venue for any such
action shall be the State or Federal Courts serving the State of Florida located
in Broward  County.  In the event  suit or action is brought by any party  under
this Agreement to enforce any of its terms,  or in any appeal  therefrom,  it is
agreed that the prevailing party shall be entitled to reasonable  attorneys fees
to be fixed by the arbitrator, trial court, and/or appellate court.

                                       13

8.8.  ENTIRE  AGREEMENT.  This  Agreement  embodies  the  entire  agreement  and
understanding  between the Company and each other party  hereto  relating to the
subject  matter hereof and supercedes  all prior  agreements and  understandings
relating to such subject matter.

8.9.  SEVERABILITY.  If any provision of this  Agreement,  or the application of
such  provisions  to any  Person or  circumstance,  shall be held  invalid,  the
remainder of this Agreement,  or the application of such provision to Persons or
circumstances  other  than  those  to  which it is held  invalid,  shall  not be
affected thereby.

8.10.  BINDING EFFECT. All the terms and provisions of this Agreement whether so
expressed  or not,  shall be  binding  upon,  inure to the  benefit  of,  and be
enforceable by the parties and their respective administrators, executors, legal
representatives, heirs, successors and assignees.

8.11.  PREPARATION  OF AGREEMENT.  This  Agreement  shall not be construed  more
strongly against any party regardless of who is responsible for its preparation.
The parties  acknowledge  each  contributed  and is equally  responsible for its
preparation.

8.12. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No failure or delay
on the part of any party  hereto in the  exercise of any right  hereunder  shall
impair such right or be  construed  to be a waiver of, or  acquiescence  in, any
breach of any representation,  warranty, covenant or agreement herein, nor shall
nay  single or partial  exercise  of any such  right  preclude  other or further
exercise thereof or of any other right.  All rights and remedies  existing under
this  Agreement are  cumulative to, and not exclusive of, any rights or remedies
otherwise available.

8.13. COUNTERPARTS.  This Agreement may be executed in one or more counterparts,
and by the different parties hereto in separate counterparts, each of which when
executed  shall be deemed to be an  original,  but all of which  taken  together
shall  constitute one and the same agreement.  A facsimile  transmission of this
signed Agreement shall be legal and binding on all parties hereto.

                         [SIGNATURES ON FOLLOWING PAGE]

                                       14

     IN WITNESS WHEREOF,  the Investor and the Company have as of the date first
written above executed this Agreement.

RELATIONSERVE MEDIA, INC.

--------------------------------------
By:
Title:

INVESTOR

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

                                       15

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