DEF 14A 1 file1.htm

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )

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Soliciting Material Pursuant to §240.14a-12

SendTec, Inc.

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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SendTec, Inc.
877 Executive Center Drive West
Suite 300
St. Petersburg, Florida 33702

October 27, 2006

Dear Stockholder:

You are cordially invited to attend a Special Meeting of Stockholders of SendTec, Inc. (the ‘‘Company’’) on November 10, 2006 at 10:00 a.m. local time at our headquarters at 877 Executive Center Drive West, Suite 300, St. Petersburg, Florida 33702. The accompanying formal Notice of Special Meeting of Stockholders and Proxy Statement contain the items of business to be considered and acted upon at the Special Meeting.

We hope you will be able to attend this Special Meeting, but if you cannot, it is important that your shares be represented at the meeting. Thus, whether or not you plan to attend the Special Meeting, we urge you to sign and return the enclosed proxy card at your earliest convenience so that your shares will be represented at the meeting. If you so desire, you can withdraw your proxy and vote in person at the meeting.

We welcome the opportunity to share our thoughts about the Company with our stockholders at this Special Meeting and look forward to addressing your questions and comments. In order to attend in person, you must agree to abide by the rules established for the Special Meeting which will be available at commencement of the Special Meeting.


			Sincerely,

			Paul Soltoff
			Chairman of the Board of Directors

SendTec, Inc.
877 Executive Center Drive West
Suite 300
St. Petersburg, Florida 33702
Telephone: (727) 576-6630
Fax: (727) 576-4864

NOTICE OF SPECIAL MEETING
OF STOCKHOLDERS

To Be Held November 10, 2006

Notice is hereby given that a Special Meeting (the ‘‘Special Meeting’’) of the Stockholders of SendTec, Inc. (the ‘‘Company’’), a Delaware corporation, will be held at 10:00 a.m. local time on November 10, 2006 at our headquarters located at 877 Executive Center Drive West, Suite 300, St. Petersburg, Florida 33702, or such other date or time as to which the Special Meeting may be adjourned, to consider and act upon the following items of business:


	1.	To authorize an amendment to our Certificate of Incorporation to increase the number of authorized shares of our common stock, par value $0.001 per share, to 190,000,000 shares; and


	2.	To transact such other business that may properly come before the Special Meeting or any adjournments thereof.

All of the above matters are more fully described in the accompanying Proxy Statement.

Only stockholders of record at the close of business on October 9, 2006 will be entitled to receive notice of and to vote at the Special Meeting or any adjournment thereof. A list of all stockholders of record as of October 9, 2006 will be open for inspection by stockholders at the Special Meeting.

The enclosed Proxy Statement is being mailed on or about October 27, 2006.


			By Order of the Board of Directors

			Donald Gould
			Secretary

St. Petersburg, Florida
October 27, 2006

ALL STOCKHOLDERS ARE INVITED TO ATTEND THE SPECIAL MEETING. WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DATE, SIGN AND MAIL THE ENCLOSED PROXY CARD PROMPTLY SO THAT YOUR SHARES MAY BE REPRESENTED AT THE SPECIAL MEETING AND TO ENSURE A QUORUM. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES USING THE ACCOMPANYING ENVELOPE. IF YOU ATTEND THE SPECIAL MEETING, YOU MAY WITHDRAW YOUR PROXY AND VOTE YOUR SHARES. PROXIES CAN ALSO BE REVOKED BY SUBMITTING A NEW PROXY WITH A LATER DATE OR BY DELIVERING WRITTEN INSTRUCTIONS TO THE SECRETARY OF THE COMPANY.

When completing your proxy card, please sign your name as it appears printed. If signing as an attorney, executor, administrator, trustee or guardian, please give your full title. A proxy executed by a corporation must be signed by a duly authorized officer.

SendTec, Inc.

877 Executive Center Drive West
Suite 300
St. Petersburg, Florida 33702
Telephone: (727) 576-6630
Fax: (727) 576-4864

PROXY STATEMENT

SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD NOVEMBER 10, 2006

This Proxy Statement and accompanying form of proxy are furnished in connection with the solicitation of proxies by the Board of Directors of SendTec, Inc., a Delaware corporation (the ‘‘Company’’, ‘‘we’’ or ‘‘our’’), for the Special Meeting of Stockholders of the Company (the ‘‘Special Meeting’’) to be held at 877 Executive Center Drive West, Suite 300, St. Petersburg, Florida 33702 on November 10, 2006 at 10:00 a.m. local time and at any adjournments thereof.

At the Special Meeting, stockholders will be asked: (1) to authorize an amendment to our Certificate of Incorporation increasing the number of authorized shares of our common stock, par value $0.001 per share (the ‘‘Common Stock’’), to 190,000,000 shares; and (2) to transact such other business that may properly come before the Special Meeting or any adjournments thereof.

General

The enclosed proxy is solicited by the Board of Directors of the Company (the ‘‘Board’’) for the purposes set forth in the Notice of Special Meeting of Stockholders. The solicitation is being made by mail and we may also use our officers, employees and consultants to solicit proxies from stockholders either in person or by telephone, facsimile, e-mail or letter, without additional compensation. We will pay the cost for solicitation of proxies, including the preparation, assembly and mailing of this Proxy Statement and proxy. Such costs normally include charges from brokers and other custodians, nominees and fiduciaries for the distribution of proxy materials to the beneficial owners of our Common Stock. The approximate mailing date of this Proxy Statement, Notice of Special Meeting and form of proxy is October 27, 2006.

Pursuant to a vote of the Board on September 7, 2006, each stockholder of record at the close of business on October 9, 2006 (the ‘‘Record Date’’), is entitled to notice of and vote at the Special Meeting. As of the close of business on the Record Date, we had 46,015,142 shares of Common Stock outstanding. Each share of Common Stock outstanding on the Record Date entitles the holder thereof to one vote. Consistent with Delaware law and as provided under our By-laws, the holders of shares entitled to cast a majority of the votes entitled to be cast on a particular matter, present in person or represented by proxy, constitutes a quorum as to such matter.

Required Vote

Pursuant Section 242 of the Delaware General Corporation Law, the affirmative vote of the holders of a majority of our outstanding Common Stock entitled to vote thereon is required to approve the increase in our authorized capital under Proposal 1.

Inspector of Election

Votes cast by proxy or in person at the Special Meeting will be tabulated by persons appointed by our Board to act as Inspector of Election for the meeting, as provided by our By-laws. The Inspector of Election will count the total number of votes cast for approval of each proposal for purposes of determining whether a sufficient number of affirmative votes has been cast. The Inspector of Election will count shares represented by proxies that reflect abstentions and ‘‘broker non-votes’’ (i.e., shares

represented at the Special Meeting held by brokers or nominees as to which (i) instructions have not been received from the beneficial owners or persons entitled to vote and (ii) the broker or nominee does not have the discretionary voting power on a particular matter) as shares that are present and entitled to vote on the matter for purposes of determining the presence of a quorum. If your broker does not have discretion to vote your shares and you do not give your broker instructions, the votes will be broker non-votes. Abstentions and broker non-votes are not treated as a vote ‘‘for’’ or ‘‘against’’ the proposal to increase our authorized capital, which have the same effect as a vote against Proposal 1.

Proxies

Proxies returned to us or our transfer agent, American Stock Transfer and Trust Co. (‘‘Transfer Agent’’), and properly executed will be voted in accordance with the stockholders’ instructions. You may specify your choice by appropriately marking the enclosed proxy card. Brokers holding shares for the account of their clients may vote such shares in the manner directed by their clients.

Any proxy which is timely signed and returned with no other markings will be voted ‘‘for’’ the proposal to increase our authorized capital. The proxies also give our Board discretionary authority to vote the shares represented thereby on any matter which was not known as of the date of this Proxy Statement and is properly presented for action at the Special Meeting.

The execution of a proxy will in no way affect your right to attend the Special Meeting and vote in person. You have the right to revoke your proxy prior to the Special Meeting by giving notice to our Corporate Secretary, Donald Gould, at our executive offices. You may also complete and submit a new proxy prior to the Special Meeting or you may revoke a previously submitted proxy at the Special Meeting by giving notice to our Secretary at the Special Meeting.

For convenience in voting your shares on the enclosed proxy card, we have enclosed a postage-paid return envelope to our Transfer Agent, who will assist in tabulating the stockholder vote.

PROPOSAL NO. 1

INCREASE IN OUR AUTHORIZED CAPITAL

Background of the Proposal

On October 30, 2005, our subsidiary, SendTec Acquisition Corp. (‘‘STAC’’), sold $34.95 million of Senior Secured Convertible Debentures due October 30, 2009 (the ‘‘Debentures’’), pursuant to a Securities Purchase Agreement (the ‘‘SPA’’) between the Company, STAC and a group of institutional investors in connection with the purchase of substantially all of the assets of SendTec, Inc. from the globe.com, inc. At the time of this transaction, STAC operated independently from us as a minority owned subsidiary. The reason for this structure was that the institutional investors party to the SPA desired that their lien on the SendTec assets be structurally senior to the remainder of our business until such time as we had audited financials for the nine months ended September 30, 2005 and we could demonstrate that we met certain financial milestones for the nine months ended September 30, 2005.

Following the satisfaction of these financial milestones, on February 3, 2006, STAC became our wholly-owned subsidiary (the ‘‘Consolidation’’). Among the other transactions which occurred on February 3, 2006, we guaranteed the obligations of STAC and pledged our assets as security for the Debentures. In addition, as a result of the Consolidation with STAC, on February 3, 2006, the Debentures, initially convertible at $1.00 per share into STAC Common Stock, became convertible into our Common Stock at a conversion price of $1.50 per share. At the present conversion price the Debentures are convertible into 23.3 million shares of our Common Stock.

The Debentures bear interest at 6% per annum, payable in quarterly installments. After the first anniversary of the Consolidation, STAC may, in its sole discretion, redeem all, but not less than all, of

the outstanding principal amount of the Debentures plus accrued but unpaid interest and interest not yet accrued but that would be payable through maturity. In addition to STAC's optional redemption right, commencing November 1, 2007, STAC is required to redeem 6.25% of original principal amount of the Debentures on the first day of every November, February, May and August. All amounts outstanding under the Debentures are due and payable on October 30, 2009 (the ‘‘Maturity Date’’).

The entire principal amount of the Debentures may become due before the Maturity Date upon the occurrence of certain events. Upon a change in control of STAC, the holders may require STAC to repurchase the Debentures in whole or in part, plus accrued but unpaid interest. Furthermore, upon an event of default, as defined in the Debentures, at the holders' election, the full principal amount of the Debentures, plus interest, becomes immediately due and payable in cash, or the Debentures will remain outstanding and continue to be paid in the ordinary course except that the mandatory quarterly redemptions shall equal 12% of the original principal amount and interest shall accrue at 18% per annum.

Beginning on the date of the Consolidation, the Company became subject to certain financial covenants contained in the SPA as long as any amount of the Debentures remains outstanding. We would not have been in compliance with those financial covenants as of the date of Consolidation. Therefore, in connection with the Consolidation, we entered into a letter agreement with the Debenture holders in which the Debenture holders agreed to (a) forbear to call a covenant default of STAC’s breach of the financial covenants, and (b) amend the Debentures to substantially eliminate the requirement for the Company to have complied with the financial covenants at any time up to the date of the Consolidation and to comply with them during the year ended December 31, 2005. The financial covenants, as amended on February 3, 2006, required us to attain minimum EBITDA of $8,434,000 for the year ended December 31, 2006, including EBITDA of at least $1,257,000, $2,013,000, $2,324,000 and $2,824,000 for the first quarter, second quarter, third quarter and fourth quarter of 2006, respectively, and quarterly EBITDA thereafter of $2,840,000 until the Debentures were paid in full. In addition, we were restricted from making capital expenditures in excess of $550,000, $375,000 and $300,000 during each of the quarters ended March 31, 2006, June 30, 2006 and September 30, 2006, respectively, and $250,000 per quarter thereafter, until the Debentures were paid in full. We were also to maintain minimum cash balances of $2,500,000 in the first quarter of 2006, $2,750,000 in the second quarter of 2006, $3,000,000 in each of the third and fourth quarters of 2006 and $4,000,000 thereafter, until the Debentures were paid in full.

As of March 31, 2006, we were not in compliance with certain of the financial covenants, and on May 19, 2006, more than 75% of the Debenture holders waived the Company’s breach of these covenants pursuant to a letter agreement dated May 19, 2006. Under the terms of this waiver, the Debenture holders agreed to permanently forbear their right to (a) declare the Company in default of the Debentures and (b) demand acceleration of the loan; however, such waiver related solely to the Company’s non-compliance with the covenants as of March 31, 2006. The waiver did not amend any other terms of the Debenture nor did it waive the requirement for us to maintain compliance with any covenants contained in the SPA at any other times subsequent to March 31, 2006.

In early summer 2006, we determined that we would be non-compliant with certain financial covenants for the second quarter ended June 30, 2006 as of the filing of our Form 10-Q for such period. In light of this expectation, management undertook a comprehensive process to retain a financial advisor to assist the Company to both (i) obtain a waiver for non-compliance with the June 30, 2006 covenants and (ii) restructure the terms of the Debenture and SPA in an effort to avoid future instances of non-compliance. On July 27, 2006, we engaged Burnham Hill Partners, a division of Pali Capital, Inc. (‘‘BHP’’), an experienced financial advisory and restructuring firm, to act as our exclusive financial advisor in connection with obtaining a waiver for the non-compliance with the June 30, 2006 covenants and the proposed restructuring of the Debentures. On August 21, 2006, we entered into a letter agreement with the holders of the Debentures. The letter agreement: (i) waived certain Events of Default; (ii) amended and clarified certain of the terms and provisions of the SPA; and (iii) acknowledged the intent of the parties to negotiate and execute definitive agreements in order to effectuate the intent and purposes of the letter agreement and pursue all required consents.

Inasmuch as the amendment to the SPA and the Debentures reduces the conversion price of the Debentures to $0.50 per share of Common Stock and provides for issuance of additional warrants, the Company has insufficient authorized Common Stock available under its existing Certificate of Incorporation to effectuate the intent and purposes of the agreements. Therefore, approval of stockholders to increase our authorized Common Stock is required to affect the intent and purpose of the agreements.

On September 7, 2006, BHP met with the Board of Directors, following extensive meetings and discussions with members of management, and delivered its oral advice that the adjustments contemplated in the agreement were advisable. Following such discussions, the Board of Directors adopted a resolution requiring submission to stockholders for approval of a proposal providing for an amendment to our Certificate of Incorporation to increase our authorized capital to 190,000,000 shares of Common Stock from 90,000,000 shares of Common Stock. Pursuant to Section 242 of the Delaware General Corporation Law, such an amendment must be approved by the holders of a majority of the issued and outstanding shares of our Common Stock. A form of the Certificate of Amendment to our Certificate of Incorporation is set forth as Exhibit A annexed hereto.

In consideration for its services, BHP received a cash fee of $50,000 and was issued warrants to purchase 250,000 shares of Common Stock at $0.60 per share.

We entered a definitive agreement pursuant to the letter agreement with more than 75% of the Debenture holders on September 27, 2006.

As of the Record Date, we had outstanding 46,015,142 shares of Common Stock. We also had
(i) 13,533,486 shares of our Common Stock underlying outstanding options and warrants, (ii) 3,164,000 shares reserved for issuance pursuant to our stock option plans, and (iii) $34.95 million aggregate principal amount the Debentures convertible into an aggregate of 23,300,000 shares of our Common Stock at the present conversion price of $1.50 per share.

Modified Terms of Debentures and Related Agreements

The proposed amendments to the Debentures include, among other things, reducing the price at which the Debentures convert into shares of our Common Stock to $0.50 per share, and giving us the option, at our discretion, to make 50% of the payments for interest and other amounts due under the Debentures on November 1, 2006 and February 1, 2007 in shares of our Common Stock, and, subject to certain limitations, 100% of interest and others amount due for payment dates thereafter. As a result, it is estimated that if the Debentures were converted in full under the proposed Debenture amendment at $0.50 per share, we would be required to issue approximately 69.9 million shares of Common Stock, which is approximately 46.6 million more shares than the approximately 23.3 million shares of Common Stock we would be required to issue under the present conversion price of the Debentures. As of the Record Date, taking into account issued and outstanding shares of Common Stock, shares underlying outstanding options and warrants, shares reserved for issuance under our stock option plans, and approximately 23.3 million shares of Common Stock presently issuable upon conversion of the Debentures at $1.50 per share, the present conversion price, we would have 3,987,372 shares of Common Stock available for issuance under our existing Certificate of Incorporation.

Accordingly, unless stockholders approve Proposal No. 1, the amendments to the Debentures would not become effective. Therefore, the holders of our Debentures have made the effectiveness of the agreement contingent upon approval of this proposal to increase our authorized capital. For additional information on the effects of a conversion or redemption of the Debentures on our capitalization please see ‘‘Illustrations of Potential Redemption/Conversion of the Debentures’’ beginning on page 6 below.

Under the proposed amendments, 50% of the original principal amount of the Debentures will, subject to the other conditions set forth in this paragraph, automatically convert into shares of Common Stock if the minimum closing bid price of our Common Stock equals or exceeds $0.75 per share for 15 out of 20 consecutive trading days. The remaining 50% of the original principal amount of

the Debentures will automatically convert into shares of our Common Stock if the minimum closing bid price of our Common Stock equals or exceeds $1.00 per share for 15 out of 20 consecutive trading days. In order for such automatic conversion to occur, there must be an effective registration statement under the Securities Act of 1933, as amended, covering the resale of the shares underlying the Debentures. In addition, if the average daily dollar volume of our Common Stock is less than $1.0 million, then the conversion will be limited to $1.0 million of the original principal amount of the Debentures for each 20 trading day period that the minimum bid price for our Common Stock equals or exceeds the applicable threshold of $0.75 or $1.00; and if the average daily dollar volume of our Common Stock exceeds $1.0 million but is less than $2.0 million, the conversion of the Debentures will be limited to $2.0 million of the original principal amount of the Debentures for each 20 trading day period. There will be no limitations on the conversion of the Debentures if the average daily dollar volume of our Common Stock exceeds $2.0 million.

In the twenty trading day period from September 15, 2006 through October 12, 2006 the average daily dollar volume of our Common Stock was approximately $15,030. Therefore, if the closing bid price of our Common Stock exceeded $0.75 for at least 15 trading days during such 20 trading day period and the other conditions were met, $1 million of the principal amount of the Debentures would have converted into 2,000,000 shares of our Common Stock. The closing bid price of our common stock on October 12, 2006 was $0.33 and it has not exceeded $0.75 since June 22, 2006.

Additional Terms of the Agreement

As discussed above, we have been unable to comply previously with certain of our financial covenants under the SPA, in part, as a result of losses experienced in our RelationServe Access, Inc. and Friendsand.com, Inc. subsidiaries, which were sold and closed, respectively, in July 2006. However, as a growth company, we believe that elimination of these financial covenants and adoption of new financial covenants would be beneficial to our business and results of operations and avoid future potential defaults. Although the amendment of these financial covenants and the agreement and its implementation, generally, does not require stockholder approval, it is not likely that the Debenture holders will agree to amend these financial covenants or any other provisions of the Debentures and related agreements, unless the charter amendment described as Proposal No. 1 is approved and the conversion price is reduced.

The terms of the previously amended financial covenants referenced above require us to have EBITDA of $8,434,000 for fiscal 2006 (including EBITDA of at least $1,257,000, $2,013,000, $2,324,000 and $2,824,000 for the first quarter, second quarter, third quarter and fourth quarter of 2006, respectively) and thereafter quarterly EBITDA of $2,840,000 until the Debentures are paid in full. We are also required to maintain minimum cash balances of $3,000,000 for the fiscal year 2006, and $4,000,000 per quarter for each quarter thereafter. Our actual EBITDA for the first and second quarters of 2006 was ($2,354,156) and ($3,132,134), respectively. Our actual cash balances at the end of the first and second quarters of 2006 were $5,270,406 and $4,635,472, respectively. In addition, we are prohibited from making any capital expenditures in excess of $300,000 during the third quarter of 2006, and $350,000 during the fourth quarter of 2006 and each quarter thereafter until maturity of the Debentures.

We do not believe that we can comply with these financial covenants as they presently apply to us, which may result in an event of default under the Debentures. If we default on our obligations under the Debentures or related agreements, the Debenture holders may accelerate the maturity of the Debentures, plus increased interest, and any default penalties. This would require us to make a cash payment of approximately $48,755,250. The cash required to pay such amounts will most likely come out of our working capital. Since we rely on our working capital for our day-to-day operations, such a default would have a material adverse effect on our business, operating results, or financial condition. In such event, we could be forced to restructure, file for bankruptcy, sell assets, or cease operations, any of which would put our Company, our investors and the value of our Common Stock, at significant risk. Further, our obligations under the Debentures are secured by substantially all of our assets. Failure to fulfill our obligations under the Debentures and related agreements could lead to loss of these assets, which would be detrimental to our operations.

The amendments to the financial covenants would eliminate the restrictions on our capital expenditures, reduce the minimum cash balance requirements, and use our net revenues determined in accordance with GAAP rather than EBITDA as a benchmark for the financial covenants. We believe that net revenues is a more appropriate benchmark for the financial covenants than EBITDA. As a company in its early stages of growth, we grow our revenues by investing heavily in expanding our business. Because of the significant costs associated with expanding and growing our business, we may not have significant EBITDA even if we experience increases in our net revenue, until later stages of our growth. The amended terms of the financial covenants would require us to have net revenues of $4,675,000 for the third and fourth quarters of 2006, and net revenues of $5,025,000, $5,175,000, $5,450,000, and $5,700,000 for the first, second, third and fourth quarters of 2007, respectively. Our net revenues for the first and second quarter of 2006 were $11,388,975 and $11,575,998, respectively. We cannot guarantee that our net revenues for future periods will be similar to our past results.

The required minimum cash balances would be $2,750,000 for the third quarter of 2006, $3,000,000 for the fourth quarter of 2006 and the first quarter of 2007, and $3,250,000, $3,500,000 and $3,750,000 for the second, third and fourth quarters of 2007, respectively. The Debenture holders have agreed to waive our compliance with the unamended terms of the financial covenants for the quarters ended June 30, 2006 and September 30, 2006 pending the terms of the agreement becoming effective. While we cannot give any assurances, we believe that an event of default on the Debentures is less likely under the amended financial covenants. In addition, we would have greater flexibility to make capital expenditures to grow our business.

Other provisions of the agreement would relieve us of required quarterly redemptions of the principal amount of the Debentures. Instead, we would have the option to redeem in whole or in part, all or any portion (but not less than 25%) of the original principal amount of the Debentures plus accrued interest, interest not yet accrued but that would be payable through maturity and other amounts due under the Debentures pro rata for such principal amount redeemed. In the event that we redeem any portion of the Debentures, we would be required to issue five-year warrants to purchase 500,000 shares of our Common Stock at an exercise price of $0.50 per share, subject to customary anti-dilution provisions, to the Debenture holders for each $1.0 million of Debentures redeemed.

All unpaid principal, interest and other amounts due under the Debentures will be payable on March 31, 2008, the new maturity date of the Debentures, as amended following the effectiveness of the definitive agreement with the Debenture holders upon approval of this Proposal No. 1.

Debenture holders may not convert the Debentures into shares of Common Stock if as a result of such conversion, the Debenture holder would be deemed to beneficially own in excess of 9.99% of the issued and outstanding shares of our Common Stock as opposed to 4.99% under the present terms of the Debenture. However, such restrictions on conversion of the Debentures may be waived by the Debenture holder to whom such restriction applies upon 61 days written notice to the Company. In addition, Debenture holders have agreed not to maintain a net short position in our Common Stock as long as any amount remains outstanding under the Debentures.

The amendments to the Debentures proposed by the letter agreement, as described above, will not become effective unless we increase our authorized capital to allow for full conversion of the Debentures into shares of our Common Stock at $0.50 per share and the payment of interest and other amounts due on the Debentures in shares of our Common Stock. Therefore, management strongly recommends a vote for this proposal.

Amending our Certificate of Incorporation to increase the number of authorized shares of Common Stock will not alter the number of shares presently issued or change the relative rights of holders of the issued and outstanding shares of Common Stock. If the amendment is approved by the stockholders, the additional shares of Common Stock will be identical in all respects to our presently authorized shares of Common Stock. Holders of Common Stock have no preemptive rights to purchase or subscribe for any newly issued shares of Common Stock. Therefore, the authorization and subsequent issuance of additional shares of Common Stock will, among other things, have a dilutive effect on the voting power, earnings per share and equity of existing holders of Common Stock;

however, the actual effect on the present holders of Common Stock cannot be ascertained until additional shares of Common Stock are issued in the future. No dissenters' rights under the Delaware General Corporation Law are afforded to our stockholders as a result of the adoption of this resolution.

Illustration of Potential Redemption/Conversion of the Debentures

The following table sets forth the effect on our capitalization as of the Record Date of: (i) the hypothetical conversion of the Debentures at the present conversion price of $1.50; (ii) the hypothetical conversion of the Debentures at the proposed conversion price of $0.50 per share; and (iii) the hypothetical redemption of the Debentures under the proposed terms of the agreement for cash and warrants to purchase 500,000 shares of our Common Stock per $1 million of principal redeemed of $10 million, $20 million and $34.95 million of the original principal amount of the Debentures. Presently, the entire $34.95 million original amount of the Debentures is outstanding.


	Conversion of the Debentures at the present conversion price of $1.50 per share
	$10 Million		$20 Million		$34.95 Million
Shares of Common Stock outstanding		46,015,142		46,015,142		46,015,142
Shares issued upon conversion		6,666,667		13,333,333		23,300,000
Total shares outstanding after conversion		52,681,809		59,348,475		69,315,142
Shares of Common Stock underlying unconverted principal amount of the Debentures		16,633,333		9,966,667		—
Outstanding Options and Warrants		13,533,486		13,533,486		13,533,486
Total shares outstanding and shares underlying unconverted debentures, options and warrants		82,848,628		82,848,628		82,848,628
Shares reserved for issuance under our stock plans		3,164,000		3,164,000		3,164,000
Total shares remaining available for issuance		3,987,372		3,987,372		3,987,372


	Conversion of the Debentures at the proposed conversion price of $0.50 per share
	$10 Million			$20 Million			$34.95 Million
Shares of Common Stock outstanding after conversion		46,015,142			46,015,142			46,015,142
Shares issued upon conversion		20,000,000			40,000,000			69,900,000
Total shares outstanding after conversion		66,015,142			86,015,142			115,915,142
Shares of Common Stock underlying outstanding principal amount of the Debentures		49,900,000			29,900,000			—
Outstanding Options and Warrants		13,533,486			13,533,486			13,533,486
Total shares outstanding and shares underlying outstanding debentures, options and warrants		129,448,628			129,448,628			129,448,628
Shares reserved for issuance under our stock plans		3,164,000			3,164,000			3,164,000
Deficiency in shares available for issuance if Proposal 1 is not approved upon amendment of the Debentures		(42,612,628	)		(42,612,628	)		(42,612,628	)
Shares available for issuance if Proposal 1 is approved upon amendment of the Debentures		57,387,372			57,387,372			57,387,372


	Redemption of the Debentures for Cash and Warrants
	$10 Million			$20 Million			$34.95 Million
Shares of Common Stock outstanding after redemption		46,015,142			46,015,142			46,015,142
Shares issued upon redemption		—			—			—
Total shares outstanding after redemption		46,015,142			46,015,142			46,015,142
Shares of Common Stock underlying outstanding principal amount of the Debentures		49,900,000			29,900,000			—
Outstanding Options and Warrants		13,533,486			13,533,486			13,533,486
Warrants issued to Debenture holders in connection with redemption		5,000,000			10,000,000			17,475,000
Total outstanding options and warrants		18,533,486			23,533,486			31,008,486
Total shares outstanding and shares underlying outstanding debentures, options and warrants		114,448,628			99,448,628			77,023,628
Shares reserved for issuance under our stock plans		3,164,000			3,164,000			3,164,000
Deficiency in shares available for issuance if Proposal 1 is not approved upon amendment of the Debentures		(27,612,628	)		(12,612,628	)		—
Shares available for issuance if Proposal 1 is approved upon amendment of the Debentures		72,387,372			87,387,372			109,812,372

Other Information

The form of Amendment to the SPA and the Debentures is set forth as Exhibit B annexed hereto.

Certain Debenture holders, owning approximately 15% of the Common Stock on the Record Date, have agreed to cast their vote ‘‘For’’ Proposal No. 1. In addition management of the Company owns in excess of an additional 18.6% of the Common Stock on the Record Date and are anticipated to vote such shares ‘‘For’’ Proposal No. 1.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information regarding beneficial ownership of our Common Stock has been presented in accordance with the rules of the SEC. Under these rules, a person or entity may be deemed to beneficially own any shares as to which such person or entity, directly or indirectly, has or shares voting power or investment power, or has the right to acquire voting or investment power within 60 days through the exercise of any stock option or other right. The percentage of beneficial ownership as to any person as of a particular date is calculated by dividing (a) (i) the number of shares beneficially owned by such person, plus (ii) the number of shares as to which such person has the right to acquire voting or investment power within 60 days, by (b) the total number of shares outstanding as of such date, plus any shares that such person has the right to acquire from us within 60 days. Including those shares in the tables does not, however, constitute an admission that the named stockholder is a direct or indirect beneficial owner of those shares.

Based solely upon information available to us, the following table sets forth certain information regarding beneficial ownership of our Common Stock as of October 6, 2006 by (i) each person or entity known by us to own beneficially more than 5% of our outstanding Common Stock, (ii) each of our directors and executive officers, and (iii) all directors and executive officers as a group. Except as otherwise indicated, each of the stockholders named below has sole voting and investment power with respect to such shares of Common Stock:


Name and Address of Beneficial Owner⁽¹⁾	Number of Shares Beneficially Owned			Percentage Beneficially Owned
Paul Soltoff		3,341,276	⁽²⁾	7.3%
Donald Gould		2,248,013	⁽³⁾	4.9%
Eric Obeck		2,788,487	⁽⁴⁾	6.1%
Robert G. Beauregard		0		0
Vincent Addonisio		0		0
Anthony Abaté		0		0
LB I Group Inc.		3,024,484	⁽⁵⁾	6.6%
MHB Trust		5,392,500	⁽⁶⁾	11.0%
Leslie T. Altavilla Revocable Trust⁽⁷⁾		2,780,000		6.0%
Shawn McNamara		103,334	⁽⁸⁾	*
Adam Wasserman		0		0
Danielle Karp		100,000	⁽⁹⁾	*
Ohad Jehassi		105,000	⁽¹⁰⁾	*
Mandee Heller Adler		200,000	⁽¹¹⁾	*
Scott Young		0		0
All directors and executive officers as a group (6 people)		8,377,776	⁽¹²⁾	18.6%


*	Represents less than 1%.


(1)	Unless otherwise indicated, the address of each stockholder listed above is c/o the executive offices of SendTec, Inc.


(2)	Based on a Schedule 13D filed on March 1, 2006.


(3)	Based on a Schedule 13D filed on March 1, 2006.


(4)	Based on a Schedule 13D filed on March 1, 2006.


(5)	Based on a Schedule 13D filed on July 5, 2006, as amended October 4, 2006, and other information, LB I Group Inc. beneficially owns 3,024,484 shares of Common Stock. Lehman Brothers Inc. is the parent company of LB I Group. Lehman Brothers Holdings Inc., a public reporting company, is the parent company of Lehman Brothers Inc. The address for LB I


	Group is c/o Lehman Brothers Inc., 399 Park Avenue, New York, New York 10022, Attn: Eric Salzman and Will Yelsits. Lehman Brothers Inc. is a registered broker-dealer.

(6)

Based on a Schedule 13D filed April 4, 2006 by MHB Trust and Southpac Trust International, Inc. Includes immediately exercisable warrants to purchase 2,792,500 shares of Common Stock. MHB Trust’s address is c/o Southpac Trust Limited, ANZ House, Main Road, Avara Raratongo, Cook Islands. Southpac Trust International, Inc. serves as trustee to the MHB Trust. The natural control persons of the MHB Trust are Brian Mason, Leanne Corvette, Doreen Ford, Tokoa John, Serena Hunter, Rachel Terri, Tracey Williams and Ernie Dover.


(7)	The business address for the trust is 14300 Clay Terrace Blvd., Ste. 269, Carmel, IN 46032. The natural control person of the trust is Leslie T. Altavila who serves as trustee.


(8)	Consists of an option to purchase 100,000 shares of Common Stock exercisable within 60 days and 3,334 shares of Restricted Common Stock granted under the 2005 Plan. Mr. McNamara’s business address is c/o RelationServe Access, 6700 North Andrews Ave, Ft. Lauderdale, 33390.


(9)	Consists of immediately exercisable options to purchase up to 100,000 shares of Common Stock. Ms. Karp’s business address is c/o RelationServe Access, 6700 North Andrews Ave, Ft. Lauderdale, 33390.


(10)	Consists of an immediately exercisable option to purchase 25,000 shares of Common Stock and 80,000 shares of restricted Common Stock granted under the 2005 Plan. Mr. Jehassi’s business address is c/o RelationServe Access, 6700 North Andrews Ave, Ft. Lauderdale, 33390.


(11)	Includes immediately exercisable option to purchase 100,000 shares of Common Stock granted under the 2005 Incentive Plan. Ms. Adler’s business address is c/o RelationServe Access, 6700 North Andrews Ave, Ft. Lauderdale, 33390.


(12)	Does not include shares beneficially owned by Company’s former President, Danielle Karp; former Chief Operating Officer Ohad Jehassi; former Chief Executive Officers, Mandee Heller Adler and Scott Young; former Senior Vice President, Shawn McNamara.

OTHER MATTERS

It is not expected that any matters other than those in the Notice of Special Meeting, as described in this Proxy Statement, will be brought before the Special Meeting. If any other matters are presented, however, it is the intention of the persons named in the proxy to vote the proxies in accordance with the discretion of the persons named in such proxy.

COMMUNICATIONS WITH THE BOARD OF DIRECTORS

Stockholders wishing to communicate with the Company’s Board as a whole or with certain directors, including committee chairpersons or the Chairman of the Board, individually, may do so by writing the Corporate Secretary at 877 Executive Center Drive West, Suite 300, St. Petersburg, Florida 33702. Each stockholder communication should include an indication of the submitting stockholder’s status as a stockholder of the Company and eligibility to submit such communication. Each such communication will be received for handling by the Corporate Secretary, who will maintain originals of each communication received and provide copies to (i) the Chairman and (ii) any other appropriate committee(s) or director(s) based on the expressed desire of the communicating stockholder and content of the subject communication. The Corporate Secretary also will coordinate with the Chairman to facilitate a response, if it is believed that a response is appropriate or necessary, to each communication received. The Board, or a committee designated by the Board, will review all stockholder communications received on a periodic basis. The Board reserves the right to revise this policy in the event that this process is abused, becomes unworkable or otherwise does not efficiently serve the purposes of the policy.

FORWARD-LOOKING STATEMENTS

This Proxy Statement may contain certain ‘‘forward-looking’’ statements, which represent our expectations or beliefs, including but not limited to, statements concerning our operations, economic performance, financial condition, growth and acquisition strategies, investments, and future operational plans. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as ‘‘may,’’ ‘‘will,’’ ‘‘expect,’’ ‘‘believe,’’ ‘‘anticipate,’’ ‘‘intend,’’ ‘‘could,’’ ‘‘estimate,’’ ‘‘might,’’ or ‘‘continue’’ or the negative or other variations thereof or comparable terminology are intended to identify forward-looking statements. These statements, by their nature, involve substantial risks and uncertainties, certain of which are beyond our control, and actual results may differ materially depending on a variety of important factors, including uncertainty related to acquisitions, governmental regulation, managing and maintaining growth, volatility of stock prices and any other factors discussed in this and other of our filings with the Securities and Exchange Commission.

AVAILABLE INFORMATION

We are subject to the information and reporting requirements of the Securities Exchange Act of 1934, as amended, and in accordance with this act, we file periodic reports, documents and other information with the Securities and Exchange Commission relating to our business, financial statements and other matters. These reports and other information may be inspected and are available for copying at the offices of the Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549. Our Securities and Exchange Commission filings are also available to the public from the Securities and Exchange Commission’s website at http://www.sec.gov.

Exhibit A

CERTIFICATE OF AMENDMENT

OF THE

AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

SENDTEC, INC.

Under Section 242 of the Delaware General Corporation Law

It is hereby certified that:

The name of the corporation is SendTec, Inc.

The Amended and Restated Certificate of Incorporation of the Corporation is hereby amended by amending and restating Article FOURTH thereof as follows:

FOURTH: A. CLASSES AND NUMBERS OF SHARES. The total number of shares of stock which the Corporation shall have authority to issue is two-hundred million (200,000,000). The Classes and aggregate number of shares of each class which the Corporation shall have authority to issue are as follows:

1. One Hundred Ninety Million (190,000,000) shares of Common Stock, par value $0.001 per share (the ‘‘Common Stock’’); and

2. Ten Million (10,000,000) shares of Preferred Stock, par value $0.001 per share (the ‘‘Preferred Stock’’); and

B. BLANK CHECK POWERS. The Corporation may issue any class of the Preferred Stock in any series. The Board of Directors shall have authority to establish and designate series, and to fix the number of shares included in each such series and the variations in the relative rights, preferences and limitations as between series, provided that, if the stated dividends and amounts payable on liquidation are not paid in full, the shares of all series of the same class shall share ratably in the payment of dividends including accumulations, if any, in accordance with the sums which would be payable on such shares if all dividends were declared and paid in full, and in any distribution of assets other than by way of dividends in accordance with the sums which would be payable on such distribution if all sums payable were discharged in full.

Shares of each such series when issued shall be designated to distinguish the shares of each series from shares of all other series.

The amendment of the Certificate of Incorporation herein certified has been duly adopted in accordance with the provisions of Section 242 of the General Corporation Law of the State of Delaware pursuant to a resolution adopted by the Corporation’s Board and by the affirmative vote of the holders of a majority of the capital stock of the Corporation at a meeting duly noticed and conducted in accordance with Section 222 of the General Corporation Law of the State of Delaware and the By-Laws of the Corporation.

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IN WITNESS WHEREOF, said SendTec, Inc. has caused this Certificate to be signed by Paul Soltoff, its Chairman and Chief Executive Officer, and attested by Donald Gould, its Secretary this day of , 2006.

A-2

Exhibit B

AMENDMENT

Reference is hereby made to (i) that certain Securities Purchase Agreement dated as of October 31, 2005 (the ‘‘SPA’’) by and among SendTec, Inc. (formerly RelationServe Media, Inc.), a Delaware corporation (the ‘‘Company’’), SendTec Acquisition Corp., a Delaware corporation (‘‘STAC’’ or ‘‘Issuer’’), each purchaser identified on the signature pages thereto (each, including its successors and assigns, a ‘‘Purchaser’’ and collectively the ‘‘Purchasers’’), and Christiana Corporate Services, Inc., a Delaware corporation, in its capacity as administrative agent for the Purchasers (together with its successors and assigns in such capacity, the ‘‘Agent’’), and (ii) the Senior Secured Convertible Debentures of STAC, dated October 31, 2005 (including Appendix A annexed thereto), as amended through the date hereof, issued pursuant to the SPA (the ‘‘Debentures’’ and each of the Debentures, a ‘‘Debenture’’). Capitalized terms used herein, but not otherwise defined, shall have the meanings ascribed to such terms in the SPA, or the Debentures, respectively.

WHEREAS, the Required Purchasers, as such term is defined in the SPA and the Debentures, on August 21, 2006 entered into a letter agreement (with attached term sheet annexed thereto, the ‘‘Letter Agreement’’) that: (i) waived certain Events of Default; (ii) amended and clarified certain of the terms and provisions of the SPA; and (iii) acknowledged the intent of the parties to negotiate and execute definitive agreements in order to effectuate the intent and purposes of the Letter Agreement and pursue all required consents, and desire to set forth herein specific provisions of the SPA and the Debentures, as modified by the agreement of the parties upon satisfaction of each of the conditions set forth in the Letter Agreement.

NOW, THEREFORE, in consideration of the premises and mutual covenants hereinafter set forth, the parties hereto, intending to be legally bound, hereby agree as follows:

1. The effectiveness of the amendments to the SPA and Debenture set forth in this Amendment pursuant to Paragraph 2 and Paragraph 3 hereof (and therefore, the ‘‘Closing Date’’ as provided in the term sheet annexed to the Letter Agreement) shall be the date of filing and acceptance by the Secretary of State of the State of Delaware of an amendment to the Certificate of Incorporation of the Company increasing to 190,000,000 the authorized common stock, par value $0.001 per share, of the Company, which filing shall be following stockholder approval of such amendment (the ‘‘Effective Date’’). This Amendment and any obligations of the Purchasers under the Letter Agreement shall be of no further force and effect if the Effective Date has not occurred prior to December 16, 2006, unless such date is extended by the Required Percentage.

2. Amendments to the SPA.

(A) Section 1.1 of the SPA is hereby amended by adding the following definition:

‘‘Net Revenues’’ means net revenues calculated in accordance with GAAP as applied by the Company in its audited financial statements.’’

(B) Section 4.22(a) of the SPA is hereby amended by deleting such paragraph in its entirety and substituting therefore ‘‘INTENTIONALLY LEFT BLANK’’.

(C) Section 4.22(b) of the SPA is hereby amended by replacing the caption ‘‘Minimum EBITDA’’ and the words ‘‘Consolidated EBITDA’’ with the words ‘‘Net Revenues.’’

(D) Schedule 4.22(b) to the SPA is hereby amended by deleting such schedule in its entirety and replacing it with Schedule 4.22(b) attached hereto.

(E) Schedule 4.22(c) to the SPA is hereby amended by deleting such schedule in its entirety and replacing it with Schedule 4.22(c) attached hereto.

(F) Section 4.22(d) to the SPA is hereby amended in its entirety as follows:

‘‘Calculation of Financial Covenants. With respect to each of the calculations performed under this Section 4.22, within 30 days following each measurement period,

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the Company shall deliver to the Purchasers a certificate, duly executed by its Chief Executive Officer and Chief Financial Officer, setting forth the calculations of the financial covenants set forth in this Section 4.22, including information sufficient to confirm such calculation. Absent manifest error, such calculations shall be deemed accepted by Holders unless written objection thereto is made to Company within 60 days following the filing of the Company’s consolidated financial statements for such measurement period with the Commission in accordance with the requirements of the Exchange Act. To the extent any information set forth constitutes non-public information, Holders will agree, upon the request of the Company, to be bound to treat all such information confidentially and shall agree to the terms of the Company’s non-disclosure agreement (the form of which is annexed hereto as Exhibit A) as a condition to receiving such information, or alternatively may request that the Company not provide such certificate and calculation, provided however, the Company shall not be deemed to have taken a position as to what information shall be deemed to constitute material non-public information. To the extent any Holder requests not to receive such certificate and calculation, such Holder shall be deemed to have waived any rights or remedies arising from the Company’s failure to deliver such certificate and calculation.’’

3. Amendments to the Debentures.

(A) The new Maturity Date of the Debentures shall be March 31, 2008, and the second paragraph of the Debentures is hereby amended by amending the phrase that includes the definition of Maturity Date, and the Maturity Date of the Debentures, as follows:

‘‘March 31, 2008 or such earlier date as this Debenture is required or permitted to be repaid as provided hereunder (the ‘‘Maturity Date’’),’’.

(B) Section 2.1(a) ‘‘Payment of Interest in Cash or Kind’’ of the Debentures (as set forth in Section 2.1(a) of Appendix A to the Debentures) is hereby amended by amending the first clause of ‘‘(y)’’ in its entirety as follows:

‘‘the average daily trading volume of the Common Stock on such market or exchange shall be equal to at least $250,000 (provided, however, that the Company shall have the option to pay one-half of the interest payment due on each of November 1, 2006 and February 1, 2007 in shares of Common Stock regardless of the average daily trading volume of the Common Stock and, if agreed by the Holders, the Interest Conversion Shares delivered may, if registered shares are not then available as required by the Equity Conditions, consist of shares that are subject to demand registration rights; provided further, that (1) such shares shall be registered no later than 90 days following the Interest Payment Date (and if not so registered shall be paid in cash, with Interest accruing from the original due date for payment), and (2) on the date of the effectiveness of any registration statement therefore (the ‘‘Special Effective Date’’), the Company shall deliver additional Interest Conversion Shares, if any, as determined by calculating the difference between the number of Interest Conversion Shares required to be delivered using the Interest Conversion Rate as of the applicable Interest Payment Date and as of the Special Effective Date) and’’

(C) Section 4(b) of the Debentures (as set forth in Section 3 of Appendix A to the Debentures) is hereby amended by deleting such Section 3, and inserting the following:

‘‘The Conversion Price set forth in Section 4(b) shall be $0.50, subject to adjustment as provided herein.’’

(D) Section 4(c) of the Debentures is hereby amended by deleting each reference therein to the percentage ‘‘4.99%’’ and replacing with the percentage ‘‘9.99%’’ which percentage may be waived in accordance with the procedures for waiver set forth in such Section 4(c).

(E) Section 4 of the Debentures is hereby amended by inserting the following:

‘‘(e) Mandatory Conversion. Notwithstanding anything herein or in the SPA to the contrary and after the Effectiveness Date (as defined in the Registration Rights

B-2

Agreement) so long as the Registration Statement is effective: (i) fifty (50%) percent of the original principal amount of this Debenture (the ‘‘Mandatory Conversion Amount’’) shall automatically, and without any action on the part of the Holder, convert into shares of Common Stock at the Conversion Price then in effect if the closing bid price of the Common Stock in the Trading Market as reported by Bloomberg shall equal or exceed $0.75 (the ‘‘Conversion Threshold’’) for 15 of the 20 consecutive Trading Days (the ‘‘Mandatory Conversion Period’’) and (ii) fifty (50%) percent of the original principal amount of this Debenture (the ‘‘Additional Mandatory Conversion Amount’’) shall automatically, and without any action on the part of the Holder, convert into shares of Common Stock at the Conversion Price then in effect if the closing bid price of the Common Stock in the Trading Market as reported by Bloomberg shall equal or exceed $1.00 per share (the ‘‘Additional Conversion Threshold’’), during a Mandatory Conversion Period’’). Notwithstanding the foregoing, if the average daily trading volume of the Common Stock during the Mandatory Conversion Period on such market or exchange is less than $1,000,000, then the Mandatory Conversion Amount or Additional Mandatory Conversion Amount, as the case may be, shall be limited to $1,000,000 of principal amount of Debentures for each Mandatory Conversion Period that the closing bid price for the Common Stock equals or exceeds the Conversion Threshold or the Additional Conversion Threshold, as the case may be. If the average daily trading volume of the Common Stock on such market or exchange is greater than $1,000,000, but less than $2,000,0000, then the Mandatory Conversion Amount or Additional Mandatory Conversion Amount, as the case may be, shall be limited to $2,000,000 of principal amount of Debentures for each Mandatory Conversion Period that the closing bid price for the Common Stock equals or exceeds the Conversion Threshold, or Additional Conversion Threshold, as the case may be. The limitations set forth in the immediately preceding two sentences shall irrevocably terminate upon the occurrence of average daily trading volume in excess of $2,000,000 in the Common Stock. for a Mandatory Conversion Period’’

(F) Section 1, Definitions, of the Debentures is hereby amended by deleting the following definitions: ‘‘Quarterly Redemption;’’ ‘‘Quarterly Redemption Amount;’’ and ‘‘Quarterly Redemption Date’’, and Section 6(a) and Section 6(b) of the Debentures are hereby amended by deleting such sections and substituting therefore ‘‘INTENTIONALLY LEFT BLANK’’.

(G) Section 6(c) of the Debentures is hereby amended to read in its entirety as follows:

‘‘Issuer Redemption. Notwithstanding any other provision contained herein to the contrary, at any time from the Effectiveness Date (as defined in the Registration Rights Agreement) through the Maturity Date, the Issuer may redeem, in whole or in part (in a single or series of transactions), all or any portion (but not less than twenty-five (25%) percent of the original principal amount of the Debentures in any individual Redemption Notice (as defined herein)) (the ‘‘Redemption Amount’’) by paying to the Holder the Redemption Price. The election to exercise its right to redeem must be by notice in writing (‘‘Redemption Notice’’), which Redemption Notice shall contain Evidence of Requisite Funds. The Redemption Notice shall specify the date for such optional redemption (the ‘‘Redemption Payment Date’’), which date shall be not less than 15 nor more than 20 Trading Days after delivery of the Redemption Notice. The Holder’s right to convert the principal amount of this Debenture pursuant to Section 4.1, with respect to the Redemption Amount, shall terminate five calendar days following the date of receipt of the Redemption Notice. On the Redemption Payment Date, the Issuer shall pay the Redemption Price to the Holders. In the event the Issuer fails to pay the Redemption Price on the Redemption Payment Date as set forth herein, then such Redemption Notice shall be null and void. ’’Redemption Price’’ shall mean: (A) the sum of: (i) the Redemption Amount, (ii) accrued but unpaid interest thereon through the Redemption Payment Date, (iii) the unpaid interest payments thereon, not yet accrued, but that would be payable thereon through the Maturity Date had the Redemption Amount been paid on the Maturity Date, and (iv) all liquidated damages and other amounts due and owing in respect of the Redemption Amount; and

B-3

(B) five-year Warrants, substantially identical to the Form of Warrant previously issued to Holders in connection with the SPA, to purchase 500,000 shares of Common Stock for each $1,000,000 of principal amount of Debentures redeemed, at a cash exercise price of $0.50 per share, which amount shall be subject to adjustment in accordance with the provisions of Section 5(a) of the Debentures. ‘‘Evidence of Requisite Funds’’ shall mean a firm commitment or other evidence reasonably satisfactory to the Holder that requisite funds have been deposited in a financial institution or that such funds have been committed by third parties and will be available to pay the cash portion of the Redemption Price on the Redemption Payment Date.

4. Short Sales and Confidentiality. The undersigned Holder represents and warrants to Issuer that Holder has not, directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with the Holder, executed any disposition, including short sales (including the location and/or reservation of borrowable shares of Common Stock for third parties or Holder), in the securities of the Company during the period commencing from the time that the Purchaser received a term sheet from the Company or any other Person setting forth the material terms of the transactions contemplated by this Amendment through the date that the Company’s Current Report on Form 8-K disclosing the material terms hereof was filed with the Commission; agrees not to execute any short sales following the date hereof, so long as any Debentures remain outstanding, in an amount greater than the number of shares of Common Stock that such purchaser owns or reasonably expects it could receive upon conversion of the Debentures and any other convertible securities of the Company owned by it. Other than with other Holders, (and officers and directors, agents, advisers and legal counsel), such Holder represents and warrants the it has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction) except as required by court order or applicable law, rule or regulation.

5. Registration Provisions. All shares of Common Stock issuable upon exercise of any of the securities issued pursuant to this Agreement, unless previously registered, shall be subject to registration for resale under the Securities Act of 1933, as amended, pursuant to the terms and conditions of the Registration Rights Agreement, subject to Required Percentage consent previously obtained that 110% of the conversion amount (in lieu of 130%) shall apply to the shares of Common Stock issuable pursuant to this Agreement. Notwithstanding anything contained in the Registration Rights Agreement to the contrary, the undersigned acknowledge the intent and purposes of the SPA providing for effectiveness of any amendment to the Registration Rights Agreement effective upon receipt of the Required Percentage.

6. Governing Law.This Amendment shall be governed by and construed in accordance with the internal laws of the State of New York, without reference to principles of conflicts of laws. Any dispute involving this Amendment or the agreements referred to herein shall be brought only in the United States District Court for the Southern District of New York.

7. BHP Warrants.The Purchasers hereby consent to (i) the issuance of 250,000 five-year warrants to purchase Common Stock (and the shares of Common Stock underlying such warrants) at an exercise price of $0.60 per share, to Burnham Hill Partners in connection with services provided the Company in connection with this Amendment, and (ii) registration of such shares of Common Stock issuable thereunder in connection with any registration of Holders’ shares.

8. Miscellaneous.This Amendment shall be binding upon and inure to the benefit of and be enforceable by the respective successors and assigns of the parties hereto. This Amendment may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. This Amendment shall be the sole evidence and represent the terms of the Amendments to the SPA and Debentures set forth herein and no further documents or agreements shall be required, following the Effective Date, to memorialize the agreements of the parties set forth herein.

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

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IN WITNESS WHEREOF, the parties hereto have cause this Amendment to be duly executed as of this 27^th day of September 2006.


			SENDTEC ACQUISITION CORP.
			By:			/s/ Paul Soltoff
						Name: Title:
			SENDTEC, INC. (FORMERLY RELATIONSERVE MEDIA, INC.)
			By:			/s/ Paul Soltoff
						Name: Title:

AGREED AND ACCEPTED

By:
Name:

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Schedule 4.22(b)


Period	Minimum Net Revenues
3^rd Quarter 2006		$	4,675,000
4^th Quarter 2006		$	4,675,000
1^stQuarter 2007		$	5,025,000
2^nd Quarter 2007		$	5,175,000
3^rd Quarter 2007		$	5,450,000
4^th Quarter 2007		$	5,700,000

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Schedule 4.22(c)


Period	Minimum Cash Balances
3^rd Quarter 2006		$	2,750,000
4^th Quarter 2006		$	3,000,000
1^stQuarter 2007		$	3,000,000
2^nd Quarter 2007		$	3,250,000
3^rd Quarter 2007		$	3,500,000
4^th Quarter 2007		$	3,750,000

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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF

SENDTEC, INC.

Proxy — Special Meeting of Stockholders
November 10, 2006

The undersigned hereby appoints Paul Soltoff and Donald Gould, and each of them, the true and lawful attorneys and proxies of the undersigned, with full power of substitution, to vote all of the shares of Common Stock of SendTec, Inc. (the ‘‘Company’’) which the undersigned is entitled to vote at the Special Meeting of Stockholders of the Company to be held at 877 Executive Center Drive West, Suite 300, St. Petersburg, Florida on November 10, 2006, at 10:00 a.m. local time, or at any adjournment thereof.

The undersigned hereby revokes any proxy or proxies heretofore given and acknowledges receipt of a copy of the Notice of Special Meeting and Proxy Statement, both dated October 27, 2006.

THIS PROXY WILL BE VOTED IN ACCORDANCE WITH ANY DIRECTIONS HEREIN GIVEN.


	1.	To authorize an amendment to the Company’s Certificate of Incorporation to increase the number of authorized shares of our common stock, par value $0.001 per share to 190,000,000 shares.


FOR [ ]	AGAINST [ ]	ABSTAIN [ ]

NOTE: Your signature should appear the same as your name appears hereon. If signing as attorney, executor, administrator, trustee or guardian, please indicate the capacity in which signing. When signing as joint tenants, all parties in the joint tenancy must sign. When a corporation gives a proxy, an authorized officer should sign it.


Signature: __________________		Date: ______________


Signature: __________________		Date: ______________

SENDTEC, INC.

Name: Paul Soltoff

Title: Chairman and Chief Executive Officer