[OLSHAN LETTERHEAD] PARK AVENUE TOWER 65 EAST 55TH STREET NEW YORK, NEW YORK 10022 TELEPHONE: 212.451.2300 FACSIMILE: 212.451.2222 WWW.OLSHANLAW.COM DIRECT DIAL: 212-451-2259 EMAIL: HKESNER@OLSHANLAW.COM July 7, 2006 United States Securities and Exchange Commission Division of Corporation Finance Mail Stop 3720 100 F. Street, N.E. Washington, D.C. 20549 Attn: Larry Spirgel, Assistant Director RE: AMENDMENT NO. 3 TO RELATIONSERVE MEDIA, INC. REGISTRATION STATEMENT ON FORM SB-2 FILED JUNE 23, 2006 FILE NO. 333-132586 Dear Mr. Spirgel: We are securities counsel to RelationServe Media, Inc. (the "Company"). We are submitting responses to the oral comments from the Division of Corporation Finance, received June 30, 2006, relating to Amendment No. 3 to the Company's Registration Statement on Form SB-2 filed May 23, 2006 ("Amendment No. 3"). The following responses have been numbered to correspond to the Staff's comments and are being filed together with Amendment No. 4 to Registration Statement on Form SB-2 ("Amendment No. 4"). GENERAL - ------- 1. PLEASE PROVIDE MORE DETAILED DISCUSSION CONCERNING THE TERMS AND CONDITIONS OF THE WARRANTS TO PURCHASE COMMON STOCK, $.01 PER SHARE AND THE SENIOR SECURED DEBENTURES. AMONG THE ITEMS TO CONSIDER INCLUDING IN THE DISCUSSION ARE THE FACT THAT (I) UPON EXPIRATION THE $.01 WARRANTS ARE AUTOMATICALLY EXERCISABLE INTO COMMON STOCK AS OPPOSED TO EXPIRING ON THEIR OWN TERMS (II) DEBENTURE HOLDERS CAN NOT BENEFICIALLY OWN MORE THAN 4.99% OF THE COMPANY'S OUTSTANDING COMMON STOCK UPON EXERCISE OR CONVERSION OF THEIR WARRANTS OR DEBENTURES AND (III) THE DEBENTURES HAVE A MANDATORY REDEMPTION PROVISION COMMENCING NOVEMBER 1, 2007. NEW JERSEY OFFICE 2001 ROUTE 46 / SUITE 202 PARSIPPANY, NEW JERSEY 07054 TELEPHONE: 973.331.7200 FACSIMILE: 973.331.7222 July 7, 2006 Page 2 The disclosure in "Description of Securities - The Senior Secured Convertible Debentures" and "Description of Securities - Warrants" has been expanded in accordance with the Staff's comment. The Staff is advised that "Description of Securities - the Senior Secured Convertible Debentures" already included a description of the mandatory redemption provision. However, such description of the mandatory redemption provision has now been included under the Risk Factor "If An Event Of Default Occurs Under The Debenture Other Than A Covenant Default, It Could Result In A Material Adverse Effect On Our Business, Operating Results, Or Financial Condition As The Debenture Holders Maintain A First Priority Security Interest On All Of Our Assets And On The Assets Of Our Subsidiaries." 2. PLEASE CLARIFY IN THE REGISTRATION STATEMENT FEE TABLE HOW MANY SHARES ARE BEING REGISTERED DUE TO THE PROVISION IN THE REGISTRATION RIGHTS AGREEMENTS WITH THE DEBENTURE HOLDERS REQUIRING THE REGISTRATION 110% OF THE REGISTRABLE SECURITIES (AS DEFINED IN SUCH AGREEMENT). The Registration Statement fee table has been revised in accordance with the Staff's comment. 3. PLEASE CLARIFY WHETHER ANY SHARES PAID AS INTEREST UNDER THE DEBENTURES OR PAID IN CONSIDERATION ON THE LIQUIDATED DAMAGES PROVISION OF THE REGISTRATION RIGHTS AGREEMENT HAVE BEEN REGISTERED UNDER THE REGISTRATION STATEMENT. "Description of Securities - Registration Rights" has been revised in accordance with the Staff's comments. As indicated in the response, the Company intends to pay cash as consideration for the interest on the debentures and the liquidation penalty if any. Moreover, the Staff is advised that the terms of the Debentures provide limitations as to when the Company can issue shares in consideration of the interest payment and the Registration Rights Agreement also has language which states that amy liquidated damages under such agreement should be paid in cash. The Staff is advised that if the Company subsequently decides to issue shares instead of paying cash, the resale of such shares will be registered prior to their issuance. CLOSING FOR YOUR CONVENIENCE, UNDER SEPARATE COVER WE WILL DELIVER TO YOU: o two (2) marked copies of Amendment No. 4 (compared to Amendment No. 2); o two (2) clean copies of Amendment No. 4. July 7, 2006 Page 3 We welcome a further discussion on any of our points addressed within this response letter. The Company would like to request acceleration of the effectiveness of the Registration Statement as soon as possible. Should you have any questions, please contact the undersigned at (212) 451-2259 or Kenneth Schlesinger at (212) 451-2252. Very truly yours, Harvey J. Kesner cc: Donald Gould July 7, 2006 Page 4 bcc: Michael Brauser Paul Soltoff Ed Hackert Nilene Evens Kenneth Schlesinger Mark Lakin Jonathan Deblinger
