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SendTec sends out the most complicated Press Release Ever… Seriously…

SendTec Announces Agreement in Principle to Recapitalize Bondholders to Exchange Secured Debt for Equity

ST. PETERSBURG, Fla.-(Business Wire)-SendTec, Inc. (OTCBB:SNDN), a Multichannel Customer Acquisition
Direct Marketing Agency, today announced that it has reached a
non-binding agreement in principle to exchange all of its Senior
Secured Convertible Debentures, due March 31, 2008 with an outstanding
principal amount of approximately $32.7 million, for shares of a newly
created Series B Preferred Stock. The exchange is expected to occur in
two separate transactions. At the first closing, $18,360,000 of the
debt will exchange into preferred stock convertible into approximately
108 million shares of the Company’s common stock. The remaining
$14,370,000 of Senior Secured Convertible Debentures will be exchanged
for Series B Preferred Stock at a subsequent closing conditioned upon,
among other things, a proxy vote to increase the number of authorized
common shares of the Company and completion of a financing with
minimum aggregate gross proceeds to the Company of $5 million. In the
event the Company does not secure the necessary minimum capital by the
second closing, only $3,370,000 of the remaining $14,370,000 of Senior
Secured Convertible Debentures will be exchanged for Series B
Preferred Stock at such closing. The residual $11.0 million shall
remain outstanding as three-year convertible debt with no coupon;
provided, however, that the new debt shall automatically convert into
Series B Preferred if the Company raises minimum aggregate gross
proceeds of $5 million any time within one year of the date of the
second closing.

The first closing is expected to occur within thirty days. The
second closing is subject to, among other things, shareholder approval
to increase the number of authorized shares of Common Stock to
500,000,000. As part of this restructuring, interest due on the
Debentures as of November 16, 2007, will be paid at the time of the
first closing. Provided the second closing occurs, no additional
interest will be paid on the Senior Secured Convertible Debentures
after November 16, 2007.

As part of the restructuring, the management team led by Paul
Soltoff, SendTec’s Chairman and Chief Executive Officer, has agreed to
invest $900,000 into the Company to purchase Common Stock at $0.12 per
share at the time of the first close.

The transactions contemplated herein are subject to a number of
terms and conditions including the execution of legally binding
definitive agreements by all parties. There can be no assurance that
the recapitalization will be consummated. The above-described
arrangement is non-binding upon the parties and accordingly, is
subject to change.

Paul Soltoff Chairman and CEO stated: “After two mergers that left
SendTec with liquidity problems, we believe this proposed
recapitalization will enable SendTec to create long term value for all
of its stakeholders while continuing its growth. We anticipate that
the completion of this critical restructuring will provide SendTec
with the necessary capital structure and resources to implement its
strategic mission, using its unique capabilities, to become a major
force in multichannel interactive direct marketing.”

Throughout this process, SendTec has continued to win major
advertising clients. Most recently eDiets.com, the diet delivery
company ranked #1 by epicurious.com, awarded SendTec its agency of
record account. SendTec will be launching a multi-channel TV-driven
consumer advertising campaign for the eDiets Meal Delivery Program
starting in January 2008. Paul Soltoff, Chairman and CEO stated: “This
is a major win with a market leader in an important and growing
category.”

About SendTec, Inc.

SendTec is a leading customer acquisition ad agency with expertise
in multi-channel integrated direct marketing, online and offline. The
company builds and leverages technology as an integral part of growing
its clients’ businesses. SendTec is headquartered in St. Petersburg,
Florida, with an office in New York City and account representatives
serving its clients across the US. For more information, go to
www.sendtec.com.

Caution Concerning Forward-Looking Statements:

Safe Harbor Statement under the Private Securities Litigation
reform Act of 1995: Forward-looking statements often are proceeded by
words such as “believes”, “expects”, “may”, “anticipates”, “plans”,
“intends”, “assumes”, “will” or similar expressions. Forward-looking
statements reflect management’s current expectations, as of the date
of this press release, and involve certain risks and uncertainties.
SendTec’s actual results could differ materially from those
anticipated in these forward-looking statements as a result of various
factors. The statements that are not historical facts contained in
this press release are “forward-looking statements” that involve
certain risks and uncertainties, including, but not limited to, risks
associated with the uncertainty of future financial results,
additional financing requirements, change in marketing services mix,
adoption of new accounting and reporting methods to report on our
various marketing services offerings, development of new products or
services, the effectiveness, probability and marketability of such
products and services, the ability to protect proprietary information,
the impact of current, pending or future legislation and regulation on
the electronic marketing industry, the impact of competitive products
or pricing, technological changes, the effect of general economic and
business conditions and other risks and uncertainties detailed in the
Company’s filings with the Securities and Exchange Commission.

In particular, there can be no assurance that the Company will
enter into any definitive agreements with its debenture holders.
Failure to do so would likely result in material adverse consequences
for the Company.

SendTec, Inc., St. Petersburg
Donald Gould Jr., 727-576-6630 x 140
Chief Financial Officer
www.SendTec.com

Copyright Business Wire 2008

Categories: Ad Agencies