9. EDSR 08-14-2006 - Laserfiche WebLink

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<a~=NEtica= To: Jeff Gongoll From: Steve Pederson Date: June 22, 2006 Dear Jeff: K-Netica Corporation 6120 Earle Brown Drive, Suite 502 Minneapolis, MN 55430-4112 763.274.1000 It was good chatting with you yesterday, Jeff. As you know (see copy of the "thank-you" letter attached), if it weren't for the organizations mentioned in the letter that have supported K-Netica during our formative stage, we very well may not be here today. As you know, in early January K-Netica was awazded its first major implementation contract (nearly $1M over the next 12 months with Blue Cross of Minnesota). We suddenly found we were no longer just an R&D/development company - we now needed to focus on customer service and revenue. We were expecting to work from our Elk River location for the next couple of years and focus on developing a successful, cash-flow positive company. Things changed quickly when we were notified our lease would not be renewed, and later that the incubator program was being discontinued. Unfortunately, we then had to reallocate resources during this critical period to find a new location for K-Netica. Per our phone conversation yesterday, I'd like to reiterate a few of the facts that may have been overlooked when the EDA made the decision to exercise the put option on the K-Netica contract. • We were notified in late January that the lease on our space would not be renewed. (Thankfully, the landlord allowed us until early May to vacate.) • On January 27`h, we met with Heidi and Cathy to discuss our urgent need to find new space for K-Netica in the Elk River area and work out a strategy. • In February we were notified that the City chose not to continue the Incubator Program. • Space requirements included: 0 2K - 2.SK square feet o High speed Internet capacity o Server room/Conference room/At least 2 private offices/Common area for cubes o Class B-/C+ price o Annual lease preferred...wiling to consider 2 or 3 year agreement o Few incremental costs (no budget for build out, etc.) o May 15` (or sooner)