9. EDSR 08-14-2006 - Laserfiche WebLink

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Page 1 of 1 From: TedGenesis@aol.com Sent: Monday, July 24, 2006 9:52 AM To: Mehelich, Catherine Cc: TedGenesis@aol.com; harlangenesis@mac.com Subject: K-netica situation Dear Cathy, Please accept this as sincere advice: I think it's a mistake to take $2 for $1 now (so to speak) and let the following contingencies occur: -The company is as successful as Bixby is likely to be (Bixby is now slated to go public in the next few months and its sales are close to $7 million now). The shares that the City of Elk River's EDA holds are likely to be quite valuable and so too could the K-netica shares. -It could seal the fate of the company ever coming back to Elk River. I sincerely believe that a rapproachment (sp?) could be achieved here whereby the company would commit to establish its first expansion or satelllite software center in Elk River in consideration for the ER EDA to refrain from exercising the put. If I had extra cash, I'd offer to buy the shares from the Elk River EDA. It may also be possible for me to get the Anoka Investors club to purchase the shares from you folks (if K-netica agrees). That would give you folks the cash that the exercise of the put would do without causing cash to come forth form the company. I am not authorized to extend any terms or conditions. I'm just trying to facilitate here. For a variety of good reasons, I hope that the City of Elk River's EDA will re-consider this matter and refrain from exercising the put at this time and for the next year or so. Just consider what the newspaper article might be down the road when someone complains that the City took a $2 bill when it could have had a $20 bill. Let me know what I can do to help in any constructive approach here. REgards Harlan PS Bixby would love to establish an expansion facility in Elk River. I met with Bob Walker last week. Please let me know if you'd like to go to meet with him sometime. Harlan T. (Ted) Jacobs President, Genesis Business Centers, Ltd. 3989 Central Avenue NE Suite 630 Columbia Heights MN 55421 (North Suburban Minneapolis/Twin Cities) Tel 763 782 8576 Fax 763 782 8578 Mobile (Minnesota/Wisconsin/Europe,Canada): 612 701 8153 Mobile in rest of U.S.A.: 612 743 8730 TedGenesis@aol.com H a rl a n G e n e s i s@ m a c. co m HarlanJacobs@GenesisCenters. com www. GenesisCenters.com file://S:\EDA\Incubator\K-Netica\Letters\7.24.06 Harlan Jacobs K-Netica letter.htm 8/10/2006