Xyvision Enterprise Solutions Debuts as Subsidiary of Xyvision, Inc.; Positioned to Solve Large-Scale Information Management Problems Across Diverse Business Environments.

READING, Mass.--(BUSINESS WIRE)--Jan. 4, 1999--Xyvision Enterprise Solutions, Inc. (XyEnterprise) today announced its debut, formed as a separate entity and subsidiary of Xyvision, Inc. Privately held, XyEnterprise was created through a transfer of assets from Xyvision, Inc. and will operate Xyvision, Inc.'s publishing and information management software business utilizing the management team, employees, and assets previously held by Xyvision, Inc. Its primary focus will be to provide companies with complete information and knowledge management solutions that streamline the information creation and delivery process.

"Our decision to create Xyvision Enterprise Solutions was made partially in response to increased market demand for specialized consulting and integration services," said Kevin Duffy, president of Xyvision, Inc. "Our customers and prospects are looking for increasingly unified solutions that solve specialized departmental requirements as well as provide general information and knowledge management across the enterprise. XyEnterprise is uniquely positioned to meet this need."

Inheriting a business that is already a leading provider of information management and publishing solutions, XyEnterprise will continue to develop and market its own software applications, Parlance Document Manager and Xyvision Production Publisher. In addition, as a provider of many best-of-breed information creation, management and delivery products--XyEnterprise has the experience and product suite to provide fully integrated publishing and knowledge management solutions. Xyvision has been an authorized reseller and OEM for a range of products from companies such as Open Text, Oracle, Verity, Adobe, and Arbortext and is in the process of transferring the reseller contracts to XyEnterprise. In addition, XyEnterprise will expand the role of Xyvision's well-respected consulting services division in integrating enterprise-wide information management systems.

One of XyEnterprise's initial implementations will be a 5000 seat Open Text Livelink system, which includes software, services and hardware valued at approximately $2,000,000. "We see more and more business directed toward integrating complete solutions," says John Shackleton, president of Open Text. "With a legacy of over 15 years experience solving complex publishing problems, a range of complementary products and an excellent reputation with its customers, Xyvision Enterprise Solutions is ideally positioned to gain a substantial share of the knowledge management system integration market."

In addition to expanding product and service offerings, the restructuring of Xyvision, Inc. and the creation of the new company also increases operating capital and reduces previously incurred debt. Tudor Trust agreed to purchase 400,000 shares of Preferred Stock in Xyvision Enterprise Solutions as well as provide XyEnterprise with a $1,000,000 line of credit. The majority of Xyvision's debt, including obligations under its existing line of credit with Tudor Trust, the largest stockholder and creditor of Xyvision, Inc., will remain with Xyvision, Inc. This restructuring plan immediately converts $1,750,000 of Xyvision credit line debt into equity. An additional $5,000,000 will become convertible in June of 1999.

According to Jeffrey Neuman chairman of the board for Xyvision, Inc. "This combination of reduced Xyvision debt and additional investment and operating funds for Xyvision Enterprise Solutions provides the clean financial slate required to attract both customers and investors. Our partners and prospects can now focus on the quality of XyEnterprise's products and services versus historical financial issues. XyEnterprise combines the focus, energy, and financial profile of a start-up with the experience and track record of a seasoned veteran."

The formation of Xyvision Enterprise Solutions follows a series of organizational restructuring efforts, which included a transaction in September 1998, in which Xyvision, Inc. sold essentially all of the assets of its Contex pre-press business to Barco Graphics. Over the past several months, Xyvision has installed a new management team that will continue at the XyEnterprise level, including Mark LeBlanc as vice president of engineering, Carol Bumbaca as vice president of customer support, and Wendy Darland as vice president of Finance. Kevin Duffy will serve as president and chief executive officer, Jerry Ulbricht will remain as vice president of sales, and Michael Borin will continue as vice president of human resources.

"Our management team has the expertise and commitment needed to make Xyvision Enterprise Solutions successful," says Duffy. "We will continue aggressive product development, excellent customer service, and will move quickly to expand our market position in information and knowledge management solution integration."

About Xyvision Enterprise Solutions, Inc.

Xyvision Enterprise Solutions provides companies with complete information and knowledge management solutions that streamline the information creation and delivery process. XyEnterprise combines its own publishing and component management software with integration services and best-of-breed technologies to build enterprise-wide solutions for the collaborative creation, management and dissemination of information.