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Lernout & Hauspie speech products announces the sale of remaining speech and language technology assets

From ScanSoft

Ieper, Belgium and Burlington, Mass, USA. November 28, 2001 —Lernout & Hauspie Speech Products N.V. (OTC: LHSPQ), L&H Holdings USA, Inc., and certain of their subsidiaries (collectively, “L&H” or “ the Company”), world leaders in speech and language technology, products, and services, today announced the sale of remaining speech and language technology assets through a court-approved, public auction held on the 26 of November.  The sales of the Company’s individual assets are subject to final approval by the US Bankruptcy Court for the District of Delaware and the Ieper Commercial Court of Belgium.

The major portion of L&H’s core speech and language technology business, including its text-to-speech (TTS) technologies, including L&H™ RealSpeak™, and certain of its automatic speech recognition (ASR) technologies, including the Dragon Naturally Speaking® line of products, will be acquired by Massachusetts-based ScanSoft, Inc. (NASDAQ: SSFT) in exchange for $10m in cash, a $3.5m note, and 7.4m common shares of ScanSoft, Inc. stock with a market value of  $26m based on the November 26^th closing price of $3.52 per share.

ScanSoft’s chairman and chief executive officer, Paul Ricci, said: “The technology and intellectual property included in these assets are widely considered the finest in the industry and represent a strategic growth opportunity for Scansoft. We are especially enthusiastic about L&H’s talented research, engineering, sales and marketing employees in both the U.S. and Belgium, its prestigious customer base, and the added strength it brings to our software distribution channels.” ScanSoft expects to retain at least 150 L&H employees worldwide.

Additional assets were also sold at the auction:

• The ASR technologies of L&H’s ISI division will be acquired by Pennsylvania-based Multimodal Technologies, Inc., a company headed by Michael Finke, one of ISI’s founders, for $2m in cash and the assumption of a $2m earnout.
• L&H’s Intelligent Content Management (ICM) assets and its Knexys division, which develops next-generation ICM technologies will be acquired by Pennsylvania-based Vantage Technology Holding for $2m in cash.
• The Company’s Audiominingä assets (audio search engine technology pioneered by Dragon Systems Inc.) will be acquired for $0.75m in cash to Dragon Catalyst LLC, a newly formed company headed by Dr. James Baker.

John Shagoury, President of L&H’s SLT Group said: “We are excited that ScanSoft and the other buyers are committed to enhancing the technologies that we have built and furthering the strong relationships that we have established with our broad customer base.”

About Lernout & Hauspie Speech Products

L&H is a global leader in advanced speech and language solutions for vertical markets, computers, automobiles, telecommunications, embedded products, consumer goods, and the Internet. The company is making the speech user interface (SUI) the keystone of simple, convenient interaction between humans and technology. The company provides a wide range of offerings, including: customized solutions for corporations; core speech technologies marketed to OEMs; end user applications for continuous speech products in vertical markets; and document creation and linguistic tools. L&H’s products and services originate in the following basic areas: automatic speech recognition (ASR), text-to-speech (TTS), search and retrieval and audio mining. For more information, please visit L&H on the World Wide Web at www.lhsl.com.

This Press Release contains forward-looking information that involves risks and uncertainties, including statements about L&H’s plans, objectives, expectations, and intentions. Readers are cautioned that forward looking statements include known and unknown risks, including uncertainty of new product development, the risk that newly introduced products may contain undetected errors or defects or otherwise not perform as anticipated, early state of development of the speech, language and medical information technology markets, the ability of L&H’s customers to successfully integrate and commercialize L&H’s technology, the uncertainties associated with the Company’s Chapter 11 filings in the US and related proceedings in Belgium, the retention of key technical and other personnel, currency and other risks related to international operations, rapid technological change and intense competition, as well as other risks set forth in L&H’s filings with the Securities and Exchange Commission. The forward-looking statements contained herein speak only as of the date of this Press Release.

L&H, the L&H logo, RealSpeak, Nothing But Speech (NBS), Say It Your Way and Dragon NaturallySpeaking are either registered trademarks or trademarks of Lernout & Hauspie Speech Products N.V. or its affiliates, in the United States and/or other countries. All other product names or trademarks referenced herein are trademarks of their respective owners.

Contact Info:

L&H Speech and Language Technologies Division:

Media Contact US:

Catherine Van Evans, Lernout & Hauspie, +1 (781) 203-5286, email: catherine.van.evans@lhsl.com

Jonna Schuyler, FitzGerald Communications, 617-488-9500 ext 263, email: jschuyler@fitzgerald.com

Media Contact EMEA:   Vanessa Richter, Lernout & Hauspie, + 32 57-2295-18, email: vanessa.richter@lhs.be

L&H Corporate Contact Info:

Investor Relations:  Allan Forsey, Lernout & Hauspie, +1 (781) 203-5233, email: aforsey@lhsl.com