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SpeechWorks Statement Regarding Lernout & Hauspie Assets

BOSTON--(BUSINESS WIRE)--Nov. 29, 2001--At an auction that was initiated on Monday, November 26, 2001, the business and technology assets of Lernout & Hauspie Speech Products N.V., which SpeechWorks (Nasdaq:SPWX - news) offered to purchase on October 21, 2001, were awarded to ScanSoft, Inc. ScanSoft's bid is subject to approval of the U.S. Bankruptcy Court on December 4, 2001.

Today, SpeechWorks filed with the U.S. Bankruptcy Court an objection to the selection of ScanSoft as the highest or otherwise best bidder based on the failure of the auction to follow the prescribed bidding procedures. SpeechWorks has asked the Court not to accept the competitive bid and, instead, require submission of final, sealed bids.

Microsoft Sells Bulk of Lernout Stake Below 2 Cents a Share

Washington, Nov. 29 (Bloomberg) -- Microsoft Corp. sold the bulk of its remaining stake in Lernout & Hauspie Speech Products NV for less than 2 cents a share.

The Redmond, Washington, developer of Windows software sold 5.4 million Lernout shares on Nov. 26 at 1.9 cents a share, according to a Schedule 13D filed with the Securities and Exchange Commission. That equals $103,191.

Microsoft originally invested in Lernout in 1997, according to regulatory filings. The company acquired 11.6 million common shares, adjusted for stock splits, for the equivalent of $3.88 each.

The investment was part of an alliance between the two companies. Microsoft sought to accelerate the development of speech products in multiple languages that could run on its Windows software.

Lernout, based in Belgium, develops software that enables computers to understand the human voice. The company was declared bankrupt by a Belgian court on Oct. 24 after failing to pay creditors.

Microsoft's sales cut its stake in Lernout to 1.3 percent of shares outstanding from about 5 percent. Microsoft now holds 1.88 million Lernout shares.

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