Dictaphone Signs Agreement to License L&H Speech Recognition Software and to Acquire PowerScribe Assets.

Business/Hi-Tech Editors & Health/Medical Writers

MIAMI--(BW HealthWire)--Oct. 17, 2001

Access to Critical Technology Underpinning Dictaphone's Growing

Speech Recognition Product Line for Healthcare

American Health Information Management Assoc. (AHIMA) Convention--Dictaphone Corporation ("Dictaphone") announced today that it has concluded an agreement with Lernout & Hauspie Speech Products N.V., L&H Holdings USA, Inc. and certain of their related subsidiaries (collectively, "L&H") to license key speech recognition technology, and to acquire L&H's PowerScribe(R) for Radiology speech recognition product line, which Dictaphone has been co-marketing for the past year.

The appropriate bankruptcy courts have approved this agreement, and it represents a significant step for Dictaphone in advance of its expected emergence by year-end from Chapter 11 and independence from parent L&H.

The contract calls for Dictaphone to license one of L&H's core speech recognition engines, called MREC, which is used in PowerScribe(R) and will be used in Dictaphone's EXSpeech(TM) product lines. Dictaphone will have access to key MREC software development tools, giving Dictaphone the ability to provide on-going technical support to existing platforms, and to develop new applications and solutions upon this speech recognition engine. Additionally, Dictaphone will have a special team of L&H software engineers assigned to provide on-going support and development in connection with the contract. These L&H employees will complement Dictaphone's own internal speech recognition engineering staff. Under the agreement, Dictaphone has also licensed important data needed to develop and expand language models used in the speech recognition process.

PowerScribe(R) is a leading speech recognition system for the radiology market and part of Dictaphone's current product portfolio marketed by its national sales organization. Dictaphone is acquiring the PowerScribe line of products, including its software source code. The agreement also calls for L&H to transfer to Dictaphone certain L&H employees directly involved in the development and support of the PowerScribe(R)-based speech technology as well as the company's Clinical Language Understanding products, which are under development, a move that will significantly increase the size of Dictaphone's speech recognition engineering force.

"Speech recognition is core to Dictaphone's mission and strategy," stated Rob Schwager, president and COO of Dictaphone. "This technology will allow Dictaphone to deliver to the market solutions that offer tremendous improvements in terms of cost saving and productivity, where currently $6 billion is spent annually in the transcription of medical documentation.

Our agreement with L&H provides Dictaphone with long-term access to this leading technology, which will assure our customers on-going support of their present systems, and access to software enhancements and developments made by Dictaphone in the future."

Under the agreement, Dictaphone has also licensed and acquired from L&H software intended to be used by Dictaphone in its Clinical Language Understanding products as well as natural language processing (NLP) technology components. Dictaphone has made a significant investment in NLP with an internal advanced linguistics staff, which is developing practical healthcare applications such as automatic coding products.

About Dictaphone Healthcare Solutions Group

Dictaphone currently deploys dictation, transcription and report management system solutions in some of the world's premier healthcare organizations. Its solutions automate and integrate critical elements in the creation and management of health information, helping healthcare organizations improve productivity and the quality of patient care. Dictaphone's flagship Enterprise Express(R) dictation, transcription and report management system is an integral part of the creation and flow of patient information in a substantial number of U.S. hospitals. It currently supports several hundred thousand physicians who use Dictaphone systems to generate an estimated one million reports and 100,000 hours of dictation a day. Dictaphone is also actively deploying its EXSpeech(TM) and PowerScribe(R) speech recognition solutions, designed to dramatically reduce transcription costs and speed report turnaround. Dictaphone has also introduced the ichart(TM) family of Internet subscription-based solutions that integrate existing systems with new coding, natural language and data mining technologies, which can significantly reduce the costs of managing patient information. For sales and product information visit Dictaphone at www.dictaphone.com or call 1-888-350-4836.

The foregoing projections are "forward-looking" statements within the meaning of the Federal Securities Laws. Because such statements include risks and uncertainties, actual results may differ from the estimates provided. The company undertakes no duty to update such forward-looking statements. Factors that could cause actual results to differ from these forward looking statements include, but are not limited to, those disclosed previously and from time to time in any of the company's public filings. In addition, readers are cautioned that forward looking statements include known and unknown risks, such as the uncertainties associated with Chapter 11 filings in the United States and the risk that newly introduced products may contain undetected errors or defects or otherwise not perform as anticipated.