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March 2, 1999

MICROSOFT TO WORK WITH DIALOGIC, TAKE 5% STAKE

By CBR Staff Writer

Microsoft Corp said Tuesday that it has signed a licensing agreement with Dialogic Corp and taken a 5% in the computer telephony company. The software giant will license Dialogic’s CT Media server software for NT as it moves to extend the Windows environment to enable developers to build computer telephony and converged communications systems based on a combination of the two companies’ technologies. Parsippany, New Jersey-based Dialogic manufactures components that allow voice, fax, data, voice recognition, speech synthesis and call center management features to be integrated in PCs. Its CT Media software allows for the transmission of voice calls or faxes over the internet. Under the terms of the $20m four-year agreement, Dialogic will also provide development services to Microsoft. In addition to the licensing deal, Microsoft will make a $24.2m equity investment in Dialogic in exchange for 860,000 shares of its common stock, equal to roughly 5% of the total outstanding. The company has also issued four-year warrants to Microsoft to buy 280,000 additional shares of Dialogic stock at $35.19 per share. In return, Microsoft agreed to refrain from selling any shares for one year and from selling 50% of the shares for two years. Announcements outlining more detailed product plans resulting from the joint effort are expected to made in the near future. After the announcement, Dialogic shares rose $3.375, or more than 10%, to close at $34. Trading volume was nearly seven times its daily average at 1.1 million shares.

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