Companies approach single-source solutions for the use and management of rich media

Boston, MA — October 17, 2001 — Covington Associates, seasoned M & A advisors to technology and healthcare, today announced the sale of its client, privately-held, Pittsburgh-based MediaSite, Inc. ("MediaSite"), to Sonic Foundry® Inc. ("Sonic Foundry," NASDAQ: SOFO), a leading developer and marketer of digital media software products and services. MediaSite, a global pioneer in automating rich media publishing, management, and access solutions, provides key components to Sonic Foundry's single-source solution for producing, publishing, and managing rich media within various industries, including the entertainment industry.

Under the terms of the agreement, Sonic Foundry acquires all assets and certain liabilities of MediaSite, in exchange for 3,420,000 shares of newly-issued Sonic Foundry common stock. An additional 360,000 shares will be issued upon the realization of various closing conditions. Certain patent rights, including pending patents, are also part of the transaction, as MediaSite derived its proprietary technology from a Carnegie Mellon University research effort funded by various government agencies and private corporations.

MediaSite's groundbreaking technology for indexing, searching, and retrieving media has received numerous awards-the 2001 Frost & Sullivan award for technology leadership in digital media management systems, selection for the "Ten Emerging Technologies That Will Change the World" list within MIT's Magazine of Innovation-and its combination with Sonic Foundry's capture and production expertise represents a significant step toward a single-source solution for managing the often-demanding use of rich media within the enterprise. A new business unit will retain and use the MediaSite brand name for marketing resultant products and services.

"One of the greatest strategic opportunities we've identified is the need for a single source solution that manages rich media content through the entire process of production to publishing," said Rimas P. Buinevicius, Chairman and CEO of Sonic Foundry, in a MediaSite release dated September 7, 2001. "This combination provides the industry with an unprecedented array of technologies, solutions, and expertise that help solve the inadequacies of previous offerings and helps drive the industry's overall growth. More importantly, the two companies fit well culturally and share a mutual respect for outstanding engineering development."

About Covington Associates
Covington Associates are seasoned M & A advisors to technology and healthcare. Focused exclusively on mergers and acquisitions, Covington Associates has established a track record of success based on deep domain experience and an unrivaled level of service from a team of senior advisors. Since 1991, the firm has successfully completed over 50 transactions ranging in size from $10 million to over $1 billion in e-services, software, IT services, and healthcare technologies. To learn more about Covington Associates, visit www.covingtonassociates.com.



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