PEABODY, Mass., - December 7, 2001 - ScanSoft, Inc. (Nasdaq: SSFT), today announced that it has signed a definitive agreement to purchase substantially all of the operating and technology assets of the Speech and Language Technologies business of Lernout & Hauspie (L&H). The agreement was signed among ScanSoft, Lernout & Hauspie Speech Products N.V., L&H Holdings USA, Inc. and certain L&H subsidiaries.

The agreement signed today serves to define the specific terms of the previously announced acquisition and enable the quick and seamless transfer of assets and employees upon closing. Completing the transaction is subject to the approval of the U.S. Bankruptcy Court for the District of Delaware and conclusion of parallel bankruptcy proceedings in Belgium. The U.S. Bankruptcy Court began its hearing on December 4, 2001, and will continue on December 11, 2001.

“We see this formal agreement as an important next step in helping to finalize our acquisition of the L&H assets,” said Paul Ricci, ScanSoft’s chairman and CEO. “We look forward to next week’s hearing and closing the transaction in a time period that serves the best interests of both company’s employees, customers and partners.”

About Lernout & Hauspie Speech and Language

The Lernout & Hauspie Speech and Language business develops and markets a variety of technologies, systems and products that incorporate automatic speech recognition, text-to-speech, telematic and other capabilities. These solutions enable telecommunications systems, computing equipment and mobile communications devices to effectively hear what users say, speak to users, hold conversations and recognize users by their voice. Organizations using these technologies comprise some of the world’s leading technology and telecommunications companies including Alcatel SA, AOL Time Warner, British Telecom, Cisco Systems, Delphi Automotive, Deutsche Telecom, Fujitsu Ltd., Microsoft Corporation and Sony Corp.

Among the technology assets to be acquired by ScanSoft:

RealSpeak Text-to-Speech – RealSpeak technology is widely recognized as the world market leading text-to-speech (TTS) engine, capable of generating high-quality human sounding speech that is available in 19 languages including regional variants.
Dragon NaturallySpeaking Product Line - This prominent speech recognition software allows users to harness the power of speech to easily create, format and edit documents as well as to control and work with virtually all Windows-based applications.
Automatic Speech Recognition Solutions - The L&H automatic speech recognition engines are capable of multi-lingual, speaker independent recognition of discrete words or a continuous string of naturally spoken words, including free-text dictation. This includes automotive technology that enables drivers to operate climate control, telematic, audio and other functions of an automobile using voice commands, as well as listen to email messages and receive turn-by-turn navigation routing.

About ScanSoft, Inc.

Headquartered in Peabody, Mass., with European headquarters in The Netherlands, ScanSoft, Inc. (NASDAQ: SSFT) is a global leader in paper-to-digital solutions for desktop, network, Internet and mobile environments that enable users to leverage the power of their scanners, digital cameras and other electronic devices. ScanSoft's award-winning product line - OmniPage Pro, TextBridge Pro, PaperPort Deluxe, Pagis Pro, OmniForm, eOmniForm, and numerous software developer's kits - enables users to capture, recognize, edit, manage and share documents and photos electronically by taking advantage of ScanSoft's cutting-edge technology.

ScanSoft has established numerous strategic partnerships with the industry's leading scanner and multifunction vendors to deliver the most comprehensive and cost-effective solutions for its customers. Vendors who have chosen ScanSoft's cutting-edge products and technologies include Brother, Canon, Epson, Fujitsu, Hewlett-Packard, IBM/Lotus, Mustek, Primax, Sharp, Symantec Corporation, Visioneer, Xerox and others. ScanSoft's leading technologies have been licensed by Microsoft for use in Office XP and other future products. ScanSoft continues to cultivate and develop strategic partnerships to deliver the most comprehensive and cost-effective solutions for its customers. ScanSoft software is sold, marketed and supported worldwide through retail, dealer and OEM channels and the Internet, capturing the small to medium size business and corporate markets. There are more than eight million registered users of ScanSoft products. ScanSoft can be found on the Web at www.scansoft.com.

Trademark reference: ScanSoft, PaperPort, PaperPort Deluxe, OmniPage, OmniPage Pro, TextBridge, Pagis, OmniForm, eOmniForm, and Developer's Kit 2000 are registered trademarks or trademarks of ScanSoft, Inc., in the United States and other countries. All other trademarks and trade names mentioned are hereby recognized and may be registered to their respective holders.

Safe Harbor Statement
The Company notes that the statements in this release that relate to the company’s plans, objectives, expectations and intentions, including without limitation ScanSoft’s integration plans, are forward-looking statements subject to risks and uncertainties that may cause the Company’s actual results to differ materially. These risks and uncertainties include, but are not limited to, the risks that the bankruptcy court may not approve ScanSoft’s bid, that the bankruptcy court re-opens the bidding process based upon claims being made by SpeechWorks, the Company’s ability to close the transaction in a timely manner, market acceptance, the impact of competitive products, and other risks detailed from time to time in the Company’s SEC reports. Readers are cautioned not to place undo reliance on these forward-looking statements, which speak only as of the date hereof.

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