Warburg Pincus Closes Purchase of ScanSoft Shares

PEABODY, Mass., April 13, 2004 - ScanSoft, Inc. (NASDAQ: SSFT) today announced the closing of the previously announced agreement of Warburg Pincus to purchase all outstanding shares of ScanSoft stock held by Xerox Corporation (NYSE: XRX) for approximately $80 million.

Under the agreement, Warburg Pincus has purchased all outstanding shares of ScanSoft stock previously held by Xerox Corporation, comprising 11,853,602 shares of common stock; 3,562,238 shares of non-voting Series B preferred stock; and a warrant to purchase up to 525,732 shares of common stock. In addition, Warburg Pincus has acquired a warrant to purchase 2.5 million shares of common stock from ScanSoft and William Janeway, a vice chairman at Warburg Pincus, has joined the ScanSoft board of directors.

"Bill Janeway and Warburg Pincus bring to ScanSoft a wealth of experience, resources and strategic insight that have previously helped companies such as BEA and Veritas achieve new levels of accomplishment and growth," said Paul Ricci, chairman and CEO at ScanSoft. "We are pleased to have Warburg Pincus as a shareholder, and to welcome Bill Janeway to our board of directors."

About Warburg Pincus

Warburg Pincus has been a leading private equity investor since 1971. The firm currently has approximately $9 billion under management and $5 billion available for investment in a range of sectors including information and communication technology, business services, energy, financial services and technologies, healthcare and life sciences, media and real estate. The firm has invested approximately $4.8 billion in 140 technology companies, including Avaya (NYSE: AV), BEA Systems (Nasdaq: BEAS), Manugistics Group (Nasdaq: MANU), and VERITAS Software (Nasdaq: VRTS). Warburg Pincus is an experienced partner to entrepreneurs seeking to create and build durable companies with sustainable value. The firm has an active portfolio of about 125 companies. For more information, please visit www.warburgpincus.com

About ScanSoft, Inc.

ScanSoft, Inc. (NASDAQ: SSFT) is the leading supplier of speech and imaging solutions that are used to automate a wide range of manual processes - saving time, increasing worker productivity and improving customer service. For more information regarding ScanSoft products and technologies, please visit www.ScanSoft.com.

ScanSoft and the ScanSoft logo are registered trademarks or trademarks of ScanSoft, Inc. in the United States and other countries. All other company or product names mentioned herein may be the trademarks of their respective owners.

This press release contains forward-looking statements within the meaning of the federal securities laws, including, without limitation, statements regarding ScanSoft's position as a provider of speech and imaging solutions. Such statements are based on current expectations that are subject to a number of risks and uncertainties, and actual results may differ materially. These risks and uncertainties include, without limitation, the following: economic conditions in the United States and abroad; fluctuations in demand for ScanSoft's existing and future products; the effects of competition, including pricing pressure; possible defects in products and technologies and ScanSoft's dependence on OEM customers. A detailed discussion of other risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements is included in ScanSoft's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended December 31, 2003. ScanSoft undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this press release.

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