PEABODY, Mass., November 15, 2004 - ScanSoft, Inc. (Nasdaq: SSFT), a global leader of speech and imaging solutions, today announced an offer to acquire Rhetorical Systems Ltd., an Edinburgh, Scotland-based supplier of innovative text-to-speech solutions and tools.

With the acquisition of Rhetorical Systems, ScanSoft solidifies its position as a leading provider of speech synthesis or text-to-speech (TTS) solutions for a variety of speech-based applications. ScanSoft's TTS portfolio comprises the most languages and voices available anywhere - nearly more than all other vendors combined. The company will further differentiate its solutions with a number of techniques, tools and services that enhance the ability to deliver custom, dynamic voices.

"As we continue to drive the industry forward through the best technologies, services and partners, Rhetorical and ScanSoft share a vision for providing an enhanced voice experience through our TTS solutions," said Paul Ricci, chairman and CEO of ScanSoft. "We are excited at the prospects offered by Rhetorical and its talented employees for extending the value and augmenting the capabilities of our TTS solutions to better satisfy customers."

The transaction has been approved by both companies' boards of directors and is expected to close in December 2004. Consideration for this transaction is approximately $6.7 million, comprising approximately $4.9 million in cash due at closing and $1.8 million of ScanSoft common stock.

"With speech applications becoming more global, dynamic and personalized, our combined solutions can help eliminate static, recorded voice prompts and speed time to market for our customers," said Marc Moens, chief executive officer at Rhetorical Systems. "We are excited to join forces with ScanSoft to deliver compelling, custom and timely solutions for our customers and to the millions of people that use our collective solutions every day."

This acquisition is another example of how ScanSoft continues to invest in high-growth speech markets and is delivering on its strategy for a future where natural, human conversations will be the predominant way that people retrieve information and interact with automated systems. To achieve this, ScanSoft recognizes that speech applications need to be more dynamic, sound more natural, interact more conversationally and adapt to personal preferences. Rhetorical provides an array of technology, customer, partner and employee resources to help ScanSoft fuel its growth and propel the quality of speech applications throughout the world.

Benefits of the combined organization include:

Leading-Edge Technologies
ScanSoft has a rich history of technology leadership in the text-to-speech market. Rhetorical TTS solutions are an ideal addition to its portfolio and bring a number of techniques, tools and services that expand its language catalog and enhance the company's ability to deliver custom, dynamic voices.
Working with the World's Best Companies
ScanSoft has worked hard to garner a rich set of global customers and partners. Rhetorical enhances this position and brings relationships with a number of renowned companies including Verizon, Orange, Coca Cola, Sony, British Airways and Motorola.
Success through Partnering
Broad, sweeping deployments require sophisticated distribution and partner networks to address customer demand and emerging opportunities. ScanSoft and Rhetorical share a partner-centric distribution philosophy, with strong ties to a number of common technology vendors and integrators including Nortel, VoiceGenie, BeCogent, Eckoh and Gold.

About Rhetorical Systems, Ltd.

Rhetorical is a leading provider of text-to-speech (TTS) solutions. The company builds high-quality voices, which in many applications are indistinguishable from the real voices on which they are modeled. Rhetorical is headquartered in Edinburgh, Scotland, with offices in the U.S. and Europe. The company's complete focus on text-to-speech allows it to set very high standards as it innovates, develops and maintains the highest quality products and services available.

About ScanSoft, Inc.

ScanSoft, Inc. (Nasdaq: SSFT) is the global leader 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.

Trademark reference: 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 may be the trademarks of their respective owners.

This press release contains certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements relating to the ability of ScanSoft to realize the anticipated benefits from the acquisition of Rhetorical; the growth of the speech industry and the demand for speech solutions; future demand for, performance of, and opportunities for growth in ScanSoft's speech solutions; future revenue contributions from relationships with ScanSoft's partners; potential synergies from the Rhetorical acquisition; the continued strength of existing products, services and relationships as well as the introduction of new products, services and relationships; the market for ScanSoft's products; and ScanSoft's strategic and operational plan. 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: difficulties with integrating product plans and operations of acquired businesses and the accounting effects of such acquisitions on ScanSoft's operating and financial results; fluctuations in demand for ScanSoft's existing and future products; economic conditions in the United States and abroad; ScanSoft's ability to control and successfully manage its expenses, inventory and cash position; the effects of competition, including pricing pressure; possible defects in products and technologies; and ScanSoft's dependence on OEM customers. A detailed discussion of these and 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, and its most recent quarterly reports on Form 10-Q. ScanSoft undertakes no obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this document.

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