<PAGE>
                                                                   EXHIBIT 10.30


                    TECHNOLOGY TRANSFER AND LICENSE AGREEMENT


         This TECHNOLOGY TRANSFER AND LICENSE AGREEMENT, dated as of January 30,
2003, 2002, between KONINKLIJKE PHILIPS ELECTRONICS N.V., a limited liability
company organized under the laws of The Netherlands ("Seller"), ScanSoft, Inc.,
a Delaware corporation ("Purchaser").

                              W I T N E S S E T H:

         WHEREAS, Seller and Purchaser have entered into the Principal Agreement
(as defined below) whereby Seller agrees to sell to Purchaser, and Purchaser
agrees to purchase certain assets from Seller; and

         WHEREAS, in connection with such transaction Seller wishes to assign,
or cause its Affiliates to assign, and the Purchaser wishes to accept assignment
of, certain technology and intellectual property rights as provided for in this
Agreement.

         NOW, THEREFORE, in consideration of the mutual covenants and
undertakings contained herein, and subject to and on the terms and conditions
herein set forth, the Parties agree as follows:

                                   ARTICLE I
                              DEFINITIONS AND TERMS

         Section 1.1 Definitions Incorporated from the Principal Agreement.
Unless otherwise defined herein, all defined terms used in this Agreement shall
have the same meaning as ascribed to them in the Principal Agreement.

         Section 1.2 Specific Definitions. As used in this Agreement, the
following terms shall have the meanings set forth or as referenced below:

         "Agreement" shall mean this Agreement (including all Schedules,
Appendices, Annexes and Exhibits hereto), as the same may be amended or
supplemented from time to time in accordance with the terms hereof.

         "Confidential Information" shall have the meaning given to such term in
Section 4.7.

         "Consolidated Subsidiaries" shall mean each of the entities as is now
in existence as, or as will be incorporated to be, wholly-owned Affiliates of
Purchaser for the purpose of conducting the Business.
<PAGE>
         "Licensed Other IPR" means all Other IPR (other than the Transferred
Other Business IPR And Technical Information) that, as of the Closing Date, is
(i) related to, used in, necessary to, or would otherwise be infringed by, the
current and reasonably contemplated future conduct of the Business, including
the development, manufacture, use, distribution, sale, support and other
exploitation of the Products or (ii) embodied by any of the Transferred Other
Business IPR And Technical Information and the Licensed Technical Information,
including all Other IPR described or listed in Schedule [A]and (iii) owned or
licensable.

         "Licensed Technical Information" means: (i) all Technical Information
(other than that which is Transferred Other Business IPR And Technical
Information) that, as of the Closing Date, is related to, used in, or necessary
for the operation of the Business, including the development, manufacture, use,
distribution, sale, support or other exploitation of the Products, including all
Technical Information described or listed in Schedule A hereto; (ii) any
Technical Information disclosed to, or learned by, the Purchaser as a result of
the transactions contemplated hereby, including the employment by the Purchaser
of the Transferred Employees; and (iii) owned or licensable.

         "Transferred Other Business IPR And Technical Information" shall mean
any and all Other IPR and Technical Information which is (i) owned by Seller or
its Affiliates and (ii) originated solely within the Business prior to the
Closing Date.

         "Other IPR" shall mean any and all intellectual property rights (such
as mask work rights, copyrights, works of authorship design rights and database
rights) including any intellectual property rights in or to any Product Software
but expressly excluding any: (i) trademarks, service marks, trade names, logos,
slogans, domain names, or business names (which shall be solely addressed by the
Trademark Transfer and License Agreement), (ii) Patents, and (iii) Technical
Information. Notwithstanding the foregoing, with respect to Software, Other IPR
means only the Product Software and Software created in the Business and used
only in the Business.

         "Patents" shall mean patents, patent applications, utility models and
other governmental grants for the protection of inventions anywhere in the world
and all continuations, divisions, reissues, re-examinations, renewals and
extensions of any of the foregoing rights. Patents shall be categorized as
follows:

         "A-Patents" shall mean the Patents listed in Appendix A to this
Agreement; provided, however, that so long as on or prior to the Closing Date
the Definitive Agreement referred to in the Letter of Intent is executed, the
Additional Patents (as defined therein) will also be A-Patents hereunder. In the
event that such Definitive Agreement is not executed on or prior to the Closing
Date, the parties agree that such Patents shall be C-Patents hereunder. All
Patents which (i) originated within the Business, (ii) are exclusively usable
within the Business prior to the Closing Date, and (iii) have or would be
entitled to the benefit of a priority date prior to the Closing Date are listed
on Appendix A.


                                      A-2
<PAGE>
         "B-Patents" shall mean the Patents listed in Appendix B to this
Agreement. All Patents which (i) originated within the Business (excluding
A-Patents), and (ii) have or would be entitled to the benefit of a priority date
prior to the Closing Date are listed on Appendix B.

         "C-Patents" shall mean any and all Patents, excluding the A-Patents and
B-Patents, owned by Seller and issued or issuing on any patent applications that
have or would be entitled to the benefit of a priority date prior to the Closing
Date and in respect of which: (i) Seller has the free right to grant licenses
under such Patents and (ii) which would, absent a license, be infringed by the
Business at the Closing Date, including the design, use, manufacture, sale,
offer for sale, importation and support of the Products.

         "Products" shall mean any and all (i) products manufactured, sold or
offered for sale by or for the Business as at the Closing Date, including any
services related thereto; (ii) products under development by or for the Business
for which Purchaser can demonstrate by written documentation that a material
development activity on the basis of an approved budget was in operation; (iii)
the Product Software; and (iv) all products listed on Schedule 1.2(i).

         "Product Software" shall mean any and all Software used or intended for
use in the design, development or production of Products at the Closing Date
(whether or not as part of the Products and including any such Software that
constitutes a Product), including the design and development of the Products and
including all Software listed on Schedule 1.2(k).

         "Principal Agreement" shall mean that certain Purchase Agreement dated
as of October , 2002 relating to the sale and transfer of the Business to
Purchaser which has been entered into between Seller and Purchaser.

         "Software" means any and all computer software and code, including
assemblers, applets, compilers, source code, object code, data (including image,
voice and sound data), design tools and user interfaces, source code listings
and documentation, in any form or format, however fixed.

         "Technical Information" shall mean any and all technical information,
technology, know how, trade secrets, formulae, algorithms, routines, netlists,
verilog files, emulation and simulation reports, test vectors, Software, files,
data-bases (including voice data-bases), devices, hardware, processes, designs,
drawings, specifications and the like, and any documentation relating to or
containing any intellectual property, all in whatever form held (including on
paper, electronically, on magnetic media or otherwise) but expressly excluding
all of the foregoing relating to Software other than the Product Software.

         Section 1.3 Other Terms. Other terms may be defined elsewhere in the
text of this Agreement and, unless otherwise indicated, shall have such meaning
throughout this Agreement.


                                       A-3

<PAGE>
         Section 1.4 Other Definitional Provisions.

         (a) The words "herein" and "hereunder" and words of similar import,
when used in this Agreement, shall refer to this Agreement as a whole and not to
any particular provision of this Agreement.

         (b) The terms defined in the singular shall have a comparable meaning
when used in the plural, and vice versa.

         (c) This Agreement shall be construed without regard to any presumption
or rule requiring construction or interpretation against the party drafting or
causing any instrument to be drafted.

         (d) Whenever the words "include", "including", or "includes" appear in
this Agreement, they shall be read to be followed by the words "without
limitation" or words having similar import.

                                   ARTICLE II
                             ASSIGNMENT OF A-PATENTS

         Section 2.1 Subject to this Article II and effective upon the Closing
Date of the Principal Agreement, Seller hereby irrevocably assigns, and shall
cause its appropriate Affiliates to assign, to Purchaser, in perpetuity,
throughout the world, with effect from the Closing Date all of its right, title
and interest in and to the A-Patents, including all rights to recover past,
present and future damages for the infringement of any of the A-Patents.

         Section 2.2 The Purchaser acknowledges and agrees that the assignment
as provided in Section 2.1 is subject to Seller and its Affiliates retaining an
irrevocable, perpetual, non-exclusive, worldwide, fully paid-up, royalty free
license, to use such A-Patents for their own activities (including, without
limitation, the right to design, develop, make, have made, sell, offer for sale,
import, use and service products and services with use of or incorporating such
A-Patents). For the avoidance of doubt, Seller and its Affiliates agree that the
license granted under this Section 2.2 is subject to the obligations of Seller
contained in Section 5.4(a) of the Principle Agreement.

         Section 2.3 The Purchaser acknowledges and agrees that the assignment
provided in Section 2.1 is subject to any and all licenses and other rights and
prior commitments that may have been granted by Seller or its Affiliates with
respect to the A-Patents prior to the Closing Date and any renewals thereof.

         Section 2.4 The Purchaser shall bear any and all costs of filing,
prosecution and maintenance of the A-Patents first becoming due and payable
after the Closing Date, including any statutory remuneration or other
compensation payable to inventors with respect to the A-Patents (even if the
event giving rise to the obligation occurred prior to the Closing Date). Seller
shall be responsible for any and all costs for


                                      A-4
<PAGE>
remuneration or other compensation with respect to the A-Patents becoming due
and payable prior to the Closing Date, and shall reimburse the Purchaser for
such costs if Seller has not paid them prior to the Closing Date and Purchaser
pays them after the Closing Date on behalf of Seller. Seller agrees to continue
to maintain and continue any current prosecutions of the A-Patents prior to the
Closing Date consistent with its past practice.

         Section 2.5 Purchaser agrees not to, and to cause its successors and
assigns and any subsequent assignees or transferees of the A-Patents not to,
enforce or authorize any person to enforce any of the A-Patents against Seller
or its Affiliates and their customers to the extent such customers have an
actual or implied license to such A-Patent(s) with respect to a product or
service purchased directly or indirectly from Seller or its Affiliates.

         Section 2.6 Before taking any enforcement action relating to any
A-Patent against a third party, Purchaser shall, and shall cause its successors
and assigns and any subsequent assignees or transferees of the A-Patents to,
notify Seller in writing at least twenty (20) Business Days (or, if the
Purchaser will seek immediate injunctive relief, then as promptly as
practicable) of the intended enforcement action and the name of such third party
and a specification of the relevant A-Patents and such other information as
Seller may require to evaluate whether such third party is entitled to use such
A-Patents under any prior grants and to promptly provide such other information
as Seller may reasonably request. Within twenty (20) Business Days (or, if
Purchaser will seek immediate injunctive relief, then as promptly as
practicable) after receipt of such notice, Seller shall identify whether such
Party is entitled to use of such A-Patents. Purchaser agrees not to, and to
cause its successors and assigns and subsequent assignees or transferees of the
A-Patents not to, enforce or authorize any person to enforce any of the
A-Patents against any such third party of which it is timely and properly
notified by Seller (i) that such party is entitled to use of such A-Patent
pursuant to a prior grant and (ii) of any relevant additional information as
Seller has the right to disclose.

                                   ARTICLE III
                       LICENSE OF B-PATENTS AND C-PATENTS

         Section 3.1 Seller hereby grants, and agrees to cause its appropriate
Affiliates to grant, to Purchaser with effect from the Closing Date an
irrevocable, perpetual, non-terminable, non-exclusive, worldwide, fully paid and
royalty free license, to use the B-Patents to use, make, have made, sell, offer
for sale, import and service and otherwise exploit and dispose of made products
using the B-Patents in connection with Purchaser's current and future products.

         Section 3.2 For the avoidance of doubt, Seller retains the right to
grant additional non-exclusive licenses in the B-Patents but such right is
subject to Section 5.4(a) of the Principle Agreement (and may not be used to
circumvent by licensing the


                                      A-5
<PAGE>
purposes of such section), except for any cross-license agreements to which
Philips is now or may in the future become a party which are not limited to the
B-Patents.

         Section 3.3 Subject to Section 3.4, Seller hereby grants, and agrees to
cause its appropriate Affiliates to grant, to Purchaser and its Affiliates an
irrevocable, perpetual, non-terminable, non-exclusive, worldwide, fully paid up
and royalty free license under the C-Patents to use, make, have made, sell,
offer for sale, import and service and otherwise exploit and dispose of products
using the C-Patents in the field of speech technology (which shall include
speech technology used as a component of products relying primarily on other
technologies). Notwithstanding the foregoing, upon the occurrence of an
Assertion Event (as defined in Section 7.2 hereof), in accordance with Section
7.2, the license to the C-Patents granted in this Section will be reduced in its
scope such that the license is only to use, make, have made, sell, offer for
sale, import and service, and otherwise exploit and dispose of the Products
existing as at the Closing Date and natural successors of such Products.

         Section 3.4 Purchaser and its Affiliates acknowledge and agree that the
licenses provided in Section 3.3 do not include any right to make, have made,
sell or service any magnetic, integrated circuit, mechanical, electronic,
optical or software components or otherwise perform under any C-Patents in
respect of such components, except in respect of speech components and those
components which were actually produced and not abandoned by the Business at the
Closing Date.

         Section 3.5 If Seller for any reason wishes to abandon or transfer to a
third party, any of the B-Patents in any country, Seller shall not be obliged to
maintain the same, but shall first notify Purchaser who shall have the right
within thirty (30) days after receiving such notice to take an assignment of
that Patent subject to:

                  (i) Seller and its Affiliates retaining a royalty-free,
                  irrevocable, unrestricted, worldwide, non-exclusive license
                  under such Patent;

                  (ii) any prior commitments relating to such Patent; and

                  (iii) Purchaser bearing all costs of the prosecution and
                  maintenance of the Patent concerned from the date of
                  assignment, including remunerations payable to inventors
                  according to national laws with respect to such Patent.

                                   ARTICLE IV
          ASSIGNMENT AND LICENSE OF OTHER IPR AND TECHNICAL INFORMATION

         Section 4.1 Subject to this Article IV, Seller hereby assigns, and
agrees to cause its appropriate Affiliates to assign, to Purchaser all of
Seller's or its appropriate Affiliate's right, title and interest in and to any
and all Transferred Other Business IPR And Technical Information.


                                      A-6
<PAGE>
         Section 4.2 Subject to this Article IV, Seller hereby grants, and
agrees to cause its appropriate Affiliates to grant, to Purchaser with effect
from the Closing Date an irrevocable, perpetual, non-exclusive, worldwide, fully
paid-up and royalty free license to and under all of the Licensed Other IPR and
Licensed Technical Information to use, disclose, copy, distribute, make, have
made, make derivative works from, sell, and otherwise fully exploit in its
business. For the avoidance of doubt, Philips and its Affiliates shall have no
obligation to transfer any Other IPR or Technical Information or know-how to
Purchaser after the Closing Date (except as may otherwise expressly be required
in the Corporate Research & Development Agreement between the parties).

         Section 4.3 Philips agrees and acknowledges that all of the Software
comprising the Products is either transferred to Purchaser pursuant to Section
4.1 or licensed to Purchaser pursuant to Section 4.2.

         Section 4.4 The Purchaser acknowledges and agrees that the assignment
provided in Section 4.1 is subject to Seller and its Affiliates retaining an
irrevocable, perpetual, non-exclusive, worldwide, fully paid-up, royalty free
license to use the Transferred Other Business IPR And Technical Information for
their own activities (including, without limitation, the right to design,
develop, make, have made, and service products and services with use of or
incorporating such Transferred Other Business IPR And Technical Information).
For the avoidance of doubt, Seller and its Affiliates agree that the license
granted under this Section 4.3 is subject to the obligations of Seller contained
in Section 5.4(a) of the Principle Agreement and may not be used to circumvent
by licensing the purposes of said Section 5.4(a).

         Section 4.5 The Purchaser acknowledges and agrees that the assignment
as provided in Section 4.1 is subject to any and all licenses and other rights
and prior commitments that may have been granted by Seller or its Affiliates
with respect to such Other IPR and Technical Information prior to the Closing
Date.

         Section 4.6 The Purchaser agrees not to, and to cause its Affiliates,
successors and assigns and any subsequent assignees or transferees of the
Transferred Other Business IPR And Technical Information not to, enforce or
authorize any person to enforce any Transferred Other Business IPR And Technical
Information against Seller or its Affiliates and their customers to the extent
such customers have an actual or implied license to such Transferred Other
Business IPR And Technical Information from Seller, with respect to product or
service purchased, directly or indirectly, from Seller or its Affiliates.

         Section 4.7 Before taking any enforcement action relating to any
Transferred Other Business IPR And Technical Information against a third party,
Purchaser shall, and shall cause its successors and assigns and any subsequent
assignees or transferees of the Transferred Other Business IPR And Technical
Information to, notify Seller in writing at least twenty (20) Business Days (or,
if the Purchaser will seek immediate injunctive relief, then as promptly as
practicable) of the intended enforcement


                                      A-7
<PAGE>
action and the name of such third party and a specification of the relevant
Transferred Other Business IPR And Technical Information and such other
information as Seller may require to evaluate whether such third party is
entitled to use such Transferred Other Business IPR And Technical Information
under any prior grants and to promptly provide such other information as Seller
may reasonably request. Within twenty (20) Business Days (or, if Purchaser will
seek immediate injunctive relief, then as promptly as practicable) after receipt
of such notice, Seller shall identify whether such Party is entitled to use of
such Transferred Other Business IPR And Technical Information. Purchaser agrees
not to, and to cause its successors and assigns and subsequent assignees or
transferees of the Transferred Other Business IPR And Technical Information not
to, enforce or authorize any person to enforce any of the Transferred Other
Business IPR And Technical Information against any such third party of which it
is timely and properly notified by Seller (i) that such party is entitled to use
of such Transferred Other Business IPR And Technical Information pursuant to a
prior grant and (ii) of any relevant additional information as Seller has the
right to disclose.

         Section 4.8 During the course of performance of this Agreement, Seller
or its Affiliates, on the one hand and Purchaser or its Affiliates, on the other
hand (each a "Party"), may disclose certain Confidential Information to the
other Party. Each Party shall, and shall cause its Affiliates to, maintain the
confidentiality of such Confidential Information and shall not, and cause its
Affiliates not to, use, disclose, or otherwise exploit any Confidential
Information for any purpose not expressly contemplated by this Agreement.
Notwithstanding the foregoing, the Party receiving Confidential Information may,
to the extent necessary to effect the meaning and purpose of this Agreement,
disclose the other Party's Confidential Information to third parties in
connection with fulfilling its obligations or enjoying its rights under this
Agreement, Confidential Information on the same terms as, and together, with its
own confidential information. For the purpose of this Agreement, the term
"Confidential Information" as used herein shall mean any data or information
that is designated as confidential by either Party or its Affiliates.
Notwithstanding the foregoing, Confidential Information is deemed not to include
information that (i) is publicly available or in the public domain at the time
disclosed; (ii) is or becomes publicly available or enters the public domain
through no fault of the Party receiving information purported to be
confidential; (iii) is rightfully communicated to the other Party by persons not
bound by confidentiality obligations with respect thereto; (iv) is already in
the other Party's or its Affiliates' possession free of any confidentiality
obligations with respect thereto; (v) is determined to be independently
developed based on reasonable documentation or (vi) is approved for release or
disclosure by Party disclosing information without restriction. As of the
Closing Date, for the avoidance of doubt, the Transferred Other Business IPR And
Technical Information shall be considered the Purchaser's Confidential
Information (to the extent such information otherwise qualifies as Confidential
Information).


                                      A-8
<PAGE>
                                   ARTICLE V
                            DELIVERY AND ALLOCATION

         Section 5.1 Delivery of Technical Information. At no charge to the
Purchaser, Seller shall deliver, or cause its appropriate Affiliate to deliver,
to the Purchaser all Technical Information assigned hereunder as it exists on
the Closing Date, and such other tangible items as may be requested to affect
the licenses and transfers hereunder. To the extent that any Software or
Technical Information is capable of being delivered electronically, upon
Purchaser's request, Seller shall deliver such items to Purchaser by electronic
means. Without limiting the foregoing, Seller shall deliver to Purchaser all
files and documents, including patent prosecution files and legal opinions (or
portions thereof) related to the A - Patents.

         Section 5.2 Allocation. On the Closing, Purchaser shall designate in
writing to Seller how to allocate the assignments of the A-Patents hereunder
among Purchaser and its Affiliates. Seller shall cooperate with the Purchaser in
effecting such allocation.

         Section 5.3 Bankruptcy. All licenses granted to a licensee under or
pursuant to this Agreement are, and shall otherwise be deemed to be, for
purposes of Section 365(n) of the United States Bankruptcy Code, licenses to
rights of "Intellectual Property Rights" as defined thereunder. Notwithstanding
any provision contained herein to the contrary, if a licensor under this
Agreement is under any proceeding under the Bankruptcy Code and the trustee in
bankruptcy of such licensor, or such licensor as a debtor in possession,
rightfully elects to reject the licenses granted to the licensee under this
Agreement, the licensee may, pursuant to 11 U.S.C. Section 365(n)(1) and (2),
retain any and all of the licensee's rights under such licenses, to the maximum
extent permitted by law, otherwise subject to the terms of this Agreement.

         Section 5.4 Assignments. Until the consummation of the formal
assignment of the A-Patents and transfer of the related files, Seller will,
without demanding any further consideration therefor, at the reasonable request
and expense of Purchaser, do all lawful and just acts, that may be or become
reasonably necessary for transferring, conveying, prosecuting, sustaining,
obtaining continuations, continuations-in-part, or divisionals of reissuing, or
re-examining the A-Patents and any Other IPR and Technical Information to be
assigned hereunder, and for evidencing, maintaining, recording and perfecting
Purchaser's rights to the A-Patents and any Other IPR and Technical Information
assigned under this Agreement, including but not limited to execution and
acknowledgement of assignments and other instruments in a form reasonably
required by Purchaser for each jurisdiction.

         Section 5.5 Power of Attorney. In furtherance of the foregoing, Seller
irrevocably constitutes and appoints Purchaser, with full power of substitution,
to be its true and lawful attorney, and in its name, place or stead, to execute,
acknowledge, swear to and file, all instruments, conveyances, certificates,
agreements and other documents,


                                      A-9
<PAGE>
and to take any action which shall be necessary, appropriate or desirable to
effectuate the transfer of the A-Patents and any Other IPR and Technical
Information to be assigned to Purchaser in accordance with the terms of this
Agreement; provided, however, that such power shall be exercised by Purchaser
only in the event that Seller fails after thirty (30) days notice to take the
necessary actions required to effect or record the transfer of such A-Patents or
Other IPR or Technical Information as Purchaser has reasonably requested.

                                   ARTICLE VI
                                 INDEMNIFICATION

         Section 6.1 The representations and warranties set forth in Section
3.22 of the Principal Agreement are in lieu of, cancel and supersede any other
representations or warranties given by or on behalf of Seller or its Affiliates
or any of their respective representatives or agents or any other Person at any
occasion, whether in writing or verbally, express or implied, if any. Further,
the parties acknowledge and agree that neither Seller nor its Affiliates shall
have any obligation under this Agreement to maintain or support any of the
Patents, Other IPR or Technical Information or to provide any upgrades or
enhancements thereto to Purchaser or its Affiliates.

         Section 6.2 After the Closing occurs, any claim for a breach of any
covenants or agreements of Seller or its Affiliates hereunder or of any of the
representations and warranties contained in Section 3.22 of the Principal
Agreement shall only be enforceable by Purchaser (on behalf of itself and its
Affiliates) against Seller or its Affiliates in accordance with the provisions
of the Principal Agreement and liability (and limitations on such liability) in
respect of any breach of such representations and warranties shall be determined
solely in accordance with the terms of the Principal Agreement.

                                  ARTICLE VII
                                 OTHER COVENANTS

         Section 7.1 Subject to compliance with Section 3.4, neither Seller nor
its Affiliates shall have any obligation to prosecute or maintain any Patents,
or to notify Purchaser if Seller or its Affiliates abandon any such Patents.
With respect to any (alleged) infringement or violation by a third party
involving any of the B-Patents, C-Patents, Other IPR or Technical Information
licensed to Purchaser hereunder and/or any of Seller's intellectual property
rights relating to the Patents, Other IPR or Technical Information licensed to
Purchaser and its Affiliates hereunder, Seller or its Affiliates as the case may
be, shall have the right, but not the duty, to assert or commence any action for
infringement or violation of such Patents, Other IPR or Technical Information
against such third party. Any decision to assert or commence any such action
shall be solely with Seller or its Affiliates, as the case may be. At the
request of Seller, Purchaser and its Affiliates shall cooperate, in any
reasonable manner, in taking such action.

         Section 7.2 If Purchaser asserts in litigation any patents that
ScanSoft Inc. owns that have or would be entitled to a filing date prior to the
Closing Date (the


                                      A-10
<PAGE>
"Non-Assertion Patents") against products of Seller or its Affiliates in the
field of integrated dictation systems in the medical, legal and other
professional markets but excluding general dictation software packaged and sold
through conventional indirect software channels (such an event, an "Assertion
Event"), then Seller, upon written notice to Purchaser (which notice may be
effective immediately), may reduce the scope of the license granted under
Section 3.3 hereof, as provided therein. The covenant contained in this Section
7.2 shall continue to apply with respect to the Non-Assertion Patents,
irrespective of any transfers thereof.

         Section 7.3 Each of Seller and Purchaser agrees to negotiate in good
faith a license to the other party (or, if applicable, the other party's
customers or affiliates) on commercially reasonable terms to use any patent
infringed by such party. It is acknowledged and agreed that in the event that
the parties are unable to reach agreement through such negotiations, each party
retains all its remedies under the law.

         Section 7.4 Notwithstanding anything herein to the contrary, Seller
shall not be obliged to grant a license hereunder which results in Seller
incurring an obligation to pay royalties or other consideration to third parties
unless Purchaser, at its option, reimburses Seller on an as incurred basis (or
obtains a release of Seller of such obligation). Seller shall promptly inform
Purchaser of any such royalties or other consideration and Purchaser shall
promptly inform Seller whether it wishes to exercise such option.

         Section 7.5 Seller agrees that it shall bear any and all costs relating
to the assignment of the A-Patents and the Transferred Other Business IPR And
Technical Information pursuant to this Agreement.

         Section 7.6 Seller and Purchaser shall execute and deliver all such
documents and perform all further acts and things as may reasonably required to
implement or give effect to this Agreement and the assignment and licenses
contemplated thereby.

         Section 7.7 If Philips learns of any patents in the text to speech
field that have or would be entitled to the benefit of a priority date prior to
the Closing Date that were not transferred to Purchaser as A Patents, then
Seller shall transfer such patents to Purchaser (including taking such actions
under Section 5.4 as necessary to do so).

         Section 7.8 Where the consent of any third party is required to enable
the Purchaser to be entitled to the benefit of any rights assigned or licensed
under this Agreement, the Parties shall use commercially reasonable endeavors to
procure such consent.


                                      A-11
<PAGE>
                                  ARTICLE VIII
                                   TERMINATION

         Section 8.1 Term. This Agreement shall become effective on the Closing
Date and shall remain in effect until terminated upon mutual agreement of the
Parties.

                                   ARTICLE IX
                                  MISCELLANEOUS

         Section 9.1 Notices. All notices or other communications hereunder
shall be deemed to have been duly given and made if in writing and if served by
personal delivery upon the party for whom it is intended, if delivered by
registered or certified mail, return receipt requested, or by an international
courier service, or by telecopier, to the person at the address set forth below,
or such other address as may be designated in writing hereafter, in the same
manner, by such person:

                  To Purchaser:

                  SCANSOFT, INC.
                  9 Centennial Drive,
                  Peabody, MA  01960
                  U.S.A.
                  Attention:  Chief Financial Officer
                  Telephone:  (978) 977-2000
                  Facsimile:  (978) 977-2436
                  E-mail:  Richard.Palmer@scansoft.com



                  With a copy to:

                  WILSON SONSINI GOODRICH & ROSATI
                  650 Page Mill Road
                  Palo Alto, CA 94304-1050
                  Attention:  Selwyn B. Goldberg, Esq.
                  Facsimile:  (650) 493-6811



                  To Seller:

                  KONINKLIJKE PHILIPS ELECTRONICS N.V.
                  Breitner Center Amstelplein 2
                  P.O. Box 77900


                                      A-12

<PAGE>
                  1070 MX Amsterdam
                  The Netherlands
                  Attention:  General Secretary
                  Telephone: +31 20 597 7232
                  Facsimile: +31 20 597 7230

                  With a copy to:

                  SULLIVAN & CROMWELL
                  125 Broad Street
                  New York, NY  10004
                  Telephone:  (212) 558-3653
                  Telecopy:  (212) 558-3588
                  Attn:  Neil Anderson

         Section 9.2 Amendment. Any provision of this Agreement may be amended
if, and only if, such amendment is in writing and signed, in the case of an
amendment, by Purchaser and Seller.

         Section 9.3 Assignment and Sublicensing (a) Except as provided
otherwise herein, none of the rights licensed hereunder is sublicensable, except
that (i) Seller and Purchaser each may sublicense its Affiliates, provided that
each such sublicensed Affiliate agrees to be bound and abide by the terms of
this Agreement and that Seller or Purchaser, as the case may be, causes such
Affiliate to do so; and (ii) Seller and Purchaser each may sublicense developers
or joint ventures (but in any case only to the extent that any product from such
outsourced development is used in its business only or for products as use or
sold by Seller or Purchaser, as applicable), have-made manufacturers,
distributors, customers and end users, in each case, in their respective
capacities as such. For clarification purposes, such sublicenses may be
transferred only in connection with a sale of all or substantially all of the
assets of the sublicensee to which the sublicense relates, or otherwise in
connection with a change of control, merger, reorganization, restructuring,
spin-out or similar transaction.

         (b) Neither this Agreement nor any right or obligation under this
Agreement is transferable (whether by assignment, merger, stock purchase,
operation of law or otherwise, (any such transfer, a "Transfer")) in whole or in
part by any Party without the prior written consent of the other Party, which
consent shall not be unreasonably withheld (it being understood that transfer to
a competitor, would be a reasonable basis on which to withhold such consent),
except that such transfers to an Affiliate of Seller or Purchaser, as
applicable, shall be permissible without the need for consent. Neither Party may
transfer this Agreement or any right or obligation under this Agreement to an
Affiliate for the sole or material purpose of, or which transfer to an Affiliate
has a material effect of, circumventing the transfer restriction contained in
the preceding sentence. Notwithstanding the foregoing, Purchaser may Transfer
this Agreement without the need for consent in connection with a sale of all or
substantially


                                      A-13
<PAGE>
all of the business to which this Agreement relates (or otherwise in connection
with a stock purchase, merger, reorganization, restructuring or change of
control or otherwise), so long as the sale does not result involve any of the
entities listed in Schedule 9.17 to the Principal Agreement (the "Scheduled
Entities") or their Affiliates. In the event that such a sale does involve any
of the Scheduled Entities: (i) if the Transfer occurs in connection with the
acquisition of Purchaser by one of the Scheduled Entities as a subsidiary, this
Agreement may be transferred with the Purchaser without the need for consent and
will remain in full force and effect so long as such Scheduled Entity confirms
to Seller in writing that it will abide by the scope of the use of the C-Patents
licensed to Purchaser as provided herein and will otherwise abide with the terms
of this agreement (and that it will not transfer other business lines to
Purchaser or otherwise attempt to circumvent the limitations on use of the
C-Patents in this Agreement), and (ii) if the Transfer does not occur as set
forth in (i), this Agreement will continue in full force in effect with respect
to the entity to which this Agreement is transferred without the need for
consent, except that the license granted in Section 3.3 will be reduced in its
scope such that the license is only to use, make, have made, sell, offer for
sale, import and service, and otherwise exploit and dispose of the products of
the business existing or in planning as of three months prior to the execution
of any agreement, consent, order or similar document which results in such
Transfer , and natural successors of such products (such license, a "Reduced C
License"). Further, without limiting the foregoing, Purchaser shall be entitled
to transfer this Agreement without the need for consent in part(s) one time (but
only one time) provided that any rights to C -Patents so transferred shall be
limited to a Reduced C License but Purchaser's right with respect to the
C-Patents shall be remain in effect as set forth herein and unaffected (even if
otherwise purported to be transferred).

         (c) Notwithstanding the foregoing provisions (a) and (b) of this
Section 9.3, all rights to Technical Information and Other IP licensed under
this Agreement are freely sublicensable provided that such sublicensee is bound
by confidentiality restrictions no less stringent than those set forth in
Section 4.7.

         Section 9.4 Entire Agreement. This Agreement (including all Appendixes,
Schedules, Exhibits and Annexes hereto) contains the entire agreement among the
Parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, oral or written, with respect to such matters,
except for the Principal Agreement (including all Appendixes, Schedules,
Exhibits, Annexes and Ancillary Agreements thereto) and the Non-Disclosure
Agreement by Seller, on the one hand, and Purchaser, on the other, related to
the subject matter of this Agreement (to the extent such agreements would
otherwise fall within the notion of prior agreements and understandings as meant
in this Section 9.4), which will remain in full force and effect pursuant to the
terms thereof. Any subsequent agreement among the Parties in respect of the
subject matter hereof shall further be subject to the terms of this Agreement
except to the extent such agreement expressly (i) states that it supersedes this
Agreement in relevant part and (ii) refers to this Section 9.4. For
clarification purposes, nothing


                                      A-14
<PAGE>
contained in this Agreement shall in any way reduce or limit any of Seller's or
its Affiliates' obligations under Section 5.4 of the Principal Agreement.

         Section 9.5 Parties In Interest; No Third Party Beneficiaries. This
Agreement shall inure to the benefit of and be binding upon the Parties hereto
and their respective successors and permitted assigns. Unless this Agreement
expressly provides otherwise, nothing in this Agreement is intended to confer
upon any Person other than Seller and Purchaser or their successors or permitted
assigns, any rights or remedies under or by reason of this Agreement.

         Section 9.6 GOVERNING LAW; DISPUTE RESOLUTION. THIS AGREEMENT SHALL BE
DEEMED TO BE MADE IN AND IN ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND
GOVERNED BY AND IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF. PARTIES HERETO AGREE THAT ANY
ACTION OR PROCEEDING IN RESPECT OF ANY CLAIM ARISING OUT OF OR RELATED TO THIS
AGREEMENT SHALL BE SOLELY CONDUCTED BY SELLER AND PURCHASER THROUGH PURCHASER
(ON BEHALF OF ITSELF AND ITS AFFILIATES) IN ACCORDANCE WITH THE PROCEDURE
PROVIDED IN THE PRINCIPAL AGREEMENT.

         Section 9.7 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same Agreement. Copies of executed
counterparts transmitted by telecopy, telefax or other electronic transmission
service shall be considered original executed counterparts for purposes of this
Section 9.7, provided that receipt of copies of such counterparts is confirmed.

         Section 9.8 Headings. The heading references herein are for convenience
purposes only, do not constitute a part of this Agreement and shall not be
deemed to limit or affect any of the provisions hereof.

         Section 9.9 Severability. The provisions of this Agreement shall be
deemed severable and the invalidity or unenforceability of any provision shall
not affect the validity or enforceability of the other provisions hereof. If any
provision of this Agreement, or the application thereof to any person or entity
or any circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision and (b) the remainder of this Agreement and the application of such
provision to other persons, entities or circumstances shall not be affected by
such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.

         Section 9.10 Fulfillment of Obligations. Any obligation of any Party to
the other Party under this Agreement, which obligation is performed, satisfied
or fulfilled


                                      A-15

<PAGE>
by a current Affiliate of such Party, shall be deemed to have been performed,
satisfied or fulfilled by such Party.

         Section 9.11 English Language. This Agreement shall be made in the
English language, which language shall be controlling in all respects, and all
versions hereof in any other language shall not be binding upon the parties. All
communications and notices to be made pursuant to this Agreement, including all
Exhibits and related documentation, shall be in the English language.

         Section 9.12 Expenses. Except as otherwise set forth herein, each Party
shall pay its own legal, accounting and other expenses incidental to this
Agreement and the consummation of the transactions contemplated thereby.


                                      A-16
<PAGE>
         IN WITNESS WHEREOF, the Parties have executed or caused this Agreement
to be executed as of the date first written above.



                                            KONINKLIJKE PHILIPS ELECTRONICS N.V.

                                            By: /s/ E. Coutinho
                                               ---------------------------------
                                            Name: E. Coutinho
                                            Title: Authorized Signatory

                                            SCANSOFT, INC.

                                            By: /s/ Michael K. Tiunan
                                               ---------------------------------
                                            Name: Michael K. Tiunan
                                            Title: President & COO


                                      A-17