Aladdin Knowledge Systems Acquires Electronic Software Distribution Business From Preview Systems

CHICAGO, May 18, 2001 - Aladdin Knowledge Systems (NASDAQ: ALDN), a global leader in the field of Internet content and software security, has signed a definitive agreement to acquire Preview Systems' (NASDAQ: PRVW) electronic software distribution (ESD) products and business for $5 million in cash.

Preview Systems is the recognized leader in providing commerce platforms and services for the secure distribution of digital goods over the Internet. Aladdin's acquisition of Preview's ESD business includes the ZipLock, Vbox and PortableStore product lines and a customer base of leading software developers and publishers.

In addition, Aladdin acquires technology and intellectual property that is complementary to Aladdin's existing Privilege product, an integrated electronic licensing system that provides increased revenue through flexible business models. Aladdin and Preview will begin working together immediately on the continuing development of Preview's current product lines and the ongoing support and customer care for all existing active customer contracts. In order to remain close to customers, Aladdin plans to maintain a US west coast office. The deal is subject to Preview shareholders' approval and is expected to close in July 2001.

"The acquisition of Preview's ESD business serves as a significant technological boost to Aladdin's existing Privilege and HASP products," said Yanki Margalit, CEO and Chairman of Aladdin Knowledge Systems. "As part of Aladdin's continuing advancement in the software security arena, the strategic acquisition provides a combination of powerful technologies and a high-quality customer base that is capable of positioning Aladdin at the forefront of the growing ESD market. Aladdin is fully committed to the Software DRM/ESD vision, and we intend to grow the business, as well as work closely with the customers to make sure we answer their needs for electronic software distribution and rights management."

Dr. Vincent Pluvinage, CEO of Preview Systems, has been invited to join Aladdin's Global Advisory Board. Dr. Pluvinage received a Ph.D. in Bio Engineering from the University of Michigan, later joined AT&T Bell Laboratories, then spun off a digital signal processing technology to Silicon Valley based ReSound Corporation who went public on Nasdaq in 1993. Dr. Pluvinage joined Preview Systems in June 1997 and completed an IPO in December 1999.

"I look forward to helping Yanki Margalit and his company in a strategic advisory capacity to ensure that customers from both Preview and Aladdin derive increasing benefits from the combination of our respective technologies and resources," said Dr. Pluvinage.

Conference Call Details

Mr. Yanki Margalit, CEO and Chairman, and Mr. Erez Rosen, Chief Financial Officer, will host a conference call on Monday, May 21st, 2001 at 11 a.m. EST to announce the transaction. Listeners may dial using the numbers below:

May 21st, 2001 at 11 a.m. EST

Domestic: (800) 403-1024

International: (865) 544-0908

Participant Code: 342371

About Vbox

Vbox Builder is a comprehensive yet easy-to-use solution for the creation of trial versions of software applications. It enables software publishers and developers to produce trial-enabled software; ultimately giving end user customers the opportunity to use a full-featured product on a try-before-you-buy basis with the option to buy at any point during or after the trial period. With Vbox, publishers and resellers can easily generate incremental revenues by offering trial-enabled software and capitalizing on cross-selling or up-selling possibilities.

About ZipLock

The ZipLock System for digital goods distribution is the industry's most comprehensive and flexible infrastructure solution for managing, selling and fulfilling digital goods over the Internet. Without restricting the different ways publishers and channel partners want to do business, it provides scalable, secure, and reliable electronic digital goods e-commerce.

The ZipLock System is the only digital goods e-commerce technology that simultaneously supports direct sales and multi-tier channel sales. Because ZipLock is based on a modular architecture, a distributed system can be deployed across the entire digital goods supply chain. By employing a common platform, partners can leverage a global network of digital goods publishers, distributors, and resellers.

About PortableStore

Based on ZipLock technology for digital rights commerce, PortableStore technology brings a complete e-commerce storefront and a selected inventory of digital goods to a local device, such as a CD-ROM, DVD-ROM or OEM hard drive. Once distributed, the PortableStore provides customers with access to a variety of software products in either try-before-you-buy or purchase only format. Customers simply add items to a local shopping cart, connect to the Internet, and complete the "checkout" process at the appropriate online store. Software orders are fulfilled directly from the CD, DVD, or hard drive as soon as payment processing is complete with no need to wait for lengthy downloads or for delivery of a physical box.

About Aladdin

Aladdin (NASDAQ: ALDN) is a global leader in securing digital content, from applications software to Internet use and access. Aladdin's products include HASP and Hardlock, software security systems that protect the revenues of developers and publishers; Privilege, a software licensing platform for the Internet; the eSafe line of anti-vandal, anti-virus and content filtering software for PCs and networks connected to the Internet; and eToken for Internet security and authentication. Aladdin serves its customers through eight offices located in the world's major software markets as well as through a network of 50 distributors serving more than 100 countries. For more information visit the Aladdin web site at www.aladdin.com.

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