Aladdin Announces SmartHASP Software Protection on a Smart Card.

TEL AVIV, Israel--(BUSINESS WIRE)--July 2, 1998--

Industry-Leading Security with Unparalleled Ease-of-Use

Aladdin Knowledge Systems Ltd. (NASDAQ: ALDNF), a leading developer of solutions for the secure licensing and distribution of digital content, today announced SmartHASP(TM), the latest addition to HASP, the industry-leading hardware-based software protection system.

SmartHASP combines the traditional security of HASP with the up-to-the-minute technology of smart cards, building on Aladdin's reputation as a leader both in software protection and smart card development.

"With the announcement of USBHasp and Hardlock-USB, we confirmed our position as the innovators in the field of software security. Now SmartHASP takes us one stage further, providing next-generation solutions for managing and controlling network-based applications," says Aladdin's VP R&D Rami Kasterstein.

SmartHASP utilizes a CPU-based smart card with 496 bytes of internal read/write memory that can control access to different software modules, save passwords or other sensitive data. Such features facilitate innovative marketing and distribution techniques such as time-limited, demo, rental or leased software and have been field-proven by MemoHASP, Aladdin's most popular mainstream protection key.

SmartHASP works in conjunction with a PC/SC compliant read/write drive, and with Aladdin's ASEDrive. The integration of smart card drives into PCs is becoming more widespread in network environments. System integrators recognize the versatility of smart cards across a wide range of applications particularly appropriate to security- conscious networks. These range from simple PC-access control through to sophisticated authentication procedures based on biometric recognition.

The problem of protecting software on networks was highlighted by the 1998 BSA/SPA study which showed that 40% of office software was in illegal use.

"We believe that SmartHASP will further prove to developers and end-users that software protection is simple to implement, transparent in operation and an effective barrier to piracy," comments Rami Kasterstein.

About Aladdin:

Aladdin Knowledge Systems is a global leader in the secure licensing and distribution of digital content. Aladdin's product range includes HASP(R) and Hardlock(R), key-based software security systems which monitor software licensing and prevent unauthorized use of computer programs, Privilege(TM), a suite of software licensing and metering tools for developers and corporate IT managers, and ASE(R) -- The Aladdin Smartcard Environment -- a set of smart card application development tools for integrating smart cards with PCs. Aladdin is an ISO 9002 accredited company with headquarters in Tel Aviv, Israel, 5 international offices and distributors in more than 40 countries, serving over 25,000 clients worldwide. For more information, visit the Aladdin home page at http://www.aks.com.

    CONTACT: Aladdin Knowledge Systems Inc., New York



              Peter Felgentreff, 212/564-5678
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                           or
              Aladdin Knowledge Systems Ltd., Tel Aviv




              Lisa Appelson, 972-3/636-2222
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              E-mail: [e-mail]