California Software Ends Talks With MAI Systems to Protect Shareholders.

Business/Technology Editors

IRVINE, Calif.--(BUSINESS WIRE)--June 28, 2000

California Software Corporation (OTC BB:CAWC), a leader in IBM migration products and developer of the award-winning BABY product line, today announced that it will not proceed with the acquisition of HIS, a division of MAI Systems Corporation.

Bruce Acacio, President and CEO of the Company, stated "The preliminary agreement between California Software Corporation and MAI Systems contained protective provisions designed to limit dilution incurred by existing shareholders of California Software in the event the stock price fell below a certain price per share prior to consummation. This has in fact occurred over the past few weeks. The net result would have adversely impacted our present shareholders and therefore we opted not to proceed with the deal. We have exhaustively reviewed the merits of a potential acquisition of HIS and while we are still impressed with the company, we believe that this acquisition would not be, at this juncture, in the best interests of our shareholders nor a prudent course of action for California Software."

Acacio continued, "We have not attenuated our goal of aggressive growth through acquisitions, but at this point we have opted to shift gears by prioritizing our goal to secure an American Stock Exchange listing prior to seeking or courting acquisition candidates. This accomplishes two things. First, we anticipate that an AMEX listing would strengthen our potential bargaining position in that an AMEX listing results in accretion to the value

we have endeavored to create for California Software Corporation. An increased bargaining position ultimately translates into the greater value retained by our shareholders and likelihood that they would be exposed to less dilution as a result of any acquisition. Second, by attenuating our present acquisition activities, we are free to resiliently re-emphasize our core operations and do what we do best until such a time as we are optimally structured for growth. The key component of that structure is AMEX listing.

"California Software Corporation is a company deeply committed to the notion of adding value. At its core, our management team is determined to offer its customers the very best products and services without compromising efficiency and prudent resource allocation. This is because we are likewise committed to adding value for the benefit of our shareholders. I must emphasize though, that at the end of the day, we are still adamantly committed to the very same vision,S forging a path to industry leadership and in so doing, maximizing our shareholders' return on investment. Our management team is steadfast in achieving these goals."

California Software Corporation markets a family of software products under the brand name BABY that support the migration of Midrange applications in the IBM AS/400 and PC-LAN business environment. The products provide (a) software solutions that allow business customers to migrate IBM Midrange RPG applications to the PC environment and execute such applications in native mode on a PC network without a complete rewrite; (b) software designed to create a distributed processing environment including a true AS/400 client-server environment, remote site operations, deployment of specific applications to PC workstations separate from an AS/400, various high availability applications, or delegation of AS/400 batch processing to NT; (c) graphical user interface (GUI) software that allows a developer of an AS/400 text-based application to present screens with Windows point-and-click functionality.

Forward-looking statements in this release are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including without limitation, continued acceptance of the Company's products, increased levels of competition for the Company, new products and technological changes, the Company's dependence on third-party suppliers, and other risks detailed from time to time in the Company's periodic reports filed with the Securities and Exchange Commission.

For additional information, see www.californiasoftware.com and www.otcfn.com/cawc.