ACQUISITION PART OF STRATEGY TO PROVIDE SINGLE SOURCE SOLUTIONS FOR THE ELECTRONIC RETRIEVAL AND STORAGE OF INFORMATION

LAKE FOREST, IL (November 30, 1995) SoftNet Systems, Inc. (AMEX:SOF) announced today an agreement in principle to acquire Hyland Software, Inc. SoftNet indicated that a substantial portion of the total consideration is expected to be paid in SoftNet common stock and will be contingent on unit sales of Hyland’s product over the next three years. Specific terms of the transaction were not disclosed. The acquisition is contingent on completion of SoftNet’s due diligence review. SoftNet expects to close the acquisition in the first quarter of 1996.

Hyland is an innovative software development company providing solutions to an end user’s electronic document management needs. The Company’s principal product is the OnBase™ Information Management System. OnBase™ is a powerful Windows client/server application designed to offer “seamless” access to scanned images, computer output laser disk (“COLD”) reports, faxes, Word™, Excel™ and other application documents. OnBase™ is built on an open system architecture providing flexibility to connect to a wide variety of imaging products. Additionally, the product is scaleable from a single user system to an enterprise-wide solution. Hyland currently has 140 installed locations and its customers include National Semiconductor, Sherwin-Williams, PETsMART, Bell South, GE and Northern States Power.

John J. McDonough, Chairman of the Board of SoftNet, stated that “Hyland is a critical component of SoftNet’s business strategy to build a company providing single source solutions for the electronic retrieval and storage of information. Hyland will help differentiate us in the marketplace.” John Jellinek, Chief Executive Officer and President of SoftNet, stated that “Hyland’s products provide solutions which allow customers to gain new efficiencies. Because the product is fully configurable, users are able to create an application that meets a business’s unique operational requirements. The “user friendly” application interface allows this customization without additional programming resulting in significant labor savings.”

SoftNet develops, markets, installs and services electronic information and document management systems that allows customers to electronically request and electronically receive information. The Company’s hardware and software systems allow the electronic capture, indexing, storage and retrieval of information through the integration of telecommunications and the following media: magnetic disk, optical disk, microfilm, and paper. SoftNet’s fully integrated information storage and retrieval systems allow users to re-engineer their information management processes to access information on a cost-effective basis and to achieve immediate cost savings through productivity increases.