Seagull Software to Acquire SofTouch Systems

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Combination to Entrench Seagull Software's Leadership Position in Mainframe Web Services Market

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Atlanta, GA– 18 April 2005

Seagull Software (AEX: SEAGULL), today announced that it has signed a definitive agreement to acquire SofTouch Systems, Inc., a privately-held software company that specializes in ultra high-performance middleware to integrate mainframe applications with service-oriented architectures (SOA).

As a result of the acquisition, SofTouch Systems' widely respected CrossPlex product line, which supports mainframe-resident methods for transforming CICS transactions into Web services, will join Seagull Software's LegaSuite® platform of software solutions, which is used by over 8,000 enterprises worldwide to transform legacy applications into SOA assets. Service-oriented architecture is a strategic trend driven by the pervasiveness of IT across all aspects of today's global enterprises, and the need for much faster IT response to business change. The combination of Seagull Software and SofTouch Systems offers unrivaled breadth and depth to the large number of private and public sector organizations that are adopting SOA and wish to integrate the services of core business applications that are not currently SOA-compliant.

"Both organically and through acquisition, we are investing in continued leadership in the legacy integration market," said Seagull Software CEO and President Don Addington. "Seagull Software is the only software company in the market that can meet the legacy Web services needs of the heterogeneous enterprise with such depth and breadth. This acquisition further entrenches our position by adding valuable new mainframe integration capabilities to our LegaSuite platform."

Seagull Software's vision is to be the leading provider of multi-method SOA-enablement for large enterprises with heterogeneous legacy systems. One important advantage that Seagull Software has over its competition is that LegaSuite supports not only IBM mainframe systems but also Fujitsu ICL mainframe, UNIX/VT, iSeries and Windows client/server applications.

"Our market is consolidating and SofTouch Systems is one of the very best technologies of its kind. I'm extremely proud that SofTouch Systems has chosen to join up with us," said Don Addington. "We're gaining proven, market-ready products; a new development lab with tremendous mainframe transaction processing expertise; and new customers such as American Express, Getronics PinkRoccade, the New York Times, Dassault Falcon Jet, Columbia University, and the State of Minnesota. Seagull and SofTouch are a perfect match."

"We are really excited about this technology and business combination," said SofTouch Systems founder and President Richard Jones. "Seagull Software has the market presence to take CrossPlex to a much broader global audience and CrossPlex fits perfectly into the LegaSuite platform - the combined offering is the premier legacy Web services middleware on the market today." Founded in 1980 and based in Oklahoma, SofTouch Systems brings over 100 person years of experience in mainframe transaction processing. "The CrossPlex architecture yields blazingly fast performance like none we've ever seen," commented Seagull Software Sr. Vice President of Product Strategy Andre den Haan. "We expect that CrossPlex will be very interesting to our installed base."

The definitive agreement is for the purchase of all issued and outstanding shares of SofTouch Systems for $3.6 million in cash and Seagull Software stock. Upon closing, Seagull Software will own all of the assets of SofTouch Systems including all intellectual property and will gain a new customer base of approximately 70 enterprises. Richard Jones will join Seagull Software as Vice President of Development with responsibility for running the company's new Oklahoma development lab. The transaction has been approved by the boards of directors for both companies and is planned to close by the end of April 2005.

Seagull Software expects to generate additional revenues from its existing installed base and from new customers through sales of the acquired products and related services. This would be in addition to revenues from SofTouch customers who have annual renewable software maintenance and upgrade contracts with the company. "SofTouch is a profitable company, and we expect this acquisition to be accretive," said Seagull Software CFO Mory Motabar.

About Seagull Software

Seagull Software specializes in technology that transforms "legacy" applications into SOA-compliant Web services, helping enterprises achieve exponentially faster IT support for business change, governance and compliance. Our LegaSuite^® software platform includes integration, GUI, BPM and terminal emulation technology. With LegaSuite, customers connect legacy applications on IBM mainframe, ICL mainframe, iSeries, UNIX/VT and Windows client/server platforms to the Web, to other middleware and to newer-generations of applications such as portals, CRM and SCM. LegaSuite is based on open standards including Web services, XML, J2EE and .NET. Powerful and innovative tools require no coding, which means rapid results, reduced risk and no maintenance burden. Committed to providing the best customer experience in the industry, Seagull SoftwareÕs technology is in use in more than 8,000 business and government organizations worldwide, and by millions of end users. Seagull Software has direct operations in the United States, the Netherlands, UK, France, Germany and Australia, supplemented by distributors serving approximately 30 additional countries. For more information, visit www.seagullsoftware.com.

NOTE TO EDITORS: The correct usage of our company name is Seagull Software.

Forward-Looking Information: All statements in this press release which address operating performance, events or developments that we expect or anticipate will occur in the future, including statements expressing general optimism about future operating results and non-historical information, are forward-looking statements. These forward-looking statements are, and will be, based on management's then-current views and assumptions regarding future events and operating performance. Forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially, including, but not necessarily limited to management's ability to manage growth, and hire and retain qualified employees; unpredictable customer demand; intense competition; rapid technological change; unpredictable market acceptance of new products; and market instability and/or reduction in software purchasing caused by exceptional circumstances.