San Francisco, January 12, 2009—Shearman & Sterling represented Vector Capital Corporation in connection with its execution of definitive agreements for the purchase of Aladdin Knowledge Systems, an Israeli-based publicly traded company, in a deal valued at $160 million. The parties have been engaging in discussions and negotiations since August 2008, when Vector initially submitted a proposal to acquire Aladdin after an affiliate of Vector took a significant toehold ownership position in Aladdin.

The transaction is subject to certain closing conditions, including the approval of Aladdin’s shareholders, antitrust regulatory approvals, and the satisfaction of other customary closing conditions.

Vector is a leading private equity firm specializing in spinouts, buyouts and recapitalizations of established technology businesses. Aladdin is an information security leader with offices in 15 countries, a worldwide network of channel partners, and numerous awards for innovation.

The Shearman & Sterling team was led by partner Steve Camahort (San Francisco-Mergers & Acquisitions) and associate Dana Kromm (San Francisco-Mergers & Acquisitions) and included partners Laurence Crouch (Menlo Park-Tax), Tina Patel (Menlo Park-Intellectual Property), John J. Cannon, III (New York-Executive Compensation and Employee Benefits), Beau Buffier, (New York-Antitrust) and Annette Schild (Brussels-Antitrust) and associates Danielle Giles (San Francisco-Mergers & Acquisitions), Sharon Herman (New York-Intellectual Property) and Ajay Chanayil (New York-Antitrust).

For additional information contact: Ron Brandsdorfer | New York | T +1.212.848.5081 |