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Knowledge Mang (KMS)

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Friday 16 February, 2001

Knowledge Mang

Merger Talks

Knowledge Management Software PLC
16 February 2001

                     16 February 2001
                             
         Knowledge Management Software plc ('KMS')
                             
        & Orbital Software Holdings plc ('Orbital')
                             
                 Merger talks in progress
                             

The Boards of KMS and Orbital announce that they are  in
preliminary discussions concerning a merger of  the  two
companies.  It is anticipated that any transaction would
be  effected  by an offer to be made by HSBC  Investment
Bank   plc  on  behalf  of  KMS  resulting  in   Orbital
shareholders  being issued approximately 1.219  new  KMS
shares for each existing issued Orbital share and so  in
proportion for any other number of Orbital shares  held.
On  the basis of the share price of KMS at the close  of
business on 15 February 2001, this equates to 98.7p  per
Orbital share.

The  Boards  of  KMS and Orbital believe that  a  merger
could provide benefits in terms of the compatibility  of
product  offerings, the potential for  enhanced  product
development and in cost savings.

The  Boards wish to emphasise that at this stage  it  is
not certain that the transaction will complete.

A further announcement will be made in due course.

KMS  is  being advised by HSBC Investment Bank  plc  and
Orbital  is  being  advised by  Broadview  International
Limited.

Knowledge Management Software plc      Orbital Software Holdings plc
Stuart  Whistance   0161  227 1120     Ian Ritchie      0131 348  3000
Tim Jackson-Smith                      Kevin Dorren

HSBC Investment Bank plc               Broadview International Limited
Simon Murphy        020 7336 9000      Tom S. Anthofer  020 7968 3700
Clive Rates                            Roger Manship


The Directors of KMS and Orbital accept responsibility for
the  information in this announcement.  To the best of the
knowledge  and belief of the Directors of KMS and  Orbital
(who have taken all reasonable care to ensure that such is
the  case)  the information contained in this announcement
is in accordance with the facts and does not omit anything
likely  to  affect  the import of such information.   This
announcement has been approved for the purposes of section
57  of  the Financial Services Act 1986 by HSBC Investment
Bank plc.

HSBC Investment Bank plc, which is regulated in the United
Kingdom  by The Securities and Futures Authority  Limited,
is  acting exclusively for KMS and no one else in relation
to  the offer and will not be responsible to anyone  other
than  KMS  for  providing  the  protections  afforded   to
customers  of  HSBC Investment Bank plc, or for  providing
advice in relation to the offer.

Broadview International Limited, which is regulated in the
United  Kingdom  by  The Securities and Futures  Authority
Limited, is acting exclusively for Orbital and no one else
in  relation  to the offer and will not be responsible  to
anyone  other  than Orbital for providing the  protections
afforded  to customers of Broadview International Limited,
or for providing advice in relation to the offer.