Magic Software and Vadim Software Sign Five-Year Agreement For Application Development and Integration Technology

Vadim to Supply Solutions to Local Governments, Municipalities and Utilities with eDeveloper

Tuesday August 19, 9:05 am ET

IRVINE, Calif.--(BUSINESS WIRE)--Aug. 19, 2003-- Magic Software Enterprises (Nasdaq:MGIC - News), a leading provider of state-of-the-art development and integration technology, announced today that it has signed a five year Premier Partner Agreement to provide application development and integration technology to independent software vendor, Vadim Software, a leading provider of fully integrated, innovative software designed specifically for municipalities, local governments and utilities.

The Premier Partner Program is designed to provide Magic's premier customers with extremely cost-effective and flexible license and pricing programs. Under the terms of the agreement, Vadim has standardized on eDeveloper v9.4, the latest version of Magic Software's leading application development and deployment technology (www.magicsoftware.com/edeveloper) as its primary development platform. In addition, Magic Software will provide development and deployment licenses, maintenance, support and training to Vadim Software over the next five years.

"Vadim's decision in 1996 to move to an open standards development and integration tool like eDeveloper has proven to be the right one for our customers time and again," said Raghwa Gopal, President and CTO of Vadim. "As emerging technologies like XML parsing, Web Services, .NET and J2EE support have been added to the eDeveloper toolkit, we continue to be able to offer our clients the most sophisticated, standards-based solutions available on the market today."

"Integration, migration and computing independence have always been the strength of Magic's technology," added Larry Smith, President and COO of Vadim. "With the introduction of the iBOLT Suite as a business integration framework, Magic has taken a clearly agnostic approach to development and integration that strengthens their open standards approach."

eDeveloper v9.4 offers many new features and enhancements that directly translate into tangible business benefits. These include powerful new integration facilities, service oriented architecture for composite application development, new standards-based messaging, advanced XML component functionality, enhanced functionality for the development of Web services and improved support for interfacing with and deployment in J2EE and .NET architectures.

"Integration with new technologies is much easier with eDeveloper than with code-based development tools," said Oren Inbar, CEO of Magic Software Enterprises North American Subsidiary. "In most cases, companies like Vadim do not need to rewrite existing application logic to take advantage of new technologies and standards."

"We look forward to continuing to supply leading solution vendors like Vadim with technology that helps them gain competitive advantage with their end users," continued Inbar. "The Premier Partner Program strengthens the relationship between Magic and Vadim, and helps us to build a more solid business relationship."

About Vadim
Vadim, a leading provider of fully integrated, innovative software designed specifically for municipalities, local governments and utilities, was founded in 1975. Vadim designs, develops and markets a comprehensive selection of integrated financial and municipal applications. Vadim is dedicated to providing customer-focused service and support to clients across North America. More information about Vadim can be found at www.vadimsoftware.com.

About Magic Software Enterprises
Magic Software Enterprises, a member of the Formula Group (Nasdaq:FORTY - News) develops, markets and supports software development, deployment and integration technology that enables enterprises to accelerate the process of building and deploying applications that can be rapidly customized and integrated with existing systems. Magic technology, applications and professional services are available through a global network of subsidiaries, distributors and Magic solutions partners in approximately 50 countries. The company's North American subsidiary is located at 17310 Redhill Avenue #270, Irvine, CA 92614-5637, telephone 800/345-6244, 949/250-1718, fax 949/250-7404, http://www.magicsoftware.com/.

The Formula Group is an international information technology company principally engaged, through its subsidiaries and affiliates, in providing software consulting services, developing proprietary software products and producing computer-based solutions.

Except for the historical information contained herein, the matters discussed in this news release include forward-looking statements that may involve a number of risks and uncertainties. Actual results may vary significantly based upon a number of factors including, but not limited to, risks in product and technology development, market acceptance of new products and continuing product conditions, both here and abroad, release and sales of new products by strategic resellers and customers, and other risk factors detailed in the Company's most recent annual report and other filings with the Securities and Exchange Commission.

Contact:
Magic Software Enterprises Ltd.
David Leichner, 949/250-1718 ext. 299
davidl@magicsoftware.com