Sunday October 13, 10:57 am

Crystal Systems Solutions to Combine Forces With Liraz Systems Ltd.

HERZLIA, Israel--(BUSINESS WIRE)--Oct. 13, 2002--Crystal Systems Solutions (NASDAQ: CRYS - News):

• Consolidation Creates a Leading Software Modernization Solutions Entity
• Strengthens Crystal's and Liraz's Presence in Europe and The U.S.

Crystal Systems Solutions Ltd. (NASDAQ: CRYS - News), a global provider of leading software products and support services for the modernization of existing information systems, today announced it has received audit committee and board approval to issue 3,478,624 shares to certain shareholders of Liraz Systems Ltd. (TASE: LIRAZ) in exchange for 5,809,302 million shares of Liraz. As a result, these Liraz shareholders will own approximately 26% of the outstanding shares of Crystal, and Crystal will own approximately 86% of Liraz.

Crystal and Liraz intend to work together in the areas of marketing, sales and technology development. The closing of the transaction is subject to the approval of the shareholders of Crystal. A special meeting of Crystal shareholders is scheduled for November 14, 2002.

Commenting on the merits of the consolidation, Mr. Gad Goldstein, Chairman of Crystal said, "We anticipate that this transaction will generate both quantitative and qualitative benefits for both companies due to the significant synergies in marketing, sales and technology. By capitalizing on the strengths of each company and combining our efforts, we can increase sales, improve the technological offerings and generate a sound infrastructure of a leading player in the software modernization market."

"We anticipate that the consolidation will facilitate rapid development of leading-edge products and tools that enable reliable modernization of legacy applications, and development of new business applications. The AppBuilder software together with the CRYSWARE tool kit, offers a comprehensive technological solution that meets customer needs to bridge legacy systems to current enterprises needs such as multichannel requirements and Web Services," said Arik Kilman, Chairman of Liraz.

Formula Systems (1985) Ltd. (NASDAQ: FORTY - News) is the largest shareholder of Crystal. Prior to consummation of the transaction, Formula is also the largest shareholder of Liraz. Formula currently owns approximately 52% of Crystal's shares and prior to consummation of the transaction, 58% of Liraz shares. Following this transaction, Formula will own approximately 56% of the outstanding shares of Crystal.

About Crystal Crystal Systems Solutions Ltd. develops solutions that enable clients to efficiently manage their IT assets, including legacy applications, modern application packages, middleware, and networking technologies. Crystal's products provide cross-platform software renovation, modernization, and IT asset management solutions that are designed to accelerate the process of mission-critical legacy renewal, integration, and maintenance during an application's entire life cycle. For more information, please visit Crystal's web site at http://www.crystal-sys.com.

Crystal Systems Solutions is a member of the Formula Group (NASDAQ: FORTY - News). 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 providing computer-based solutions.

About Liraz
Liraz develops and markets the Appbuilder software, through its wholly owned subsidiary, BluePhoenix. The AppBuilder software is a package used to manage and develop sophisticated applications for large enterprises. In addition, through another wholly owned subsidiary, Advances Systems Europe BV, Liraz provides consulting services to various leading financial and telecommunications businesses in Europe and the United States.

Liraz maintains local offices in Denmark, the United Kingdom, Germany and Italy and has a development center in the United States. Liraz generates a significant portion of its revenues from long-term software maintenance agreements, consulting services and sales of AppBuilder licenses.

SAFE HARBOR: Certain statements contained in this release may be deemed forward-looking statements, with respect to plans, projections, or future performance of the Company, the occurrence of which involves certain risks and uncertainties that could cause actual plans to differ materially from these statements. These risks and uncertainties include but are not limited to: market demand for the Company's tools, successful implementation of the Company's tools, competitive factors, the ability to manage the Company's growth, the ability to recruit and retrain additional software personnel, and the ability to develop new business lines.

This press release is also available at www.crystal-sys.com All names and trademarks are their owners' property.

The proposed proxy statement for the special general meeting, is available at the Company's office, at 8 Maskit Street, Herzelia, Israel, during the local business hours.

Contact:
Crystal Systems Solutions Ltd.
Iris Yahal, +972-9-9600233