Tuesday July 16, 7:01 am Eastern Time

Magic Software Solution Partner Sage Delivers Prospero Banking Solution To Merrill Lynch Bank -- Suisse -- On iSeries

IRVINE, Calif.--(BUSINESS WIRE)--July 16, 2002-- Magic Software Enterprises (Nasdaq:MGIC - News), a leading provider of application development technology and business solutions, announced today that Magic Solution Partner (MSP), Sage, has successfully implemented their Prospero banking application at Merrill Lynch Bank (Suisse) -MLB(S), a subsidiary of Merrill Lynch International Bank Ltd (London), one of the world's leading financial management and advisory companies.

Prospero, developed with Magic eDeveloper (www.magicsoftware.com/edeveloper), is a comprehensive and powerful banking and asset management solution. It supports the capture and the processing of financial operations from the front to the back-office. Prospero is fully customizable, and modular and flexible enough to supports the needs of the financial industry and investment managers, independent asset managers, fund managers, banks, private banks and financial consultants.

"Working with Sage we were able to implement a banking solution that enables us to provide our customers with better on-line access to their investment portfolio as well as sophisticated Management Reports and trade details," said Khanh Nguyen, head of IT at MLBS. "Prospero enables us to provide better quality services to our customers and required information for our management, improving the decision making process."

The implementation enables customers of MLB(S) to receive quality reports and statements, trade confirmations and real-time web access. The system accesses legacy data running on an IBM Mainframe and transfers this data to the Magic-based Prospero running on iSeries servers, which handles the computations, transaction processing and output of statements and confirmations. On the customer side, clients are able to enter data and queries over the Web accessing Prospero through a browser-based interface.

"Sage has an excellent reputation providing solutions to leading European companies," said Menachem Hasfari, chief executive officer of Magic Software Enterprises. "We are excited to provide the development environment that enables Sage to implement this integrated web based system for MLB(S). We look forward to continuing to provide leading technology to enable iSeries customers to modernize their applications and integrate into existing systems."

Sage is an international consulting and software development firm, with headquarters in Switzerland. Their customers include some of the leading companies in Europe including Merrill Lynch Bank (Suisse), the Financial Times and Nestle's Nespresso. The company has been a Solution Partner of Magic Software for almost 10 years and continues to realize increased return on investment by developing their applications with Magic eDeveloper.

"We continue to achieve great results using Magic technology," stated Robert Tschan, Sage's CEO. "Using Magic eDeveloper, we were able to integrate our Prospero solution to provide MLB(S) with an integrated application to replace their legacy systems and bring rapid return on the investment to both the bank and their clients."

About Sage
Sage is an independent software provider dedicated to the financial community. Its highly qualified staff delivers state-of-the-art turnkey or customized solutions that enable global banks and financial institutions to concentrate on what they do best: manage money, not systems. Sage was founded in 1984 in Switzerland and has worldwide implementations. Fore more information, call: +41.21.653.64.01 or visit: www.sage-sw.com.

About Merrill Lynch Bank (Suisse)
Merrill Lynch Bank (Suisse) S.A. was founded in 1984. As an integral part of Merrill Lynch International Private Client Group, it provides a full range of highly personalized Swiss banking services to High Net Worth and Ultra High Net Worth individuals. Merrill Lynch Bank (Suisse) S.A. is a wholly owned subsidiary of Merrill Lynch International Bank Limited, London. It is a distinct legal entity incorporated in Switzerland and it is subject to the same banking and confidentiality rules as other Swiss banks. The Bank is member of both the Swiss Bankers Association, which formulates professional banking guidelines, and the Association of Foreign Banks in Switzerland.

Headquartered in Geneva, Merrill Lynch Bank (Suisse) S.A. has branches in Zurich and Lugano. For more information, visit: www.mlbs.ch.

About Magic Software Enterprises
Magic Software Enterprises, a member of the Formula Systems group (Nasdaq:FORTY - News), develops, markets and supports software development and deployment 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 13710 Redhill Avenue #270, Irvine, CA 92614-5637, telephone 800/345-6244, 949/250-1718, fax 949/250-7404, http://www.magicsoftware.com.

Formula Systems is a global information technology company principally engaged, through its subsidiaries and affiliates, in providing software consulting services, developing proprietary software products and providing computer-based business 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
David Leichner, 949/253-9299
davidl@magicsoftware.com