Magic Software Enterprises' Solutions Partner, E-Carisma, Signs Deal With

Magic Software Enterprises’ Solutions Partner, e-Carisma, Signs Deal with Philips Lighting to Implement Magic eService Submitted by: Marylebone Media Relations Wednesday, 7 March 2001

CRM Solution to be Integrated with Philips’ Web-Based Procurement, Logistical and Product Information Systems Bracknell, UK (7th March, 2001) – Magic Software Enterprises (Nasdaq: MGIC), a leading provider of state-of-the-art development technology and business solutions, announced today that its solutions partner in the United Kingdom, e-Carisma, has signed a deal with Philips Lighting (Philips) to implement Magic eService as part of Philips’ new B2B e-business strategy. Magic eService, the Company’s customer service management solution, will be integrated with Philips’ new Web-based procurement, logistical and product information systems to provide enhanced customer response. Philips, a division of Royal Philips Electronics, one of the largest electronics companies in the world and the largest electronics company in Europe, is the leading provider of goods and services to the global lighting market. Recently, the Company made the strategic decision to support its distribution network with a Web-based system to better serve its customers, improve operating efficiencies and increase revenues. Magic eService will be integrated with that system to allow customers to immediately log queries and request support from within the Philips’ portal. Tailored to provide a complementary look and feel with the rest of the site, it will fully reflect the working practices within Philips. “While our new portal was developed to provide relevant information on product, procurement and logistics to our customer base, we needed a way to enable customers to quickly and easily log queries and track responses. In addition, we needed a mechanism that would allow us to prioritise service requests within the Company, assigning requests to the appropriate people and helping us manage the ongoing service process,” said Clive Roach, business systems manager for Philips. “Magic eService not only met these requirements, its easy customisation and seamless integration made it the ideal choice for our needs.” The easy-to-use, custom-tailored Magic eService application being implemented at Philips will include the following features: - The ability to prioritise and escalate service requests - The ability to seamlessly embed Magic eService within the existing Philips portal, allowing customers to place service calls without having to re-enter contact and security details - The ability to run the solution over the Web from a remote server farm “One of the most significant issues facing companies today in the current Internet economy is providing customers adequate, robust methods for gaining service from within an e-commerce site,” said Menachem

Page 1 Hasfari, chief executive officer of Magic. “We are pleased to have this opportunity to help Philips provide this option to its customers utilising our Magic eService application, and within the tight timeframe prescribed by the Company.” About Philips Lighting Philips Lighting is a division of Royal Philips Electronics (NYSE: PHG), one of the world’s largest electronics companies and the largest electronics company in Europe. Ranked number one in the global lighting market, its products are found all around the world, in 30 percent of offices, 65 percent of the world’s top airports, 30 percent of hospitals and 35 percent of cars. Its products include a full range of incandescent and halogen lamps, compact and normal fluorescent lamps, high-intensity gas-discharge and special lamps, fixtures, ballasts, lighting electronics, automotive lamps and batteries. Philips Lighting employs some 50,000 people at various manufacturing locations worldwide, including in the Netherlands, Belgium, Germany, France, the United Kingdom, Poland, the United States, Canada, Brazil, India, Indonesia, Thailand, the People’s Republic of China, South Korea, Spain and Mexico. For more information, contact +31 40 2756476 (tel), +31 40 2757052 (fax) or visit the Philips Lighting website at http://www.lighting.philips.com About e-Carisma Based in Reading in the United Kingdom, e-Carisma is a software house committed to developing and marketing Magic-based software solutions that can be customised and implemented as stand-alone applications or executed on its ASP platform. The ASP environment is provided through its partnership with a leading American ASP. In addition to its service management products, e-Carisma also offers ASP products for asset management, configuration management, employee expense management and Web-based surveying. For more information, contact [email protected] or visit the e-Carisma website at http://www.e-Carisma.com About Magic Software Magic Software Enterprises, a member of the Formula Group (Nasdaq: FORTY), 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 customised 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, including the UK. 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

Page 2 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. Company Contact: Andy Peart Magic Software Enterprises UK Ltd 01344 667000 [email protected] http://www.magicsoftware.com/ Media Contact: Sara Claridge Marylebone Media Relations Tel: 0118 975 5188 Email: [email protected]

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