From: Katharine_Hanley@magic-sw.com To: Katharine_Hanley@magic-sw.com Date: Mon, 4 Oct 1999 05:51:51 -0700 Subject: Magic Software Signs Developer Partnership Agreement with Red Hat MAGIC SOFTWARE SIGNS DEVELOPER PARTNERSHIP AGREEMENT WITH RED HAT Magic Enterprise Server v.8.3 To Be Included On Red Hat Linux 6.1 IRVINE, CA (October 4, 1999) - Magic Software Enterprises (NASDAQ: MGIC) announced today that it has signed a developer partnership agreement with Red Hat, Inc. (NASDAQ: RHAT) that includes release of Magic Enterprise Server v.8.3 on Red Hat Linux 6.1, Red Hat's new product distribution. This development is consistent with Magic's strategy of bringing e-commerce and other business solutions to the Linux platform. Magic will benefit from being able to leverage access to the rapidly expanding Red Hat Linux installed base, who need technology that can help them quickly develop business solutions for the platform. The Linux community will benefit because they will have more immediate access to the solutions developed by Magic's Solutions Partners, many of whom already have expressed strong interest in porting their existing e-commerce and other business solutions to the Red Hat Linux platform. "I am particularly excited about this new development because it will help to actively increase the number of enterprise-level e-commerce and other business solutions. This is necessary to propel Linux's penetration of the commercial workplace and ensure its long-term success," said Jon "mad dog" Hall, Executive Director of Linux International. The availability of Magic Enterprise Server v.8.3 brings e-commerce and other business solutions to the Red Hat Linux platform. It enables developers working on other platforms to quickly and seamlessly port existing business solutions to Red Hat Linux 6.0 and 6.1. In addition, developers can take advantage of Magic's strengths as the most productive application development technology on the market to build e-commerce solutions and fully realize Linux's potential as one of the most reliable Internet operating systems available. "Magic is a firm believer in the viability of the Linux operating system," said David Leichner, vice president of worldwide marketing for Magic. "Just prior to this partnership with Red Hat, we ported our award-winning business-to-business e-commerce solution, Magic eMerchant(, to the Linux platform. Now, we are exploring with Red Hat how we might extend this joint development and marketing arrangement to other markets around the world where Magic has a strong existing installed base." About Magic Software Magic Software offers the most productive, state-of-the-art development technology, customizable applications, and services for cost-effectively solving business problems. Using Magic, companies can efficiently leverage their existing resources and take advantage of emerging technologies, such as Linux and e-commerce. Magic technology, applications and services are available through a global network of subsidiaries, distributors and solutions partners in more than 50 countries. The Company is located at 1642 Kaiser Avenue, Irvine, Calif., 92614, telephone (949) 250-1718, fax (949) 250-7404, http://www.magic-sw.com. About Red Hat Founded in 1994, Red Hat is a leader in the development of Linux-based operating system software and services. Based in Durham, NC, red Hat builds the most accessible and advanced server operating system available anywhere with technical innovations, such as RPM and the disk druid installation tool. Red Hat Linux, which is available for Intel, Compaq Alpha and Sun SPARC platforms, is distributed directly from the Company and through Red Hat's partner distributor and reseller programs, which include top PC and server manufacturers, such as Dell, IBM and Hewlett-Packard. 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 demand, the impact of competitive products and pricing, changing economic 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.