-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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<SEC-DOCUMENT>0001178913-08-001169.txt : 20080512
<SEC-HEADER>0001178913-08-001169.hdr.sgml : 20080512
<ACCEPTANCE-DATETIME>20080512130900
ACCESSION NUMBER:		0001178913-08-001169
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20080512
FILED AS OF DATE:		20080512
DATE AS OF CHANGE:		20080512

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MAGIC SOFTWARE ENTERPRISES LTD
		CENTRAL INDEX KEY:			0000876779
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-PREPACKAGED SOFTWARE [7372]
		IRS NUMBER:				330477418
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-19415
		FILM NUMBER:		08822062

	BUSINESS ADDRESS:	
		STREET 1:		5 HAPLADA STREET
		CITY:			OR YEHUDA ISRAEL
		STATE:			L3
		ZIP:			602
		BUSINESS PHONE:		97235389322

	MAIL ADDRESS:	
		STREET 1:		5 HAPLADA STREET
		CITY:			OR YEHUDA ISRAEL
		STATE:			L3
		ZIP:			602
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>zk85204.htm
<TEXT>
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     <!-- Control Number: 85204                                                            -->
     <!-- Rev Number:     1                                                                -->
     <!-- Client Name:    Magic Software Enterprises Ltd                                   -->
     <!-- Project Name:   6-K                                                              -->
     <!-- Firm Name:      Zadok-Keinan Ltd                                                 -->
     <TITLE>6-K</TITLE>
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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4>FORM 6-K </FONT></H1>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=4>SECURITIES AND
EXCHANGE COMMISSION </FONT><BR><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Washington D.C. 20549 </FONT></H1>


        <P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>                                 Report of Foreign Private Issuer
<BR>                                      Pursuant to Rule 13a-16 or 15d-16 Under
    <BR>                                    The Securities Exchange Act of 1934
</FONT></P>


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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> For
the month of May, 2008 </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Commission File Number:
0-19415 </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="5"><B><I>MAGIC SOFTWARE
ENTERPRISES LTD.</I></B> </FONT> <BR><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(Translation of
Registrant&#146;s Name into English) </FONT></P>

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<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B><I>5 HaPlada Street,
Or-Yehuda, Israel 60218</I></B> </FONT> <BR><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(Address of Principal
Executive Offices) </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Indicate by check mark whether the
registrant files or will file annual reports under cover Form 20-F or Form 40-F:
&nbsp;&nbsp; </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Form
20-F  <FONT size="3" face="Wingdings">x
</font> Form 40-F  <FONT size="3" face="Wingdings">o
</font> </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Indicate by check mark if the
registrant is submitting the Form 6-K in paper as permitted by RegulationS-T  Rule 101(b)(1): N/A </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Indicate by check mark if the registrant
is submitting the Form 6-K in paper as permitted by RegulationS-T  Rule 101(b)(7): N/A </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Indicate by check mark whether by
furnishing the information contained in this Form, the registrant is also thereby
furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the
Securities Exchange Act of 1934: &nbsp; </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Indent Lv 0-TNR" FSL="Workstation" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> Yes
 <FONT size="3" face="Wingdings">o
</font> No  <FONT size="3" face="Wingdings">x
</font> </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Workstation" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>If &#147;Yes&#148; is marked,
indicate below the file number assigned to the registrant in connection with Rule
12g3-2(b): 82- N/A </FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CONTENTS </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>This report on Form 6-K of MAGIC
SOFTWARE ENTERPRISES Ltd. consists of the following documents, which are attached hereto
and incorporated by reference herein: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para (List) Flush Lv 0- TNR" FSL="Workstation" -->
     <P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1. NOTICE OF 2008 ANNUAL GENERAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 15,
          2008 </FONT></P>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2. PROXY CARD </FONT></P>

<p align=center>
<font size=2></font></p>
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<page>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SIGNATURES </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized. </FONT></P>

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<TABLE WIDTH=100% CELLSPACING=0 CELLPADDING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=40%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Date: May 12, 2008</FONT></TD>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Magic Software Enterprises Ltd<BR><BR>
<BR>By: /s/ David Zigdon<BR>&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;&#151;<BR>
David Zigdon<BR>Chief Financial Officer</FONT></TD>
</TR>
</TABLE>
<BR>

<p align=center>
<font size=2>- 2 -</font></p>
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<page>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>EXHIBIT INDEX </FONT></H1>




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<TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Exhibit Number</FONT></TD>
<TD WIDTH="85%" ALIGN="Center"><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Description of Exhibit</FONT></TD>
</TR>
</TABLE>
<BR>


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<TR VALIGN=TOP>
<TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.1  </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NOTICE
OF 2008 ANNUAL GENERAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 15, 2008 </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=15%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10.2  </FONT></TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROXY
CARD  </FONT></TD>
</TR>
</TABLE>
<BR>



<p align=center>
<font size=2>- 3 -</font></p>
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<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<FILENAME>exhibit_10-1.htm
<TEXT>
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     <!-- Project:        F:\EDGAR Filing\Magic Software Enterprises Ltd\85204\a85204.eep  -->
     <!-- Control Number: 85204                                                            -->
     <!-- Rev Number:     1                                                                -->
     <!-- Client Name:    Magic Software Enterprises Ltd                                   -->
     <!-- Project Name:   6-K                                                              -->
     <!-- Firm Name:      Zadok-Keinan Ltd                                                 -->
     <TITLE>6-K</TITLE>
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<P ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B><U>Exhibit 10.1</U></B> </FONT> </P>





<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>MAGIC SOFTWARE ENTERPRISES LTD.
<BR>5 HaPlada Street, Or Yehuda 60218, Israel</B> </FONT></P>



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<HR SIZE=1 NOSHADE WIDTH=25% ALIGN=center>


<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>NOTICE OF 2008
<BR>ANNUAL GENERAL MEETING OF SHAREHOLDERS
<BR>TO BE HELD ON JUNE 15, 2008</B> </FONT></P>


<HR SIZE=1 NOSHADE WIDTH=25% ALIGN=center>


<!-- MARKER FORMAT-SHEET="Head Left-TNR" FSL="Workstation" -->
<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Magic Software
Enterprises Ltd. Shareholders: </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
cordially invite you to attend the Annual General Meeting of the Shareholders of Magic
Software Enterprises Ltd., to be held at 10:00 a.m. (Israel time) on June 15, 2008, at our
offices at 5 HaPlada Street, Or Yehuda 60218, Israel, for the following purposes: </FONT></P>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1. </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To
elect six directors for terms expiring at our 2009 Annual General Meeting of
               Shareholders; </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2. </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To
reelect an outside director for a three-year term; </FONT></TD>
</TR>
</TABLE>
<BR>

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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3. </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To
ratify the appointment of Kost Forer Gabbay &amp; Kasierer, a member firm of
               Ernst &amp; Young Global, as our independent registered public accounting
firm                for the year ending December 31, 2008; and </FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4. </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>To
review and discuss our Auditor&#146;s Report and the Consolidated Financial
               Statements for the year ended December 31, 2007. </FONT></TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Board of Directors recommends that you vote in favor of all of the proposals, which are
described in the attached Proxy Statement. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
can vote by proxy either by mail or in person. If voting by mail, the proxy must be
received by our transfer agent or at our registered office in Israel at least 48 hours
prior to the meeting to be validly included in the tally of ordinary shares voted at the
meeting. Detailed proxy voting instructions are provided both in the Proxy Statement and
on the enclosed proxy card. </FONT></P>

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<TD WIDTH=50%>&nbsp;</TD>
<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Sincerely,

<BR>
<BR>
<BR>Guy Bernstein, Chairman
 </FONT></TD>
</TR>
</TABLE>
<BR>

<p align=center>
<font size=2></font></p>
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<page>



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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>MAGIC SOFTWARE
ENTERPRISES LTD. </FONT></H1>

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<HR SIZE=1 NOSHADE WIDTH=25% ALIGN=center>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>PROXY STATEMENT </FONT></H1>

<HR SIZE=1 NOSHADE WIDTH=25% ALIGN=center>


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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2008 ANNUAL GENERAL
MEETING OF SHAREHOLDERS </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
statement is being furnished in connection with the solicitation of proxies on behalf of
the Board of Directors of Magic Software Enterprises Ltd. to be voted at the 2008 Annual
General Meeting of Shareholders, or the Meeting, pursuant to the accompanying Notice of
2008 Annual General Meeting of Shareholders. The Meeting will be held on Sunday, June 15,
2008, at 10:00 a.m. at our offices at 5 HaPlada Street, Or Yehuda 60218, Israel. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This
Proxy Statement, the attached Notice of 2008 Annual General Meeting and the enclosed Proxy
Card are being mailed to shareholders on or about May 9, 2008. </FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Purpose of the Annual
General Meeting </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
the Meeting, shareholders will be asked to vote upon the: (i) election of six directors
for terms expiring at our 2009 Annual General Meeting of Shareholders; (ii) reelection of
an outside director for a three-year term; and (iii) ratification of the appointment of
Kost Forer Gabbay &amp; Kasierer, a member firm of Ernst &amp; Young Global, as our
independent registered public accounting firm for the year ending December 31, 2008. In
addition, our Auditor&#146;s Report and Consolidated Financial Statements for the year
ended December 31, 2007 will be reviewed and discussed at the Meeting. </FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Proxy Procedure </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Only
holders of record of our ordinary shares, par value of NIS 0.1 per share, as of the close
of business on May 7, 2008 are entitled to notice of, and to vote in person or by proxy at
the Meeting. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shares
eligible to be voted and for which a proxy card is properly signed and returned at least
48 hours prior to the beginning of the Meeting will be voted as directed. If directions
are not given or directions are not in accordance with the options listed on a signed and
returned proxy card, such shares will be voted FOR the nominees for director and each
proposal for which the Board of Directors recommends a vote FOR. Unsigned or unreturned
proxies, including those not returned by banks, brokers, or other record holders, will not
be counted for quorum or voting purposes. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Abstentions
and broker &#147;non-votes&#148; are not counted in determining outcomes of matters being
acted upon; however, they are counted for determining a quorum at the Meeting. A broker
&#147;non-vote&#148; occurs when a nominee holding ordinary shares of our company for a
beneficial owner does not vote on a particular proposal because the nominee does not have
discretionary voting power with respect to that proposal and has not received instructions
from the beneficial owner. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
will bear the cost of soliciting proxies from our shareholders. Proxies will be solicited
by mail and may also be solicited personally or by telephone by our directors, officers
and employees. We will reimburse brokerage houses and other custodians, nominees and
fiduciaries for their expenses in accordance with the regulations of the Securities and
Exchange Commission, or the SEC, concerning the sending of proxies and proxy material to
the beneficial owners of our stock. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You
may vote by submitting your proxy with voting instructions by mail if you promptly
complete, sign, date and return the accompanying proxy card in the enclosed self-addressed
envelope to our transfer agent or to our registered office in Israel at least 48 hours
prior to the Meeting. You may revoke your proxy at any time prior to the exercise of
authority granted in the proxy by giving a written notice of revocation to our Corporate
Secretary, by submitting a subsequently dated, validly executed proxy, or by voting in
person. </FONT></P>

<p align=center>
<font size=2></font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>


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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Quorum and Voting </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
of May 7, 2008 the record date for determination of shareholders entitled to vote at the
Meeting, there were outstanding 31,638,440<B> </B>ordinary shares. Each ordinary share
entitles the holder to one vote. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
presence of two shareholders, holding at least one third of our share capital voting
rights, represented in person or by proxy at the Meeting, will constitute a quorum. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An
affirmative vote of the holders of a majority of the ordinary shares represented at the
Meeting, in person or by proxy, entitled to vote and voting thereon, is required to
approve each of the proposals, except as otherwise stated in the proposal. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
have received indications from our principal shareholder, Formula Systems (1985) Ltd., or
Formula Systems, which holds approximately 53.8% of our issued and outstanding ordinary
shares, that it presently intends to vote for all of the nominees for director and in
favor of all of the proposals to be acted upon at the Meeting. </FONT></P>


<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>ELECTION OF DIRECTORS
</B><BR><I>(Item 1 on the Proxy Card)</I> </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
directors, other than the outside directors, are elected at each annual meeting of
shareholders. We are presenting six nominees for election as directors at the Meeting: Guy
Bernstein, Hadas Gazit, Gad Goldstein, Eli Reifman, Naamit Salomon and Yehezkel Zeira.
They are to hold office for one year until the 2009 Annual General Meeting and until their
successors are elected and qualified. Each nominee is currently serving as a member of our
Board of Directors. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
the Israeli Companies Law, our Board of Directors is required to determine the minimum
number of directors who must have &#147;accounting and financial expertise&#148; (as such
term is defined in regulations promulgated under the Israeli Companies Law). In addition,
under the Israeli Companies Law at least one of our outside directors must have
&#147;accounting and financial expertise.&#148; Our Board of Directors has determined that
our Board of Directors will include at least one director who has &#147;accounting and
financial expertise&#148; within the meaning of the regulations promulgated under the
Israeli Companies Law. Our Board of Directors has determined that Mr. Elan Penn, a member
of our Board of Directors, who is an outside director and an audit committee member, has
the requisite &#147;accounting and financial expertise.&#148; </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
general, under NASDAQ Marketplace Rules promulgated pursuant to the Sarbanes-Oxley Act of
2002, a majority of the board of directors of a NASDAQ-listed company must qualify as
independent directors within the meaning of the NASDAQ Marketplace Rules and its audit
committee must have at least three members and be comprised only of independent directors,
each of whom satisfies the respective &#147;independence&#148; requirements of NASDAQ and
the SEC. However, a controlled company within the meaning of the NASDAQ Marketplace Rules,
such as our company, is exempt from the NASDAQ requirement that a majority of the
company&#146;s board of directors qualify as independent directors, as defined under the
NASDAQ Marketplace Rules. We rely on the foregoing exemption and instead follow Israeli
law and practice, which requires that we appoint at least two outside directors within the
meaning of the Israeli Companies Law to our Board of Directors. In addition, in accordance
with SEC rules, we have the mandated three independent directors, as defined by the SEC
and NASDAQ rules, on our audit committee. </FONT></P>

<p align=center>
<font size=2>- 2 -</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;A
controlled company within the meaning of the NASDAQ Marketplace Rules, such as our
company, is also exempt from the NASDAQ requirement regarding the process for the
nomination of directors. We rely on the foregoing exemption and instead follow Israeli law
and practice in accordance with which directors are elected by the shareholders, unless
otherwise provided in a company&#146;s articles of association. Our articles of
association do not provide otherwise. Our practice has been that our director nominees are
presented in our proxy statement for election at our annual meetings of shareholders. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
are not aware of any reason why any of the nominees, if elected, would be unable or
unwilling to serve as a director. In the event that any of such nominees would be unable
to serve, the proxies will be voted for the election of such other person or persons as
shall be designated by the Board of Directors. We do not have any understanding or
agreement with respect to the future election of any of the nominees named. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Set
forth below is information about each nominee, including age, position(s) held with our
company, their present principal occupation or employment, business history and other
directorships held. For details about beneficial ownership of our shares held by any of
these nominees, see below under the caption &#147;Security Ownership of Certain Beneficial
Owners and Management.&#148; </FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Nominees For Election As
Director For Terms Expiring In 2009 </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Guy
Bernstein (40)</I></B><I></I> has served as a director since December 2006,<B> </B>and as
our chairman of the Board of Directors since November 8, 2007. Mr. Bernstein has served as
the chief executive officer of Emblaze Ltd. since December 2006 and a member of the board
of directors of Emblaze since April 2004. From April 2004 to December 2006, Mr. Bernstein
served as the chief financial officer of Emblaze. From 1999 to 2004, Mr. Bernstein served
as chief financial and operations officer of our company. Mr. Bernstein also acted as the
interim chief executive officer of two of our subsidiaries, Magic Software Enterprises
(Israel) Ltd. and Coretech Consulting Group. Mr. Bernstein is a director of Matrix IT
Ltd., Formula Systems and Sapiens International Corporation. Mr. Bernstein is a certified
public accountant in Israel and holds a B.A. in accounting and economics from Tel Aviv
University. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Hadas
Gazit Kaiser (32)</I></B><I></I> was appointed by our board of directors to serve as a
director of our company in August 2007. Ms. Gazit Kaiser has served as chief financial
officer of Emblaze Ltd. since December 2006. From August 2005 to December 2006, Ms. Gazit
Kaiser served as a vice president of finance of Emblaze Ltd. and as chief financial
officer of Emblaze Mobile. Prior thereto and since August 2003, Ms. Gazit Kaiser served as
the budget control manager of TTI Team Telecom International. From August 2000 to August
2003, Ms. Gazit Kaiser was a manager for Kost Forer Gabbay &amp; Kasierer, a member of
Ernst &amp; Young Global. Ms. Gazit Kaiser is a director of Matrix IT Ltd., Formula
Systems, Sapiens International Corporation and RadView Software Ltd. Ms. Gazit Kaiser is a
certified public accountant in Israel and holds a B.A. in Economics and Accounting and an
M.B.A. in Finance from Tel Aviv University. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Gad
Goldstein (48)</I></B><I></I> has served as a director since December 1998. Mr. Goldstein
has been president of Formula Systems since 1995. Prior thereto and since 1985, Mr.
Goldstein was vice president-finance and a director of Formula Systems. Mr. Goldstein is
chairman of the board of directors of Blue Phoenix Solutions Ltd. and a director of other
companies within the Formula Systems group, including Matrix IT Ltd., Formula Vision
Technologies Ltd. and Sapiens International Corporation N.V. Mr. Goldstein holds a B.A.
degree in economics and an M.B.A. degree from Tel Aviv University. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Eli
Reifman</I></B><I></I> <B><I>(39) </I></B><I></I>was appointed by our board of directors
to serve as a director of our company in January 2007. In 1994, Mr. Reifman co-founded
Emblaze Ltd., an Israeli company publicly traded on the AIM Stock Exchange, and has served
as its vice-chairman since December 2006. Mr. Reifman served as the chief executive
officer of Emblaze Ltd. from September 2000 until December 2006. Mr. Reifman is a director
of Sapiens International Corporation. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Naamit
Salomon</I></B><I></I> <B><I>(43)</I></B><I></I> has served as a director since March
2003.<B> </B>Ms. Salomon has served as a vice president finance of Formula Systems since
August 1997. Ms. Salomon also serves as a director of BluePhoenix Solutions Ltd. and
Sapiens International Corporation N.V. From 1990 through August 1997, Ms. Salomon was the
controller for two large privately held companies in the Formula Systems Group. Ms.
Salomon holds a B.A. degree in economics and business administration from Ben Gurion
University and an L.L.M. degree from Bar-Ilan University. </FONT></P>

<p align=center>
<font size=2>- 3 -</font></p>
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<page>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Yehezkel
Zeira (64) </I></B><I></I>has served as a director since August 2005. Mr. Zeira has been
an independent information technologies consultant since 2001. From 2000 to 2001, Mr.
Zeira served as Executive Vice President International of Ness Technologies Inc., and from
1970 to 2000, Mr. Zeira served in various positions at Advanced Technology Ltd., or ATL,
and in 1982 he assumed the position of Chief Executive Officer of ATL. Mr. Zeira also
serves as a director of TIM Computers and Systems Ltd., Kalanit Carmon Software Services
Ltd. and Dafron Ltd. Mr. Zeira is also a lecturer at Ben Gurion University Faculty of
Engineering. Mr. Zeira holds a B.Sc. degree in industrial engineering and an M. Sc. degree
in operations research, both from Israel Institute of Technology, in Haifa, Israel and has
participated in the Harvard Business School program for management development. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholders
may vote in favor of the election of all the nominees named above, or may withhold their
vote in respect of all or some of such nominees. Under the Israeli Companies Law, the
affirmative vote of a majority of the ordinary shares represented at the Meeting in person
or by proxy, entitled to vote and voting on the matter, is required to elect each of the
nominees named above as a director. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The
Board of Directors recommends a vote FOR the election of each of the nominees named above.</B> </FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Audit Committee </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
Audit Committee assists our board of directors in overseeing the accounting and financial
reporting processes of our company and audits of our financial statements, including the
integrity of our financial statements, compliance with legal and regulatory requirements,
our independent public accountants&#146; qualifications and independence, the performance
of our internal audit function and independent public accountants, finding any defects in
the business management of our company for which purpose the Audit Committee may consult
with our independent auditors and internal auditor, proposing to the board of directors
ways to correct such defects, approving related-party transactions as required by Israeli
law, and such other duties as may be directed by our Board of Directors. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
Israeli law, an audit committee may not approve an action or a transaction with a
controlling shareholder, or with an office holder, unless at the time of approval two
outside directors are serving as members of the audit committee and at least one of the
outside directors was present at the meeting in which an approval was granted. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
Audit Committee consists of three board members who satisfy the respective
&#147;independence&#148; requirements of the SEC, NASDAQ and Israeli Law for audit
committee members. Our Audit Committee is currently composed of Messrs. Itiel Efrat, Elan
Penn and Yehezkel Zeira. </FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Security Ownership of
Certain Beneficial Owners and Management </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following table sets forth certain information as of May 7, 2008 regarding the beneficial
ownership by (i) all shareholders known to us to own beneficially more than 10% of our
ordinary shares, (ii) each director and (iii) all directors and executive officers as a
group: </FONT></P>

<p align=center>
<font size=2>- 4 -</font></p>
<HR SIZE="1" NOSHADE  STYLE="margin-top: -2px"><HR SIZE="4" NOSHADE  STYLE="margin-top: -10px">
<page>







<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH COLSPAN=3 align=left><FONT FACE="Times New Roman" SIZE=1>Name</FONT><HR WIDTH=60% SIZE=1 COLOR=black NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1>Number of Ordinary <BR>Shares
Beneficially<BR> Owned (1)</FONT><HR WIDTH=95% SIZE=1 COLOR=black NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1>Percentage of <BR>Ownership (1)(2)</FONT><HR WIDTH=95% SIZE=1 COLOR=black NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1>&nbsp;</FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD WIDTH="67%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Formula Systems (1985) Ltd. (3)(4)</FONT></TD>
     <TD WIDTH="1%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="12%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>17,036,018</FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH="1%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD WIDTH="12%" ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>53.80</FONT></TD>
        <TD WIDTH="2%" ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Guy Bernstein</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Hadas Gazit Kaiser</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>--</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>--</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Gad Goldstein (4)</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Eitan Naor (5)</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>437,500</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>1.30</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>%</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Eli Reifman</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Naamit Salomon (4)</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>--</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>--</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Elan Penn (6)</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>18,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>(*</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>)</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>Yehezkel Zeira (6)</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>18,000</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>(*</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>)</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>Itiel Efrat</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>--</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT" colspan=7><FONT FACE="Times New Roman" SIZE=2>All directors  and executive  officers as a group (10</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN="BOTTOM" BGCOLOR="#cceeff">
     <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;persons)(7)</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>473,500</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN="RIGHT"><FONT FACE="Times New Roman" SIZE=2>2.78</FONT></TD>
        <TD ALIGN="LEFT"><FONT FACE="Times New Roman" SIZE=2>%</FONT></TD></TR>
<TR>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD></TR>
</TABLE>
<BR>



<HR SIZE=1 NOSHADE WIDTH=15% ALIGN=LEFT>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%>&nbsp;</TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
(*)
Less than 1%  </FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> (1)  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Beneficial
 ownership  is  determined  in  accordance  with  the  rules  of the  Securities  and
 Exchange          Commission  and  generally  includes  voting or  investment  power
with  respect to  securities.  Ordinary          shares relating to options currently
 exercisable or exercisable  within 60 days of the date of this table          are deemed
 outstanding  for computing the  percentage of the person or group holding such
 securities but          are not deemed outstanding for computing the percentage of any
other person or group.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> (2)  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Based
on 31,638,440 ordinary shares outstanding as of the record date.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> (3)  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
address of Formula Systems (1985) Ltd. is 3 Hagalim Boulevard, Herzliya Pituach, Israel.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> (4)  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Gad
 Goldstein,  a director of Formula  Systems  and a director of our  company,  and Naamit
 Salomon,  an          officer  of  Formula  Systems  and a  director  of  our  company,
 disclaim  beneficial  ownership  of the          17,036,018 ordinary shares held by
Formula Systems.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> (5)  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Includes
87,500 ordinary shares underlying currently exercisable stock options.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> (6)  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Subject
to currently exercisable options.</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2> (7)  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Includes
123,500 ordinary shares underlying currently exercisable stock options.</FONT></TD>
</TR>
</TABLE>
<BR>

<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>Executive Compensation</B> </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
 following  table  sets  forth all  compensation  we paid with  respect  to all of our
 directors  and executive officers as a group for the year ended December 31, 2007. </FONT></P>






<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=100%>
<TR VALIGN=Bottom>
     <TH> </TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1>Salaries, fees,<BR>
commissions and<BR>
bonuses</FONT><HR WIDTH=95% SIZE=1 COLOR=black NOSHADE></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1>Pension, retirement<BR>
and similar benefits</FONT><HR WIDTH=95% SIZE=1 COLOR=black NOSHADE></TH></TR>
<TR VALIGN=Bottom>
     <TH> </TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1>&nbsp;</FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH> </TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH> </TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TH> </TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH>
     <TH COLSPAN=3><FONT FACE="Times New Roman" SIZE=1></FONT></TH></TR>
<TR VALIGN=Bottom>
     <TD WIDTH=10%> </TD>
     <TD WIDTH=57% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>All directors and executive</FONT></TD>
     <TD  ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=3% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD WIDTH=12% ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2></FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD WIDTH=12% ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2></FONT></TD>
        <TD WIDTH=2% ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD> </TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>officers as a group, then consisting</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR VALIGN=Bottom>
     <TD> </TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>of eleven persons</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2> 1,260,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>$</FONT></TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman" SIZE=2>    92,000</FONT></TD>
        <TD ALIGN=LEFT><FONT FACE="Times New Roman" SIZE=2>&nbsp;</FONT></TD></TR>
<TR>
     <TD> </TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD>
     <TD COLSPAN=3></TD></TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;During
the year ended December 31, 2007, we paid to each of our outside and independent directors
an annual fee of approximately $13,000<B> </B>and a per meeting attendance fee of
approximately $400. Those fees are paid based on the fees detailed in a schedule published
semi-annually by the Committee for Public Directors under the Israeli Securities Law. We
provide automobiles to our executive officers at our expense. </FONT></P>

<p align=center>
<font size=2>- 5 -</font></p>
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<page>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
of December 31, 2007, our directors and executive officers as a group, then consisting of
ten persons, held options to purchase an aggregate of 911,000 ordinary shares, at exercise
prices ranging from $1.50 to $2.40 per share (after the dividend adjustment), vesting
immediately. Of such options, options to purchase 36,000 options expire in 2015 and
options to purchase 875,000 ordinary shares expire in 2017. All such options were granted
under our 2000 Stock Option Plan and 2007 Incentive Compensation Plan. </FONT></P>


<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>II. ELECTION OF AN OUTSIDE DIRECTOR
</B><BR><I>(Item 2 on the Proxy Card)</I> </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
the Israeli Companies Law, companies incorporated under the laws of the State of Israel
whose shares have been offered to the public are required to appoint at least two outside
directors. The Israeli Companies Law provides that a person may not be appointed as an
outside director if the person, or the person&#146;s relative, partner, employer or an
entity under that person&#146;s control, has or had during the two years preceding the
date of appointment any affiliation with the company, or any entity controlling,
controlled by or under common control with the company. The term &#147;relative&#148;
means a spouse, sibling, parent, grandparent, child or child of spouse or spouse of any of
the above. The term affiliation includes an employment relationship, a business or
professional relationship maintained on a regular basis, control and service as an office
holder (excluding service as an outside director of a company that is offering its shares
to the public for the first time). </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
addition, no person may serve as an outside director if the person&#146;s position or
other activities create, or may create, a conflict of interest with the person&#146;s
responsibilities as director or may otherwise interfere with the person&#146;s ability to
serve as director. If, at the time an outside director is appointed all members of the
board of directors are of the same gender, then that outside director must be of the other
gender. A director of one company may not be appointed as an outside director of another
company if a director of the other company is acting as an outside director of the first
company at such time. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As
of 2006, at least one of the elected outside directors must have &#147;accounting and
financial expertise&#148; and any other outside director must have &#147;accounting and
financial expertise&#148; or &#147;professional qualification,&#148; as such terms are
defined by regulations promulgated under the Israeli Companies Law. This requirement does
not apply to outside directors appointed prior to 2006. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any
committee of the board of directors must include at least one outside director and the
audit committee must include all of the outside directors. An outside director is entitled
to compensation as provided in regulations adopted under the Israeli Companies Law and is
otherwise prohibited from receiving any other compensation, directly or indirectly, in
connection with such service. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Outside
directors are elected by shareholders by a special majority. In general, outside directors
serve for a three-year term, which may be renewed for only one additional three-year term.
Outside directors can be removed from office only by the same special percentage of
shareholders as can elect them, or by a court, and then only if the outside directors
cease to meet the statutory qualifications with respect to their appointment or if they
violate their duty of loyalty to the company. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mr.
          Elan Penn was elected to serve as an outside director of our company at our
2005           annual general meeting of shareholders for an initial three-year term
expiring           at our 2008 annual general meeting of shareholders, following which
the service           of Mr. Penn as an outside director may be renewed for only one
additional           three-year term.  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
the Meeting, shareholders will be asked to reelect Mr. Elan Penn as an outside director of
our company for a second three-year term effective as of the expiration of his initial
three-year term on December 29, 2008 and expiring three years thereafter on December 29,
2011. </FONT></P>

<p align=center>
<font size=2>- 6 -</font></p>
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<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
Board of Directors has determined that Elan Penn qualifies as an outside director within
the meaning of the Israeli Companies Law. Our Board of Directors has further determined
that Mr. Penn has accounting and financial expertise. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Set
forth below is information about Mr. Penn, including his principal occupation, business
history and any other directorships held. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Elan
Penn (56)</I></B><I></I> has served as an outside director of our company since December
2005. Mr. Penn has served as chief executive officer and chairman of Penn Publishing Ltd.,
a private company based in Tel Aviv, Israel since 2001. From 2000 to 2001, Mr. Penn served
as vice president of finance and administration of A.I. Research and Development Ltd. Mr.
Penn was chief executive officer of Sivan Computer Training Company Ltd. during the years
1998 and 2000. From 1992 to 2000, Mr. Penn served as vice president of finance and
administration of Mashov Computers Ltd. From 1987 to 1991 and again from 1992 to 1997, Mr.
Penn served as our company&#146;s vice president of finance and administration. Mr. Penn
also serves as a director of Healthcare Technologies Ltd. Mr. Penn holds a B.A. degree in
economics from the Hebrew University of Jerusalem and a Ph.D. in management science from
the University of London. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
reelection of the nominee for outside director requires the affirmative vote of a majority
of ordinary shares represented at the Meeting, in person or by proxy, entitled to vote and
voting on the matter, provided that either (i) the shares voting in favor of such
resolution include at least one-third of the shares of non-controlling shareholders who
vote on the matter (excluding the vote of abstaining shareholders), or (ii) the total
shareholdings of the non-controlling shareholders who vote against such proposal do not
represent more than 1% of the voting rights in our company. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We
are not aware of any reason why the nominee, if elected, would be unable or unwilling to
serve as an outside director. In the event that the named nominee for outside director
would be unable to serve, the proxies will be voted for the election of such other person
as shall be nominated by our Board of Directors. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>The
Board of Directors recommends a vote FOR the election of the nominee for outside director.</B> </FONT></P>

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<H1 ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Outside Director
Continuing in Office </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><I>Itiel
Efrat (42)</I></B> has served as an outside director of our company since December 2006. Mr.
Efrat is the founder and has served as co-managing director of ERB Ltd., a leading
financial consulting firm, since 1995. Mr. Efrat is the founder and a member of the
Board of Directors of ESOP-Excellence Trust Company since 2004. Mr. Efrat is a
certified public accountant in Israel and holds a B.A. degree in accounting and
economics from Tel-Aviv College of Management. </FONT> </P>






<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><B>APPOINTMENT OF REGISTERED INDEPENDENT PUBLIC ACCOUNTING FIRM
</B><BR><I>(Item 3 on the Proxy Card)</I> </FONT> </P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our
Board of Directors first appointed Kost Forer Gabbay &amp; Kasierer, a member firm of
Ernst &amp; Young Global, as our independent auditors in 1983. They served as our auditors
until 1999 and were re-engaged to act as our independent auditors again beginning with the
fiscal year ended December 31, 2001 and have served as our independent auditors since
2001. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
the Meeting, the shareholders will be asked to approve the re-appointment of Kost Forer
Gabbay &amp; Kasierer as our registered independent public accounting firm for the fiscal
year ending December 31, 2008, pursuant to the recommendation of our Audit Committee and
Board of Directors. In accordance with applicable law, our Board of Directors has
delegated to our Audit Committee the authority to determine the remuneration of Kost Forer
Gabbay &amp; Kasierer in accordance to the volume and nature of their services. With
respect to fiscal year 2007, we paid Kost Forer Gabbay &amp; Kasierer approximately
$171,000 for audit services, approximately $10,000 for audit related services,
approximately $27,000 for tax related services and approximately $18,000 for other
services mainly related to strategic consulting. </FONT></P>

<p align=center>
<font size=2>- 7 -</font></p>
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<page>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following resolution will be offered by the Board of Directors at the Meeting: </FONT></P>

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<TABLE WIDTH=100% CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;RESOLVED,
that the appointment of Kost Forer Gabbay &amp; Kasierer, a member of Ernst &amp; Young
Global, as the registered independent public accountants of Magic Software Enterprises
Ltd. to conduct the annual audit of its financial statements for the year ending December
31, 2008, be and hereby is approved, and that the Board of Directors be, and it hereby
is, authorized to delegate to the Audit Committee the authority to fix the remuneration
of such independent registered public accountants in accordance with the volume and
nature of their services.&#148; </FONT>
</TD>
</TR>
</TABLE>
<BR>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
affirmative vote of the holders of a majority of the ordinary shares represented at the
Meeting, in person or by proxy, entitled to vote and voting thereon, is required to
approve the foregoing resolution. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event this resolution does not receive the necessary vote for adoption, or if for any
reason Kost Forer Gabbay &amp; Kasierer will cease to act as our auditors, the Audit
Committee will appoint other independent public accountants as our auditors. </FONT></P>

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<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2> <B>The
Board of Directors recommends a vote FOR the foregoing resolution.</B> </FONT></P>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>REVIEW AND DISCUSSION
OF OUR AUDITOR&#146;S REPORT AND THE <BR>CONSOLIDATED FINANCIAL STATEMENTS </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At
the Meeting, our Auditor&#146;s Report and the Consolidated Financial Statements for the
year ended December 31, 2007 will be presented. We will hold a discussion with respect to
the Financial Statements at the Meeting. This item will not involve a vote of the
shareholders. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Annual Report on Form 20-F for the year ended December 31, 2007 including our audited Consolidated
Financial Statements, will be available on our website on or about May 20, 2008 at www.magicsoftware.com.
 </FONT></P>


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<TR VALIGN=TOP>
<TD WIDTH=50%>&nbsp;</TD>
<TD WIDTH=50%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>By Order of the Board of Directors,
<BR>
<BR>
<BR>Amit Birk, Secretary
 </FONT></TD>
</TR>
</TABLE>
<BR>



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<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Dated: May 9, 2008 </FONT></P>

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<TYPE>EX-99
<SEQUENCE>3
<FILENAME>exhibit_10-2.htm
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     <!-- Control Number: 85204                                                            -->
     <!-- Rev Number:     1                                                                -->
     <!-- Client Name:    Magic Software Enterprises Ltd                                   -->
     <!-- Project Name:   6-K                                                              -->
     <!-- Firm Name:      Zadok-Keinan Ltd                                                 -->
     <TITLE>6-K</TITLE>
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<P align=right><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U><B>Exhibit 10.2</B></U> </FONT> </P>

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<P ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE="3"><B>MAGIC SOFTWARE
ENTERPRISES LTD.</B> </FONT> </P>

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<H1 ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>THIS PROXY IS SOLICITED
ON BEHALF OF THE BOARD OF DIRECTORS </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
undersigned hereby appoints Guy Bernstein and Amit Birk, or either of them, attorneys or
attorney of the undersigned, for and in the names(s) of the undersigned, with power of
substitution and revocation in each to vote any and all ordinary shares, par value NIS
0.1 per share, of Magic Software Enterprises Ltd. (the &#147;Company&#148;), which the
undersigned would be entitled to vote as fully as the undersigned could if personally
present at the Annual General Meeting of Shareholders of the Company to be held on June
15, 2008 at 10:00 a.m. at the offices of the Company, 5 HaPlada Street, Or Yehuda 60218,
Israel, and at any adjournment or adjournments thereof, hereby revoking any prior proxies
to vote said shares, upon the following items of business more fully described in the
notice of and proxy statement for such Annual General Meeting (receipt of which is hereby
acknowledged):  </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>THIS PROXY WHEN PROPERLY EXECUTED
WILL BE VOTED AS SPECIFIED. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR (i) THE
ELECTION OF THE NOMINEES FOR DIRECTOR AND (ii) PROPOSALS 2 AND 3 SET FORTH ON THE REVERSE.</B> </FONT></P>

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<H1 ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(Continued and to be
signed on the reverse side) </FONT></H1>

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<H1 ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ANNUAL GENERAL MEETING
OF SHAREHOLDERS OF </FONT></H1>

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<H1 ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=4>MAGIC SOFTWARE
ENTERPRISES LTD. </FONT></H1>

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<H1 ALIGN=center><FONT FACE="Times New Roman, Times, Serif" SIZE=2>June 15, 2008 </FONT></H1>

<P align=center><FONT FACE="Times New Roman, Times, Serif" SIZE=4>Please sign, date and mail
<BR>your proxy card in the
<BR>envelope provided as soon
<BR>as possible.</FONT></P>


<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2> <FONT size="2" face="Wingdings 3">&#152;</font>
Please detach along perforated line and mail in the envelope provided.  <FONT size="2" face="Wingdings 3">&#152;</font></FONT></P>



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     <TD align=center colspan=7 Style="border:SOLID BLACK 0.5PT; border-right:NONE; border-left:NONE;"> <FONT FACE="Times New Roman, Times, Serif" SIZE="2"><BR><B>THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF DIRECTORS AND "FOR" PROPOSALS 2 AND 3.

<BR>
PLEASE SIGN, DATE AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. PLEASE MARK YOUR VOTE IN BLUE OR BLACK INK AS SHOWN HERE</B> </FONT> <FONT FACE="Wingdings" SIZE="3">x </FONT>

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     <TD colspan=2 Style="border:SOLID BLACK 0.5PT;border-left:NONE; border-top:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(1)</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">The election of six directors</FONT></TD>
     <TD align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2">FOR</FONT></TD>
     <TD  align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2">AGAINST</FONT></TD>
     <TD  align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2">ABSTAIN</FONT></TD></TR>
<TR VALIGN="TOP">
     <TD colspan=2 Style="border:SOLID BLACK 0.5PT;border-left:NONE; border-top:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Guy Bernstein</FONT></TD>
     <TD align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD  align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD  align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2">
<FONT size="3" face="Wingdings">o
</font></FONT></TD></TR>
<TR VALIGN="TOP">
     <TD colspan=2 Style="border:SOLID BLACK 0.5PT;border-left:NONE; border-top:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Hadas Gazit Kaiser</FONT></TD>
     <TD align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD  align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD  align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2">
<FONT size="3" face="Wingdings">o
</font></FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD colspan=2 Style="border:SOLID BLACK 0.5PT;border-left:NONE; border-top:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Gad Goldstein</FONT></TD>
     <TD align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD  align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD  align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2">
<FONT size="3" face="Wingdings">o
</font></FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD colspan=2 Style="border:SOLID BLACK 0.5PT;border-left:NONE; border-top:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Eli Reifman</FONT></TD>
     <TD align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD  align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD  align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2">
<FONT size="3" face="Wingdings">o
</font></FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD colspan=2 Style="border:SOLID BLACK 0.5PT;border-left:NONE; border-top:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Naamit Salomon</FONT></TD>
     <TD align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD  align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD  align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2">
<FONT size="3" face="Wingdings">o
</font></FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD colspan=2 Style="border:SOLID BLACK 0.5PT;border-left:NONE; border-top:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Yehezkel Zeira</FONT></TD>
     <TD align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD  align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD  align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2">
<FONT size="3" face="Wingdings">o
</font></FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD colspan=2 Style="border:SOLID BLACK 0.5PT;border-left:NONE; border-top:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(2)</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">To elect Elan Penn as an outside director.</FONT></TD>
     <TD align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD  align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD  align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2">
<FONT size="3" face="Wingdings">o
</font></FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD colspan=2 Style="border:SOLID BLACK 0.5PT;border-left:NONE; border-top:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">(3)</FONT></TD>
     <TD><FONT FACE="Times New Roman, Times, Serif" SIZE="2">To ratify the appointment of Kost Forer Gabbay &amp; Kasierer, a
member firm of Ernst &amp; Young Global, as the Company's
independent registered public accounting firm for the year
ending December 31, 2008.</FONT></TD>
     <TD align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD  align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> <FONT size="3" face="Wingdings">o
</font></FONT></TD>
     <TD  align=center><FONT FACE="Times New Roman, Times, Serif" SIZE="2">
<FONT size="3" face="Wingdings">o
</font></FONT></TD>
</TR>
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     <TD colspan=2 Style="border:SOLID BLACK 0.5PT;border-left:NONE;border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD colspan=5><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
</TR>
<TR VALIGN="TOP">
     <TD colspan=2 Style="border:SOLID BLACK 0.5PT;border-left:NONE; border-top:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD colspan=5><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
</TR><TR VALIGN="TOP">
     <TD colspan=2 Style="border:SOLID BLACK 0.5PT;border-left:NONE; border-top:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD colspan=5><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
</TR><TR VALIGN="TOP">
     <TD colspan=2 Style="border:SOLID BLACK 0.5PT;border-left:NONE; border-top:NONE; border-bottom:NONE;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD colspan=5><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
</TR><TR VALIGN="TOP">
     <TD Style="border:SOLID BLACK 0.5PT; border-right:NONE; border-left:NONE; "><FONT FACE="Times New Roman, Times, Serif" SIZE="2">To change the address on your account, please check the box at right and
indicate your new address in the address space above. Please note that
changes to the registered name(s) on the account may not be submitted via
this method.

</FONT></TD>
     <TD ALIGN="CENTER" VALIGN="MIDDLE" Style="border:SOLID BLACK 0.5PT;border-left:NONE; "><FONT FACE="Times New Roman, Times, Serif" SIZE="2"> <FONT size="5" face="Wingdings">o
</font></FONT></TD>
     <TD colspan=5><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
</TR>
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     <TD WIDTH="15%" VALIGN="BOTTOM"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Signature of Shareholder</FONT></TD>
     <TD WIDTH="15%" STYLE="border:SOLID BLACK 0.5PT;"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="8%" ALIGN="center" VALIGN="BOTTOM"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Date:</FONT></TD>
     <TD WIDTH="12%" STYLE="border:SOLID BLACK 0.5PT;" ALIGN="center"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="15%" ALIGN="center" VALIGN="BOTTOM"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Signature of Shareholder</FONT></TD>
     <TD WIDTH="15%" STYLE="border:SOLID BLACK 0.5PT;" ALIGN="center"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD>
     <TD WIDTH="8%" ALIGN="center" VALIGN="BOTTOM"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Date:</FONT></TD>
     <TD WIDTH="12%" STYLE="border:SOLID BLACK 0.5PT;" ALIGN="center"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">&nbsp;</FONT></TD></TR>
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<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2><B>Note:</B> </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Please
sign exactly as your name or names appear on this Proxy. When shares are held jointly,
each holder should sign. When signing as executor, administrator, attorney, trustee or
guardian, please give full title as such. If the signer is a corporation, please sign
full corporate name by duly authorized officer, giving full title as such. If signer is a
partnership, please sign in partnership name by authorized person. </FONT></TD>
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