BluePhoenix Solutions Awarded a Multi-Million Dollar Contract by IBM to Modernize Mission Critical Systems of a Global Tier 1 Retail Chain.

HERZLIYA, Israel -- BluePhoenix Solutions (NASDAQ:BPHX), the leader in value-driven legacy modernization, today announced that it has been awarded a multi-million dollar modernization contract for a global Tier 1 retail chain by IBM.

BluePhoenix is partnering with IBM to integrate, synchronize, convert, and remediate the customer's disparate legacy purchase order systems, including associated applications and technologies. BluePhoenix will modernize the databases from legacy IMS and VSAM systems to an IBM DB2 environment providing the customer with improved productivity with a lower cost of ownership.

"We are very pleased to work with IBM to modernize and integrate these mission critical systems which are core to their customer's business," said Yaron Tchwella, CEO, BluePhoenix Solutions. "Our partnership with IBM continues to strengthen as we continue to work together to modernize their customers to state of the art IBM technology. The end customer is well known for its leadership and we are honored to have been selected to modernize one of their critical systems."

About BluePhoenix Solutions

BluePhoenix Solutions (NASDAQ:BPHX) is the leading provider of value-driven legacy IT modernization solutions. The BluePhoenix portfolio includes a comprehensive suite of tools and services from global IT asset assessment and impact analysis to automated database and application migration, rehosting, and renewal. Leveraging over 20 years of best-practice domain expertise, BluePhoenix works closely with its customers to ascertain which assets should be migrated, redeveloped, or wrapped for reuse as services or business processes, to protect and increase the value of their business applications and legacy systems with minimized risk and downtime.

BluePhoenix provides modernization solutions to companies from diverse industries and vertical markets such as automotive, banking and financial services, insurance, manufacturing, and retail. Among its prestigious customers are: Aflac, Capita Group, CareFirst, Citigroup, Danish Commerce and Companies Agency, Desjardins, Los Angeles County Employees Retirement Association, Rabobank, Rural Servicios Informaticos, SDC Udvikling, TEMENOS, Toyota, and Volvofinans. BluePhoenix has 14 offices in the USA, UK, Denmark, Germany, Italy, The Netherlands, Romania, Russia, Cyprus, South Korea, Australia, and Israel.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in this release may be deemed forward-looking statements within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995 and other Federal Securities laws. You can identify these and other forward-looking statements by the use of words such as "may," "will," "plans," "believes," "estimates," "expects', "predicts", "intends," the negative of such terms, or other comparable terminology. Because such statements deal with future events, plans, projections, or future performance of the Company, they are subject to various risks and uncertainties that could cause actual results to differ materially from the Company's current expectations. These risks and uncertainties include but are not limited to: the failure to successfully defend claims brought against the Company; the effects of the global economic and financial crisis; market demand for the Company's products; successful implementation of the Company's products; changes in the competitive landscape, including new competitors or the impact of competitive pricing and products; the failure of the Company to successfully integrate acquired assets or entities under M&A transactions pursued by the Company into the Company's business as anticipated; the failure to achieve the anticipated synergies from such acquisitions; the incurrence of unexpected liabilities relating to the mergers and acquisitions pursued by the Company from time to time; the ability to manage the Company's growth; the ability to recruit and retain additional software personnel; the ability to develop new business lines; and such other risks and uncertainties as identified in BluePhoenix's most recent Annual Report on Form 20-F and other reports filed by it with the SEC. Except as otherwise required by law, BluePhoenix undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

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