  We consider locally consistent systems of magnetized D9 branes on an
orbifolded six-torus which support N=1 gauge theories. In such realizations,
the matter multiplets arise from "twisted" strings connecting different stacks
of branes. The introduction of Euclidean 5 branes (E5) wrapped on the
six-dimensional compact space leads to instanton effects. For instance, if the
system is engineered so as to yield SQCD, a single E5 brane may account for the
ADS/TVY superpotential. We discuss the subtle interplay that exists between the
annuli diagrams with an E5 boundary and the holomorphicity properties of the
effective low-energy action of the N=1 theory. The consistency of this picture
allows to obtain information on the Kahler metric of the chiral matter
multiplets arising from twisted strings.
